August 2008
Suspension of collection of taxes during Mutual Agreement Procedure under the India-Danish Double Taxation Avoidance Convention (DTAC) — Instruction No. 7/2008, dated 24-6-2008.
By Pinky Shah, Sonalee Godbole, Gaurang Gandhi, Chartered Accountants
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Part A : DIRECT TAXES
57 Suspension of collection of taxes during
Mutual Agreement Procedure under the India-Danish Double Taxation Avoidance
Convention (DTAC) — Instruction No. 7/2008, dated 24-6-2008.
Competent authorities of India and Denmark have entered into
a Memorandum of Understanding to avoid the unintended hardship to the taxpayers,
as well as for efficient management of collection of revenue for the captioned
subject.
Summary of amendments made to the Finance Bill, at the time of
enactment.
The following are the important additional amendments which
were made to the Finance Bill, which have been passed by the Parliament and
enacted in the Finance Act, 2008 :
- Exemption available u/s.10A and u/s.10B has been extended by one more year
- Relief is given u/s.40(a)(ia) for TDS on amounts provided/payments in March
and paid after the due date of payment of TDS, but before the due date of
filing the return of income would be allowable as a deduction in that previous
year itself. It is in line with the deduction available u/s.43B of the Act.
This amendment is retrospective with effect from A.Y. 2005-06
- Due date for obtaining the tax audit report has been pre-poned to 30 September
- For eligibility of deduction u/s.80-IB, if an undertaking begins refining of
mineral oil on or after April 1, 2009, deduction will be allowed to such
undertaking only if the following conditions are satisfied :
- It is wholly owned by a public sector company or any other company in which
a public sector company or companies hold at least 49% of the voting rights
- It is notified by the Central Government before June 1, 2008
- It begins refining during April 1, 2009 and March 31, 2012
- Since an amendment is made in S. 115JB for addition of deferred tax liability,
similar adjustment has been provided for a credit in the deferred tax asset
created during the previous year
- Notice for scrutiny assessment for Fringe Benefit Tax u/s.115WE shall be
served on the assessee within a period of 6 months from the end of the
financial year in which return is furnished. This amendment is applicable from
April 1, 2008
- AOP/BOI have been made liable to TDS provisions u/s.194-C if they are subject
to tax audit
- Certain powers have been given to the Commissioner of Income-tax (Appeals) in
case of an appeal filed against the assessment order in respect of which the
proceeding before the Settlement Commission abates u/s.245HA. Similar
amendment has been provided under the Wealth-tax Act also.
- S. 292BB has been inserted, wherein if the assessee appears for proceedings, it
would be deemed that the Notice has been duly served on him as per the provision
of the Act. Consequently, claims of objection for the notice not served or
served late, etc., would be precluded. However, in case the assessee has filed
such an objection and then appeared for the proceedings, the provisions of S.
292BB would not apply.
