Quarterly audit report deadlines enforced; late submissions will be escalated and defaulting charges reported to the Board.
Quarterly Internal/Receipt Audit reports must be submitted within 15 days after each quarter; the Directorate will await reports only until specified final dates (30 April, 31 July, 31 October, 31 January). This supersedes the earlier two month waiting guidance. No reminders will normally be issued, and defaulting charges that fail to file by the final dates will have their names reported to the Board.

Approval of deed of variation: Commissioners may permit incorporation of LIC annuity plan if statutory conditions are satisfied.
Commissioner approval may be granted for deeds of variation by approved superannuation funds that incorporate LIC's annuity plan returning corpus with a group pension terminal bonus, provided the Commissioner is satisfied that the conditions in Part B of the Fourth Schedule and the relevant Income-tax Rules, including rule 89, are complied with.

Sectionwise and subjectwise index required for authorised representatives to catalogue favourable ITAT decisions for reuse.
The Board directs that Authorised Representatives maintain a sectionwise/subjectwise index of favourable ITAT decisions for the Bench they represent, using the prescribed proforma; sectionwise indices must be in numerical order and subjectwise indices in alphabetical order, the registers must be handed over on transfer, and maintenance is to commence in respect of Tribunal orders issued from 1st October, 1987 onwards.

Deduction under section 80C for housing loan repayment requires completion and chargeability to house property income.
Deduction for repayment of loans for purchase or construction of residential property is allowable only if the property's construction is completed after the cut-off date and the income from the property is chargeable to tax under Income from House Property in the relevant assessment year; if construction remains incomplete by the end of the previous year relevant to an assessment year, no deduction is admissible for that assessment year and TDS should be applied accordingly.

Control of litigation: mandatory annual review of judicial branches to identify litigation-driving provisions and withdraw appeals.
Control of litigation is to be achieved by a mandatory Annual Review of the Judicial Branch in each CIT office, conducted by the Chief Commissioner using a prescribed proforma that supplies statistics on workload, disposal and success rate and identifies legal provisions generating litigation. The review must provide separate data for the nine-month period ending 31 March and the three-month period ending 30 June, with the consolidated report for the year ending 30 June submitted to the Board with comments by the prescribed deadline. The review also aims to enable screening and withdrawal of appeals rendered infructuous by changes in law or accepted court decisions.

Timely case record delivery ensures authorised representatives receive flagged briefs before hearings for effective departmental representation.
Assessing officers must forward Briefs with Records, with relevant papers flagged, to authorised departmental representatives in time before hearings; for Departmental Appeals, the Commissioner's file authorising the appeal must also be sent. Responsibility for sending records is fixed on ITO(J)/IAC(J). Commissioners must monitor compliance and report defaults for appropriate action, with repeated failures recorded in the Annual Confidential Report.

Stay orders: file caveats and centrally designate judicial officers to monitor and follow up on stays.
The Board mandates immediate caveat filing where appeals and stay applications against favourable departmental judgments are anticipated, and requires designation of one IAC (Judicial) in multi Commissioner Charges and one ITO (Judicial) in other Charges to centrally monitor, coordinate and follow up on all stay orders; officers receiving stay orders must promptly contact the designated judicial officer and circulate these instructions within their Charges.

Appeal delegation: Chief Commissioners decide contesting adverse tax judgments under monetary-limit guidelines with specified exceptions.
Authority to accept or contest adverse tax litigation judgments is delegated to Chief Commissioners under guidelines requiring selective filing of appeals and references based on cumulative revenue effect across years and related cases, with first-instance questions of law to be contested regardless of revenue. Certain adverse judgments (prosecution risk, departmental strictures, accepted audit objections, conflicts with Board directives, or cases requiring consistent treatment across years) must be contested irrespective of amount, while judgments consistent with Board views or arising from procedural failures need not be contested. Prior Board approval is required for specified categories including special leave petitions, public sector undertakings, and high-revenue or disputed cases; deviations require timely Board approach and fortnightly reporting to an Integrated Judicial Reference System.

Reallocation of administrative functions centralises supervisory control under Director General (Admn), streamlining oversight and approvals.
Reallocation redesignates Director General (Special Investigation) as Director General (Admn) with supervisory control over specified Directorates; transfers of senior officers remain Board prerogative while intra-Directorate movements require Director General (Admn) approval; a small headquarters staff will be formed from existing Directorates and temporary cadre control will reside with the Director of Inspection (I.T.).

Delegation of regional authority to Chief Commissioners enhances administrative control and consolidates field jurisdiction under them.
Instruction No. 1775/CBDT delegates defined powers, functions and regional jurisdiction from the Board to Chief Commissioners/Directors General (Investigation), makes all regional Commissioners/Directors of Inspection administratively subordinate to them and requires that their staff be drawn from existing sanctioned strength without separate posts; specified Director General roles are unaffected and detailed authorities are set out in annexures, with communications to be channelled through the regional Chief Commissioner/Director General except in emergencies.

Tax-deduction Account Number obligation: all deductors must apply for TAN and quote it in TDS documents.
Section 203A mandates that all persons responsible for deduction of tax at source must apply for and obtain a Tax-deduction Account Number (TAN) and quote it in challans, TDS certificates and periodical returns; application is by prescribed Form 49B under the notified rules, with centralised allotment in certain metropolitan charges and assistance available from the concerned Income-tax Officer or local Public Relations Officer.

Surcharge on advance tax instalments: late payments accepted within an authorised extended period without levy of penalties.
Surcharge on instalments of advance tax due 15 June and 15 September 1987 was to be paid by 30 September 1987; the Board authorised that payments made by 30 October 1987 will not attract penalties and instructed officers to notify subordinate staff of this administrative concession.

Tax-deduction Account Number requirement: deductors must apply for and quote TAN in TDS documentation consistently.
Persons responsible for tax deduction at source must apply for and quote a Tax-deduction Account Number (TAN) using the prescribed application; metropolitan TDS work is centralised to a single circle for uniform allotment. TAN structure comprises an employer letter and serial number, a check digit derived by remainder on division by seven (mapped to letters A-G), a letter indicating the nature of payment (specified codes for salary, interest, dividends, contractor payments, insurance commission, lottery winnings and other sums), and a station abbreviation.

Salary classification of incentive bonus prevents separate expense deduction; only the standard deduction applies to such payments.
Incentive payments to Development Officers of the Life Insurance Corporation constitute salary inclusion because of the employer employee relationship; such payments do not qualify for the fixed percentage expense deduction applicable to insurance agents, and only the statutory standard deduction for salaried income is allowable against these incentive payments.

Sales tax deferral treated as discharged under section 43B when state law deems deferred payments as paid, preserving incentives.
Sales tax deferral schemes permit collection and retention of sales tax for a prescribed period, but tax deduction timing under section 43B allows deduction only when tax is actually paid; a State-law deeming provision treating deferred tax as paid will satisfy section 43B and cause the statutory liability to be treated as discharged for income-tax purposes.

Jurisdictional allocation of high-value assessments: metropolitan IAC(Assessment) to handle large business/professional cases with reassignment and reporting deadlines.
Jurisdiction for assessment work in four metropolitan cities is revised to assign significant business and professional cases to the metropolitan IAC (Assessment) when returns or aggregate receipts exceed prescribed high-value thresholds for pending assessment years; Commissioners should reassign additional important scrutiny cases to metropolitan IACs if workload requires. Other scrutiny assessments remain with Income-tax Officers under Range IACs, with an objective of thorough investigation to detect concealment, and transfers and compliance reporting are to be completed within specified timelines.

Deemed dividend rules expanded to tax loans and advances to smaller shareholders and concerns, preventing distribution avoidance.
The Finance Act, 1987 enacts wide ranging direct tax amendments: it sets tax and TDS rates, expands the definition of dividend to treat loans/advances to smaller shareholders and to concerns as deemed dividends, broadens the meaning of transfer to capture substantive transfers (including power of attorney and membership rights), reforms capital gains computation and carry forward rules, mandates timely employer crediting of employee fund contributions for deduction, introduces a minimum tax on company book profits, and strengthens TDS administration through tax deduction account numbers and revised TDS thresholds and timing.

Surcharge on income-tax increases liability where taxable income exceeds threshold; surcharge on advance-tax instalments must be paid by the due date.
The Ordinance requires a surcharge to be added at a fixed percentage to income-tax computed for purposes such as deduction at source on salaries and advance-tax payments when taxable income exceeds the threshold, and it mandates that surcharge attributable to earlier advance-tax instalments be paid by a specified due date, with non-payment attracting defaulter consequences under the Income-tax law.

Acceptance of returns below taxable limit only where they meet proviso exceptions; counters must identify and accept qualifying returns.
Returns of income below the taxable limit must not be accepted at receipt counters unless they fall within the exceptions in the proviso to the filing provision; the prescribed return forms include specific columns enabling counter staff to identify such exceptions, and Form No. 3A and company returns in Form No. 1 are to be accepted as falling within those exceptions, while statutory filings accompanied by covering letters or markings may also be identified and accepted.

Special audit powers urged for film producers and artists to enforce proper accounts and safeguard revenue.
Use of compulsory special audit powers under 142(2A) is reiterated for established film producers and artists whose accounts require intensive investigation; persons obliged to keep accounts under 44A may present complex facts warranting investigative audit to protect revenue. Assessing Officers are directed to increase referrals for special audit and to circulate this instruction to subordinate officers.