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 WHATS NEW » INCOME TAX   (Total Uploads : 15)
Income Tax Rules amended
Apr 19, 2010:  8The Central Board of Direct Taxes has added a new sub rule U to Rule 11 of the Income Tax Rules, 1962. This rule describes the procedure to determine fair market value of property other than immovable property. It gives detailed information about:
 8Meaning of expressions used in determination of fair market value
 8The procedure for determination of Fair Market Value
     - valuation of jewellery
     - valuation of archeological collections, drawings, paintings, sculptures or any work of art
     - valuation of shares and securities   Details
Income Tax Brief
Apr 13, 2010: 8Section 35 of the Income Tax Act lists the expenditure made on scientific research which are allowed for deduction. According to a notification released by the Central Board of Direct Taxes, the Ministry of Finance, the organization B.M. Birla Science and Technology Centre, Jaipur has been approved by the Central Government for the purpose of exemption under section 35 of the Income-tax Act, from assessment year 2009-2010 subject to the following conditions:
 8The amount will be used for research in social sciences
 8 Research will be carried out through its faculty members or its enrolled students
 8 The organization will maintain separate books of accounts
 8 The organization will maintain a separate statement of donations received and amounts applied for research in social sciences and a copy of such statement duly certified by the auditor shall accompany the report of audit   Details
Income Tax Briefs
Mar 23, 2010:  8The CBDT has clarified that the spread applicable to the interest rates on the tax-free Railway Bonds to be issued by Indian Railway Finance Corporation this fiscal is '6-7.5%' and not '6.5-7.25%', as notified earlier.
 8The FInance Ministry has granted University of Pennsylvania Institute for the Advanced Study of India, New Delhi, the categorization of "other institution"(one that is partly involved in research), with respect to clause (ii) of sub-section (1) of section 35 of the Income-tax Act, 1961 (said Act), read with Rules 5C and 5E of the Income-tax Rules, 1962, from the assessment year 2009-2010 onwards. The institution will now be eligible to deduct expenses incurred on scientific research.   Details
Income Tax Briefs
Mar 09, 2010: 8The FInance Ministry has granted Public Health Foundation of India, New Delhi, the categorization of "other institution"(one that is partly involved in research), with respect to clause (ii) of sub-section (1) of section 35 of the Income-tax Act, 1961 (said Act), read with Rules 5C and 5E of the Income-tax Rules, 1962, from the assessment year 2009-2010 onwards. The institution will now be eligible to deduct expenses incurred on scientific research.
8The same designation has also been bestowed upon Petroleum Conservation Research Association (PCRA), New Delhi.   Details
Income Tax Briefs
Feb 22, 2010: 8The Central Government has granted Lokmanya Medical Research Centre, Pune, classification as "other institution" (one that is partly involved in research), with respect to clause (ii) of sub-section (1) of section 35 of the Income-tax Act, 1961 (said Act), read with Rules 5C and 5E of the Income-tax Rules, 1962, from Assessment years 2008-2009. This allows the centre to claim deductions on all expenses incurred on scientific research and is subject to conditions.
8The Central Government has notified the project being undertaken by Kolte Patil Developers, Pune, at Survey No. 198/1B, Lohgaon, in the Pune district of, Maharashtra, as an industrial park, under clause (iii) of sub-section(4) of section 80-IA of the Income Tax Act, 1961.   Details
Railways to issue Rs 5000 crore worth of bonds
Feb 14, 2010: The Central Government has allowed Indian Railways Finance Corporation to issue Rs 5000 crore worth of tax free, secured, redeemable, non-convertible Railway Bonds during the year, 2009-10. These bonds would have a face value of Rs 1000, each, in case of public issue, and Rs 1,00,000, each, for other cases. The interest payable on these bonds would be in the range of 6.5% to 7.25% per annum, depending on the size and tenure of each tranche.
8Tax benefits would, however, accrue only to bond-holders that are registered with the Corporation.   Details
Income Tax briefs
Feb 14, 2010: 8An Income Tax notification no. 4/2010 has been released by the Central Government, granting the School of Human Genetics and Population Health, Kolkata, classification as "other institution" (one that is partly involved in research),with respect to clause (ii) of sub-section (1) of section 35 of the Income-tax Act, 1961 (said Act), read with Rules 5C and 5E of the Income-tax Rules, 1962, from Assessment years 2008-2009. This allows the association to claim deductions on all expenses incurred on scientific research and is subject to conditions.
8The same classification has been bestowed upon The Indian Law Institute, New Delhi, and Sunder Lal Jain Charitable Eye Hospital, New Delhi.
8The Income Tax department has clarified that in accordance with provisions of Section 80CCD of the Income Tax Act, contributions made by the employee or the relevant employer to a pension scheme for the employee is completely deductible from total income for tax purposes, subject to a limit of 10% of salary.   Details
Fringe Benefit Tax paid in advance to be adjusted against advance tax obligations
Feb 01, 2010: 8The Finance Ministry has ruled that advance payments already made against Fringe Benefit Tax (FBT) obligations for the Assessment Year (A.Y.) 2010-11 will be treated as advance tax paid by the assessee for the same fiscal. FBT was a tax levied on the value of fringe benefits provided to employees and was introduced by the Finance Act 2005. It was, subsequently, abolished in the Finance Act 2009, effective from 2010-11. Employee benefits, thus, are to be treated as perquisites, which are taxable subject to conditions per the Income Tax Act, 1961.
8However, during the current financial year, 2009-10, some assessees have already remitted FBT in advance for AY 2010-11. The CBDT has decided that such assessees may adjust advance FBT payments against their respective advance tax obligations for income earned in AY 2010-11. In case of claimed losses, these amounts will be returned to the assessees, in the form of refund of advance tax paid.   Details
Amendments to Income-Tax (Thirteenth Amendment) Rules 2009: CBDT Notification
Jan 31, 2010: CBDT has release notification no. 2/2010 dated January 12, 2010, outlining a series of corrections to Income-Tax (Thirteenth Amendment) Rules 2009. This notification amends an existing notification no. 94/2009 dated December 18, 2009. The latest 2010 notification is read with clause 2 of Section 17, Income Tax Act 1961. The amendments to the Income-Tax (Thirteenth Amendment) Rules 2009 are as follows:
8In notification no. 94/2009, in the first line of paragraph (1), the word sub-section (2) is replaced with clause (2), which explains the constituents of perquisites on which taxable people can claim benefit from.
8Value of motor-car perquisite (for purpose of claiming tax relief) is now calculated by taking into account amount of charges met or reimbursed by employer, reduced by the amount claimed to have been actually spent in maintaining and running the vehicle for official duties, provided that certain conditions are fulfilled. Previously, in Notification no. 94/2009, the value of the perquisite was the actual amount attributable to official use of the vehicle subject to conditions.
8Third correction is related to listing provisions for receiving medical benefits, which are contained in sub-clause (viii) of clause 2 of section 17, and not clause (viii) of sub-section (2) of section 17, as mentioned speciously in notification 94/2009.
8The word "credit card" is to substitute "credit care", as mentioned in  second line of clause (v) of sub-rule (7) of notification no. 94/2009.
8'Clause (vi) of sub-section (2) of section 17', as stated in notification no. 94/2009, in the first line of clause (i) of sub-rule (8), is renamed 'sub-clause (vi) of clause (2) of section 17', which is related to tax benefit claims on the value of any other fringe benefit or amenity.
8The first line of sub-rule (9) in notification no. 94/2009, 'clause (vi) of sub-section (2)'  is replaced by 'sub-clause (vi) of clause 2', which is related to claiming tax benefits on the fair market value of any specified security that is not an equity share in a company.   Details
Rural Electrification Corporation Limited exempt from tax on interest income: CBDT Notification
Jan 31, 2010: 8CBDT has released notification no. 01/2010, date January 4, 2010, exempting Rural Electrification Corporation Limited from income tax on interest credited to its account.   Details
Additions made to list of sports that can be provided by institutions deemed charitable: CBDT Notification
Jan 31, 2010: 8The Ministry of Finance has released an Income Tax notification no. 3/2010, dated January 12, 2010, which appends a prior notification, dated November 29, 2002. Via the 2010 announcement, if an association or an institution is involved in the control, supervision, regulation or provision on the following sports, then donations to said institution are deductible from taxable income:
-- Baseball, Fencing, Handball, Ice Hockey, Karate, Kayaking and Canoeing, Netball, Sepak Takraw, Snooker, Soft Tennis, Taekwondo, Triathlon, Winter Games (Skiing and Ice Skating), and Wushu.
8This would be applicable for the assessment year 2010-11 and beyond.   Details
Rule 3 of Income Tax Rules 1962 substituted and new Rule 40F added: CBDT Notification
Jan 06, 2010: 8Central Board of Direct Taxes has released a notification, wherein Rule no. 3 of Income Tax Rules 1962 has been revised. In addition, Income Tax Rules, 1962, are now called Income-tax (13th Amendment) Rules, 2009. Please click on Details to view new rule number 3.
8After rule 40E of Income Tax Rules, the following rule will also be added:
40F. Nothing contained in this Part, shall apply, in respect of any assessment for the assessment year commencing on the 1st day of April, 2010 or any subsequent assessment year.
8These rules are effective April 1, 2009.   Details
Institutions eligible for deductions on Scientific Research Expenditure
Jan 05, 2010: 8Income Tax notifications have been released by the Central Government, granting each of the following institutions, classification as "other institution" (one that is partly involved in research), with respect to clause (ii) of sub-section (1) of section 35 of the Income-tax Act, 1961 (said Act), read with Rules 5C and 5E of the Income-tax Rules, 1962 from Assessment year 2009-2010 onwards. These institutions are:

8The Institute of Road Transport, Chennai
8Mothers Service Society, Puducherry
8Madras School of Economics, Chennai
8Giri Institute of Development Studies, Lucknow
8Thiagarajar College of Engineering, Madurai

This allows these associations to claim deductions on all expenses incurred on scientific research and is subject to the following conditions:
8The sums paid to the approved organization shall be utilized for scientific research;
8The approved organization shall carry out scientific research through its faculty members or its enrolled students;
8The approved organization shall maintain separate books of accounts in respect of the sums received by it for scientific research, reflect therein the amounts used for carrying out research, get such books audited by an accountant as defined in the explanation to sub-section (2) of section 288 of the said Act and furnish the report of such audit duly signed and verified by such accountant to the Commissioner of Income-tax or the Director of Income-tax having jurisdiction over the case, by the due date of furnishing the return of income under sub-section (1) of section 139 of the said Act;
8The approved organization shall maintain a separate statement of donations received and amounts applied for scientific research and a copy of such statement duly certified by the auditor shall accompany the report of audit referred to above.   Details
Diabetic Association of India, Mumbai eligible for deductions on Scientific Research expenditure
Jan 04, 2010: 8An Income Tax notification no. 95/2009 has been released by the Central Government, granting the Diabetic Association of India, Mumbai, classification as "other institution" (one that is partly involved in research), with respect to clause (ii) of sub-section (1) of section 35 of the Income-tax Act, 1961 (said Act), read with Rules 5C and 5E of the Income-tax Rules, 1962, from Assessment years 2007-2008. This allows the association to claim deductions on all expenses incurred on scientific research and is subject to the following conditions:
8The sums paid to the approved organization shall be utilized for scientific research;
8The approved organization shall carry out scientific research through its faculty members or its enrolled students;
8The approved organization shall maintain separate books of accounts in respect of the sums received by it for scientific research, reflect therein the amounts used for carrying out research, get such books audited by an accountant as defined in the explanation to sub-section (2) of section 288 of the said Act and furnish the report of such audit duly signed and verified by such accountant to the Commissioner of Income-tax or the Director of Income-tax having jurisdiction over the case, by the due date of furnishing the return of income under sub-section (1) of section 139 of the said Act;
8The approved organization shall maintain a separate statement of donations received and amounts applied for scientific research and a copy of such statement duly certified by the auditor shall accompany the report of audit referred to above.   Details
CBDT Double Taxation Agreement - Notification No. 93 / 2009
Dec 13, 2009: 8According to Notification No. 93 / 2009, dated December 9, 2009, all jurisdictions of the Ministry of Finance in Taipei, along with the India-Taipei Association in Taipei and the Taipei Economic and Cultural Centre in New Delhi, have been notified, respectively, as specified territories and associations, for the purpose of applicability of the double-taxation agreement between the two countries, vide clauses (a) and (b) of Explanation 2 to section 90A of the Income-tax Act, 1961.   Details
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