TMI BlogCentral Government notifies in a case where a foreign company is said to be resident in India on account of its Place of Effective ManagemenX X X X Extracts X X X X X X X X Extracts X X X X ..... reinafter referred to as PoEM) being in India under sub-section (3) of section 6 of the Act in any previous year and such foreign company has not been resident in India in any of the previous years preceding the said previous year, then, notwithstanding anything contained in the Act, the provisions of the Act relating to the computation of total income, treatment of unabsorbed depreciation, set off or carry forward and set off of losses, collection and recovery and special provisions relating to avoidance of tax shall apply to the foreign company for the said previous year with exceptions, modifications and adaptations specified here under: (i) If the foreign company is assessed to tax in the foreign jurisdiction, and, (a) where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the 1st day of the said previous year. (v) The brought forward loss and unabsorbed depreciation of the foreign company as arrived at paras (iii) or (iv), as the case may be, shall be deemed as loss and unabsorbed depreciation brought forward as on the 1st day of the said previous year and shall be allowed to be set off and carried forward in accordance with the provisions of the Act for the remaining period calculated from the year in which they occurred for the first time taking that year as the first year. Provided that the losses and unabsorbed depreciation of the foreign company shall be allowed to be set off only against such income of the foreign company which have become chargeable to tax in India on account of it becoming ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding on 31st March during which it has become resident, is,- (a) less than six months, it shall be included in that accounting year; (b) equal to or more than six months, that period shall be treated as a separate accounting year. Thus, if the accounting year followed by the foreign company is calendar year, the accounting year immediately preceding the accounting year in which the foreign company is held to be resident in India, shall be increased by three months, i.e., 1st January to 31st March; and if the accounting year followed by the foreign company is from 1st July to 30th June, the accounting year immediately preceding the accounting year in which the foreign company is held to be resident in India, shall be of nine months ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion would mean the place of incorporation of the foreign company. (ii) the rate of exchange for conversion into rupees of value expressed in foreign currency, wherever applicable, shall be in accordance with provision of rule 115 of the Income-tax Rules, 1962 . B. the exceptions, modifications and adaptations referred to in para A shall not apply in respect of such income of the foreign company becoming Indian resident on account of its PoEM being in India which would have been chargeable to tax in India, even if the foreign company had not become Indian resident. C. in a case where the foreign company is said to be resident in India during a previous year, immediately succeeding a previous year during which it is said to be r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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