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Significant notification issued by the Central Board of Direct Taxes during the period 15.08.2010 to 15.09.2010

 

1.      Notification No. 69/2010 dated 26-08-2010

Recognised Provident Fund: 8.5 percent rate notified under rule 6(b) of Part A of Schedule IV to the Income-tax Act, 1961

Rule 6 of Part A of the Fourth Schedule to the Income-tax Act, 1961, provides, inter alia, that interest credited on the balance to the credit of an employee participating in a recognized provident fund in so far as it is allowed at a rate exceeding such rate notified by the Central Government, shall be deemed to have been received by the employee in the relevant previous year and shall be included in his total income.

Accordingly, the Central Government has notified w.e.f. 1st September, 2010, in exercise of the powers conferred by Rule 6, 8.5 per cent as the rate of interest on Employer’s annual contributions in a recognised provident fund.  This implies that w.e.f. 1st September 2010 interest credited on the balance to the credit of the employee in excess of 8.5 percent shall be deemed to have been received by the employee in the previous year and shall be included in the total income of the employee. Prior to this date, the interest credited in excess of 9.5 percent was deemed to be the income of the employee. 

 

The complete text of the said notification can be downloaded from the link below:

http://law.incometaxindia.gov.in/DIT/File_opener.aspx?page=NOTF&schT=&csId=679ecf4a-4c15-4199-aed4-6102755ed0ba&NtN=&yr=ALL&sec=&sch=&title=Taxmann - Direct Tax Laws

2.   Notification No. 72/2010, dated 8.9.2010

Notification of bonds, interest from which would be exempt under section 10(15)(iv)

Section 10(15)(iv)(h) of the Income-tax Act, 1961, exempts interest on bonds/debentures issued by any public sector company and notified by the Central Government in the Official Gazette.  Accordingly, the Central Government has notified the tax-free secured, redeemable, non-convertible Railway Bonds (of Rs.1,000 each in case of public issue and Rs.1,00,000 each in other cases) to be issued by the Indian Railway Finance Corporation (IRFC),  interest from which would be exempt under section 10(15)(iv)(h).

 

The complete text of the said notification can be downloaded from the link below:

      http://law.incometaxindia.gov.in/DIT/File_opener.aspx?page=NOTF&schT=&csId=5857d9b4-0293-4146-a99b-8a28b50b200a&NtN=&yr=ALL&sec=&sch=&title=Taxmann - Direct Tax Laws

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