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How do you rate your relationship with your CFO

Very good, they understand TP requirements well enough
8%
Good but there's room for improvement
30%
Good but TP is not their main concern
52%
They do not understand the requirements of the TP department
10%


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Thin capitalisation is on the way to India

September 08, 2009

India’s proposed new direct taxes code has provisions in the fine print that propose the introduction of thin-capitalisation rules

As is the case with most jurisdictions, a typical thin-capitalisation regulation places a cap on the gearing ratio in the capital structure of a company and any debt more than that is treated as equity whereby the corresponding interest expense is not allowed as a tax deductible expense. Though the capital gearing ratio may be differently prescribed for different sets of industries, stage of project cycle, type of investment and so on, a range of 2:1 to 3:1 is often observed.

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