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Details

  • Service: Tax, International Corporate Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 2/12/2013

India - Deductible interest, withholding certificates, telecom-related royalty payments 

February 12:   The KPMG member firm in India has prepared reports on the following developments (read the February 2013 reports by clicking on the hyperlink provided below):
  • Interest on funds borrow to acquire controlling interest allowed as deduction because dividend income was taxable: The Mumbai Bench of the Income-tax Appellate Tribunal held that the interest paid on borrowed funds used for acquiring the controlling interest in a company was allowed as deduction under the Income-tax Act, 1961, because the funds were used to acquire shares of a company and the dividend income was taxable during the year under consideration.

    The case is: Pistabai Rikhabchand Kothari. Read a February 2013 report [PDF 206 KB]


  • Withholding certificate is valid even when tax withholding amounts differ: The Punjab & Haryana High Court held that lower withholding certificates furnished by a taxpayer are effective even if the tax deduction account number (TAN) differs. The High Court found that merely because the taxpayer had separate TANs for two units, this would not render the certificate “redundant.”

    The case is: Parle Biscuits Pvt Ltd. Read a February 2013 report [PDF 195 KB]


  • Royalty income related to manufacture of equipment for Indian telecom service providers is not taxable in India: The Delhi Bench of Income-tax Appellate Tribunal held that royalty income received with respect to the licensing of patents by a foreign company to another foreign equipment manufacturer, and used for the manufacture of CDMA technology-enabled handsets and equipment sold to Indian telecom service providers is not taxable in India under the Income-tax Act, 1961.

    The case is: Qualcomm Incorporated. Read a February 2013 report [PDF 242 KB]


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