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India proposes presumptive tax regime to cut foreign investor disputes
Cumulative FDI inflows have crossed $1.07 trillion since 2000, with annual inflows rising from just $5.8 billion in 2005-06 to more than $50 billion in 2024-25
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R Suryamurthy - Fri, 03, Oct 2025
- 16:22 EDT
- 8
Representative Image / Canva
India is gearing up for one of its most consequential tax reforms in years. A new policy framework released by NITI Aayog, the government’s think tank, proposes an optional presumptive taxation scheme to end the chronic uncertainty surrounding how multinational corporations are taxed in India.
The proposal, part of the first NITI Tax Policy Working Paper unveiled on Friday, targets two of the thorniest issues in international taxation: the definition of a Permanent Establishment (PE) and the methodology for profit attribution. These two concepts, though technical, determine whether and how much of a foreign company’s global income can be taxed in India.
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