By TIOL News Service

NEW DELHI, SEPT 01, 2013: THE US Dollar never had it so good in India. It has been enjoying the constantly rising fortune and commanding an enviable premium in the forex market. In contrast, the Indian Rupee has been tossing around and quite often falling flat on its face. In this background when the RBI is mulling over pledging its gold stocks and the Government is contemplating to buy gold from public and float a gold bank, here comes the major revelation that there is no agency in the Government, which centrally maintains the data on dollars transferred abroad by foreign companies in India. Such a statement was made in the Lok Sabha by the MoS(R), Mr J D Seelam, on Friday.

However, the Minister stated that with a view to prevent shifting of profits out of India and consequent erosion of the Indian tax base, selected international transactions undertaken are analysed every year in accordance with the transfer pricing provisions contained in Chapter X of the Income Tax Act, 1961. The total quantum of transfer pricing adjustments made in the last three years are as under:

Chapter X, containing special provisions relating to avoidance of tax, was inserted in the Income Tax Act, 1961 vide the Finance Act, 2001. Section 92 (1) of the Income Tax Act, 1961 stipulate that income from an international transaction shall be computed based on the arm's length principle. Further, income of foreign companies operating in India is taxed as per the extant provisions of Income Tax Act, 1961 and the various Double Taxation Avoidance Agreements. Some of the relevant sections of the Income Tax Act in this regard are section 9, 44BB, 44BBA, 44 BBB, 44DA, 115A etc.