Retrospective amendments by finance bill

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Akhil Gupta (Querist)
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10 May 2012 Does anyone explain the effects of following amendments:

LIST OF RETROSPECTIVE AMENDMENTS BY FINANCE BILL, 2012 AS PASSED BY LOK SABHA

Amendment in section
Descripttion of the amendment
Effective date of amendment

Income-tax Act, 1961

2(14)
Insertion of Explanation in the definition of the 'Capital asset'
01-Apr-62

2(16)
Inclusion of 'Director' in the definition of 'Commissioner'
01-Apr-88

2(47)
Insertion of Explanation in the definition of the 'Transfer'
01-Apr-62

9(1)(i)
Insertion of Explanations in the provisions for 'Income deemed to accrue or arise in India'
01-Apr-62

9(1)(vi)
Insertion of Explanations in the provisions for taxability of royalty income
01-Jun-76

10(23C)
Insertion of a proviso to make applicable the provisions of sec. 2(15)
01-Apr-09

13(8)
New insertion to restrict benefit of secs. 11 & 12 if provisions of sec. 2(15) are attracted
01-Apr-09

35AD(6A)
Allowability of deduction even if operation of the hotel business is transferred to another person while continuing to own the hotel
01-Apr-11

44AD(6)
Exclusion of certain persons from the applicability of the presumptive taxation scheme
01-Apr-11

49(1)(iii)(e)
Additions in the list for determination of cost with reference to certain modes of acquisition
01-Apr-99

56(2)(vii),Explanation (e)
Insertion of HUF in the meaning of 'relative'
01-Oct-09

90, Explanation 3
Determination of meaning with reference to the notification
01-Oct-09

90A -Explanation 3
Determination of meaning used in treaty with reference to the notification
01-Jun-06

92B -Explanation
Explanation inserted to clarify meaning of 'International Transaction' & 'Intangible Property'
01-Apr-02

92C(2)
Insertion of explanation for applicability of threshold limit of 3%
01-Oct-09

92C(2A)
The option to take the benefit of first proviso of section 92C(2) (as stood before amendment by Finance Act, 2009) is not available if price at which international transaction took place exceeds 5%
01-Apr-02

92CA(2B)
If report under sec. 92E is not furnished in respect of international transaction, such transaction shall be automatically referred to TPO
01-Jun-02

111A(1)
Tax rates for taxability of short term capital gain from transfer of shares, on which STT has been paid, increased from '10%' to '15%'
01-Apr-09

115JB(5A)
New insertion: Exemption from MAT to companies engaged in life insurance business
01-Apr-01

143(3), IIIrd Proviso
Insertion of a proviso to make applicable the provisions of sec. 2(15)
01-Apr-09

144C(4)
In case of reference to DRP, the assessment shall be completed within the specified period and the period specified for assessment in case of search shall have an overriding effect
01-Oct-09

144C(8),Explanation
Authorisation of DRP to increase the assessment
01-Apr-09

144C(13)
Amended to give the reference of sec. 153B
01-Oct-09

195(1),Explanations 1 & 2
The provisions of this section shall be applicable to a non-resident also
01-Apr-62

201(3)(ii)
The specified period for deeming the payer as assessee in default is increased from 4 years to 6 years
01-Apr-10

234D,Explanation1,2
Change in the provision for interest on excess refund
01-Jun-03

246A(1)(ba)
Change in the provision of 'appealable orders, before CIT(A)
01-Oct-09

253(1)(d)
Change in the provisions for 'appeal to the Appellate Tribunal'
01-Oct-09

292CC
New insertion - New provisions for 'Authorisation and assessment in case of search or requisition.'
01-Apr-76

Wealth-tax Act, 1957

45(k)
New insertion : Exemption to RBI from payment of wealth tax
01-Apr-57

Thanks & Best Regards,

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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10 May 2012 Nice work.

You should upload this information in the files section so that it can be more useful.

Akhil Gupta

Akhil Gupta (Querist)
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10 May 2012 @ Siddartha Bhardwaj Ji,

My query is that the list given of retrospective amendments as proposed in the union budget now get full acceptance, and I am working in real estate company and concerned the impact of these changes, what would be there composite impact on our working?

Akhil Gupta

Akhil Gupta (Querist)
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10 May 2012 Please reply

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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21 July 2025 Sure! Here’s a concise explanation of the impact of retrospective amendments by Finance Bill 2012 on your real estate business, along with general points to keep in mind:

What are Retrospective Amendments?
Retrospective amendments are changes made to tax laws with effect from an earlier date (sometimes several decades back), not from the date of enactment.

They can affect transactions or assessments done in past years and may change tax liabilities, exemptions, or interpretations retroactively.

Key Points for Real Estate Business Impact:
Capital Asset Definition (Section 2(14)):

Explanation inserted retrospectively (from 1962) can change what is considered a capital asset.

For real estate, this might affect treatment of land/building transactions as capital gains.

Transfer Definition (Section 2(47)):

Broader interpretation of what constitutes a “transfer” of assets.

Real estate sales or any change in rights/interests might attract capital gains tax differently.

Income Deemed to Accrue or Arise in India (Section 9(1)(i)):

Taxability on income from assets or transactions related to India is clarified retrospectively.

May impact income from overseas real estate if linked to India.

Cost of Acquisition (Section 49(1)(iii)(e)):

Clarifies cost calculation for assets acquired through certain modes.

Important for calculating capital gains on inherited or transferred property.

Exemptions/Restrictions on Charitable Trusts (Sections 10(23C), 13(8)):

Likely less relevant for pure real estate business unless charitable trust involved.

Tax Rates Changes (Section 111A):

Increase in tax rates on short-term capital gains from shares, less relevant for real estate directly but good to note for any equity investments.

International Transaction and Transfer Pricing (Sections 92B, 92C, 92CA):

May affect real estate companies engaged in cross-border transactions or having international related-party dealings.

Composite Impact on Real Estate Company:
Increased Compliance: Due to retrospective amendments, companies must revisit past transactions and ensure correct tax treatment.

Higher Tax Liability Risk: Tax authorities may reassess past years, leading to demands for additional tax, interest, and penalties.

Need for Reconciliation: Property transfers, capital gains computations, and cost bases need detailed review to avoid disputes.

Legal & Financial Planning: Strongly recommend consulting tax experts to plan for potential past liabilities and to optimize current transactions.

What You Should Do:
Review past transactions, especially involving property transfers or capital asset acquisitions.

Ensure tax returns and disclosures are in line with new explanations/amendments.

Maintain thorough documentation of purchase cost, transaction details, and agreements.

If needed, consider seeking advance rulings or legal opinions to reduce ambiguity.

Stay updated on any further clarifications or amendments by the government or judiciary.

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