LKS Direct Tax Amicus, December 2024

Pandora’s box of income-tax implications arising from 2014 amendment to Employee Pension Scheme, 1995

Certain amendments to Employees’ Pension Scheme, 1995 in 2014 brought in multi-layered restrictions on the contributions that can be made to the Pension Fund, the benefits that would arise from any Pension Fund, additional conditions to be fulfilled to claim benefits out of past contributions, etc. The Employees’ Provident Fund Organisation also issued a series of Circulars subsequently. The article in this issue of Direct Tax Amicus discusses in this regard certain unforeseen income-tax implications, on the monies that would be contributed to the Pension Fund, as well as monies that would be receivable from the Pension Fund and Provident Fund. The discussion by the author (Samyak Navedia) is limited to the income-tax liability in the hands of the employees on, transfer of balances from PF Scheme to Pension Scheme, contribution to the Pension Scheme from PF Scheme, and on receipt of pension from the Pension Scheme at the time of retirement.

Read the full article here.

Notifications and Circulars

• Condonation of delay in filing of Form No. 9A/10/10B/I0BB for Assessment Year 2018-19 and subsequent AYs
• Condonation of delay in filing Form No. 10-IC / 10-ID for Assessment Years 2020-21, 2021-22 and 2022-23
• Recipients notified in whose case the provisions of Section 194N shall not apply
• Form Nos. 42, 43 and 44 to be furnished electronically
• Safe Harbour Rules notified for foreign companies engaged in the business of diamond mining

Ratio decidendi

• Petrol Pump run by a Trust having a music school and a library as the main charitable activity, is an incidental activity since entire surplus from petrol pump utilised for the main charitable activities – ITAT Chennai
• Assessment based on information found during search – Non-obstante clause in Section 153C does not exclude applicability of Section 147, if the Assessing Officer does not assume jurisdiction under Section 153C – Delhi High Court
• Maximum Marginal Rate (MMR) includes surcharge in relation to the highest slab of income, even where the income of the assessee is below INR 50 lakh – ITAT Bengaluru
• Share premium – Provisions of Section 56(2)(viib) apply in case of conversion of a loan into share capital – ITAT Ahmedabad
• Guarantee fee received by a Korean company from its Indian subsidiaries and assessed as ‘other income’ is not taxable in India – ITAT Chennai

Read the full newsletter LKS Direct Tax Amicus, December 2024 (Complete)..........................

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