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  • CBDT Open to Giving Foreign Cos a Breather

    Publish Date : 24 Aug 2017

    The Central Board of Direct Taxes is open to lowering the withholding tax rate for foreign companies which have income in India, but said that companies should pay their due taxes.

    “I would like to be informed in which areas the TDS (tax deducted at source) is high, so that we can think of reducing that also,“ CBDT chairman Sushil Chandra said at an international tax conference organised by Assocham on Wednesday .“We are absolutely open to any suggestions which can make the life of a genuine taxpayer easy .“

    Chandra urged firms and multinational companies operating in India to pay their due share of taxes and said adequate safeguards had been put in place to ensure that anti-abuse provisions like General Anti Avoidance Rules (GAAR) are not misused.

    Rahul Garg, chairman at Assocham's National Council on Direct Taxes, said the tax department issues refunds to the tune of Rs 40,000-60,000 crore every year and, hence, the industry chamber has suggested a relook of the withholding tax scenario.

    “Withholding tax deducted by various segments of business vary between 1% and 42%. Since the refund quantum is so big, we have suggested the department to analyse the class on investors to whom refund is due every year and reduce the TDS rate for them,“ Garg said.

    Chandra said the GAAR will be used in exceptional circumstances and only to ensure that the country gets its due share of taxes.

    GAAR will be invoked only if the tax provisions are misused, he said, adding that companies, firms or MNCs should believe in fair taxation. Chandra said the policies of income tax department have been very transparent and are being decided after considering the concerns of stakeholders.

    Under GAAR, which has come into effect from April 2017, the tax officials may potentially want to know whether the transaction was done in the normal course of business or conducted simply with the intention to avoid taxes. - www.economictimes.indiatimes.com [24-08-2017]

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