Income Tax Department's Latest Announcement

In a significant update, the income tax department has declared that taxpayers cannot claim deductions for expenditures related to settlements under four specific laws. This move is set to impact many businesses and professionals across India.

Details of the Notification

On April 23, the Central Board of Direct Taxes (CBDT) issued a notification clarifying that expenses incurred to settle proceedings under the Securities and Exchange Board of India Act, 1992, the Securities Contracts (Regulation) Act, 1956, the Depositories Act, 1996, and the Competition Act, 2002 will not be considered for business or profession deductions.

What This Means for Taxpayers

This clarification means that any costs associated with settling disputes or defaults under these laws cannot be claimed as deductible expenses, potentially increasing the tax liability for affected entities.