Direct Taxation
India’s taxation system is a few of the more complex systems globally and is continuously being up to date to account for adjustments within the economic system and policy. The system remains liable to delays and inefficiencies as well as widespread tax burdens for a misstep or lack of know-how. There are extra regulations on overseas nationals and groups, in addition to international transactions among organization agencies.
At gift, a enterprise working in India may additionally need to pay three styles of direct taxes – corporate Taxes, minimal alternative Tax (MAT), and Dividend Distribution Tax (DDT). These are the broad guidelines for those taxes
- Corporate Tax - For a domestic company, the prevailing tax rate is 30% (or 25% for SMEs). In addition to this, a surcharge may apply (based on the company’s profit levels) and a cess of 4% applies to all companies (irrespective of profit levels). Foreign companies are required to pay a basic tax rate of 40% (plus surcharge and cess).
- Minimum Alternate Tax - Because of the differences between calculation of accounting profit and taxable profit, the Government introduced MAT which is applicable on book profits (if they exceed tax profits). The MAT rate is currently 18.5% of the book profits plus surcharge and cess. Every entity would need to pay the higher of corporate tax or MAT.
- Dividend Distribution Tax - DDT is a tax payable by domestic companies on the dividend that they pay out, since that dividend is tax free in the hands of the shareholder. On the other hand, if a shareholder receives dividend from a foreign company, he or she is liable to pay tax on it. The current DDT rates are 15% on dividend amount, plus surcharge and cess.
AMA’s tax practice is a long-established one with specialists across all regulations and revel in with earnings tax instruction, evaluation, scrutiny and dispute cases. Our tax consulting practice assists our customers with the subsequent services:
- Tax making plans and optimisation approach for Indian and distant places agencies
- Tax making plans and optimisation for proposed transactions including mergers and acquisitions (see Transaction advisory offerings for more details)
- Monetary due diligence for proposed transactions
- Ongoing direct tax payments and self-assessments for organizations and firms
- Ongoing tax compliances (TDS, expert tax, and many others.)
- Income Tax guidance and filing of tax returns for organizations and firms
- Liaising with profits Tax authorities in cases of tax needs, scrutiny or disputes
- Tax audits for businesses and firms in shape 3CD as prescribed via the earnings Tax government
- Employee tax calculations for agencies and companies
- Interpretation of international tax codes and Double Tax Avoidance Agreements (DTAA) across geographies
- Switch pricing studies (see transfer pricing for extra info)