Lok Sabha Passes Finance Bill 2021

The Lok Sabha on Tuesday passed the Finance Bill, 2021 to give effect to the financial proposals of the Central Government for the financial year 2021-2022. Apart from the Finance Act, the Bill also proposes to amend the Income Tax Act, 1961; Life Insurance Corporation Act, 1956; the Securities Contracts (Regulation) Act, 1956; the Central Sales Tax Act, 1956; the SEBI Act, 1992; etc. Some major proposals under the Bill as summarised as follows: Relaxation filing return of income-tax for certain category of senior citizen from Tax rates, both corporate and individual, remain unchanged. However, there is a relief to Senior Citizens aged 75 year and above, who will not be required to file income tax returns in case of income only from pension or interest. As per the proposed Section 194P under the Income Tax Act, such senior citizen must be a resident of India having income of the nature of pension and no other income except interest received from any account maintained by such individual in the same specified bank in which he is receiving his pension income. Such senior citizen shall be required to furnish a Declaration to the Bank, which shall then, after giving effect to the deduction allowable under Chapter VI-A and rebate allowable under section 87A, compute the total income of such specified senior citizen for the relevant assessment year and deduct income-tax on such total income on the basis of the rates in force. Faceless proceedings before Income Tax Appellate Tribunal The Income-tax Settlement Commission shall cease to operate with effect from 1st February, 2021. Further, Section 255 is sought be amended for establishment of a Faceless, jurisdiction-less National Income Tax Appellate Tribunal, for the purposes of disposal of appeals. This, the Government said, shall impart greater efficiency, transparency and accountability by: eliminating the interface between the Appellate Tribunal and parties to the appeal in the course of appellate proceedings to the extent technologically feasibleoptimising utilisation of the resources through economies of scale and functional specialisationintroducing an appellate system with dynamic jurisdiction. This means that and the all communications between the Tribunal and the Appellant shall be electronic. Where personal hearing is needed, it shall be done through video-conferencing.Also Read : Union Budget : Impact Of Finance Bill 2021 On Judicial Precedents Constitution of Dispute Resolution Committee (DRC) for small and medium taxpayers Bill proposes to insert Section 245MA to the IT Act for constitution of Dispute Resolution Committees by the Central Government, for dispute resolution in the case of such persons as may be specified by the CBDT. Anyone with a taxable income up to Rs. 50 lakh and disputed income up to Rs. 10 lakh shall be eligible to approach the Committee. The Dispute Resolution Committee shall have the powers to reduce or waive any penalty imposable under the IT Act or grant immunity from prosecution for any offence punishable under the Act in case of a person whose dispute is resolved. The Central Government may also make a scheme for the purposes of dispute resolution, so as to impart greater efficiency, transparency and accountability by: eliminating the interface between the Dispute Resolution Committee and the assessee in the course of dispute resolution proceedings to the extent technologically feasible optimising utilisation of the resources through economies of scale and functional specialisation introducing a dispute resolution system with dynamic jurisdiction. The provision shall not be applicable in case of orders passed under Section 132 (Search), Section 132A (Requisition), Section 133A (Survey) or Section 90 & 90A (information received under an agreement). Income escaping assessment & search assessments The Bill proposes that an Assessing Officer, before issuing reassessment notice under Section 148, shall: Conduct an enquiry with the prior approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment Provide an opportunity of being heard to the assessee, by serving upon him a notice to show cause in not less than 7 days but not exceeding 30 days, as to why a notice under section 148 should not be issued to him Consider the assessee's reply Decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148. Further amendments to Section 148 of the Act propose that the time period for re-opening of assessment in case of non-serious tax evasion shall be reduced to 3 years from 6 years. However, in case of serious tax fraud where there is evidence of ...

Lok Sabha Passes Finance Bill 2021

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