What is Transfer Pricing (TP)?
With the increased involvement of international corporations in India’s economic activity, new and complex concerns have arisen from transactions between connected entities within the global corporation. To address this, the Indian Income Tax Act was amended in 2001 to include transfer pricing regulations. Transfer pricing is an accounting practice that seeks to ensure that profits are allocated appropriately between different subsidiaries or divisions of a company in different countries, while taking local tax laws and regulations into account.
These regulations adhere to OECD norms and include a variety of transfer pricing mechanisms and documentation processes, as well as significant penalties for non-compliance.
Significance of TP
With the increased involvement of international corporations in India’s economic activity, new and complex concerns have arisen from transactions between connected entities within the global corporation. To address this, the Indian Income Tax Act was amended in 2001 to include transfer pricing regulations. Transfer pricing is an accounting practice that seeks to ensure that profits are allocated appropriately between different subsidiaries or divisions of a company in different countries, while taking local tax laws and regulations into account.
These regulations adhere to OECD norms and include a variety of transfer pricing mechanisms and documentation processes, as well as significant penalties for non-compliance.
Services HNHACA offers-
TDS on Outward Remittances
TDS (Tax Deducted at Source) is a tax collection mechanism in which tax is deducted by the payer at the time of making payment to the payee. If a person is making a payment to a non-resident or a foreign company, they may be required to deduct TDS as prescribed by the Income Tax Act, 1961. It is important to note that TDS on outward remittances must be deposited with the government within a specified time frame, failing which, the payer may be liable to pay interest and penalties.
Services HNHACA offers-
Concrete guidance on TDS applicability considering DTAA and other relevant laws
Hand holding w.r.t compliances:
- TDS returns and issuing TDS certificates
- 15CA, Form 15CB, Form 15CC, Form 10F etc.
Auditing TDS compliances
Taxation of Expatriate
An expatriate is a person provisionally residing and employed in a different country while being citizen of his native land. The taxation of such expat employees requires a slightly modified computation than the tax computed for a normal resident employee of an Indian organization.
Services HNHACA offers-
Application and acquiring a TRC for residents in India (form 10FA and 10FB)
Guidance and aid in navigating the complex tax laws and regulations of different countries
Assistance in preparing and submitting the essential documents for obtaining a TRC
TDS on properties of NRIs
When a resident buys property from an NRI, she/he must deduct TDS at 20% if the property has been held for more than two years and at 30% if the property is being sold within two years