• Service: Tax, Global Indirect Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 8/27/2014

India - Fund management fees, VAT on real estate sales 

August 27: The KPMG member firm in India has prepared reports concerning the following developments (click on the hyperlinks below to read more).
  • Investment not resulting in income cannot be considered for “disallowance” - The Hyderabad Bench of the Income-tax Appellate Tribunal held that an investment that has not resulted in any income during the year cannot be a “disallowed” expenditure with respect to fund management fees under section 14A of the Income-tax Act, 1961 when read with Rule 8D(2)(i) of the Income-tax Rules, 1962. However, in computing a disallowance under Rule 8D(2)(iii), the average of the total investment of the taxpayer as appearing on the balance sheet (whether or not it has generated income) on the first day and the last day of the year can be considered for the purpose of disallowance.

    The case is: Bellwether Microfinance Fund Pvt. Ltd. Read an August 2014 report [PDF 314 KB]

  • Haryana VAT regime for real estate developers – The government of the northern state of Haryana has provided guidance for real estate developers, providing that value added tax (VAT) on the sale of residential and commercial properties may be discharged at the rate of 1% of the total contract value.

    Read an August 2014 report [PDF 434 KB]

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