In a major ruling, the Authority for Advance Ruling has held that electronic sale of business information by a foreign company to an Indian company is not taxable in India.
In a measure that will affect most corporates with export earnings, the tax authorities have sent instructions to deny export benefits on income arising from the sale of Duty Entitlement Passbook Scheme ( DEPB) licenses, which generally forms a significant part of income for most exporters.
Housing society charges in the case of rented flats will be exempt from income tax, thanks to a recent verdict by the Income Tax Appellate Tribunal (ITAT), Mumbai.
The Supreme Court, in a recent order, has reaffirmed the powers of the president of Income Tax Appellate Tribunal (ITAT), a quasi judicial fact-finding authority that decides on disputes between tax payers and the income-tax department.
If tax officials have their way, gift tax could make a comeback. The tax, which existed in India until five years ago, could be reintroduced in a modified form, possibly with the liability to pay tax shifting from the donor to the receiver. While it existed, from '58-98, the donor was liable to pay gift tax at the rate of 30% of the value of the gift. The Gift Tax Act also had a provision to treat as a gift the difference between the sale price of a property and its actual market value and tax it at the rate of 30%.
The question of whether tax is payable on import of packaged software products will soon be settled.
The foreign tax division under the department of revenue has issued a notification empowering transfer pricing officers (TPOs) to take up cases, which are not referred to it by the regular assessing officers.
The government has taken the first step to respond to the challenges of taxing transnational transactions by setting up an eight-member committee headed by Vijay Mathur, director general of income-tax (International Taxation), for studying and analysing issues relating to taxation of non-residents and make recommendation to the Indian tax authorities.
In a judgement that will have a bearing on the taxabilty of funds released by the Maharashtra state government for the welfare projects of its employees, such as housing schemes for its officers, the Income-tax Appellate Tribunal, Mumbai has held that the income generated by parking these funds with banks and FIs are liable to be taxed.
Employees will no longer be at fault in case the employer fails to pay tax deducted at source, thanks to an amendment in the current Budget. Instead, the employer will be liable to pay interest and penalty. The defaulting corporate is liable to face 15% interest on the tax payable and penalty that can go up to 100% of the tax amount.
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