Doing Business in India - RSM Austria

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Section Details of Exemption / Deduction Period Quantum of Deduction 33AB Tea / Rubber/ Coffee development allowance Deduction is available to assessee engaged in the business of growing and manufacturing tea, coffee or rubber in India. Deduction equal to an amount deposited in a special account with the National Bank for Agriculture and Rural Development ('NABARD') or any Deposit Account opened by the assessee and approved by the Tea Board or Coffee Board or Rubber Board from the profits is allowed. The amount has to be deposited within specified period from the end of the financial year or before furnishing the return of income, whichever is earlier. The amount has to be utilised by the assessee for specified purposes. NA Upto 40% of profits or amount deposited in special account, whichever is less Section 32 35/35 (2AB) Eligibility Criteria, Quantum and Period of Deduction Additional Depreciation General rate of depreciation for plant and machinery is 15% from FY 2005- 2006. Additional depreciation of 20% is allowed for new plant and machinery acquired and installed after 31 March 2005. Additional Depreciation is available only in the year in which such machinery is first put to use. Commercial vehicles acquired on or after 1 January 2009 but before 1 October 2009 and put to use before 1 October 2009 will be eligible for depreciation @ 50%. Expenditure on Scientific Research Where any capital expenditure (other than expenditure on land and building) is incurred on scientific research related to the business carried on by the assessee, 100% of such expenditure can be claimed as deduction. Where any expenditure (other than expenditure on cost of land and building), on in-house research and development facility, as approved by the prescribed authority, incurred by the assessee, engaged in the business of manufacture or production of article or thing except those specified in the Eleventh Schedule the deduction shall be one and one-half times (150%) of the expenditure incurred up to 31 March 2012. The Act increased the deduction from 150% to 200%. Where amount is paid to a scientific research association, which has its object of undertaking scientific research or to a university, college or other institution to be used for scientific research, the deduction shall be one and one-fourth times (125%) of the amount paid provided that such association, university, college or institution is approved by the Central Government. Similar deduction is available for amount paid to approved university, college or other institution to be used for research in social science or statistical 102 DOING BUSINESS IN INDIA
Section 35AD Eligibility Criteria, Quantum and Period of Deduction research. Vide Notifications, certain institutions have been approved in the category of 'other institution' subject to fulfillment of certain conditions. Section 35(1)(iii) has been amended to include an approved research association which has as its object of undertaking research in social science or statistical research. Where the amount paid by a person to a company to be used for scientific research, provided that the company complies with the specified conditions, the weighted deduction shall be one and one-forth times (125%). The Act increased the deduction from 125% to 175%. A company approved under the provisions of the said section will not be entitled to claim weighted deduction of 125% under section 35(2AB). However, deduction to the extent of 100% of the sum spent as revenue expenditure on scientific research, which is available under section 35(1)(ii) will continue to be allowed. The Act has replaced the word 'research association' for the word 'scientific research association' in section 35(1). Expenditure on specified businesses Any expenditure of capital nature incurred, wholly and exclusively, during the year for specified business. Specified business has been defined to mean the business of setting up and operating of cold chain facilities for storage or transportation of agricultural produce, dairy products and other related items. It would also include the business of warehousing for storing agricultural produce and the business of laying and operating a cross-country natural gas or crude or petroleum oil pipeline network for distribution, including storage facilities being an integral part of such network subject to fulfillment of specified conditions. The Act has extended the benefit of specified business to cover the following businesses: 1. To include the business of building and operating a new hotel of two star or above category anywhere in India which starts functioning after 1 April 2010. 2. Business in the nature of building and operating, anywhere in India, a new hospital with atleast 100 beds of patients. 3. Business in the nature of developing and building a housing project under a scheme for slum redevelopment or rehabilitation framed by the Central Government or a State Government, as the case may be, and which is notified by the Board in this behalf in accordance with the guidelines as may be prescribed. 100% deduction is allowed in respect of any capital expenditure incurred (other than expenditure incurred on the acquisition of any land or goodwill or financial instrument), during the year by the specified business subject to the specified provisions contained in this section. The assessee shall not be allowed any deduction in respect of the specified business under the provisions of chapter VI A for the same or any other assessment year. No deduction in respect of the expenditure in respect of which deduction has been claimed shall be allowed to the assessee under any other provisions of the IT Act. The benefits shall be available In a case where the business relates to laying and operating a cross country natural gas pipeline network for distribution, if such business commences its operations on or after 1 April 2007 and DOING BUSINESS IN INDIA 103
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International global excellence in
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Doing business in India
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Marine Drive, Mumbai
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Contents Hawa Mahal, Jaipur
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Education .........................
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SIGNIFICANT COMPANY LAW REGULATIONS
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ANNEXURE 1 Sectors Prohibited for F
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Chapter 1 India - A Profile Golden
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2.2 Language India is a land of man
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5.2 Communication The Indian teleph
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7.5 Public Holidays The statutory p
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CHAPTER 2 INDIAN BUSINESS AND INVES
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This resulted in a fall in the Bomb
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4.3.3 Designs After expiry of three
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non-banking finance activities viz.
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trading in derivative based on BSE
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same as those where concessional fi
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10.3 Low Research and Development C
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CHAPTER 3 BUSINESS ENTITIES 1.0 FOR
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Sr. No. Criteria Requirements 1 Tra
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The project is funded by inward rem
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cause the disassociation of the par
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2.1.2 MOA 2.1.3 AOA Companies for r
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paid up equity capital can be less
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The requirements for public and pri
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3.0. STATUTORY REQUIREMENTS FOR COM
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3.4 Online Filing System Ministry o
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Section Nature of default 168 Defau
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4.0 SIGNIFICANT COMPANY LAW REGULAT
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4.7 Audit Committees For better cor
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The meetings of the board are requi
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Chapter 4 Human Resources Kathakali
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Employee benefit What is it? Applic
Page 68 and 69: Employee benefit D e p o s i t L i
Page 70 and 71: 2.5 The Equal Remuneration Act, 197
Page 72 and 73: The Factories Act safeguards agains
Page 74 and 75: CHAPTER 5 FOREIGN INVESTMENT IN IND
Page 76 and 77: 2.3 Prohibition on investments 2.3.
Page 78 and 79: ii. Subject to compliance with the
Page 80 and 81: ii. iii. iv. The NRI investor has t
Page 82 and 83: ii. On repatriation basis An NRI ca
Page 84 and 85: Indian company can issue ESOPs to e
Page 86 and 87: ii. iii. iv. The foreign equity aft
Page 88 and 89: vi. Branch Offices have to submit A
Page 90 and 91: ii. ECB up to US$ 20 million or equ
Page 92 and 93: 3.2 Approval Route 3.2.1 Eligible B
Page 94 and 95: 3.2.6 End Use not permitted i. Util
Page 96 and 97: issued by Reserve Bank from time to
Page 98 and 99: Sr. No. Sector/Activity FDI Cap / E
Page 100 and 101: Sr. No. II C POWER Sector/Activity
Page 106 and 107: Sr. No. 29. Sector/Activity Telecom
Page 108 and 109: Chapter 6 Taxation System India Gat
Page 110 and 111: Entity Domestic Company Financial y
Page 112 and 113: **** Mutual funds, other than equit
Page 114 and 115: interest deductible is restricted t
Page 116 and 117: 2.4 Tax Relief In order to encourag
Page 120 and 121: Section 35 DDA 54G 54GA 54EC 10(34)
Page 122 and 123: Sr. No. Nature of activity and loca
Page 128 and 129: Sr. No. xviii Nature of activity an
Page 130 and 131: No deduction under 80IA, 80IB, 80IA
Page 132 and 133: Tax is payable in advance on income
Page 134 and 135: 3.1.2 Other Non-corporate Entities
Page 136 and 137: the Finance Act 2010, 'bullion' is
Page 138 and 139: Rs. 40,00,000. The scheme is applic
Page 140 and 141: 4.5 Income of Offshore Funds Income
Page 142 and 143: 7.3 Advance Rulings The Indian gove
Page 144 and 145: 9.0 INDIRECT TAXES 9.1 Goods and Se
Page 146 and 147: on goods manufactured and vice vers
Page 148 and 149: Annexure I Double Taxation Avoidanc
Page 150 and 151: Sr. No. Country Dividend [Note 1] T
Page 156 and 157: ANNEXURE II: TAX DEDUCTION AT SOURC
Page 158 and 159: NOTES 142 DOING BUSINESS IN INDIA
Page 164: RSM International Executive Office,
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