- Income Tax
- Transfer Pricing
- Tax Controversey
The direct tax which is paid by individual to the Central Government of India is known as Income Tax. It is imposed on our income and plays a vital role in the economic growth & stability of our country. Government generates revenue through this tax system.
The word 'Tax' originated from the 'Taxation.' which mean 'Estimate.' Hence, 'Income Tax' mean 'Income Estimate,' which helps the government to know the actual economic strength of a person. It is also a way to set up an economic standard for general people. It helps the Government to know the distribution of money among country's people.
Income Tax has been in force in different forms since years. If we go through the history of India, we get relevant information regarding the taxation system of India. In ancient history, it is mentioned about such systems which were imposed on the income, expenditure and other subject. Even information of the same is given in Manu Smriti and Arthasatra which confirms its existence at that time.
In modern India, Income Tax came into existence in 1860 with the implementation of first Income Tax Act. After implementation of this Act, people became aware of the actual meaning of Income Tax. This act was in force for first five years. After this, in 1865, second Act came into force. There were major changes in this Act relative to the first. It proved itself as a good factor for the growth of our economy. With this Act a new concept of Agriculture Income came into existence.
Integration of financial markets and opening up of economies to allow free movement of goods and services has led to enormous growth in intra-group transactions.
Besides drawing the attention of revenue authorities worldwide, Transfer Pricing is one of the most challenging tax issues and a key influence on a company’s worldwide tax burden. It impacts every aspect of the supply chain – R&D, procurement, manufacturing, marketing, distribution and customer support.
A multinational company’s ability to keep on low effective tax rates, domestically or across multiple jurisdictions, can impact its market valuation, and the way in which the issue is handled in a transaction can be critical in determining the success of a business venture.
As more and more economies take on board the concept of Transfer Pricing regulations, new rules, documentation standards and penalties are being enacted to enforce and administer the regulations. This impacts the tax planning, compliance and reporting obligations of multinationals.