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Residential Status Of A ' Company '- [Section 6(3)]

Section 6(3)(i) : Indian Company

Always Resident in India.

An Indian company is always resident in India. Even if an Indian company is controlled from a place located outside India (or even if shareholders of an Indian company controlling more than 51 per cent voting power are non-resident and/or located outside India), the Indian company is resident in India. An Indian company can never be non-resident.

Section 6(3)(ii) :  A Foreign Company (whose turnover/gross It will be resident in India if its place of effective receipt in the previous year is more than management (POEM), during the relevant previous Rs. 50 crore)

It will be resident in India if its place of effective management (POEM), during the relevant previous year, is in India

A foreign company (with effect from the assessment year 2017-18) is resident in India if its place of effective management (POEM), during the relevant previous year, is in India. For this purpose, the place of effective management means a place where key management and commercial decisions that are necessary for the conduct of the business of an entity as a whole are, in substance made. For this purpose, a set of guiding principles (to be followed in determination of POEM) have been issued by the Board in Circular No. 6/2017, dated January 24, 2017.

Residential Status Of A ' Company '

Section 6(3)(iii) :  A Foreign Company (whose turnover/gross Always Non-Resident in India [Note 3] receipt in the previous year is Rs. 50 crore or less)

Always Non-Resident in India

Provisions of section 6(3)(ii) shall not apply to a foreign company having turnover or gross receipts of Rs. 50 crore or less in a financial year – Circular No. 8/2017, dated February 23, 2017. In other words, a foreign company (whose annual turnover/gross receipts is Rs. 50 crore or less) cannot be resident in India from the assessment year 2017-18 onwards.

Residential Status of a Company is determined as follows a Table Format.

Section Company Residential Status
6(3)(i) Indian Company Always Resident in India
6(3)(ii)

A foreign company (whose turnover/gross receipt in the previous year is more than Rs. 50 crore)

It will be resident in India if its place of effective management (POEM), during the relevant previous year, is in India.
6(3)(ii)

A foreign company (whose turnover/gross receipt in the previous year is Rs. 50 crore or less)

Always non-resident in India

 

Related Topics ...

Residential Status of an Assessee
Residential Status Of A ' Company '- [Section 6(3)]
Residential Status of an 'Individual' (Section-6)
Residential Status of Firm, Association of Persons (AOP), Body of Individuals (BOI) and of Other Persons (except Companies) [Sections 6(2) and 6(4)]
Residential Status Of HUF (Hindu Undivided Family) - [Section 6(2)]



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