India: Depreciation on goodwill; foreign tax credit | KPMG | GLOBAL
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India: Depreciation on goodwill; foreign tax credit; R&D credit treatment

India: Depreciation on goodwill; foreign tax credit

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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  • Depreciation on goodwill: The Ahmedabad Bench of Income Tax Appellate Tribunal allowed the taxpayer’s claim of depreciation on goodwill under Section 32 of the Income-tax Act, 1961 (even though the claim was not made by the taxpayer on an amended return, but was made during the course of assessment proceedings). The case is: Zydus Wellness Ltd. Read a January 2017 report [PDF 329 KB]
  • Foreign tax credit allowed on basis of “gross receipts”: The Ahmedabad Bench of the Income-tax Tribunal held that the foreign tax credit is applicable with respect to “income”—and not “gross receipts.” However, the tribunal allowed the taxpayer’s claim for foreign tax credit on the basis of “gross receipts.” The case is: Elitecore Technologies Private Ltd. Read a January 2017 report [PDF 321 KB] 
  • PANs and reporting of cash transactions: The Central Board of Direct Taxes issued guidance with respect to permanent account numbers (PANs) reflecting the links to bank accounts with PAN/Form No. 60. The rules were also amended to provide details of bank accounts in which cash deposits were made during the demonetisation period and making this information available to tax officers. Read a January 2017 report [PDF 327 KB]
  • “Tax sparing” credit: The Hyderabad Bench of the Income-tax Appellate Tribunal held that: (1) the “tax sparing” credit is allowed on the interest income under the India-Cyprus income tax treaty; (2) payment for clinical trials is not taxable as “fees for technical services” under the India-United States income tax treaty; and (3) post-merger, weighted deduction on scientific research expenditure is allowed to the merged entity. The case is: Dr. Reddy's Laboratories Ltd. Read a January 2017 report [PDF 435 KB]

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