Finance Acts

Amendment of section 206C In section 206C of the Income-tax Act,— (a)   for sub-section (1F), the following sub-section shall be substituted with effect from the 1st day of January, 2025, namely:—     “(1F) Every person, being a seller, who receives any amount as consideration for sale of— (i)   a motor vehicle; or (ii)   any other goods, as may be specified by the Central Government by notification in the Official Gazette,     of the value exceeding ten lakh rupees, shall, at the time of receipt of such amount, collect from the buyer, a sum equal to one per cent of the sale consideration as income-tax.”; (b)   in sub-section (3B), the following proviso shall be inserted with effect from the 1st day of April, 2025, namely:—     “Provided that no correction statement shall be delivered after the expiry of six years from the end of the financial year in which the statement referred to in the proviso to sub-section (3) is required to be delivered.”; (c)   in sub-section (4), after the words “such person”, the words “or any other person eligible for credit” shall be inserted with effect from the 1st day of January, 2025; (d)   with effect from the 1st day of April, 2025,— (i)   in sub-section (7), for the words “interest at the rate of one per cent per month or part thereof on the amount of such tax from the date on which such tax was collectible to the date on which the tax was actually paid and such interest shall be paid”, the following shall be substituted, namely:—     “interest— (a)   at the rate of one per cent for every month or part thereof on the amount of such tax from the date on which such tax was collectible to the date on which such tax is collected; and (b)   at the rate of one and one-half per cent for every month or part thereof on the amount of such tax from the date on which such tax was collected to the date on which such tax is actually paid,     and such interest shall be paid”; (ii)   after sub-section (7), the following sub-section shall be inserted, namely:—     “(7A) No order shall be made under sub-section (6A) deeming a person to be an assessee in default for failure to collect the whole or any part of the tax from any person, at any time after the expiry of six years from the end of the financial year in which tax was collectible or two years from the end of the financial year in which the correction statement is delivered under sub-section (3B), whichever is later.”; (e)   with effect from the 1st day of October, 2024,— (i)   in sub-section (9), for the words, brackets, figures and letter “sub-section (1) or sub-section (1C)” at both the places where they occur, the words, brackets, figures and letters “sub-section (1), sub-section (1C) or sub-section (1H)” shall be substituted; (ii)   after sub-section (11), the following sub-section shall be inserted, namely:—     “(12) Notwithstanding anything contained in this section, no collection of tax shall be made or collection of tax shall be made at such lower rate in respect of specified transaction, from such person or class of persons, including institution, association or body or class of institutions, associations or bodies, as the Central Government may, by notification in the Official Gazette specify in this behalf.”.

Amendment of section 201 In section 201 of the Income-tax Act, in sub-section (3), with effect from the 1st day of April, 2025,— (i)   for the words “a person resident in India, at any time after the expiry of seven years”, the words “any person, at any time after the expiry of six years” shall be substituted; (ii)   for the words “under the proviso”, the words “under the first proviso” shall be substituted.

Amendment of section 200 In section 200 of the Income-tax Act, in sub-section (3), after the proviso, the following proviso shall be inserted with effect from the 1st day of April, 2025, namely:— “Provided further that no correction statement shall be delivered after the expiry of six years from the end of the financial year in which the statement referred to in sub-section (3) is required to be delivered.”.

Amendment of section 198 In section 198 of the Income-tax Act, after the words “this Chapter”, the words “and income-tax paid outside India, by way of deduction, in respect of which an assessee is allowed a credit against the tax payable under this Act,” shall be inserted with effect from the 1st day of April, 2025.

Amendment of section 197  In section 197 of the Income-tax Act, in sub-section (1), for the figures and letter “194-O”, the figures and letters “194-O, 194Q” shall be substituted with effect from the 1st day of October, 2024.

Amendment of section 196C In section 196C of the Income-tax Act, for the words “at the rate of ten per cent”, the following shall be substituted and shall be deemed to have been substituted with effect from the 23rd day of July, 2024, namely:— “at the rate of— (a)   ten per cent in respect of income by way of interest or dividends in respect of bonds or Global Depository Receipts referred to in section 115AC; (b)   ten per cent in respect of long-term capital gains arising from transfer of such bond or Global Depository Receipts referred to in section 115AC which takes place before the 23rd day of July, 2024; (c)   twelve and one-half per cent in respect of long-term capital gains arising from transfer of such bond or Global Depository Receipts referred to in section 115AC which takes place on or after the 23rd day of July, 2024.”

Amendment of section 196B In section 196B of the Income-tax Act, for the words “at the rate of ten per cent”, the following shall be substituted and shall be deemed to have been substituted with effect from the 23rd day of July, 2024, namely:— “at the rate of— (a)   ten per cent in respect of income from units referred to in clause (i) of sub-section (1) of section 115AB; (b)   ten per cent in respect of long-term capital gains arising from transfer of units referred to in section 115AB, which takes place before the 23rd day of July, 2024; (c)   twelve and one-half per cent in respect of long-term capital gains arising from transfer of units referred to in section 115AB, which takes place on or after the 23rd day of July, 2024.”.

Insertion of new section 194T After section 194S of the Income-tax Act, the following section shall be inserted with effect from the 1st day of April, 2025, namely:— “194T. Payments to partners of firms.— (1) Any person, being a firm, responsible for paying any sum in the nature of salary, remuneration, commission, bonus or interest to a partner of the firm, shall, at the time of credit of such sum to the account of the partner (including the capital account) or at the time of payment thereof, whichever is earlier shall, deduct income-tax thereon at the rate of ten per cent. (2) No deduction shall be made under sub-section (1) where such sum or the aggregate of such sums credited or paid or likely to be credited or paid to the partner of the firm does not exceed twenty thousand rupees during the financial year.”.

Amendment of section 194-O In section 194-O of the Income-tax Act, in sub-section (1), for the words “one per cent”, the figures and word “0.1 per cent” shall be substituted with effect from the 1st day of October, 2024.

Amendment of section 194M In section 194M of the Income-tax Act, in sub-section (1), for the words “five per cent”, the words “two per cent” shall be substituted with effect from the 1st day of October, 2024.