India: Undisclosed foreign income; cricket TV coverage

India: Undisclosed foreign income; cricket TV coverage

The KPMG member firm in India has prepared reports concerning the following developments (to read more, click on the hyperlinks provided below):


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  • No expense disallowance if no related exempt income is received during the year: The Delhi High Court held that there must be an actual receipt of exempt income during the relevant year, for the purpose of the rules that apply to disallow a deduction for an expenditure incurred in relation to such income. Section 14A of the Income-tax Act, 1961 will not apply if no exempt income is received during the year. The case is: Cheminvest Limited v. CIT.
  • Undisclosed foreign income and assets: The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 has been introduced to deal with “black money”—undisclosed foreign income and assets held outside India. The Central Board of Direct Taxes (CBDT) issued guidance, and is providing a one-time opportunity, for a limited period, to persons who have undisclosed foreign assets (i.e., not disclosed for income tax purposes). These persons must make their disclosures by 30 September 2015, and pay related taxes and penalties by 31 December 2015.
  • Payments related to cricket match coverage is not fees for technical services or royalty under treaty with UK: The Mumbai Bench of the Income-tax Appellate Tribunal held that a payment received by the taxpayer for capturing and delivering live audio and visual coverage of cricket matches is not taxable as fees for technical service under Article 13(4)(c) of the India-United Kingdom income tax treaty and is not taxable as royalty because the payment was not made “for the use of, or the right to use any copyright…” Rather, the payment was made to the taxpayer for producing the program content consisting of live coverage of cricket matches. The case is: IMG Media Limited v. DDIT.

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