India: Tax withholding at source, other developments

India: Tax withholding at source, other developments

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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  • Incorrect MAT credit: The Delhi Bench of the Income-tax Appellate Tribunal agreed with the Assessing Officer in correcting the minimum alternate tax (MAT) credit granted to the taxpayer, and concluded the MAT credit afforded the taxpayer was erroneous. The case is: Fiserv India Pvt Ltd. Read a July 2020 report [PDF 327 KB]

  • Nature of losses, not business losses: The Delhi Bench of Income-tax Appellate Tribunal held that the rental loss from a hotel unit in the United States and share of loss in U.S. limited liability companies (LLCs) were in the nature of “income from other sources” and not business losses. The case is: Rohit Kapur. Read a July 2020 report [PDF 312 KB]

  • Tax withholding: The Finance Act, 2020 introduced various new tax withholding (referred to in India as “tax deducted at source”) including with regard to payments by e-commerce operators to e-commerce participants. The Central Board of Direct Taxes (CBDT) issued guidance implementing the tax law amendments. Read a July 2020 report [PDF 303 KB]

  • Cash deposits by individual taxpayer: The Jaipur Bench of the Income Tax Appellate Tribunal rejected the determination of the Assessing Officer regarding cash deposits made by an individual taxpayer in a non-resident ordinary account in India. The case is: Shri Rajesh Chadha. Read a July 2020 report [PDF 330 KB]

  • Tax withholding on rent payments to joint-owners of a property: The Indore Bench of Income-tax Appellate Tribunal addressed tax withholding on rent payments made to joint-owners of a property and to a government undertaking whose income is exempt. The tribunal held that the taxpayer cannot be treated as an “assessee in default” for under-withholding of tax on rent payment made to the property’s joint-owners because the taxpayer had correctly withheld (deducted), collected, and paid the tax on share of the rent paid to each of the co-owners. The case is: M.P. Warehousing & Logistics Corporation. Read a July 2020 report [PDF 213 KB]

  • Exemption from tax: Receipts of money or property for no or little consideration are taxable to the receiver as “income from other sources.” The Central Board of Direct Taxes (CBDT) issued guidance providing an exemption from tax for certain classes of taxpayers. Read a July 2020 report [PDF 172 KB]

  • Clarification regarding exemptions/deductions under the new tax regime: The Finance Act 2020 added new tax law section 115BAC to provide that an election for individual taxpayers to select between existing tax rates and a new tax regime (concessional tax rates without exemptions or deductions). Because of some uncertainty regarding the exemptions or deductions which the taxpayer might elect to forgo under the new tax regime, the Central Board of Direct Taxes issued guidance prescribing certain exemptions that can be claimed (or not claimed) by taxpayers under the new tax regime.  Read a June 2020 report [PDF 170 KB]

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