Quick Summary
The amended Income Tax Bill aims to settle the persistent dispute over the definition and tax treatment of Non-Performing Assets (NPAs). The Select Committee of Parliament has adopted its report on the new Bill, which is expected to be submitted to the Lok Sabha Speaker early next week. The Bill has been listed for discussion and passage during the upcoming Monsoon Session, beginning July 21. For years, there has been a misalignment between the RBI's prudential norms and income tax provisions c
Daily Limit Reached
You have reached your daily limit of 2 Free News
Subscribe to CCI PRO for unlimited access
Why Upgrade to CCI PRO?
- No Ads
- WhatsApp Community
- Daily E-Newsletter
- Unlimited News Access
- Profile Visitors
- Link Social Profiles
- Featured Job Posts
- Pro Badge
- Expert GST Guidance
- Unlimited Forum Replies
- Download Content in PDF
1 Year PLAN
1999
(Excl. of GST ₹359)
2 Years PLAN
3499
(Excl. of GST ₹629)
BEST VALUE
3 Years PLAN
4999
(Excl. of GST ₹899)
View all CCI PRO benefits
Already a PRO member? Login here for an ad-free experience. 07941056694
FAQ :
The main aim is to settle disputes regarding the definition and tax treatment of Non-Performing Assets (NPAs) by aligning income tax provisions with RBI guidelines.
Currently, RBI considers a loan an NPA if payments are overdue for over 90 days, but income tax rules only allow taxing interest on a receipt basis if the default lasts over 180 days, causing a conflict.
The bill proposes to define 'bad or doubtful debts' according to RBI guidelines and align the taxability of NPA interest income with the year it is actually received or credited.
The 'real income' principle, upheld by courts, suggests that only income that has actually been earned or received should be subject to tax, not hypothetical or notional income.
The bill is listed for discussion and passage during the upcoming Monsoon Session, beginning July 21.
If passed, the amendment is expected to simplify India's tax regime, reduce litigation for banks and financial institutions, and uphold the principle of taxing only real income.
CAclubindia
