* Domestic companies are permitted to deduct dividends received from other domestic companies in certain cases.

* Inter Company transactions are honored if negotiated at arm’s length.

* Special provisions apply to venture funds and venture capital companies.

* Long-term capital gains have lower tax incidence.

* There is no concept of thin capitalization.

* Liberal deductions are allowed for exports and the setting up on new industrial undertakings under certain circumstances.

* There are liberal deductions for setting up enterprises engaged in developing, maintaining and operating new infrastructure facilities and power-generating units.

* Business losses can be carried forward for eight years, and unabsorbed depreciation can be carried indefinitely. No carry back is allowed.

* Specular tax provisions apply to activities carried on by nonresidents.

* A minimum alternative tax (MAT) on corporations has been proposed by the Finance Bill 1996.

* Dividends, interest and long-term capital gain income earned by an infrastructure fund or company from investments in shares or long-term finance in enterprises carrying on the business of developing, monitoring and operating specified infrastructure facilities or in units of mutual funds involved with the infrastructure of power sector is proposed to be tax exempt.