CBDT ORDERS SCRUTINY OF NEW REVENUE SOURCES

The Central Board of Direct Taxes has issued instructions to take all returns filed by companies paying royalty on mining contracts for scrutiny assessment. The CBDT has directed that the interest payments on delayed compensation and wheeling charges paid by electricity distribution companies to transmission line owners will be subject to tax deducted at source under section 194A. Under Section 194A, "which deals with tax deducted at source on interest other than interest on securities", TDS will be deducted at 20.6 per cent. The board has directed the department to make a scrutiny of all companies, especially the loss making ones, to have deferred TDS payments. The board has also asked the department to take return of all sports bodies engaged in commercial activities and private educational institutions for scrutiny assessment. This is because the definition of charitable purpose has been amended, making some of the income of trusts taxable.