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  • Forex Unit 5

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    Ankita Devnath
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    This document discusses tax treatment of foreign exchange gains and losses. It covers principles of tax neutrality and equity, such as avoiding double taxation. It also discusses different types of taxes in India, including direct taxes like corporate income tax, wealth tax, and personal income tax, as well as indirect taxes like sales tax and customs duties. Finally, it covers categories of assessees (companies) as domestic or foreign, resident or non-resident, and how their residence impacts taxation of Indian versus foreign income.

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    This document discusses tax treatment of foreign exchange gains and losses. It covers principles of tax neutrality and equity, such as avoiding double taxation. It also discusses different types of taxes in India, including direct taxes like corporate income tax, wealth tax, and personal income tax, as well as indirect taxes like sales tax and customs duties. Finally, it covers categories of assessees (companies) as domestic or foreign, resident or non-resident, and how their residence impacts taxation of Indian versus foreign income.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Scarica in formato PPTX, PDF, TXT o leggi online su Scribd
    Segnala contenuti inappropriati
    11 visualizzazioni9 pagine

    Forex Unit 5

    Caricato da

    Ankita Devnath
    This document discusses tax treatment of foreign exchange gains and losses. It covers principles of tax neutrality and equity, such as avoiding double taxation. It also discusses different types of taxes in India, including direct taxes like corporate income tax, wealth tax, and personal income tax, as well as indirect taxes like sales tax and customs duties. Finally, it covers categories of assessees (companies) as domestic or foreign, resident or non-resident, and how their residence impacts taxation of Indian versus foreign income.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Scarica in formato PPTX, PDF, TXT o leggi online su Scribd
    Segnala contenuti inappropriati
    di 9

    Tax Treatment of Foreign Exchange Gains & Losses

    Multiple

    tax jurisdiction Varying definition of tax base Different tax rates

    Tax Neutrality

    Tax structure favouring optimal allocation of capital among countries


    Tax amount should be in proportion to the amount of public services a tax payer receives No one should be taxed twice for the same income

    Tax Equity

    Avoidance of double taxation

    Income

    tax With holding tax Value added tax

    Retention OR repatriation of profits by subsidiaries

    Cost allocation

    Branches OR Subsidiaries

    Direct Taxes in India

    Wealth tax This tax is applicable to all the citizens of India. Wealth tax is the cess levied on owned property. Corporate Income Tax

    Domestic corporations in India pay a minimum income tax rate of 35 percent along with a surcharge of 2.5 percent.

    Foreign corporations are required to pay tax on 40 percent of their income along with a surcharge of 2 percent. Personal Income Tax . This tax is based on the personal income of an individual

    Indirect Taxes in India

    Sales Tax Sales Tax is the tax levied by the state government on goods bought and sold in the country. Custom Duties Custom duties were introduced in India through the Customs Act in 1962. This duty was introduced with the aim of checking illegal exports and imports of goods. Taxes would be charged for all the good that were imported into the country mainly to protect the industries in Indian.

    ASSESSEE

    COMPANY IS

    Domestic / Foreign Resident / Non resident

    Indian Income
    Income that arises in India and is received/ to be received in India Income that arises outside India but is received / to be received in India Income that arises in India and is received/ to be received outside India

    Foreign Income
    Income that arises outside India but is received / to be received outside India

    resident assessee is taxed on both its Indian and foreign Income A non resident assesse is not taxed on its foreign income Rate of corporate income tax is

    33.99% for an Indian Company.(10% surcharge+3% education cess) 42.23% for foreign company .(2.5% surcharge+3% education cess)

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