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of <h1>New Rules on Fair Market Value and Reporting for Indirect Asset Transfers under Income-tax Act Section 9(1)(i)</h1> The circular prescribes draft rules under the Income-tax Act, 1961, detailing the determination of fair market value (FMV) and reporting requirements for Indian concerns involved in indirect transfers of assets located in India by foreign companies or entities. It clarifies that shares or interests deriving at least 50% of their value from Indian assets are deemed situated in India, making income from their transfer taxable in India. FMV calculation methods vary based on asset type and listing status, requiring valuation by merchant bankers or accountants using internationally accepted methodologies. Indian concerns must electronically report such transactions within stipulated timelines using prescribed forms and maintain detailed documentation for eight years. The circular emphasizes transparency and compliance in indirect transfer cases, mandating certification of income attributable to Indian assets and furnishing comprehensive information on holding structures, transactions, and valuations to tax authorities.
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