Foreign Company Case Study

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Introduction
As Per section 6(3) of the Income Tax Act, any company which is incorporated in India is always considered as resident company or during the year control and management of its affairs situated wholly in India.
Indian company:
An Indian company always resident in India.
Foreign Company:
When a foreign company is “resident”:
• Control and management of affairs of a company wholly In India.
When a foreign company is “non-resident”:
• Control and management of affairs of a company wholly outside India and partly in India and partly outside India.
An Indian company is always resident in India. A foreign company is resident in India only if the control and management of its affairs are wholly in India. The term …show more content…

2(23A)]
It means a company which is not a domestic company, i.e. a company registered outside India in any other foreign country.
The Foreign Company may be treated as Domestic Company if such company makes prescribed arrangement in India as per Rule 27.
Sec.6 (3), Residential Status of foreign Company
Foreign Company is treated as Resident in India if it’s Control and Management is located wholly in India. Foreign Company is treated as Non-Resident in India if its Control and Management located wholly / partially Outside India. Sections applicable to Foreign Company are 44BBB, 44D, 115A, 195 etc.
Domestic Company
A Domestic Company means an Indian Company or any other company with respect to its income, liable to tax under the Income-Tax Act, has made the prescribed arrangements for the declaration and payment within India, of the dividends (including dividends on preference shares) payable out of such income. Thus, all Indian Company are treated as Domestic Company but all Domestic Company are not Indian Company. If a Foreign Company makes prescribed arrangements for payment of dividends in India it shall be treated as Domestic Company.
Residential Status of A

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