Section 2 ( 1A )

Income from saplings or Seedlings grown in a nursery, deemed to be Agricultural Income.

Section 2 (15)

‘Charitable purpose' not to include trade, commerce or business or any service for a CESS, fee or any other consideration irrespective of the use of the income.

Section 35

Deduction of 1.25 times any sum paid to a company for scientific research .

Section 36

Deduction allowed for Securities Transaction tax and Commodities Transaction Tax. Consequently the deduction not allowed under Section 40(a )( ib ) is deleted with effect from 01.04.2009.

Section 40A (3)

Cash expenditure above Rs.20 ,000 /- not allowed.

[ A little clarification : As per the existing provisions, payment made in excess of Rs.20 ,000 /- by cash is not allowed as deduction. Now, this is made as payment of Rs.20 ,000 /- to a person in a day.]

Section 47

Transfer by way of conversion of certain bonds and capital asset in reverse mortgage, not to be treated as transfer.

Section 80C

Senior Citizen Savings Account, 5 Year Term Deposit with Post Office allowed for deduction under Section 80C .

Section 80D

The whole Section is substituted . It was earlier deduction for a medical insurance; it is now for health insurance. The added feature is there is an exemption of Rs.15 ,000 /- for Health Insurance of parents. It is Rs.20 ,000 /- for Senior Citizens.

Section 80IB

No deduction for refining of Mineral Oil, if refining is started after 01.04.2009.

100% deduction to hospitals having 100 or more beds which start functioning between 01.04.2008 and 31.03.2013.

Section 80ID

100% deduction to hotels in certain areas extended to hotels located in a World Heritage site.

Section 88E

No deduction of STT from the Assessment Year beginning 01.04.2009.

Section 111A

Short Term Capital Gains Tax increased from 10% to 15%.

Section 115AD

Short Term Capital Gains Tax for FIIs increased from 10% 15%.

Section 115O

Dividend Distribution Tax – Dividend received from subsidiary to be deducted.

Section 115WB

Fringe benefits – “Prepaid Electronic Meal Card” included.

Fulfilling statutory obligations, mitigating occupational hazards, providing first-aid facility, crèche, organizing sports or sponsoring sports-men, not liable for tax under Fringe benefits .

Guest house outside the purview of fringe benefits.

Section 115WD

Fringe benefit return to be filed by 30 th September instead of 31 st October.

Section 115WE

Procedure prescribed for processing fringe benefit return

Section 115WKB

This is a new Section under which if the FBT is recovered by the employer from the employee in respect of ESOP, the employee is not eligible for a refund or credit against his tax liability.

Section 139

Income tax return to be filed by 30 th September instead of 31 st October.

Is the TDS certificate back-in-action? As per Section 139(9 )( c)( i ), the TDS certificate is to be enclosed for TDS deducted before 1 st April, 2008. Now this date 1 st April, 2008 is deleted.

Section 142

Audit Report – Extension of time – suo motto or on application by the assessee.

Section 143

Assessment – procedure for processing the return prescribed.

Section 147

Income escaping assessment – AO can assess or re-assess income not involved in appeal or revision.

Section 151

Sanction by JC /Commissioner/Chief Commissioner for issue of notice – notice need not be issued by these officers.

Section 153A

An assessment order annulled in appeal will stand revived from the date the annulment order is received by the Commissioner.

Section 153

Such revived assessment as mentioned above has to be assessed within one year from the date of revival.

Section 156

Intimation about tax determined – to be treated as notice.

Section 191

A person liable to deduct tax, including the Principal officer of a company, who fails to deduct or fails to pay after deduction, will be treated as an assessee in default.

Section 193

No interest needs to be deducted on interest payable on any security in D- MAT form

Section 194C

TDS on contracts – “any association of persons or body of individuals whether incorporated or not” included in the list of TDS for contracts.

Section 195

TDS on payment to Non-residents – information relating to payment to be furnished in a form to be prescribed by the Board.

Section 199

Credit of TDS – This whole section is re-written – Board to frame Rules to allow credit.

Section 201

Failure to deduct tax – to be treated assessee in default.

Section 203

TDS certificate to continue? As per Section 203(3), where the tax has been deducted or paid after 1 st day of April, 2008, there is no requirement to furnish a TDS certificate. This date is now changed to 1 st day of April, 2010.

Section 206C

TDS for liquor, forest produce, scrap etc. No TDS certificate after 01-04-2010 (instead of 01-04-2008 ) – Rules to be framed by the Board for giving credit of TDS .

Section 254

Stay granted by Tribunal stands vacated after 365 days even if the delay is not attributable to the assessee. [The Government gets a lot of pleasure in making such unenforceable law. How can the assessee be blamed if Tribunal cannot decide the case. In any case, judicial opinion is a stay is a stay until vacated by the authority granting the stay or a higher one. So whatever you write in the Income Tax Act, the stay continues! ]

Section 268A

No estoppel against State. A new Section 268A has been inserted giving the Board the power to issue orders, fixing monetary limits on Income Tax authorities to file appeal, reference etc. Non-filing of an appeal on a particular issue will not bar the Government from filing an appeal on the same issue for a different assessee or same assessee for a different period. [There seems to be a cell in the Board whose only job is to find out ways and means of undoing judicial decisions.]

Section 271

Satisfaction of the Assessing Officer – dereliction of revenue officers condoned with retrospective effect. Penalty is imposed under the Income Tax Act if the AO, Commissioner( Appeals), Commissioner is satisfied that income is concealed, notice is not complied with etc. The Department has lost several cases because this satisfaction had not been established. Now the law is amended to state that if penalty proceedings are ordered, that itself is satisfaction. And this satisfaction is deemed to have been in existence from 01.04.1989. Lost ten years' cases can be revived.

Section 273 A

If you fail in Settlement Commission, go to Commissioner, for now Commissioners have been empowered to grant immunity from penalty where settlement proceedings have abated.

Section 278AB

And immunity from prosecution too. Commissioners are empowered to grant this immunity also.

Section 282A

Notice authenticated if the name of the officer is printed, stamped or written, with his designation. [Does this mean that the officer need not sign the notice?]

Section 292BB

If you have appeared before an authority, you cannot claim that notice was not served on you.

Section 292C

If you handover books or documents to the Income Tax officer, it will be deemed that they have been taken into custody from you.

Section 28B

Any ‘person' who collects any amount in excess of assessed duty of Customs to deposit it with the Government.

Section 108

Any officer of Customs can summon – with retrospective effect. [Prior to 13.07.2006, any Gazetted officer of Customs had the power to summon. From 13.07.2006 only those officers empowered by the Government could summon. The Government forgot to empower any one and finally woke up a few days ago and empowered all Gazetted Officers to summon. DDT 810 had pointed out that all summons issued between 13.07.2006 and 20.02.2008 were illegal. The King can do no wrong – even after it is done. So now the wrong is made right retrospectively.]

Section 117

General penalty enhanced to Rs.1 ,00,000 /- from Rs.10,000 /-. Inflation is catching up with the Government.

Section 129A

Appeal against orders of Commissioner( Appeals) – If the Committee of Commissioners, differs, refer the matter to the Chief Commissioner.

Section 129D

Appeal against orders of Commissioner – If there is difference of opinion in the committee of Chief Commissioners, refer the matter to the Board.

Section 129EE

Interest on pre-deposit refunded

Section 141

Customs powers to be outsourced ? Rules to be framed.

Section 158

Contravening Rules or Regulations. For contravening or non-compliance of a Rule, the penalty was Rs.500 /- and for Regulation, it was Rs.200 /-. Now, for both it is made Rs.50,000 /-

Validation of Notification

Cenvat Credit of DEPB debit allowed from 04.06.2005.

Section 2

For the first time, “goods” defined under the Central Excise Act. Even this is an inclusive definition to say that “ goods” includes “any article, material or substance which is capable of being bought and sold for a consideration and such goods shall be deemed to be marketable”.

Section 3A

Excise duty based on capacity of production is back. Sure to generate a lot of action.

Section 11B

Provision to refund interest.

Section 11D

Every person who has collected excess excise duty, to deposit it with the Government.

Section 11DD

Any person liable – interest on excess collection.

Section 35B

Appeal against orders of Commissioner( Appeals) – difference in Committee of Commissioners – refer to Chief Commissioner.

Section 35E

Appeal against orders of Commissioner – difference in Committee of Chief Commissioners – refer to Board.

Section 35FF (new)

Interest on pre-deposit refunded.

85

Section 67

Gross amount charged includes payment by cheque, credit card, deduction from account, credit or debit notes and book adjustments. To this illustrious list now added,

“ any amount credited or debited, whether called suspense account, or by any other name in the books of account of a person liable to pay Service Tax where the transaction is with any associated enterprises.”

Section 71

Service Tax Return Preparer Scheme

Section 72

Best judgment assessment for those who fails to furnish return or pay tax properly. This Section was omitted in 2004 and makes its re-entry now.

Section 77

It's penal time in Service Tax. If you don't take registration, penalty can be Rs.5000 /- or Rs.200 /- per day of offence – of course whichever is higher.

If you don't maintain records, furnish information to the officer, produce documents called for or disobey the summons issued by the officer; if you don't pay tax through internet banking; issue an invoice without all the required particulars – you can't get away. There is a hefty penalty awaiting you. The Department is sure to collect a large revenue through penalty.

Section 78

If penalty is payable under Section 78, there will be no penalty under Section 76.

Section 86

Difference of opinion in Committee of Commissioners and Chief Commissioners – push the matter up.

Section 95

All mistakes in the Bill and after it becomes an Act can be corrected within one year of enactment