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CA Final · Direct Tax Laws & International Taxation · Provisions to Counteract Unethical Tax Practices

Anand Engineering Ltd, an Indian concern, was required to furnish Form No. 163 for a share transfer that took place in a tax year. Its compliance officer asks how long the supporting information and documents listed in Rule 235(3) must be kept. What is the correct period under Rule 235(7) of the Income-tax Rules, 2026?

The documents must be kept for eight years from the end of the relevant tax year. The period is reckoned from the tax year end, not the date of filing Form No. 163. Ninety days is the filing time limit, not the retention period.

  1. ASix years from the end of the relevant tax year
  2. BEight years from the end of the relevant tax yearCorrect
  3. CNinety days from the end of the financial year
  4. DEight years from the date of filing Form No. 163

Explanation

Rule 235(7) says the information and documents specified in sub-rule (3) are kept and maintained for eight years from the end of the relevant tax year. The period runs from the end of the tax year, not from the filing date, so the fourth option is wrong. Ninety days is only the filing deadline.

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