Taxation of foreign telecasting companies: guidelines extended to apply to all pending cases until further orders.
Circular No. 765 extends the guidelines for the taxation and computation of income of foreign telecasting companies issued earlier in Circular No. 742, directing that those guidelines apply to all pending cases irrespective of the assessment year until further orders.

Transport allowance compensating commuting is taxable; employers must deduct tax at source on such payments.
Transport allowance paid as compensation for commuting between residence and place of duty does not qualify for exemption under section 10(14)(i) read with rule 2BB(1)(c); any allowance with a commuting reimbursement element is similarly excluded. Persons making such payments must treat them as part of taxable salary and deduct tax at source at the appropriate rates under the Income-tax Act.

Tax on distributed corporate profits imposed, companies pay final tax on dividends while shareholders receive dividend exemption.
The Finance Act, 1997 revises income tax and withholding rates, introduces a tax on profits distributed by domestic companies while exempting corresponding dividend income for shareholders, and creates sector specific tax incentives (notably for telecommunication, industrial parks and selected hotels). It reforms presumptive taxation by requiring maintenance and audit of accounts for electing assessees and allows partner salary and interest deductions in firm computations. The Act strengthens compliance by mandating returns based on economic indicators, enabling magnetic media TDS returns, altering TDS rules on government securities and lottery winnings, and refines MAT with a carry forward credit for MAT paid.

Minimum alternate tax introduced to ensure companies with substantial book profits pay minimum tax alongside expanded tax incentives.
The Act revises income-tax and TDS rates, introduces a Minimum Alternate Tax on companies by deeming a portion of book profits taxable where normal taxable income is lower, and expands sectoral exemptions, tax holidays and targeted deductions (including for pension funds, infrastructure funds, R&D companies, medical expenses and donations). It clarifies depreciation for fractional ownership, tightens rules on sale-and-reacquisition for depreciation, broadens TDS credit for jointly owned income, raises thresholds for advance tax and TDS, and amends procedural time limits and registration requirements for charitable trusts and wealth-tax asset definitions.

Inclusion of pension as salary requires tax deductors to issue Form 16 when tax is deducted at source.
Pension payments are treated as salary under the Income-tax Act, and when tax is deducted at source from pensions the deductor is required to issue the tax deduction certificate in Form No. 16. This obligation does not depend on an employer-employee relationship and Form No. 16 cannot be denied merely because the deductor is unaware of the payee's other income.

Taxability of hire-charges: treat receipts as interest only when transactions are in substance financing, not genuine hire-purchase.
Hire-purchase receipts are not automatically interest under the Interest-tax Act, 1974; Assessing Officers must distinguish genuine hire-purchase arrangements from transactions that are in substance financing. Where the arrangement functions as security for repayment of a loan-e.g., the hirer is the real purchaser but does not pay the full price and the hire-purchase company advances purchase money-the hire-charges should be treated as interest and subject to interest-tax. Examinations should consider agreement terms, relationship among parties, and manifested intention, applying the Sundaram Finance tests.