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      Question

      Under Indian tax law, a foreign company is resident in

      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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