THE Finance Bill has redefined the term 'liable to tax' under the I-T Act.

The Act currently does not define the term - 'liable to tax' though this term is used in section 6, in clause (23FE) of section 10 and various agreements entered into under section 90 or section 90A of the Act.

Hence, it is proposed to insert clause (29A) to section 2 of the Act providing its definition. The term - 'liable to tax' in relation to a person means that there is a liability of tax on that person under the law of any country and will include a case where subsequent to imposition of such tax liability, an exemption has been provided.

This amendment will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-22 and subsequent assessment years.