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Taxation of a indian subsidiary 100% owned by uk holding co.

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Querist : Anonymous

Querist : Anonymous (Querist)

01 October 2015 UK based Holding co., into Managerment advisory and consulatancy has formed an Indian Subsidiary with 100% holding (Private Limited Co., with 1 lakch capital). The Indian Co. is involved only in Marketing and all the income is directly credited to Holding co. by customers and only salary of Marketing Personnel and Rent and other misc exp are paid here. What is the tax treatment of the subsidiary as per Indian IT and can it file a Loss return. What is other option.

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Guest (Expert)

04 October 2015 For the marketing activities the subsidiary is rendering, the subsidiary should be showing marketing fees based on Arms' length principle. From that fees, it can claim the salary to marketing personnel and rent / other administrative expense as deduction. If there is surplus left, it shall be taxed. If there is loss, then the loss can be filed provided the return is filed before due date

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