1. Finance Bill 2017: All you need to know about five amendments defeated by Opposition in Rajya Sabha

Finance Bill 2017: All you need to know about five amendments defeated by Opposition in Rajya Sabha

The Union Government faced a brief embarrassment in the Rajya Sabha on Wednesday when the Opposition parties united to defeat five amendments to the Finance Bill, 2017 proposed by the Modi government.

By: | New Delhi | Updated: March 30, 2017 12:39 PM
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The Union Government faced a brief embarrassment in the Rajya Sabha on Wednesday when the Opposition parties united to defeat five amendments to the Finance Bill, 2017 proposed by the Modi government.  Out of the five amendements, three were moved by Congress leader Digvijaya Singh and other two by CPI(M) leader Sitaram Yechury. However, the government won’t be embarrassed for long as the Bill would now be taken up in the Lok Sabha. Since the Finance Bill is a Money Bill, the Lok Sabha may or may not reconsider the amendments opposed in Rajya Sabha. Modi government enjoys a majority in the Lok Sabha with over 300 seats.

Here we take a look at the five amendments defeated by the Rajya Sabha:

Amendments opposed by Digvijay Singh and adopted by Rajya Sabha:

a. Two amendments related to Finance Bill clauses that give more power to the Income Tax officials

What Digvijay Singh said: The proposed amendment provided “unbridled” powers to the tax officials for search and seizure which may lead to harassment of taxpayers. He added, ‘Inspector Raj’  will come back with even a junior level income tax officers will get enormous powers.

What Finance Bill, 2017 says:

The Amendment to Section 132 of Income Tax Act gives the taxman power to not disclose to any individual or even an Appellate Tribunal the reason why he or she conducted the raid.

“Clause 50 of the Bill seeks to amend section 132 of the Income-tax Act relating to search and seizure. Sub-section (1) of the said section provides that where an income-tax authority mentioned therein, based on the information in his possession, has reason to believe of
circumstances specified therein, he may authorise an authority specified therein to carry out search and seizure.

“It is proposed to insert an Explanation after the fourth proviso to the said sub-section (1) so as to provide that the reason to believe recorded by the income-tax authority specified therein under the said sub-section shall not be disclosed to any person or any authority or the Appellate Tribunal. This amendment will take effect retrospectively from 1st , April, 1962, the date of commencement of the Income-tax Act, 1961.

“Sub-section (1A) of the said section provides that where an authority mentioned therein, based on the information in his possession, has reason to suspect of the circumstances specified therein, he may authorise an authority specified therein to carry out search and seizure.
It is proposed to insert an Explanation in the said subsection (1A) so as to declare that reason to suspect recorded by the income-tax authority specified therein under the provisions of the said sub-section shall not be disclosed to any person or any authority, or the Appellate Tribunal.”

This amendment will take effect retrospectively from 1st October, 1975.

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b. Finance Bill proposal to tighten rules that regulate charitable organisation run by companies

What Singh said: He alleged that this is a part of the Modi government’s campaign against NGOs.

What Finance Bill, 2017 Says:

“Clause 8 of the Bill seeks to amend section 11 of the Income-tax Act relating to income from property held for charitable or religious purposes. Sub-section (1) of the said section provides that voluntary contributions made by a trust to any other trust or institution,
except those made out of accumulated income, is considered as application of income for the purposes of its objects. It is proposed to insert a new Explanation 2 under the said sub-section so as to provide that in respect of any amount credited or paid, out of income referred to in clause (a) or clause (b) read with Explanation 1, being contributions with a specific direction that they shall form part of the corpus of the trust or institution shall not be treated as application of such contribution to charitable or religious purposes. This amendment will take effect from 1st April, 2018 and will, accordingly, apply to the assessment year 2018-2019 and subsequent years.”

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Sitram Yechury’s amendments: Clauses dealing with political funding

What Yechury said: Finance Bill lifting the restriction on money donated to political parties by big businessmen would lead the later to float fake companies for money laundering. This will also increase the play of money and affect democracy.

“We defeated govt bid to make corporate funding secret, lift ceiling on amounts they can give and impose motivated Inspector raid raj. Despite walkouts by TMC, BJD and AIADMK, Opposition in Rajya Sabha succeeded in defeating government in four amendments,” he Tweeted.

What Finance Bill says:

At present, a company may contribute up to 7.5% of the average of its net profits in the last three financial years, to political parties. For this, the company needs to disclose the amount it has contributed to political parties in its profit and loss account. This should also include the name of the political parties to which the company has contributed.

Finance Bill, 2017 proposes to remove the limit of 7.5% of net profit of the last three financial years which a company can contribute to political parties. It also seeks to do away with the need for the company to disclose the name of political parties to it has contributed.

The Finance Bill 2017 makes it compulsory for companies to make donations to political parties only through cheques, bank drafts, electronic means or any other scheme notified by the government.

The Bill also contains provisions to introduce electoral bonds to make contributions to political parties. Electoral bonds will be issued by notified banks, for an amount paid by or electronic means.

(With agency inputs)

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