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Commodities Transaction Tax - Income Tax - Ready Reckoner - Income TaxExtract 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. 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 almond, barley, cardamom, castor seed, channa/gram, copra, coriander/dhaniya, cotton, cotton seed oilcake/kapasia khali, guar seed, isabgul seed, jeera, kapas, maize feed, pepper, potato, rape/mustard seed, raw jute, red chilli, soya bean/seed, soymeal, turmeric, wheat. 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). S.No Taxable Commodities Rate Payable By 1. Sale of commodity derivative 0.01 per cent of value of taxable commodities transaction (i.e., the price at which commodity derivative is traded) Seller 2. Sale of an option on commodity derivative 0.05% of Option premium Seller 3. Sale of an option on commodity derivative, where option is exercised 0.0001% of Settlement price Purchaser Taxable commodities transaction has been defined to mean a transaction of sale of commodity derivatives in respect of commodities other than agricultural commodities traded in recognised associations. CTT is to be collected on taxable commodities transactions by the recognised associations.
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