Finance Bill amendments: What the key changes mean for us
The finance ministry has moved 40 amendments to the Finance bill, changes that will had far-reaching changes. A look at what the key changes mean for people.india Updated: Apr 20, 2017 11:32 IST
The finance ministry moved on Tuesday as many as 40 amendments to the finance bill, in an unusual step. The amendments, over and above the proposed changes in the budget 2017, aim to implement far-reaching changes from cash transactions to tribunals.
A look at some of the key changes.
Amendment: Aadhaar mandatory for PAN and Income Tax Return
What it means: To ensure Aadhaar enrolment as the government expands the usage of the unique identification number. A failure to provide Aadhaar will result in the PAN becoming invalid. This rule is effective from July 1, and Aadhaar enrolment number in place of the unique identity card will also be acceptable.
Aadhaar might become the sole identity card in the future, finance minister Arun Jaitley said in Parliament on Wednesday, a move that could possibly replace PAN, voter and ration cards.
Amendment: The government removes the cap of 7.5% of average net profit of the last three years for companies making political donations.
What it means: As the government has curbed the limit on cash donation to political parties from unknown sources, it wants to open a new avenue for such funding. It is a welcome step towards more transparency, as donations are only possible through cheques, drafts and e-transafers. Allows higher corporate donations while curbing black money and unknown source of political donations.
Amendment: Limit on cash transactions at Rs 2 lakh
What it means: This cash transaction limit was part of the 40 amendments that the government moved to the finance bill. The amendment had to be introduced to lower the limit from the budget proposal of Rs 3 lakh. The cash transaction limit of Rs 3 lakh was in keeping with the recommendation of the Special Investigation Team on black money. But the reduction, explained finance ministry was to ensure less cash transactions in the economy.
Amendment: Competition Act 2002 and Companies Act 2013 amended.
What it means: Competition Appellate Tribunal merged with National Company Law Appellate Tribunal. This is part of rationalizing the number of tribunals. The government has merged several powerful administrative tribunals and assumed powers to appoint and remove their chiefs, triggering fears the unprecedented move will undermine the authority and independence of these quasi-judicial institutions.
Amendment: Airports Economic Regulatory Authority of India Act, 2008 and Telecom Regulatory Authority Act.
What it means: Airports Economic Regulatory Authority Appellate Tribunal will be merged with Telecom Disputes Settlement and Appellate Tribunal (under the TRAI Act, 1997). Critics have panned the move saying that this is incongruous as these tribunals were formed to regulate different sectors that have little in common.
Amendment: Employees Provident Funds and Miscellaneous Provisions Act, 1952 and the Industrial Disputes Act
What it means: EPF Appellate Tribunal will be merged with Industrial Tribunal. The EPF tribunal deals with pensions funds and its irregularities of employees while the industrial tribunal deals with larger issues of retrenchment. Experts claim that this merger could lead to dilution of expertise of the tribunal as well as confusion and backlog.
Amendment: Railways Act, 1989 and Railways Claims Tribunal Act.
What it means: Railways Rates Tribunal will be merged with Railway Claims Tribunal. This merger has the potential to achieve the stated purpose of rationalizing tribunals in India. For long, tribunalisation of sectors have failed to achieve its purpose as huge backlogs haunt the tribunals of India.
Amendment: Foreign Exchange Management Act, 1999 and Forfeiture of Property Act.
What it means: Appellate Tribunal for Foreign Exchange to be merged with Appellate Tribunal under the Smugglers and Foreign Exchange Manipulators Act. Experts say that this is part of the long proposed merger and is a welcome move. Both tribunals deal with FEMA and violations of other foreign exchange rules.