IT Act 1961

When A Princess Worried About Tax on Alimony

March 21, 2025March 21, 2025

All things in life have a tax angle, including alimony payments. In this article I elaborate on tax treatment of alimony payments under the Income Tax Act, 1961 (‘IT Act, 1961’). Upfront, these are the three takeaways from this article: first, a lump sum payment of alimony amount is not… Read More »

Tax Privacy: To Begin a Conversation …

March 11, 2025March 14, 2025

Income tax law is based on disclosing information to the State. Personal financial information. Bank account statements, investments, salary receipts, rent paid or received, medical expenses, money transferred to spouse, expenses of children, insurance premiums, political donations, charitable contributions to name a few. Each piece of information is necessary to… Read More »

Long Wait for GSTATs: July 2017 … and Counting.

February 24, 2025February 24, 2025

GSTATs have been envisaged as the first appellate forum under GST laws. And yet, 7.5 years since implementation of GST, not a single GSTAT is functioning. Reason? Many. Some are easy to identify, others are tough to understand. Nonetheless, here is a small story of the ill-fated GSTATs since the… Read More »

Income Tax Bill, 2025: In Search of a Big Idea

February 17, 2025February 17, 2025

The Department of Revenue claims that Income Tax Bill, 2025 – tabled in the Parliament on 13 February 2025 – marks a significant step towards simplifying the language and structure of the Income Tax Act, 1961. Does it? Yes. Was it needed? Yes. Is it a major reform? No, and herein lies… Read More »

Skeletal Timeline of Income Tax Reform in India

February 13, 2025February 13, 2025

1860-1886: Income tax was introduced in India for the first time in 1860 to overcome the financial difficulties due to First War of Independence of 1857. The period of 1860-1886 saw the Govt alternating between income tax and license tax as a source of revenue. Income tax became the preferred… Read More »

Shimla HC Decodes Scope of Sec 43-B, IT Act, 1961

January 17, 2025January 17, 2025

In a recent judgment, the Shimla High Court had to adjudicate on the conditions prescribed in Section 43-B, IT Act, 1961 for an assessee to claim deductions. The issue related to Section 43-B(f) which envisages deductions to an employer for payments made to employees on encashment of cash leaves. Facts For… Read More »

Issuance of Shares under Amalgamation Scheme is Not Transfer of Property: ITAT

January 4, 2025January 4, 2025

The Rajkot Bench of ITAT recently ruled that issuance of shares under a scheme of amalgamation does not amount to transfer of capital assets under IT Act, 1961. The Assessing Officer had applied Sec 56(2)(vii)(c)(ii) of the IT Act, 1961 to assert that a skewed swap ratio was applied for transfer and… Read More »

Fee for Technical Services: Future Demands Answers

August 27, 2024August 27, 2024

Introduction Tax practitioners tend to refer to Fee for technical services (‘FTS’) and Royalty income in tandem with an intent to highlight the shape shifting nature of both concepts under domestic and international tax law. And in Indian context, the discussion is also about the high volume of litigation that… Read More »

ESOPs-Related Compensation Present an Interesting Dilemma

August 21, 2024August 21, 2024

Introduction Employee Stock Options (ESOPs) are typically taxable under the IT Act, 1961 in the following two instances: first, at the time of exercise of option by the employee as a perquisite. The rationale is that the employee has received a benefit by obtaining the share at a price below the… Read More »

Short Note from Tax History: Cost of Acquisition and Capital Gains Tax

August 13, 2024August 13, 2024

This article aims to examine in detail a judgment on capital gains tax that continues to have enduring relevance. B.C. Srinivasa Shetty case was decided in 1981 by a 3-Judge Bench of the Supreme Court and its observations on chargeability of capital gains tax continue to be cited in various contemporary cases.… Read More »