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The Centre on Tuesday clarified that the amendments in the Finance Bill - which expand the definition of income taxable under the Income Tax Act, 1961, by inserting a sub-clause on subsidies, grant and cash incentives - would not include individual subsidies such as the one received on liquid petroleum gas (LPG).
The expansion of definition had triggered queries controversy whether the individual subsidies received through Direct Benefit Transfer (DBT) schemes would also be taxable.
"This is not applicable to individuals not having any income chargeable under the head "profits and gains of business or profession" and receiving LPG subsidy or any other subsidy which is for the welfare of the individual," the finance ministry stated.
However, subsidies received by individuals who have business income would be taxed according to the income computation and disclosure standards that are yet to be notified.
