DEVELOPMENTS - of a recent origin i.e. Mar 16 2018

https://taxguru.in/income-tax/key-amendments-finance-bill-2018-passed-lok-sabha.html

	Amendments as introduced by Finance Bill, 2018	Amendments as passed by Lok Sabha
1. Significant economic presence  shall constitute Business connection [Section 9(1)(i)]	– Section 9(1)(i) is amended to provide that ‘significant economic presence’ in India shall also constitute ‘business connection’. – Further, ‘significant economic presence’, shall mean – any transaction in respect of any goods, services or property carried out by a non-resident in India including provision of download of data or software in India if the aggregate of payments arising from such transaction or transactions during the previous year exceeds the amount as may be prescribed; or systematic and continuous soliciting of its business activities or engaging in interaction with such number of users as may be prescribed, in India through digital means. – Income attributable to such transactions or activities shall be deemed to accrue or arise in India. – The transactions or activities shall constitute significant economic presence in India, whether or not the non-resident has a residence or place of business in India or renders services in India. – Section 9(1)(i) is amended to provide that ‘significant economic presence’ in India shall also constitute ‘business connection’. – Further, ‘significant economic presence’, shall mean – any transaction in respect of any goods, services or property carried out by a non-resident in India including provision of download of data or software in India if the aggregate of payments arising from such transaction or transactions during the previous year exceeds the amount as may be prescribed; or systematic and continuous soliciting of its business activities or engaging in interaction with such number of users as may be prescribed, in India through digital means. – Income attributable to such transactions or activities shall be deemed to accrue or arise in India. – The transactions or activities shall constitute significant economic presence in India, whether or not the non-resident has a residence or place of business in India or renders services in India. – The scope of ‘significant economic presence’ in India is expanded – The transactions or activities shall constitute significant economic presence in India, whether or not: the agreement for such transactions or activities is entered into in India, or the non-resident has a residence or place of business in India, or the non-resident renders services in India – In cases where the inventory is converted into, or treated as, capital asset: any profit or gains arising from conversion of inventory into capital asset or its treatment as capital asset shall be charged to tax as business income. fair market value of the inventory on the date of conversion or treatment, shall be deemed to be the full value of the consideration; fair market value on the date of conversion shall be the cost of acquisition; period of holding of such capital asset shall be reckoned from the date of conversion or treatment. – A new ‘Explanation 1A’is inserted to Section 43, to provide that the fair market value of the inventory as on the date of conversion shall be deemed to be the actual cost of capital asset – Capital gain arising from the transfer of a long-term capital asset, only being land or building or both, invested in the long-term specified asset at any time within a period of six months after the date of such transfer, shall not be charged to tax subject to certain conditions specified in the said section – Long-term specified asset, for making any investment: on or after 1 April 2007 and before 1 April 2018: shall mean any bond, issued and redeemable after three years; on or after 1 April 2018: shall mean any bond, issued and redeemable after five years by National Highways Authority of India or by Rural Electrification Corporation Limited or any other bond notified by the Central Government >>>> See DOCUMENT – A new proviso is inserted in section 54EC(2) which provides that the exemption shall be withdrawn if bonds issued on or after 1 April 2018 are transferred or redeemed within 5 years	– The scope of ‘significant economic presence’ in India is expanded – The transactions or activities shall constitute significant economic presence in India, whether or not: the agreement for such transactions or activities is entered into in India, or the non-resident has a residence or place of business in India, or the non-resident renders services in India