The parliament hurriedly approved Finance Bill 2020 as India is headed for a lockdown to fight the pandemic COVID-19, which has so far claimed about 17,000 deaths worldwide.
The government with this bill has relaxed controversial tax residence proposals and has also created room to raise the excise duty on petrol and diesel by as much as Rs 8 each, given the low oil price regime in the country.
The bill was passed without the customary discussion and duly returned by the Rajya Sabha. Lok Sabha Speaker Om Birla and Rajya Sabha Chairman M. Venkaiah Naidu met the other leaders before the Parliament session was adjourned.
The amendments moved by finance minister Nirmala Sitharaman included tax residence and clarifications related to dividend distribution tax (DDT) besides the taxation of petrol and diesel.
With this amendment, the government would raise special additional excise duty on both oil and diesel, when required. This move comes at a time when the government is looking to announce a financial package to fight the impact of the pandemic outbreak.
In the original bill, Sitharaman proposed to reduce the time for Indian citizens or persons of Indian origins required to qualify as an Indian tax resident, from 182 days to 120 days, however, with this amended bill, the lower 120-day rule will not be applicable, if the Indian-sourced income of such persons is less than Rs 15 lakh in the relevant financial year.