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Foreign Investment Approvals in India

Foreign Investment Approvals in India is primarily governed by the FDI policy formulated by the Secretariat for Industrial Assistance (SIA), Department of Industrial Policy and Promotion (DIPP), and the Reserve Bank of India (RBI).

Under present policies and regulations, foreign investment in India is possible through the following avenues:

• As FDI
• By FIIs directly via Portfolio Investment Scheme (PIS)
• By NRIs/Persons of Indian Origin (PIOs) directly and indirectly via PIS
• By qualified foreign investors via the PIS
• By foreign venture capital investors (FVCIs)

FDI

A. Foreign Direct Investment

In the wake of liberalization in 1991, substantial policy changes were made to remove administrative barriers for foreign capital and investments. India now has one of the most liberal and transparent foreign investment regimes globally.

Automatic Route

Under this route, no prior regulatory approval is required except for filings with the RBI or FIPB. The company must inform the concerned authority within 30 days of share allotment.

Approval/Government Route

FDI in sectors requiring prior approval must apply to the FIPB for clearance.

Foreign Persons Who Can Invest in India under the FDI Regime

• Non-residents (excluding citizens or entities of Pakistan/Bangladesh) can invest subject to compliance with FDI regulations.
• Entities or citizens of Pakistan/Bangladesh can invest only with prior FIPB approval.

FDI Policy

The Government of India issues a compendium of FDI policy every six months. Investments may be made through the automatic or approval route.

Entities into which FDI can be made under the FDI Regime

A. FDI in an Indian Company

This is subject to sectoral caps, pricing conditions, and other restrictions.

B. FDI in Partnership Firms / Proprietary Concerns

• NRIs and PIOs can invest on a non-repatriation basis, following specific conditions.
• Non-residents other than NRIs/PIOs require prior approval from RBI and the Government.

FDI in Limited Liability Partnerships (LLPs)

• Allowed under automatic route in sectors permitting 100% FDI.
• Not allowed in agriculture/plantation or real estate/print media.

Types of Instruments Available for Making FDI

• Indian companies can issue equity shares, fully or mandatorily convertible debentures or preference shares.
• RBI prescribes conditions on pricing and valuation under FEMA.
• Exit allowed after minimum lock-in period as applicable.

Prior Approval of FIPB

• Required for investments exceeding 24% in certain industries or involving downstream investment.
• Applications are submitted to the FIPB/Ministry of Finance online or offline.

AUDITING OVERVIEW

If you own a business, the annual audit can sometimes feel like a time-consuming and expensive process that only benefits the statutory authorities. We make sure all your onerous reporting requirements are met as painlessly as possible- keeping banks, creditors, finance providers, and even the inland revenue, happy.

But more than that – we aim to offer you the kind of business advice that could help you to run your company efficiently and cost-effectively. We also offer expert corporate tax planning advice, to make sure you’re as tax-efficient as possible.

1. Audit

Auditing Firms Dehl can test your performance against industry standards, even against your direct competitors. We’ll review your accounts department and the control measures you currently use, recommending ways to improve. We might discover that your competitors are receiving payment more quickly than you, your stock levels might be higher than the industry norm, or perhaps your company takes longer than average to complete orders and sell finished work. Or there may be ways to improve your cashflow using some careful tax planning.

Our audit is special because of the people who do it – we only recruit the best, and they’re not afraid to get their hands dirty if it means they really get to understand your business. We train all our staff to anticipate client needs, communicate clearly and take ownership of their work. And because we draw on the experience of our senior partners across all disciplines, we take every opportunity to help your business grow.

There’s no such thing as ‘just another audit client’ at Neeraj Bhagat & Co. you’re a growing enterprise, and your growth is the focus of our business. So don’t be afraid of your audit – use it.

Are you looking for bad credit debt consolidation loans, to consolidate poor credit or other debt then consolidating your debt into one of our cheap loans with lower monthly repayments!

2. We provide following Audit Services

• Internal Audit Services / Concurrent Audit Services
• Management Audit Services
• Operations and Efficiency Audit Services
• Special Investigative Audit Services
• Due Diligence Review
• Costing and Accounting System Design and Review
• Compilation of final accounts as per accounting standards of US GAAP
• Internal Audits

Internal Audit

Internal Audit is an independent appraisal function established within an organization to examine and evaluate its activities as a service to the organization. It is an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It helps organizations accomplish objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.

1. Scope and Objectives of Internal Audit

As per AAS–6, Internal Control System refers to all the policies and procedures adopted by the management of the entity to assist in achieving management’s objectives ensuring the orderly conduct of the business, the accuracy and completeness of accounting records, the timely preparation of financial information, safeguarding of assets, and detection of fraud and errors in a timely manner.

The Scope and Objectives of internal audit vary widely and depend upon the size and structure of the entity and management's requirements. The internal audit normally operates in one or more of the following areas:

• (a) Review of accounting systems and related internal controls: Although the establishment of an adequate accounting system is the responsibility of management, it must be reviewed from time to time to ensure it is operating effectively and to recommend improvements.
• (b) Examination of management of financial and operating information: This includes the review of methods used to identify, measure, classify, and report financial information, and specific inquiries into individual transactions.

Service Tax Audit in India – An Overview

Director General of Audit, has published services tax audit manual, 2010, 2010. As per the guidance, taxpayers whose annual service tax payment (including cash and cenvat) was Rs 30 million or more in the preceding financial year may be subjected to mandatory audit each year. It is preferable that audit of all such units is done by using computer assisted audit program (CAAP) techniques. The frequently of audit for other taxpayers would be as per following norms:

• Taxpayers with service tax payment above Rs 30 million (cash+ cenvat) (mandatory units) to be audited every year.
• Taxpayer with service tax payment between Rs 10 million and Rs 30 million (cash+ cenvat) to be audited once every two years.
• Taxpayers with service tax payment between 2.5 million and 10 million (cash+ cenvat) to be audited once every five year.
• Taxpayers with service tax payment up to 2.5 million (cash+ cenvat) 2% of taxpayers to be audited every year.

The audit selection guidelines, therefore would apply to the non-mandatary taxpayers, forming part of discretionary workload. These taxpayers should be selected on the basis of assessment of risk potential to the revenue. This process, which is an essential feature of audit selection, is known as Risk Assessment. It involves the ranking of taxpayers according to quantitative indicators of risk known as a “risk parameter”. It is also suggested that the taxpayers whose returns were selected for detailed scrutiny, the taxpayers who have been selected for audit, may not be taken up for detailed scrutiny of their ST–3 returns during that year.

1. FOCUS OF AUDIT IN SERVICE TAX-BOOKS/RECORDS

The focus of audit in service tax matters is again to be seen from the revenue’s point of view. The objective is to find out whether there has been proper and appropriate payment of service tax by an assessee.

2. BOOKS AND RECORDS FOR SERVICES TAX PURPOSES

It is an interesting to note that the Finance Act, 1994 or the Services Tax Rules, 1994 do not prescribe any set of books or records to be maintained by the service tax assessees. The assessees are free to maintained their own books/accounts. In fact rule 5 of the services tax rules, 1994 provides that the records including computerized data as maintained by an assessees in accordance with the various laws in force from time to time shall be acceptable to the Department. Accordingly, service tax assessees who are joint stock companies governed by the provisions of Companies Act, 2013 will maintain books/accounts as prescribed under the Companies Act, 2013. Assessees who are registered under the Co-operative Societies Act or under the Societies Registration Act will maintain books/records under the respective rules/regulations framed under the laws governing the assessees. Similarly, assessees who are registered as Trust will maintain books/accounts as required of them under the law governing the trust, if any. Assessees who are receiving foreign contributions will maintain books/records specially required of them as prescribed under the Foreign Contributions Regulation Act /rules framed thereunder. Similarly sole traders and partnership firms will maintain accounts/books as required under the income tax / sales tax acts including work contracts and also as required under the Tax Audit rules under the Income Tax Act 1961 besides records under other tax laws and special statutes such as Insurance Laws, Banking Laws and Rules and Regulations framed thereunder. Normally service tax assessees maintain the following records:

Leading Transfer Pricing Company in India

Are you searching for the best transfer pricing company in India? Look no further! We specialize in providing comprehensive transfer pricing solutions tailored to your business needs. Our team of seasoned experts helps companies navigate the complex world of transfer pricing regulations, ensuring full compliance with Indian tax laws.

Why Choose Us As Your Transfer Pricing Company in India?

• Expertise Across Industries: Whether you’re in manufacturing, IT, or services, we understand your unique transfer pricing challenges.
• End-to-End Solutions: From transfer pricing documentation, benchmarking studies, planning, and advisory to handling audits and litigation support, we offer complete services.
• Regulatory Compliance: Stay updated and compliant with the latest transfer pricing rules under the Income Tax Act, 1961.
• Customized Strategies: Our transfer pricing strategies are tailored to minimize risks and maximize tax efficiency.
• Global Network: With access to international tax resources, we support multinational companies operating in India.

Why Transfer Pricing Matters in India?

Transfer pricing regulations are crucial for businesses with cross-border transactions. Indian tax authorities closely monitor related-party transactions to ensure they are conducted at arm’s length prices. Choosing a reliable transfer pricing company in India ensures that your business stays compliant, avoids penalties, and optimizes tax liabilities.

Transfer Pricing in India – Background & History

Since 1991, with liberalization, India began integrating its economy globally. Transfer pricing rules were introduced under the Finance Act, 2001 to regulate international transactions under sections 92A to 92F of the Income Tax Act, 1961. These apply to relevant transactions from April 1, 2001.

How to Transfer Pricing Audit in India

During the last decade, India has emerged as a preferred destination for global businesses. The government introduced the ‘Transfer Pricing Regulation’ to ensure fair taxation. Companies in India must maintain detailed documentation and file Form 3CEB certified by a Chartered Accountant.

The following are the important statutes of the law:

• Each person or association involved in an international transaction should maintain an up-to-date record of each transaction.
• Arm’s length price shall be calculated using prescribed methods such as CUP, cost plus, resale price, and transactional net margin method.
• Reports must be filed in Form 3CEB along with the income tax return.
• Failure to comply attracts penalties imposed by the Board.

What is a Transfer Pricing Study?

A transfer pricing study examines transactions between related entities to ensure they meet arm’s length principles under market conditions. It provides justification for methods used and documents compliance with tax regulations.

Transfer Pricing Study for Indian Companies

All Indian companies engaged in international transactions must adhere to Transfer Pricing Regulations and maintain proper documentation.

How can NB Consultants help you?

Our consultants assist in determining effective operation and compliance with India’s transfer pricing laws, providing cost-effective and timely documentation solutions.

Step-by-step process:

• Fact-finding to analyze inter-company functions and risks.
• Select appropriate method and identify tested parties.
• Benchmarking analysis using public and private databases.
• Prepare consolidated report and submit Form 3CEB.

Transfer Pricing Litigation, Documentation and Study

We offer litigation support and documentation under Indian Transfer Pricing Law, helping clients set arm’s length pricing and defend positions before authorities.

Why NBC Consultants for Transfer Pricing Audit and Study

Our team delivers quality transfer pricing advisory, documentation, and audit defense for multinational and Indian companies, ensuring sustainable compliance and tax optimization.

Transfer Pricing Audit in Delhi, Mumbai and Gurgaon

NBC’s professionals assist multinational corporations in preparing global transfer pricing documentation and reports across major cities in India, ensuring full compliance and accuracy.

Transfer Pricing FAQs and Guidelines

Q1. When do the transfer pricing outline regulations apply to a business?

The auditing services apply when two or more associated companies enter into a mutual contract during an international transaction to transfer or apportion a particular cost incurred in relation with a benefit, service, or facility offered by any one or all of the companies. Each cost shall be calculated considering the arm’s length price of the particular benefit, service, or facility, as applicable.

Q2. When can two companies be classified as ‘associated enterprises’?

According to sections 92, 92A, 92B, 92C, 92D, 92E, and 92F, a company can be termed as an associated enterprise with respect to the other under the following circumstances:

• If one company is involved directly or indirectly with the help of one or more intermediaries in the management, control, or capital of the other company.
• If any person (or persons of the respective company) is involved directly or indirectly in the management, control, or capital of the other company.

Q3. What is meant by ‘International Transaction’ with regard to Transfer Pricing Outline?

‘International Transaction’ includes transactions between two or more associated companies for the transfer of tangible or intangible property, services, or lending/borrowing of money, etc., where one of the participants is a non-resident. For example, a transaction that has been entered into between two associated enterprises, either or both of whom are non-residents, is termed an international transaction.

Q4. What are the different procedures to calculate the arm’s length price?

• Transactional net margin procedure
• Resale price procedure
• Cost plus procedure
• Comparable uncontrolled price procedure
• Profit split procedure

Various other procedures are prescribed by the Central Board of Direct Taxes (CBDT).

Q5. What documents are required to be maintained by a company executing an international transaction?

• Ownership details of the group with which the company is associated.
• Detailed profile of the foreign group to which the company belongs.
• Detailed description of the business activities of both the company and the associated group of companies.
• Transaction details such as nature, terms, and value of each transaction.
• Supporting records and analysis reports prepared by the company.

Q6. Who is authorized to furnish the report under section 92E of the Transfer Pricing Regulation Act?

Any person involved in an international transaction during the previous year shall submit a report in Form 3CEB through a Chartered Accountant, duly verified by him, on or before the due date prescribed by the authority.

Q7. Does the expression “arithmetical mean” mean there could be two prices where the most appropriate method is followed?

When more than one price may be determined by the most appropriate method, the arm’s length price shall be taken as the arithmetical mean of such prices. However, if more than one price is equally applicable, transfer pricing will only apply when there is tax relevance.

Q8. Is transfer pricing to be certified even when the assessee is not liable to tax?

A non-resident with no tax liability or income arising in India is not required to certify transfer pricing documentation since the transaction has no taxable effect within India.

Q9. Can an Indian company be associated with a non-resident in the last quarter of the year?

Yes, it is reasonable to presume that transactions covered in the last quarter apply for the entire year unless otherwise specified, based on the principle of consistency.

Q10. What is the relevance of related party transactions as per Accounting Standard 24?

AS 24 defines related party transactions as transfers of resources or obligations between related parties, regardless of pricing. Disclosure is mandatory under the standard to ensure transparency of financial reporting.

Q11. How is confidentiality handled in international transactions?

Confidentiality is vital to prevent the disclosure of proprietary or sensitive data. However, the principle of transparency is balanced against the need for taxpayer privacy.

Q12. What is an auditor’s liability?

Auditors must verify that transfer pricing adjustments are consistent with accounting records and financial statements. Failure to report inconsistencies may attract penalties.

Q13. Are prices approved by the government relevant for transfer pricing?

Government-approved prices or rates can serve as benchmarks; however, transfer pricing principles still apply independently of such approvals when determining the arm’s length price.

Q14. What is the maximum retail price (MRP) relevance?

MRP-based prices set by authorities do not automatically determine the arm’s length price but may influence transfer pricing assessments.

Q15. Does transfer pricing apply to transactions between head office and branch?

Transactions between an Indian head office and its foreign branch are not treated as international transactions under transfer pricing rules, as both are parts of the same legal entity.

Q16. Can motive affect transfer pricing applicability?

The existence or absence of motive to manipulate prices does not affect transfer pricing applicability. Compliance is based on factual determination of price deviation.

Q17. Are transfer pricing rules applicable to capital gains?

Yes. If shares are transferred between associated enterprises, the valuation must adhere to transfer pricing rules to prevent avoidance of taxable gains.

Q18. Is certification required when there is no tax liability on international transactions?

Certification is not necessary when no income arises from the transaction, as the transfer pricing provisions are meant for transactions affecting taxable income.

Domestic Transfer Pricing

Introduction

Finance Act, 2012 has extended the scope of transfer pricing regulations to "Specified Domestic Transactions" (SDTs). Accordingly, with effect from A.Y. 2013-14, the pricing of specified domestic transactions between related parties (resident persons) is also required to be determined at arm's length price.

The following pages explain in overview all fields of transfer pricing. This guide enables you to understand the framework of transfer pricing in India.

Meaning of Specified Domestic Transactions

Section 92BA defines "Specified Domestic Transactions" in relation to an assessee, as any of the following transactions, not being an international transaction:

1. Any transaction referred to in section 80A;
   • (a) Any transaction of dealing between any two (or more) units or undertakings of the assessee to which section 80A(6) applies;
   • (b) Any transaction of goods or services transferred from one unit or undertaking to another unit or undertaking.
2. Any transfer of goods or services referred to in sub-section (8) of section 80-IA;
3. Any business transacted between the assessee and other person as referred to in sub-section (10) of section 80-IA;
4. Any transaction, referred to in any other section under Chapter VI-A or section 10AA (to which provisions of sub-section (8) or sub-section (10) of section 80-IA are applicable)

Last, any business transacted between the persons specified in clause (b) of sub-section (1) of section 40A(2). Example: TDS/TCS

Further, where the assessee has entered into a transaction with a person who is not a 'related person', the transaction will be subject to section 92BA.

Moreover, the aggregate of such transactions entered into by the assessee in the previous year must exceed a sum of INR 20 crore.

Threshold exemption

Transfer pricing provisions shall apply to specified domestic transactions only if the aggregate value of such transactions exceeds INR 20 crore in a financial year. Moreover, there is no monetary threshold for specified domestic transactions under section 40A(2). This means that if an assessee enters into specified domestic transactions of more than INR 20 crore, all of the specified domestic transactions (including those under section 40A(2)) would be subject to transfer pricing provisions. If the aggregate value of specified domestic transactions does not exceed INR 20 crore, then transfer pricing provisions would not apply.

Consequential amendments

Sub-section (2A) has been inserted in section 92 to provide that any allowance for an expenditure or interest or allocation of any cost or expense or any income in relation to specified domestic transaction shall be computed at arm's length price. The section has also been amended to cover cases under section 40A(2) of the Income-tax Act, 1961.

1. Section 92CA has been amended to provide that a Transfer Pricing Officer (TPO) can determine the arm's length price of specified domestic transactions.
2. The fair market value of goods or services transferred between related parties shall be determined at arm's length price as defined in section 92F of the Income-tax Act.

Meaning of 'related person'

The persons referred to in section 40A(2)(b) are the following, namely:

Where the assessee is an individual:

1. Any relative of the assessee;
2. Any person who has a substantial interest in the business or profession of the assessee, or any relative of such person;

Where the assessee is a company, firm, association of persons or Hindu undivided family:

3. Any director of the company, partner of the firm, or member of the association or family, or any relative of such director, partner or member;
4. Any person who has a substantial interest in the business or profession of the assessee or any relative of such person;
5. A company, firm, association of persons or Hindu undivided family having a substantial interest in the business or profession of the assessee or any director, partner, or member of such company, firm, association or family, or any relative of such director, partner or member;
6. A company, firm, association of persons or Hindu undivided family of which a director, partner or member, as the case may be, has a substantial interest in the business or profession of the assessee; or any director, partner, or member of such company, firm, association or family or any relative of such director, partner or member;
7. Any person who carries on a business or profession, where the assessee has a substantial interest in the business or profession of that person.

Meaning of 'substantial interest in a business'

(A) Where in a case where the business or profession is carried on by a company, such person is, at any time during the previous year, the beneficial owner of shares (not being shares entitled to a fixed rate of dividend whether with or without a right to participate in profits) carrying not less than twenty per cent of the voting power; and

(B) In any other case, such person is, at any time during the previous year, beneficially entitled to not less than twenty per cent of the profits of such business or profession.

Further, "relative" in relation to an individual, means the husband, wife, brother or sister or any lineal ascendant or descendant of that individual.

Some of the illustrations of specified domestic transactions are: Expenditure on advertisement, commission, interest, professional services, rent, salary, etc. paid to related persons; Transactions of purchase or sale of goods or property from related persons; Transactions of availing or rendering of services with related persons; Transactions of lending or borrowing of money with related persons; Transactions of guarantee or collateral given or received from related persons; and any other transaction having a bearing on the profit, income, loss or assets of the assessee. The arm's length price in relation to such transactions shall be determined by applying any of the methods provided in section 92C of the Act. The methods prescribed for determination of arm's length price in relation to international transactions shall also apply for determination of arm's length price in relation to specified domestic transactions.

Any other transaction (not being an international transaction) entered into by an assessee with a related person, where the aggregate value of such transactions exceeds INR 20 crore, would be subject to transfer pricing provisions. These transactions are required to be reported in the transfer pricing audit report (Form 3CEB). The due date for filing the transfer pricing audit report is November 30th of the assessment year.

While computing the aggregate value of specified domestic transactions, the value of transactions entered into by the assessee with each related person should be considered separately. For example, if an assessee has entered into transactions with three related persons, and the aggregate value of transactions with each related person is INR 7 crore, INR 8 crore and INR 6 crore respectively, the total aggregate value of specified domestic transactions would be INR 21 crore (7+8+6). Since the aggregate value exceeds INR 20 crore, the transfer pricing provisions would apply to all such transactions. The determination of arm's length price for each transaction shall be done separately.

There are many other provisions relating to specified domestic transactions, such as maintenance of documents, penalty for non-compliance, etc. The transfer pricing regulations are complex and require careful consideration. It is advisable to seek professional advice to ensure compliance with the transfer pricing provisions. The arm's length principle is the cornerstone of transfer pricing regulations. The arm's length price is the price that would have been charged for a transaction if it had been entered into between unrelated persons under similar circumstances. The determination of arm's length price is a factual exercise and requires a thorough analysis of the functions performed, assets employed and risks assumed by the parties to the transaction.

International Transactions versus Specified Domestic Transactions

S. No.	Subject	International Transaction	Specified Domestic Transaction
1	Meaning	A transaction between two or more associated enterprises.	Transactions referred to in section 92BA, where aggregate value exceeds INR 20 crore.
2	Parties to transaction	At least one of the parties must be a non-resident.	All parties involved are resident persons (related parties).
3	Compensating adjustment	Allowed if it increases the total income or decreases the loss of the assessee. (Section 92(3))	Allowed if it increases the total income or decreases the loss of the assessee or the other party. (Section 92(3))
4	Transfer pricing methods	The statute specifies five methods (CUP, RPM, CPM, PSM, TNMM) and "other method" (Rule 10AB).	Income-tax provisions (section 92C) and rules (Rule 10B) do not specify any methods. However, CBDT's press release clarifies that all methods applicable for international transactions will apply to specified domestic transactions.
5	Penal provisions (Section 271AA)	Section 271AA(1) empowers the tax officer to levy a penalty for failure to maintain documentation.	Specific provisions for penalty (Section 271AA) are not applicable. But general penalty provisions may apply.
6	Safe Harbour Provisions	CBDT has issued detailed guidelines (Rules 10TA to 10TG) for safe harbour.	Safe harbour rules are not applicable to specified domestic transactions.
7	Advance Pricing Agreement	An assessee can enter into an APA (unilateral, bilateral, or multilateral) with the CBDT (Section 92CC and 92CD).	APAs do not apply to specified domestic transactions.
8	Documentation	Detailed documentation is required to be maintained (Section 92D and Rule 10D).	Documentation requirements (Rule 10D) do not apply.
9	Chartered Accountant's Report	Form 3CEB to be filed by the due date.	Form 3CEB to be filed by the due date.
10	Audit report	Audit report is required for all international transactions.	Audit report is required only if the aggregate value of transactions exceeds INR 20 crore.

Business Taxation Overview

Tax Consultancy firm in Delhi

One needs to have a tax consultant who can help them in managing their taxes and complying with the tax laws. We are a team of tax consultants in Delhi, who provide tax consultancy services to individuals and businesses. Our team of tax consultants in Delhi has a rich experience in tax planning, tax compliance, and tax representation.

Our Tax Consultants Team Comprises of:

• Chartered Accountants (CAs)
• Company Secretaries (CSs)
• Law graduates (LLBs)
• Cost and Management Accountants (CMAs)
• Business Management graduates (MBAs)

Range of Tax consultancy services provided in Delhi:

• Tax Management: We provide tax management services to individuals and businesses. Our services include tax planning, tax compliance, and tax representation.
• Personal tax: We provide personal tax consultancy services to individuals. Our services include tax planning, filing of income tax returns, and tax representation.
• Tax representation: We represent our clients before the tax authorities in matters of tax assessment, appeals, and revisions.
• Indirect tax: We provide indirect tax consultancy services to businesses. Our services include VAT, service tax, excise, and customs.
• Transfer pricing: We provide transfer pricing consultancy services to businesses. Our services include transfer pricing documentation, transfer pricing audit, and transfer pricing representation.

The tax consultants at our firm are well-versed with the latest tax laws and regulations. We provide customized tax solutions to our clients based on their specific needs. We also provide regular updates to our clients on the latest changes in the tax laws.

We provide value added services to our clients by providing them with timely and accurate tax advice. Our tax consultants in Delhi are committed to providing the best tax consultancy services to our clients. We believe in building long-term relationships with our clients by providing them with quality services.

Our Tax Services Include:

• Income Tax
• Tax planning
• Tax compliance
• TDS
• Service Tax
• VAT / Sales Tax
• FBT
• Wealth Tax
• Central Excise
• Customs Duty
• Transfer Pricing
• International Taxation
• Taxation of expatriates
• Tax representation
• Tax audit
• Company formation
• LLP formation
• Bookkeeping
• Payroll processing
• FEMA / RBI compliance
• STPI compliance
• Software Technology Parks of India (STPI)
• Export Oriented Units (EOU)
• Special Economic Zones (SEZ)

Our tax consultants in Delhi provide the following services:

Overview of Tax Policy

Tax policy is the choice by a government as to what taxes to levy, in what amounts, and on whom. It has two components: the tax base and the tax rate. The tax base is the item or economic activity on which the tax is imposed. The tax rate is the percentage of the tax base that is paid in tax. The tax liability is the amount of tax that is payable.

Tax policy has two components: fiscal policy and monetary policy. Fiscal policy is the use of government spending and taxation to influence the economy. Monetary policy is the use of the money supply and interest rates to influence the economy. Tax policy is a part of fiscal policy.

The tax base is the item or economic activity on which the tax is imposed. The tax base can be income, wealth, consumption, or transactions. The tax rate is the percentage of the tax base that is paid in tax. The tax rate can be progressive, regressive, or proportional. A progressive tax is a tax in which the tax rate increases as the tax base increases. A regressive tax is a tax in which the tax rate decreases as the tax base increases. A proportional tax is a tax in which the tax rate remains the same regardless of the tax base.

Personal Income Tax and Wealth Tax

Personal income tax is a tax on the income of individuals, households, and unincorporated businesses. Wealth tax is a tax on the wealth of individuals and households. Both taxes are direct taxes. Direct taxes are taxes that are paid directly by the person on whom they are imposed. Indirect taxes are taxes that are paid indirectly by the person on whom they are imposed. Examples of indirect taxes are VAT, service tax, and excise duty.

The personal income tax is the most important source of revenue for the government. The wealth tax is a minor source of revenue for the government. The personal income tax is a progressive tax. The wealth tax is a proportional tax.

Advance Tax Ruling Scheme

The Advance Tax Ruling Scheme is a scheme under which a non-resident can obtain a binding ruling from the Authority for Advance Rulings (AAR) on a question of law or fact in relation to a transaction. The ruling is binding on the applicant and the tax authorities. The ruling is not appealable. The AAR is a quasi-judicial body. The AAR is headed by a retired judge of the Supreme Court.

The scheme is intended to provide certainty to non-residents on the tax implications of their transactions in India. The scheme is also intended to reduce tax litigation. The scheme is available to residents also in certain cases. The scheme is governed by the Income-tax Act, 1961 and the Authority for Advance Rulings (Procedure) Rules, 1996.

Related updates on Tax Laws in India

The Finance Act, 2012 has extended the scope of transfer pricing regulations to specified domestic transactions. The transfer pricing regulations are applicable from the assessment year 2013-14. The specified domestic transactions are transactions between related parties. The transfer pricing regulations are intended to ensure that the transactions between related parties are at arm's length price.

Income Tax

Income Tax is a tax on income. Income includes salary, business profits, capital gains, and other income. Income Tax is a direct tax. Income Tax is levied by the central government. The Income-tax Act, 1961 is the law that governs income tax in India. The Income-tax Rules, 1962 are the rules that provide for the procedure for the implementation of the Income-tax Act, 1961.

Tax Deducted at Source (TDS)

Any person making specified payments (e.g. salary, interest, commission, rent, etc.) is required to deduct tax at source (TDS) at the prescribed rates. The tax deducted at source is required to be deposited with the government. The person deducting tax at source is required to file TDS returns. The person from whose income tax has been deducted at source is entitled to get credit for the tax deducted.

The person making the payment is responsible for deducting tax at source and depositing it with the government. If the person making the payment fails to deduct tax at source or fails to deposit the tax deducted at source with the government, he is liable to pay interest and penalty.

Tax benefits for investments in SEZ in India

There are several tax benefits available for investments in Special Economic Zones (SEZs) in India. The tax benefits are available under the Income-tax Act, 1961, the Central Sales Tax Act, 1956, the Service Tax law, and the Central Excise Act, 1944. The tax benefits are:

• Exemption from income tax for a period of 10 years
• Exemption from central sales tax
• Exemption from service tax
• Exemption from central excise duty
• Exemption from customs duty

Double Taxation Avoidance Agreement (DTAA) in India

India has entered into Double Taxation Avoidance Agreements (DTAAs) with several countries. The DTAAs are intended to avoid double taxation of income. The DTAAs provide for the allocation of taxing rights between the two countries. The DTAAs also provide for the reduction of tax rates in certain cases.

The DTAA provides relief from double taxation in two ways: exemption method and credit method. Under the exemption method, the income is taxed in only one country. Under the credit method, the income is taxed in both countries, but the country of residence gives credit for the tax paid in the country of source.

Safe Harbour Provisions in India

The concept of 'Safe Harbour' has been introduced in the Income-tax Act, 1961. The safe harbour rules provide for the circumstances in which the transfer pricing regulations will not be applicable. The safe harbour rules are intended to reduce transfer pricing litigation. The safe harbour rules are applicable from the assessment year 2013-14.