• Service: Tax, International Executive Services, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 8/16/2013

India - Reporting, withholding on payments to non-residents 

August 16:  The KPMG member firm in India prepared reports on the following developments (read the August 2013 reports by clicking on the hyperlinks provided below):
  • Revised rules for information required to be provided on payments made to non-residents - India’s Central Board of Direct Taxes issued guidance (Notification No 58/2013) revising the manner and forms to be used in providing information electronically for payments and remittances made outside India to non-residents. The new requirements are effective 1 October 2013

    Read an August 2013 report [PDF 209 KB]

  • Disallowance of claimed deduction for withholding tax related to payments - Two judicial opinions addressing the tax authority’s disallowance of a taxpayer’s deduction for tax payments, under section 40(a)(ia), reached opposite conclusions. The taxpayers made certain payments to non-residents without withholding tax on the payments. The tax authorities disallowed the taxpayer’s claim for this payment as an expenditure under section 40(a)(ia) of the Income-tax Act, 1961, on account of the taxpayer’s failure to withhold (or as referred to in India, “deduct”) tax on the payments made to the non-residents. The Allahabad High Court held that in disallowing an expenditure under section 40(a)(ia) on which tax has not been deducted, the tax expense is based on the amount payable—not the amount that has been paid by the end of the year. However, the Mumbai Bench of the Income-tax Appellate Tribunal upheld the disallowance of the expense for the tax on payments under section 40(a)(ia), even for amounts that have been paid during the year.

    Read an August 2013 report [PDF 202 KB]

  • Capital gains taxation triggered in the year in which joint development agreement is entered - The Chandigarh Bench of the Income-tax Appellate Tribunal held that capital gains (on land held as a capital asset) are taxable in the year when a joint development agreement is entered, under which land rights are transferred to the developer.

    The case is: Charanjit Singh Atwal. Read an August 2013 report [PDF 214 KB]

  • New rules for special economic zones (SEZs) - Concerning the SEZ regime, guidance was issued on 12 August 2013.

    Read an August 2013 report [PDF 194 KB]

  • Expatriate employees on various tax issues - The Delhi High Court issued a decision concerning tax issues of expatriate employees.

    The case is: Yoshio Kubo. Read an August 2013 report [PDF 206 KB]

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