Regarding 86B

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This discussion clarifies the application of Rule 86B concerning income tax payments. It addresses whether the Rs. 1 lakh threshold for exemption applies to taxes paid by the company or by directors in their personal capacity. The consensus suggests that both company and director payments are considered, and the actual income tax liability, after refunds, is the determining factor.

Prem Chandra Thakur

Prem Chandra Thakur (Querist)

23 September 2021 Dear Sir,

Provided that the said restriction shall not apply where –
(a) the said person or the proprietor or karta or the managing director or any of its two partners, whole-time Directors, Members of Managing Committee of Associations or Board of Trustees, as the case may be, have paid more than one lakh rupees as income tax under the Income-tax Act, 1961(43 of 1961) in each of the last two financial years for which the time limit to file return of income under subsection (1) of section 139 of the said Act has expired; or

My question is (in case of company) whose income tax would be covered either paid by company or paid by Director personal file.
Kindly guide us.
Thanking You
Prem Chandra Thankur

Udaya Chandran

Udaya Chandran (Expert)

23 September 2021 Any one of them. If company or director of the company (in his individual capacity) paid income tax of more than Rs.1 lakh in the last two financial years, the said provision is not applicable.

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Prem Chandra Thakur

Prem Chandra Thakur (Querist)

23 September 2021 Dear Sir,
I am little bit confused about Income tax paid means income tax liability.
Director paid the income tax in a financial year 2 lacs but he get refunds by Rs.1.50 lacs then his actual liability is 0.50 lacs.
whether the rule 86B would be apply or not
Kindly guide us.

Udaya Chandran

Udaya Chandran (Expert)

23 September 2021 As of now, there is no clarification as I know, so we can assume that it is actual liability.

CA Puja Sharma

CA Puja Sharma (Expert)

23 September 2021 It will include Company and its directors both.

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