Location of gifted property determines gift-tax: receipt abroad avoids tax, direct delivery in India attracts tax.
Taxability of gifts in foreign exchange from non-resident donors depends on the location of the property when gifted: receipt by or on behalf of the donee outside India avoids gift-tax; delivery to the donee in India by the donor attracts gift-tax because the delivering agency is the donor's agent; but where the donor sends the instrument at the donee's request the bank/post is treated as agent of the donee and no gift-tax arises.

Tax deduction at source on horse race winnings requires prescribed rates and timely deposit using designated challans.
The circular prescribes withholding arrangements for winnings from horse races for 1981-82: apply the specified flat withholding rates or, if higher, the tax and surcharge computed as if such winnings were the total income. Tax deducted must be remitted to the Central Government within one week of the month end into authorized banks using the appropriate challan (No. 2 red band for companies; No. 8 blue band for non companies). Failure without reasonable cause to deduct or to pay deducted tax attracts penal consequences, and taxpayers should consult the Income tax Act, the Finance Act, or local tax officers for guidance.

Tax deduction at source on insurance commission: payer must withhold, remit, and comply with prescribed forms and challans
Deduction of tax at source applies to income by way of insurance commission and must be made at the time of credit or payment, with remittance to the Central Government within prescribed periods or within an extended interval when commission is credited as at the payer's accounts-closing date. Payers must use specified coloured challans for companies and non-companies, show surcharge separately, round the tax to the nearest rupee, cannot adjust for prior excess commission debits, issue deduction certificates to payees, and file quarterly and annual statements and returns in the prescribed forms; recipients (other than companies) may seek a certificate authorising lower or no deduction.

Tax deduction at source on interest on government securities: prescribed deduction rates under the Finance Bill require immediate implementation.
The circular transmits draft rates prescribed in the Finance Bill for deduction of income-tax and surcharge from interest on government securities and directs immediate issuance of the circular to all Treasury Officers and Sub Treasury Officers so that those prescribed rates are applied to such interest.

Residential house exemption: determine deceased's share first, then allow proportionate exemption under estate duty rules.
The Board advised that the deceased's share in the principal value of joint family property should be determined first and then the proportionate residential house exemption under Sec.33(1)(n) allowed from that share, because the statutory valuation provision is to be invoked only for the limited purpose of estimating principal value and only provisions bearing on that estimation should apply.

Tax deduction at source from salaries: employers must include perquisites and apply statutory deductions before withholding tax.
Employers must deduct tax at source from salaries only when estimated salary income exceeds the exemption threshold and must include perquisites and other specified receipts in estimating salary. Taxable salary is computed after allowing the standard deduction (subject to ceilings and special limits where employer provided motor vehicles are used personally). Statutory deductions for approved savings and provident contributions are permitted within the prescribed monetary and percentage limits, exemptions for house rent allowance and special allowances require documentary proof, and prescribed rounding, challan usage and penalty provisions apply.

Supply of return forms limited to assessees above the applicable taxable limit and those claiming refunds.
Postal supply of return and challan forms is restricted to assessees whose latest return or assessment shows income above the applicable taxable threshold for the assessment year and to assessees claiming refunds; Commissioners must instruct officers immediately to implement this change.

Summary assessment scheme must be strictly enforced to prevent arbitrary issuance of notices under section 143(2) and harassment.
The directive requires strict enforcement of the summary assessment scheme: inspecting authorities must ensure cases fit for summary disposal are not subjected to unjustified scrutiny and ITOs do not mechanically issue notices under section 143(2). Officers are to dispose of such matters expeditiously and, where appropriate, generously. Complaints of unnecessary notices continue; inspecting authorities must monitor ITO actions and initiate supervisory or disciplinary measures against officials who cause unwarranted taxpayer harassment.

Tax recovery certificates preserve limitation while coercive action is stayed; undisputed amounts may be enforced during settlement proceedings.
Recovery certificates should be issued to preserve limitation while coercive action is held in abeyance; suspension of coercive action excludes issuance of statutory notices under the second schedule and attachment of property as protective measures but includes sale and arrest. Commissioners must report undisputed tax amounts in admitted settlement cases so the commission can permit recovery of those amounts, and assessees should be permitted and encouraged to pay taxes or offered amounts during pendency. Normal recovery continues for years not admitted or not yet admitted, and commissioners must expedite reports to the commission.

Income-tax Clearance Certificate: revised mandatory form requires contractor income, partners and recent contract payment disclosures before contract award.
The Income-tax Clearance Certificate proforma for contractors has been amended to require disclosure of income returned, details of partners and contract payments in the last five years; certificates B(i) and B(ii) are omitted, and the revised form is mandated as the sole acceptable application format from the effective date, with all Ministries, subordinate offices, Public Sector Undertakings and procurement agencies instructed to insist on the amended certificate before awarding contracts or orders.

Wealth tax valuation disputes over property appurtenances require prompt case review and compliance reporting under binding legal guidance.
Wealth-tax arrears stem from valuation disputes, notably where palace lands and appurtenances of former rulers are assessed at market value. Administrative guidance treats a building under section 5(i)(iii) as including outhouses, garages, guest houses and land appurtenant when within the same compound or immediate vicinity, and specifies lists of exempted places. The Ministry of Law's opinion is binding under the Rules of Business; officers must review and, if appropriate, modify cases and submit a compliance report within one month detailing reviews and tax effects.

Supply of return forms: mail blank income-tax and wealth-tax return and challan forms to registered assessees, with compliance reporting.
Income-tax Officers must dispatch by ordinary post two copies of income-tax return forms with challan forms for self-assessment tax and two copies of advance tax statements to taxpayers on departmental registers; two copies of wealth-tax return forms must also be sent to registered wealth-tax assessees. Bulk mailing supplements counter and selected post office supply. Where returns are not received by the due date, notices for non-filing must be sent separately by registered post or notice servers. Commissioners must submit a compliance report by 31 May confirming distribution of forms.

Excise duty as manufacturing cost: require inclusion in inventory valuation and reassessment where omitted under tax law.
Excise duty and customs duty are to be treated as manufacturing expenses and included as an element of cost for inventory valuation. Where pending assessments have not included these duties in cost price, action under the proviso to the relevant income tax accounting provision should be taken; where assessments are completed, steps permitted by law may be taken to reopen them.

Deduction under Section 194C remains on gross contractor payments, including materials supplied by specified persons.
Deduction at source for payments to contractors and sub-contractors must be made on the gross payment, including the cost of materials supplied by the Government or any other specified person; the Supreme Court decision cited concerns income computation not the withholding provision, and paragraph 1(v) of the Board's circular is therefore affirmed without modification.

House Rent Allowance exemption applies when a special employer allowance meets actual rent for residential accommodation occupied by the employee.
Section 10(13A) exempts a special allowance granted by an employer to meet rent actually incurred for residential accommodation, subject to Rule 2A calculation and three conditions: employer granted special allowance, allowance specifically to meet actual rent, and occupation of the accommodation by the employee. An individual paying rent to an HUF of which he is a member may claim the exemption if he produces proof of payment (including a receipt signed as Karta); the rent will be assessable as income of the HUF.

Change of jurisdiction: ensure Tribunal is notified of address transfer so service and limitation run from the correct Commissioner.
The procedure mandates that when jurisdiction over a case is transferred, the transferring Income-tax Officer must notify the ITAT Registrar and record the notice in the transfer memo with evidence of service; the transferring Commissioner must return any Tribunal order served on him to the Registry and declare the transferee Commissioner's jurisdiction; the transferee Commissioner must file a reference under section 256(1) or invoke the proviso for additional time where necessary; service on the transferring Commissioner remains valid if the transfer occurred after the Tribunal order, and Departmental Representatives should inform the Tribunal of known address changes.

Statement of irrecoverable demand must be reported annually for consolidation and onward statistical reporting.
All Commissioners must submit an annual statement of remission or abandonment of claim to revenue compiled from the register of Irrecoverable demand maintained by each ITO to the Director of Inspection (Research, Statistics & Publication) by 30 June following the financial year; the Director will consolidate the data and forward a consolidated statistical return to the Board by 31 July, and accuracy must be ensured for parliamentary submission and receipt audit.

Approval of research programme allows contributors beyond original sponsors to claim weighted deduction subject to certificate and cost cap.
Approval of a scientific research programme operates at the programme level so any person may pay into an approved programme and claim the prescribed weighted deduction provided total contributions do not exceed the programme's approved cost; the assessing officer must obtain from the contributor a certificate from the research institution certifying the amount paid and that aggregate contributions do not exceed the approved cost.

Maintenance of official correspondence diary requires stenographers to record Board communications and submit weekly for commissioner review.
Stenographers must maintain an official diary recording all letters from the Board and directorates, submit it weekly to the Commissioner for scrutiny of specified columns to ensure prompt action or reports, and permit the Commissioner to round off serial numbers when final reports are sent. Communications requiring periodical reports must be entered in the calendar of returns and noted in the diary; receipt should be acknowledged and action intimated to the Board.

Exemption from income tax on freight earnings applies only to bilateral shipping; third-country cargo remains taxable.
Agreements provide a mutual exemption from income tax on freight earnings and turnover tax for vessels on bilateral voyages between contracting ports, including time chartered vessels, based on reciprocity. The exemption is limited to cargo between the two countries; freight earnings from cargos meant for third countries remain taxable.