Freebies and incentives get a bitter pill!

Jimit Shah, Shivali Valecha & Siddhi Maru – [2022] 137 taxmann.com 218 (Article)

In recent years, the tax policy of the government has been guided by the vision to promote voluntary compliance and reduce litigation. Also, the endeavour has been to widen and deepen the tax base.

With this objective, Budget 2022 brought in two major amendments to the Income-tax Act, 1961(‘the Act’) related to deductibility of expenses and withholding tax. These provisions require close attention and are likely to extensively impact the pharmaceutical and consumer goods industry. A week after the Budget 2022 proposals were announced, the Supreme Court pronounced a critical judgment which will significantly impact pharmaceutical companies.

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