Page 23 - Budget_2020

Union Budget 2020
Special Regime
Widening the Scope of Commodity Transaction Tax (CTT)

To widen the base of CTT and charge as follows:
Particulars CTT Rate
Sale of a commodity derivative based on prices or indices of prices of commodity 0.01%
derivatives
Sale of an option in goods, where option is exercised resulting in actual delivery of goods 0.0001%
Sale of an option in goods, where option is exercised resulting in a settlement otherwise 0.125%
than by the actual delivery of goods

1st April 2020

Eligibility for Member of Adjudicating Authority under the Prohibition of Benami Property Transaction Act, 1988

To provide that a person qualified for appointment as District Judge shall be eligible for appointment as a
Member of the Adjudicating Authority

1st April 2020

Modification in Conditions for Offshore Funds for Exemption from “Business Connection”

Sec 9A provides for special regime for offshore funds providing tax exemptions subject to specified conditions

The following amendments are proposed with regard to conditions relating to eligibility of the fund: -
 For the purpose of calculation of the aggregate participation or investment in the offshore fund, directly
or indirectly, by Indian resident, contribution of the eligible fund manager during first 3 years up to Rs.
25 crores shall not be accounted for
 If the fund has been established or incorporated in the previous year, the condition of monthly average
of the corpus of the fund to be at Rs. 100 crores, shall be fulfilled within 12 months from the last day of
the month of its establishment or incorporation.
AY 2020-21 and subsequent AYs

Fund Corpus Rs. 1,000 crores and contribution of the eligible fund manager to the corpus Rs. 55 crores
Particulars Eligibility

5% of Corpus (5% of Rs. Pre- • 55 crores - Exceeds 5% of corpus – Ineligible for
1,000 crores) – 50 crores Amendment Sec 9A
Contribution from Fund Post- • First 25 crores shall not be accounted for
Manager – 55 crores Amendment • Hence, Rs. 30 crores (Rs. 55 crores – Rs. 20 crores)
does not exceed 5% of corpus i.e. Rs. 50 crores –
Eligible u/s 9A

The proposed amendment aims at eliminating the difficulties faced by resident fund managers by liberalizing
the scope of threshold – since investors get comfort when the manager makes significant contributions to the
fund in the initial years. We need to understand that India is still a net importer of financial services, with a
trade deficit of -USD 373 million as of 2017-18. The financial service exports have averaged about USD 5.2
billion in recent years, while their share in total services exports has declined from 5.2% in 2010-11 to 2.6% in
2017-18.

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