India-Business Environment

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Published: 06 Oct 2008 17:41:46 PST

Standards

Domestic framework and international association

The BIS is a founder member of the International Standard organization (ISO) and of the International Electrotechnical Commission (IEC)

For more details consult www.bis.org.in.

Legal framework

Independence of justice

Judiciary is largely independent in India. But, the courts are severely backlogged and understaffed which results in the detention of a large number of persons who are awaiting trial. India accepts compulsory ICJ jurisdiction, with reservations.

Equal treatment of nationals and foreigners

Though India is ruled by law and in the texts justice ensures non-discriminatory treatment of all cases. However in practice, fair trial to foreign nationals from the country's judicial system cannot be always guaranteed.

The language of justice

Hindi.

Having recourse to an interpreter

Interpreters in other foreign languages are easily available.

Sources of the law and legal similarities

The Constitution of India 1950

The country also has separate personal law codes for Muslims, Christians, and Hindus.

Intellectual Property

Domestic network and international agreements: Controller-General of Patents, Designs and Trademarks
Copyright Office
Protection of Plant Varieties and Farmers' Rights Authority
Department of Information Technology
National Intellectual Property Organization (NIPO)

Texts currently applying to patents/brands

Type	Text	Date entered into law	Period of validity	Remarks
Trade Mark	Law one Marks		10 renewable years indefinitely

Tax rates

Consumption taxes

Tax rate

12.5%

Reduced tax rate

The lower rates are 4% (agriculture and industrial inputs) and 1% (gold and silver ornaments).

Other consumption taxes

Service Tax (12%) applies to more than 100 services. For details visit the web site: Service Tax

Excise Duty: 8% (on drugs, pharmaceuticals, cans, paper, Water filtration and purification devices, etc), 12% (small cars, packaged software), 14% (cement) and 24%.
For further information consult the Central Board of excise and Customs.

Corporate taxes

Tax rate for resident companies: 30%
Tax rate on long-term capital gains: Long-term capital gains: 20% flat with indexation or 10% flat without indexation.
Short-term capital gains: 10%.
Gains from the sale of long-term capital assets are exempt from capital gains tax if they are reinvested in certain securities within six months and locked in for three years.
System governing groups of companies and dividends paid by subsidiaries to their parent companies
Tax rate on branches: Branches are taxed in India at the rate of 41.82%.

Individual taxes

Tax rate: Tax Rate (%)
Allowable deductions and tax credit: Deductions are allowed for contributions to life insurance, recognized provident funds, national savings certificates, the national savings scheme, income from certain mutual funds and dividends, and some educational expenses up to an overall ceiling of INR 100,000.

Double taxation treaties

Countries with whom a double taxation treaty have been signed: The Withholding Tax rates are different for different countries (country specific).

Sources of fiscal information

Tax Authorities: Income Tax Department

Accounting rules

Tax year: The fiscal year begins on 1st of April and ends on the 31st of March of the next year.
Accounting standards: 'Balance Sheet' and 'Profit & Loss' report.
Accounting reports: The "balance sheet" and profit and loss account' need to be published every fiscal year.
Accountancy profession: In order to become a certified accountant, one needs to become member of The Institute of Chartered Accountants of India (ICAI)' by passing a 3-tire examination conducted by ICAI. The qualified accountant is then named "Chartered Accountant (CA)".
Certification and auditing: The Institute of Cost and Works Accountants of India (ICWAI)