India: Assessment order issued in name of amalgamating company; provident fund contributions

The KPMG member firm in India has prepared reports about recent tax developments

The KPMG member firm in India has prepared reports about recent tax developments

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

  • Validity of assessment order issued in the name of amalgamating company post amalgamation: The Supreme Court in a case concerning the validity of an assessment order issued in the name of amalgamating company post amalgamation, observed that the taxpayer did not inform the assessing officer about the amalgamation prior to the issuance of the assessment order. Further, the taxpayer itself undertook various compliances such as furnishing of tax returns, correspondences with the tax department, filing of appeal before appellate authorities, etc., in the name of the amalgamating company, which had ceased to exist. The Supreme Court, while distinguishing its earlier decision in the case of Maruti Suzuki India Ltd., upheld the validity of the assessment order passed in the name of amalgamating company on the basis of specific facts of the case. The case is: Mahagun Realtors (P) Ltd. Read an April 2022 report [PDF 585 KB]

  • Computation of taxability of interest on excess contribution made by employee to their provident fund account:  The Finance Act, 2021 has limited the tax exemption with respect to interest income on the contributions made by the employee in a financial year in a recognized provident fund to INR 250,000. Consequently, the Central Board of Direct Taxes inserted a new rule, wherein the mechanism of calculation of taxable interest on the contributions exceeding the specified limit, has been specified. The Employees Provident Fund Organization has issued a circular detailing the calculation and mode of deduction of taxable interest relating to employee’s contribution in their provident fund account exceeding INR 250,000. Read an April 2022 report [PDF 382 KB]

 

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.