India: Tax bill addressing “black money” | KPMG | GLOBAL

India: Tax bill addressing “black money” and other items

India: Tax bill addressing “black money”

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

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  • Legislation aimed at addressing “black money” in tax law changes: As a step forward to curb “black money,” bank notes of existing series of denomination of the value of Rs.500 and Rs.1000 were recently withdrawn from circulation by the Reserve Bank of India. There have been concerns also that certain existing provisions of the Income-tax Act, 1961 can possibly be used for concealing black money. India’s government introduced a bill in Parliament that would amend tax law provisions to determine that “defaulting taxpayers” are subjected to tax at a higher rate and that stringent penalty provision would apply. Read a November 2016 report [PDF 289 KB]
  • No capital gains on transfers in a demerger: The Mumbai Income-Tax Appellate Tribunal held that no capital gain tax is to be levied (absent any consideration received / accrued to the taxpayer) for transfers of undertakings under a plan of demerger. The tribunal observed that absent a connection between the transfer of the undertaking and the revaluation of the investment, neither can be considered as arising on account of the demerger, nor considered to be the full value of the consideration. The case is: Aditya Birla Telecom Limited. Read a November 2016 report [PDF 346 KB]
  • Business connection of offshore funds: The Central Board of Direct Taxes issued guidance (a notification) amending the rules concerning the business connection of offshore funds. Read a November 2016 report [PDF 309 KB]

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