Commodities Transaction Tax - Income Tax - Ready Reckoner - Income Tax

Commodities Transaction Tax Commodities Transaction Tax (CTT) is been levied on taxable commodities transactions entered into in a recognized association. Salient features of this tax are given below:- Commodities transaction tax will come into force from a date which is to be notified by the central Government. CTT was introduced in the Finance Act 2013 and applicable with effect from 1st July, 2013 Taxable commodities transaction means a transaction of sale of commodity derivatives in respect of commodities (other than agricultural commodities), traded in recognized associations. Agricultural commodities which are not liable to CTT are specified under rule 3 of Commodities Transaction Tax Rules, 2013. Further, Section 36 of the Income-tax Act has been amended to provide that an amount equal to the commodities transaction tax paid by the assessee in respect of the taxable commodities transactions entered into in the course of his business during the previous year shall be allowable as deduction, if the income arising from such taxable commodities transactions is included in the income computed under the head - Profits and gains of business or profession. Every recognized association shall collect the commodities transaction tax from the seller who enters into a taxable commodities transaction in that recognized association (such association will also be known as assessee for this purpose). The assessee will deposit commodities transaction tax within 7 days immediately after the end of the month in which such tax is collected. For non-payment or short payment or payment after due date, interest would be charged at the rate of 1 per cent per month (or part thereof). There shall be charged a commodities transaction tax in respect of taxable commodities transaction specified, at the rate specified in the corresponding entry on the value of such transaction and such tax shall be payable by the purchaser or the seller, as the case may be. [ Section 117 of Finance Act, 2013 ] The return of taxable commodities transactions required to be furnished under section 120(1) shall be in Form No. 1, verified in the manner indicated therein, and may be furnished in any of the following manners, namely:- (i) furnishing the return in paper form; (ii) furnishing the return electronically under digital signature. [ Rule 6(1) of CTT Rules 2013 ] The return of taxable commodities transaction entered into during a financial year shall be furnished on or before the 30th June immediately following that financial year. [ Rule 6(2) of CTT Rules 2013 ]