Taxmann’s Master Guide To Income Tax Act | 2022

S T N E T N O C

PAGE

CHAPTER-HEADS PAGE

DIVISION ONE 

Commentary on Finance Act, 2022 l l l l l l l l l l l l l l l

Taxation of Virtual Digital Asset Income and Tax Computation Taxation of Charitable Trusts Profits and Gains from Business or Profession Capital Gains Deductions and Exemptions Carry Forward and Set-off of Losses Unexplained Income and Search TDS/TCS Updated return of Income Return, Assessment and Re-assessment Appeals and Dispute Resolution Liability in Special Cases Penalties and Prosecutions Reporting Obligation under section 285B

1.1 1.3 1.39 1.54 1.125 1.149 1.153 1.171 1.183 1.209 1.250 1.289 1.326 1.338 1.346 1.354

DIVISION TWO 

Income-tax Practice Manual l l l l

2.1

Deduction of tax at source Collection of tax at source Return of income Assessment/reassessment

2.3 2.118 2.141 2.167 I-5

S D A E H R E T P A H C

I-6

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Rectification of mistakes Payment of tax/interest & refund of taxes PAN & Aadhaar Statement of Financial Transaction (SFT) Advance tax Interest and fees Refunds Faceless proceedings

2.209 2.217 2.220 2.230 2.242 2.247 2.270 2.276

DIVISION THREE 

Circulars, Clarifications & Notifications [1961- February 2022]

3.3

DIVISION FOUR 

Landmark Rulings of Supreme Court/High Courts [1922 2022]

4.3

CONTENTS PAGE

DIVISION ONE Commentary on Finance Act, 2022 1 TAXATION OF VIRTUAL DIGITAL ASSET

1.1

Introduction

1.3

1.2

Key concepts

1.3

1.3

Lifecycle of virtual currencies

1.5

1.4

Meaning of Virtual Digital Asset (VDA) as per section 2(47A)

1.6

1.5

Tax on income arising from transfer of Virtual Digital Asset

1.9

1.6

Transfer of Virtual Digital Asset without or inadequate consideration

1.28

1.7

Comprehensive Example

1.31

1.8

Overview of taxation of cryptocurrencies

1.32

1.9

Deduction of tax at source under section 194S

1.32

2 INCOME AND TAX COMPUTATION 2.1

Expenditure incurred in relation to incomes not includible in total income [Section 14A]

1.39

2.2

Extension of sunset date for commencement of manufacturing or production [Section 115BAB]

1.46

2.3

Reduction in AMT and surcharge rate for co-operative societies

1.46

2.4

No concessional tax rate under section 115BBD on dividend income

1.47

2.5

No enhanced surcharge on long-term capital gains taxable under section 112

1.48

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2.6

Surcharge in case of AOP having only company as members capped at 15%

1.51

3 TAXATION OF CHARITABLE TRUSTS

3.1

Relaxation in the tax treatment of voluntary contributions for renovation and repair of temples, etc. [Explanations 3A and 3B to section 11(1)]

1.54

3.2

Amendment to section 11(3) regarding consequences of violation of section 11(2)

1.59

3.3

Amendment in the meaning of ‘application of income’ [Explanation to section 11]

1.59

3.4

Amendment in section 12A(1)(b) to provide for the maintenance of prescribed books of account and other documents [Section 12A]

1.62

3.5

Amendment in the provisions relating to cancellation of registration of a charitable institution [Section 12AB(4)]

1.65

3.6

Amendment to provision relating to benefit to interested parties [Section 13(1)(c)]

1.102

3.7

Amendment to provision relating to impermissible investment [Section 13(1)(d)]

1.104

3.8

Insertion of new provision relating to computation of income in certain situations [Section 13(10)/(11)]

1.107

3.9

Special rate for taxation of certain income of trusts [Section 115BBI]

1.111

3.10

Provisions of accreted income extended to institutions claiming exemption under section 10(23C) [Sections 115TD to 115TF]

1.113

3.11

Substitution of second proviso to section 143(3) in respect of a reference for cancellation of registration under section 12AB or approval under section 10(23C)

1.115

3.12

Penalty for passing unreasonable benefits to trustee or specified person [Section 271AAE]

1.115

3.13

Change in approving authority for section 10(23C) [Section 10(23C)]

1.117

3.14

Contributions for renovation and repair of temples, etc. covered by section 10(23C)(v) [Explanations 1A and 1B to third proviso to section 10(23C)]

1.117

3.15

Amendment in conditions for accumulation of income under third proviso to section 10(23C).

1.118

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3.16

Consequences of non-fulfilment of conditions regarding accumulation for five years [Explanation 4 to third proviso to section 10(23C)]

1.120

3.17

New provision to permit change in the purpose of accumulation [Explanation 5 to third proviso to section 10(23C)]

1.120

3.18

Insertion of new provision containing requirement to maintain prescribed books of account [Tenth proviso to section 10(23C)]

1.120

3.19

New provision for cancellation of registration [Fifteenth proviso to section 10(23C)]

1.121

3.20

Simultaneous exemption cannot be claimed under section 10(23C) and Section 10(46)

1.121

3.21

Insertion of new provision stipulating the requirement to furnish return of income within prescribed time [Twentieth proviso to section 10(23C)]

1.122

3.22

Insertion of a provision for benefit to interested parties [Twenty first proviso to section 10(23C)]

1.122

3.23

Insertion of twenty second proviso to section 10(23C)

1.122

3.24

Restriction of application of income to actual payment [Explanation 3 to section 10(23C)]

1.122

3.25

Inconsistencies between section 10(23C) & section 11

1.123

3.26

Amendment to the proviso to section 56(2)(x)

1.123

3.27

Disallowance of deduction to donor [Section 35]

1.123

4 PROFITS AND GAINS FROM BUSINESS OR PROFESSION

4.1

Disallowance of expenses prohibited by law [Section 37(1)]

1.125

4.2

No deduction for surcharge and cess [Section 40(a)(ii)] and resultant recomputation of income [Section 155(18)]

1.135

4.3

No deduction on the conversion of interest into debentures [Section 43B]

1.141

4.4

Definition of ‘books or books of account’ in section 2(12A) amended

1.146

5 CAPITAL GAINS

5.1

Curative amendment to the definition of ‘Slump Sale’ [Section 2(42C)]

1.149

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5.2

Curative amendment to section 50 in relation to goodwill [Section 50]

1.149

5.3

Clarificatory amendment on taxation of long-term capital gains referred to in Section 112A for non-resident [First Schedule to Finance Act, 2022]

1.152

6 DEDUCTIONS AND EXEMPTIONS

6.1

Deduction for contribution to NPS [Section 80CCD]

1.153

6.2

Rationalisation of provisions of Section 80DD

1.155

6.3

One year extension for incorporation of start-ups for deduction under section 80-IAC [Section 80-IAC]

1.159

6.4

Tax relief to Covid-19 patients and their family [Sections 17 & 56]

1.160

6.5

Exemption to promote International Financial Services Centre (IFSC)[Section 10(4D)/(4E)/(4F)/(4G)]

1.167

6.6

Withdrawal of exemption under section 10(8), 10(8A), 10(8B) and 10(9)

1.169

7 CARRY FORWARD AND SET-OFF OF LOSSES

7.1

Change in shareholding due to strategic disinvestment [Section 79]

1.171

7.2

Loss from transfer of Virtual Digital Assets

1.175

7.3

Expanding the scope of bonus stripping and dividend stripping [Section 94]

1.175

8 UNEXPLAINED INCOME AND SEARCH

8.1

Person giving loan or borrowing shall explain the source of income [Section 68]

1.183

8.2

No set-off of loss against undisclosed income discovered during search [Section 79A]

1.203

8.3

Specified authorities to conduct survey [Section 133A]

1.208

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9 TDS/TCS

9.1

Deduction of tax on the benefit or perquisite in respect of business or profession [Section 194R]

1.209

9.2

Deduction of tax under section 194S from the payment of consideration on the transfer of Virtual Digital Assets

1.233

9.3

Stamp duty value of immovable property to be considered for TDS under section 194-IA

1.233

9.4

Rationalisation of provisions relating to deduction or collection of tax at higher rates in case of non-filers of return [Section 206AB and section 206CCA]

1.238

9.5

Levy of interest on TDS and TCS defaults [Section 201 and Section 206C]

1.241

9.6

Assessee can approach AO to get a refund of tax deducted under Section 195 [Section 239A]

1.245

10 UPDATED RETURN OF INCOME

10.1

New provisions to allow filing of an Updated Return

1.250

10.2

Who can file updated return?

1.251

10.3

Time limit for filing of updated return

1.252

10.4

Form for filing of an updated return

1.253

10.5

When can an updated return not be filed?

1.254

10.6

Filing of updated return for subsequent year consequent to a reduction in carried forward losses, depreciation or MAT/AMT credit [Fifth proviso to Section 139(8A)]

1.266

10.7

Tax on updated return

1.268

10.8

Assessment in case of updated return [Section 144]

1.279

10.9

Benefit of filing of updated return

1.279

10.10 Comparative analysis of opting for updated return and income detected by AO

1.279

10.11 Illustrations on updated return

1.280

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11 RETURN, ASSESSMENT AND RE-ASSESSMENT

11.1

New provisions have been introduced to allow the filing of an Updated Return [Section 139(8A) and Section 140B]

1.289

11.2

Change in provisions relating to re-assessment [Sections 148, 148A, 148B and 149]

1.289

11.3

Change in provisions relating to time-limit for completion of assessment or re-assessment [Section 153]

1.302

11.4

Change in provisions relating to faceless assessment [Section 144B]

1.308

11.5

Amendment in limitation period for completion of assessment where search initiated on or before 31-3-2021 [Section 153B]

1.322

11.6

Empowering CBDT to issue directions for relaxing levy of fee for default in furnishing return of income [Section 119]

1.324

11.7

Extension in time-limit to issue directions for implementing faceless regime

1.325

11.8

Consequential Amendment in Section 132 and Section 132B

1.325

12 APPEALS AND DISPUTE RESOLUTION

12.1

New provision introduced for avoidance of repetitive appeal [Sections 158AA and 158AB]

1.326

12.2

Power of AO to give effect to order of DRC [Section 245MA]

1.331

12.3

Commissioner is empowered to revise order passed by Transfer Pricing Officer (TPO) for revision of order passed by TPO [Section 263]

1.333

12.4

Extension in time-limit to issue directions for implementing faceless regime [Sections 253 and 255]

1.337

13 LIABILITY IN SPECIAL CASES

13.1

Validation of proceedings completed on predecessor entity [Section 170]

1.338

13.2

Filing of modified return by successor entity [Section 170A]

1.340

13.3

Modification of demand order in insolvency resolution process [Section 156A]

1.343

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13.4

Recovery of tax from directors of a private company not in liquidation [Section 179]

1.344

14 PENALTIES AND PROSECUTIONS

14.1

Commissioner (Appeals) is empowered to levy penalties under Sections 271AAB, 271AAC and 271AAD

1.346

14.2

Penalty under section 272A for failure to comply with the statutory requirements

1.350

14.3

Penalty for passing unreasonable benefits to trustee or specified persons [Section 271AAE]

1.351

14.4

Inclusion of Section 276BB under the ambit of sections 278A and 278AA

1.352

14.5

Sunset clause under section 276AB

1.352

14.6

Consequential amendments to sections 276B and 271C

1.353

14.7

No prosecution under section 276CC if an updated return is filed

1.353

15 REPORTING OBLIGATION UNDER SECTION 285B

15.1

Background

1.354

15.2

Amendment by the Finance Act, 2022

1.354

15.3

Who is required to furnish a statement under section 285B?

1.355

15.4

Specified activities

1.357

15.5

Form and time limit to furnish the statement

1.358

15.6

Monetary limit for reporting

1.359

15.7

Computation of threshold limit

1.359

15.8

TDS v. Reporting under this provision

1.360

15.9

Consequences of failure to furnish the statement

1.360

DIVISION TWO Income-tax Practice Manual 

Deduction of tax at source

2.3

- Overview

2.3

- TDS from salary [Section 192]

2.17

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- TDS on ESOPs [Sections 191 and 192(1C)]

2.20

- TDS on withdrawal from EPF scheme [Section 192A]

2.22

- TDS from interest on securities [Section 193]

2.23

- TDS from dividends [Section 194]

2.25

- TDS from interest other than interest on securities [Section 194A]

2.26

- TDS from winning from lottery or crossword puzzles [Section 194B]

2.31

- TDS on winnings from horse races [Section 194BB]

2.32

- TDS from payment to contractors [Section 194C]

2.32

- TDS from insurance commission [Section 194D]

2.36

- TDS from payment in respect of life insurance policy [Section 194DA]

2.37

- TDS from payment to non-resident sports person [Section 194E]

2.39

- TDS from payment under national savings scheme [Section 194EE]

2.40

- TDS from payment for repurchase of units by mutual fund or UTI [Section 194F]

2.40

- TDS from commission on sale of lottery tickets [Section 194G]

2.41

- TDS from commission and brokerage [Section 194H]

2.42

- TDS from rent [Section 194-I]

2.43

- TDS from sum paid to buy an immovable property [Section 194-IA]

2.46

- TDS on rent by certain individual or HUF [Section 194-IB]

2.47

- TDS from payment under joint development agreement [Section 194-IC]

2.48

- TDS from royalty and fees for technical or professional services [Section 194J]

2.48

- TDS from income in respect of units payable to resident [Section 194K]

2.52

- TDS in case of compulsory acquisition of immovable property [Section 194LA]

2.53

- TDS from interest on infrastructure debt fund [Section 194LB]

2.54

- TDS from income distributed by business trust [Section 194LBA]

2.54

- TDS from income in respect of units of investment fund [Section 194LBB]

2.55

- TDS from income in respect of investment in securitization trust [Section 194LBC]

2.56

- TDS from interest paid on foreign borrowings [Section 194LC]

2.57

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- TDS from interest on rupee denominated bonds and Govt. Securities [Section 194LD]

2.59

- TDS from payment to contractors or professionals by certain individuals or HUFs [Section 194M]

2.60

- TDS on cash withdrawals [Section 194N]

2.62

- TDS from payment by e-commerce operator [Section 194-O]

2.66

- TDS from pension and interest income of senior citizen [Section 194P]

2.72

- TDS on purchase of goods [Section 194Q]

2.74

- Deduction of tax on the benefit or perquisite in respect of business or profession [Section 194R]

2.78

- Deduction of tax from the payment of consideration on the transfer of VDA [Section 194S]

2.78

- TDS from other sum paid to a non-resident [Section 195]

2.78

- TDS from income in respect of units payable to non-resident [Section 196A]

2.85

- TDS from income from units [Section 196B]

2.86

- TDS from income arising from bonds or GDRs [Section 196C]

2.87

- TDS from income payable to FPIs and specified funds [Section 196D]

2.87

- Certificate for lower deduction of tax [Section 197]

2.89

- Non-deduction of tax [Section 197A]

2.91

- Overview

2.93

- Credit for TDS [Section 199 read with rule 37BA (TDS credit)]

2.94

- Due dates for deposit of TDS [Rule 30]

2.95

- Filing of TDS return [Rule 31A]

2.97

- TDS certificate [Section 203 read with rule 31]

2.102

- Requirement to furnish PAN (for TDS) [Section 206AA read with rule 37BC and rule 114AAB]

2.104

- Deduction of tax at higher rates in case of non-filers of return [Section 206AB]

2.108

- Tax deduction and collection account number (TAN) [Section 203A]

2.111

- Consequences of failure to deduct or pay TDS [Section 201]

2.112

- Quarterly return by banks to report interest payments [Section 206A]

2.114

- Intimation to department about payment to non-resident [Rule 37BB]

2.115

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

u

u

- Refund for denying liability to deduct tax in certain cases [Section 239A]

2.117

Collection of tax at source

2.118

- Overview

2.118

- Collection of tax at source [Section 206C]

2.119

- Deposit of TCS [Rule 37CA]

2.129

- Furnishing of TCS returns

2.130

- Credit of TCS [Rule 37-I]

2.132

- TCS certificate [Rule 37D]

2.133

- Consequences of failure to collect or pay TCS [Section 206C]

2.134

- Certificate to collect TCS at lower rate [Section 206C read with rules 37G & 37H]

2.135

- Requirement to furnish PAN [Section 206CC]

2.136

- Collection of tax at higher rates in case of non-filers of return [Section 206CCA]

2.139

Return of income

2.141

- Who has to file income-tax return?

2.141

- Filing of return by a person other than assessee

2.145

- Exemption from filing ITR

2.147

- Due date for filing of income-tax return

2.152

- Form for filing of income-tax return

2.154

- Mode of filing of income-tax return

2.156

- Verification of income-tax return [Section 140]

2.158

- Belated return of income [Section 139(4)]

2.160

- Revised return of income [Section 139(5)]

2.161

- Updated return [Section 139(8A)/Section 140B]

2.161

- Defective income-tax return [Section 139(9)]

2.162

- Condonation of delay in filing income-tax return [Section 119]

2.163

- Consequences of default in filing of return

2.164

Assessment/reassessment

2.167

- Self-assessment [Section 140A]

2.167

- Power of Assessing Officer to enquire before assessment [Sections 142 and 142A]

2.169

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- Special audit [Section 142(2A)]

2.170

- Estimation of value of assets by valuation officer [Section 142A]

2.171

- Faceless inquiry or valuation [Section 142B]

2.172

- Summary assessment [Sections 143(1) and 241A]

2.173

- Scrutiny assessment [Section 143(3)]

2.175

- Best Judgment assessment [Section 144]

2.180

- Faceless Assessment [Section 144B]

2.182

- Reference to Dispute Resolution Panel [Section 144C]

2.182

- Income escaping assessment [with effect from 1-4-2021]

2.184

- Time limits for assessments

2.195

- Directions by Joint Commissioner [Section 144A]

2.204

- Reference to authorities to invoke GAAR [Section 144BA]

2.204

- Notice of demand [Section 156/156A]

2.206

- Document identification number

2.207

Rectification of mistakes

2.209

- Rectification of mistake [Section 154]

2.209

- Other amendments [Section 155]

2.212

- Faceless rectification, Amendments and notice of demand [Section 157A]

2.216

Payment of tax/Interest & Refund of taxes

2.217

- Payment of taxes [Rule 125]

2.217

PAN & Aadhaar

2.220

- Quoting of Aadhaar number [Section 139AA]

2.220

- Permanent Account Number (PAN) [Section 139A]

2.222

Statement of Financial Transaction (SFT)

2.230

- Statement of Financial Transaction (SFT) [Section 285BA]

2.230

u

Annual Information Statement (AIS) [Section 285BB]

2.240

u

Advance tax

2.242

- Advance tax

2.242

- Notice by Assessing Officer to pay advance tax

2.245

Interest and fees

2.247

u

u

u

u

u

S T N E T N O C

I-18 PAGE

u

u

- Consequences of default in furnishing returns, certificates, statement, or reports

2.247

- Consequence of failure to pay taxes

2.248

- Interest for default in furnishing return [Section 234A]

2.250

- Interest for default in payment of advance tax [Section 234B]

2.253

- Interest for deferment of advance tax [Section 234C]

2.258

- Interest on excess refund [Section 234D]

2.261

- Interest for late payment of income-tax demand [Section 220]

2.262

- Waiver or reduction of interest under section 234A, 234B or 234C [Section 119]

2.265

- Waiver or reduction of interest under section 201(1A) [Section 119]

2.266

- Fee for default in furnishing of TDS/TCS statement [Section 234E]

2.267

- Fee for default in furnishing return of income [Section 234F]

2.268

- Fee for default in furnishing statement or certificate [Section 234G]

2.268

- Fee for failure to intimate Aadhaar number [Section 234H]

2.268

Refunds

2.270

- Refunds [Sections 237 to 245]

2.270

- Interest on refunds [Section 244A]

2.273

Faceless proceedings

2.276

- ‘Faceless proceedings’ under the income-tax Act

2.276

DIVISION THREE Circulars, Clarifications & Notifications [1961 - February 2022] 

Circulars, Clarifications & Notifications [1961 - February 2022]

3.3

DIVISION FOUR Landmark Rulings of Supreme Court/High Courts [1922 - 2022] 

Landmark Rulings of Supreme Court/High Courts [1922 - 2022] 4.3

5

CAPITAL GAINS*

e n pwo i oot cH i n s . fi se t e ld i dae nsh apt ,mf 1 u o 2l e 0s 2fi n ,ol t t c es Apa l eoe cch nst aen nhi t i ” F ns i e eh l hi ta t s yw“ brm e df r . ” es e r t dn e e f na s hn et rt mf a or ao t t s e“ s a mcm n wr r ee ’o r e fe t l l a e lfh e s a r t pre h meh t uvti o , l w y scl ‘ d fote n t o ec dt ne a rl od e p i t nve i n adr t fip a o n exi n de, r s ese a hav w Twe d dr no ew m e ah yt bh t ti n ew ” ms dl e na es m“ ad r eo : vw s i i t a e el r ha ut s ce p et u m ht t i u et l nss b f ou o ds n soo a ti h) t i 2 n 2 fi 0 e 2(d ,2d t ne c o Ai d tn ec e ce ns m afa no i e F sh ent how i t s o i ,v y N l o . g r ” np r i e d f res ohn t cg a cn r t Ai “ -

42C

.

2 2 1 2 0 2 r a e Y t n e m s s e s s A e h t m o r f y l e v i t c e p s o r t e r t c e f f e e k a t l l i w t n e m d n e m a s i h T

t dc ne af f ,e l l i h wt di ow ot gc nA oe eh ct nf ao s wn oo l l i t a c ne os i s t u a i o c i er r a pv eo dt de ed t i a b m i h oe: rr2 2 pe1 dw2 at s0 hn 2 1er 2 a 0me 2dY n ,e t t n c Ame a m e,s cy s l ng e an s s nd iA i F r om ec o hc r Ta f

, t e s s a e l b a i c e r p e; dn ai o st a a u dt es i r e y dn i s a nr oe cd tn o nu t si i nn oo i e s l s b e a f o w ro pl rl oa s si s e n ni o i sa t ui bc e ar fp o e ld l i wo dn od on Ga ) (

a

*SECTIONS 2(42C) AND 50.

1.149

: s w o l l o f s a , t c A e h t f o ) 42C

( 2 n o i t c e s r e d n u d e n fi e d n e e b s a h ’ e l a s p m u l s ’ m r e t e h T

5.1 Curative amendment to the definition of ‘Slump Sale’ [Section 2(42C)] “slump sale” means the transfer of one or more undertaking, by any means, for a lump sum consideration without values being assigned to the individual assets and liabilities in such sales

-

“slump sale” means the transfer of one or more undertaking, by any means, for a lump sum consideration without values being assigned to the individual assets and liabilities in such transfer

5.2 Curative amendment to section 50 in relation to goodwill [Section 50]

5.2-1 Introduction

S N I A G L A T I P A C

l l i ; ws di n oa og gl a et hi t p a fc o eg ci n i r t pu ep s m a o hc cr r uo pf n eo hi t t i ,i s d eu s q a c ha cf r o ut ps o sc i le l i h wt ds oa od ge er r e e d i hs wn o ec s a e cb al l i nw I ) (

, e 2 er r t 2u u e pp h 1 2emw 0ho 0 2tc f 5 ro o a n etto yn i C t uA to c n e em8S m er a l seue s d hRn e t s d s mi eu a e oi fu er tl r f o od f na. e e vd bcsne luawn h l d i i oa weTd t drDnb oe e o obBt n lCi gl te aer nh e hwb os T s d . da l edl n h nei a n i ws l i l a a i d t n t w b o i b d oo oa o soggo l a e sh a g wn t ti n no po oifan t o c i a t i e o a c m c i i t ei c r r a r ep i pec r t peee tr eds r p deaoe hh hc ft sd I ) ( 0nd 5oe i m ns s oe e i e t f d c o er e Sp . b) le rl oo t v ao shb s s e )a nB d i (e s ) u( s s eb) u ha(c t )s f6 i ro (d e l3 t l f 4 i a wn di o ot oc ge fS o h t ti n uwn oei n cd amne a dad n eer o h t i ot t r cn e fc s e noam n i n soi n i a t t o e hc i s t 2us a 2dau 0ent i 2ra s ef ,h ( t or c e Atkf t s eacn o chl a ntb r ayet f ni ha i r t F a e mb l ec oo ho rt Tt f

) l l i m Vw ( oeDd Wo cs fu o e a o l hg dc t f ofto a hoh t t )ts e o m(ec eeda l i s huvu o t ar t slp c c e a bb oe i uth r c S1t s 2 .0 e t y r e 2b ps ,d )st a 6 c e ( fAc 3 o u 4k ed ce nc nr oo a i l t ne b c i b eaF Sf l l e a o h h ets . s uys t l b s e t a e vds s a nes wdaf oneo e l k dm b c i nag o es l nb t a t a i t h r n c wwi ) u e6fs o ( h3 n t i f4kt h c o no i l ob ni w ot c g i en t e hi a S t t l l u fo fa po f srl enTy ta on s o r D f a h i o t cc B ro h ne e neCso l nb s i i ndedtna n h a a i et c i ac a i ml gdtte p n a e r l aehs gp. p n a s t mta e t i i s s s b d p a i i e i fd aod x r o cs e c li v ns o k fa a e o c o t r r okp s ndp l a c e oh s oCsa obl i t1 seb Aie a 2i t vh 8hc t t u 0ota e,d r p2rfh l e n u ,pot mt v a dVfRel oci l Dodwi cAa reS teow r oc.Wa fiH d i f n)e t .o sa2hpo k o nn(t g cg n 0 i oF o n 5 e s i l nisb s a n eni m i i v o h ht a mrhc i oTt oT n r r. c f e Duo ps e s t s t s c e Bn i se ns l s C odl ot i s t i o a e ns ei a wh t t n e rdT s a ol e o ga b ca no.ll e n a g i n tc b ot c ii e afep Ar i g m r an nec epw i e a a e hd ahft ne t n gtoi ffab d o o ilenf a t r o o t m i 0rrc i t e e s 5f i k p a s a e c t a s nr lu nn o i pccp oa l i o b n t m r y t c ema t re ef 0ae of So bci 5mt n o i t c e S f o ) ( e s u a l c r e p s a n ot : i t n c uu do em r a fg i sn ni i w a o gl lo l a t f i p e ah ct df eo e mt ea eg de r sg e g t u a pe mh t os cd )e 3 ( e Cc Ax 8e ) e6 l ( u 3 R4

to n t at vc e ef l e f e r rg a n ei yi v sg ut ou i o v eh r t pi ew h1 t 2 f0 o 2 g4 n0 i n 1 n0 i g en bod n ega hn; i t c ) tn a ( e) sm 6 t ( e 3 m4 s s on a fco r o i a t ke c cy e ot S l b nr e eed hmn t fsu s o e n s Vs o i Dat ec Wh u etd e ht or t ) (

t rn e he t m o s ,s s t e e s s s s a a e eh l t b i o g t nt an t a n v i e fl o e r kr ca oe l b y es hu t o i nv i e h r t i p we . gh1 nt2 i g 0 l l n2 a i f r 4 tu0 e d1 s s d 0 a en r yi o nu aq g fc n i o ac tl ,n s ie ol cw ldm a m o uo o t c g c anr a eae ht hy t ) (

s dne ea t mt u np ei ef m do o fkc o cd non ola b i t e n a hi t o t u t pma u mo t or i cfs s rdi oeh c f t us 0d r 5e e nrv oi so i t lc c y il el Swe d r do a eo u dg q nf s eo ) 3 mt( anC uA to o 8 nme dal aeus .

Rn hh i 1t,a 2erg e s 0a vl 2c e a t ,a wi t p c o nH a Ai c es.d s cnt e nie aas m g s nl e i a e a F t d e i l ep e b ha i h Tc g t

rr e o ds ns ue n ti n s eu mb da . nf r eo e f ml ls ai n lwa a dr i t ot n eoa uge qfb eoo s tt nn d oue co a m e tme a h ged uh e otb rfl bo l a s h n a os hi t 2t e 2cs u 0d s 2e a , f tr c o Aak etc cao h l nt b ae nd e i ih F evt hom r t po , r p f ao, gtn 0 s5 o i i h s n t s oe l l i f to fi c oe r Ts p

r a e Y t n e m s s e s s A m o r f t c e f f e e v i t c e p s o r t e r h t i w e l b a c i l p p a s i t n e m d n e. m2 2 a1 s2 i h 0 T2

d e r i u q c a t i , 8 1 0 2 4 0 1 n O . s s e n i s u b g n i r u t c a f u n a m: s t ae s ns i a de el gb ag i gn na et n si i dg n ei t i w mo il l L o Zf e Yh Xt

5.2-3 Example

c ii

para 5.2-1(c)

proviso

Explanation

1.150 Para 5.2

b

-

c

5.2-2 Amendment by the Finance Act, 2022

c

ii

5.2-2a Purpose of the amendment -

proviso

proviso

c

a

b

c

-

0 5 N O I T C E S O T T N E M D N E M A E V I T A R U C

1.151

Para 5.2

; s e r o r c 0 0 1 . s R : l l i w d o o G ) ( d n a ; s e r o r c 0 5 . s R : s k r a m e d a r T ) (

a

. s e r o r c 0 5 . s R : t n e m e e r g a e s i h c n a r f d n a s e s n e c i L ) (

b

1 2 0 2 3 0 1 3 n o s a . d t L Z Y X f o s t e s s a e l b i g n a t n i f o k: cs on l o b i t ea hu t t i fs o o Vw Dt g Wn ei hw t o l eo l t f u pe h mt on Ci

c

. s e r o r c 0 4 . s R r o f s k r a m e d a r t e h t d l o s . d t L Z Y X , 9 1 0 2 l i r p A n I -

n i d n a , s e r o r c 0 8 . s R r o f s k r a m e d a. r s t e er ho t r dc l 2 o . ss .R d t r Lo Zf s Yt Xn e ,t 9 1a 0p 2d e lr i r i pu Aq c na I -t i , 0 2 0 2 l i r p A

Situation 1 Situation 2

Computation of WDV as on 31-3-2021

(In Crores)

Particulars

Situation 1

Situation 2

0 5 .

7 1 0 0 5 0 . .

2 5 2

82.50

54.50

5 2 .

6 5 -

0 5 .

4 5 -

Less:

52.50

] J [ l l i w d o o g f o t n u o c c a n o t n e m t s u j d A

WDV of Block of Asset (before depreciation and before goodwill adjustment) [I]

0 0 .

0 8 -

] H [ r a e y e h t g n i r u d d e s a h c r u p s t e s s a e l b i g n a t n I

Add:

70

82.50

0 0 5 0 . .

2 8 0

] G [ V D W g n i n e p O

Previous Year 2020-21

0 0 .

0 5 1

Closing WDV (after depreciation) of block of intangible assets [G = E - F]

110 0 5 .

7 2 -

Less:

] % 5 2 * E = F [ n o i t a i c e r p e D

Closing WDV (before depreciation) of block of intangible assets [E = C - D]

0 0 .

0 4 -

] D [ r a e y g n i r u d d l o s s t e s s a e l b i g n a t n I

Less:

150.00

0 0 .

0 5 1

] C [ V D W g n i n e p O

Previous Year 2019-20

150.00

200.00 0 0 .

0 5 -

Closing WDV (after depreciation) of block of intangible assets [C = A - B]

200.00 0 0 .

0 5 -

Less:

] % 5 2 * A = B [ n o i t a i c e r p e D

Closing WDV (before depreciation) of block of intangible assets [A]

0 0 .

0 5

0 0 .

0 5

Trademarks

0 0 .

0 5

0 0 .

0 5

Goodwill

0 0 .

0 0 1

0 0 .

0 0 1

8 1 0 2 , 0 1 l i r p A n s e o e d s i e h r i c u n q a c r f a s & t e s s e s s a n e e l c i b i L g n a - - t n I

Previous Year 2018-19

Actual cost of goodwill

100.00

Less: Depreciation for previous year 2018-19 [100 * 25%]

(25.00)

S N I A G L A T I P A C

0 0 .

0

6 5 .

6 -

0.00 NA

1.75

WDV of block of intangible assets as on 31-03-2021

19.69 Short term capital gain [N = K - (G + H)]

56.25 Maximum adjustment towards goodwill shall not exceed the value computed in [I] above, i.e., 82.50 or 54.50, as the case may be.

26.25

0.00 Amount of reduction [K]

Situation 2 Particulars

Situation 1

WDV (before depreciation) of block of intangible assets [L] ] % 5 2 * L = M [ n o i t a i c e r p e D Less:

(18.75) Less: Depreciation for previous year 2019-20 [(10025) * 25%]

1.152 Para 5.3

-t. nl t lt aa ran e fhaxd s P a o i t.ts s h ru f e e kor ra f t s n nslno o 1 i as. tn e r s c t nR d un i ms da g ounet d i rbd n f a r e d gfeoi e f noc s i se txe s i r i rneta a u s a nro sai t nrase i ogel d a b lv i gda a nt y lu ioa a t fprp p a i p dctr aenc o cto Ad n i edea mi cp e r ro ns i e v a t e e y n l t g i m i e F nu o b oq c l len h l tea t i n a s f haho s u t f o er i soxl a e t t ua ie dn dv i uhe v o Thm ra. co r po r Sf % 0t) Ae ,1 sS 2r trD i 1a a F 1h T d e ( nse he yx ot c i atr i t f t c u u o eqeI o Se bIs

5.3 Clarificatory amendment on taxation of long-term capital gains referred to in Section 112A for non-resident [First Schedule to Finance Act, 2022]

rne oo h f it t sc n e eo ds i d v e ont ric o pt u d Id I e ted r r r e a e b Pf ,e n ro. o th d s sn ek r i r a e i a l pg u 1 tlq. n es ar et R i dp sf i a s a o e cws r s mxe n a rt oe c x nt e -he ag t n fns ,i o oi t l ho ef t n mo fd o on cyga nan i w i s eydn aa i hb t eg merl l a a omr t roe i f p ci ta Snl Diec Tmhm t r or or e t et tfpg c eSsn o pDAl .l sTA e a r %2t 01o n1 1t I

e h t m o r f x a t f o n o i t c u d e d g n i w o l l a . yh bk a pl a1 g. es hR t f do es gs ge uc l x p e sn a i hs 2n 2i 0a 2g l ,a t c t i Ap ea cc nm ar ne i t F g en ho Tl

Master Guide To Income Tax Act AUTHOR PUBLISHER DATE OF PUBLICATION EDITION ISBN NO NO. OF PAGES BINDING TYPE

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TAXMANN TAXMANN APRIL 2022 32ND EDITION 9789393880345 2024 PAPERBACK

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Description This is a unique book that covers the following: u [Section-wise Commentary] on the Finance Act 2022 u [Ready-referencer for All-important Procedural Aspects] of the Income-tax Act u [Gist of All Circulars and Notifications] Section-wise, which are still in force u [Digest of Landmark Rulings] are given Section-wise The Present Publication is the 32 nd Edition, amended by the Finance Act 2022 & the Taxation Laws (Amendment) Act, 2021. This book is authored by Taxmann’s Editorial team, with the following coverage: u

[Division One] Section-wise commentary on the Finance Act, 2022  Taxation of Virtual Digital Asset  Income and Tax Computation  Taxation of Charitable Trusts  Profits and Gains from Business or Profession  Capital Gains  Deductions and Exemptions  Carry forward and Set-off of losses  Unexplained Income and Search  TDS/TCS  Updated Return of Income  Return, Assessment and Reassessment  Appeals and Dispute Resolution  Liability in Special Cases  Penalties and Prosecutions  Reporting Obligation under Section 285B [Division Two] n Income Tax Practice Manual

u

Deduction of tax at source Collection of tax at source l Return of income l Assessment/reassessment l Rectification of mistakes l Payment of tax/interest & refund of taxes l PAN & Aadhaar l Statements of Finance Transactions (SFT) l Advance Tax l Interest and Fees l Refunds l Faceless Proceedings [Division Three] n The gist of all Circulars, Clarifications & Notifications l From 1961 – February 2022 with Section & Alphabetical key for easy navigation [Division Four] n Digest of all Landmark Rulings l From 1922 – 2022 with Section & Alphabetical keys for easy navigation l

n

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