Tag: Taxation
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The Tax Evasion Debate Revisited
[Posted by Shantanu Naravane] An earlier post here had looked at the interrelation between the ratios of Azadi Bachao Andolan and McDowell on the issue of tax evasion, and concluded that the stricture against tax evasion laid down in McDowell hadn’t been completely laid to rest by Azadi, and that there still was scope for…
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DTAA income now included in total income
[Posted by V. Niranjan] The CBDT has notified that if a DTAA provides that the income of a resident “may be taxed” in the other country, such income will be considered to be part of the total income of the assessee (CBDT Notification No. 91/2008). The notification is available here. The implication is that such…
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Motive to Avoid and Transfer Pricing
[Posted by V. Niranjan] Transfer pricing and arm’s length pricing have become increasingly important subjects over the past few years, with the growing importance of cross-border transactions between companies under the same umbrella organisation, or connected in other ways. Several questions have arisen – the definition of ‘associated enterprises’, the appropriate method of computing transfer…
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Tax Implications of Demergers
[Posted by Umakanth Varottil] (The following post is contributed by Mihir Naniwadekar) Generally, the gains arising from a demerger are exempt from capital gains tax, while those arising from a slump sale are not. But, then, what exactly is a ‘demerger’ for the purposes of the exemption from capital gains tax? Can a demerger ever…
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Are Companies Bound to Deduct TDS on Service Tax?
[Posted by Umakanth Varottil] (The following post is contributed by V. Niranjan) There is some doubt on the course of action that companies should take, as far as TDS on professional fees is concerned. The question, essentially, is this – should TDS be deducted on the amount of the professional fee paid, exclusive of service…
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Supreme Court on Fringe Benefit Taxes
[Posted by Umakanth Varottil] (In the following post Shantanu Naravane, a 4th Year B.A., LL.B (Hons.) student at the National Law School of India University, Bangalore, examines one of the first Supreme Court decisions on fringe benefit taxes) Ever since its introduction by the 2005 Finance Act, the concept of Fringe Benefit Taxes [“FBT”] has…
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The Efficacy of Windfall Profits Tax
[Posted by Umakanth Varottil] In an earlier post, we had discussed how the recent spike in oil prices has raised important issues relating to corporate governance in listed public sector companies. Now, this steep oil price rise has rekindled the debate on the need to impose a windfall profits tax on private oil companies. The…
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Vodafone Income Tax Case
[Posted by Umakanth Varottil] The acquisition of shares in Hutch Essar by Vodafone from Hutchison in a multi-billion dollar M&A deal last year has resulted in a dispute on the taxability of capital gains on the transaction. This dispute is currently pending before the Bombay High Court, with a decision being awaited. The court’s verdict…
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Taxation on Sale of Shares in a Foreign Holding Company
[Posted by Umakanth Varottil] Often, divestments by foreign owners of Indian companies are effected through a sale of the stake outside India. More specifically, where foreign companies hold shares in Indian companies through intermediate offshore investment companies, they can effect a divestment by merely selling off shares of the offshore holding companies. This does not…
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Taxation on Slump Sales
[Posted by Umakanth Varottil] A ‘slump sale’ is one of the methods available to give effect to a transfer of a division or undertaking of a company to another company. Under this method, all the assets and liabilities of (or relatable to) the undertaking are transferred for a ‘lump sum’ consideration without assigning values to…