India: Indian Budget 2017 Announced

India announced its fiscal year 2017-2018 budget on February 1. A summary of the new budget's key points follows. For additional details, read the related Radius blog post.

• Companies with a turnover of up to INR 500 million (roughly USD 7.4 million) will be taxed at the rate of 25 percent. 
• The government prosposed to carry forward the Minimum Alternate Tax (MAT) credit to 15 years from the existing 10 years.

• To facilitate ease of doing business and promote startups in India, the condition of holding 51 percent shareholding has been done away with for eligible startups.

• The concept of a secondary adjustment on transfer pricing adjustments has been introduced, so a taxpayer would be required to make a secondary adjustment when the primary adjustment to the transfer price is made in certain situations.

• Interest deduction is proposed to be restricted to 30 percent of EBITDA in case of payment of interest to related parties or to unrelated parties if the amount is guaranteed by an associated enterprise or related party.