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CMA Final · Direct Tax Laws and International Taxation · Business Restructuring

Under the Income-tax Act, 2025, which of the following is expressly listed within the meaning of 'international transaction' in the context of business restructuring between associated enterprises?

A business restructuring or reorganisation transaction with an associated enterprise is an international transaction regardless of whether it affects profit, income, losses or assets now or in the future. The provision imposes no profit-impact condition, so the option stating this is correct.

  1. AA transaction of business restructuring or reorganisation with an associated enterprise, whether or not it affects profit, income, losses or assets at the time or laterCorrect
  2. BA restructuring transaction is covered only if it reduces the profits of the Indian enterprise in the same tax year
  3. CA restructuring transaction is covered only if both associated enterprises are resident in India
  4. DA restructuring transaction is covered only if it involves transfer of tangible property

Explanation

Section 163(1)(e) includes a transaction of business restructuring or reorganisation entered into with an associated enterprise, irrespective of any bearing on profit, income, losses or assets, now or in future. The other options add conditions (profit impact, both resident, tangible property) that the text does not impose.

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