https://www.taxtmi.com/article/detailed?id=6664 Subsidies should be classified as capital receipts and excluded from taxable income because they preserve and create long term capital and public welfare; taxing subsidies or treating them as adjustments to asset cost undermines their purpose. Appellate decisions are cited supporting capital character where subsidies aim to set up units, encourage projects or protect capital in distress, while a contrary view stresses application of the object test and notes some subsidies possess revenue like elements. The author recommends deleting provisions that treat subsidies as income and enacting a specific exclusion for capital receipts. en-us Mon, 08 Feb 2016 13:18:58 +0530 Mon, 08 Feb 2016 13:18:58 +0530 TaxTMI RSS Generator https://www.taxtmi.com/article/detailed?id=6664 Subsidies should be classified as capital receipts and excluded from taxable income because they preserve and create long term capital and public welfare; taxing subsidies or treating them as adjustments to asset cost undermines their purpose. Appellate decisions are cited supporting capital character where subsidies aim to set up units, encourage projects or protect capital in distress, while a contrary view stresses application of the object test and notes some subsidies possess revenue like elements. The author recommends deleting provisions that treat subsidies as income and enacting a specific exclusion for capital receipts. Articles Budget - Tax Proposals Mon, 08 Feb 2016 13:18:58 +0530 https://www.taxtmi.com/article/detailed?id=6664