I-T Dept Issues Notice To Fgn Firms To Pay Rs10,000Cr Addl Tax

New Delhi: The Income Tax department has asked foreign companies to pay about Rs 10,000 crore as additional tax after collecting information from other sources and scrutinising their returns. A Finance Ministry official told that Income Tax department has raised demand for additional tax amounting to Rs 54,823 crore from corporates and individuals, including Rs 9,890 crore from foreign companies till March 31, 2007. Foreign companies have been asked to pay Rs 9,400 crore additional corporate tax and Rs 496 crore as income tax. Out of this, they have deposited Rs 113 crore. In total, around Rs 1,400 crore has been deposited with the department.

Foreign companies have to pay 40% corporate tax, 2.5% surcharge and 3% educational cess. In fact, the Central Board of Direct Taxes (CBDT) has asked chief income tax commissioners to ensure that foreign companies are taxed properly, especially after Supreme Court''s decision in the Morgan Stanley case on captive BPOs. The Supreme Court had held that income tax department cannot tax a part of the global income of a foreign company by attributing it to its India-based BPO.