Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: cpt :: ACCOUNTING STANDARDS :: ARTICLES ON INPUT TAX CREDIT IN VAT :: list of goods taxed at 4% :: empanelment :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TDS :: articles on VAT and GST in India :: ACCOUNTING STANDARD :: due date for vat payment :: VAT Audit :: TAX RATES - GOODS TAXABLE @ 4% :: VAT RATES :: Central Excise rule to resale the machines to a new company :: form 3cd
 
 
Direct Tax »
 Hopeful of meeting direct tax collection target for this financial year: CBDT
 Bengaluru tops in income tax probes after demonetisation
 Income Tax department rejects black money disclosures of over Rs 2 lakh crore
 CBDT urges people to protect bank accounts from 'unscrupulous elements'
 No change in gold seizure norms in proposed I-T Law amendments
 Direct tax collection will get a long-term boost, Franklin Templeton says
 I-T Act amendments upset calculations of cash hoarders
 Claim tax benefit on costs incurred to evict tenants
 The Integrated Goods And Services Tax Act, 2016
 Here’s what Income Tax Department did leading up to demonetisation
 I-T department asks IDS declarants to pay tax by November 30

Breather for IT firms as CBDT withdraws controversial tax circular
July, 02nd 2013

In a major relief to the IT industry, the Central Board of Direct Taxes (CBDT) today announced the withdrawal of a controversial circular that could have adversely impacted the tax spend for this industry.

The CBDT also modified another circular relating to taxation of R&D centres that also has a crucial role in software development.

The circular (No 2 of 2013) that has been withdrawn related to the adoption of Profit Split Method (PSM) as a preferred mode for computation of tax liability. The decisions were taken following representation from the industry for clarity on two circulars concerning global taxation of transfer pricing.

Tax experts hailed the latest announcements stating that compliance cost will come down and chances of double taxation may be reduced.

“The rescinding of Circular No. 2 is very good news for the industry. This is a positive move and would certainly improve the sentiments of foreign investors who were shying away from investing in R&D in India,” said Vijay Iyer, National Transfer Pricing Leader, Ernst & Young India

SAFE HARBOUR RULES

The Finance Ministry also said that CBDT would soon issue safe harbour rules. Such a move would bring further certainty in assessment of development centres that are engaged in providing contract R&D services.

Safe harbour rules have been defined as circumstances in which the income-tax authorities shall accept the transfer price declared by the assessee.

The Income Tax Department by withdrawing Circular No 2 has made sure that profit-split method, which could lead to higher taxation, will not be the preferred mode.

Besides this method, there are five other methods for computing tax liability under the transfer pricing rules. These include resale price method, cost plus method, comparable uncontrolled price method and transactional net margin method.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Privacy Policy

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions