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News INCOME TAX

  • May 20, 2024
  • Gifting shares? Bombay HC ruling clarifies capital gains tax treatment

    In a potentially significant decision for wealth transfer strategies, the Bombay High Court has ruled that gifting shares may not be subject to capital gains tax in India. This judgment, delivered in the case of Jai Trust vs. Union of India, clarifies the tax implications surrounding capital gains arising from gifted financial assets.
    The case: The Mumbai-based Jai Trust gifted shares of Nerka Chemicals, United Phosphorus, and Uniphos Enterprises to its beneficiaries in 2010. The trust declared "NIL" income for the 2010-2011 financial year on its tax return, accurately reflecting the distribution of income among beneficiaries. However, the tax authorities later issued a reassessment notice, claiming the trust owed capital gains tax on the gifted shares.

  • May 15, 2024
  • Why Indian HNIs invested in blank-cheque shell cos are facing tax scrutiny

    Several high net-worth individuals (HNIs) in India are reportedly facing tax notices for their investments in Special Purpose Acquisition Companies (SPACs), commonly known as "blank cheque companies." The notices come amid increased scrutiny by the Income Tax Department (ITD) on offshore investments, particularly those made in jurisdictions like Bermuda and Cayman Islands.

  • May 14, 2024
  • Income tax department rolls out new functionality in AIS

    The income tax department on Monday said it has rolled out a new functionality in the Annual Information Statement (AIS) through which taxpayers will be able to view the status of information confirmation process.

    AIS is populated based on the financial data received from multiple information sources and provides details of a large number of financial transactions undertaken by the taxpayer that may have tax implications.

  • May 09, 2024
  • SC holds bank employees' interest-free loans taxable as fringe benefits

    Interest-free or concessional loans given by banks to their employees will qualify as "fringe benefits" or "amenities,” thus taxable, the Supreme Court has held, giving a major blow to the bank employees.
    While upholding the income tax rule in this regard, the apex court said that such benefits enjoyed by bank employees are a “unique” to them and are in the nature of a ‘perquisite,’ hence liable to taxation.

  • May 08, 2024
  • If you get a notice, make sure to file your I-T return or face scrutiny

    If a taxpayer does not file an Income-tax (I-T) return in response to a notice under section 142(1), the case will be picked up for scrutiny. This notice, seeking information, is issued when a taxpayer has not filed the tax return or is issued to seek additional preliminary information regarding a particular detail – say bank interest or long-term capital gains/loss on sale of a property.
    This guidance is part of a comprehensive set of guidelines issued recently by the Central Board of Direct Taxes (CBDT) for compulsory selection of Income-tax (I-T) returns for the purpose of complete scrutiny.

  • May 06, 2024
  • MSMEs protest 45-day payment rule, file appeal in apex court: Report

    To ensure timely payments to micro, small and medium enterprises (MSMEs), a new regulation was implemented on April 1. It requires companies to settle their dues to MSMEs within 45 days. Non-compliance will lead to a tax liability on the overdue amount.
    More than 40,000 small businesses, including 12,000 in Gujarat, have cancelled their registration and approached the Supreme Court with an appeal to remove the regulation, according to a report by CNBC Awaaz. Since the regulation’s implementation, numerous small businesses have reported a decline in new orders from larger clients, said the TV news channel.

  • May 06, 2024
  • Data sharing among authorities, taxpayers can help improve I-T dept AIS functionality: Deloitte

    Deloitte India on Sunday said creating a seamless data exchange and establishing a framework for efficient data sharing among businesses, tax authorities and taxpayers would help improve the AIS functionality of the income tax department.
    The Annual Information Statement is a comprehensive view of financial information for a taxpayer, made available by the income tax department.
    Information about the taxpayer relating to specified financial transactions such as cash deposit/ withdrawal from bank accounts, sale/purchase of immovable property, time deposits, credit card payments, purchase of shares, debentures, foreign currency, mutual funds, buyback of shares, cash payment for goods and services etc.

    To improve the functionality of AIS and the efficiency of tax administration and compliance, Deloitte India's latest paper, "Annual Information Statement: Ushering in a new era of tax administration", recommends creating a seamless data exchange and establishing a framework for efficient data sharing among businesses, tax authorities and taxpayers.

  • Apr 30, 2024
  • Advance pacts for transfer pricing keep rising, 125 clinched in FY24

    Despite paucity of manpower available with the government, a record 125 Advance Pricing Agreements (APAs) were signed during FY24, in what experts believe shows the APA teams have become more efficient.

    “The government has multiple APA teams spread across the country and with every year, both taxpayers and APA teams are gaining more experience in relation to various international transactions,” said Sanjiv Malhotra, senior advisor, Shardul Amarchand Mangaldas & Co. “This experience and efficiency seem to be a prime contributor for the number of signings going up on a year-on-year basis,” he said. In FY23, the total APAs signed were 95.

    Currently, there are four teams under CBDT – based in Delhi, Mumbai, and Bengaluru, who take up both bilateral and unilateral APA applications.

  • Apr 26, 2024
  • CBDT extends deadline for charitable trusts' registration till June 30

    The income tax department on Thursday extended the deadline for charitable and religious trusts to furnish registration application with tax authorities till June 30. The Central Board of Direct Taxes (CBDT) had earlier extended the due date for filing Form 10A, Form 10AB by trusts, institutions and funds multiple times and the last such extension was till September 30, 2023.
    "Considering the representations received by CBDT requesting for further extension of due date for filing of such forms beyond the last extended date of September 30, 2023, and with a view to avoid genuine hardships to taxpayers, CBDT has extended the due date of filing Form 10A/Form 10AB up to June 30, 2024," the CBDT said in a statement.

    Form 10A is an application form filed by trusts/institutions who wish to get themselves registered for income tax exemption.

  • Apr 22, 2024
  • I-T dept starts drive to dispose of appeals, 0.54 million at last count

    As many as 5,44,205 appeals were pending resolution with the Income Tax (IT) Department at commissioner (appeals) level as of January 31 this year, and 63,246 at various Income Tax Appellate Tribunals (ITATs), High Courts, and the Supreme Court, FE has learnt.

    To be precise, the cases pending in ITATs were 20,266 High Courts, 37,436; and Supreme Court 5,544.

  • Apr 19, 2024
  • Govt kicks off direct tax code revision

    The Narendra Modi government, if voted back to power, will implement the long-delayed Direct Taxes Code (DTC) on a priority basis, official sources said, adding that discussions were already underway in the finance ministry in this regard. Initiation of the law-making process has been included as part of the agenda for the Modi 3.0 government after directions from the prime minister, the sources said, requesting anonymity.

  • Apr 18, 2024
  • CBDT signs record number of 125 Advance Pricing Agreements in FY24

    The Central Board of Direct Taxes (CBDT) has entered into a record 125 Advance Pricing Agreements (APAs) with Indian taxpayers in 2023-24. This includes 86 Unilateral APAs (UAPAs) and 39 Bilateral APAs (BAPAs), the finance ministry said in a statement on Tuesday.

  • Apr 18, 2024
  • Proof of HRA claims of previous years; can you really take it easy after CBDT's assurance of no review of old HRA cases

    If you have made certain claims to get an income tax deduction or exemption while filing your income tax return, then you need to keep documentary evidence of it as the income tax department may ask for it. There were media reports which indicated that the income tax department was running a special drive to identify fake HRA claims from previous years. However, the Central Board of Direct Taxes (CBDT) recently clarified that there was no special drive to re-open cases concerning mismatch of data relating to House Rent Allowance (HRA).
    If you have made certain claims to get an income tax deduction or exemption while filing your income tax return, then you need to keep documentary evidence of it as the income tax department may ask for it. There were media reports which indicated that the income tax department was running a special drive to identify fake HRA claims from previous years. However, the Central Board of Direct Taxes (CBDT) recently clarified that there was no special drive to re-open cases concerning mismatch of data relating to House Rent Allowance (HRA).

  • Apr 18, 2024
  • ITR Filing: How to claim TDS Credit not reflecting in Form 26AS

    Tax Deducted at Source (TDS) applies to various income sources, including salaries, business income, property sales, and interest on bank deposits. When a payer deducts TDS from your income, they essentially withhold a portion of your tax liability. This deducted amount is then credited to your tax account and is supposed to be reflected when you file your tax return.

  • Apr 16, 2024
  • Bombay HC holds housewife was a mere joint owner, quashes I-T reassessment order

    The Bombay High Court has nullified a reassessment order against a housewife, noting that the property was purchased solely by her husband. The Income-tax (I-T) authorities, on noting a high-value transaction of purchase of property valued at more than Rs. 30 lakhs, had held that income had escaped assessment. Thus, a reassessment order was passed under section 148A (b) of the I-T Act for the financial year 2015-16.

  • Apr 15, 2024
  • Relief for taxpayers going abroad on business visa: ITAT Ruling

    Some Indians go abroad as employees, while others choose to work for themselves. Being Indian citizens, both are subject to the income tax laws of the country. But, will ’employment’ will be governed by similar tax laws as ‘self-employment’ for these taxpayers generating overseas income?

    Mumbai ITAT Rules that the term “Employment” under Section 6 – Explanation 1(a) of the Income Tax Act, 1961 shall include “Self-Employment”In accordance with Section 6(1) of the Income Tax Act, 1961, an individual would be considered as an Indian tax resident if he has stayed in India for a period of 365 days or more within 4 years preceding the relevant financial year and has stayed in India for a period of 60 days or more in the relevant financial year.

  • Apr 13, 2024
  • Relief for taxpayers going abroad on business visa: ITAT Ruling

    Some Indians go abroad as employees, while others choose to work for themselves. Being Indian citizens, both are subject to the income tax laws of the country. But, will ’employment’ will be governed by similar tax laws as ‘self-employment’ for these taxpayers generating overseas income?

    Mumbai ITAT Rules that the term “Employment” under Section 6 – Explanation 1(a) of the Income Tax Act, 1961 shall include “Self-Employment”