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."
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."
You may also like
Under PM Modi's leadership, terrorism will be wiped out: UP Minister on escalating tensions between India-Pakistan
Nottingham attack survivors' haunting moments before lifelong injuries and memory wiped
'We salute your bravery, sacrifice and strength': Gill, Rahul lead tributes to Indian armed forces amid tension with Pak
FPJ Fact Check: No Petrol Shortage In Pune; Rumors Of Crisis Amid Border Tensions Debunked
Terrifying moment pensioner smashes into bakery after hitting accelerator over brake
