Tag: tax relief

Cummins India Secures ₹210 Crore Tax Relief as ITAT Rules in Favour financial year 2017–18

Power solutions major Cummins India Ltd on Friday (December 19) announced that the Income Tax Appellate Tribunal (ITAT) has passed a favourable order for the financial year 2017–18, granting tax relief amounting to ₹210.29 crore.

According to the company, the ITAT, in its order dated December 4, 2025, directed ₹13.11 crore of the disputed amount back to the Assessing Officer for revalidation, while upholding a disallowance of ₹0.48 crore. Cummins India said it is currently reviewing the order and evaluating possible next steps with respect to the disallowed amount.

The case relates to long-pending litigation with the Income Tax Department and had earlier been disclosed to stock exchanges in August 2023 and December 2023.

Cummins India clarified that the disclosure is based on a copy of the ITAT order downloaded from the tribunal’s official website, as the physically signed order is yet to be received. The company added that its internal teams are analysing the financial and accounting implications of the ruling.

Following the announcement, shares of Cummins India Ltd closed at ₹4,402.30 on the BSE, rising ₹16.90 or 0.39%

Income Tax Department strongly objects to TVK leader Vijay’s ₹1.5 crore relief plea

Tamilaga Vettri Kazhagam President Vijay Faces Income Tax Penalty Challenge

The Income Tax (I-T) department has strongly opposed a case filed by Tamilaga Vettri Kazhagam (TVK) president and actor C. Joseph Vijay concerning a penalty of ₹1.5 crore. This penalty was imposed for failing to voluntarily disclose an additional income of ₹15 crore during the financial year 2015-16.

During a hearing before Justice C. Saravanan, who is overseeing a 2022 writ petition filed by Vijay challenging the penalty, I-T department senior standing counsel A.P. Srinivas asserted that the fine had been justifiably imposed under Section 271AAB(1) of the I-T Act. He argued that the writ petition should be dismissed.

The petitioner’s counsel argued that the penalty proceedings were affected by a limitation period, indicating that such actions should have been initiated on or before June 30, 2019, and not on June 30, 2022. In response, the judge requested the petitioner’s counsel to provide a ruling by October 10, 2025, from a similar case that he had adjudicated concerning limitation.

Mr. Srinivas elaborated on the background of the writ petition. He explained to the court that I-T officials had conducted a search and seizure operation at Vijay’s premises on September 30, 2015, during which incriminating materials were found. These materials suggested that P.T. Selvakumar and Shibu from SKT Studios, who produced Vijay’s 2015 movie Puli, had paid him ₹4.93 crore in cash, in addition to ₹16 crore via cheques. However, the Tax Deducted at Source (TDS) was only deposited for the cheque amount, excluding the cash.

Upon confronting the actor with the evidence, he reportedly acknowledged that he had received ₹5 crore in cash and agreed to pay taxes on it. When questioned about any unaccounted income he might have earned over the previous six years, he claimed he had not received any unaccounted cash apart from the ₹5 crore related to Puli.

In an effort to cooperate with the I-T department and settle tax issues amicably, Vijay agreed to disclose an additional ₹15 crore of income (including the cash received) for the financial year 2015-16, committing to pay the necessary taxes on this amount. Subsequently, on July 29, 2016, he submitted his income tax return for the assessment year 2016-17, declaring a total income of ₹35.42 crore, which included the additional ₹15 crore. Alongside this, he claimed depreciation on assets worth ₹17.81 lakh and sought exemption for expenses related to his fans’ club amounting to ₹64.71 lakh.

However, the I-T department disallowed these claims and issued an assessment order on December 30, 2017, which determined the taxable income to be ₹38.25 crore. The order noted that Vijay would not have disclosed the additional income had it not been for the search and seizure operation.

Consequently, the I-T department imposed penalties under Sections 271(1)(c) and 271AAB(1) of the I-T Act. While he initially chose to file an appeal against the assessment order and the penalty under Section 271(1)(c), he specifically challenged the penalty under Section 271AAB(1) through a writ petition.

Upon admitting the writ petition on August 16, 2022, Justice Anita Sumanth temporarily restrained the I-T department from recovering the penalty amount. This interim order was periodically extended until Justice Abdul Quddhose stated on February 21, 2023, that the order would remain in effect until further notice.

The writ petition was last scheduled for hearing in December 2023 and reappeared on the docket recently, as Justice Saravanan commenced the final hearing of long-pending income tax cases.

Tax relief, pension security mark a decade of middle class focus

Over the past eleven years, India’s middle class has found itself at the centre of the government’s reform agenda. From tax relief measures to simplified compliance norms and pension schemes aimed at long-term security, successive budgets have reflected a steady policy commitment towards easing the financial burden on the salaried segment.

Framed as more than a collection of administrative reforms, the government’s approach has been marked by continuity and responsiveness. Whether in streamlining tax returns, enabling affordable housing, or expanding access to essential services such as healthcare and urban transport, the focus has been on removing procedural barriers and making systems work better for ordinary citizens.

Revised Income Tax Thresholds

A major highlight in the Union Budget 2025–26 was the announcement of a higher income tax exemption limit. Individuals earning up to ₹12 lakh annually will now be exempt from paying income tax, barring certain categories such as capital gains. With the standard deduction raised to ₹75,000, taxpayers with incomes up to ₹12.75 lakh effectively fall outside the tax net.

The move is expected to benefit crores of salaried taxpayers and comes despite a projected revenue loss of close to ₹1 lakh crore. Officials indicated that the measure was guided by a recognition of middle-class pressures and a long-standing demand for greater tax relief.

Simplified Compliance and Rising Voluntary Filings

Over the years, income tax compliance has been progressively simplified. From the introduction of standard deductions to the rollout of a new tax regime in 2020, efforts have focused on reducing documentation and making systems more user-friendly.

Pre-filled income tax return forms—now populated with data such as salary income, interest, and dividends—have played a key role in reducing procedural complexity. As a result, the number of individual return filers has more than doubled in the past decade, rising from 3.91 crore in FY 2013–14 to 9.19 crore in FY 2024–25.

Faceless Assessment and Digital Governance

Introduced in 2019, the faceless e-assessment framework has fundamentally altered the way scrutiny proceedings are conducted. By eliminating physical interface between taxpayers and assessment officers, the system is intended to enhance transparency and reduce discretion.

Under the framework, cases selected for scrutiny are allocated randomly through a centralised system operated by the National e-Assessment Centre in New Delhi. Taxpayers receive notices under Section 143(2) and are required to respond digitally within 15 days. The move from territorial to dynamic jurisdiction has been widely viewed as a structural reform in tax administration.

Policy Continuity and Recognition

Observers note that the measures implemented over the last decade reflect a consistent policy stance rather than isolated interventions. The middle class—often referred to as the backbone of consumption-driven growth—has been acknowledged not just as a tax base, but as a constituency requiring long-term support and recognition.

Patanjali Foods Wins Legal Battle as Supreme Court Overturns Rs 186 Crore Tax Demand

Patanjali Foods Ltd on Wednesday announced that the Supreme Court has quashed the Rs 186 crore tax demand imposed on the company. The move came as part of a Special Leave Petition (SLP) filed by the Principal Commissioner of Income Tax, Central 4. The SLP was filed against a ruling by the Bombay High Court.

“The demands of Rs 186 crore for pre–Corporate Insolvency Resolution process (CIRP) period raised by Income Tax Deptt. has been quashed by Hon’ble Supreme Court of India,” Patanjali Foods said in a regulatory filing.

The Supreme Court of India had dismissed the SLP on January 15, 2025, in favour of Patanjali Foods, upholding the Bombay High Court’s decision. However, per the FMCG brand, it did not get notice of the hearing of the Supreme Court then and got the information of the same “from the website http://www.taxmann.com only on February 18, 2025 where this order was posted”.

The Income Tax Department had originally raised pre–CIRP demand for various assessment years and it was later quashed by the National Company Law Tribunal (NCLT). The department had preferred a Writ Petition which was dismissed by the Bombay High Court. The Income Tax Department had then filed the SLP against the order of the High Court of Bombay which was dismissed by the Supreme Court of India.In the copy of the order passed by the Supreme Court, as shared by Patanjali Foods in the exchange filing, the Court had said, “…The Special Leave Petition is, accordingly, dismissed”.

Shares of Patanjali Foods were up 0.31 per cent at 11:30 pm to a trading price of Rs 1,823.95.

GST Council Considers Granting Exporter Status to Intermediaries for Enhanced Tax Relief

GST Council Meeting Likely to Provide Relief to Intermediaries

The 55th Goods and Services Tax (GST) Council meeting, scheduled for Saturday, is expected to bring significant relief to intermediaries, including brokers, agents, and online bidding portals that provide services to overseas entities. This potential relief comes in the form of a proposal to classify these intermediaries as exporters, which would render their services zero-rated for GST purposes.

Currently, intermediary services are subject to an 18% tax under the Central GST Act. However, sources indicate that the fitment committee of the GST Council has proposed an amendment to the Integrated GST Act, specifically the deletion of Section 13(8)(b). This modification would alleviate the financial burden imposed by the existing 18% GST on these services, effectively creating a more favorable competitive landscape for Indian intermediaries when compared to foreign counterparts.

This proposal is particularly timely, given the recent issuance of show-cause notices (SCNs) totaling Rs 3,357 crore to these intermediaries, which may be withdrawn if the amendment is enacted. In India, a vast number of individual and corporate brokers operate within the commodities market, especially in sectors such as textiles and leather goods. Granting them the zero-rated benefit would provide substantial financial relief.

Experts have indicated that online bidding platforms, such as Mjunction, ONDC (Open Network for Digital Commerce), and MSTC, would also stand to gain from the proposed amendment. One tax expert remarked, “Ideally, the service of the agent should be categorized as an export of services under Section 2(6) of the IGST Act and should be zero-rated. However, Section 13(8)(b) hinders this by stipulating that the place of supply for these services is considered to be the location of the service provider in India.

The current 18% tax creates an additional burden on intermediaries, especially since the recipients of such services abroad do not receive input tax credit on these claims.

In a related development, the law committee has recommended that the GST Council simplify the process of providing input tax credit via the newly launched Invoice Management System (IMS). This system is designed to assist businesses in tracking their GST liabilities more efficiently.

As it stands, the current framework poses challenges regarding accounting timelines and reconciliation processes, placing financial strain on suppliers who often find themselves accountable for GST liabilities they should not bear.

As the GST Council meets, the proposed changes could herald a new chapter for intermediaries in India, fostering a more equitable business environment while promoting growth in international trade.

SBI Chairman Advocates Tax Relief for Interest Income in Budget 2024-25

The Chairman of the State Bank of India, Dinesh Kumar Khara, has advocated for tax relief on interest income in the upcoming Budget. He emphasized that such relief would enable banks to attract more savings, which could then be utilized to finance long-term infrastructure projects. Presently, banks are mandated to deduct tax when the interest income from combined deposits in all bank branches exceeds Rs 40,000 in a year. Additionally, interest earned up to Rs 10,000 from savings accounts is exempt from tax.

Khara expressed that providing tax relief on interest earnings in the Budget would serve as an incentive for depositors. He highlighted the significant role of deposits in capital formation within the country through the banking sector. The Full Budget for 2024-25 is anticipated to be presented by Finance Minister Nirmala Sitharaman in the Parliament next month.

In line with the current economic growth rate, the SBI chairman foresees a 14-15% loan growth in the fiscal year 2024-25. He explained that the anticipated credit growth is based on the GDP growth rate, inflation, and an additional 2-3%. This projection indicates the opportunities available for lending and aligns with the bank’s risk appetite. Khara also noted that deposits grew by 11% in the previous year.

Furthermore, SBI possesses excess Statutory Liquidity Ratio (SLR) ranging between Rs 3.5 lakh crore and Rs 4 lakh crore, providing flexibility without necessitating an increase in deposit rates to maintain the loan-to-deposit ratio.

Recently, the bank raised the fixed deposit rate for selected short-term maturities by up to 75 basis points. The rate for retail term deposits of 46-179 days was increased by 75 basis points to 5.50%.