Ministry of Finance

CBDT invites stakeholder comments on report pertaining to Profit Attribution to Permanent Establishment(PE) in India

Dated: 18 APR 2019

Central Board of Direct Taxes (CBDT) places the report of the Committee on Profit Attribution on online public domain and invites suggestions/comments to be furnished electronically within 30 days from the date of publication of the aforementioned document on the website of the Department. The document can be accessed at www.incometaxindia.gov.in and comments can be sent to email address: usfttr-1@gov.in.

Background:

Taxation of non-residents in India is governed by the provisions of the Income-tax Act, 1961 (“the Act”) and the provisions of the Double Taxation Avoidance Agreement(s) [DTAA(s)] concluded or adopted by the Central Government under the powers conferred under Section 90 or 90A of the Act, respectively. The business income of a non-resident can be taxed in India if it satisfies the requisite thresholds provided under the Act as well as the threshold provided in the applicable tax treaty, by a concept of Permanent Establishment (PE), which is defined in Article 5 of Model Tax Conventions and tax treaties. Under Article 7 in the Indian treaties, profits are to be attributed to the PE as if it were a distinct and separate entity on the basis of the accounts of the PE and where such accounts are not available to enable determination of profits attributable to the PE, the profits attributable to the PE can be determined under the domestic laws. For the application of this method, the Assessing Officer in India can resort to Rule 10 of Income-tax Rules, 1962.

Recognizing the significance of issues relating to attribution of profits to a permanent establishment as well as the need to bring greater clarity and predictability in the applicable tax regime, a Committee was formed to examine the existing scheme of profit attribution to PE under Article 7 of DTAAs and recommend changes in Rule 10 of the Income-tax Rules, 1962. The Committee has submitted its report and it has been decided to seek suggestions/comments of the stakeholders and the general public.

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DSM/RM/KMN

(Release ID: 1570902)

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, 10th April, 2019

PRESS RELEASE

CBDT conducts search in the case of Sri Gurappa Naidu

The Income Tax Department conducted search on 9 th April, 2019 in Vijaywada at the premises of Sri Gurappa Naidu, a cost accountant. An information had been received on toll-free-number that cash was kept at the residence of Shri Gurappa Naidu which was to be used in General Election. It was only at the time of recording his statement late in the night that he revealed that he was giving services to Shri Galla Jayadaev, MP, TDP also in his capacity as a cost accountant. During the course of search, cash of Rs. 45.4 Lakhs was seized being unexplained.

The person searched, Sri Gurappa Naidu is a retired person who is practicing free lance cost accountancy. No other premise except the residence of Sri Naidu was searched. No premise of the MP candidate Sri Galla Jayadaev was searched.

(Y. D. Sharma)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT.

Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

New Delhi, 8th April, 2019

PRESS RELEASE

Brief highlights of the recent searches in NCR, Bhopal, Indore and Goa

Based upon credible information of large scale collection, possession and movement of unaccounted assets, Delhi Directorate of Income Tax (Investigation) initiated search and seizure action on a group in NCR, Bhopal, Indore and Goa. More than 300 IT officials participated in the operation at about 52 locations in 4 States.

Searches in Madhya Pradesh have detected wide spread and well-organized racket of collection of unaccounted cash of about Rs. 281 cr through various persons in different walks of life including business, politics and public service. A part of the cash was also transferred to the headquarter of a major political party in Delhi including about Rs 20 cr which was moved through hawala recently to the headquarter of the political party from the residence of a senior functionary at Tughlak Road, New Delhi.

Meticulous records of collection and disbursement of cash in the form of hand written diaries, computer files and excel sheets found and seized corroborate the above findings.

Unaccounted cash of Rs 14.6 cr has been found so far, besides 252 bottles of Liquor, few arms and hide-skins of tiger. The searches in Delhi in the group of a close relative of the senior functionary have further led to seizure of incriminating evidence including cash book recording unaccounted transactions of Rs 230cr, siphoning off money through bogus billing of more than Rs. 242 cr and evidence of more than 80 companies in Tax havens. Several unaccounted/Benami properties at posh locations in Delhi have also been detected.

Instances of violations of Model Code of Conduct are being brought to the notice of ECI.

(Y. D. Sharma)
Commissioner of Income Tax
(Media & Technical Policy)
Official Spokesperson, CBDT.

Click below to read and download the CBDT Notification No.33/2019 dated 01/04/2019

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, 31st March, 2019

PRESS RELEASE

CBDT issues clarification on linking of PAN with Aadhaar

It has been reported in some sections of the media that those PANs which are not linked with Aadhaar number by 31.03.2019 may be invalidated. The matter has been considered by the Central Government and now the cut-off date for intimating the Aadhaar number and linking PAN with Aadhaar is 30.09.2019, unless specifically exempted.

Notwithstanding the last date of intimating/linking of Aadhaar Number with PAN being 30.09.2019, it is also made clear that w.e.f. 01.04.2019, it is mandatory to quote and link Aadhaar number while filing the return of income, unless specifically exempted.

(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT.