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A Tax Indemnity Agreement is a crucial document used in Indian corporate and commercial transactions where one party agrees to protect another against specific tax liabilities. This agreement becomes particularly relevant in mergers, acquisitions, corporate restructurings, or when separating business units, where historical tax exposures need to be allocated between parties. The document details the scope of tax matters covered, procedures for handling tax claims, payment mechanisms, and dispute resolution processes, all within the framework of Indian tax and corporate laws. It requires careful consideration of various Indian tax regulations, including direct and indirect taxes, and must comply with the Indian Contract Act, 1872, for enforceability. The agreement typically includes specific provisions for dealing with Indian tax authorities and addresses unique aspects of Indian tax litigation and assessment procedures.

1. Parties: Identification of the Indemnitor and Indemnitee with full legal names and addresses

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

3. Definitions: Definitions of key terms including 'Tax', 'Tax Authority', 'Tax Liability', 'Losses', 'Claims', etc.

4. Scope of Indemnity: Detailed description of the tax matters covered by the indemnity and any exclusions

5. Indemnification Obligations: Specific obligations of the Indemnitor to indemnify, defend, and hold harmless the Indemnitee

6. Notice of Claims: Procedures for notifying the Indemnitor of any tax claims or assessments

7. Claims Process: Process for handling tax claims, including cooperation between parties and control of proceedings

8. Payment Terms: Timing and method of indemnity payments, including provisions for direct payments to tax authorities

9. Duration and Survival: Term of the agreement and survival period for indemnification obligations

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

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

12. Miscellaneous: Standard boilerplate provisions including notices, amendments, assignment, and severability