Tax Indemnification Agreement Template for India

The Tax Indemnification Agreement serves as a critical risk management tool in various business transactions under Indian law. It is commonly used in mergers and acquisitions, corporate restructurings, joint ventures, and other commercial arrangements where tax liabilities need to be allocated between parties. The agreement becomes particularly relevant when historical tax exposures exist or when future tax risks need to be addressed. The document outlines specific tax indemnities, mechanisms for claiming indemnification, and procedures for handling tax authorities' queries or assessments. Governed by Indian law, it must comply with various legislative requirements including the Income Tax Act 1961, GST laws, and the Indian Contract Act 1872. The agreement typically includes detailed provisions about covered taxes, excluded matters, claim procedures, and payment terms.

1. Parties: Identification of the indemnifier and indemnitee, including full legal names and addresses

2. Background: Context of the agreement, including the underlying transaction or relationship giving rise to the tax indemnification

3. Definitions: Definitions of key terms including 'Tax', 'Tax Authority', 'Tax Liability', 'Indemnified Taxes', 'Tax Claim'

4. Scope of Indemnification: Detailed description of the tax liabilities covered by the indemnification

5. Indemnification Obligations: Core provisions detailing the indemnifier's obligations to pay and protect the indemnitee

6. Tax Claims Procedure: Process for handling tax claims, including notification requirements and conduct of proceedings

7. Payment Terms: Timing and method of indemnification payments, including provisions for tax gross-up if applicable

8. Limitations: Time limits and financial caps on indemnification claims

9. Representations and Warranties: Standard representations regarding tax matters and authority to enter into the agreement

10. Dispute Resolution: Procedures for resolving disputes between parties regarding the indemnification obligations

11. Governing Law and Jurisdiction: Specification of Indian law as governing law and jurisdiction for disputes

12. Notices: Process and contact details for serving notices under the agreement

13. General Provisions: Standard boilerplate clauses including severability, entire agreement, and amendments