I-T department to recover Rs 500 Crore from BSE brokers
Facebook Twitter google+ RSS Feed

I-T department to recover Rs 500 Crore from BSE brokers

By SiliconIndia   |   Friday, 27 February 2009, 12:22 Hrs   |    1 Comments
Printer Print Email Email
Mumabi: As stock brokers avoid paying income tax of about 500 crore on the pretext of claiming depreciation on their Bombay Stock Exchanges (BSE) membership card, Income Tax (I-T) department has approached the Bombay High Court to recover the amount. According to the I-T officials, nearly 60 percent of the BSE card-holders have been claiming a 25 percent depreciation benefit using the written down value on the BSE membership card.

The maximum value of an exchange membership card was 2.25 before BSE was de-mutualised in 2008 and brokers claimed depreciation on this every year, which is debited to their profit and loss account.

However, as per I-T department's view, depreciation benefits can be claimed on items like plant and machinery, which suffer wear-and-tear with time, and not on the card, the value of which fluctuates and can also appreciate. I-T department is also looking to charge interest of 12 percent to the brokers now for all those years for which they have claimed depreciation and paid lower taxes.

Meanwhile, brokers say that their cards fall in the list of intangible asset, and are used as a license to conduct trading activity on which depreciation can be claimed under section 32 of the I-T Act, which was amended in 2000.

The section 32 of the Income Tax Act (Act) introduced, with effect from the assessment year 1999-2000, "intangible assets" viz "know-how, patents, copyrights, trademarks, licenses, franchises, or any other business or commercial right of similar nature" in the eligible category of depreciable assets.

Experts on SiliconIndia
Santhosh  K
Sr. Soft. Engg.
Oracle India
Nehal Vyas
Sr. Team Lead
Cyberoam Tech.
Rani Malli
Sr. Director
Philips
Sr. Executive
ISB
Vijay Balkrishna Konduskar
Business Consultant
Imans Web Tech
Dr L P  Sharma
Technical Director
NIC
Reena Khanna
Founder
Solitaireworld
Dellas  Asse
sys-network admin
Computer Station
Write your comment now
Submit Reset
Reader's comments(1)
1: good keep it up
Posted by:riya - 27 Feb, 2009
SPOTLIGHT