Section 80C deduction expanded to include post office five year deposits and senior citizen savings, eligible from the financial year start.
Investments by individuals and Hindu undivided families in the Five Year Post Office Time Deposit Account and the Senior Citizens Savings Scheme are eligible for deduction under Section 80C, subject to the overall deduction ceiling of one lakh; investments on or after the start of the financial year 2007-08 and subsequent years qualify, and Drawing and Disbursing Officers may consider such investments when determining employees' TDS liability.

Exemption of disability pension: banks instructed to stop deducting income tax from armed forces disability pensions.
An inquiry found a wrongful income tax deduction from an armed forces pensioner's disability pension. The central banking authority directed all agency banks to follow para 88.3 of the Defence Pension Payment Instructions 2005 and instructed pension-disbursing branches not to deduct income tax from disability pensions paid to armed forces pensioners.

Direct tax collection growth exceeds forty percent, advancing progress toward the annual budgeted revenue target for the period.
Strong growth in direct tax receipts for 1 April-15 December 2007 raised aggregate net collections sharply year on year and advanced progress toward the budgeted direct tax target; major contributors included Corporate Tax, Personal Income Tax and transaction based levies (Securities Transaction Tax, Fringe Benefit Tax, Banking Cash Transaction Tax), with marked regional variation in growth rates across metropolitan and regional offices.

Section 153(3) time limit absence: inordinate unexplained delay and lack of revenue diligence can bar late reassessment proceedings.
The provision creates a category of assessments that are not subject to the ordinary statutory time limits, permitting completion "at any time" in specified circumstances; however, where the revenue's initiation of such proceedings followed an inordinate and unexplained delay and showed lack of due diligence after the assessee's refund representations, the court quashed the late proceedings as procedurally unfair.

Tax deduction eligibility extended to post office time deposits and senior savings; monthly income account now gets a maturity bonus.
Investments in the Five Year Post Office Time Deposit Account and the Senior Citizens Savings Scheme are made eligible for deduction under the relevant income tax deduction provision from 1 April 2007. A bonus of five per cent will be payable on Post Office Monthly Income Account deposits upon maturity for new accounts opened on or after 8 December 2007, increasing the scheme's effective yield and enhancing its competitiveness with comparable bank deposits and government securities.

Direct tax collections rise sharply, reflecting strengthened tax compliance and improved tax administration in current fiscal.
Direct tax collections recorded substantial growth in the first eight months, reaching just over half of the budgeted direct tax target. Corporate Tax and Personal Income Tax registered marked increases, and Securities Transaction Tax, Fringe Benefit Tax and Banking Cash Transaction Tax also grew. Regional variations were notable, with the highest corporate tax growth in the North-Eastern region and highest personal income tax growth in the Madhya Pradesh & Chhattisgarh region. Tax deduction at source increased by over fifty percent and self-assessment tax payments rose by over seventy percent, indicating improved tax administration and compliance.

Deduction under section 80-ID requires prescribed convention centre standards and an accountant's audit report in prescribed form.
A new tax incentive grants a 100% deduction for profits from hotels or building, owning and operating convention centres, contingent on meeting prescribed physical and operational standards (area, seating capacity, facilities, minimum halls). Claimants must submit a prescribed audit report signed by an accountant certifying the correctness of the deduction. Implementing rules and a prescribed auditor's form have been inserted to give effect to these requirements.

Business profession distinction: eligibility for initial depreciation under section 32(1)(iv) excludes professions from claiming it.
A chartered accountant firm claimed forty percent initial depreciation for a newly erected building used solely as employee residence; the assessing officer denied the claim because Section 32(1)(iv) applies to an assessee carrying on business and does not extend to a professional practice. The court rejected a purposive interpretation to include profession within the word business, holding that such an expansion would improperly create and fill an imagined lacuna in the statute.

Capital gains recognition triggered when transferee obtains right to possession via irrevocable GPA, not upon physical delivery.
An instrument that vests in the transferee the right to enter upon and exercise acts of possession - such as an irrevocable general power of attorney executed under the agreement - constitutes the transaction allowing possession and fixes the date of transfer for capital gains; the agreement date or physical delivery is not decisive, and receipt of the full consideration is not a precondition for clause (v) to operate.

Deferred taxation affirmed: AS 22's deferred tax framework upheld as consistent with company law provisions.
The Rule adopting AS 22 neither suffers from excessive delegation nor is inconsistent with the Companies Act; deferred tax is an accrual reflecting timing and measurement differences between accounting profit and taxable profit arising from divergent treatment or amounts of revenue and expense, and is properly recognized as tax expense under the accounting framework.

Double taxation avoidance: source-country withholding capped and treaty provides tax credit, information exchange and collection assistance.
Bilateral agreement establishes taxing rights on income, taxes dividends, interest, royalties and technical service fees in residence and source states with a source-country withholding cap of ten percent for beneficial owners resident in the other Contracting State; capital gains on company shares taxable in the company's state of residence; relief via credit for taxes paid abroad; and provisions for exchange of information, mutual assistance in recovery of revenue claims, and a limitation of benefits to prevent treaty abuse.

Direct tax collections growth driven by corporate and personal tax increases and stronger compliance measures.
Direct tax collections for 1 April to 15 November grew substantially, driven by marked increases in Corporate Tax and Personal Income Tax, with notable rises in Securities Transaction Tax and Fringe Benefit Tax. Strengthened compliance is indicated by substantial growth in tax deducted or collected at source and in voluntary self-assessment payments, contributing to achievement of just over half of the budgeted direct tax target for the fiscal by mid-November.

Refund Banker Scheme expands nationwide to expedite electronic tax refunds and encourage provision of bank ECS details.
The Income Tax Department accelerated refund processing for non-corporate personal income tax and large corporate categories, with electronic filing volumes rising and remaining electronic returns scheduled for processing within the month; taxpayers are urged to furnish bank and ECS details to enable electronic credit. The Refund Banker Scheme, piloted regionally, is being extended nationwide for non-corporate personal income taxpayers, and annexure-less returns are being used to facilitate electronic processing and timely refund disbursement.

Single window facilitation for large taxpayers improves processing times and increases electronic compliance and collections.
Establishment of a Large Taxpayer Unit as a single window facilitation centre consolidates excise, service tax and corporate/income tax administration for large assessees. The Bangalore LTU applied a Client Executive model providing a single point interface, achieved rapid processing of refunds and assessments, expedited adjudication and approvals, increased electronic filing and payments, improved compliance monitoring and higher indirect tax collections. The model reduced compliance costs and will be expanded to Chennai and other metropolitan centres.

Exemption of Allowance extended to all mine workers, broadening tax-exempt eligibility for specified employee allowances.
Exemption of employee allowances under Rule 2BB read with section 10(14) has been extended to include all workers and employees engaged in mines, broadening the prior concession that applied only to coal mine employees and specified a fixed monthly limit.

Tax compliance by elderly taxpayer prompts administrative processing and expedited action by revenue department following ministerial recognition.
A centenarian taxpayer filed an Income-tax return and paid the due tax; the Finance Minister acknowledged this compliance and instructed the income-tax administration to process the return on a specified date, which the department carried out promptly the next day, underscoring tax compliance and administrative processing of income-tax returns upon ministerial direction.

Direct tax buoyancy signals improved compliance and administration following expansion of refund banker scheme nationwide.
Direct tax collections rose over 40 percent through October 2007, led by marked increases in corporate tax and personal income tax receipts; STT and FBT also grew while BCTT rose modestly. Advance tax, TDS and self-assessment tax increased, indicating stronger compliance. The Refund Banker Scheme, piloted in select cities, will be extended nationwide for personal income tax refunds to accelerate payouts.

Extension of tax return filing deadlines - electronic filings pushed to mid-November, paper filings to early November.
The deadline for electronic income tax and fringe benefit tax returns (applicable to companies and firms subject to tax audit) is extended to 15 November 2007; paper returns (not required to file electronically) are extended to 2 November 2007. The period for obtaining and submitting the tax audit report linked to the tax audit obligation has been extended to correspond with these revised filing dates.

Extension of tax audit report date under section 44AB: deadline moved to end of December for Bihar due to floods.
Extension of the deadline for obtaining the tax audit report under section 44AB has been authorized for the State of Bihar, moving the last date to 31 December 2007 to align with an earlier extension for filing income tax returns due to flood-related disruption.

Direct tax collection growth signals stronger compliance and improved corporate and personal tax receipts this fiscal period.
Direct tax collections showed substantial expansion to 15 October 2007, with marked increases in corporate tax and personal income tax (including FBT, STT and BCTT). Notable growth in STT and FBT occurred. The press release links large growth in amounts deducted or collected at source to rising employment and investment, higher advance tax collections to better corporate profitability and cash flows, and increased self-assessment tax to improved tax compliance.