Assessment of Banks - Checklist for deductions

CBDT has observed that, In a recent review of assessment of Banks carried out by C&AG, it has been observed that white computing the income of banks under the head 'Profit and Gains of Business & Profession', deductions of large amounts under different sections are being allowed by the Assessing Officers without proper verification, leading to substantial loss of revenue.

It is, therefore, necessary that assessments in the cases of banks are completed with due care and after proper verification. In particular, deductions under the provisions referred to below should be allowed only after a thorough examination of the claim on facts and on law as per the provisions of the I.T. Act., 1961.

Therefore, CBDT has issues long list of deductions to be examined while allowing from profit and gains from Business or Profession in case of Banking Sector.

See Income Tax - INSTRUCTION NO. 17/2008 - dated - 26-11-2008