Introductory remarks as per Finance Bill, 2008
A new tax called Commodities Transaction Tax (CTT) was levied on taxable commodities transactions entered in a recognized association.
Originally, it defined ‘Taxable commodities transaction’ to mean a transaction of purchase or sale in a recognised association of – (i) option in goods; or (ii) option in commodity derivative; or (iii) any other commodity derivative.
The tax is levied at the prescribed rate, on taxable commodities transactions undertaken by the seller or the purchaser, as the case may be.
The provisions with regard to collection and recovery of CTT, furnishing of returns, assessment procedure, power of assessing officer, chargeability of interest, levy of penalty, institution of prosecution, filing of appeal, power to the Central Government, etc. have also been provided.
Further, section 36 of the Income-tax Act amended to provide that any amount of commodities transaction tax paid by the assessee during the year in respect of taxable commodities transactions entered into in the course of business shall be allowed as deduction subject to the condition that such income from taxable commodities transactions is included under the head ‘profits and gains of business or profession’
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