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

Meridian Components Pvt Ltd, an Indian concern, is required to furnish information in Form No. 163 under the Income-tax Rules, 2026 because shares of its foreign parent were transferred on 20 August 2026 (within the financial year ended 31 March 2027), and the transfer did not transfer rights of management or control in the Indian concern. By when must the form ordinarily be furnished?

The form must be furnished within ninety days from the end of the financial year in which the transfer occurred. The ninety-days-from-the-transaction rule applies only where management or control of the Indian concern is transferred, which did not happen here.

  1. AWithin ninety days from the end of the financial year in which the transfer took placeCorrect
  2. BWithin thirty days of the transfer
  3. CWithin ninety days of the transfer, in every case
  4. DAlong with the return of income for that year

Explanation

Rule 235(2) requires Form No. 163 within ninety days from the end of the financial year in which the transfer took place. The shorter rule of ninety days from the transaction applies only where the transfer has the effect of directly or indirectly transferring rights of management or control. Since no control passed here, the option counting from the transaction date is wrong.

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