Central Board of Direct Taxes has inserted the Income Tax (31st Amendment) Rules, 2021, which provides for insertion of New Rule 11UE under Income Tax Rules, 1961. which provides for Specified conditions under Explanation to fifth and sixth proviso to Explanation 5 to clause (i) of sub-section (1) of section 9.

Sec. 9(1)(i) states that all income accruing or arising, whether directly or indirectly, through or from any business connection in India, or through or from any property in India, or through or from any asset or source of income in India, or through the transfer of a capital asset situate in India

Through Explanation 5 of the Sec. 9(1)(i), it has been clarified that an asset or a capital asset being any share or interest in a company or entity registered or incorporated outside India shall be deemed to be and shall always be deemed to have been situated in India, if the share or interest derives, directly or indirectly, its value substantially from the assets located in India.

5th & 6th Proviso states that if any order is passed u/s 143, 144, 147, 153A, 153C, 154, 201 or 221 before 28th May 2012, then it shall be deemed that such order shall be deemed never to have been passed or made subject to fulfillment of specified conditions.

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