India: “House rent allowance” exemption; royalty under India-Italy tax treaty

India: “House rent allowance” exemption

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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  • Mandatory quoting of Aadhaar number: The Central Board of Direct Taxes (CBDT) has clarified that mandatory quoting of the Aadhaar number/enrollment ID only applies to a person who is eligible to obtain an Aadhaar number. Only a resident individual is entitled to obtain an Aadhaar number--an individual who has resided in India for a period (or periods) amounting to 182 days or more in the 12 months immediately preceding the date of application for enrollment. Read an April 2017 report [PDF 263 KB]
  • “House rent allowance” exemption not allowed when paid to parent: The Mumbai Bench of the Income-tax Appellate Tribunal held that a claim for an exemption of the house rent allowance concerning the non-contractual payment of rent to a parent is not allowable. The case is: Meena Vaswani. Read an April 2017 report [PDF 338 KB] 
  • Tax deducted on actual payment of royalty under India-Italy tax treaty: The Ahmedabad Bench of the Income-tax Appellate Tribunal held that under Article 13 of the India-Italy tax treaty, taxability of a royalty paid by an Indian company to an Italian company depends on the actual payment by the former and receipt by the latter. Therefore, unless the actual payment takes place, the taxability under Article 13 of the tax treaty does not arise. The case is: Saira Asia Interiors (P.) Ltd. Read an April 2017 report [PDF 311 KB]
  • Exemption of acquisitions of equity shares from long-term capital gain tax: The CBDT has proposed under Section 10(38) of the Income-tax Act, 1961 that for purposes of the exemption, the condition of chargeability to securities transaction tax will only apply to certain specified transactions of acquisitions of equity shares entered into on or after 1 October 2004. Read an April 2017 report [PDF 286 KB]
  • Draft goods and services tax (GST) rules: The GST Council released draft rules for the procedures pertaining to registration, valuation, tax invoice, credit and debit notes, input tax credit, returns, payment of tax, refunds, transitional provisions, and composition levy. The set of 9 rules, prescribing procedures to be followed by taxpayers under the GST regime, is a significant step to implementing the GST by 1 July 2017. Read an April 2017 report [PDF 494 KB]

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