The man passes around the installation of the logo of rupees and Indian currency coins outside the Reserve Bank of India (RBI) headquarters in Mumbai. Representative Photo Credit: Reuters
The Government Tank Think Tink Niti Aayog on Friday (October 3, 2025) proposed the introduction of the expected tax system for foreign companies to ensure security and simplicity.
In the working document, Aayog stated that the optional expected tax system would help in addressing PE (permanent devices), simplification of compliance and revenue protection.
“The proposed expected tax system is a proactive and pragmatic solution to a long -term problem.
“It balances the Indian sovereign right to tax with the need to provide foreign investors with certainty and simplicity,” the working document said.
The contribution noted that despite the inherent attraction of India and the remarkable growth of direct foreign investments, structural obstacles such as unclear PE, tax uncertainty and inquest investments.
“Codify PE and the principles of domestic law, in accordance with global standards, avoiding retrospective changes.
“… by receiving the expected tax system, India can transform its tax regime from the” Mining Field “into a” well -lit path “, which significantly improved its position in global business indexes,” she said.
The assumed tax system strives to provide relief to taxpayers from tiring work to maintain regular account books under certain circumstances.
A company that has decided on this system can declare income at the prescribed rate; Instead, the maintenance of books on accounts for audit by tax authorities was relieved.
The paper stressed that this courageous reform would align tax policy with a greater economic vision.
He suggested that the expected tax system should have different profits for different sectors.
“A foreign company may decide to be sure. However, it can also unsubscribe and make a regular return if its actual profits are lower than the supposed rate,” she said.
It also recommended that the tax authorities do not have the existence of the existence of PE for this activity and provide a critical safe port.
The contribution stated that the government should train tax officials to consistently apply the rules, especially in complex digital and cross -border cases, which reduces subjectivity.
Published – 3 October 2025 20:30 is
