Residential Status of a Company – Section 6 of the Income Tax Act 1961
Residential Status of company is determined on the basis of conditions prescribed under sub-section 3 of Section 6 of the Income-Tax Act 1961.
UP-TO ASSESSMENT YEAR 2016-17
Pre amended provisions – SECTION 6
Sub-section 3 of Section 6 of the Income Tax Act, 1961 (“IT Act”) provided that a company is said to be resident in India in any previous year, if –
a) it is an Indian company; or
b) during that year, the control and management of its affairs are situated wholly in India.
FROM ASSESSMENT YEAR 2017-18 AND ONWARDS
A company is said to be resident in India in any previous year, if : –
(i) it is an Indian company; or
(ii) its Place of Effective Management (‘POEM’), in that year, is in India.
PLACE OF EFFECTIVE MANAGEMENT (“POEM”)
Place of Effective Management rule were notified by the CBDT in order to determine the residential status of company.
For detail analysis of Place of Effective Management go through