Exemptions Exemption Under Chapter III VisaVis Finance Bill, 2025

SUBSCRIBE FOR FULL CONTENT


The Tax Publishers Finance Bill, 2025--Exemptions Exemption Under Chapter III Vis-a-Vis Finance Bill, 2025 CA. Nisha Bhandari Section 10 of the Income Tax Act provides that certain income shall not be included while computing total income of the assessee. The Finance Bill, 2025 has proposed certain amendments in various clauses of section 10 and also inserted a new clause (12BA) therein. The present write-up aims at analysing all these amendments. 1. Various incentives to IFSC via different clauses of section 10 International Financial Services Centre (IFSC) is a jurisdiction that provides financial services to non-residents and residents, to the extent permissible under the current regulations, in any currency except Indian Rupee. In order to promote the development of world-class financial infrastructure in India, several tax concessions have been provided to units located in IFSC, under the Act, over the past few years. The Finance Bill, 2025 has proposed some more incentives in respect of IFSC -- (i) Sunset dates for commencement of operations of IFSC units for availing of tax concessions extended upto 2030 [Amendment in clauses (4D), (4F) and (4H) of section 10] Clauses (4D), (4F) and (4H) of section 10 provides exemption in respect of certain income arising in respect of IFSC units. The Finance Bill, 2025 has proposed to amend clauses (4D), (4F) and (4H) of section 10 so as to extend the sunset date for commencement of operations of IFSC units upto 31-3-2030. (a) Definition of investment division of offshore banking units amended [Clause (aa) of Explanation to section 10(4D) amended] The Finance Bill, 2025 has proposed to amend clause (aa) of Explanation to clause (4D) section so as to extend the date of commencement of operations specified therein from 31st March, 2025 to 31st March, 2030. Accordingly, now, 'investment division of offshore banking unit' means an investment division of a banking unit of a non-resident located in an International Financial Services Centre, as referred to in sub-section (1A) of section 80LA and which has commenced its operations on or before the 31st day of March, 2030. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Finance Bill, 2025--Exemptions

Exemption Under Chapter III Vis-a-Vis Finance Bill, 2025

CA. Nisha Bhandari

Section 10 of the Income Tax Act provides that certain income shall not be included while computing total income of the assessee. The Finance Bill, 2025 has proposed certain amendments in various clauses of section 10 and also inserted a new clause (12BA) therein. The present write-up aims at analysing all these amendments.

1. Various incentives to IFSC via different clauses of section 10

International Financial Services Centre (IFSC) is a jurisdiction that provides financial services to non-residents and residents, to the extent permissible under the current regulations, in any currency except Indian Rupee. In order to promote the development of world-class financial infrastructure in India, several tax concessions have been provided to units located in IFSC, under the Act, over the past few years.

The Finance Bill, 2025 has proposed some more incentives in respect of IFSC --

(i) Sunset dates for commencement of operations of IFSC units for availing of tax concessions extended upto 2030 [Amendment in clauses (4D), (4F) and (4H) of section 10]

Clauses (4D), (4F) and (4H) of section 10 provides exemption in respect of certain income arising in respect of IFSC units. The Finance Bill, 2025 has proposed to amend clauses (4D), (4F) and (4H) of section 10 so as to extend the sunset date for commencement of operations of IFSC units upto 31-3-2030.

(a) Definition of investment division of offshore banking units amended [Clause (aa) of Explanation to section 10(4D) amended]

The Finance Bill, 2025 has proposed to amend clause (aa) of Explanation to clause (4D) section so as to extend the date of commencement of operations specified therein from 31st March, 2025 to 31st March, 2030.

Accordingly, now, 'investment division of offshore banking unit' means an investment division of a banking unit of a non-resident located in an International Financial Services Centre, as referred to in sub-section (1A) of section 80LA and which has commenced its operations on or before the 31st day of March, 2030.