Under existing provisions of section 194-I of the Act tax is deductible at source from payment of rent. Individuals and HUFs other than those liable for tax audit are not required to deduct tax under this section. A New section 194-IB is being inserted to provide for deduction of tax at source @ 5%. Tax is required to be deducted in the last month of the year or last month of the tenancy period if the property is being vacated. In case payee is not having PAN and provisions of section 206AA of the Act are applicable, amount of tax deductible shall not exceed the amount of rent payable in the last month of the previous year or in the last month of the tenancy. The deductor will not be required to comply with the provisions of section 203A of the Act regarding obtaining of TAN. The amendment will take effect from 1-6-2017.
|194-IC||In respect of joint venture agreements it is being provided by way of amendment in section 45(5A) of the Act that capital gain in case of individuals and HUFs will be chargeable in the year in which the project completion certificate is obtained in respect of the project. In the case of joint venture agreements, apart from sharing of constructed area in certain cases the payment is also made by the developer in cash or way of cheque. It is being provided by inserting a new section 194-IC that tax will be deductible @ 10% from the amount paid by the developer under the agreement.|
|194J||Tax is deductible under section 194J of the Act @ 10% in respect of payments made on account of professional and technical services. It is being provided that in case of a payee engaged only in the business of operation of call centre tax will be deductible @ 2%.|
|194LA||U/s. 194LA tax is deductible @ 10% from payment of compensation on acquisition of immovable property, other than agriculture land. In terms of provisions of “Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Re-settlement Act, 2013”, compensation payable on acquisition of land is not chargeable to tax. Pursuant to specific provision in this regard in above Act, a proviso is being inserted in section 194LA to provide that in case of compensation payable under the above Act tax will not be deductible at source.|
|194LC||U/s. 194LC of Income-tax Act, tax is deductible at the concessional rate of 5% from interest payable to Non-Resident on borrowings made by specified companies in foreign currency from sources outside India by way of loan and on long-term bonds, including long-term infrastructure bonds. The provision is applicable only if the borrowings have been made before 1-7-2017. The period is proposed to be extended to 1-7-2020. The concession, henceforth, will also be applicable on interest payable on Rupee denominated bonds.|
|194LD||Provisions similar to section 194LC are contained in provisions of section 194LD in relation to interest payable to Foreign Institutional Investors or Qualified Foreign Investors at concessional rate of 5%. In this section also, qualifying period for payment of interest at concessional rate is being extended from 1-7-2017 to 1-7-2020.|
|197A||Provisions of section 197A are being amended by inserting sections 194D in it so as to grant exemption from deduction of tax at source from payment of insurance commission by insurance companies exceeding ₹ 15,000/- per financial year on furnishing of self declaration by payee in form 15G and 15H to the effect that no tax is payable by him on the basis of his estimated income.|
|204||As per provisions of section 195(6) of the Income-tax Act a person making payment to Non-Resident is required to furnish details relating to payment irrespective of the fact whether payment is chargeable to tax or not. Particulars are to be furnished in Form Nos. 15CA, 15CB and 15CC. Section 204 of the Act is being amended to insert a clause that “the person responsible for paying to a Non-Resident” would mean the payer himself or if the payer is a company, the company itself including the principal officer thereof.|
Section 206C provides for collection of tax at source while receiving sale consideration in the cases specified therein. Following amendments are being made in provisions of section 206C of the Act.
(i) Section provides for collection of tax at source @ 1% in a case where sale consideration in case of jewellery exceeds ₹ 5 lakhs. By way of insertion of a new section 269ST in the Act, it is being provided that no person shall receive sale consideration in excess of ₹ 3 lakh failing which penalty will be leviable equal to amount of sale consideration. In view of provisions of section 269ST, provision under section 206C regarding sale consideration exceeding ₹ 5 lakh in case of jewellery has become redundant and, therefore, amendments are being made to delete the reference to sale consideration received in cash in case of jewellery.
(ii) Sub-section (IF) of section 206C provides for collection of tax at source @ 1% in case of sale of motor vehicle of the value exceeding ₹ 10 lakh. In order to provide exemption from above provision to Central Government, State Government, High Commissions, local authorities and public sector companies engaged in the business of carrying passengers, amendment is being made in provisions of sub-section (IF) of section 206C of the Act to provide that provisions of this section will not apply in above cases.
Section 206AA of the Income-tax Act provides for deduction of tax at source at a higher rate in case payee is not having PAN. Similar provision is being made in regard to collection of tax at source u/s. 206C of the Act by inserting a new section 206CC. The aforesaid section provides that :-
(i) The person paying any sum on which tax is collectible u/s. 206C of the Act has to furnish PAN to the person selling the goods. In case PAN is not furnished, tax will be collected at the rate twice of the rate specified in above section or @ 5% whichever is higher.
(ii) As per provisions of section 206C(IA), tax is not required to be collected in respect of sale of certain goods in case a declaration is furnished to the effect that these goods shall be used for the purpose of manufacturing and not for trading purpose. It is being provided that such declaration shall be invalid unless PAN is given in the declaration. In case of invalid declaration tax will be collectible at the rate as mentioned above, considering the case as if PAN has not been furnished.
(iii) In terms of sub-section (9) of 206C a certificate can be obtained from the A.O. for collection of tax at source at the lower rate. It is being provided that such certificate shall not be issued unless PAN has been given in the application made for such certificate to the A.O.
(iv) It is also being provided that in case PAN submitted is invalid or does not belong to the collectee, it shall be deemed that collectee has not furnished the PAN and tax will be collected accordingly.
(v) It is also being clarified that provisions of this section shall not apply to a Non- Resident who is not having permanent establishment in India.
In certain circumstances the tax deductor is also entitled to claim refund of tax deducted and deposited with the Government. Section 244A of the Act which provides for grant of interest on refund allowable to an assessee has no provision in regard to grant of interest in case refund has become allowable to the tax deductor. It is being provided that interest will also be allowed on grant of refund to tax deductor pursuant to his claim or as per the appellate order.