Carry forward of losses restricted: only losses determined from returns filed within the prescribed time or extended period.
Entitlement to carry forward and set off losses is limited to losses determined pursuant to a return filed within the prescribed time or within any extension granted by the Income tax Officer; the Board's earlier instruction denying carry forward for belated loss returns is confined to assessment year 1984-85, and the amended statutory rule effective 9 April 1985 governs subsequent years.

Undervalued transfers: treat as understated consideration or bona fide inadequate sale, invoking income tax or gift tax rules accordingly.
Where a transfer for consideration below fair market value reflects an understated consideration (assessee received more than declared), section 52 of the Income-tax Act applies subject to the statutory threshold and without need to quantify exact understatement; where the transfer is a bona fide inadequate consideration, the difference is taxable under section 4(1) of the Gift-tax Act if its conditions are satisfied, and the two regimes should not duplicate tax on the same amount, though either may be invoked protectively.

Leave travel concession exemption: full relief for first entitlement in a block; excess on subsequent trips is taxable as perquisite.
Clarification states that employer-provided leave travel concession for travel within India is exempt up to the value of travel to the employee's home district, except where block-based exceptions apply. If entitlement occurs once per block, the concession is fully exempt; if more than once in the block, full exemption is allowed only for the first concession and subsequent concessions are exempt only to the extent of the home-town fare, with any excess treated as a perquisite included in salary income.

Political party tax exemption requires audited accounts, donor records and annual return filing obligation under law
Section 13A exempts specified heads of income and voluntary contributions of a political party provided the party maintains adequate books and documents, records donor details for contributions above the threshold, and has its accounts audited by a qualified accountant. Political parties must also voluntarily file annual returns of total income computed without the section 13A exemption when taxable income exceeds the basic exemption, and subordinate units file separately only if they are separately registered or maintain separate accounts.

Extra shift allowance calculation now applies on a factory basis, not per individual machinery days, simplifying claims.
The Board directs that extra shift allowance for plant and machinery be calculated with reference to the working of each factory as a whole, not by determining the number of days each individual machine or plant worked extra shifts; where a concern has multiple factories, the allowance is to be regulated separately for each factory to simplify calculation and administration.

Wealth-tax exemption for non-resident external account deposits continues after return, covering funds and assets brought into India.
Balances in Non-resident (External) Accounts remain exempt from wealth-tax by virtue of non-resident status, and where a person of Indian origin or an Indian citizen returns to India to reside permanently, those moneys and assets brought in or acquired from them continue to be exempt from wealth-tax for the prescribed temporary exemption period following return.

Permanent Account Number allotment: administrative directive to complete allotment and submit compliance report by specified deadlines.
Directs completion of allotment of Permanent Account Numbers to all assessees enrolled on the Department register, including those who did not apply, and reiterates that PANs should be allotted within one month of filing the first return or enrolment. Chief Commissioner(Admn)/Commissioner of Income-tax in charge of Administration must complete the allotment work, and a compliance report on existing assessees' allotment must be sent to the Board by the specified deadline.

Set-off of accumulated losses and unabsorbed depreciation: not allowed in provisional assessments under section 141A.
The Board advises that accumulated losses and unabsorbed depreciation of an amalgamating company, though transferable under section 72A subject to conditions, shall not be given effect to in provisional assessments under section 141A where those amounts have not been computed in regular assessments; such set-offs must await computation in the regular assessment process.

Correction of instruction reference: prior citation amended to rectify an erroneous bibliographic reference in board guidance.
Correction to Board Instruction No.1582 amends the cited reference in paragraph 1 by replacing the prior citation "Instruction No.1132 dated 5-1-81 (F.No.176/89/77-IT(AI))" with the corrected citation "Instruction No.1132 dated 5-1-78 (F.No.176/89/77-IT(AI))", effecting an administrative rectification of the bibliographic reference.

Ex-parte injunction misuse: department entitled to resituate goods removed to frustrate tax recovery.
Supreme Court guidance affirms that the balance of convenience in fiscal matters favours the Government and warns against misuse of an ex-parte injunction to remove goods from tax authorities' reach; where goods were removed under such interim orders and proceedings withdrawn to defeat prohibitory orders, the Department should be resituated in respect of those goods.

Valuation referral under Section 16A requires referring asset valuations to a valuation officer when declared values appear understated.
Wealth-tax officers must follow Section 16A by referring asset valuation to a valuation officer when the declared value is based on a registered valuer and appears below fair market value, when the officer believes fair market value substantially exceeds returned value, or when the asset's nature and circumstances make a reference necessary; prior monetary-limit instructions have been superseded by the Taxation Laws (Amendment) Act, 1972, and officers are directed to ensure compliance and notify the Board.

Exemption under section 10(15)(ii): interest on Post Office Cumulative Time Deposits exempt if deposits within postal bank limits.
The Central Board of Direct Taxes clarifies that interest under the Post Office Savings (Cumulative Time Deposits) Rules, 1959, is exempt under section 10(15)(ii) of the Income-tax Act, 1961, to the extent the deposit does not exceed the maximum amount permitted by the Post Office Savings Bank regulations.

Accrual taxation of deposit interest requires annual inclusion by depositors and notification by private sector issuers to enable disclosure.
Interest on cumulative deposit schemes of private sector undertakings is to be taxed on an accrual basis annually; private sector issuers must inform individual depositors of accrued interest amounts so depositors can disclose and include that accrued interest in their income-tax returns.

Dismissal of special leave petitions at admission stage does not create binding precedent when orders are unreasoned.
Dismissal at the admission stage of a special leave petition does not affirm the underlying High Court ruling and, when rendered without reasons, does not constitute a binding precedent under the constitutional principle of binding precedent; officers should not treat unreasoned admissions-stage dismissals as settled authority.

Interest on employee loans: government-prescribed rate and monthly outstanding calculation determine taxable perquisite valuation under income tax rules.
The Government fixed simple interest at 10% per annum for employee loans under the newly inserted sub-clause and, via rule 3A of the Income-tax Rules, 1962, mandated that interest be calculated at the prescribed rate on loan amounts outstanding as on the last date of each month of the previous year, after deducting in-month repayments of principal or interest from the opening or advanced amounts, with the result used for perquisite valuation and tax deduction at source from salaries.

House Rent Allowance exclusion reaffirmed; owner occupied or non rent HRA must be included in salary and tax recovered.
Retrospective Explanation to section 10(13A) renders HRA exemption inadmissible where the employee occupies owned accommodation or has not incurred rent; prior guidance permitting such exemption is withdrawn and tax not deducted must be recovered from salaries by March 31, 1985, and included in total income for the financial year. A new sub clause to section 17(2) treats interest free or low interest employer loans for house or motor car as a taxable perquisite equal to prescribed notional interest (with specified employee exclusions) and is to be incorporated into existing circular guidance.

Remedial action in audit disputes: precautionary proceedings must be kept open and only dropped under prescribed approvals.
Remedial action should be taken as a precaution where Audit objections persist beyond three months of the department's reply; action may be initiated under appropriate statutory provisions and later re-examined considering Audit's rejoinder, departmental reply, assessee representations and judicial decisions. Minor objections may be dropped with supervisory approval and major objections require higher sanction; if the Auditor-General seeks Audit Report inclusion, remedial action can be dropped only with central board approval. Specific guidance governs withdrawal where Board instructions are challenged, where court or tribunal decisions bear on the point, and where objections are purely factual.

Information on a point of law can trigger reassessment when it identifies overlooked statutory provisions, regardless of source.
A communication pointing out an overlooked statutory provision qualifies as 'information' under the Estate Duty Act and can justify reopening an assessment; for a communication to be information on a point of law its content must be law (a legislative provision or a judicial/quasi judicial determination), and the source of the communication does not negate its character as information.

Accrual taxation of deposit interest: National Deposit Scheme interest deemed accrued by fiscal year end and taxable in that year.
Interest on deposits under the National Deposit Scheme made in the 1984-85 financial year is deemed to have accrued on 31-3-1985 despite half-yearly payment or compounding; the Board advises that such interest is taxable in the year of accrual.

Statistical reporting obligations require timely submission to DI(IT) to ensure prompt compilation of appeals statistics.
Mandates that Commissioners and Commissioners(Appeals) must send statistical reports on the institution, disposal and pendency of appeals and revision petitions to DI(IT) for every month or quarter, and that such statistics be transmitted within ten days after the end of the month or quarter to avoid delay in compilation.