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Clarification for determination of Place of Effective Management (POEM) of a company, other than an Indian company-reg - Income Tax - 8/2017Extract Circular No 08 of 2017 F. No. 142/11/2015-TPL Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes Dated 23rd February, 2017 Subject: Clarification for determination of Place of Effective Management (POEM) of a company, other than an Indian company-reg. The concept of POEM for deciding the residential status of a company, other than an Indian company, was introduced by the Finance Act, 2015 . The existing provision of clause (ii) of sub section (3) of section 6 of the Income-tax Act, 1961 (the Act) shall come into effect from 1st April, 2017 and accordingly, applies to Assessment Year 2017-18 and subsequent years. Guiding Principles for determining POEM of a company were issued by Circular No. 6 of 2017 on 24th January, 2017 . Press Release on POEM guidelines dated 24th January, 2017 has, inter alia, stated that the POEM guidelines shall not apply to a company having turnover or gross receipts of ₹ 50 crores or less in a financial year. 2. In view of above, it is clarified that existing provision of clause (ii) of sub section (3) of section 6 of the Act , shall not apply to a company having turnover or gross receipts of ₹ 50 crores or less in a financial year. (Rajesh Kumar Kedia) Director (Tax Policy Legislation)
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