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Tax authorities

Income Tax Department
Department of Revenue, Ministry of Finance, A R A Centre, E-2, Jhandewalan Extn, New Delhi, 110055
Tel: +91 37 387 6070
Web: www.incometaxindia.gov.in/international.asp

Tax rates at a glance

(As of July 31 2009) 

Corporate income tax rate 33.99% (a)
Capital gains tax rate See below (b)
Branch tax rate 42.23% (a)

Withholding tax
Dividends 16.995% (c)
Interest 21.115% (d)
Royalties from patents and licences 10.55% (e)
Branch remittance tax -

Net operating losses (years)
Carryback 0
Carryforward 8

(a) The corporate rate is 30%, plus a 10% surcharge and 3% education cess. The applicable rate for foreign companies is 42.23% (40% plus 2.5% surcharge and 3% education cess). However, in case the tax payable at these rates is less than 11.33% (for Indian company) or 10.55% (for a foreign company) of adjusted book profits, minimum alternate tax at the rate of 11.33%/10.55% would be payable. (Finance Bill, 2009 has proposed to increase the rate of minimum alternate tax to 16.995%/15.83% respectively).
(b) The basic rates are as follows:

1) If the asset constituting shares in a company, other securities listed on a recognised stock exchange in India, units of a mutual fund or specified zero coupon bonds is held for more than 12 months and securities transaction tax (STT) is paid on the transaction, the rate of withholding tax is nil. If these assets are held for 12 months or less and STT is paid on the transaction, the withholding rate is 15.83%.
2) Typically, if assets are not covered in point 1 above, the rate of capital gains tax is 21.115% (if asset is held for more than 36 months) or the applicable corporate income tax rate (if asset is held for 36 months or less). Additionally, please note that there exist different rates of capital gains tax for specific asset classes or specific classes of investors.

(c) Dividends distributed by Indian companies are not subject to withholding tax. However, the company is required to pay dividend distribution tax at the rate of 16.995%
(d) General rate applicable to interest income of non-residents on foreign currency loans. Additionally, please note that there exist different rates of tax for specific asset classes or specific classes of investors.
(e) Applicable to non-resident

Source: Professionals from BMR Advisors, the Indian member of the Taxand global network of leading independent tax firms.

India

Srinivasa Rao
Ernst & Young
India

Srinivasa Rao of Ernst & Young picks out some of the key provisions for multinational companies in the draft direct code, such as the redefinition of residence and the introduction of a general anti-avoidance rule

[Show full article]

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Controversy is a buzzword in India. Whether it is annual account assessment or transfer pricing adjustments, controversy in India is something that cannot be ignored. It is less than a decade since transfer pricing was introduced in India and yet there ... [more]

A growing team has made BMR Advisors - Taxand able to compete with the big four accountancy firms. The firm boasts 250 tax professionals and 18 partners and is part of the Taxand global network of independent tax firms. Such is the firm's rapid expansion, ... [more]

For the second consecutive year running, Deloitte have poached a significant number of tax professionals from PricewaterhouseCoopers. The firm took 22 transfer pricing specialists from their big four rival, all coming from PwC's transfer pricing centre ... [more]

Two key areas of focus for Ernst & Young over the past year have been tax litigation and tax policy. The firm has aggressively hired in all these areas and have been involved in some the country's largest transactions. Srinivasa Rao heads the 1,200-strong ... [more]

PricewaterhouseCoopers' tax practice is made up of more than 50 partners. The firm makes use of being part of an international network to understand international ideas and apply them on a local basis.Head of transfer pricing, Shyamal Mukherjee, has ... [more]

Bansi S Mehta & Co is a well-respected accounting firm with nine partners who boast over 170 years tax experience between them. Clients include Cadbury India, HSBC, Korean Air and Vodafone. Recent work includes the merger of Jaiprakash Enterprises, Jaypee ... [more]

KPMG is one of the fastest growing tax practises in India. In the past 12 months the firm hired seven new partners from big-four rivals and from industry. It now has 40 partners and around 600 tax professionals in India and services some of the country's ... [more]

TP Ostwal & Associates may be smaller than other firms in India, but its reputation is second to none. The firm is recognised for its strong structuring and restructuring abilities. Senior partner TP Ostwal has years of experience and one peer explained ... [more]

Economic Laws Practice is a growing tax firm in India and is steadily establishing itself as a viable alternative to the big-four accounting firms. This growth is highlighted by the appointment of Vispi Patel to the role of head of tax in late 2008. ... [more]

Nishith Desai & Associates is a smaller firm that believes actions speak louder than words. Over the past year, it seemed the firm was shouting loudly as it became involved in some of the larger transactions in India. Nishith Desai, Mansi Seth and Milind ... [more]

GM Kapadia & Co is a boutique tax firm with international tax capabilities. Partner Harsh Shah is in charge of international taxation and is part of the firm's accounting and compliance practice. Managing partner, Rajesh Kapadia, is commended by clients ... [more]

Sudit K Parekh & Co is a firm of chartered accountants with a long tradition. Founder and leading partner Sudiit Parekh, is widely-lauded by his peers for his more than 30 years experience and he is truly respected in the market.

See also

India
Asia-Pacific (Regional Rankings)

Law firm contact details