India: Partnership assets transferred to partners; treaty rate on dividend distributions

The KPMG member firm in India has prepared reports about recent tax developments.

The KPMG member firm in India has prepared reports about recent tax developments.

The KPMG member firm in India has prepared reports about the following tax developments (read more at the hyperlinks provided below).

  • Extension of time, Forms 15CA and 15CB: Taxpayers have been allowed more time, until 15 July 2021, for manual submission of income tax forms 15CA and 15CB to an “authorized dealer” regarding foreign remittances. Read a July 2021 report [PDF 207 KB]
  • Tax treatment of asset transfer by partnership to partners: The Central Board of Direct Taxes (CBDT) issued guidance (a circular) regarding the tax treatment of distributions of assets by a partnership to its partners on its dissolution or reconstitution. The CBDT also issued a notification amending rules with respect to the method for determining the holding period of capital assets in certain situations, and introduced a rule with respect to the attribution of taxable income with regard to capital assets. Read a July 2021 report [PDF 298 KB]
  • Tax withheld at source, purchase of goods: The Finance Act, 2021 introduced new set of provisions—Section 194Q (effective 1 July 2021)—applicable to any buyer responsible for paying any sum to any resident seller for the purchase of any goods of value exceeding INR 50 lakh. The CBDT issued guidelines to provide clarity on the applicability of these tax-withheld-at-source provisions with regard to the purchase of goods. Read a July 2021 report [PDF 276 KB]
  • Business income offset by loss carryforward: The Karnataka High Court held that a taxpayer was entitled to apply a loss carryforward against income that had the attributes of business income even though this same income was assessable to tax under a heading other than “profits and gains from business.” The case is: Nandi Steels Ltd. Read a June 2021 report [PDF 309 KB]
  • Lower rate of tax under tax treaty vs. rate of dividend distribution tax: The Mumbai Bench of the Income-tax Appellate Tribunal addressed a taxpayer’s eligibility for a lower rate of tax under an income tax treaty versus the 15% rate of the dividends distribution tax. The case is: Total Oil India Pvt Ltd. Read a June 2021 report [PDF 314 KB]
  • Program to verify tax withheld at source / collected at source in instances of non-filing of tax returns: The CBDT announced a “compliance check” program regarding functionality of withholding agents or tax collection agents. Read a June 2021 report [PDF 289 KB]

 

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