Under Indian tax law, a foreign company is resident in

Q: Answer-Under Indian tax law, a foreign company is resident in India if:

POEM the place where key management and commercial decisions are made. If these are taken in India the foreign company is treated as a resident in India. This prevents tax avoidance by routing operations through foreign entities while being controlled from India.

India if:

A Its majority shareholders are Indian Correct Answer Incorrect Answer

B Income is sourced from India Correct Answer Incorrect Answer

C Place of Effective Management (POEM) is in India Correct Answer Incorrect Answer

D It has a liaison office in India Correct Answer Incorrect Answer

Solution

• POEM = the place where key management and commercial decisions are made. • If these are taken in India → the foreign company is treated as a resident in India. This prevents tax avoidance by routing operations through foreign entities while being controlled from India.

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