TMI BlogCOMPUTATION OF INCOME ATTRIBUTABLE TO A CONTROLLED FOREIGN COMPANYX X X X Extracts X X X X X X X X Extracts X X X X ..... th the formula— A x B/100 x C/D Where A = specified income of the Controlled Foreign Company as computed under paragraph 4; B = percentage of— (i) value of capital, (ii) voting share or interest, whichever is higher, held by the assessee, directly or indirectly, in the Controlled Foreign Company; C = number of days out of D, the voting shares or capital or interest has been held by the assessee in the Controlled Foreign Company; D = number of days the company remained as a Controlled Foreign Company during the accounting period; 4. The specified income of the Controlled Foreign Company shall be computed i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge recognised by law of the territory of which it is a resident for the purposes of tax; (iii) one or more persons, resident in India, individually or collectively exercise control over the company; (iv) it is not engaged in any active trade or business; (v) the specified income of the company determined in accordance with the provisions of paragraph 4 exceeds twenty-five lakh rupees; (b) one or more persons resident in India shall be said to exercise control over the company if — (i) such persons, individually or collectively possess or are entitled to acquire directly or indirectly shares carrying not less than fifty per cent. of the voting power or not less than fifty per cent. capital of the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve applies, then, in one of the territories falling within sub-clause (i) above in which, at the end of the accounting period, the greater amount of the company's assets is situated; and (iii) if in any accounting period a territory is not falling within sub-clause (i) above, then, for the purposes of this Schedule it shall be conclusively presumed that the company is in that accounting period resident in a territory with a lower rate of taxation; (d) "territory with a lower rate of taxation" means a country or a territory outside India in which the amount of tax paid under the law of that country or territory in respect of profits of a company that accrue in any accounting period, is less than one-half of the corresponding t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assigned to it in clause (5) of section 124. 6. (1) Unless otherwise provided, each period of twelve months ending with the 31st day of March shall be the accounting period of a company. (2) Where a company regularly adopts a period of twelve months ending on a day other than the 31st day of March for the purpose of— (i) complying with the tax law of the territory of which it is a resident for tax purposes; or (ii) reporting to its shareholders, then the period of twelve months ending with such other day shall be the accounting period of the company. (3) The first accounting period of the company begins from the date of its incorporation and end with the 31st day of March or such other day, as the case may ..... X X X X Extracts X X X X X X X X Extracts X X X X
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