tax authorities

In March 2008, Central Board of Direct Taxes (CBDT) inserted Rule 8D in the income tax rules laying down the formula for the disallowance of expenses incurred in relation to exempt income. With the recent pressures to boost tax collections, the rule has created an endless bout of litigation as authorities are taking aggressive tax positions resulting [...] Full Article

Tax deducted at source (TDS) credit can now be availed by persons other than the deductees. This has been clearly articulated by the Central Board of Direct Taxes (CBDT) in a new rule on TDS credit availment. Bringing relief and certainty to taxpayers, the CBDT has also spelt out the situations and the procedure through [...] Full Article

Giving relief to companies engaged in leasing and financing business, the Income Tax Appellate Tribunal has ruled that they are not required to pay interest tax, applicable to other credit institutions. Since substantial earnings is made from such (lease financing) activity after employing substantial funds...the assessee would be outside the scope of charging provisions contained in the Act (Interest Tax Act). Full Article

Trade Cir. No. 5 T of 2008 A Trade Circular No. 1T of 2008 dt. 25.1.2008 had been issued explaining the procedure for issuance of statutory forms under the Central Sales Tax Act, 1956. In that circular, a procedure had been set down for the use of applicants of declaration forms under the Central Sales Tax Act. As per that circular, the dealers were required to show proof of filing of returns and payments from 1.4.2005 onwards till the last return/payment due from them o.. Full Article

According to income tax officials, Section 55(2) of the I-T Act estimates the cost of right to carry on any business as nil. However, non-compete compensation received by a person carrying on a reputed business is not explicitly covered in the clause right to carry on any business and is claimed as capital receipt. The department has favoured an amendment to Section 28 of the I-T Act to exclude such compensation from the list of capital transactions. The non-compete fee.. Full Article

The income tax department has won its appeals against tea exporting companies when the Supreme Court resolved the prevailing conflict of views among the High Courts on the question as to at what stage Section 80HHC, deduction in income tax, should be allowed i.e. before the 60 : 40 apportionment under the 1962 IT Rule 8(1) or from 40 per cent profits on sales taxable as business income. Full Article

Under the latest provisions, any sum of money received without consideration (in excess of Rs 50,000), by an individual or Hindu Undivided Family (HUF), during a financial year, are taxable in the hands of the recipient. For the purpose of computation of the threshold limit of Rs 50,000, the aggregate value of gifts received from all sources by the recipient needs to be considered. Full Article