The Income Tax Appellate Tribunal’s (“ITAT”) Chennai bench in Zoho Corporation Pvt. Ltd. v. Deputy Commissioner of Income Tax,[1] determined that foreign taxes paid by an assessee, which do not qualify for relief under Sections 90 or 91 of the Income Tax Act, 1961 (“IT Act”), cannot be claimed as business expense deduction under Section 37(1).Continue Reading Foreign taxes cannot be allowed as tax deductible expenditure: Chennai ITAT
The principal purpose test (“PPT”) has been introduced into the Indian double taxation avoidance agreement (“DTAA”) lexicon through the base erosion and profit shifting (“BEPS”) project of the Organisation for Economic Cooperation and Development (“OECD”) to dissuade sophisticated taxpayers from entering into transactions aimed at tax avoidance. The requisite amendments to the DTAAs have been made via multilateral instruments (“MLIs”).Continue Reading Delhi ITAT delivers one of the first decisions dealing with Principal Purpose Test
The Alternate Minimum Tax (“AMT”) has its genesis in the Minimum Alternate Tax (“MAT”), which was introduced to ensure that taxes were paid by even those companies that intended to avoid payment of taxes by engaging in ingenuous tax planning methods despite having earned significant amount of book profits. These companies, called “zero-tax companies”, while reporting significant book profits, paid minimal or no income tax by leveraging various exemptions and deductions available under the Income Tax Act, 1961 (“IT Act”). Continue Reading AMT: Does It Impose Additional Taxes Under Income Tax Bill, 2025?