- Central Board of Direct Taxes on Friday has issued tax refunds worth Rs. 26,242 crore to 16,84,298 tax assesses between April and May.
- The IT department has also notified the ‘safe harbour’ rates for 2019-20 fiscal for calculation of transfer pricing by foreign companies in India.
Central Board of Direct Taxes (CBDT) on Friday has issued tax refunds worth Rs. 26,242 crore to 16,84,298 tax assesses between April and May. The refunds were made from April 1 to May 21 this year. CBDT also issued corporate tax refund to 1.02 lakh assesses amounting to Rs 11,610 cr given during this period.
Giving the break-up of the refund, the CBDT said that income tax refund amounting to Rs 14,632 crore was given to 15,81,906 individual assesses and Rs 11,610 crore of corporate tax refund to 1,02,392 assesses. The CBDT released a sum of Rs 2050.61 crore in the week ending May 16 (from May 9) to 37,531 income tax assesses and a sum of Rs 867.62 crore to 2,878 corporate tax assesses.
The income tax department has also notified the ‘safe harbour’ rates for 2019-20 fiscal for calculation of transfer pricing by foreign companies in India. The Central Board of Direct Taxes (CBDT) has notified changes to Rules 10TD and 10TE of Income Tax Rules relating to Safe Harbour Rules. It said rates applicable from Assessment Year (AY) 2017-18 to 2019-20 will continue to apply for AY 2020-21.
Transfer pricing implies the prices at which various overseas divisions of a company transact with each other. Generally, safe harbour is defined as circumstances in which the tax authority shall accept the transfer price declared by the taxpayer to be at arm’s length.
Following the best practices of international tax jurisdiction, the Indian government introduced the concept of Safe Harbour Rules (SHR) in Finance Act 2009. The first round of SHR provisions were introduced in August 2013 for a period of three years, followed by revision in 2017 in the SHR which was applicable till financial year 2019-20.
Different rates were prescribed for different category of international transactions. Of these, the category of software development, ITeS and KPO were popularly opted for.
Tax experts said in the past, these were applicable for more than one year but this time the government decided to announce only for one year considering fiscal 2020-21 would be impacted by COVID-19 disruptions.