Avoidance of Double Taxation Current Affairs

India-Iran: Cabinet approves Agreement for Avoidance of Double Taxation

The Union Cabinet has approved Agreement for Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to taxes on income between India and Iran. The Agreement is on similar lines as entered into by India with other countries.

Key Facts

The agreement will stimulate flow of investment, technology and personnel from India to Iran & vice versa and prevent double taxation. It will provide for exchange of information between two contracting parties as per latest international standards. It will improve transparency in tax matters and will help curb tax evasion and tax avoidance. It also meets treaty related minimum standards under G-20 OECD Base Erosion & Profit Shifting (BEPS) Project, in which India participated on equal footing.

Background

The Central Government is authorized to enter into Agreement with other country or specified territory for avoidance of double taxation of income for exchange of information for prevention of evasion or avoidance of income-tax chargeable under Section 90 of Income Tax Act, 1961

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Cabinet approves Double Taxation Avoidance Agreement with Hong Kong

The Union Cabinet approved Agreement between India and Hong Kong, special administrative region of China for Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to taxes on income.

The agreement will stimulate flow of investment, technology and personnel from India to HKSAR & vice versa. It will also prevent double taxation and provide for exchange of information between them. It will also improve transparency in tax matters and will help curb tax evasion and tax avoidance.

Background

The Section 90 of Income Tax (IT) Act, 1961 empowers Central Government to enter into agreement with foreign country or specified territory for avoidance of double taxation of income and for exchange of information for prevention of evasion or avoidance of income-tax chargeable under IT Act, 1961. This Agreement is on similar lines as entered into by India with other countries.

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