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Decoding tax fine-print, Finance Bill, 2021 – Clause by Clause Analysis February 16, 2021
Published in: Alerts
DISCLAIMER: The material contained in this publication is solely for information and general guidance and not for advertising or soliciting. The information provided does not constitute professional advice that may be required before acting on any matter. While every care has been taken in the preparation of this publication to ensure its accuracy, Vaish Associates Advocates neither assumes responsibility for any errors, which despite all precautions, may be found herein nor accepts any liability, and disclaims all responsibility, for any kind of loss or damage of any kind arising on account of anyone acting/ refraining to act by placing reliance upon the information contained in this publication.
The Hon’ble Finance Minister presented the Finance Bill 2021 in an unprecedented environment of economic slowdown. The Budget focused on measures to boost the economy and as promised by the Hon’ble Finance Minister, it is a “Budget Like Never Before”. However, as it is said, the ‘Devil lies in the details’. In the Finance Bill, several amendments have been proposed which are path breaking and may have far-reaching consequences. Continuing with the reform of Direct-tax administration of faceless assessment and appeals, we are also going to see a faceless Income-tax Appellate Tribunal. There could be a debate whether the same would be an efficacious justice delivery system. Other structural changes in the tax administration, for e.g., abandoning the Settlement Commission, constitution of a Dispute Resolution Committee and Board of Advance Ruling, have been proposed.
Significant amendments have also been proposed which overrule decisions of the Supreme Court, such as, the retroactive removal of allowance of depreciation on Goodwill, which by definition was considered as a profit earning apparatus and was held to be appreciable asset by the Supreme Court. Similarly, amendment relating to residency rule for non-resident whereby the definition of liable to tax has been introduced, overruling the interpretation given by the Supreme Court in Azadi Bachao Andolan. The Finance Bill also proposes to expand the scope of Equalisation Levy on the non-resident e-commerce supply of goods and provision of services.
These amendments required an in-depth Clause by Clause analysis of the proposals of Finance Bill 2021. Vaish Associates organised a Budget Webinar on 5th February, 2021 which was chaired by Mr. Ajay Vohra, Senior Advocate, the leading legal luminary and one of the most respected jurists, who lead the discussions.
Please find below our presentation analyzing threadbare, the proposals of Finance Bill 2021 and their likely impact.
