Mumbai Tribunal holds reclassification of fully equity instrument to “Other Equity” on convergence to Ind-AS is not liable to MAT

This Tax Alert explains Circular No. 4/ 2023 dated 5 April 2023 issued by Central Board of Direct Taxes (CBDT) which provides clarification on the manner of application of salary withholding provisions by employer in view of the new concessional tax rate (CTR) regime applicable to certain non-corporate taxpayers as a default regime unless opted out by the taxpayer. The CTR regime provides lower tax rates and surcharge than old regime but without specified exemptions and deductions. 

The CBDT has directed employers to seek information from their employees regarding their choice of tax regime and each employee shall intimate whether he/she is availing CTR or old regime. The intimation is to be furnished every tax year to enable employer to withhold taxes on salary income as per regime opted by the employee.  If employer does not receive any intimation, employer shall withhold taxes at lower slab rates as per CTR regime. The CBDT clarification is applicable from tax year 2023-24 onwards.