27 July 2010
What is the tax treatment of Gain on Prepayment of Sales Tax Liability on NPV basis (Maharashtra State Sales Tax)? Suppose - The Sales Tax Liability is at 15,00,000 Rs. The prepayment on the Basis of NPV is Rs. 9,60,000 in full discharge of the loan liability. Whether the Gain of Rs. 5,40,000 on prepayment of sales tax liability is chargable to tax? If yes, then under which section? What is the benefit to the assessee to avail the Maharashtra State Government scheme of prepayment of loan on NPV basis? On one side he is gaining but he has to pay Income Tax on the Gain?
CAclubindia
