Tax clearance (37-1)
One of the fundamental principles of finance is the Income Tax Act of 1961. This act states that any lease transaction that lasts for at least 12 years or any sale transaction above a certain value must be approved by the Income Tax Appropriate Authority, as per the prescribed process. This involves submitting a joint application by the parties involved, along with the required processing fees. The clearance process can take up to three months, and without it, the sale transaction cannot be finalized. This process is commonly referred to as the 37-(I) clearance, named after the application form used.
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