Fringe Benefit Tax on stock options applies at vesting value minus employee payment, employer liable to pay and may recover it.
Fringe Benefit Tax applies to allotment or transfer of specified securities and sweat equity shares to employees, with taxable value equal to the Fair Market Value on the date of vesting minus any amount paid or recovered from the employee. Rule 40C prescribes FMV determination-listed shares use average opening and closing prices (or highest-volume exchange), unlisted shares require valuation by a SEBI-registered Category I Merchant Banker on a specified date within 180 days of vesting. Cost of acquisition for capital gains is the FMV used for fringe benefit computation and holding period runs from the date of allotment or transfer.

Small demand TDS cases may be administratively dropped to avoid disproportionate compliance costs, with DDOs warned.
Assessing Officers are authorised to ignore such cases and drop the demand where the demand/default is up to a specified de minimis level, because the cost of issuing show cause notices and follow up may exceed the amount involved; DDOs in such cases may be warned to avoid habitual short deduction. These instructions apply to all TCS/TDS cases under direct tax enactments and are effective immediately.

Extension of due date for income-tax return filing allows re-filing in prescribed forms without penalty.
The due date for filing income-tax returns was extended to 29 February 2008 to allow assessees who filed returns on or after 14 May 2007, or who filed in forms other than the prescribed forms ITR-1 to ITR-8, to re-file their returns in the specified forms for assessment year 2007-08; such re-filings made on or before the extended date will not attract interest or penalty.

Extension of return filing deadline permits assessees who used old return forms after form change to refile.
The Central Board of Direct Taxes, invoking section 119, extended the due date for filing returns for all categories of assessees to permit those who filed returns on or after the notification of new forms but did so in a form other than one of the forms notified for the assessment year to file returns in the specified prescribed forms.

Tax deduction at source on salaries: employer duties, perquisite valuation, compliance and electronic TDS filing obligations.
The circular prescribes the operational scheme for deduction of tax at source from salaries under section 192 for FY 2007-08: employers must estimate annual salary (including taxable perquisites), compute tax at applicable category rates, deduct tax on average at each payment, and may elect to pay tax on non monetary perquisites on behalf of employees. It sets compliance obligations-TAN/PAN quoting, issuance of Forms No.16/16AA and No.12BA, electronic filing of Form No.24Q, deposit rules, penalties for non-compliance-and explains valuation rules, permitted exemptions, and Chapter VI A deduction treatment, with illustrative computations and adjustment provisions for excess or shortfall within the financial year.

Valuation of perquisites revised: reduced rent perquisite rates retrospectively and new valuation rules for exempt employers.
The amendments to Rule 3 reduce valuation rates for concessional rent, rent free and leased accommodation retrospectively and add valuation provisions for benefits provided by employers not subject to Fringe Benefit Tax. New sub rules prescribe valuation methods for specified amenities and residual benefits supplied by exempt employers; these sub rules take effect for the assessment year following their notified effective date, and the Income Tax Rules were amended and notified by the Board.

Extension of filing date for e-returns, allowing specified audit, income and fringe benefits returns to be filed later.
An administrative direction under section 119 permits companies and firms required to furnish e-returns for assessment year 2007-08 to file specified documents after the normal deadline due to technical difficulties. The relief covers the report of audit under section 44AB and the return of income under section 139(1), together with the return of fringe benefits under section 115WD.

Extension of filing date for paper income and fringe benefit returns under section 119 due to work disruption.
Central Board of Direct Taxes, exercising section 119, permits assessees required to file returns in paper format to file returns of income or fringe benefits by the extended date specified by the Board; the extension excludes assessees mandated to file electronically and responds to dislocation of work.

Tax audit due date extension granted for assessees in Bihar, postponing obligation to obtain the tax audit report.
The due date for obtaining the tax audit report under the tax audit provisions is extended for income-tax assessees in the State of Bihar, postponing the previously notified filing deadline for the audit report. The extension is issued by the Central Board of Direct Taxes under its administrative powers in continuation of an earlier order and is communicated through an office instruction signed by the Director (ITA-II).

Suspension of tax collection during Mutual Agreement Procedure permitted upon official confirmation and bank guarantee.
Assessing Officers must suspend enforcement of tax collection in admitted MAP cases only after obtaining confirmation of MAP pendency from the Foreign Tax and Tax Research Division and on receipt of a bank guarantee in the MoU's model format for the amount specified; the MoU's other conditions remain applicable and the extension covers Indian residents where MAP is invoked by a US resident.

Refund of TDS under section 195 allowed to deductor subject to approval, undertaking, adjustment and time limit.
Refunds of TDS under section 195 may be given to the person who deducted and deposited the tax where income has not accrued to the non resident or where no or lesser tax is due, subject to prior approval of the Chief Commissioner or Director General; no interest is admissible; the Assessing Officer may adjust refunds against direct tax liabilities and must ensure corresponding expense disallowance and prescribed undertakings or indemnities; a two year limitation for claims applies.

Allowability of harvesting and transportation expenses affirmed as business deductions for co-operative sugar mills procuring cane under supply agreements.
Expenses incurred by Co-operative sugar mills to procure sugarcane from member-farmers under exclusive supply agreements are made to secure an adequate continuous supply of an essential input; they are incurred for commercial expediency and are regarded as incurred wholly and exclusively for the purpose of business and therefore allowable in computing the mills' income.

Extension of filing deadline for income tax returns in Bihar due to flood disruption, administrative order provides relief.
An administrative order under Section 119 of the Income Tax Act, 1961 extends the due date for filing returns for income-tax assessees in the State of Bihar from 31 October 2007 to 31 December 2007 owing to disruption caused by floods; the extension provides temporal relief for filing obligations without altering substantive tax liabilities or other procedural provisions.

Appraisal report standards require post-search action plans and detailed issue-based evidence to support assessment and prosecution potential.
Appraisal Reports must be supported by a Post-Search Action Plan identifying enquiries, core documents and timelines; each main issue must be framed and discussed in a self-contained narrative with corroborative evidence (including digital evidence), seized records and statements. Admissions of undisclosed income require documentary corroboration and continued inquiry. Reports must assess prosecution potential, indicate offences and applicable provisions, recommend actions where other parties or other-law contraventions are implicated, set timeframes for collateral enquiries and require timely supervisory approval and submission of supplementary findings.

Security of seized materials: strict custody and verification procedures required to prevent tampering and preserve evidence.
Security of seized and impounded books, documents and electronic storage devices requires numbered and sealed pages at seizure, Control Room verification, and immediate rectification of discrepancies. Processing officers must identify and copy Core Documents, confront them with the assessee during post search investigation, and annex photocopies and corroborating evidence to the Appraisal Report. Inspections must be recorded in a prescribed register and supervised. Receiving officers must verify materials against Panchnama and Appraisal Report, report discrepancies to the CIT, and bear custody responsibility for any subsequent loss or tampering unless preexisting defects are recorded.

Depreciation verification: assessing officers must verify claims and link records to prevent revenue loss and ensure compliance.
Assessing Officers are instructed to verify depreciation claims and the set off of brought forward losses against physical records during scrutiny, ensuring such claims and unabsorbed depreciation are linked with assessment records for correctness; remedial action for earlier years should be initiated and the instruction communicated for strict compliance.

Counsel fee revision updates appointment, qualification, payment and reimbursement rules for government standing counsels.
Revised fees and engagement terms set out category-specific rates, retainerships, allowances, reimbursement rules, documentation and staged payment procedures for Senior Standing Counsel, Standing Counsel and Junior Standing Counsel; define fee entitlement conditions including effective appearance, treatment of uncontested and connected cases, deductions for late submission, and payment apportionment on change of counsel; and prescribe qualification criteria, appointment, three-year terms, renewal by performance review, allocation of cases, reporting proformas and conflict-of-interest restrictions on private practice.

Retention of seized materials: require physical handover at transfers and personal liability for any loss be fixed.
Where approval is sought under section 132(8) for retention of seized or impounded books of account and documents, the Competent Authority must ensure physical handover of such materials by the officer in charge at the time of transfer, mark a copy of the handover note to the Competent Authority, and fix personal responsibility and report to the Board if seized materials are lost or untraceable.

Designation of Assessing Officer: CITs may assign or retain jurisdictional AOs; ensure tracing and valid service before alternative notice issuance.
The Board revises prior AIRs guidance to permit Commissioners of Income Tax to designate Assessing Officers or leave work to jurisdictional Assessing Officers for issuing notices under section 142(1), amending sub paras (d)-(g). Notices under section 142(1) should follow the Central Action Plan timeline. Where AIR addresses are incomplete, officers must trace assessees per the established procedure and secure valid service; if tracing delays prevent issuing section 142(1) notices and completing assessment within the prescribed period, a notice under section 148 may be issued thereafter.

Extension of due date for income tax returns in Bihar after floods; filing deadline shifted by CBDT under section 119.
The Central Board of Direct Taxes, invoking its statutory power to extend deadlines under section 119 of the Income Tax Act, 1961, has extended the filing deadline for income-tax returns for assessees in the State of Bihar from 31 July 2007 to 16 August 2007 due to disruption caused by floods.