Amendments proposed in Finance (No. 2) Bill, 2019

LOK SABHA

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FINANCE (NO.2) BILL, 2019
[As introduced in Lok Sabha]
Notice of Amendments

S.No	Name of Member and text of Amendment	Clause No.
7	Page 6, for lines 47 to 49, substitute.- “(viii) income arising outside . India, being any sum of money referred to in sub-clause (xviia) of clause (24) of section 2, paid on or after the 5th day of July, 2019 by a person resident in India to a non-resident, not being a company, or to a foreign company.”	4
8	Page 7, after line 5, insert— ‘(IA) after clause (4C) as so inserted, the following shall be inserted with effect from 1st day of April, 2020, namely:— “(4D) any income accrued or arisen to, or received by a specified fund as a result of transfer of capital asset referred to in clause (viiab) of section 47, on a recognised stock exchange located in any International Financial Services Centre and where the consideration for such transaction is paid or payable in convertible foreign exchange, to the extent such income accrued or arisen to, or is received in respect of units held by a non-resident. Explanation.—For the purposes of this clause, the expression— (a) “convertible foreign exchange” means foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purposes of the Foreign Exchange Management Act, 1999 and the rules made thereunder; (b) “manager” shall have the meaning assigned to it in clause (q) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Alternative Investment Fund) Regulations, 2012, made under the Securities and Exchange Board of India Act, 1992; (c) “specified fund” means a fund established or incorporated in India in the form of a trust or a company or a limited liability partnership or a body corporate,— (i) which has been granted a certificate of registration as a Category III Alternative Investment Fund and is regulated under the Securities and Exchange Board of India (Alternative Investment Fund) Regulations, 2012, made under the Securities and Exchange Board of India Act, 1992; (ii) which is located in any International Financial Services Centre; (iii) of which all the units are held by non-residents other than units held by a sponsor or manager; (d) “sponsor” shall have the meaning assigned to it in clause (w) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Alternative Investment Fund) Regulations, 2012, made under the Securities and Exchange Board of India Act, 1992; (e) “trust” means a trust established under the Indian Trusts Act, 1882 or under any other law for the time being in force; (f) “unit” means beneficial interest of an investor in the fund and shall include shares or partnership interests;’.	6
8	Page 7, after line 5, insert— ‘(IA) after clause (4C) as so inserted, the following shall be inserted with effect from 1st day of April, 2020, namely:— “(4D) any income accrued or arisen to, or received by a specified fund as a result of transfer of capital asset referred to in clause (viiab) of section 47, on a recognised stock exchange located in any International Financial Services Centre and where the consideration for such transaction is paid or payable in convertible foreign exchange, to the extent such income accrued or arisen to, or is received in respect of units held by a non-resident. Explanation.—For the purposes of this clause, the expression— (a) “convertible foreign exchange” means foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purposes of the Foreign Exchange Management Act, 1999 and the rules made thereunder; (b) “manager” shall have the meaning assigned to it in clause (q) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Alternative Investment Fund) Regulations, 2012, made under the Securities and Exchange Board of India Act, 1992; (c) “specified fund” means a fund established or incorporated in India in the form of a trust or a company or a limited liability partnership or a body corporate,— (i) which has been granted a certificate of registration as a Category III Alternative Investment Fund and is regulated under the Securities and Exchange Board of India (Alternative Investment Fund) Regulations, 2012, made under the Securities and Exchange Board of India Act, 1992; (ii) which is located in any International Financial Services Centre; (iii) of which all the units are held by non-residents other than units held by a sponsor or manager; (d) “sponsor” shall have the meaning assigned to it in clause (w) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Alternative Investment Fund) Regulations, 2012, made under the Securities and Exchange Board of India Act, 1992; (e) “trust” means a trust established under the Indian Trusts Act, 1882 or under any other law for the time being in force; (f) “unit” means beneficial interest of an investor in the fund and shall include shares or partnership interests;’.	6
9	Page 7, after line 16, insert — ‘(IIA) in clause (23C), with effect from the 1st day of September, 2019,— (a) in the second proviso, for the words “and the prescribed authority”, the words “and the compliance of such requirements under any other law for the time being in force by such fund or trust or institution or any university or other educational institution or any hospital or other medical institution, as the case may be, as are material for the purpose of achieving its objects and the prescribed authority,” shall be substituted; (b) in the fifteenth proviso, for the portion beginning with “(ii) the activities of such fund” and ending with “was notified or approved,”, the following shall be substituted, namely: — “(ii) the activities of such fund or institution or trust or any university or other educational institution or any hospital or other medical institution— (A) are not genuine; or (B) are not being carried out in accordance with all or any of the conditions subject to which it was notified or approved; or (iii) such fund or institution or trust or any university or other educational institution or any hospital or other medical institution has not complied with the requirement of any other law for the time being in force, and the order, direction or decree, by whatever name called, holding that such non-compliance has occurred, has either not been disputed or has attained finality.”	6
10	Page 9, omit lines 13 and 14.	17
11	Page 9, omit lines 18 to 32.	17
12	Page 10, for lines 7 to 9, substitute— ‘consideration received for issue of share that exceeds the fair market value of such share shall be deemed to be the income of that company chargeable to income-tax for the previous year in which such failure has taken place and, it shall also be deemed that the company has under reported the said income in consequence of the misreporting referred to in sub-section (8) and sub-section (9) of section 270A for the said previous year.”;’.	21
13	Page 10, in line 13, for “Category II”, substitute “Category I or a Category II”.	21
14	Page 15, for line 36, substitute ‘International Financial Services Centre and where the consideration for such transaction is paid or payable in convertible foreign exchange:”;’.	37
15	Page 15, omit line 50.	37
16	Page 16, line 1, for “(c)”, substitute “(b)”.	4
17	Page 18, line 13, for “consideration for immovable property”, substitute “consideration for transfer of any immovable property”.	45
18	Page 18, for lines 19 to 24, substitute— “required to deduct income-tax as per the provisions of section 194C, section 194H or section 194J) responsible for paying any sum to, any resident for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract, by way of commission (not being insurance commission referred to in section 194D) or brokerage or by way of fees for professional services during the financial year, shall, at the time of credit of such sum or at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to five per cent. of such sum as income -tax thereon:”.	46

Team Edu-Visor

NEW DELHI;
July 18, 2019

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Ashadha 27, 1941 (Saka)