Employees’ Stock Option Plan or Scheme (ESOP or ESOS, for short), was not liable to fringe benefit tax (FBT) upto the assessment year (AY) 2007-08, relevant to the financial year (FY) 2006-07. The reason for the same is that though under the provisions of section 115WB(1)(a) of the Income-Tax Act, 1961 (the Act), ESOP could be considered as a privilege and accordingly, chargeable to FBT, yet in the absence of specific valuation provisions in this regard in section 115WC,
As per the income tax laws, entities (both corporates and non-corporates – deductors) making payments to third parties (deductees) are required to deduct tax at source (Tax Deducted at SourceTDS) from these payments and deposit the same at any of the designated branches of authorised banks. They should also furnish TDS returns containing details of deductee(s) and bank where TDS amount is deposited with the Income Tax Department (ITD).
Indian tax laws As per the Income-tax Act, 1961, capital asset [as defined under section 2(14)] could be either short-term [as defined under section 2(42A) and 2(42B)] or long-term [as defined under section 2(29A) and 2(29B)]. The tax liability of long term capital gains in respect of shares, securities and units (holding period more than twelve months) is elaborated in section 112 and such gain if covered by securities transaction tax is exempt (i.e., nil) under section 10(38). The taxability of short-term capital gain as per section 111A is at a flat rate of 10 per cent in addition to surcharge and cess. Shares held as capital asset by the investor will be chargeable under the head Capital gain.
1. What Is PAN? Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued in the form of a laminated card, by the Income Tax Department. Why Is It Necessary To Have PAN? It is mandatory to quote PAN on return of income, all correspondence with any income tax authority. From 1 January 2005 it will be mandatory to quote PAN on challans for any payments due to Income Tax Department.
An Indian company engaged in computer software business set up a trading office in Japan. The company’s Japan branch suffered loss, which it claimed as deduction from profits earned in India. The assessing officer, however, held that since the profits of the trading office are taxable in Japan only, any loss incurred by the firm in respect of its trading office is not allowable as deduction from the income which is taxable in India.
Central Board of Direct Taxes (CBDT) has recently issued Instruction (Income Tax) No. 9/2006, dated 7th November, 2006 (157 Taxman St.23/16 CAPJ St. 739) covering all aspects of procedure to be followed for conduct of revenue audit and also for dealing with audit objections including remedial actions to be taken by the departmental authorities. The present instruction is said to be issued in suppression of earlier instructions nos. 159, 484, 499, 612, 828, 854, 1046, 1057, 1071, 1176, 1205, 1473, 1598, 1609, 1928 & 1971.
The Government has come to the rescue of high net worth individuals on the borderline from an additional tax liability that goes beyond the income in excess of Rs 10 lakh. By way of a rule of thumb, the financial world condescends to grant the hallowed status of high net worth (HNW) individuals on those with assets of Rs 5 crore and more. The income-tax law on this touchstone ought to have imposed surcharge of 10 per cent on those having income of Rs 1 crore or more assuming 20 per cent return on wealth to be normal as a rule of thumb.
The Supreme Court has ruled that the companies have statutory obligation to deduct tax at sources (TDS) on interest payments for the loans taken in the name of its directors. The revenue department is empowered to impose interest on such a company for not deducting tax by declaring it assessee in default, the apex court said.
Gross total income in Chapter VI-A means the total income computed in accordance with the provisions of the Act before making any deduction under the said Chapter VI-A. Thus, the only deductions which are excluded by that definition are those under Chapter VI-A. More importantly the total income has to be computed in accordance with the provisions of the Income Tax Act. Obviously, the provisions of Income Tax Act includes section 32-AB.
YOU are liable to deduct TDS. By a mistaken understanding, you deduct less TDS than what was required to be deducted. However the deductee pays the correct Income Tax. Can the Department demand the TDS again from you? Logic would say, NO, but logic and tax don’t always go together and you need the Supreme Court to tell you that on the same income, you cannot levy tax twice.
