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

Zenith India Pvt Ltd is an Indian concern. A foreign parent's share transfer has the effect of indirectly transferring the rights of management or control in Zenith. A transfer of the foreign entity's shares occurred on 10 August 2026 (financial year 2026-27 in the Income-tax Rules, 2026). As per Rule 235, within what period must Zenith furnish Form No. 163?

Zenith must furnish Form No. 163 within ninety days of the transaction itself, because the transfer has the effect of transferring management or control of the Indian concern. The general ninety days from financial year-end applies only to other transfers. Eight years is only the document retention period.

  1. AWithin 90 days of that transaction, i.e. 90 days from 10 August 2026Correct
  2. BWithin 90 days from the end of the financial year only
  3. CWithin 30 days of the transaction
  4. DWithin 8 years from the end of the tax year

Explanation

Rule 235(2) generally requires Form 163 within ninety days from the end of the financial year of the transfer. Where the transaction has the effect of directly or indirectly transferring rights of management or control in the Indian concern, it must be furnished within ninety days of that transaction. Eight years is the retention period for documents, not the filing deadline.

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