India: Withholding on payments to non-residents; minimum alternative tax calculations

India: Withholding on payments to non-residents

The KPMG member firm in India prepared reports concerning the following tax developments (read more at the hyperlinks provided below):

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  • No disallowance of withholding deduction for payments made to non-residents based on a “nil” withholding certificate: The Bangalore Bench of the Income-tax Appellate Tribunal held that no withholding deduction would be disallowed under section 40(a)(i) of the Income-tax Act, 1961 when there was no withholding of tax at source on a payment made to a non-resident, if the taxpayer made the payment and on the basis of a “nil” withholding certificate. The case is: Carl Zeiss India (P) Ltd. 

    Read an August 2015 report [PDF 440 KB]

  • Interest assessments: The Supreme Court of India held that an assessment of interest under section 234B of the Income-tax Act, 1961 is automatic if certain prescribed conditions are satisfied, even when an interest calculation is provided in the form attached with the assessment order. The case is: Bhagat Construction Co. Pvt. Ltd. 

    Read an August 2015 report [PDF 331 KB]

  • Exempt capital gains are excluded from minimum alternative tax: The Mumbai Bench of the Income-tax Appellate Tribunal held that exempt gains on the transfer of a capital asset are excluded for purposes of computing book profits under the minimum alternate tax (MAT) rules. The tribunal held that since the capital gains do not fall under the definition of “income” and do not enter into the computation provisions, these amounts are not to be included in the book profits under section 115JB of the Income-tax Act, 1961. The case is: Shivalik Venture Pvt Ltd. 

    Read an August 2015 report [PDF 436 KB]

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