Global

Details

  • 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]




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