Date de publication : 06-10-1907
The following information are for the sole purpose of providing a general overview of the local taxation of the Corporate tax aspects of the country. In any case, it can not replace a tax advice, or be considered as an official information.
Yes we tax in India
New tax reform: Pan Number is not anymore compulsory for intra-group distribution of dividends free of tax.
News in French language in this article (http://www.lexplicite.fr/relations-franco-indiennes-evolutions-recentes-fiscalite/).
New tax treaties:
- Protocol to tax treaty between India and Portugal is signed.
- Protocol to tax treaty between India and Vietnam enters into force.
Local tax advisors
No specific information on the local tax advisors.
Local tax administration
Website Income tax department: Click here
Resident companies are taxed on their worldwide income. However, non-resident companies are only taxed on their revenues derived from India sources.
The definition of resident company for tax purposes, corresponds to the definition of the OECD Model Convention. As per article 4 of the OECD Model Tax Convention, a person is treated as resident of a contracting state if he is liable to tax in such a country by virtue of his domicile, residence or place of management or any other similar criterion.
Entities are considered to be resident for tax purposes in India if their place of management & control is in India.
However, the place of residence is subject to the relevant provisions of any applicable double tax treaty, if any.
Corporate Income Tax
The general CIT tax rate is 30%.
In addition there is a surcharge and an education cess; As a consequence the effective CIT tax rate up to 34.608%.
Note: There is a minimum tax up to 20.38% on book profits (effective tax rate including surcharge and eduction cess).
Non-taxable income includes the following:
- Dividends (participation exemption).
- Capital gains under certain condition.
Non-deductible expenses includes the following:
- Dividends benefiting from the participation exemption
Carry forward : Yes 8 years, but some restrictions may apply
Carry back: No
Annual tax returns are established by the company on a self-assessment system.
Companies shall pay 4 advance payments on 15 June, 15 September, 15 December of the current taxable year and 15 March of the following year.
Whithholding Taxes (payment to foreign companies)
The local tax rates in India are the following, subject to the provisions of an applicable double tax treaty, if any.
There is no WHT on the profits paid from a branch to its foreign head office .
Note: Indian branches of non-resident companies are subject to a 40% CIT tax rate on their Indian-source incomes.
There is no WHT on dividends.
Note: there is a 20,358% dividend distribution tax (not in the scope of the article « dividends » of the double tax treaties).
The effective tax rate of WHT on interest is 21.63%%.
The effective tax rate of WHT on Royalties is 10.5% (including surcharge and education cess).
The effective tax rate of WHT on management fees is 10.5% (including surcharge and education cess).
The effective tax rate of WHT on technical services is 10.5% (including surcharge and education cess).
There is a specific regime for the capital gains.
Do not hesitate to share your experience in India with us in the comments below. Any comments are welcome !
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