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  • Service: Tax, International Corporate Tax, International Executive Services, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 11/26/2012

India - Tax treatment of non-compete fees 

November 26: The KPMG member firm in India has prepared reports on the following developments (read the November 2012 reports by clicking on the hyperlinks provided below):
  • No interest liability for deferment of advance tax when tax is refunded: The Bangalore Bench of the Income-tax Appellate Tribunal held that when the final income of the taxpayer is assessed at a loss, and the advance tax paid by the taxpayer is also refunded, the taxpayer is not liable to pay interest for the deferment of advance tax under section 234C of the Income-tax Act, 1961. Rather, the interest paid by the taxpayer under section 234C is to be refunded to the taxpayer along with the overpayments.

    The case is: Mysore Paper Mills Ltd. Read the November 2012 report [PDF 198 KB]


  • FAQs on international workers and Indian plans: The Indian government has issued an updated list of “frequently asked questions” (FAQs) on international workers and India’s provident funds plans.

    Read the November 2012 report [PDF 319 KB]


  • Non-compete fees not revenue expenditure nor eligible for depreciation: The Delhi High Court held that “non-compete fees” paid by the taxpayer were not allowable as a revenue expenditure because the benefit accrued was in the nature of a capital expenditure for a substantial period of time, and also were not eligible for depreciation because only intangible rights enforceable against the “world at large” qualify for depreciation.

    The case is: Sharp Business System. Read the November 2012 report [PDF 214 KB]


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