Archive for: April 2016

India Budget Series April 30, 2016

TAX BENEFITS UNDER RUPEE DENOMINATED BOND

In order to provide relief to the non-resident investor, it is proposed to amend Section 48 to exempt capital gains, in the hands of non-resident investor, arising in case of appreciation of the Indian Rupee between the date of issue and date of redemption against the foreign currency. This amendment will take effect from 1st […]

India Budget Series April 30, 2016

TAX BENEFITS UNDER SOVEREIGN GOLD BOND SCHEME, 2015

The Sovereign Gold Bond Scheme was introduced with the dual intention of providing security as well as fulfilling a social obligation. It is proposed that redemption of a Sovereign Gold Bond under the said Scheme by an individual shall not be considered as a transfer and shall be exempt from capital gains tax. It is […]

India Budget Series April 30, 2016

AMENDMENT OF SECTION 54GB

As per the existing provisions of Section 54GB, long term capital gains are exempted on account of transfer of residential property, if the proceeds are invested in subscription of shares of a MSME company, subject to other conditions specified therein It is proposed to amend Section 54GB so as to widen the scope of exemption, […]

India Budget Series April 30, 2016

INSERTION OF NEW SECTION 54EE

In order to promote the Start-up India Action Plan with the intention to raise Rs.10,000 crores, in a span of 4 years, in order to finance start-ups through a specified Fund, the department has introduced a new Section on the same lines of Section 54EC. The provisions of the new Section are as follows:- -Long […]

India Budget Series April 30, 2016

APPLICABILITY OF MAT ON FOREIGN COMPANIES FOR THE PERIOD PRIOR TO 01.04.2015

Under the existing provisions of Section 115JB, if tax payable under the Income Tax Act is lower than 18.5% of the book profits, then such assessee shall be liable to pay taxes at the rate of 18.5% of the book profits. There were issues whether the above provisions shall be applicable to Foreign Institutional Investors […]

India Budget Series April 30, 2016

TAX INCENTIVES TO INTERNATIONAL FINANCIAL SERVICES CENTRE

In order to provide a fill-up to the growth of International Financial Services Centre, following proposals are made:- -Capital gains arising from transaction undertaken in foreign currency on recognised stock exchange located in the International Financial Services Centre (IFSC) shall be exempt from tax even when STT is not paid in respect of such transactions. […]

India Budget Series April 30, 2016

MODIFICATION OF CONDITIONS FOR OFF SHORE FUNDS

  In the above case, the investors invest in an offshore fund that is located outside India. The fund, in turn, appoints a consultant outside India. Further, consultant, in turn, from its office outside India, appoints a fund manager in India to take care of its Indian Portfolio. In this case, if the fund is […]

India Budget Series April 30, 2016

TAXATION OF BUY BACK OF SHARES

It is proposed to amend Section 115QA to provide for: -taxation of distributed income in case of buy back of shares by an unlisted company under any law relating to companies (currently it refers to only Companies Act 1956) and -providing clarity on the method of determination of consideration received by the company at the […]

India Budget Series April 30, 2016

AMORTISATION OF SPECTRUM FEE FOR PURCHASE OF SPECTRUM

Territory of India is not limited to land and sea but it includes air as well. There is a levy of Spectrum fee for auction of air waves. There are uncertainties in tax treatments in relation to payments in respect of Spectrum. In order to provide clarity and avoid any future litigation and controversy, it […]

India Budget Series April 30, 2016

TAXATION OF NON-COMPETE FEES AND EXCLUSIVITY RIGHTS IN CASE OF PROFESSION

Under the existing provisions of the Income Tax Act, there are provisions in relation to taxation of non-compete fees and exclusivity rights in relation to Business but there are no such provisions in relation to Profession. Thus, it is proposed to make the following considerations:- -Non-compete fees received/receivable, recurring in nature, in relation to not […]

123