Management of the income-tax function: Is India a tax haven?

Abstract

Many people believe that the corporate sector in India is probably the highest taxed in the world. On the other haind, some people argue that the presen: system of income taxationt in India is such that it enables a large nunmber of comtnpanies to manage their tax function such that they end up paying little or no taxes on their inconmes. The purpose of this paper is to take a close look at the way two large Indian companies have mana caged their tax functions. This is done with a view to getting some idea of how high the incidence of cor porate income taxation in India really is. The two companies are: Tata Engineering and Locomotive Compainy and Reliance Textile Industries. It is clear that the income-tax system, in India has many provisions that help growing companies to reduce their tax liability to zero.