The Hindu Business Line : Sikkim taxpayers confused over terms of circular

Gangtok, Aug 8 It has been barely two days since the new Income-Tax Office in the State was inaugurated, but taxpayers here seem to be a confused lot.

The confusion stems from a July 29 circular issued by the Central Board of Direct Taxes, which has sought to clarify the position and the mechanism of Central direct taxes in Sikkim.

The people who come under the purview of direct taxes said they were confused over Section 2 (d) of the circular which says that “for the assessment year 2008-09 and subsequent assessment years, assessment or re-assessment, if required, shall be made in accordance with the provision of the Income-Tax Act, 1961” — this refers to the financial year 2007-08. In simpler terms, the people have to file their income-tax returns for the financial year 2007-08 according to the notification.

Taxing issues

This means the members of the business community and government employees in Sikkim, who have already paid their taxes under State Income-Tax Manual, 1948, may be subject to a dose of double taxation.

“How can we be double-taxed because we have already paid our taxes under State Income Tax Manual till June 16, 2008. There is no question of double taxation,” a businessmen said.

“We were of the view that the Central direct taxes would come into effect from April 1, 2008, which means the assessment year would be for 2009-10 and the financial year would be 2008-09,” he said.

Ms Bonani Ghosh, Commissioner of Income-Tax, told Business Line that the matter had been taken up with the Chief Commissioner based in Kolkata.

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