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May 2017

Direct Tax Amicus: March 2017

Article

Finance Bill, 2017 – A look at further amendments

Finance Bill, 2017 proposed a number of changes like thin capitalization rules, secondary adjustments, changes in domestic transfer pricing provisions, taxation of dividend in excess of Rs. 10 lakhs in a year and so on. At the time of passing of the Finance Bill, 2017 on 23rd March, a few more amendments to the Income Tax Act, 1961 have been moved in the Lok Sabha. Some of the significant amendments include mandatory quoting of Aadhar Number, reduction in maximum amount which can be received in cash in a day, changes to thin capitalization provisions.

 

Ratio Decidendi

  • Payment to seconded employees with high managerial skills taxable as FTS
  • Payment for advertising and marketing rights not taxable as royalty
  • Non-resident bank qualified to perform FII activities in India eligible for exemption under of India-Mauritius DTAA
  • Amounts which are otherwise not taxable under normal provisions of the Act cannot be held to be taxable for the purposes of Section 115JB
  • Payment for use of standard facility in the nature of reimbursement is not royalty

 

Circulars and Notifications

  • Guidelines issued for granting reduction/waiver of interest charged under Section 201 (1A)(i) for non-compliance with TDS provisions
  • Amendment to India-Israel DTAA incorporating taxation of indirect transfers and LOB clause notified

 

March, 2017/Issue-32 March, 2017/Issue-32

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