Residential Status for Corporate & Non-Corporate Assessee - Outside India

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..... foreign Company is resident in India, only if, during the previous year, Place of effective management (POEM) is in India. Conversely, a Foreign Company is treated as Non-Resident if, during the previous year, place of effective Management (POEM) is outside India. Place of Effective Management means a place where key management and commercial decisions that are necessary for the conduct of business of an entity as a whole are, in substance made. In case where Foreign Company is said to be resident due its POEM being in India u/s 6(3) in previous year, Notwithstanding anything contained in this Act, The provisions of the Act relating to computation of income, treatment of unabsorbed depreciation, set off or carry forward and set of .....

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..... total number of employees are situated in India or are residents in India; and Payroll expenses incurred on such employees are less than 50% of its total payroll expenditure. Meaning of Certain Term Income shall be (a) as computed for tax purpose in accordance with the laws of the country of incorporation; or (b) as per books of account, where the laws of the country of incorporation does not require such a computation. Passive income of a company shall be aggregate of: (i) Income from the transactions where both the purchase and sale of goods is from/ to its associated enterprises ; and (ii) income by way of royalty, divi .....

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..... If de facto decision making authority is not BOD but Indian parent or resident, POEM shall be in India. Read with Circular No. 25/2017 dated 23.10.2017 , Clarification on if the majority meetings of the board of directors (BoD) of the company are held outside India. Stage 1 : Identification of persons who actually make the key management and commercial decision for conduct of the company s business as a whole. Stage 2 : Determination of place where these decisions are, in fact, made. POEM not apply The POEM guidelines shall not apply to a company having turnover or gross receipts of ₹ 50 crores or less in a financial year. [ Circular No 08 of 2017 dated .....

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