Direct Taxes Code 2010 - Analysis
TAX
Table of Contents
? Income Business ? Alternate Tax Minimum ? Distribution Tax Dividend ?Profit Tax Branch ? International Taxation ? Residence Rules ? Treaty Override ? Controlled Foreign Company ? Anti-Avoidance Rules General ? Tax Incentives & Special Economic Zones ?Gains Capital ? Pricing & Advanced Pricing Agreement Transfer ? Taxation Personal ? Capital Funds, Mutual Funds & Insurance Venture
02 04 05 06 07 10 11 12 14 16 18 21 24 29-31
Companies
?Tax Wealth ? Glossary
32 33
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02
Business Income
Computation of income
Under the Act The income under the head “Business and Profession” is computed as “business profits with specified adjustments” which , can be described as “Income expense model” . DTC 2009 Income from each business is to be computed separately and each unit deemed to be distinct and separate from another unit, unless there is interlacing, inter-dependence or unit embarrassing the two business/units. The Income expense model proposed by DTC 2009 is as under:
Gross earnings Less: Specified Business Expenditure Operating Expenditure Permitted Finance Charges Capital Allowances Taxable Income from business Xxxxx
Xxxxxx Xxxxx
Xxxxx
DTC 2010
? in rates of presumptive taxation for businesses relating Increase
OUR COMMENTS
Since each unit is deemed as a separate business, all the ? provisions of computation of profits will apply separately to each such unit
? The proposed section will cast a more burdensome duty on the
to oil exploration, shipping operation, air transport, etc. The actual profits would be taxable if higher than presumptive profits
? in depreciation rates Changes
tax payer to comply with the extra documentation requirement
?