Tax Treaty

Government has no plans to bring a new amnesty scheme for tax evaders and wants to amend the Indo-Mauritius tax treaty to curb its abuse by companies, the Rajya Sabha was informed on Tuesday. VDS schemes in the past offered amnesty to people declaring black money and paying tax. But VDS schemes cannot be hugely successful [...] Full Article

The AAR upholds the importance of the transfer pricing provision over the capital gains provision in case of an international transaction  In a recent ruling in case of Canoro Resources Limited1 (the taxpayer) the Authority for Advance Ruling (AAR) has held that   The transfer pricing provisions shall override the general provisions provided for computing capital [...] Full Article

Payment for transfer of right to use software loaded on hardware – not a royalty; Making available other personnel to subsidiary under control and supervision – constitutes Service PE. Background Lucent Technologies International Inc. 1(“the assessee”) is a company incorporated in the USA. It is a tax resident of USA. It is a leading supplier [...] Full Article

The Income Tax Department has slapped a bill of Rs50 crore on leading private telecom company Bharti Airtel for “non-payment of taxes on interest paid on loans taken by it” and allegedly furnishing wrong information to the tax department. Bharti has contested the claim, but has also paid more than Rs40 crore to the department, [...] Full Article

The government may introduce provisions in the new direct tax code to prevent misuse of double taxation avoidance agreements India has with other countries. The new code is likely to be unveiled before the year ends. A government official said a discussion paper on the code, a major initiative undertaken under the guidance of the former finance minister and present home minister P Chidambaram, is being fine-tuned. Full Article

Since August last year, the world has been watching. It all began with a show cause notice issued to Vodafone BV (based in the Netherlands), holding it to be an “assessee in default” for not withholding tax at source when it made payments to a Hutchison Group company (based in Cayman Islands) for acquiring shares of another Cayman Island company. Full Article

Income tax relief could be in store for US-bound students with New Delhi planning to seek changes in the Double Taxation Avoidance Agreement. Indian students have to pay an income tax on earnings from part-time jobs. This is because the India-US tax treaty provides for treatment of Indian students on a par with US nationals without giving a special tax relief. Full Article

In a ruling which could affect tax payments of thousands of employees of Indian IT companies earning mega bucks on overseas assignments, the Authority of Advance Rulings (AAR) has said that that there was no escape from paying tax on the amount earned during a stint with the employer's foreign affiliates. Full Article