Finance Acts

Amendment of section 13 In section 13 of the Income-tax Act, in sub-section (1), in clause (d), in the proviso, after clause (iii), the following clause shall be inserted with effect from the 1st day of October, 2024, namely:— “(iv) any asset referred to in sub-clauses (i), (ia) and (ii) of clause (b) of the third proviso to clause (23C) of section 10 or any accretion to the shares, forming part of the corpus mentioned in the said sub-clauses (i) and (ia) and voluntary contributions referred to in sub-clause (iv) of clause (b) of the said proviso.”.

Insertion of new section 12AC After section 12AB of the Income-tax Act, the following section shall be Inserted with effect from the 1st day of April, 2025, namely:— “12AC. Merger of charitable trusts or institutions in certain cases – Where any trust or institution registered under section 12AB or approved under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, as the case may be, merges with another trust or institution, the provisions of Chapter XII-EB shall not apply if— (a)   the other trust or institution has same or similar objects; (b)   the other trust or institution is registered under section 12AA or section 12AB or approved under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, as the case may be; and (c)   the said merger fulfils such conditions as may be prescribed.”.

Amendment of section 12AB In section 12AB of the Income-tax Act, for sub-section (3), the following sub-section shall be substituted with effect from the 1st day of October, 2024, namely:— “(3) The order under sub-section (1) shall be passed, in such form and manner as may be prescribed, within a period of,— (i)   three months calculated from the end of the month in which the application was received in case of clause (a); (ii)   six months calculated from the end of the quarter in which the application was received in case of sub-clause (ii) of clause (b); and (iii)   one month calculated from the end of the month in which the application was received in case of clause (c).”.

Amendment of section 12A In section 12A of the Income-tax Act, in sub-section (1), in clause (ac) with effect from the 1st day of October, 2024,— (a)   in sub-clause (ii),— (i)   after the words, figures and letters “under section 12AB”, the words, brackets, figures and letters “or approved under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10″ shall be inserted; (ii)   after the words “the period of the said registration”, the words “or approval, as the case may be,” shall be inserted; (b)   in sub-clause (iii),— (i)   after the words, figures and letters “under section 12AB”, the words, brackets, figures and letters “or provisionally approved under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10″ shall be inserted; (ii)   after the words “period of the provisional registration”, the words “or provisional approval, as the case may be,” shall be inserted; (c)   after sub-clause (vi), the following proviso shall be inserted, namely:—     “Provided that where the application is filed beyond the time allowed in sub-clauses (i) to (vi), the Principal Commissioner or Commissioner may, if he considers that there is a reasonable cause for delay in filing the application, condone such delay and such application shall be deemed to have been filed within time;”.

Amendment of section 11 In section 11 of the Income-tax Act, in sub-section (7), with effect from the 1st day of April, 2025,— (a)   for the words, brackets, figures and letters “other than clause (1), clause (23C), clause (23EC), clause (46) and clause (46A) thereof”, the words, brackets, figures and letters “other than clause (1), clause (23C), clause (23EA), clause (23EC), clause (23ED), clause (46), clause (46A) and clause (46B) thereof” shall be substituted; (b)   in the first proviso,— (i)   for the portion beginning with the words “is notified under” and ending with the word, brackets and figures “clause (46)”, the words, brackets, figures and letters “is notified under clause (23EA) or clause (23EC) or clause (23ED) or clause (46)” shall be substituted; (ii)   after the words “whichever is later”, the words, figures, letters and brackets “, or, the 1st day of April of the previous year relevant to the assessment year for which the exemption is claimed under clause (46B) of the said section” shall be inserted; (c)   in the second proviso,— (i)   after the words “notification under”, the words, brackets, figures and letters “clause (23EA) or” shall be inserted; (ii)   after the words, brackets, figures and letters “clause (23EC) or”, the words, brackets, figures and letters “clause (23ED) or” shall be inserted.

Amendment of section 10 In section 10 of the Income-tax Act,— (a)   with effect from the 1st day of April, 2025,— (i)   in clause (4D), in the Explanation, in clause (c), in sub-clause (i), item (I) shall be renumbered as item (I)(a) and after sub-item (a) as so renumbered, the following sub-item shall be inserted, namely:—     “(b) which has been granted a certificate as a retail scheme or an Exchange Traded Fund, and is regulated under the International Financial Services Centres Authority (Fund Management) Regulations, 2022, made under the International Financial Services Centres Authority Act, 2019 (50 of 2019) and satisfies such conditions, as may be prescribed;”; (ii)   after clause (15A), the following clause shall be inserted, namely:—     ‘(15B) any income of a foreign company from lease rentals, by whatever name called, of cruise ships, received from a specified company which operates such ship or ships in India, where such foreign company and the specified company are subsidiaries of the same holding company, and such income is received or accrues or arises in India for any relevant assessment year beginning on or before the 1st day of April, 2030.     Explanation.—For the purposes of this clause,— (a)   “specified company” means any company, other than a domestic company which operates cruise ships in India and opts to pay tax in accordance with the provisions of section 44BBC; (b)   “holding company”, in relation to a foreign company or a specified company, means a company of which such companies are subsidiary companies; (c)   “subsidiary company” or “subsidiary”, in relation to a holding company, means a company in which the holding company exercises or controls more than one-half of the total share capital either at its own or together with one or more of its subsidiary companies.’; (b)   in clause (23C), with effect from the 1st day of October, 2024,— (i)   in the first proviso, after the words “makes an application”, the words, figures and letters “before the 1st day of October, 2024,” shall be inserted; (ii)   in the second proviso, after the words “first proviso”, the words, figures and letters “before the 1st day of October, 2024,” shall be inserted; (iii)   after the twenty-third proviso, the following proviso shall be inserted, namely:—     “Provided also that no approval under the second proviso shall be granted in relation to any application made on or after the 1st day of October, 2024.”; (c)   with effect from the 1st day of April, 2025,— (i)   in clause (23EE), in the Explanation,— (A)   in clause (i), after the words, brackets and figures “the Securities Contracts (Regulation) Act, 1956 (42 of 1956)”, the following shall be inserted, namely:—     “or clause (n) of sub-regulation (1) of regulation 2 of the International Financial Services Centres Authority (Market Infrastructure Institutions) Regulations, 2021 made under the International Financial Services Centres Authority Act, 2019 (50 of 2019)”; (B)   in clause (ii), after the words, brackets and figures “the Securities Contracts (Regulation) Act, 1956 (42 of 1956)”, the following shall be inserted, namely:—     “or the International Financial Services Centres Authority (Market Infrastructure Institutions) Regulations, 2021 made under the International Financial Services Centres Authority Act, 2019 (50 of 2019)”; (ii)   in clause (23FB), in the Explanation, in clause (b), in sub-clause (A), in item (II),— (A)   in the opening portion, after the words “under the Alternative Investment Funds Regulations”, the words, brackets and figures “or as referred to in sub-regulation (2) of regulation 18 of the International Financial Services Centres Authority (Fund Management) Regulations, 2022 made under the International Financial Services Centres Authority Act, 2019 (50 of 2019),” shall be inserted; (B)   in sub-item (ii), the word “and” shall be omitted; (C)   in sub-item (iii), for the word “or”, the word “and” shall be substituted; (D)   after sub-item (iii), the following sub-item shall be inserted, namely:—     “(iv) any other condition as may be prescribed; or”; (d)   in clause (34A), the following proviso shall be inserted with effect from the 1st day of October, 2024, namely:—     “Provided that this clause shall not apply with respect to any buy back of shares by a company on or after the 1st day of October, 2024.”; (e)   in clause (50), for the portion beginning with the words “any income arising from” and ending with the words “under that Chapter.”, the following shall be substituted and shall be deemed to have been substituted with effect from the 1st day of August, 2024, namely:—     “any income arising from any— (i)   specified service provided on or after the date on which the provisions of Chapter VIII of the Finance Act, 2016 (28 of 2016) comes into force; or (ii)   e-commerce supply or services made or provided or facilitated on or after the 1st day of April, 2020 but before the 1st day of August, 2024,     and chargeable to equalisation levy under that Chapter.”.

Amendment of section 2 In section 2 of the Income-tax Act,— (a)   in clause (22), with effect from the 1st day of October, 2024,— (I)   after sub-clause (e) and before the long line, the following sub-clause shall be inserted, namely:—     “(f) any payment by a company on purchase of its own shares from a shareholder in accordance with the provisions of section 68 of the Companies Act, 2013 (18 of 2013);”; (II)   in the long line, clause (iv) shall be omitted; (b)   in clause (42A), with effect from the 23rd day of July, 2024,— (i)   in the opening portion, for the words “thirty-six months”, the words “twenty-four months” shall be substituted and shall be deemed to have been substituted; (ii)   in the first proviso,— (A)   the brackets and words “(other than a unit)” shall be omitted and shall be deemed to have been omitted; (B)   for the words “thirty-six months”, the words “twenty-four months” shall be substituted and shall be deemed to have been substituted; (iii)   in the second proviso, after the words “had been substituted”, the words, brackets, letters and figures “as it stood immediately prior to the commencement of the Finance (No. 2) Act, 2024” shall be inserted and shall be deemed to have been inserted; (iv)   the third proviso shall be omitted and shall be deemed to have been omitted.

Income-tax (1) Subject to the provisions of sub-sections (2) and (3), for the assessment year commencing on the 1st day of April, 2024, income-tax shall be charged at the rates specified in Part I of the First Schedule and such tax shall be increased by a surcharge, for the purposes of the Union, calculated in each case in the manner provided therein. (2) In the cases to which Paragraph A of Part I of the First Schedule applies, or in the cases where income is chargeable to tax under sub-section (1A) of section 115BAC of the Income-tax Act, 1961 (43 of 1961) (hereinafter referred to as the Income-tax Act) and, where the assessee has, in the previous year, any net agricultural income exceeding five thousand rupees, in addition to total income, and the total income exceeds two lakh fifty thousand rupees, then,— (a)   the net agricultural income shall be taken into account, in the manner provided in clause (b) (that is to say, as if the net agricultural income were comprised in the total income after the first two lakh fifty thousand rupees of the total income but without being liable to tax), only for the purpose of charging income-tax in respect of the total income; and (b)   the income-tax chargeable shall be computed as follows:— (i)   the total income and the net agricultural income shall be aggregated and the amount of income-tax shall be determined in respect of the aggregate income at the rates specified in the said Paragraph A or sub-section (1A) of section 115BAC, as if such aggregate income were the total income; (ii)   the net agricultural income shall be increased by a sum of two lakh fifty thousand rupees, and the amount of income-tax shall be determined in respect of the net agricultural income as so increased at the rates specified in the said Paragraph A or sub-section (1A) of section 115BAC, as if the net agricultural income as so increased were the total income; (iii)   the amount of income-tax determined in accordance with sub-clause (i) shall be reduced by the amount of income-tax determined in accordance with sub-clause (ii) and the sum so arrived at shall be the income-tax in respect of the total income: Provided that in the case of every individual, being a resident in India, who is of the age of sixty years or more but less than eighty years at any time during the previous year, referred to in item (II) of Paragraph A of Part I of the First Schedule, the provisions of this sub-section shall have effect as if for the words “two lakh fifty thousand rupees”, the words “three lakh rupees” had been substituted: Provided further that in the case of every individual, being a resident in India, who is of the age of eighty years or more at any time during the previous year, referred to in item (III) of Paragraph A of Part I of the First Schedule, the provisions of this sub-section shall have effect as if for the words “two lakh fifty thousand rupees”, the words “five lakh rupees” had been substituted: Provided also that in the cases where income is chargeable to tax under sub-section (1A) of section 115BAC of the Income-tax Act, the provisions of this sub-section shall have effect as if for the words “two lakh fifty thousand rupees”, the words “three lakh rupees” had been substituted. (3) In cases to which the provisions of Chapter XII or Chapter XII-A or section 115JB or section 115JC or Chapter XII-FA or Chapter XII-FB or sub-section (1A) of section 161 or section 164 or section 164A or section 167B of the Income-tax Act apply, the tax chargeable shall be determined as provided in that Chapter or that section, and with reference to the rates imposed by sub-section (1) or the rates as specified in that Chapter or section, as the case may be: Provided that the amount of income-tax computed in accordance with the provisions of section 111A or section 112 or section 112A of the Income-tax Act shall be increased by a surcharge, for the purposes of the Union, as provided in Paragraph A, B, C, D or E, as the case may be, of Part I of the First Schedule, except in case of a domestic company whose income is chargeable to tax under section 115BAA or section 115BAB of the Income-tax Act or in case of an individual or Hindu undivided family or association of persons, or body of individuals, whether incorporated or not, or an artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act whose income is chargeable to tax under sub-section (1A) of section 115BAC of the Income-tax Act, or in case of co-operative society resident in India, whose income is chargeable to tax under section 115BAD or under section 115BAE of the Income-tax Act: Provided further that in respect of any income chargeable to tax under sections 115A, 115AB, 115AC, 115ACA, 115AD, 115B, 115BA, 115BB, 115BBA, 115BBC, 115BBF, 115BBG, 115BBH, 115BBI, 115BBJ, 115E, 115JB or 115JC of the Income-tax Act, the amount of income-tax computed under this sub-section shall be increased by a surcharge, for the purposes of the Union, calculated,— (a)   in the case of every individual or Hindu undivided family or association of persons except in a case of an association of persons consisting of only companies as its members, or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, not having any income under section 115AD of the Income-tax Act, and not having any income chargeable to tax under sub-section (1A) of section 115BAC of the Income-tax Act,— (i)   having a total income exceeding fifty lakh rupees but not exceeding one crore rupees, at the rate of ten per cent of such income-tax; (ii)   having a total income exceeding one crore rupees, but

Short title and commencement (1) This Act may be called the Finance (No. 2) Act, 2024. (2) Save as otherwise provided in this Act,— (a)   sections 2 to 87 shall be deemed to have come into force on the 1st day of April, 2024; (b)   sections 114 to 157 shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.