On Â 30/05/2012 Finance Minister Pranab Mukherjee said that his ministry has issued a circular which will avoid multi level TDS on software under section 194 J providing a cheer to the IT industry.
This his will provide relief to software distributors adding that the decision was taken on the advice of group formed to resolve issue in area of transfer pricing and international taxation as per the Finance Minister.
As reported by The Economic Times of India: ” The group had held its first meeting on May 25 and on advise of group and Nasscom I have approved the circular ( to avoid multilevel TDS on software,” he said at a function in Delhi.
The finance minister also said that the Income Tax Department will not re-open cases where assessment proceedings had been finalised before April 1, 2012.
“I gave a commitment in Parliament with regard to retrospective amendments that CBDT ( Central Board of Direct Taxes) will issue a policy circular to clarify that in cases where assessment proceedings have become final before first day of April 2012… such cases shall not be reopened. Now CBDT has issued a circular in this regard”, he said while inaugurating Pratyaksh Kar Bhawan.
Mukherjee, in the Budget 2012-13, proposed to amend the Income Tax, 1961 with retrospective effect to tax Vodafone- type merger and acquisition deals done overseas that involve domestic assets.
These amendments, which came into effect with the President giving assent to the Finance Bill, 2012, had raised concerns among investors about re-opening of the old cases.
Mukherjee also drew attention of the tax department on the number of cases which are before the CIT appeal and High Courts with a total amount to Rs 2.42 lakh crore.
“We must take appropriate steps to so that these cases are resolved as expeditiously as possible,” he said, adding that in case of divergence of view of interpretation of law, tax officials should try to ensure that this should be as minimum as possible.
Mukherjee also underlined the need for fiscal consolidation. “As individual is expected to live within its means, the state is also expected to live within its means,” he said.