Foreign Direct Investment (FDI) in Limited Liability Partnership (LLP) Liberalization
Global Tax Update : April 2017 / India
Reserve Bank of India (RBI) has notified Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Second Amendment) Regulations, 2017 (FEMA Amendment Regulations). (Global Tax Update:April 2017/India)
1. Foreign Direct Investment (FDI) in Limited Liability Partnership (LLP) Liberalization
Reserve Bank of India (RBI) has notified on 3 March Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Second Amendment) Regulations, 2017 (FEMA Amendment Regulations). These regulations have substituted the earlier regulations on FDI in LLPs formed and registered under the LLP Act, 2008. The amendments takes into account the changes earlier introduced by the Government of India in FDI Policy for investment in LLP by person resident outside India.
2. Process to facilitate payment of Provident Fund (PF) and withdrawal benefit to eligible international workers on the date of leaving service from India notified1
International Workers from foreign countries in India (IWs) are eligible for withdrawal of PF and Pension benefits.
1．IWU/7/(25)/2017/Payment of PF and Withdrawal Benefits - circular dated 23 March 2017
3. Central Board of Direct Taxes (CBDT) issues guidelines for waiver of interest charged in case of failure to deduct tax at source in select circumstances
Currently, there are no provisions under the Indian domestic tax law for waiver of the interest of 1% per month2 even in cases where there is a genuine reason for not deducting taxes at source. The CBDT has issued guidelines for waiver of interest and in that regard has given powers to the Chief Commissioner of Income-tax (‘CCIT’)/Director General of Income-tax (‘DGIT’) to reduce or waive the interest charged in specified cases.
2．under section 201(1A)(i) of the Income-tax Act, 1961
The Circular specifies the following class of cases in which reduction or waiver of interest can be considered:
- In case of search and seizure
- Retrospective amendments or subsequent Supreme Court decisions
- Payments to non-residents