Skip to main content

Cyprus agrees to amend tax treaty ahead of GAAR with caveat

By
Ahead of India’s rolling out of anti- tax avoidance regulations, Cyprus has shown eagerness to amend the bilateral tax treaty allowing New Delhi to tax capital gains. In turn, has pitched to be taken off the blacklist or being considered a “ notified jurisdiction” for not sharing tax information, which implies increased scrutiny for investments coming from Mediterranean island nation, which is the seventh largest foreign direct investment source for India.

Cyprus is learnt to have approved, inprinciple, the proposals made by the Indian side on taxing capital gains.

“Cyprus has sought removal from the blacklist and is ready to amend the double taxation avoidance agreement ( DTAA) with India. It is very keen for that now since the general anti- avoidance rule ( GAAR) is coming into play April 2017 onwards and the Mauritius treaty has already been amended,” said a source.

The move would plug loopholes in capital gains tax exemption for investments from Cyprus. India and Cyprus signed the DTAA in 1994 and around $ 8 billion has been invested into India from Cyprus between 2000 and 2015. India amended the DTAA with Mauritius in April, allowing the former to impose capital gains tax on shares.

Companies routing funds into India through Mauritius from the next financial year will have to pay short- term capital gains tax at 50 per cent prevailing rate during atwo- year transition period beginning April 2017. The short- term capital gains tax rate is 15 per cent at the moment. The full rate will be imposed from 2019 onwards. The concessional rate of 50 per cent would be subject to fulfilment of conditions in newly- inserted limitation of benefit ( LoB), which is an expenditure of at least Rs.27 lakh in Mauritius in the previous financial year.

Revenue Secretary Hasmukh Adhia had said last month that talks were on with Cyprus to amend the treaty. “If Cyprus does not renegotiate, GAAR provisions will hit the island nation,” he had said.

Cyprus was declared a non- cooperative jurisdiction by India in 2013 over not sharing information related to Indian account holders.

“IF CYPRUS DOES NOT RENEGOTIATE, GAAR PROVISIONS WILL HIT THE ISLAND NATION”

Business Standard, New Delhi, 09 June 2016

Comments

Post a Comment

Popular posts from this blog

New income tax slab and rates for new tax regime FY 2023-24 (AY 2024-25) announced in Budget 2023

By
  Basic exemption limit has been hiked to Rs.3 lakh from Rs 2.5 currently under the new income tax regime in Budget 2023. Further, the income tax slabs in the new tax regime has been changed. According to the announcement, 5 income tax slabs will be there in FY 2023-24, from 6 income tax slabs currently. A rebate under Section 87A has been enhanced under the new tax regime; from the current income level of Rs.5 lakh to Rs.7 lakh. Thus, individuals opting for the new income tax regime and having an income up to Rs.7 lakh will not pay any taxes   The income tax slabs under the new income tax regime will now be as follows: Rs 0 to Rs 3 lakh - 0% tax rate Rs 3 lakh to 6 lakh - 5% Rs 6 lakh to 9 lakh - 10% Rs 9 lakh to Rs 12 lakh - 15% Rs 12 lakh to Rs 15 lakh - 20% Above Rs 15 lakh - 30%   The revised Income tax slabs under new tax regime for FY 2023-24 (AY 2024-25)   Income tax slabs under new tax regime Income tax rates under new tax regime O to Rs 3 lakh 0 Rs 3 lakh to Rs 6 lakh 5% Rs 6
Post a Comment
Read more

Jaitley plans to cut MSME tax rate to 25%

By
Income tax for companies with annual turnover up to ?50 crore has been reduced to 25% from 30% in order to make Micro, Small and Medium Enterprises (MSME) companies more viable and also to encourage firms to migrate to a company format. This move will benefit 96% or 6.67 lakh of the 6.94 lakh companies filing returns of lower taxation and make MSME sector more competitive as compared with large companies. However, bigger firms have shown their disappointment since the proposal for reducing tax rates was to make Indian firms competitive globally and it is the large firms that are competing globally. The Finance Minister foregone revenue estimate of Rs 7,200 crore per annum for this for this measure. Besides, the Finance Minister refrained from removing or reducing Minimum Alternate Tax (MAT), a popular demand from India Inc., but provided a higher period of 15 years for carry forward of future credit claims, instead of the existing 10-year period. “It is not practical to rem
1 comment
Read more

Don't forget to verify your income tax return in August: Here's the process

By
  An ITR return needs to be verified within 120 days of filing of tax return. Now that you have filed your income tax return, remember to verify it because your return filing process is not complete unless you do so. The CBDT has reduced the time limit of ITR verification to 30 days (from 120 days) from the date of return submission. The new rule is applicable for the returns filed online on or after 1st August 2022. E-verification is the most convenient and instant method for verifying your ITR. However, if you prefer not to e-verify, you have the option to verify it by sending a physical copy of the ITR-V. Taxpayers who filed returns by July 31, 2023 but forget to verify their tax returns, will get the following email from the tax department, as per ClearTax. If your ITR is not verified within 30 days of e-filing, it will be considered invalid, and may be liable to pay a Late Fee. Aadhaar OTP | EVC through bank account | EVC through Demat account | Sending duly signed ITR-V through s
Post a Comment
Read more