India revises DTAA with South Korea

The Indian government approved the revised DTAA on May 6, 2015 in a cabinet meeting. The official text is expected to be available soon.

The revised DTAA provides for source based taxation of capital gains, provisions for making adjustments to profits of associated enterprises on the basis of arm’s length principle, provides for residence based taxation of shipping income, provisions for service of permanent establishment, rationalizes tax rates in the articles on dividend, interest and royalties and fees for technical services, it added.

The agreement further incorporates provisions for effective exchange of information and assistance in collection of taxes between tax authorities and also incorporates limitation of benefits provisions, to ensure that the benefits of the agreement are availed of by genuine residents of both countries.

 

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Finance Act 2015 available for download

The 2015 Finance Act has been passed and is now available for download here. Some interesting features are:

 

General Announcements

  • Current account deficit for FY15 to be below 1.3 % of GDP.
  • Expect CPI to remain close to 5% by year-end.
  • To achieve 3.9% fiscal deficit in FY16.
  • To put in place Direct Tax Regime.
  • Increase in Visa On Arrival facility from 43 to 150 countries.

Taxes

  • To rationalise & remove exemptions for corporates.
  • Basic rate of Corporate Tax reduced from 30% to 25% over next 4 years.
  • Exemptions for Individual Tax payers to continue.
  • Distinction between foreign direct investment and foreign portfolio investment will be abolished
  • GAAR deferred by two years.
  • To incentivise debit-credit card transactions.
  • To exempt SAD on all items.
  • To replace¬†wealth tax with additional 2% surcharge on super rich with annual income of over 1 crore rupees.
  • To increase central excise duty to 12.5%.
  • Excise duty cut on footwears.
  • Changes in Excise duty on cigarettes.
  • To increase service tax rate from 12.36% to 14%.
  • Transport Allowance exemption increased to Rs. 1600.
  • To allow Exemption of Rs. 1.5 lakh under New Pension Scheme.
  • Health insurance premium exemption raised to Rs 25,000 from Rs 15,000.
  • Health Insurance premium limit for senior citizens to be Rs. 30,000.
  • Giving the PAN number to be made mandatory for any purchases above Rs 1 lakh.

For more details, read the budget.

 

Disclaimer:
Proteus Consultants and I are not responsible for any and all losses, claims, damages and liabilities arising out of or related to following anything that may be posted in this blog. If you rely upon anything posted here, you do so at your sole risk and responsibility.