Page 17 - DCOM308_DCOM502_INDIRECT_TAX_LAWS
P. 17
Indirect Tax Laws
Notes Rates of Withholding Tax
Current rates for withholding tax for payment to non-residents are:-
(i) Interest 20%
(ii) Dividends paid by domestic companies: Nil
(iii) Royalties 10%
(iv) Technical Services 10%
(v) Any other services Individuals: 30% of the income
Notes Capital assets are held for more than three years and In case of shares, securities
listed on a recognized stock exchange in India, units of specified mutual funds, the period
for holding is one year.
Companies: 40% of the net income
The above rates are general and are applicable in respect of countries with which India does not
have a Double Taxation Avoidance Agreement (DTAA).
Tax Incentives
Government of India provides tax incentives for:-
Corporate profit
Accelerated depreciation allowance
Deductibility of certain expenses subject to certain conditions.
These tax incentives are, subject to specified conditions, available for new investment in
Infrastructure,
Power distribution,
Certain telecom services,
Undertakings developing or operating industrial parks or special economic zones,
Production or refining of mineral oil,
Companies carrying on R&D,
Developing housing projects,
Undertakings in certain hill states,
Handling of food grains,
Food processing,
Rural hospitals etc.
12 LOVELY PROFESSIONAL UNIVERSITY