• Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 9/20/2013

India - Tax treatment of share premiums, of foreign training 

September 20: The KPMG member firm in India prepared reports on the following developments (read the September 2013 reports by clicking on the hyperlinks provided below):
  • Indian companies can make downstream investment by using internal accruals - Under foreign direct investment policy rules, an Indian company making downstream investments may bring funds from abroad and/ or use internal accruals. The Reserve Bank of India issued a circular clarifying that an Indian company may make downstream investments by using internal accruals.

    Read a September 2013 report [PDF 371 KB]

  • Temporary landing permits, visas for airline and ship crew members - Indian immigration laws allows for temporary landing permit to be granted to foreign nationals visiting India for a period of three days to 60 days (generally issued to crew members of airlines and ships transiting through India, groups of foreign tourist, etc.). India’s Ministry of Home Affairs, issued detailed instructions on the grant of these pemits and visas to crews of airlines, chartered flights, ships, etc.

    Read a September 2013 report [PDF 390 KB]

  • Payments for training pilots abroad not taxable as “fees for included services” under India-United States income tax treaty - The Mumbai Bench of the Income-tax Appellate Tribunal held that payments made to a foreign company for training provided to pilots and other staff members of an Indian company are not taxable as “fees for included services” under the India-United States income tax treaty because the training was provided pursuant to a requirement of the Directorate General of Civil Aviation of India Rules. The training was only part of the pilot eligibility requirements and did not “make available” technical knowledge, experience, skill, know-how, etc. under the tax treaty.

    The case is: United Helicharters Pvt Ltd. Read a September 2013 report [PDF 465 KB]

  • Rules relating to information required to be furnished on payment made to non-residents - India’s Central Board of Direct Taxes (CBDT) amended a rule that broadens the requirements for collecting information and reporting requirements for all remittances made outside India.

    Read a September 2013 report [PDF 377 KB]

  • Share premium received on issue of shares not taxable - The Mumbai Bench of the Income-tax Appellate Tribunal in a case concerning the taxability of premium received on issue of shares, held that the share premium realized on the issuance of shares was capital in nature, formed part of the share capital of the company, and therefore could not be taxed as revenue.

    The case is: Green Infra Ltd. Read a September 2013 report [PDF 459 KB]

©2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

The KPMG logo and name are trademarks of KPMG International.

KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.

The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Direct comments, including requests for subscriptions, to
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.


Share this

Share this


Subscribe to receive the latest TaxNewsFlash email alerts (you must select the option for TaxNewsFlash)

Already a Subscriber? Login

Not a member? Subscribe now