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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

Tax rates at a glance

(As of September 2011) 

Domestic Company Income Tax 30%
Capital Gains 20%
Branch Tax 40%
 
Withholding Tax (%)
Dividends 0%
Interest
Paid to Domestic Companies 10%
Paid to Foreign Companies 20%
Royalties from Patents, Know-how, etc. 
10%
Technical Services Fees 10%
Branch Remittance Tax 0%
 
Net Operating Losses (Years)
Carryback 0
Carryforward 8
  • The rates for domestic company income tax, capital gains and branch profits are subject to an additional levy consisting of a surcharge and a cess. They are increased by a surcharge of 7.5% of such taxes in the case of domestic companies and 2.5% in the case of foreign companies. However, no surcharge is payable if the net income is not more than Rs10 million ($216,000). The tax payable (inclusive of the surcharge, as applicable) is further increased by a cess levied at 3% of the tax payable. The withholding tax rates are increased by a surcharge and cess (as stated above) for payments made to foreign companies only.
  • There are exceptions to the basic rate of branch profits tax
  • The withholding tax rate for interest paid to foreign companies applies to interest on monies borrowed, or debts incurred, in foreign currency. Other interest is taxed at a rate of 40% (plus a surcharge of 2.5%, as applicable, and the 3% cess).
  • The 10% withholding tax rate (plus the 2.5% surcharge, as applicable, and the 3% cess) for royalties from patents, know-how, etc. applies to royalties and technical services fees paid to foreign companies in accordance with agreements entered into on or after June 1 2005. However, if the royalties or technical services fees paid under the agreement are effectively connected to a permanent establishment or fixed place of the nonresident recipient in India, the payments are taxed on a net income basis at a rate of 40% (plus the 2.5% surcharge, as applicable, and the 3% cess).
  • Unabsorbed depreciation relating to the income year ending March 31 2002 and future years may be carried forward indefinitely to offset taxable profits in subsequent years.

Source: Ernst & Young

India

Rajendra Nayak
Ernst & Young
India

Companies need to keep in constant touch with a changing tax environment in India, points out Rajendra Nayak of Ernst & Young

[Show full article]

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See also

India
Asia-Pacific

Firm contact details