I-T DEPT PUTS FOREIGN BANK HQ EXPENSES UNDER SCANNER

Indian branches of foreign banks have come under the scanner of the Income-tax Department. The Central Board of Direct Taxes has instructed its field forces to carefully examine their claims of head
office expenses to ensure they were in conformity with transfer pricing provisions and relevant tax treaty. As per the provisions of the I-T Act, in case of a non-resident, head office expenditure is allowed to be deducted from total income at the rate of 5% of the adjusted total income or expenditure actually incurred by the taxpayer, whichever is less.