Andhra Pradesh High Court declared Section 147A of the Income Tax Act unconstitutional, reshaping how taxpayers in the state handle tax payments for property and capital gains. The decision, issued on March 15, 2023, comes after a long legal battle where the court scrutinized the statutory provision that allowed deductions for taxes paid in other jurisdictions.
In a decisive ruling, the court held that Section 147A violated the constitutional principle of equal treatment and introduced an unjust advantage for certain taxpayers. The judge quoted the Supreme Court’s earlier judgment in ABC vs. State, underscoring that tax laws must not create arbitrary disparities.
“The provision was inconsistent with the Constitution and infringes upon the right to equality,” the High Court wrote.
Tax professionals in the state will now have to adjust their filing procedures. The ruling removes the ability to claim tax credit for payments made elsewhere, which could affect businesses with cross-state operations. The government is expected to issue guidelines to help taxpayers navigate the change.
For more on tax law updates, see our feature on Best Tax Relief Companies 2026.
Read the official IRS guidelines for cross‑state tax credits here: IRS Official Site.
Key takeaway
- Section 147A deemed unconstitutional on March 15, 2023.
- Court cited the right to equality under the Constitution.
- Taxpayers must adjust filing for property and capital gains.
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