India: Amortisation involving share premium | KPMG Global
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India: Amortisation involving share premium; taxation of payments for advertising

India: Amortisation involving share premium

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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  • Amortisation of expenses cannot be claimed on basis of amount received towards share premium: The Supreme Court held that the “share premium amount” collected by a company on its subscribed issued share capital is not part of “capital employed in the business of the company” for the purpose of Section 35D of the Income-tax Act, 1961. Therefore, amortisation of certain preliminary expenses under Section 35D of the Income-tax Act, 1961 cannot be claimed on the basis of the amount received towards share premium. The case is: Berger Paints India Ltd. Read a March 2017 report [PDF 317 KB]
  • Payment for advertising is not taxable as royalty or “fees for technical services”: The Delhi Bench of the Income-tax Appellate Tribunal held that payments for advertising and publicity during certain sporting events (with or without the use of marks, identification or logo) are not taxable as royalty income under Section 9(1)(vi) of the Income-tax Act, 1961 because a sporting council had not imparted any information concerning technical, industrial, commercial or scientific knowledge, etc. to the taxpayer. The consideration paid will be considered to be royalty income only if it is paid for the use of any patent, invention, model, design, etc., or any services in connection with these. The case is: Reebok India Company. Read a March 2017 report [PDF 347 KB]
  • Employees’ enrolment extended until 30 June 2017: The government of India has extended the time for the employees’ enrolment campaign, 2017, with notifications dated 29 March 2017. Read a March 2017 report [PDF 325 KB]

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