Refund approval threshold raised, requiring Deputy Commissioner approval for larger refunds to expedite issuance process.
Prior approval of the Deputy Commissioner of Income-tax is required where a refund exceeds the newly prescribed ceiling, increasing the previous threshold to expedite refund issuance while maintaining supervisory authorization for larger refunds.

Valuer registration: Reports by unapproved valuers must be rejected and legal action initiated to protect wealth tax valuations.
Complaints have arisen about valuation reports from unregistered or de registered valuers. Amendments to the Wealth tax Rules confer exclusive authority on the Chief Commissioner to process valuer registrations. The Chief Commissioner should circulate a list of registered valuers with registration numbers to Assessing Officers, who must reject reports from unapproved valuers and initiate legal action against unauthorised valuers.

Reserve price rules let local tax authorities set minimum thresholds, raise prices, or seek approval to lower them.
The instructions establish that the minimum reserve price is 115% of the apparent consideration but allow the Chief Commissioner to set a higher reserve if market conditions warrant. Any proposal to set the reserve below that minimum must be sent to the Board with detailed reasons, though prompt disposal measures should be used to avoid such reductions. For repeatedly unsold properties, Chief Commissioners should engage auctioneers and may increase commission to encourage sale. Automatic monthly increases in reserve for auction delays are discouraged; auctions should be completed within three months of completing Chapter XXC formalities.

Donations in kind deemed income: their use for charitable objects qualifies trusts for exemption under section 10(23C).
Donations in kind (books, clothing, food, drugs, equipment) received by charitable or religious funds, trusts or institutions are income under the statutory definition and, when used for the entity's charitable objects, constitute application of income under the proviso restricting investments and deposits; such use supports eligibility for exemption under section 10(23C)(iv)/(v) if the other conditions of that exemption are met.

Tax deduction at source on interest: prescribed rates and compliance rules for government securities payments.
Tax on interest on Government securities must be deducted under section 193 at credit or payment, at prescribed rates varying by residential status and company type, with applicable surcharge. Exemptions arise on production of section 197 certificates, statutory exemptions for specified securities, or written declarations under section 197A(1). Payors must issue Form No.16 certificates, quote TAN on documents, file annual returns in Form No.25, apply rounding rules, and adhere to penalties and prosecution provisions for failures under sections 200, 201, 203, 203A, 206, 271C and 276B.

Tax deduction at source procedures mandate TAN allocation, registers, reconciliation, and cross verification of TDS certificates.
The instruction prescribes a centralised administrative framework for tax deduction at source by designating ITO(TDS) functions and requiring maintenance of specified registers (TAN allotment, TDS Control Registers, Demand and Collection, Daily Collection, Penalties, Prosecution, Alphabetical Employer and Special Watch) to monitor returns, reconcile monthly certificates and challans, record interest and penalties, and enable sample cross-verification of TDS certificates with ITO(TDS) records.

Deductibility of development expenditure: sugar factories' cane-programme costs may be deductible if wholly and exclusively for business.
The circular states that the agricultural development allowance was withdrawn for expenditure incurred on or after March 1, 1984. However, expenditure by sugar factories on cane development programmes can still be deductible under the general business-expenditure rule if, having regard to facts and circumstances, the expenditure is not capital or personal and is laid out wholly and exclusively for business, subject to assessing officer satisfaction.

Informant confidentiality: only anonymised reward files and reward register details to be provided for receipt audit.
The Board directs that reward files-which include summaries of information, notes on assistance, evaluations tied to amounts added and taxes realised, Assessing Officer reports, and Competent Authority orders but do not contain informant names or addresses-may be made available to Receipt Audit. Statistical data maintained in the Reward Register (para 8.02(iii), Chapter VIII, Search Audit) should also be furnished; information files that record informant identity are to be protected to preserve informant security.

Special Leave Petition filings require legible certified High Court judgments and complete, timely proposals for legal processing.
Proposals for filing Special Leave Petitions must include legible certified High Court judgments, complete photostat copies of all relevant orders, Standing Counsel opinion, and a fully completed proforma 'B' showing the correct tax effect; incomplete or illegible submissions will not be accepted. Departments must promptly apply for certified copies after pronouncement and transmit proposals well in advance to the Income-tax (Judicial) or Wealth-tax (Judicial) Sections to permit legal scrutiny and reference to law officers.

Taxation of will-declared trusts: income taxed at ordinary association-of-persons rate, not at maximum marginal rate.
Income of a trust declared by will, where it is the only trust so declared, is to be taxed under the special charging rule in the first proviso to section 164(1) rather than at the maximum marginal rate applicable under the general provision for associations of persons; other cases covered by the first provisos to sections 164(1) and 164(3) are likewise not subject to the general maximum-marginal-rate provision and are taxed at the ordinarily applicable association-of-persons rate.

Carry forward and set off of losses: BIFR sanctioned rehabilitation schemes can override income tax carry forward restrictions.
A BIFR sanctioned rehabilitation scheme that prescribes carry forward and set off of losses will have overriding effect over conflicting provisions of the Income tax Act where the loss return was filed late; the Assessing Officer must implement the scheme's tax treatment. BIFR cannot itself authorize late filing but may direct an operating agency to prepare a scheme which, once sanctioned, allows carry forward despite delayed filing.

Convertible foreign exchange clarification: non convertible rupee receipts from bilateral account countries and government credits qualify for deductions.
The circular reiterates that the expression "convertible foreign exchange" for purposes of deductions tied to foreign project income, export proceeds and royalties/commissions/fees also includes amounts received in non convertible rupees from bilateral account countries and receipts in Indian rupees under Government to Government credit, but excludes remittances from Nepal and Bhutan.

Tolling of limitation periods does not occur by mere filing of settlement application; assessing officers must continue proceedings.
Filing a settlement application does not automatically suspend the limitation period; the Settlement Commission's exclusive jurisdiction arises only after it formally allows the application to proceed. The exclusion of time from limitation operates only when the Commission, by order, rejects or does not allow the application to be proceeded with; in the interim the assessing officer must continue assessments and may not keep proceedings in abeyance or directly correspond with the Commission.

Deduction under section 80C covers life insurance premiums for adult children, including married daughters.
Deduction under section 80C permits premiums paid to effect or keep in force life insurance on the assessee, spouse, or any child; premiums on policies for adult children, including a married daughter, qualify for the deduction. The Circular confirms this treatment continues under the Finance Act, 1990 provision as it is in pari materia with the earlier section.

Taxability of lump sum payments: death-related gratuities or compensation to heirs are not treated as taxable income.
The Board clarifies that lump sum payments made gratuitously or by way of compensation or otherwise to the widow or other legal heirs of an employee who dies while in active service do not constitute taxable income under the Income-tax Act, 1961 and are not subject to income taxation in the hands of the beneficiaries.

Analysis of appeal orders to guide assessing officers and prevent recurring assessment mistakes through supervisory meetings.
Instruction requires supervisory officers to hold periodic meetings with assessing officers to analyse appeal orders, identify mistakes to be avoided, and provide corrective guidance; it also contemplates occasional involvement of Commissioners (Appeals) and Members, I.T.A.T., and directs Chief Commissioners and Directors General to ensure frequent meetings and administrative action to implement this mechanism.

Compounding procedure requirements: reports must address all guideline conditions, factual submissions, and be timely and signed.
Reports on compounding petitions must address the assessee's submissions, confirm whether guideline conditions are satisfied, and state whether it is a first offence, whether the case involves a large industrial house, prospects of successful prosecution with reasons, and whether the assessee is cooperative. Reports must explain any claimed hardship, be signed by the Chief Commissioner, reach the Board within one month, and explicitly state the assessee's willingness to pay the full composition fee; recommendations to reduce the fee where no guideline permits are impermissible.

Wealth tax scrutiny selection revised to tiered scrutiny for mid-range returns and mandatory scrutiny for high-return cases.
Revises wealth tax scrutiny from the specified assessment year by linking scrutiny to income tax selections, requiring that wealth returns corresponding to income tax scrutiny be examined. Establishes tiered selection intensity for different wealth bands and mandates scrutiny of highest wealth returns; search cases must be fully scrutinised. Jurisdiction for scrutinised wealth cases follows the Wealth Tax Act allocation, so high net wealth does not change jurisdiction if income remains below the threshold for higher officials.

Tax rate restructuring and incentive reform reshape direct tax liabilities and compliance obligations for taxpayers and intermediaries.
The Finance Act, 1990 restructures income tax and TDS rates, recalibrates surcharge applicability, curtails or phases out selected investment incentives and development allowances, and substitutes deduction based savings reliefs with tax rebate mechanisms. It introduces new measures including Equity Linked Savings and Tea Development Accounts with audit and withdrawal conditions, a deduction for expenditure on handicapped dependants, tighter rules for export incentives and foreign exchange realisation, and procedural changes enhancing assessment, return filing, reopening and penalty administration.

Export incentives tax treatment clarified: incentives are taxable but excluded from total turnover for export-profits deduction.
Cash compensatory support, duty drawback and profit on sale of import entitlement licences are revenue receipts included in taxable business profits by retrospective amendment; however, the Finance Act clarified that computing the export-profits deduction excludes these export incentives from total turnover, and that exclusion is clarificatory and applies to earlier assessment years.