CBDT Updates Guidance on Tax Liability for Voluntarily Disclosed Income u/s 68, Allowing Deductions Post-Kerala HC Ruling.

The Central Board of Direct Taxes (CBDT) issued an instruction modifying previous guidance regarding tax liability on voluntarily disclosed income under Section 68 of the Finance Act, 1965. Initially, it was stated that no tax liability should be deducted from gross wealth before March 1, 1965. However, following a Kerala High Court decision, the CBDT now advises allowing deductions for income tax payable on disclosed income when it is spread over specific assessment years and accepted by the Department. This deduction also applies to estate assessments if the income is part of the estate liable to duty.

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