In a move aimed at reducing tax litigation and easing compliance for foreign businesses, NITI Aayog has proposed the introduction of an optional presumptive taxation regime for multinational corporations operating in India. The recommendation features in the think tank’s first paper under its new Tax Policy Working Paper Series, released on Friday. Advertisement

India has received nearly USD 1.07 trillion in cumulative foreign direct investment (FDI) between April 2000 and March 2025. However, persistent disputes around the definition of “permanent establishment” (PE) and profit attribution have long created uncertainty for foreign investors. According to the paper, this ambiguity has led to frequent and protracted litigation, deterring potential investment and driving up compliance cost

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