Income Tax Act, 2025
Section 2: Ins. by Act 28 of 2016, s. 48 (w.e.f. 12017).
2. Ins. by Act 28 of 2016, s. 48 (w.e.f. 12017).
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enterprise has exclusive rights, or the provision of services of any kind, 1[or in carrying out any work
in pursuance of a contract,] or in investment, or providing loan or in the business of acquiring,
holding, underwriting or dealing with shares, debentures or other securities of any other body
corporate, whether such activity or business is carried on, directly or through one or more of its units
or divisions or subsidiaries, or whether such unit or division or subsidiary is located at the same place
where the enterprise is located or at a different place or places;
1[(iiia) “permanent establishment”, referred to in clause (iii), includes a fixed place of business
through which the business of the enterprise is wholly or partly carried on;]
2[(iv) “specified date” shall have the same meaning as assigned to “due date” in Explanation
2 below sub-section (1) of section 139;
(v) “transaction” includes an arrangement, understanding or action in concert,—
(A) whether or not such arrangement, understanding or action is formal or in writing; or
(B) whether or not such arrangement, understanding or action is intended to be enforceable
by legal proceeding.]
93. Avoidance of income-tax by transactions resulting in transfer of income to non-residents.—
(1) Where there is a transfer of assets by virtue or in consequence whereof, either alone or in conjunction
with associated operations, any income becomes payable to a non-resident, the following provisions shall
apply—
(a) where any person has, by means of any such transfer, either alone or in conjunction with
associated operations, acquired any rights by virtue of which he has, within the meaning of this
section, power to enjoy, whether forthwith or in the future, any income of a non-resident person
which, if it were income of the first-mentioned person, would be chargeable to income-tax, that
income shall, whether it would or would not have been chargeable to income-tax apart from the
provisions of this section, be deemed to be income of the first-mentioned person for all the purposes
of this Act;
(b) where, whether before or after any such transfer, any such first-mentioned person receives or
is entitled to receive any capital sum the payment whereof is in any way connected with the transfer
or any associated operations, then any income which, by virtue or in consequence of the transfer,
either alone or in conjunction with associated operations, has become the income of a non-resident
shall, whether it would or would not have been chargeable to income-tax apart from the provisions of
this section, be deemed to be the income of the first-mentioned person for all the purposes of this Act.
Explanation.—The provisions of this sub-section shall apply also in relation to transfers of assets and
associated operations carried out before the commencement of this Act.
(2) Where any person has been charged to income-tax on any income deemed to be his under the
provisions of this section and that income is subsequently received by him, whether as income or in any
other form, it shall not again be deemed to form part of his income for the purposes of this Act.
(3) The provisions of this section shall not apply if the first-mentioned person in sub-section (1)
shows to the satisfaction of the 3[Assessing Officer] that—
(a) neither the transfer nor any associated operation had for its purpose or for one of its purposes
the avoidance of liability to taxation; or
(b) the transfer and all associated operations were bona fide commercial transactions and were
not designed for the purpose of avoiding liability to taxation.
“permanent establishment”, referred to in clause
“specified date” shall have the same meaning as assigned to “due date” in Explanation
2 below sub-section
of section 139;
“transaction” includes an arrangement, understanding or action in concert,—
whether or not such arrangement, understanding or action is formal or in writing; or
whether or not such arrangement, understanding or action is intended to be enforceable
by legal proceeding.]
93. Avoidance of income-tax by transactions resulting in transfer of income to non-residents.—
Where there is a transfer of assets by virtue or in consequence whereof, either alone or in conjunction
with associated operations, any income becomes payable to a non-resident, the following provisions shall
apply—
where any person has, by means of any such transfer, either alone or in conjunction with
associated operations, acquired any rights by virtue of which he has, within the meaning of this
section, power to enjoy, whether forthwith or in the future, any income of a non-resident person
which, if it were income of the first-mentioned person, would be chargeable to income-tax, that
income shall, whether it would or would not have been chargeable to income-tax apart from the
provisions of this section, be deemed to be income of the first-mentioned person for all the purposes
of this Act;
where, whether before or after any such transfer, any such first-mentioned person receives or
is entitled to receive any capital sum the payment whereof is in any way connected with the transfer
or any associated operations, then any income which, by virtue or in consequence of the transfer,
either alone or in conjunction with associated operations, has become the income of a non-resident
shall, whether it would or would not have been chargeable to income-tax apart from the provisions of
this section, be deemed to be the income of the first-mentioned person for all the purposes of this Act.
Explanation.—The provisions of this sub-section shall apply also in relation to transfers of assets and
associated operations carried out before the commencement of this Act.
Where any person has been charged to income-tax on any income deemed to be his under the
provisions of this section and that income is subsequently received by him, whether as income or in any
other form, it shall not again be deemed to form part of his income for the purposes of this Act.
The provisions of this section shall not apply if the first-mentioned person in sub-section
shows to the satisfaction of the 3[Assessing Officer] that—
neither the transfer nor any associated operation had for its purpose or for one of its purposes
the avoidance of liability to taxation; or
the transfer and all associated operations were bona fide commercial transactions and were
not designed for the purpose of avoiding liability to taxation.