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CBDT directive on phasing out of deductions/ tax holidays under the Indian domestic tax law

Global Tax Update:December 2015/India

The Indian Finance Minister in the Budget 2015 had declared the intention to reduce rate of corporate tax from 30% to 25% over the next four years starting from the year 2016-17 along with corresponding phasing out of deductions/ tax holidays. This was proposed to simplify tax laws thereby bringing about transparency and clarity. (Global Tax Update:December 2015/India)

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1. CBDT directive on phasing out of deductions/ tax holidays under the Indian domestic tax law

The Indian Finance Minister in the Budget 2015 had declared the intention to reduce rate of corporate tax from 30% to 25% over the next four years starting from the year 2016-17 along with corresponding phasing out of deductions/ tax holidays. This was proposed to simplify tax laws thereby bringing about transparency and clarity.

2. Amendments to Foreign Direct Investment (FDI) Policy

To boost investment environment and to attract foreign investments, the Government announced, on 10 November 2015, FDI reforms relating to many sectors of the economy. 

3. Karnataka High Court holds that transfer of shares of a loss making Indian company by a shareholder company to its another subsidiary does not result in denial of business loss to be carried forward of the loss making subsidiary

The question before the High Court was whether the loss making Indian company was entitled to carry forward and set-off business losses (as the shares continued to be held and controlled by the same group) despite the change in its immediate shareholding.


>> Click for Japanese [国内税法に定める控除・優遇措置の段階的廃止に関するCBDT指令 ほか]

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