CBDT made changes in the law through the Finance Act, 2024.
If you are a taxpayer then this news matters to you. In fact, the Income Tax Department on Thursday said that taxpayers would not be given permission to deduct for the expenses incurred to settle the processed under four laws including SEBI and Competition Act. According to PTI news, a notification issued on April 23 stated that the Central Board of Direct Taxes (CBDT) notified that any expenditure incurred to deal with the action initiated in relation to violations or omissions under four specified laws would not be considered to be aimed at business or profession. No deduction or allowance will be given for such expenses.
These are four laws
According to the news, these are the four laws- the Securities and Exchange Board of India Act, 1992; Securities contract (regulation) act, 1956; Depository Act, 1996; And Competition Act, 2002. Tax partner Amit Maheshwari in AKM Global said that the deduction of disposal payment under Section 37 (1) of the Income Tax Act, 1961 has been the subject of long -standing judicial debate, especially in cases like Income Tax Officer vs. Reliance Share and Stock Brokers (P) Limited, where SEBI was paid as per the consent fees paid as a commercial expenditure.
No expenditure will be eligible for deduction
The CBDT made changes in the law through the Finance Act, 2024 and has now notified that in India or outside to settle the action under specific laws, including the SEBI Act, the Depository Act and Competition Act, to settle the action under specific laws, no expenditure will be eligible for deduction.
Maheshwari said that effectively the decisions of the former tribunal have been canceled and the tax scenario has led to a very necessary clarity, although ambiguity under other regulatory laws such as FEMA and RBI instructions.
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