Income Tax Deductions - Page 6

Govt notifies deduction u/s. 80CCF on long-term infrastructure bonds

Notification No. 48/2010-Income Tax (09/07/2010)

Notification No. 48/2010-Income Tax In exercise of the powers conferred by section 80CCF of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies bonds, subject to the following conditions, as long-term infrastructure bonds for the purposes of the said section namely :-...

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Notification No. 47/2010-Income Tax Dated 9/7/2010

Notification No. 47/2010-Income Tax (09/07/2010)

Notification No. 47/2010-Income Tax Whereas the Central Government in exercise of the powers conferred by clause (iii) of sub-section (4) of section 80-IA of the Income-tax Act, 1961 (43 of 1961) (hereinafter referred to as the said Act), has framed and notified a scheme for industrial park vide notification of the Government of India in ...

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Adjustment of brought forward losses and unabsorbed depreciation, applicable only from the initial assessment year in case of eligible business

Velayudhaswamy Spinning Mills (P) Ltd. Vs. ACIT (38 DTR 57), Madras High Court

Section 80-IA of the Income-tax Act, 1961 (ITA) deals with tax holidays for eligible businesses. Sub-section (5) of section 80-IA of ITA provides that for the purpose of determining the quantum of the deduction, the profits of the eligible business shall be computed as if such eligible business were the only source of income of the taxpay...

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Study of recent amendment in deduction for developing and building housing projects – S. 80-IB

Section 80-IB (10) of the Act is aimed at promoting construction of housing projects, so as to address the problem of shortage of dwelling units. The predominant objective of this incentive provision, therefore, is to encourage better availability of the dwelling units for low and middle class segment of the society....

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Posted Under: Income Tax |

Industrial Park Scheme Eligible for Deduction Under Section 80IA of I-T ACT Extended to 31st March 2011

The Central Board of Direct Taxes (CBDT) has amended the Industrial Park Scheme 2008 and Rule 18C of the Income Tax Rules, 1962 to give effect to the extension of the ending date of operation of the Scheme to 31st March 2011....

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Posted Under: Income Tax |

Income-tax (Fifth Amendment) Rules, 2010 – Amendment in rule 18C

Notification No. 38/2010-Income Tax (21/05/2010)

Notification No. 38/2010-Income Tax In exercise of the powers conferred by section 295 read with clause (iii) of sub-section (4) of section 80-IA of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules...

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Industrial Park (Amendment) Scheme, 2010 – Amendment in para 4 and Form IPS-I

Notification No. 37/2010-Income Tax (21/05/2010)

Notification No. 37/2010-Income Tax In exercise of the powers conferred by clause (iii) of sub-section (4) of section 80-IA of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following amendments to the Industrial Park Scheme, 2008, namely :-...

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Jeevan Akshay-VI approved for Income Tax deduction Under Section 80C

Notification No. 34/2010-Income Tax (19/05/2010)

Notification No. 34/2010-Income Tax The Central Government have approved Jeevan Akshay-VI Plan of the Life Insurance Corporation of India as an annuity plan eligible for deduction under clause (xii) of sub-section (2) of section 80C of the Income Tax Act, 1961....

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Section 80-1A(2) benefit available to telecommunication services undertaking for 10 consecutive years from the year of exercise of option

ACIT Vs Vodafone Essar Gujarat Ltd. (ITAT Ahemdabad)

We have heard both the parties and gone through the facts of the case and the decisions cited before us. The issue before us as to whether or not the assessee is entitled to claim deduction u/s 80IA in terms of the provisions amended w.e.f 1.4.2000 even when the assessee had already started providing telecommunication services in the peri...

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If assessee’s income not exempt u/s. 10 rather same was eligible for deduction u/s. 80P, assessee’s case was not hit by provisions of section 14A

Assistant Commissioner of Income Tax Vs Kribhco (ITAT Delhi)

ACIT Vs. Kribhco (ITAT Delhi) - Terms 'exempt income' and 'deduction from income' are two different propositions and, therefore, where assessee's income was not exempt under section 10 rather same was eligible for deduction under section 80P, assessee's case was not hit by provisions of section 14A....

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Receipts with no nexus to exports have to be excluded for while computing 80HHC deduction

CIT Vs. Dresser Rand India (Bombay High Court)

Explanation (baa) to s. 80HHC defines the term “profits of the business” to mean business profits as reduced by 90% of .. “receipts by way of brokerage, commission, interest, rent, charges or any other receipt of a similar nature“. The Tribunal took the view, on the basis of Bangalore Clothing 260 ITR 371 (Bom) that receipts towar...

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An assessee does not have to develop entire port to qualify for deduction u/s 80-IA of the Income Tax Act, 1961

CIT Vs ABG Heavy Industries Ltd. (Bombay High Court)

The object of Section 80IA was to provide an impetus to the growth of infrastructure in the nation. A sound infrastructure is a sine qua non for economic development. Absence of infrastructure poses significant barriers to growth and development. A model which relied exclusively on the provision of basic infrastructure by the State was fo...

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Interest earned by co-operative credit society on surplus funds invested in short-term deposits with banks and in govt. securities not eligible for deduction u/s. section 80P

The Totgars' Cooperative Sale Society Ltd. Vs. ITO (Supreme Court of India)

The words the whole of the amount of profits and gains of business in section 80P(2)(a) emphasise that the income in respect of which deduction is sought must constitute the operational income and not the other income which accrues to the Society....

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Interest on late payment from customers against supply of goods is eligible for deduction u/s 80-IA

CIT Vs Advance Detergents Ltd. (Delhi High Court)

Gujarat High Court, when interest is paid on delayed payment, it can be treated as higher sale price which is converse situation to offering of cash discount because the transaction remains the same and there is no distinction $s to the source. Looking from' this angle, the interest becomes part of the hire sale price and is clearly deriv...

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Need Cautious Real Estate

Recessions have affected mostly the real estate business. Slowing demand and sudden evaporation of liquidity position made the situation become so tough for the real estate sector that companies who were engaged in massive long term projects have to abandon the projects. In many cases they have to forgo SEZ projects too due to financial c...

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Posted Under: Income Tax |

Invest tax saved from revised tax slab for financial year 2010-11

FM has put more money in the hands of a large section of tax-payers. There are also some additional tax breaks in the form of investments made into infrastructure bonds and health insurance. Our Personal Finance team speaks to experts on the best way to manage the additional income depending on your age group. If you earn between Rs 1,60...

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Posted Under: Income Tax |

Non tax breaks U/s. 80IA for telecom companies offering 3G services

The Government has decided that telecom companies offering 3G services will not be allowed to claim tax breaks under Section 80 IA of the Income Tax Act. Benefits under Section 80 IA are extended to companies involved in infrastructure creation. In the telecom sector, existing operators are allowed to choose a block of 10 years (out of t...

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Posted Under: Income Tax |

Budget 2010 and its Impact on Real Estate sector

Real Estate sector which is slowly coming out of the Mid 2008 slump, has received good support from Union Budget 2010-11. While the budget has encouraged affordable housing below Rs 20 lakhs with 1% interest subvention for housing loan upto 10 lakhs and extension of benefits available under section 80IB by one more year, extension of som...

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Posted Under: Income Tax |

Budget 2010-11: Deduction in respect of contribution to the Central Government Health Scheme

It is, therefore, proposed to also allow deduction in respect of any contribution made to CGHS by including such contribution under the provisions of section 80D. The deduction will be limited to the current aggregate as mentioned in the section....

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Posted Under: Income Tax |

section 80CCF – Deduction in respect of long-term infrastructure bonds

In tune with the policy thrust of promoting investment in the infrastructure sector, it is proposed to insert a new section 80CCF in the Income-tax Act to provide that subscription during the financial year 2010-11 made to long-term infrastructure bonds (as may be notified by the Central Government), to the extent of Rs. 20,000, shall be ...

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Posted Under: Income Tax |

Insurance sector asked for separate limit under section 80C for long-term saving

We would recommend a separate limit for deductions under Section 80C for long-term saving instruments such as life insurance. Currently, the deduction under Section 80C also includes short-term saving instruments such as mutual funds and fixed deposits. Life insurance and pensions are the only segments of financial services that address t...

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Posted Under: Income Tax |

Insurance receipts and other savings plans post Direct Tax Code (EEE model to EET) and FAQ

It is a fact that tax incentives offered under the Income Tax Act, 1961 (the IT Act) have been instrumental in encouraging individuals to invest and save for their long-term retirement needs. One of the key incentives in this respect has been that many of the savings instruments have been under the Exempt Exempt Exempt (EEE) model....

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Posted Under: Income Tax |

Hospitality sector want tax holiday to extended to 10 years

Sushanto Roy, CEO, Sahara Prime City, has in a pre-Budget wish list of expectations said: "Given the pent-up demand for affordable housing which was discovered during the recent slowdown there is a need to reintroduce tax holiday under section 80IB for housing projects constructed after March 31, 2008." Tax holiday for hotels, under secti...

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Posted Under: Income Tax |

Co-operative Bank entitled to deduction U/s 80P(2)(a)(i) on amount of interest received U/s 244A on Income tax Refund

The Maharashtra State Co-operative Bank Limited Vs ACIT (ITAT Mumbai)

We have heard the arguments put forth by both the sides along with the case law relied upon. Having held above that the interest on income-tax refund does not fall under the head `Profits and gains of business or profession', it remains to be examined as to whether deduction u/s.80P is restricted only to the income falling under this head...

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TDS at a higher rate on all transactions not having pan to come into effect from 1st April 2010

Press Release No. 402/92/2006-MC (04 of 2010) (20/01/2010)

Press Release No. 402/92/2006-MC (04 of 2010) A new provision relating to tax deduction at source (TDS) under the Income Tax Act 1961 will become applicable with effect from 1st April 2010. Tax at higher of the prescribed rate or 20% will be deducted on all transactions liable to TDS, where the Permanent Account Number (PAN) of the deduc...

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Air travels have to forego part of the commission they receive from airlines

Air travel agents will have to forego a part of the commission they receive from airlines on tickets sold by them, as the tax department has decided that such payments will be subject to tax deduction at source, or TDS. This could increase cost of air travel, as agents will pass on this burden to the flyer. The Central Board of Direct Tax...

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Posted Under: Income Tax |

Amendment to Section 43B is retrospective -SC

CIT Vs. Alom Extrusions (Supreme Court of India)

Whether amendment to Section 43B (Section) of Income Tax Act,1961, enacted with effect from 1 April 2004, is retrospectively applicable? This amendment was introduced to rationalize the tax deduction of the employer's contribution to provident fund, superannuation fund, gratuity fund and such other funds for the welfare of employees (soc...

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Whether the ITAT was correct in law in deleting the addition of interest income from FDRs amounting to Rs.6,85,624/- under the head “Income from Other Sources” by treating it as business income

CIT, Delhi Vs M/s. Mereena Creations (Delhi High Court)

In the present case the assessee had taken loans from the bank on which the interest was paid and as a security for those loans, FDRs in question were kept with the bank and, therefore, the assessee was entitled to the netting of interest for the interest income and expenses thereto. This is also categorically answered in Shri Ram Honda (...

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If condition laid down under Section 80IA(10) are not satisfied that Sub Section cannot be invoked and no disallowance of deduction can be made

Income Tax Officer (Ahmedabad) Vs J.H. Kharawala Pvt. Ltd. (ITAT Ahmedabad)

Assessing Officer has not made out any case for disallowing even a part of deduction allowable under Section 80IA. Once any condition laid down under Sub Section 10 of Section 80IA are not satisfied that Sub Section cannot be invoked and therefore no disallowance of deduction under that section can be made....

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CBDT directed to re-opening of all cases under the search and seizure label and those claimed deduction u/s. 80IB, 80A

The Central Board of Direct Taxes ( CBDT) has directed re-opening of all cases under the search and seizure label, income-escaping assessments and deductions claimed from profits and gains on all eligible businesses....

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Posted Under: Income Tax |

Summary of Amendments made by Maharashtra Value Added Tax (2nd Amendment) Rules 2009, dt 18th June 2009 w.e.f 01st July 2009

On 18th June 2009 the Government of Maharashtra has passed the Maharashtra Value Added Tax (2nd Amendment) Rules 2009 These amendments are brought into effect from 1st July 2009 unless otherwise specified. Following are the amendments which are made in the MVAT Rules: – ...

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Posted Under: Income Tax |

New direct tax code and taxability of Provident Fund

It’s Traditionally  been viewed as a retirement saving tool and one that allows you to avail of tax deductions. In fact, you will find that most conversations about provident funds only take place during the income-tax filing season, or when salaried individuals are retiring or leaving one organisation for another. In fact, fairly ...

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Posted Under: Income Tax |

Bombay High Court admit appeal against Shah Rukh Khan

The Bombay High Court on Wednesday admitted an appeal filed by the Income Tax (IT) department against actor Shah Rukh Khan for the tax deductions allowed on his income earned as the brand ambassador for Swiss luxury watch company Omega....

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Posted Under: Income Tax |

Download Direct Tax Code 2009 and main highlights of the same

Finance Minister Pranab Mukherjee on August 10 released the New Draft Direct Tax Code. The draft, which is expected to radically change the tax structure, will now be open for discussion after which it will take the form of law. The finance minister had in his budget promised to deliver a new code within 45 […]...

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Posted Under: Income Tax |

Foreign companies can also claim benefit of lower Rate of Tax on Capital Gain from securities transaction

Foreign companies cannot be discriminated vis-a-vis Indian firms so far as capital gains tax on securities transaction is concerned, according to an order by the Authority for Advance Rulings (AAR). Giving its ruling in a case related to UK-based Fujitsu Services, AAR said the company should also be given an option of paying tax at [&hell...

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Posted Under: Income Tax |

Allowability of expenditure incurred by foreign company before RBI approval

Income Tax Appellate Tribunal (ITAT) has ruled that foreign companies can claim tax deduction on expenses incurred in setting up a project office in India even if the mandatory approval from the Reserve Bank of India comes subsequently.  The ruling was issued in the case of Stork Engineers & Contractors of the Netherlands, which was ...

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Posted Under: Income Tax |

Budget aimed at Rationalisation of provisions related to TDS

Tax deduction at source is a method of collecting taxes on behalf of the Government at the time of payment or credit. The Income-tax Act casts a legal responsibility on the deductor to deduct tax on the correct amount, at the correct rate and deposit it to the Government account. The TDS rates are specified […]...

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Posted Under: Income Tax |

Clarification regarding deduction under section 80-IB(10) in respect of undertakings developing building and housing projects

Instruction No. 4/2009 (30/06/2009)

Instruction No. 4/2009, dated 30-6-2009 Under sub-section (10) of section 80-IB an undertaking developing and building housing projects is allowed a deduction of 100% of its profits derived from such projects if it commenced the project on or after 1.10.1998 and completes the construction within four years from the financial year in which...

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Section 80-IA relief has to be deducted before computing section 80-HHC relief

ACIT Vs. Hindustan Mint (ITAT 5 Member Special Bench at Chennai)

In ACIT Vs Rogini Garments108 ITD 49 the Special Bench at Chennai held that relief allowed u/s 80-IA had to be deducted from profits and gains of assessee’s business on which relief u/s 80HHC of the Act is to be computed. Subsequently, the Madras High Court in SCM Creations 304 ITR 319 took a contrary view. The question whether Rogini G...

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To claim deduction under section 80P the status of the co-operative society shall be a primary society

ACIT Vs The Salem District Co-op. Milk Producers Union Ltd. (ITAT Chennai)

8. As seen in section 80P(2)(b), the deduction in respect of income of co-operative societies has been dealt in under different parts. In respect of the sums referred in clause (a) of sub-section (2), the assessee needs to be a co-operative society engaged in various activities specified therein. In the case of sums referred to in clauses...

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