As the Indian financial Year 2024-25 has come to an end, it is time for the Indian taxpayers to concentrate on the year end compliances and filings.
VSTN has compiled a document outlining the various timelines for Indian Transfer Pricing Compliances for the benefit of readers.
The FTA on 07 April 2025 issued a guide detailing on limitation of interest deduction in the Taxable income in the Corporate Tax return. The Guide covers various aspects on limitation of interest deductions including:
This alert summarises each of the above areas and captures key aspects that the businesses will have to bear in mind while considering interest deduction.
VSTN recently published a transfer pricing article in ITR Worldtax, leading Tax forum, on the mining sector titled “Mining sector – Impact of Interest deductions in developing countries”, coauthored by Nithya Srinivasan and Saranya Nagarajan.
The article dwells on thin capitalization regulations – BEPS – Action plan 4, in light of the mining sector, specifically the regulations in the developing countries and its impact on MNE Group.
The article concludes with the key takeaways for MNE Group to bear in mind while they set-out to expand their operations in the mining sector – especially in the developing countries.
As the financial year came to a close yesterday, the Central Board of Direct Taxes (CBDT) has issued a press release with the statistics of APA conclusions during the FY 24-25. It has been a record year for the APA and some of the key highlights are as below.
The BAPAs were majorly signed with India’s treaty partners Australia, Japan, South Korea, Netherlands, New Zealand, Singapore, UK and US. This has brought the total number of APAs signed since inception to 815 (615 UAPAs, 199 BAPAs and 1 MAPA). A copy of the press release is appended here.
The consistent increase in conclusion of APAs in India (From 95 in FY 22-23, 125 in FY 23-24 to 174 in FY 24-25) is encouraging for taxpayers and demonstrates the CBDT’s commitment in reducing the inventory of pending APA applications and providing tax certainty. Further the signing of the first MAPA is significant and should hopefully open doors for filing of many more MAPA applications.
While the threshold for Safe Harbour has been increased recently to INR 300 crores, there has been no significant inclusion/change in transactions covered, and hence APA would continue to be a viable option for taxpayers for dispute prevention and resolution, for varied complex nature of transactions.
The US IRS has also recently issued its annual APMA report which specified that the highest number of BAPAs executed during 2024 was with India (29%), which shows that India was a significant party in the US APA programme with successful interactions between the Competent Authorities.