rediffGURU Vivek Lala answers your income tax and personal finance queries.
Luxembourg plans to sign a double taxation treaty with India to boost bilateral trade, whose volume is currently low.
The revenue department is examining the service tax on industry and service providers, particularly in the telecom sector, to ensure that there is no incidence of double taxation, an official of the department said.
In a major relief to Indian information technology (IT) companies operating in Australia, Canberra has agreed to amend its domestic laws to stop taxing offshore income of such Indian companies, as part of the free trade deal inked. This may lead to savings up to $200 million each year for over 100 Indian IT companies operating in Australia. "The Government of Australia has agreed to amend the domestic taxation law to stop the taxation of offshore income of Indian firms providing technical services to Australia. "This will resolve the issue that the Indian government has raised about the double taxation avoidance agreement (DTAA) between the two governments for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income," said a commerce ministry official.
Two case studies on how one can use the exemption method or the credit route
This could come as a huge relief as majority of the FIIs operating in India are registered in tax havens. The discussion paper also removed the ambiguity on income classification for tax computation.
Finance minister Pranab Mukherjee on Saturday clarified doubts raised by overseas Indians over double taxation of global income of resident Indians while speaking at the Pravasi Bharatiya Diwas 2011.
Issuing the clarification after Minister for Overseas Indian Affairs Vyalar Ravi brought it to his notice, Mukherjee spelt out what makes for a resident Indian.
Despite a temporary relief, foreign investors still see the sword of double-taxation hanging above their hard earned returns.
'Why not aspire for 8 or 9 or even 10 per cent?'
The primary objective should be to figure out a way to grow at 7 to 7.5 per cent with inflation around 4 per cent. Any policy that can help us get there must be experimented with. Those that work should stay. Those that do not should go, suggests Karan Bhasin.
The industry employs about 10 million workforce.
InterGlobe Aviation, the operator of IndiGo, has approached the Delhi high court seeking a refund of over Rs 900 crore it claims to have paid as Customs duty on aircraft engines and parts re-imported into India after overseas repairs. The petition came up for hearing on Friday before a bench of Justices Prathiba M Singh and Shail Jain.
This single amendment, unfortunately, overshadows much of the Budget's promise, explains Harsh Roongta.
'When markets go into a budget with excessive optimism, the risk of disappointment is higher.'
President Pranab Mukherjee on Tuesday met with Mauritian Prime Minister Dr Navinchandra Ramgoolam at the latter's official house, Clarisse House (but which he doesn't stay in, choosing to reside in his private home instead). The meeting, which lasted over 45 minutes, saw the two sides reinforce and re-establish their close ties.
Analysts have sharply reduced cigarette maker ITC's earning estimates for the next two years, fearing a significant dent in the company's profitability and margins. This is owing to a steep hike in excise duty on tobacco by the government.
The norms pertain to the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital Gains.
After issuing notices to hotels across the country for allegedly underpaying goods and services tax (GST) on restaurant services, the revenue department has now widened its scrutiny by seeking information from online travel platforms.
Electric vehicle (EV) penetration in the luxury car segment has seen a drop by nearly 3 percentage points in the GST 2.0 era with the internal combustion engine versions offering better total cost of ownership, according to industry players. While the trend is also visible in the mass market segment, it is the entry luxury segment that is witnessing a more marked shift towards internal combustion engine (ICE) vehicles as price difference between EV and ICE widened under the new GST rates.
Ask rediffGURU and tax expert Mihir Tanna your income tax-related questions.
Non-resident Indians (NRIs) haven't gone big on the Indian stock market story despite the post-pandemic boom. While domestic participation through mutual funds (MFs) and dematerialised accounts has soared, NRI participation figures show limited signs of a similar rise.
'Only four or five original companies remain; the rest have been replaced every decade as sectors evolve or leadership shifts.' 'Companies that fail to adapt -- like many textile mills from the 1970s and shipping firms from the 1980s -- disappear.' 'Benchmark indices reward those who reinvent themselves in line with economic demands.'
The Trump administration has launched a premium immigration programme targeting wealthy individuals worldwide, offering permanent residency in the United States through expensive 'Gold Cards' that could generate billions in revenue for the American Treasury.
Ask rediffGURU and tax expert Mihir Tanna your income tax-related questions.
'Tax cases are technical in nature... Many high courts do not have a tax bench, which also contributes to the delay.'
'Despite rising inflows, many NRIs lack awareness about NRO and NRE accounts and mistakenly use family accounts or invest in a relative's name.' 'Many are unaware of tax implications.'
India and Qatar on Tuesday agreed to elevate their relationship to a strategic partnership and double bilateral trade to USD 28 billion over the next five years. Prime Minister Narendra Modi and Qatari Amir Sheikh Tamim Bin Hamad Al-Thani signed agreements and MoUs to strengthen economic cooperation, including a revised double taxation avoidance agreement. The strategic partnership will cover the "entire spectrum" of the bilateral relationship, including trade, energy security, and regional and international cooperation. Both leaders also discussed ways to further strengthen and broaden the energy partnership, including "exploring mutual investments." The Amir's visit provided an "excellent opportunity" for the top leadership of the two countries to discuss and "cement a strategic partnership for enhanced future cooperation."
Currently, India has five publicly listed Reits: Brookfield India Real Estate Trust, Embassy Office Parks Reit, Mindspace Business Parks Reit Nexus Select Trust, and Knowledge Realty Trust.
'Amazon, Meta, Google, Microsoft have large operations in India and rely on smooth trade and data flows.' 'Restrictions could raise their costs, limit AI chip exports, and complicate their India strategies.'
Understanding tax residency rules and maintaining proper documentation is imperative to ensure smooth tax compliance.
Implications for capital gains, wealth taxes, and investment strategies require careful consideration, notes Anil Rego, founder and CEO, RightHorizons.
'First-time investors, busy professionals, NRIs and those with modest sums looking for curated strategies may find FoFs especially appealing.'
Manas Sood, a Class 12 student from the Delhi Public School, has distributed 2,650 boxes of Tax City Education and empowered over 12,000 students from 52 schools across India. His aim? To help young Indians understand taxes and become financially literate.
Arbitrage funds, the new favourite of individual investors, delivered their best performance in nearly a decade in 2024. On average, the schemes delivered 8 per cent return last year, the highest since 2016, according to data from Value Research. The returns were supported by positive equity market sentiments, surge in open interest in stock futures, high interest rate, among other factors, analysts said.
'Once filed, it cannot be revised or rectified.'
India's leading steel companies hope the Modi 3.0 Budget will continue the massive capital expenditure currently underway, focusing on infrastructure development, manufacturing, and fair trade. The infrastructure segment is the largest steel user, and the government's focus has fuelled steel consumption even as international markets have underperformed. According to provisional statistics, steel consumption grew 13.6 per cent in FY24, reaching 136 million tonnes (mt), according to a CRISIL report.
The most striking features of this Budget was its focus on simplification and improving the ease of doing business in India, asserts Kaku Nakhate.
In a major relief for taxpayers, Finance Minister Nirmala Sitharaman on Saturday announced an increase in the threshold for Tax Deduction at Source (TDS) on rent from Rs2.40 lakh per annum to Rs6 lakh per annum while presenting the Union Budget 2025-26. Presenting the budget in Lok Sabha, the Finance Minister said, "The annual limit of Rs 2.40 lakh for TDS on rent is being increased to Rs 6 lakh.
