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Time of India
16-05-2025
- Business
- Time of India
Customs revises arrest, seizure reporting with focus on digital tracking
New Delhi: The Central Board of Indirect Taxes and Customs (CBIC) has overhauled the process of arrests and seizure reporting in customs cases, making it mandatory for officials to include Digit ID as well as date, time, place of arrest and personal information of the arrested individuals in incident reports. Digit ID is a unique identifier used for digitally tracking enforcement cases within the CBIC's internal systems. The revised format, which was sent in an internal mail to customs field formations, said officials must give description of the offence and seizure details even in cases where no arrests are made but evasion is detected. Continue to video 5 5 Next Stay Playback speed 1x Normal Back 0.25x 0.5x 1x Normal 1.5x 2x 5 5 / Skip Ads by ET has seen a copy of the mail. The revised format will apply to cases involving smuggling, commercial fraud and misuse of export promotion schemes. Live Events The move aims to bring transparency in the customs seizure process and to minimise any possibility of misuse of privilege by customs officials. While reporting was done in case of arrests, it was not done for non seizure, and most of the time there was no direct reporting to the centralised database, leaving scope for manipulation of facts. Also, there was no timeframe for reporting. The new format mandates officials to immediately file incident reports and submit them via email to senior CBIC officials including the member (compliance) and heads of the Directorate of Revenue Intelligence (DRI) and Directorate General of Analytics and Risk Management (DGARM), besides their top officials. The CBIC communication said reporting must be done in a timely manner to ensure effective enforcement. Officials said inclusion of Digit ID will help in central monitoring of customs cases. "Apart from ensuring transparency in customs seizure, the revised reporting format will help in digitising case tracking with mandatory Digit ID and help in administrative oversight," a senior official told ET. Experts said this will enhance the integrity of enforcement actions, empower data analytics for trend detection and facilitate better risk profiling "By assigning a unique identifier to each case, authorities can now track enforcement actions in real time and ensure centralised, data-driven monitoring," said Amit Maheshwari, tax partner at AKM Global, a tax and consulting firm. He added that the details of offence, modus operandi and duty implications will not only promote uniformity but also reduce the chances of selective disclosure or manipulation of facts. "Furthermore, the mandate to report these cases directly to key institutions such as the DRI, DGGRAM and CBIC ensures a multi-layered oversight mechanism," he said.
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Business Standard
25-04-2025
- Business
- Business Standard
Settle a Sebi case? You can't claim it as a business expense anymore
On April 24, the Income Tax Department (CBDT) issued a new rule that affects how businesses handle certain legal expenses in their tax filings. In a notification issued on Thursday, the Central Board of Direct Taxes (CBDT) clarified that any expenditure incurred to resolve or settle proceedings related to violations under four specific laws will not be considered a legitimate business expense. This means such amounts cannot be deducted from taxable income while computing profits for tax purposes. What's the rule About? If a company pays money to settle a case or proceeding under any of the following four laws: SEBI Act, 1992 (for violations in the stock market) Securities Contracts (Regulation) Act, 1956 Depositories Act, 1996 (related to shareholding systems) Competition Act, 2002 (anti-trust or monopoly-related cases) then those payments cannot be claimed as a business expense while filing income tax. The decision effectively closes a tax loophole that allowed companies to potentially reduce their taxable income by treating penalties or settlement payments related to regulatory violations as normal business expenditures. What Does It Mean for Taxpayers? Let's say a company is fined by SEBI or agrees to pay a settlement to resolve a case under the Competition Act. Before this rule: They might have tried to reduce their taxable income by calling that settlement an "expense" in their profit & loss account. After this rule: They can't do that anymore. That settlement won't reduce their taxable profit, so they'll pay more tax. Why is this important? The government is drawing a line: Expenses related to breaking the law or settling legal violations aren't part of doing 'normal business.' It stops companies from getting tax benefits for wrongdoing, even if they settle instead of going through full legal proceedings. "The deductibility of settlement payments under Section 37(1) of the Income-tax Act, 1961, has long been a subject of judicial debate, particularly in cases like Income Tax Officer v. Reliance Share Stock Brokers (P.) Ltd., where consent fees paid to SEBI were allowed as business expenditure on grounds of commercial expediency." However, the CBDT brought in changes to law via Finance Act, 2024, and has now notified that any expenditure incurred for settlement or compounding of proceedings under specific legislations in India or outside, including the SEBI Act, the Securities Contracts (Regulation) Act, the Depositories Act, and the Competition Act, shall not be eligible for deductions," said Amit Maheshwari, Tax Partner at AKM Global.
Time of India
24-04-2025
- Business
- Time of India
No tax deductions for settling legal proceedings under certain laws
No tax deduction can be claimed for settling legal proceedings under four laws including Securities and Exchange Board of India Act , 1992; the Securities Contracts (Regulation) Act, 1956; the Depositories Act, 1996; and the Competition Act, 2002. The central board of direct taxes(CBDT) in a notification issued April 23 clarified that from April 1, no such deduction can be claimed. Last year, the Centre had made amendments in the Finance Act, 2024 under Section 37 of the act. Amit Maheshwari, tax partner at AKM Global, said, "The deductibility of settlement payments under Section 37(1) of the Income-tax Act, 1961, has long been a subject of judicial debate, particularly in cases like Income Tax Officer v. Reliance Share & Stock Brokers, where consent fees paid to Sebi were allowed as business expenditure on grounds of commercial expediency." by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Living in Thiruvananthapuram? Don't Buy Hearing Aids Before Reading This Learn More Undo
NDTV
24-04-2025
- Business
- NDTV
Buying A Handbag, Watch Or Sunglasses Over Rs 10 Lakh Will Now Attract 1% TCS
Thinking of buying something over Rs 10 lakh? You will have to pay a small tax. In a notification released by the Income Tax Department on April 22, 1 percent Tax Collected at Source (TCS) will be levied on luxury items priced over Rs 10 lakh. TCS is the tax payable by a seller which he collects from the buyer at the time of sale. List of luxury goods that fall under the 1% TCS Art pieces: Antiques, painting, sculptures Accessories: Wrist watches, sunglasses, handbags, and shoes Collectables: Coins and stamps Sportswear: Golf-kit, ski-wear Transportation: Yacht, rowing boat, canoe, helicopter Home theatre system Horses for racing and polo games 📢CBDT Notification Alert! ➡️New rules issued for Tax Collection at Source (TCS) on the purchase of certain goods. ✅Notification S.O. 1825(E) dated 22.04.2025 published in 🔗The Notification can be accessed at: — Income Tax India (@IncomeTaxIndia) April 23, 2025 What it means: When you're buying luxury goods worth Rs 10 lakh or above, you will have to pay an additional 1% TCS on the amount. The move is not for additional revenue but to expand the taxpayer base and ensure accurate income disclosures. It is believed that many professionals and business owners under-report their income to avoid taxation. Now, the government has intensified its focus on high-value transactions to cross-check tax returns with actual purchases and prompt individuals to update their tax filings accordingly. 'This notification extends TCS coverage to luxury goods and collectibles, improving traceability of high-end spending,' Amit Maheshwari, tax partner at AKM Global, a tax and consulting firm told the Times of India. Effective immediately, the government will be collecting this tax. This move is expected to help the government keep a closer eye on the purchase and sale of luxury goods.
Time of India
24-04-2025
- Business
- Time of India
Several new items come under TCS as I-T widens tax net
A variety of luxury items, including wristwatches, handbags, shoes, sunglasses, art, paintings, and home theater systems, priced over Rs 10 lakh will now be subject to tax collected at source ( TCS ). This policy change is part of the government's initiative to enhance oversight of high-value transactions and broaden the tax base, The Times of India reported on April 24. The Central Board of Direct Taxes ( CBDT ) has announced ten categories of products that will be affected by these new TCS regulations. Among these categories are racing horses, yachts, helicopters, gold kits, and ski equipment. With this new regulation in place, buyers of these luxury goods will be required to pay a TCS of 1% at the time of purchase. This is similar to the existing policy for vehicles that exceed Rs 10 lakh in price. The government's strategy aims to increase the number of taxpayers in the nation and encourage more accurate income reporting. It may be noted here that many business owners and professionals have historically underreported their earnings to evade taxes, which has led tax authorities to broaden the scope of TCS and tax deducted at source. Data collected by the tax department allows for a comparison between tax returns and consumer purchases. Taxpayers may find themselves prompted to pay the correct tax amount, with an option to revise their returns if discrepancies are found. Live Events The department has also gathered information on various other acquisitions and investments, such as real estate and financial products, to monitor those who may not be fully disclosing their income. "This notification broadens the TCS framework to encompass luxury goods and collectibles... This will improve the ability to track luxury expenditures," ToI's report said quoting Amit Maheshwari, a tax partner at AKM Global, a tax consulting firm. The new provisions are effective immediately as of Tuesday. Additionally, this initiative is expected to enhance the scrutiny of sellers. In recent years, the income tax department has conducted extensive investigations and discovered significant cash transactions associated with high-value purchases, particularly in designer clothing and watches, some of which were suspected of being smuggled into the country.
