Article
Tax on ‘Cash’ benefits and perquisites – Applicability on waiver of debts
By Harshit Khurana
Amongst various tax amendment proposals announced this year, proposal for taxing ‘cash’ benefits and perquisites is likely to have a wide-reaching impact on the taxpayers, especially in the context of waiver of debts due from a corporate debtor. More than the corporate debtor, the amendment may prove to be burdensome for the lender waiving such debts due to withholding tax liability imposed upon such lender. The article in this issue of Direct Tax Amicus aims to discuss the proposed amendment and its impact in the context of waiver of debt. Discussing about taxation of benefits or perquisites, impact of amendment on waiver of trading liabilities, impact of amendment on waiver of loan, and potential arguments for non-applicability of Section 194R of the Income-tax Act, 1961, the author is of the view that in the context of waiver of debt or loan, the amendment proposed by Budget 2023 is like rubbing salt on the wound. Accordingly, he is of the view that it is necessary that before enactment of the proposed amendment, suitable clarifications are issued to restrict the applicability of said provisions to certain scenarios.
Notifications & Circulars
- Scheme for centralised processing of Equalisation Levy Statement notified
- Updated return under Section 139(8A) – Ineligibility – Corrigendum w.r.t Para 28.5 of the Explanatory notes to Finance Act, 2022 issued
- Updated ITR forms for AY 2023-24 notified
- Audit Report under the amended Section 12A(1)(b)(ii) and clause (b) to tenth proviso of Section 10(23C): CBDT notifies updated Form No. 10B and Form No. 10BB
- Faceless Assessment Proceedings – CBDT amends list of specified Income-tax Authorities directed to exercise powers and functions of AO concurrently
Ratio decidendi
- Physician samples – Reassessment cannot be initiated for AY 2008-09 on basis of CBDT Circular No. 5/2012 stating position as effective from December 2009 – Bombay High Court
- DTAA benefits on short-term capital gains to Singapore-based assessee holding a valid tax residency certificate – Delhi HC decision in Blackstone Capital relied – ITAT Delhi
- Article 12 of the France-New Zealand DTAA applies to royalties arising in France, paid to an intermediary in a third state, but beneficially owned by a New Zealand resident – Supreme Administrative Court of France
- Assessment order passed on non-existent amalgamating company is invalid – Delhi HC relies upon SC decision in Maruti Suzuki instead of Mahagun Realtors – Delhi High Court
- Income earned by APMC from regulating the marketing of fish, poultry and eggs is exempt under Section 10(26AAB) – Delhi High Court
