THE TAXATION LAWS (SECOND AMENDMENT) ACT, 2016

(NO. 48 OF 2016)

[15th December, 2016.]

An Act further to amend the Income-tax Act, 1961 and the Finance Act, 2016.

BE it enacted by Parliament in the Sixty-seventh Year of the Republic of India as

follows:—

CHAPTER I

PRELIMINARY

1. (1) This Act may be called the Taxation Laws (Second Amendment) Act, 2016.

(2) Save as otherwise provided in this Act, it shall come into force at once.

CHAPTER II

INCOME-TAX

2. In the Income-tax Act, 1961 (hereinafter referred to as the Income-tax Act), in

section 115BBE, for sub-section (1), the following sub-section shall be substituted with

effect from the 1st day of April, 2017, namely:—

“(1) Where the total income of an assessee,—

(a) includes any income referred to in section 68, section 69, section 69A,

section 69B, section 69C or section 69D and reflected in the return of income

furnished under section 139; or

Short title and

commencement.

Amendment of

section 115BBE.

43 of 1961.

REGISTERED NO. DL—(N)04/0007/2003—16

jftLVªh lañ Mhñ ,yñ—(,u)04@0007@2003—16

vlk/kkj.k

EXTRAORDINARY

Hkkx II — [k.M 1

PART II — Section 1

izkf/kdkj ls izdkf'kr

PUBLISHED BY AUTHORITY

lañ 57]

ubZ fnYyh] c`gLifrokj] fnlEcj 15] 2016@vxzgk;.k 24] 1938 ¼'kd½

No. 57] NEW DELHI, THURSDAY, DECEMBER 15, 2016/AGRAHAYANA 24, 1938 (SAKA)

bl Hkkx esa fHkUu i`"B la[;k nh tkrh gS ftlls fd ;g vyx ladyu ds :i esa j[kk tk ldsA

Separate paging is given to this Part in order that it may be filed as a separate compilation.

MINISTRY OF LAW AND JUSTICE

(Legislative Department)

New Delhi, Thursday, 15th December, 2016/Agrahayana 24, 1938 (Saka)

The following Act of Parliament received the assent of the President on the

15th December, 2016, and is hereby published for general information:—

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

(b) determined by the Assessing Officer includes any income referred to

in section 68, section 69, section 69A, section 69B, section 69C or section 69D,

if such income is not covered under clause (a),

the income-tax payable shall be the aggregate of—

(i) the amount of income-tax calculated on the income referred to in

clause (a) and clause (b), at the rate of sixty per cent.; and

(ii) the amount of income-tax with which the assessee would have

been chargeable had his total income been reduced by the amount of

income referred to in clause (i).”.

3. In the Income-tax Act, in section 271AAB,—

(I) in sub-section (1), after the words, figures and letters “the 1st day of July,

2012”, the words, brackets and figures “but before the date on which the Taxation

Laws (Second Amendment) Bill, 2016 receives the assent of the President” shall be

inserted;

(II) after sub-section (1), the following sub-section shall be inserted, namely:—

“(1A) The Assessing Officer may, notwithstanding anything contained in

any other provisions of this Act, direct that, in a case where search has been

initiated under section 132 on or after the date on which the Taxation Laws

(Second Amendment) Bill, 2016 receives the assent of the President, the assessee

shall pay by way of penalty, in addition to tax, if any, payable by him,—

(a) a sum computed at the rate of thirty per cent. of the undisclosed

income of the specified previous year, if the assessee—

(i) in the course of the search, in a statement under

sub-section (4) of section 132, admits the undisclosed income and

specifies the manner in which such income has been derived;

(ii) substantiates the manner in which the undisclosed income

was derived; and

(iii) on or before the specified date—

(A) pays the tax, together with interest, if any, in respect

of the undisclosed income; and

(B) furnishes the return of income for the specified

previous year declaring such undisclosed income therein;

(b) a sum computed at the rate of sixty per cent. of the undisclosed

income of the specified previous year, if it is not covered under the

provisions of clause (a).”;

(III) in sub-section (2), after the words, brackets and figure “in sub-section

(1)”, the words, brackets, figure and letter “or sub-section (1A)” shall be inserted.

4. In the Income-tax Act, after section 271AAB, the following section shall be inserted

with effect from the 1st day of April, 2017, namely:—

“271AAC. (1) The Assessing Officer may, notwithstanding anything contained

in this Act other than the provisions of section 271AAB, direct that, in a case where

the income determined includes any income referred to in section 68, section 69,

section 69A, section 69B, section 69C or section 69D for any previous year, the

assessee shall pay by way of penalty, in addition to tax payable under section 115BBE,

a sum computed at the rate of ten per cent. of the tax payable under clause (i) of

sub-section (1) of section 115BBE:

Provided that no penalty shall be levied in respect of income referred to in

section 68, section 69, section 69A, section 69B, section 69C or section 69D to the

extent such income has been included by the assessee in the return of income

Insertion of

new section

271AAC.

Amendment

of section

271AAB.

Penalty in

respect of

certain income.

SEC. 1]

THE GAZETTE OF INDIA EXTRAORDINARY

furnished under section 139 and the tax in accordance with the provisions of clause

(i) of sub-section (1) of section 115BBE has been paid on or before the end of the

relevant previous year.

(2) No penalty under the provisions of section 270A shall be imposed upon the

assessee in respect of the income referred to in sub-section (1).

(3) The provisions of sections 274 and 275 shall, as far as may be, apply in

relation to the penalty referred to in this section.”.

CHAPTER III

FINANCE ACT

5. In the Finance Act, 2016,—

(a) in Chapter II, in section 2, in sub-section (9),—

(i) in the third proviso, the figures and letters "115BBE," shall be omitted;

(ii) after the sixth proviso, the following proviso shall be inserted,

namely:—

‘Provided also that in respect of any income chargeable to tax under

clause (i) of sub-section (1) of section 115BBE of the Income-tax Act, the

“advance tax” computed under the first proviso shall be increased by a surcharge,

for the purposes of the Union, calculated at the rate of twenty-five per cent. of

such advance tax.’;

(b) after Chapter IX, the following Chapter shall be inserted, namely:—

‘CHAPTER IXA

TAXATION AND INVESTMENT REGIME FOR PRADHAN MANTRI GARIB KALYAN YOJANA, 2016

199A. (1) This Scheme may be called the Taxation and Investment Regime for

Pradhan Mantri Garib Kalyan Yojana, 2016.

(2) It shall come into force on such date as the Central Government may, by

notification, in the Official Gazette, appoint.

199B. In this Scheme, unless the context otherwise requires,—

(a) "declarant" means a person making the declaration under sub-section (1)

of section 199C;

(b) "Income-tax Act" means the Income-tax Act, 1961;

this Chapter referred to as “the Deposit Scheme”) means a scheme notified by

the Central Government in consultation with the Reserve Bank of India in the

Official Gazette; and

(d) all other words and expressions used in this Scheme but not defined

and defined in the Income-tax Act shall have the meanings respectively assigned

to them in that Act.

199C. (1) Subject to the provisions of this Scheme, any person may make, on or

after the date of commencement of this Scheme but on or before a date to be notified

by the Central Government in the Official Gazette, a declaration in respect of any

income, in the form of cash or deposit in an account maintained by the person with a

specified entity, chargeable to tax under the Income-tax Act for any assessment year

commencing on or before the 1st day of April, 2017.

(2) No deduction in respect of any expenditure or allowance or set-off of any

loss shall be allowed against the income in respect of which a declaration under

sub-section (1) is made.

28 of 2016.

Amendment

of section 2.

Insertion

new

Chapter

IX A.

Short title and

commencement.

Definitions.

43 of 1961.

Declaration of

undisclosed

income.

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

Explanation.— For the purposes of this section, “specified entity” shall mean—

(i) the Reserve Bank of India;

(ii) any banking company or co-operative bank, to which the

Banking Regulation Act, 1949 applies (including any bank or banking institution

referred to in section 51 of that Act);

(iii) any Head Post Office or Sub-Post Office; and

(iv) any other entity as may be notified by the Central Government in the

Official Gazette in this behalf.

199D. (1) Notwithstanding anything contained in the Income-tax Act or in any

Finance Act, the undisclosed income declared under sub-section (1) of section 199C

within the time specified therein shall be chargeable to tax at the rate of thirty per cent.

of the undisclosed income.

(2) The amount of tax chargeable under sub-section (1) shall be increased by a

surcharge, for the purposes of the Union, to be called the Pradhan Mantri Garib

Kalyan Cess calculated at the rate of thirty-three per cent. of such tax so as to fulfil the

commitment of the Government for the welfare of the economically weaker sections

of the society.

199E. Notwithstanding anything contained in the Income-tax Act or in any

Finance Act, the person making a declaration under sub-section (1) of section 199C

shall, in addition to tax and surcharge charged under section 199D, be liable to pay

penalty at the rate of ten per cent. of the undisclosed income.

199F. (1) Notwithstanding anything contained in the Income-tax Act or in any

other law for the time being in force, the person making a declaration under

sub-section (1) of section 199C, shall deposit an amount which shall not be less than

twenty-five per cent. of the undisclosed income in the Pradhan Mantri Garib Kalyan

Deposit Scheme, 2016.

(2) The deposit shall bear no interest and the amount deposited shall be allowed

to be withdrawn after four years from the date of deposit and shall also fulfil such

other conditions as may be specified in the Pradhan Mantri Garib Kalyan Deposit

Scheme, 2016.

199G. A declaration under sub-section (1) of section 199C shall be made by a

person competent to verify the return of income under section 140 of the Income-tax

Act, to the Principal Commissioner or the Commissioner notified in the Official Gazette

for this purpose and shall be in such form and verified in such manner, as may be

prescribed.

199H. (1) The tax and surcharge payable under section 199D and penalty payable

under section 199E in respect of the undisclosed income, shall be paid before filing of

declaration under sub-section (1) of section 199C.

(2) The amount referred to in sub-section (1) of section 199F shall be deposited

before the filing of declaration under sub-section (1) of section 199C.

(3) The declaration under sub-section (1) of section 199C shall be accompanied

by the proof of deposit referred to in sub-section (1) of section 199F, payment of tax,

surcharge and penalty under section 199D and section 199E, respectively.

199-I. The amount of undisclosed income declared in accordance with

sub-section (1) of section 199C shall not be included in the total income of the declarant

for any assessment year under the Income-tax Act.

199J. A declarant under this Scheme shall not be entitled, in respect of undisclosed

income referred to in section 199C or any amount of tax and surcharge paid thereon,

to re-open any assessment or reassessment made under the Income-tax Act or the

Wealth-tax Act, 1957, or to claim any set-off or relief in any appeal, reference or other

proceeding in relation to any such assessment or reassessment.

Charge of tax

and surcharge.

Penalty.

Deposit of

undisclosed

income.

Manner of

declaration.

Time for

payment of

tax, penalty,

surcharge and

deposit.

Undisclosed

income

declared not to

be included in

total income.

Undisclosed

income

declared not to

affect finality

of completed

assessments.

10 of 1949.

27 of 1957.

SEC. 1]

THE GAZETTE OF INDIA EXTRAORDINARY

199K. Any amount of tax and surcharge paid under section 199D or penalty paid

under section 199E shall not be refundable.

199L. Nothwithstanding anything contained in any other law for the time being

in force, nothing contained in any declaration made under sub-section (1) of section

199C shall be admissible in evidence against the declarant for the purpose of any

proceeding under any Act other than the Acts mentioned in section 199-O.

199M. Notwithstanding anything contained in this Scheme, where a declaration

has been made by misrepresentation or suppression of facts or without payment of tax

and surcharge under section 199D or penalty under section 199E or without depositing

the amount in the Deposit Scheme as per the provisions of section 199F, such declaration

shall be void and shall be deemed never to have been made under this Scheme.

199N. The provisions of Chapter XV of the Income-tax Act relating to liability in

special cases and of section 119, section 138 and section 189 of that Act shall, so far as

may be, apply in relation to proceedings under this Scheme as they apply in relation to

proceedings under the Income-tax Act.

199-O. The provisions of this Scheme shall not apply—

(a) in relation to any person in respect of whom an order of detention has

been made under the Conservation of Foreign Exchange and Prevention of

Smuggling Activities Act, 1974:

Provided that—

(i) such order of detention, being an order to which the provisions

of section 9 or section 12A of the said Act do not apply, has not been

revoked on the report of the Advisory Board under section 8 of the said

Act or before the receipt of the report of the Advisory Board; or

(ii) such order of detention, being an order to which the provisions

of section 9 of the said Act apply, has not been revoked before the expiry

of the time for, or on the basis of, the review under sub-section (3) of

section 9, or on the report of the Advisory Board under section 8, read

with sub-section (2) of section 9, of the said Act; or

(iii) such order of detention, being an order to which the

provisions of section 12A of the said Act apply, has not been revoked

before the expiry of the time for, or on the basis of, the first review under

sub-section (3) of that section, or on the basis of the report of the Advisory

Board under section 8, read with sub-section (6) of section 12A, of the

said Act; or

(iv) such order of detention has not been set aside by a court of

competent jurisdiction;

(b) in relation to prosecution for any offence punishable under

Chapter IX or Chapter XVII of the Indian Penal Code, the Narcotic Drugs

and Psychotropic Substances Act, 1985, the Unlawful Activities (Prevention)

Act, 1967, the Prevention of Corruption Act, 1988, the Prohibition of Benami

Property Transactions Act, 1988 and the Prevention of Money-Laundering

Act, 2002;

Offences Relating to Transactions in Securities) Act, 1992;

(d) in relation to any undisclosed foreign income and asset which is

chargeable to tax under the Black Money (Undisclosed Foreign Income and

Assets) and Imposition of Tax Act, 2015.

Tax, etc., not

refundable.

Declaration not

admissible

evidence against

declarant.

Declaration by

misrepresentation

of facts to be

void.

Applicability

of certain

provisions of

Income-tax

Act.

Scheme not to

apply to certain

persons.

52 of 1974.

45 of 1860.

61 of 1985.

37 of 1967.

49 of 1988.

45 of 1988.

15 of 2003.

22 of 2015.

27 of 1992.

199P. For the removal of doubts, it is hereby declared that save as otherwise

expressely provided in sub-section (1) of section 199C, nothing contained in this

Scheme shall be construed as conferring any benefit, concession or immunity on any

person other than the person making the declaration under this Scheme.

199Q. (1) If any difficulty arises in giving effect to the provisions of this Scheme,

the Central Government may, by order, not inconsistent with the provisions of this

Scheme, remove the difficulty:

Provided that no such order shall be made after the expiry of a period of two

years from the date on which the provisions of this Scheme come into force.

(2) Every order made under this section shall be laid before each House of

Parliament.

199R. (1) The Board may, subject to the control of the Central Government, by

notification in the Official Gazette, make rules for carrying out the provisions of this

Scheme.

(2) Without prejudice to the generality of the foregoing power, such rules may

provide for all or any of the following matters, namely:—

(a) the form and manner of declaration and verification to be made under

section 199G; and

(b) any other matter which is to be, or may be, prescribed, or in respect of

which provision is to be made, by rules.

(3) Every rule made under this Scheme shall be laid, as soon as may be after it is

made before each House of Parliament while it is in session for a total period of thirty

days which may be comprised in one session or in two or more successive sessions

and if, before the expiry of the session immediately following the session or the

successive sessions aforesaid, both Houses agree in making any modification in the

rule or both Houses agree that the rule should not be made, the rule shall thereafter

have effect only in such modified form or be of no effect, as the case may be; so,

however, that any such modification or annulment shall be without prejudice to the

validity of anything previously done under that rule.'.

————

DR. G. NARAYANA RAJU,

Secretary to the Govt. of India.

Power to

remove

difficulties.

Power to make

rules.

PRINTED BY THE GENERAL MANAGER, GOVERNMENT OF INDIA PRESS, MINTO ROAD, NEW DELHI

AND PUBLISHED BY THE CONTROLLER OF PUBLICATIONS, DELHI—2016.

GMGIPMRND—3952GI(S3)—15-12-2016.

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II— SEC. 1]

Removal

doubts.

RAM

DAYAL

Digitally signed

by RAM DAYAL

Date: 2016.12.15

21:09:01 +05'30'