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Clearer tax deducted at source guidelines for e-transactions
The Central Board of Direct Taxes (CBDT) has provided clear guidelines on when e-retailers using the government’s Open Network for Digital Commerce (ONDC) should adopt tax deducted at source (TDS).
E-retailers trading on the ONDC...
Take the chains off business
Recent moves to decriminalize violations of corporate and tax law are welcome, writes Nitin Mittal
With the Central Board of Direct Taxes (CBDT’s) recently introduced circular, on 9 September, which eases norms for initiating prosecution...
Who is exempt from the angel tax?
Section 56 of the Income Tax Act, 1961 (ITA) seeks to tax “income from other sources” of a taxpayer. Section 56(2)(viib) levies tax on a private company on issuance of shares, if such shares...
Tax body proposes new rules on profit attribution
The Central Board of Direct Taxes (CBDT) recommended significant amendments to the current rules on attribution of profits to permanent establishments (PEs) in a report issued on 18 April 2019.
The report is based primarily...
CBDT issues final notification on securities tax exemption
The Finance Act, 2018, withdrew an exemption under section 10(38) of the Income Tax Act, 1961 (ITA), on long-term capital gains (LTCG) arising from the transfer of listed equity shares or units of an...
CBDT amends tax audit report format
The Central Board of Direct Taxes (CBDT) recently amended the format of the tax audit report that all auditable companies and professionals whose turnover exceeds the prescribed thresholds under section 44AB of the Income...
CBDT seeks input on secondary adjustments
The Central Board of Direct Taxes (CBDT) released a draft notification on 19 June for comments and suggestions in relation to amending rule 10CB, which prescribes the timelines for secondary adjustments. In order to...
CBDT amends income tax rules
The Central Board of Direct Taxes (CBDT) has amended the Income Tax Rules, 1962, by omitting the words “or an accountant” from rule 11UA(2)(b). Section 56(2)(viib) of the Income Tax Act, 1961 (ITA), provides...
CBDT issues draft for securities tax exemption
The Central Board of Direct Taxes (CBDT) issued a draft notification specifying transactions that would not be subject to a securities transaction tax (STT) during acquisition to obtain a beneficial tax rate.
The Finance Act,...
CBDT enters into advance pricing agreements
Anotification from the Central Board of Direct Taxes (CBDT) on 3 April said it had entered into 14 unilateral advance pricing agreements (UAPAs) and two bilateral advance pricing agreements (BAPAs) in March.
As per section...
Direct tax body clarifies due date
The Central Board of Direct Taxes (CBDT) on 23 March clarified the applicability of the “due date” for country-by-country reporting (CbCR) under section 286(4) of the Income Tax Act, 1961 (ITA).
Section 286(2) of the...
Direct tax body clarifies indirect transfer provisions
The Central Board of Direct Taxes (CBDT) released a clarification via a circular on 7 November on the applicability of indirect transfer provisions (ITP) on non-resident investors on account of redemption/buyback of shares/interest held...
CBDT clarifies place of effective management guidelines
The Central Board of Direct Taxes (CBDT) issued a notification on 23 October to clarify the recent place of effective management (POEM) guidelines. The Finance Act, 2015, had amended section 6(3) of the Income...
Direct tax body issues draft notification
The Central Board of Direct Taxes (CBDT) issued a draft notification dated 6 October setting out the rules and guidelines for country by country reporting (CbCR) and maintaining/furnishing the master file (MF) inviting stakeholder...
Virtual currencies – A regulatory conundrum
Dear Editor,
I would like to highlight that the legal status of cryptocurrencies or virtual currencies (VCs) such as bitcoins continues to be debated as it remains unrecognized in India. Unlike the traditional form of...
Authority clarifies MAT calculations
The Central Board of Direct Taxes (CBDT) on 25 July released clarifications on computation of book profit for the purposes of levy of minimum alternate tax (MAT) for companies that comply with Indian Accounting...
Extent of amendment’s application clarified
A notification from the Central Board of Direct Taxes (CBDT) on 5 June said that barring a few exceptions transactions of acquisition of listed equity shares on or after October 2004 which are not...
April deadline for FATCA compliance
The Central Board of Direct Taxes (CBDT) has set 30 April 2017 as the deadline for account holders to provide self-certifications to financial institutions with respect to rule 114H(8) relating to the US Foreign...
Patent box regime modified
Through a notification on 31 March, the Central Board of Direct Taxes (CBDT) introduced changes to the patent box regime. The CBDT notified rule 5G of the Income Tax Rules, 1962, and form 3CFA...
Applicability of general anti-avoidance rules clarified
The Central Board of Direct Taxes (CBDT) recently released a circular providing clarifications in response to queries raised by stakeholders on the implementation of general anti-avoidance rules (GAAR).
The GAAR provisions, which were introduced in the...
AIFs not subject to capital gains exception
On 2 May 2016, the Central Board of Direct Taxes issued an instruction clarifying that income from the transfer of unlisted shares shall be considered under “capital gains”, irrespective of the period of holding...
Authorities to reconsider indirect transfer provision
On 21 December 2016, the Central Board of Direct Taxes (CBDT) released a circular containing responses to questions raised by foreign portfolio investors (FPIs), private equity and venture capital investors and other stakeholders on...
CBDT issues draft rules for buyback tax
Under section 115-Q of the Income Tax Act, 1961, a buyback tax at the rate of 20% is levied on distributed income arising out of a buyback of unlisted shares of a company. The...
Valuing indirect transfers: New rules introduced
A US$11 billion deal between Vodafone and Hutchison Group brought the taxability of indirect transfers of Indian assets into the limelight. The Supreme Court of India in 2012 held that Hutchinson’s sale of shares...
Working group to examine India-Mauritius tax issues
The CBDT has constituted a working group to examine issues arising out of the amendment to the India-Mauritius double taxation avoidance agreement. The working group consists of government officials, industry representatives and stakeholders. The...
Rules for tax on indirect transfers notified
The Central Board of Direct Taxes (CBDT) recently notified rules to determine whether a share or interest in a foreign company or entity derives its value substantially from assets located in India.
Under section 9...
TARC leads the way on taxation reform
In an attempt to radically reform the tax administration in India, the central government appointed the Tax Administration Reform Commission (TARC), with Dr Parthasarathi Shome at its helm. Since its inception in August 2013,...
CBDT notifies safe harbour rules for fund managers
On 15 March, the Central Board of Direct Taxes (CBDT) notified the Income Tax (5th Amendment) Rules, 2016. Under the rules, where investment in a fund has been made directly by an institutional entity,...
Special Valuation Branch: The new road ahead
Under customs laws, the Special Valuation Branch (SVB) specializes in investigation and assessment of transactions involving special relationships between buyer and seller and certain special features surrounding the sale of imported goods having influence...
The need of the hour
India must overhaul its machinery for resolving tax disputes, writes Aseem Chawla at MPC Legal
The efficiency of a tax administration system depends to a great extent upon the credibility of its dispute resolution mechanism,...
India’s annual budget and goods and services tax
India’s annual budget included a mixed bag of tax measures, but not the hoped-for repeal of retrospective tax amendments
Rohan Shah and Anay Banhatti report
The finance minister’s presentation of India’s annual budget generally draws an...
Cyprus notified as non-cooperative jurisdiction
On 1 November 2013, the Central Board of Direct Taxes (CBDT) issued a press release notifying Cyprus as a non-cooperative jurisdiction for failure to provide information that was requested under the exchange of information...
Central Board of Direct Taxes issues circulars on R&D
The Central Board of Direct Taxes (CBDT) recently issued two circulars: Circular 2/2013, on the application of the profit split method (PSM); and Circular 3/2013, on conditions relevant to identify development centres engaged in...
Tax residency certificate: Is the devil in the details?
Atax residency certificate (TRC) is important for claiming tax treaty benefits. Some source countries are cautious about providing tax benefits to non-residents, especially to corporations from low tax jurisdictions which have a favourable tax...
Expenses for prohibited gifts cannot be deducted
Ruling in Confederation of Indian Pharmaceutical Industry v Central Board of Direct Taxes & Ors, a two-judge bench of Himachal Pradesh High Court held that a Central Board of Direct Taxes (CBDT) circular denying...
Board clarifies tax obligations under QFI regime
The Central Board of Direct Taxes (CBDT) has issued clarifications on tax-related issues that have been plaguing qualified foreign investors (QFIs), in particular on their withholding obligations and their ability to use tax treaty...
Advance pricing agreements: the Indian situation outlined
The introduction of advance pricing agreements (APAs) in the Union Budget 2012-13, which is now part of the Finance Act, 2012, was a significant development in the Indian transfer pricing (TP) administration. An APA...
Direct Tax Code and impact on non-residents
The draft Direct Tax Code (DTC) released by the Finance Ministry in August 2009 posed certain challenges for taxation of non-residents. In order to clarify the concerns and issues raised by taxpayers, the Central...
Happy end to the E*Trade Mauritius saga
In a happy ending to the latest twist in the case of E*Trade Mauritius (ETM), the Authority for Advance Rulings (AAR) has ruled that the company is entitled to the beneficial capital gains tax...
Tax withholding judgment poses dilemma for businesses
Withholding tax on payments to non-residents has been a bone of contention between the taxpayer community and the tax department. Until recently, the controversy related to whether income in the hands of a non-resident...
New valuation rules for taxation of perquisites
On 18 December 2009 the Central Board of Direct Taxes (CBDT) issued its long-awaited rules for the valuation of perquisites, which will take effect on 1 April 2010. In accordance with the amendment made...
Tax rules for non-resident business income withdrawn
Increasing the uncertainty within India’s tax environment, the Indian Central Board of Direct Taxes (CBDT) recently withdrew Circular 23 of 1969, which laid out limitations on the taxability of non-resident business income in India....
Payments for offshore contracts not taxable
In the case of Hyosung Corporation (the applicant), which involved off-shore and on-shore contracts among three entities, the Authority for Advance Ruling (AAR) held that amounts paid to non-residents for off-shore contracts taking place...
Central board clarifies tax credit rules
The Central Board of Direct Taxes (CBDT) has recently clarified who will be able to benefit from tax deducted at source (TDS) in cases where income is assessable in the hands of an individual...
