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India: “Specified days” deduction for employees

India: “Specified days” deduction for employees

The KPMG member firm in India has prepared reports about the following tax developments (read more at the hyperlinks provided below).


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  • “Specified days” deduction for employer: The Bangalore Bench of the Income-tax Appellate Tribunal held that if the employee-related deduction is not given in the first year of employment due to non-fulfillment of the “specified days” condition, the deduction is available and is to be allowed in the following two years if these same employees work for more than the specified days during those years. The case is: Texas Instruments (India) Private Ltd. Read an April 2020 report [PDF 310 KB]

  • Short withholding or collection of tax due to increase the tax surcharge rates: The Central Board of Direct Taxes (CBDT) issued a circular clarifying that a person responsible for the withholding or collection of tax under any provision of the Income-tax Act, 1961 will not be considered to be an “assessee in default” with respect to certain transactions. Read an April 2020 report [PDF 161 KB]

  • Re-assessment proceedings: The Supreme Court of India held that, for purposes of determining whether there were reasons to believe that income was not reported and assessed, facts that came to the knowledge of the Assessing Officer after completion of the assessment proceedings could be taken into consideration. Read an April 2020 report [PDF 333 KB]

  • Concessional tax rates under optional tax regime, tax withheld at source: To address questions regarding new section 115BAC—the measure providing that an individual has an option to choose between the existing tax rates and the new tax regime (concessional tax rates without considering exemptions/deductions)—the CBDT issued a circular clarifying that an employer, based on information received from the individual employee, could compute the tax withheld at source by considering the provision of section 115BAC, as applicable. Read an April 2020 report [PDF 287 KB]

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