Introduction
Are you looking to understand about The Power to Make Exemption, etc., in Relation to Certain Union Territories under Section 294A of Income Tax Act 1961?
This detailed article will tell you all about The Power to Make Exemption, etc., in Relation to Certain Union Territories under Section 294A of Income Tax Act 1961.
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Section 294A of Income Tax Act 1961 is a provision that grants power to the Central Government to make exemptions, deductions, or modifications in relation to certain Union Territories. The Union Territories included in this section are Dadra and Nagar Haveli, Daman and Diu, Lakshadweep, and Puducherry. This section has a significant impact on taxpayers in these Union Territories, and it is important to understand its provisions to ensure compliance with the law.
In this blog, we will discuss the details of section 294A of Income Tax Act 1961, its implications for taxpayers, and the frequently asked questions related to this provision.
Understanding Section 294A of Income Tax Act 1961
Section 294A of Income Tax Act 1961 empowers the Central Government to make exemptions, deductions, or modifications in relation to certain Union Territories. The Union Territories covered under this provision are Dadra and Nagar Haveli, Daman and Diu, Lakshadweep, and Puducherry. The government can make exemptions or deductions in respect of any income tax payable or any other tax, including surcharge or cess.
The power to make exemptions, etc., under section 294A is not absolute, and there are certain conditions that need to be fulfilled. The government can exercise this power only if it is satisfied that it is necessary or expedient in the public interest to do so.
Implications for Taxpayers
The power to make exemptions, etc., under section 294A of Income Tax Act 1961 has significant implications for taxpayers in the Union Territories covered under this provision. Here are some of the implications:
Taxpayers in these Union Territories may be eligible for exemptions or deductions that are not available to taxpayers in other parts of the country. This can significantly reduce their tax liability and increase their disposable income.
The exemptions or deductions allowed under this section may be specific to certain industries or sectors. Therefore, taxpayers engaged in these industries or sectors may benefit more from this provision.
Taxpayers in these Union Territories need to stay updated with any changes made by the government under this provision. Failure to comply with the provisions can result in penalties or other legal consequences.
FAQs
What are the Union Territories covered under section 294A of Income Tax Act 1961? Ans: The Union Territories covered under this provision are Dadra and Nagar Haveli, Daman and Diu, Lakshadweep, and Puducherry.
What is the power granted under section 294A of Income Tax Act 1961? Ans: The power granted under this provision is the power to make exemptions, deductions, or modifications in relation to certain Union Territories.
Who can exercise the power under section 294A of Income Tax Act 1961? Ans: The power under this provision can be exercised by the Central Government.
What is the condition for exercising the power under section 294A of Income Tax Act 1961? Ans: The government can exercise this power only if it is satisfied that it is necessary or expedient in the public interest to do so.
Conclusion
Section 294A of Income Tax Act 1961 gives the Central Government the power to make exemptions, deductions, or modifications in relation to certain Union Territories. This provision has significant implications for taxpayers
in the Union Territories covered under this section, as they may be eligible for exemptions or deductions that are not available to taxpayers in other parts of the country. However, it is important to note that the government can exercise this power only if it is necessary or expedient in the public interest to do so.
Taxpayers in these Union Territories need to stay updated with any changes made by the government under this provision to ensure compliance with the law. Failure to comply with the provisions can result in penalties or other legal consequences.
In conclusion, Section 294A of Income Tax Act 1961 grants the Central Government the power to make exemptions, deductions, or modifications in relation to certain Union Territories. Taxpayers in these Union Territories may benefit from the exemptions or deductions allowed under this provision, but it is important to understand the conditions and stay updated with any changes made by the government.
Section 294A, of Income Tax Act, 1961
Section 294A, of Income Tax Act, 1961 states that
If the Central Government considers it necessary or expedient so to do for avoiding any hardship or anomaly or removing any difficulty that may arise as a result of the application of this Act to the Union territories of Dadra and Nagar Haveli, Goa*, Daman and Diu, and Pondicherry, or in the case of the Union territory of Pondicherry, for implementing any provision of the Treaty of Cession concluded between France and India on the 28th day of May, 1956, that Government may, by general or special order, make an exemption, reduction in rate or other modification in respect of income-tax or super-tax in favour of any assessee or class of assessees or in regard to the whole or any part of the income of any assessee or class of assessees :
Provided that the power conferred by this section shall not be exercisable after the 31st day of March, 1967, except for the purpose of rescinding an exemption, reduction or modification already made.