NO POEM in case sales below INR 50 crores

In a clarificatory circular by the CBDT, POEM shall not be applicable to a company having a turnover or gross receipts of INR 50 crores or less in a financial year. Last month, the tax department had come out with the long-awaited Place of Effective Management (POEM) rules that will require foreign companies in India and Indian firms with overseas subsidiaries to pay local taxes based on where the business…

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Clarification for implementation of GAAR

The Income tax Act (ITA) contains anti-avoidance provisions in the form of General Anti-Avoidance Rules (GAAR) which provides wide powers to Tax Authority to deal with impermissible tax avoidance arrangements. The GAAR provisions under the ITA are effective from tax year 2017-18 Pursuant to Industry associations requesting for clarification on implementation of GAAR provisions, CBDT has issued a Circular providing 16 clarifications in Q&A format and a Press Release of…

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Topic Charitable Trusts under Taxman Lense

The Union Budget 2017-18 has proposed a slew of changes including mandatory filing of returns and provisions to prevent misuse of funds and conduct of search operations. The step has been taken due tomany instances of misuse of funds which are owned by corporate entities. The Budget has also proposed to restrict contributions by an exempt trust from its income to another exempt entity or trust with a specific direction…

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SOCIAL SECURITY COMPLIANCE IN INDIA: ONE-TIME OPPORTUNITY FOR DEFAULTING EMPLOYERS!

The Employees’ Enrolment Campaign, 2017 (“PF Campaign”) has been introduced to encourage employers who have defaulted in making provident fund (“PF”) contributions (which also includes pensions), to voluntarily enroll their employees under the Employees’ Provident Fund Scheme, 1952 (“PF Scheme”) without incurring any legal liabilities. However, Such benefit under the PF Campaign shall apply only with respect to employees who are Indian nationals and does not apply to international workers….

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Receipts towards data processing support not taxable as Royalty or FTS

The assessee is a non-resident company incorporated under the tax laws of Hong Kong. During the assessment year in question, the assessee had entered into a worldwide contract for provision of computing services and data process support to Standard Chartered Bank in 68 countries including India. As per the terms of the agreement, the assessee was responsible to ensure adequate systems, software, hardware and security at a standard facility in…

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