India: Proposed GST rates; shares as stock-in-trade; direct foreign investments

India: Proposed GST rates; shares as stock-in-trade

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

Related content

  • GST rate recommendations: A sub-committee formed to determine the possible tax rates under the goods and services tax (GST) submitted its report to the Finance Minister, providing a range of proposed GST rates to achieve a revenue-neutral rate. Read a December 2015 report [PDF 270 KB]
  • Identifying stock-in-trade: The Delhi High Court held that income on the sale of shares and renunciation of rights is business income—and not capital gains—because the taxpayer had treated the shares as stock-in-trade. Also, the closing stock was valued at the lower of cost or market value, and this treatment could only be accorded to shares held as stock-in-trade and not as an investment. The case is: Abhinandan Investment Ltd. Read a December 2015 report [PDF 335 KB]
  • Exempt capital gain, deemed dividend provisions: The Kolkata Bench of the Income-tax Appellate Tribunal held that exempt capital gain is to be excluded from the accumulated profits for purposes of deemed dividend provisions under section 2(22)(e) of the Income-tax Act, 1961. The case is: Sri Manoj Murarka. Read a December 2015 report [PDF 347 KB]
  • Direct foreign investment allowed in AIFs, REITs and InvITs: In a development that expected to benefit the private equity/venture capital industry, foreign investment would be permitted in AIFs, REITs and InvITs under the automatic route. The change would also allow foreign investors to invest directly in Indian pooling instruments rather than routing their investments through foreign pooling vehicles. Read a December 2015 report [PDF 293 KB]
  • Interest deduction for foreign education-related loan: The Pune Bench of the Income-tax Appellate Tribunal held that interest on an education loan availed for pursuing higher education outside India is eligible for a deduction under section 80E of the Act. The case is: Nitin Shantilal Muthiyan. Read a December 2015 report [PDF 362 KB]
  • Foreign direct investments: The Department of Industrial Policy and Promotion announced changes to the foreign direct investment policy. Read a December 2015 report [PDF 377 KB]

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