AKM Global

📢 Important Update: Guidance on Principal Purpose Test (PPT) CBDT has issued Circular No. 01/2025, clarifying the application of the Principal Purpose Test (PPT) under India’s DTAAs. 🔍Background The PPT was introduced as part of the Multilateral Instrument (MLI), effective for India since 1st October 2019, to counter BEPS. It empowers tax authorities to deny treaty benefits if arrangements are primarily aimed at obtaining tax advantages, unless such benefits align with the treaty's objectives. 🛠️Key Highlights of the Circular 1. Prospective Application: In order to ensure consistency and uniformity in the application of PPT provision it has been clarified that the PPT provision will apply prospectively in the below cases-  - Bilateral Incorporation: Effective from the DTAA’s date of entry into force or the protocol date. - MLI Incorporation: Applies from specific dates tied to taxes withheld at source or other taxes, as outlined in Article 35 of the MLI. 2. Exclusions for Grandfathered Provisions: India’s DTAAs with Cyprus, Mauritius, and Singapore include specific grandfathering provisions established through bilateral commitments. It has been clarified that these provisions are explicitly excluded from the application of the PPT and, therefore, remain outside its purview. 3. Supplementary Guidance: It was clarified that the application of the PPT provision must be based on a fact-specific assessment, considering objective facts and findings. Taxpayers may refer to the BEPS Action Plan 6 Final Report and the UN Model Tax Convention Commentary (2021) as supplementary guidance to determine the applicability of the PPT. 💡Impact This guidance strengthens India’s commitment to curbing treaty abuse while maintaining consistency with international tax principles. Taxpayers are advised to evaluate their arrangements to ensure compliance with the PPT. Contributor: CA Chetna Choudhary, Manager, Tax and Advisory. #AKMGlobal #PrincipalPurposeTest #PPT #CBDT #TaxTreaties #BEPS #InternationalTax #MLI #TaxCompliance #DTAAs #TaxationUpdate #TreatyAbuse #TaxGovernance #IndiaTax #GlobalTax #TaxAdvisory #CrossBorderTax

AKM Global had a Spectacular win before the Dispute Resolution Panel (DRP) in the case of an Indian project office of a European multinational group. The issue under consideration was recharacterizing investment in AE as an unsecured loan by the tax department. As DRP is known for short hearings, our litigation support team did a great job by advancing effective and concise arguments in presenting a strong case. We are pleased to share a quick update on the same. Litigation Team: CA Manish Garg, CA.Jaspreet Kaur, Anurag Rathore #AKMGlobal #Tax #litigation #DRP #DisputeResolution #Teamefforts

Explore the January edition of our White-Collar Crime newsletter, where we unravel the complexities of recent judgments shaping the future of money laundering prosecution. Strengthen your legal strategies with our comprehensive analysis and stay ahead of the curve on the evolving paradigms of financial crime legislation. Key Judgments covered: Directorate of Enforcement v. Vilelie Khamo The Hon’ble Apex Court clarified that the quashed predicate offences don't automatically invalidate summons when Enforcement Directorate challenged Guwahati High Court decision.   M. Venkatesan v. Directorate of Enforcement The Madras High Court underscored that trials under prevention of money laundering act is independent from predicate offense.   Kunal Gupta v. Enforcement Directorate The Calcutta High Court granted bail to Kunal Gupta and opined that Enforcement Directorate must establish the foundational facts of money laundering after which the onus shall shift upon the petitioner to rebut the presumption under section 24.   Ayan Sil v. Enforcement Directorate Kolkata Zonal Office-II The Calcutta High Court granted bail to Ayan Sil in case pertaining to illegal appointment of candidates in TET-2014 and observed that statement of the co-accused can’t be considered as a substantive piece of evidence.   Davy Varghese v. The Deputy Director Enforcement Directorate The Kerala High Court allowed writ petition in part and opined that statute never intends to attach or confiscate all properties of a person connected with the crime. https://lnkd.in/gzJ_v9W9 Ashok Maheshwary Amit Maheshwari Anirudh Sood #pmla #moneylaundering #whitecollarcrime #enforcementdirectorate #arrest #custody #illegaldetention #grantofbail #bail #groundsofarrest #search #FIR #jail #scheduledoffences #predicateoffence #investigation #legalstrategy #criminaldefense #criminallaw

Unlocking Global Potential: RBI Eases FEMA Rules to Promote INR Internationalization 🌐   On January 16, 2025, the Reserve Bank of India (RBI) liberalized FEMA regulations, advancing the globalization of the Indian Rupee (INR). Non-residents can now open rupee accounts in overseas branches of Indian Authorized Dealer (AD) banks, enabling smoother cross-border INR transactions.   Key Highlights:  ✔️ Overseas Rupee Accounts: AD banks' overseas branches (OB) can now open INR accounts (SRVA) with Indian banks for non-residents, facilitating trade and investment.   ✔️ Expanded Use of INR Accounts:  1. Non-residents can settle both current and capital transactions with other non-residents and make Foreign Direct Investments (FDI) using Special Non-Resident Rupee Account (SNRR) & SRVA accounts. 2. Non-residents can also open SNRR accounts in India/overseas branches to facilitate transactions with Indian residents. ✔️ Flexibility for Indian Exporters: Indian exporters can open foreign currency accounts abroad to receive export proceeds and settle imports.   💡 Why This Matters: These reforms are set to increase INR’s global acceptance, simplify cross-border trade settlements, and reduce dependency on foreign currencies.   Stay tuned for more updates! Contributor: CA Chetna Choudhary, Manager, Tax and Advisory.   #RBI #FEMA #IndianRupee #INRInternationalization #Trade #Finance #GlobalMarkets #AKMGlobal #Crossborder

AKM Global Hits 30,000 LinkedIn Followers - Thanks to You!   We are thrilled to announce that AKM Global has crossed the 30,000-follower milestone on LinkedIn!  A huge THANK YOU to our amazing community for helping us achieve the remarkable milestone of adding 10K followers in just 2.5 months — your support and engagement have made this possible! While we continue to keep you updated on the latest tax developments, we’re also exited to share and celebrate our achievements with you.   #AKMGlobal #30kMilestone #ThankYou #Community #Growth #Innovation #Tax #TransferPricing #LinkedInFamily

📢 Tax Update: Income Tax Appellate Tribunal (ITAT) Recalls Its Order in the Buckey Trust Case - Rehearing Scheduled for February 2025 The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) had previously ruled in the matter of Buckey Trust, holding that the transfer of partnership interests and unlisted shares to the trust was taxable under Section 56(2)(x) of the Income-tax Act, 1961 (“the Act”).    Key Highlights of the Initial Ruling:  1. Partnership Interests Treated as Property: The tribunal interpreted "shares" under Explanation (d) to Section 56(2)(vii) of the Act to include partnership interests, thereby classifying them as "property".  2. Denial of Exemption: The trust’s claim for exemption was denied, as the trust deed permitted non-relatives to be included as beneficiaries, disqualifying the trust from the exemption available under Section 56(2)(x), which is restricted to "relatives".    However, in a significant development, the tribunal has entirely recalled its order in ITA No. 1051/BANG/2024, citing inadvertent errors. Notably, a rehearing has been scheduled for February 19, 2025, due to an inadvertent error found in the order pronounced by the Tribunal. It is highly likely that the Tribunal will undertake a fresh and detailed analysis on the next date of hearing. It is important to mention that no observations or comments can be made until the Tribunal passes an amended order.   Stay tuned for more updates post the rehearing! Contributor: CA. Vikas Sharma, Tax and Advisory Department.   #TaxUpdate #ITAT #BuckeyeTrust #IncomeTax #TaxLaw #TransferPricing #CorporateTax #TaxLitigation #TaxExemptions #LegalRehearing #Tribunal #TaxMatters #Trusts

🚨 Bombay HC Secures Major Relief for Taxpayers In a significant development, the Bombay High Court has intervened to support taxpayers, directing the Central Board of Direct Taxes (CBDT) to address issues faced in meeting the December 31, 2024 deadline for filing belated and revised returns. In response, the CBDT has extended the deadline to January 15, 2025, for resident individuals filing under Sections 139(4) and 139(5) of the Income-tax Act, 1961. This extension provides much-needed relief to resident taxpayers facing challenges in meeting the original deadline. However, a similar concession for non-resident individuals and other entities, such as companies and LLPs, would have ensured a more equitable approach. Contributor: CA Chetna Choudhary, Manager, Advisory and Tax. #TaxUpdate #RegulatoryUpdate #CBDT #IncomeTax #TaxRelief #BombayHighCourt #Taxation

Reflecting on an Incredible 2024 at AKM Global!   2024 has been another year of growth, innovation and successful collaborations for AKM Global. We expanded our global presence with new offices in the UAE and Hyderabad, experienced exponential client growth in some of our key services, and launched SHOKUBA, our co-working space in India. We earned the Great Place to Work certification and maintained our position as a leading tax and transfer pricing firm in ITR’s rankings for the 9th consecutive year. We are pleased to share a few highlights from this year.   As we move into 2025, we’re excited about the future and remain committed to delivering excellence, innovation, and impactful solutions for our clients.   Here’s to another successful year ahead!   #AKMGlobal #Growth #Innovation #TeamSuccess #GlobalExpansion #TaxAdvisory #Awards #ClientGrowth #Sustainability #Leadership #2025Goals

The Controversy Surrounding Form 67: Mandatory or Directory? Taxpayers with international income often grapple with the challenge of double taxation—paying taxes both in the foreign country and in India. To alleviate this burden, **Form 67** emerges as a critical tool for claiming the Foreign Tax Credit (FTC)** under Indian Income Tax laws. However, a heated debate persists: Is filing Form 67 a mandatory requirement or merely a procedural formality? What is Form 67? Form 67 is a document used to report income earned abroad and taxes paid there. It serves as the basis for claiming FTC, helping taxpayers offset foreign tax payments against their Indian tax liability. The Timeline of Filing Requirements: Pre-2022: Form 67 had to be submitted before the due date of filing the income tax return. Post-2022 Amendments**: The deadline was relaxed to the end of the assessment year, offering taxpayers more flexibility. The Controversy: Despite the extended timeline, many FTC claims are still being denied if Form 67 is filed *after* submitting the Income Tax Return (ITR). This has sparked a debate on whether such delays should lead to disqualification. Judicial Precedents: Directory, Not Mandatory Several landmark cases suggest that filing Form 67 late should not result in the denial of FTC:  - Duraiswamy Kumaraswamy v. Pr. CIT  - Soumitra Ganguly v. ITO - Ms. Brinda RamaKrishna v. ITO - Sonakshi Sinha v. CIT The courts have consistently ruled that late submission is a procedural lapse, not a substantive failure, and should not disqualify taxpayers from claiming FTC. Denying FTC solely on procedural grounds undermines judicial authority and creates unnecessary stress and delays for taxpayers, forcing them into prolonged appeals. The Growing Consensus Tax professionals and stakeholders largely agree that while timely filing of Form 67 is ideal, FTC claims should not be disallowed solely due to late submission**. Procedural non-compliance should not overshadow the substantive right to claim FTC. What’s Your Take? Have you faced challenges with filing Form 67 on time? How do you think this impacts global taxpayers? Let’s discuss and advocate for fair and efficient tax processes! Contributor: CA. Vikas Sharma, Tax and Advisory Department. #IncomeTax #ForeignTaxCredit #Form67 #Taxation #DoubleTaxation #TaxControversy