Article
Proviso to Section 115BAA(3) – Sowing confusion or certainty?
By Neethu James and Parvathy Kartha
Section 115BAA of the Income Tax Act, 1961 is a reduced corporate taxation scheme introduced for domestic companies vide the Taxation Laws (Amendment) Act, 2019 (w.e.f. AY 2020-21). Once opted for, the domestic company would be taxed at 25.17% (effective tax rate inclusive of surcharge and cess) during the lifetime of the said company in respect of its total income. The article in this issue of Direct Tax Amicus addresses an issue that may arise regarding the treatment of unclaimed portion of additional depreciation in respect of companies with substantial capital expansion in the relevant assessment year while opting for Section 115BAA. The authors elaborately discuss the question as to whether the adjustment referred to in the Proviso to said section is an upward adjustment which increases the written down value (“WDV”) of the block or is a downward adjustment reducing the WDV. According to the authors, the Proviso fraught with ambiguity could lead to varying interpretations and as it is a conscious addition made with a definite intent, it is imperative that CBDT clarifies the objective of introducing the same by prescribing appropriate rules...
Notifications and Circulars
- Mandatory provision of electronic payment – Section 269SU of Income Tax Act when not applicable
- Safe Harbour Rules for international transactions made applicable to AY 2020-21
- Remuneration to eligible fund manager under Section 9A – Manner of calculation notified
- New Form 26AS [Annual Information Statement] notified
Ratio decidendi
- Reimbursement of salary costs of employee deputed to Indian Company not taxable as FTS or income arising through Service PE – ITAT New Delhi
- Exemption to charitable trust – Proviso to Section 2(15) not applicable if dominant purpose is charitable – ITAT Mumbai
- No capital gains tax liability under Section 45(2) when character of stock-in-trade received on partition did not change – Karnataka High Court
- Commissioner of Income Tax (Appeals) cannot enhance income from a new source not considered by Assessing Officer – ITAT Kolkata
- CSR expenditure allowable as deduction under Section 80G, subject to conditions – ITAT Bengaluru
