Lok Sabha Question No. 3149 (UNSTARRED), answered on 2023-03-20
Subject: Proposals for Tax Benefits
Ministry: FINANCE
Asked by: Kotha Prabhakar  Reddy

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

## LOK SABHA UNSTARRED  QUESTION NO. 3149

TO BE ANSWERED ON MONDAY 20 TH  MARCH, 2023 PHALGUNA 29, 1944 (SAKA)

## PROPOSALS FOR TAX BENEFITS

## 3149. SHRI KOTHA PRABHAKAR REDDY:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Government proposes to extend the period of tax benefits to funds relating to IFSC,GIFT City till 31.03.2025 and if so, the details and the present status thereof;
- (b) whether the Government proposes to decriminalise section 267A of the Income Tax Act and if so, the details and the present status thereof;
- (c) whether  the  Government  proposes  to  allow  carry  forwarding  of  losses  on  strategic disinvestment  including  that  of  IDBI  Bank  and  if  so,  the  details  and  the  present  status thereof; and;
- (d) whether the Government proposes to provide EEE status to Agniveer Fund and if so, the details and the present status thereof?

## ANSWER

## THE MINISTER OF STATE IN MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

- (a) Yes, Sir. It is proposed vide the Finance Bill, 2023 to amend clause (b) of Explanation to clause  (viiad)  of  section  47  of  the  Income-tax  Act,  1961  (the  Act)  to  extend  the  last  date  for transfer  of  assets  of  the  original  fund,  or  of  its  wholly  owned  special  purpose  vehicle,  to  a resultant fund in case of relocation from 31.03.2023 to 31.03.2025.
- (b) Section 267A does not exist in the Act. However, an amendment to decriminalise section 276A of the Act has been proposed in the Finance Bill, 2023. Section 276A of the Act makes provisions  for  initiating  prosecution  proceedings  in  case  of  contravention  or  failure  to  fulfil obligations with respect to companies under liquidation as per the provisions of section 178 of the Act. Finance Bill, 2023 proposes to decriminalise this section, in line with the policy of the Government to improve ease of doing business.

(c) The provisions relating to carry forward and set off of accumulated loss and unabsorbed depreciation  allowance  in  scheme  of  amalgamation  in  certain  cases  including  amalgamation involving  banking  companies  are  provided  under  section  72AA  of  the  Act.  The  Finance  Bill, 2023  proposes  to  amend  section  72AA  to  broaden  the  scope  of  this  section  to  include  cases where there has been amalgamation of one or more banking company with--

- i. any other banking institution under a scheme sanctioned and brought into force by the Central Government under sub-section (7) of section 45 of the Banking Regulation Act, 1949; or
- ii. any  other  banking  institution  or  a  company  subsequent  to  a  strategic  disinvestment, wherein the amalgamation is carried out within a period of five years from the end of the previous year during which such strategic disinvestment is carried out.

The  Finance  Bill,  2023  has  also  proposed  that  'strategic  disinvestment'  under  section  72AA shall have the meaning assigned to it in clause (iii) of the Explanation to clause (d) of sub-section (1) of section 72A, which is proposed to be amended to mean the following:-

'strategic  disinvestment'  means  sale  of  shareholding  by  the  Central  Government  or  any State Government or a public sector company, in a public sector company or in a company, which results in--

- i. reduction of its shareholding to below fifty-one per cent.; and
2. ii.

transfer of control to the buyer: It  is  provided that  the  condition  of  reduction  of  shareholding  to  below  fifty-one  per cent. shall apply only in a case where shareholding of the Central Government or the State  Government  or  the  public  sector  company  was  above  fifty-one  per  cent  before such sale of shareholding: It  is  further  proposed  that  the  requirement  of  transfer  of  control  to  the  buyer  may  be carried  out  by  the  Central  Government  or  the  State  Government  or  the  public  sector company or any two of them or all of them.

(d) Yes,  Sir.  The  Finance  Bill,  2023  proposes  to  provide  EEE  status  to  Agniveer  Corpus Fund.  The  payment  received  from  the  Agniveer  Corpus  Fund  by  the  Agniveers  enrolled  in Agnipath  Scheme,  2022  is  proposed  to  be  exempt  from  income  tax.  Deduction  in  the computation of total income is proposed to be allowed to the Agniveer on the contribution made by  him  or  the  Central  Government  to  his  Seva  Nidhi  account.  The  Finance  Bill,  2023  was introduced on 1st February, 2023 in Lok Sabha for consideration and passage.

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