News By/Courtesy: Anakha Angeline Anilesh | 29 Jan 2019 10:59am IST

The Indian Government is interested in making  the Indian companies more competitive in the global arena, attracting the investments from outside the country an promoting start ups which introduce the made in India objective.  There is a need to maintain a right balance between benefits that are provided to the companies for making the efficient collection the taxes from the companies.

It is believed that the 2019 budget will not bring much change to the budget since it will be only an interim budget, the finance minister gave an indication recently that it may not be vote-on-account which indicates that the Government will not deviate from election years convention of budgets and will stick to preparing the budget based on the requirement of the country. It is expected that it might introduce the concept of carry forward of foreign tax credit and the carry back of losses. This provides businesses to carry back tax losses of the current year and offset it against the profit of the earlier year.

This could help in the increased cash flow to the market and also a competitive advantage to the Indian companies in the global market. It is also expected that the budget of 2019 will provide carry forward of foreign tax credit that is paid on incomes earned overseas. Currently, the Income Tax Act allows to set of foreign tax credit in respect of foreign taxes paid on overseas income only in case where taxes are payable in a year. However, in case of loss or any inadequate profits, no set off may be possible and foreign tax credit in such a scenario shall lapse.

Section Editor: Shreyashi Tiwari | 29 Jan 2019 11:03am IST

Tags : #Foreign #Tax #Credit #Carryyforward #Introduced #Indian #Firms #Global #Market

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