India: Goodwill depreciation; tax treaty provisions | KPMG | GLOBAL

India: Goodwill depreciation; tax treaty provisions, secured notes redemption

India: Goodwill depreciation; tax treaty provisions

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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  • Guidelines for processing income tax returns: The Central Board of Direct Taxes (CBDT) issued guidelines regarding the processing of certain income tax return forms. Read a November 2017 report [PDF 338 KB] 
  • Tax treaty provisions not affected by tax law amendments: The Mumbai Bench of the Income-tax Appellate Tribunal held that any notification or circular from the tax authority does not affect the nature of income that has been specifically included in tax treaty provisions. The case is: Bank of India. Read a November 2017 report [PDF 646 KB]
  • Depreciation on goodwill: The Gujarat High Court held that the taxpayer was entitled to claim depreciation on goodwill under a provision of the Income-tax Act, 1961. The case is: Zydus Wellness Ltd. Read a November 2017 report [PDF 429 KB]
  • Redemption of secured premium notes allowed as deduction: The Gujarat High Court held that a premium on the premature redemption of “secured premium notes” is allowed as a deduction under a provision of the Income-tax Act, 1961. The case is: Nirma Ltd. Read a November 2017 report [PDF 725 KB]
  • Withholding tax provisions on reversing entry of expenditure: The Bangalore Bench of the Income-tax Appellate Tribunal held that the taxpayer was required to withhold tax on amounts for an expenditure created in its books of accounts when the entry was subsequently reversed. The taxpayer waited some 22 months to reverse the entry, and this factor was important in determining whether the income had accrued to the payee or not. If the entry reversal was after income had accrued to the payee, the reversal was not relevant in determining the liability of the taxpayer for withholding the tax at source. The case is: Toyota Kirloskar Motors Pvt. Ltd. Read a November 2017 report [PDF 412 KB]
  • Indirect transfer provisions not applicable to non-resident: The CBDT issued a circular clarifying that indirect transfer provisions did not apply in respect of income accruing or arising to a non-resident on account of a redemption or buy-back of its share or on account of interest held indirectly (i.e., through upstream entities registered or incorporated outside India) in the specified funds if such income accrued or arose from or in consequence of the transfer of shares or securities held in India by the specified funds and such income was chargeable to tax in India. Read a November 2017 report [PDF 333 KB]

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