Direct Tax Code 2010
KPMG IN INDIA
Direct Taxes Code 2010 - Analysis
TAX
Table of Contents
? Income Business ? Alternate Tax Minimum ? Distribution Tax Dividend ?Profit Tax Branch ? International Taxation ? Residence Rules ? Treaty Override ? Controlled Foreign Company ? Anti-Avoidance Rules General ? Tax Incentives & Special Economic Zones ?Gains Capital ? Pricing & Advanced Pricing Agreement Transfer ? Taxation Personal ? Capital Funds, Mutual Funds & Insurance Venture
02 04 05 06 07 10 11 12 14 16 18 21 24 29-31
Companies
?Tax Wealth ? Glossary
32 33
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
02
Business Income
Computation of income
Under the Act The income under the head “Business and Profession” is computed as “business profits with specified adjustments” which , can be described as “Income expense model” . DTC 2009 Income from each business is to be computed separately and each unit deemed to be distinct and separate from another unit, unless there is interlacing, inter-dependence or unit embarrassing the two business/units. The Income expense model proposed by DTC 2009 is as under:
Gross earnings Less: Specified Business Expenditure Operating Expenditure Permitted Finance Charges Capital Allowances Taxable Income from business Xxxxx
Xxxxxx Xxxxx
Xxxxx
DTC 2010
? in rates of presumptive taxation for businesses relating Increase
OUR COMMENTS
Since each unit is deemed as a separate business, all the ? provisions of computation of profits will apply separately to each such unit
? The proposed section will cast a more burdensome duty on the
to oil exploration, shipping operation, air transport, etc. The actual profits would be taxable if higher than presumptive profits
? in depreciation rates Changes
tax payer to comply with the extra documentation requirement
?
Direct Taxes Code 2010 - Analysis
TAX
Table of Contents
? Income Business ? Alternate Tax Minimum ? Distribution Tax Dividend ?Profit Tax Branch ? International Taxation ? Residence Rules ? Treaty Override ? Controlled Foreign Company ? Anti-Avoidance Rules General ? Tax Incentives & Special Economic Zones ?Gains Capital ? Pricing & Advanced Pricing Agreement Transfer ? Taxation Personal ? Capital Funds, Mutual Funds & Insurance Venture
02 04 05 06 07 10 11 12 14 16 18 21 24 29-31
Companies
?Tax Wealth ? Glossary
32 33
© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
02
Business Income
Computation of income
Under the Act The income under the head “Business and Profession” is computed as “business profits with specified adjustments” which , can be described as “Income expense model” . DTC 2009 Income from each business is to be computed separately and each unit deemed to be distinct and separate from another unit, unless there is interlacing, inter-dependence or unit embarrassing the two business/units. The Income expense model proposed by DTC 2009 is as under:
Gross earnings Less: Specified Business Expenditure Operating Expenditure Permitted Finance Charges Capital Allowances Taxable Income from business Xxxxx
Xxxxxx Xxxxx
Xxxxx
DTC 2010
? in rates of presumptive taxation for businesses relating Increase
OUR COMMENTS
Since each unit is deemed as a separate business, all the ? provisions of computation of profits will apply separately to each such unit
? The proposed section will cast a more burdensome duty on the
to oil exploration, shipping operation, air transport, etc. The actual profits would be taxable if higher than presumptive profits
? in depreciation rates Changes
tax payer to comply with the extra documentation requirement
?