India: Amendments to Finance Bill, 2021

India: Amendments to Finance Bill, 2021

The Lok Sabha on 23 March 2021 passed the Finance Bill, 2021 with certain amendments including changes that would relate to the definition of “liable to tax,” would concern transfers between a firm and its partners, would expand the scope of exemptions (under Section 10), would exclude self-generated goodwill from the net worth of undertakings transferred as a slump sale, and would affect the statute of limitations on assessment.


Among the measures are amendments concerning the following:

  • An “equalisation levy” to include certain consideration received from e-commerce supplies or services
  • A revised definition of “liable to tax” to mean that there is a liability to tax on a person under any country including when exemptions are granted after the imposition of the tax
  • Exemptions related to institutions engaged in infrastructure and developmental financing
  • Goodwill on blocks of acquired intangible assets to be reduced
  • Expanded scope of capital assets distributed on dissolution
  • Fair market value of a transferred undertaking to be determined to be full value of consideration in a “slump sale”
  • Minimum alternative tax relief with regard to a secondary adjustment or on account of an advance pricing agreement
  • Interest accrued on the contribution by an employee to a provident fund to be taxable
  • Unit linked insurance plans (ULIPs) with “high premiums” to be taxable as capital gains
  • “Hindu undivided family” (HUF) not eligible for presumptive tax regime
  • Extension of tax exemption for capital gains arising to non-resident on the transfer or shares of an Indian company acquired from an offshore fund
  • Expanded scope of “global depository receipts” to include those included in an international financial services centre
  • Exempt royalty income from certain aircraft leases
  • A new regime for re-assessment, and an extended limitations period

Read a March 2021 report [PDF 354 KB] prepared by the KPMG member firm in India

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