India: Rental income, corporate restructuring, MAT book profits

India: Rental income, corporate restructuring

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

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  • Rental income treated as business income: The Supreme Court of India held that the rental income earned from a leased property is to be treated as business income, given the taxpayer solely was in the business of leasing of its property and earning rent. The case is: Rayala Corporation Pvt. Ltd. Read an August 2016 report [PDF 336 KB]
  • Corporate restructuring legislation: The lower house passed a bill, the Taxation Laws (Amendment) Bill, 2016, that includes changes to the terms of “demerger” and amends the rules for deductions by certain taxpayers. Read an August 2016 report [PDF 313 KB]
  • Book profits: The Central Board of Direct Taxes announced changes or suggestions for a framework with respect to the computation of book profits for minimum alternative tax (MAT) of certain companies. Read an August 2016 report [PDF 329 KB]
  • Intellectual property: The Kolkata Bench of the Income-tax Appellate Tribunal held that the intellectual property that is “know-how” does not have to be registered with the government authority for the taxpayer to claim depreciation on the intellectual property. The case is: Landis Gyr Limited. Read an August 2016 report [PDF 339 KB]
  • Penalty for delayed filing of annual information return: The Kolkata Bench of Income Tax Appellate Tribunal held that non-compliance with information return filing rules is only technical breach, and that this breach could have occurred because of “bona fide ignorance” of the taxpayer. Thus, the tribunal found no reason to invoke penalty proceedings. The case is: Malda District Central Co-op Bank Ltd. Read an August 2016 report [PDF 332 KB]

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