1. Amendment to Finance Bill, 2006

Notice of amendment in Finance Bill, 2006 (as passed by both the House of Parliament) is published.

[(151 Taxman (St.) 250) (201 CTR (St.) 225)]

2. Large Tax-Payer Units

Press note on large tax-payer units: Functions, structure and procedure has been released.

[Press Release (151 Taxman (St.) 236)]

3. Guidelines for Notification of Zero Coupon Bond – Rules 8B/8C

Rule 8B prescribes guidelines for Notification of zero coupon bond and its application shall be made in Form No. 5B.

Computation of discount u/s. 36(1)(iiia)

Rule 8C prescribes manner of computing the pro rata amount of discount on a zero coupon bond for the purpose of section 36(1)(iiia).

[Notification No. 93/2006 dated 30th March, 2006 (282 ITR (St.) 8) (152 Taxman (St.) 6) (201 CTR (St.) 259)]

4. Special Economic Zone (SEZ) to be ports

The Central Government has notified 15 special Economic Zones as deemed to be ports under section 7 of the Customs Act, 1962 with effect from 14th March, 2006.

[Notification No. S.O. 319(E) dated 14th March, 2006 (282 ITR (St.) 1)]

5. Special Economic Zone

It is notified that the provisions contained in Chapter XA of the Customs Act, 1962 and the Special Economic Zones Rules, 2003 and the Special Economic Zones (Customs Procedure) Regulations 2003 shall not apply to SEZ with effect from 14th March, 2006.

[Notification No. S.O. 320(E) dated 14th March, 2006 (282 ITR (St.) 2)]

6. Deduction under section 10A

The STP scheme notified vide Notification No. 4/(RE-95/92-97) dated 30th April, 1995 by the Ministry of Commerce, requires approval of the Software Technology Park by the Inter-Ministerial Standing Committee of the Department of Electronics. However, it has been noticed that a large number of units registered/approved only by the Directors of the Software Technology Park are claiming deduction u/s 10A.

Having examined the matter in consultation with the Department of Information & Technology, the Central Board of Direct Taxes has vide Instruction No. 1 /2006 dated
31-3-2006 has issued directions to the field authorities that the claim of deduction u/s 10A of the Income-tax Act, shall not be denied to STP units only on the ground that the approval/registration to such units has been granted by the Directors of Software Technology Parks. However, the deduction under section 10A shall be subject to fulfilment of all other conditions provided therein.

Further, in cases where assessments/reassessments have already been completed, and the claim u/s 10A has been disallowed only on the ground that the approval to the STP has not been granted by the Inter-Ministerial Standing Committee in accordance with the scheme, the demand so arising shall be kept in abeyance until further orders.

[PIB Press Release dated 31st March, 2006 (282 ITR (St.) 6) (201 CTR (St.) 248)]

[Instruction No. 1/2006 dated 31st March, 2006 (152 Taxman (St.) 68)]

7. Clarification on ‘the Produce of Animal Husbandry’ – Rule 6DD (f)(ii)

The CBDT has clarified that the expression ‘the produce of animal husbandry’ used in rule 6DD(f)(ii) would include "livestock and meat" and if a payment more than rupees 20,000 is made to a producer of the products of animal husbandry (including livestock, meat, hides and skins) otherwise than by a crossed cheque drawn on a bank or by a crossed bank draft for the purpose of such produce, no disallowance should be attracted under section 40A(3) read with rule 6DD.

It is further clarified that exception will not be available on the payment for the purchase of livestock, meat, hides and skins from a person who is not the producer of these goods and is only a trader, broker or any other middleman.

[Circular No. 4/2006 dated 29th March, 2006 (282 ITR (St) 5) (152 Taxman (St) 5) (201 CTR (St) 249)]

8. Investment of long-term capital gains in specified bonds – Section 54EC

It is, clarified that tax benefit u/s. 54EC shall not be available on long-term capital gains which are invested on or after 1st April, 2006 in the bonds of National Bank for Agriculture & Rural Development, National Housing Bank and Small Industries Development Bank of India.

It is further clarified that tax benefit under said section shall be available only on those long-term capital gains which are invested on or after 1st April, 2006 in the bonds of Rural Electrification Corporation Limited and National Highways Authority of India and which are notified.

[PIB Press Release, dated 30th March, 2006 (282 ITR (St.) 6) (201 CTR (St.) 247)]

9. FAQs on Form 26AS

FAQs on Form 26AS being a consolidated tax statement issued under Rule 31AB to PAN holders with respect to a financial year with the details of tax deducted at source, tax collected at source and advance tax/self assessment tax/regular assessment tax deposited in bank has been issued.

[Press Release (151 Taxman (St.) 244)]

10. Maintenance of particulars of Time Deposits – Rules 31AC and 31ACA

Newly inserted Rule 31AC provides that every branch of a banking company, which is required to make a quarterly return u/s. 206A(1) in respect of interest on time deposits without deduction of tax at source shall keep and maintain the particulars of time deposits in Form No. 26QA. If branch is maintaining its daily accounts in computer media, then the particulars shall be maintained in Form 26QA on computer readable media.

As per Rule 31ACA, the quarterly return of such time deposits in Form No. 26QAA shall be furnished on or before 31st July, 31st October, 31st January and 30th June following the respective quarter of the financial year. Part A and Part B of Form No. 26QAA shall be furnished on CD-Rom (650 MB or higher capacity) or DVD alongwith Part A of such form on paper.

Form Nos. 26QA and 26QAA are prescribed.

[Notification No. 71/2006 dated 17th March, 2006 (281 ITR (St.) 344) (151 Taxman (St.) 227) (201 CTR (St.) 229)]