KPMG Pre-Budget Survey 2015

KPMG in India through its survey, has tried to understand the expectations of India Inc. on various parameters such as policy reforms, clarity on indirect transfer tax provisions, applicability of MAT on foreign companies, amendment in the tax regime for REITs, deductions allowed to individuals, etc. Over 200 senior professionals across sectors participated in the online survey held during January and early February 2015. 

Direct Tax Rulings Overruled / Impacted by Finance Bill, 2015

One of the highlights of the Finance Bill 2015 (Bill) is an attempt to address some provisions that are disputed or have potential for dispute.  

The redressal of the disputed issue on source rule in respect of interest received by the non-resident engaged in the business of banking, may have effect of overruling Special Bench in Sumitomo Mitsui Banking Corporation [TS-187-ITAT-2012(Mum)] and impact few other cases. The other instances of rulings getting impacted are:

- Amendment to S.32(1)(iia) - Year of Additional Depreciation claim: Confirms ITAT in Apollo Tyres

- Amendments to S.269SS/S.269T - Mode of accepting and repaying loans or deposits or specified advances: Overrules Gujarat High Court in Madhav Enterprises Pvt Ltd. on advances

- Amendments to S.153C extending scope of persons searched: Impacts ITAT in Global Estate and Tanvir Collections on “belongs to"

- Amendments to S.115JB (MAT computation) for specified exclusions: Overrules ITAT in B. Seenaiah & Co

Taxsutra Team has compiled an indicative list of case-laws on positions that are prima facie impacted if the Finance Bill 2015 amendments take effect. This list shall be further updated during the next few days.

We hope you find this brief insight useful. We invite readers to revert with their analysis on further rulings that may be added to the compilation.Kindly send your inputs at books@taxsutra.com

Budget 2015 - The Press Box!

The pink papers, as expected have given wall to wall coverage to Budget and if you were overwhelmed by the sheer length and width of the analysis, we are here to ease the burden for you! Click here to read our special round up of the news articles that you could probably spend some free time on ! 

Analysis of Direct Tax Proposal in Finance Bill

Finance Bill defers GAAR implementation by two years and makes it prospective, cites BEPS as one of the considerations; Corporate tax rate reduction roadmap over 5 years starting next year, but increase in 2% surcharge for companies, firms as well as super-rich individuals (income > Rs 1 crore) to result in higher tax outflow for FY 2015-16; Amends scope of "indirect transfers" in line with Shome Committee recommendations, with some details to be notified in Rules, makes it applicable prospectively; Includes “Yoga” in the definition of exempt activities for ‘charitable purpose’ u/s 2(15); Fund Managers in India not to constitute business connection of offshore funds; Tax residency for companies to be aligned with international principles by introduction of Place of effective management (POEM) concept; Enhances scope of Sec 263 to include order passed without making inquiries/ verification as deemed erroneous order, prejudicial to the interest of revenue; Scope of reporting of non-resident payments u/s 195(6) enhanced to cover even non-taxable transactions; TDS rate on royalty & FTS payments reduced to 10% from FY 2015-16 

Income Tax Act : A Merry-Go-Round

Its a very popular old adage - What goes around, comes around!! Well that is true for the Income Tax Act as well. 

The Indian Income Tax Law has been amended several times in last 50 years. There are several sections (for example - FBT, taxing immovable property sale) in the law which have been introduced in the Finance Act but have subsequently been removed. There are a few sections which after removal have been brought back as well (e.g. Dividend distribution tax) !

Taxsutra traces history of few of the important sections in the Income Tax Act. We try to bring you insight into what was the rationale for such changes as explained by Finance Ministers or by the then Governments. 

GAAR - Are we ready?

If there is an 800 pound gorilla in the Budget room, it surely is GAAR. This controversial piece of legislation has been twice postponed and both MNCs and India Inc. are hoping for a ‘hat-trick’. Will the FM keep the Govt.’s date with GAAR – April 2015? Or will it see another deferral? Taxsutra spoke to leading Corporate Tax Directors, the ones likely to be in the firing line of GAAR and they gave us a wide array of views.

Budget Across Borders

As we begin the countdown to India’s 2015 Union Budget, India Unbound brings to you a quick peek on the key budget proposals of some of the G8 and BRICS nations in last one year. Simplification / rationalization especially of tax rates and procedural provisions, alignment with BEPS and other international tax related amendments like FATCA, anti-avoidance rules, CbC reporting etc seem to be the common focus themes of these countries’ budget proposals.

Make in India

“Make in India” has been one of the signature initiatives launched by the current Government with the objective of providing a booster dose to the Indian economy. Budget 2015 is expected to contain a slew of announcements to give a fillip to the "Make in India” campaign. As the FM gets ready to provide the same, India Unbound gets you a glimpse of what to expect atleast on the tax front in this regard by reviewing some of the key direct & indirect tax proposals already present in the Indian Tax laws. 

The Skyrocketing Benefits of India’s Services

Tax collections from service tax, first introduced in 1994, will cross customs and excise duties for the first time in the financial year 2014-15, an indication of the growing importance of services to India’s economy.

The only two tax heads that will contribute more than service tax are corporate tax and income tax.

Here’s a look at the 10-year data on tax collections: 

Retro Rewind

Tax payers and tax professionals await the Budget every year with bated breath; not least because it brings in several changes, big and small, in the Income Tax Act. While the Finance Minister’s speech gets the most eyeballs, it is the debates in the Lok Sabha and Rajya Sabha thereafter that have over the decades produced memorable moments. 'Retro Rewind' takes you into some of the classic Parliamentary debates around controversial tax provisions / amendments. 

Budget Amendments - The Legal Whistle

It is not always the Finance Minister or the Parliament that has the last word on the Finance Bill. Quite a few of the tax amendments introduced in the Budget are challenged before the courts for their Constitutional validity. In the recent past, the retrospective amendment to Sec 9 nullifying SC’s Vodafone judgment has been challenged before several High Courts.

In this section, we shall take a look at landmark Court rulings delivered in last 12 months wherein a Budget amendment has been challenged and key observations from the Court therein. Wherever possible, the intent of introducing the amendment has also been provided. 

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