10-19-2010, 04:22 PM
CIRCULAR NO. 26 OF 1991 (INCOME TAX)dated 24th Aug, 1991
3. Exemption to recipients
The scope of exemption to recipients has also been enlarged through the
following measures.
(i) The monetary limit of exemption from deduction of tax from payments
account of supply of goods has been raised to Rs. 25,000/-. Previously the
laid limit was Rs. 10,000/- as notified vide SRO. 586(I)/91 of 30th June,
1991. In respect of payments made on account of services rendered or
execution of a contract, the monetary limit of exemption shall be Rs,
10,000/-. Now withholding tax shall not be deducted from the aforesaid
payments unless such payments exceed Rs. 25,000/- in the case of supply
of goods and Rs. 10,000/- in the case of services rendered or execution of
a contract, in a financial year. However, if such payments exceed the
above monetary limits during a financial year, then tax shall be deducted
from all payments exceeding the said limits. Tax shall also be deductible
on all such payments made earlier from which no deduction of tax was
made.
(ii) No tax shall be deducted from payments to be made to manufacturers who
produce a certificate from the Commissioner of Income-tax concerned that
they have assessed losses carried forward and therefore their income
during the income year is not likely to be chargeable to tax.
3. Exemption to recipients
The scope of exemption to recipients has also been enlarged through the
following measures.
(i) The monetary limit of exemption from deduction of tax from payments
account of supply of goods has been raised to Rs. 25,000/-. Previously the
laid limit was Rs. 10,000/- as notified vide SRO. 586(I)/91 of 30th June,
1991. In respect of payments made on account of services rendered or
execution of a contract, the monetary limit of exemption shall be Rs,
10,000/-. Now withholding tax shall not be deducted from the aforesaid
payments unless such payments exceed Rs. 25,000/- in the case of supply
of goods and Rs. 10,000/- in the case of services rendered or execution of
a contract, in a financial year. However, if such payments exceed the
above monetary limits during a financial year, then tax shall be deducted
from all payments exceeding the said limits. Tax shall also be deductible
on all such payments made earlier from which no deduction of tax was
made.
(ii) No tax shall be deducted from payments to be made to manufacturers who
produce a certificate from the Commissioner of Income-tax concerned that
they have assessed losses carried forward and therefore their income
during the income year is not likely to be chargeable to tax.
