Taxation
- Incentives, Rebates and Allowances
General
Incentives | Income Tax Rebates |
Relief for Foriegners |
Concessions to NRI's |
Incentives for the Corporate sector |Concessions
for specific sectors |
Tax
Rebates for Corporate Sector
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The classical
system of corporate taxation is followed
- Domestic companies are
permitted to deduct dividends received from other domestic
companies in certain cases.
- Inter Company transactions are
honored if negotiated at arm's length.
- Special provisions apply to
venture funds and venture capital companies.
- Long-term capital gains have
lower tax incidence.
- There is no concept of thin
capitalization.
- Liberal deductions are allowed
for exports and the setting up on new industrial undertakings
under certain circumstances.
- There are liberal deductions
for setting up enterprises engaged in developing, maintaining
and operating new infrastructure facilities and power-generating
units.
- Business losses can be carried
forward for eight years, and unabsorbed depreciation can be
carried indefinitely. No carry back is allowed.
- Specula tax provisions apply to
activities carried on by nonresidents.
- A minimum alternative tax (MAT)
on corporations has been proposed by the Finance Bill 1996.
- Dividends, interest and
long-term capital gain income earned by an infrastructure fund
or company from investments in shares or long-term finance in
enterprises carrying on the business of developing, monitoring
and operating specified infrastructure facilities or in units of
mutual funds involved with the infrastructure of power sector is
proposed to be tax exempt.
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