India: Employee benefits, rent-free accommodation, split-residency benefits

India: Employee benefits, rent-free accommodation

The KPMG member firm in India has prepared reports about the following developments (read more at the hyperlinks provided below).

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  • Rent-free accommodation provided by employer: The Mumbai Bench of the Income-tax Appellate Tribunal held that notional interest on a security deposit paid by an employer, to a landlord in respect of a rent-free accommodation provided to employees, is not to be considered a taxable benefit to the employees. The case is: Vikas Chimakurty. Read a June 2016 report [PDF 329 KB]
  • Employee benefits, insurance: The Ministry of Labour and Employment issued guidance to increase the benefits under the Employees’ Provident Fund Organisation. Read a June 2016 report [PDF 382 KB]
  • Initial assessment year: The Gujarat High Court held that the taxpayer’s initial assessment year under section 80IB(11A) is the assessment year in which the taxpayer commenced business and not the assessment year when the section was amended. The case is: Anand Food and Dairy Products. Read a June 2016 report [PDF 330 KB]
  • Tax exemption under split-residency position: The Delhi Bench of the Income-tax Appellate Tribunal held that salary income earned outside India by an individual who qualified as a resident of another country is eligible for tax exemption in India under the relevant tax treaty based on a split-residency position. The case is: Raman Chopra. Read a June 2016 report [PDF 326 KB] 
  • Salary received by non-resident: The Kolkata Bench of the Income Tax Appellate Tribunal held that income received by a non-resident taxpayer is taxable in India when the income is received in India. The case is: Tapas Kr. Bandopadhyay. Read a June 2016 report [PDF 364 KB]
  • Allotment of bonus shares: The Bangalore Bench of the Income Tax Appellate Tribunal held that bonus shares cannot be considered to be as received without consideration or for inadequate consideration and, therefore, are not taxable under Section 56(2)(vii)(c) of the Income-tax Act, 1961. The case is: Dr. Rajan Pai. Read a June 2016 report [PDF 350 KB]
  • Contribution of land to AOP for joint development: The Pune Bench of the Income-tax Appellate Tribunal held that a contribution of land to “association of persons” (AOP) formed for joint development of property is not a transfer of a capital asset but is a joint pooling of resources by different parties. Therefore, security deposits received with respect to the contribution made by the taxpayer is not taxable as a capital gain. The case is: Ashok Gordhandas Kirpalani. Read a June 2016 report [PDF 328 KB]

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