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Background Section 115JB of India’s Income-tax Act, 1961 (the “IT Act”), provides for taxation of those companies who, despite showing high profits in their books and paying substantial dividends, do not pay or pay only marginal taxes, by taking advantage of the various tax concessions and incentives available under the IT Act.  Minimum Alternate Tax…

Introduction In its Union Budget, 2015, the Indian government has set an ambitious target of installing 175,000 Megawatts (“MW”) of renewable energy by 2022, which will include 100,000 MW of solar energy, 60,000 MW of wind energy, 10,000 MW of biomass energy and 5,000 MW of small hydro energy.  This is in line with the…

Background The provisions of section 90(2) of the Income-tax Act, 1961 (the “Act”) permit a non-resident to avail either the provisions of the Act or the Double Taxation Avoidance Agreement (the “DTAA”), whichever are more beneficial.  There are various judicial precedents propounding the principle that beneficial DTAA provisions override the provisions of the Act. However,…

Introduction To address various issues surrounding distressed assets in the banking system, on February 26, 2014, the Reserve Bank of India (the “RBI”) issued the Framework for Revitalising Distressed Assets in the Economy (the “Framework”). The Framework, inter alia, requires lenders to compulsorily form a Joint Lenders Forum (the “JLF”) if the principal or interest…

Introduction On June 5, 2015, the Ministry of Corporate Affairs, Government of India (the “MCA”) issued a notification (the “Notification”), which significantly reduces the compliance requirements for private companies under the Companies Act, 2013 (the “Act”). With these changes, corporate governance of private companies will become easier.  This update discusses the key changes. Key exemptions…

Introduction On August 29, 2013, the Companies Act, 2013 (the “2013 Act”) received the assent of the President of India.  Since then, 282 sections of the 2013 Act have been brought into force in three (3) phases.  Further, between March 27 and March 31, 2014, twenty-one (21) new rules were notified under the 2013 Act…

Introduction On May 12, 2015, the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India (the “DIPP”) issued the consolidated foreign direct investment policy circular of 2015 (the “FDI Policy 2015”). The circular on consolidated foreign direct investment policy is updated by the DIPP every year and captures all the…

Background Minimum Alternate Tax (“MAT”) is a tax levied under the Income-tax Act, 1961 (“IT Act”) on the book profit of a company where the overall tax paid by the company is less than 18.5% of the book profit.  Generally speaking, in the case of non-resident entities who do not have a permanent establishment in…

In his budget speech on February 28, 2015, the Finance Minister (“FM”) made it clear that black (unaccounted) money was eating into the Indian economy and this problem would have to be tackled forcefully.  While the FM acknowledged that there were limitations under the Income-tax Act, 1961 (the “IT Act”) to deal with black money,…

Introduction On March 24, 2015, the Hon’ble Supreme Court of India (the “SC”) pronounced its judgment on constitutional validity of Sections 66A, 69A and 79 of the Information Technology Act, 2000 (the “IT Act”) and the Information Technology (Intermediary Guidelines) Rules, 2011 (the “Intermediary Rules”). The SC declared Section 66A of the IT Act to…