Page 41 - Union Budget_2019

Union Budget 2019

Option for one-time additional tax

Where repatriation is not made within the prescribed time, the assessee will have the option to pay

additional income-tax at the rate of 18% on such excess money or part thereof with the following: -

• Interest shall still be calculated till the date of payment of such additional tax

• Additional surcharge at the rate of 12% on such additional tax
• The tax paid shall be the final payment of tax and no credit shall be allowed

• The underlying expenditure on which such additional tax paid shall not be allowed as deduction
under any other provisions

• If the additional tax is paid, secondary adjustment and consequent interest calculation need not be
made from the date of payment of such additional tax

The above amendments shall be effective from 1st September, 2019.
With the above proposal, there shall be a lot more clarity in applying the provisions of secondary

adjustment. Further, payment of one-time additional tax is a welcome move to substitute repatriation
of funds. The effective cost of transfer pricing adjustment is almost 50% to 55% inclusive of interest

which seems prohibitive.

9.4 Rationalisations of provisions relating to maintenance, keeping and furnishing of information
and documents by certain persons

Section 92D, inter alia, provides for maintenance of relevant information and document by persons entering
into an international transaction or specified domestic transaction to justify the transactions to be at arms'

length.

As per proviso to Section 92D read with Rule 10DA, constituent entity of an international group shall

maintain information and documents subject to thresholds of consolidated group revenue and international
transaction

It is proposed to substitute Section 92D, in order to provide that the constituent entity of an international

group shall be required to keep and maintain information and document and file required forms, even when
assessment year 2020-21 and subsequent assessment years.
there is no international transaction undertaken by such constituent entity. Further, such information
maintained by such constituent entity shall be provided to prescribed authority

This amendment will take effect from the 1st April, 2020 and will, accordingly, apply in relation to the

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