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International Taxation

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Determining the nature, treatment, and taxability of intra-group transactions across various geographies is the main goal of transfer pricing. This is accomplished by determining the transaction's arm's length price in accordance with the required transfer pricing methodologies.

Consider a scenario in which Company X purchases goods for Rs. 1000 and then sells them to its affiliated Company Y for Rs. 2000 in a different nation. Company Y then sells the items on the open market for Rs. 3000. Company X would have generated Rs 2000 in profit if it had sold it directly in the later nation. But by doing so, it limited the earnings to Rs. 1000 by passing it through company Y. Thus, the profit of Rs. 1000 is transferred to country Y. The goods are transferred at a random or controlled price (the "transfer price") rather than the market price ($3000).

The Income Tax Act of 1961 (referred to as "the Act") has established certain provisions to safeguard revenue interests. The fundamental idea made clear by such laws is that "arm's length price" should be taken into account in foreign transactions.

The control of transfer prices in India is a problem that any entity connected to an international entity faces. We, as the transfer pricing experts in Delhi, assist those organisations in establishing the proper transfer pricing in India by delivering transfer price reports to Indian businesses in a timely manner while adhering to the whole legal framework.

We are one of the transfer pricing consultant in Delhi providing following services:

Transfer Pricing Advisory and transaction structuring
Transfer Pricing Risk assessment
Benchmarking studies
Transfer pricing studies
Transfer pricing compliances
Transfer pricing planning (Safe Harbour and Advanced Pricing Agreements)
Transfer pricing litigation and representation
Transfer pricing controversy resolution and appeals

In essence, the Double Tax Avoidance Agreement (DTAA) is a bilateral contract signed by two nations. By avoiding double taxation, the main goal is to facilitate and stimulate economic trade and investment between two countries.

The burden of two or more countries taxing the same income would fall on the unwitting taxpayer. Most domestic laws, like those in India, simplify matters by providing a one-sided remedy for such double-taxed income.

Due to different laws in the two countries regarding the chargeability of income on a receipt and accrual basis or the residential status, a Double Tax Avoidance Agreement is required. A certain income may be subject to tax in two nations since there is no precise definition of income and its taxability that is accepted worldwide. When a person is compelled to pay two or more taxes for the same income, asset, or financial transaction in separate countries, this is known as double taxation.

The fundamental cause of double taxation is that the tax regulations of the several nations where an individual conducts business overlap.

The Indian government provides safeguard against double taxation on the same income under the section 90 & 91 of Income Tax Act. This relief procedure is classified into three distinct methods:

Deduction Method
Exemption Method
Credit Method

Any expat, NRI, or PIO engaging in business activities or working in India must be aware of and adhere to Indian laws governing foreign exchange policies.

An expatriate is a person who temporarily lives and works in another nation while maintaining citizenship in his or her home country.

According to the Income Tax Act, an expatriate's tax liability is determined by their residential status rather than their nationality.

The issue of taxes for expats in India is crucial, and our experts are knowledgeable in offering a range of services related to it, including withholding obligations, dual taxation, tax compliance problems, filing foreign bank reports, overcoming language barriers, and multiple tax liabilities.

We offer expatriate tax services in Delhi and work with you to provide a wide range of other services, including:

Accounting and Bookkeeping
Auditing & Assurance
Internal Audit
Tax Audit
Management Audit
Statutory Audit
Stock Audit
Income Tax
Tax Planning
Direct Taxes
Indirect Taxes

Under Income Tax Act, Section 6-”Residence in India” read with section 2(30)-”Non-resident” defines criteria to decide residential status of a person.

As per Section 6, any person is considered as resident in India if he satisfies any of the following conditions:

The concerned individual has been in India for more than 182 days during the relevant previous year; or
The concerned person has stayed in India for 365 days or more for 4 years immediately preceding the relevant previous year and has stayed in India for 60 or days during the relevant year.

Amendments by Finance Act, 2020

However, the Finance Act, 2020 has proposed to change the period of 182 days to 120 days. Therefore, concerned individuals must have stayed in India for more than 120 days during the relevant financial year to qualify as a resident.

Foreign equity in Indian companies can be up to 100% subject to the demand of the investor and subject to equity caps in respect to the area of activities under the Foreign Direct Investment (FDI) policy.

MSSAdvisors have expertise in providing NRI Taxation Services in Delhi to a different client profile. We are the best NRI Consultant in Delhi and provide a wide range of services to our NRI clients including NRI Income Tax Return Filing in DelhiWe provide Services to different Clients like:

Non resident Indians who have/ intend to have investments in India
Non resident Indians who inherit assets in India
Non resident Indians/ Non-residents who have / intend to set up a business in India
Returning NRI
Emigrating Indian/ New NRI
NRI PAN