Govt. Plans Lower Tax For Foreign Companies

India is considered to be an attractive destination for investment over the world in the recent times. For maintaining this pace and attracting more investments the Government of India is expected to come forward with new policy initiatives.
Planning for a lower tax rate for the foreign companies in the coming budget 2007-08 is a step to invite more investors to the country.

Development of Infrastructure is considered to be the main area of concentration for the Government in the coming budget 2007-08.For making this fruitful it is essential to give birth an investment friendly climate in the country.

According to Section 115A of the Income Tax Act, foreign companies with incomes in the forms of dividends and interest rates are exempted from Income tax returns, only if tax is deducted from sources. If the foreign firm earns in the form of royalty then the firm has to file an income tax return.