TaxTMI 
TaxTMI 
Question - What are the proposed amendment in section 6 of income tax act, 1961 in Finance Bill 2015 ?
Amendment to the conditions for determining residency status in respect of Companies
28 Feb 2015 
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Place of effective management test to determine company residence; companies with POEM in India treated as resident.
Amendment provides that a company shall be resident in India if it is an Indian company or if its Place of Effective Management (POEM) is in India at any time in the previous year. POEM is defined as the place where key management and commercial decisions necessary for the conduct of the entity's business as a whole are, in substance, made. The change replaces the prior requirement that control and management be wholly situated in India for the entire year and aims to align domestic rules with DTAA and OECD principles; guiding principles for POEM determination will be issued. (AI Summary)
Amendment provides that a company shall be resident in India if it is an Indian company or if its Place of Effective Management (POEM) is in India at any time in the previous year. POEM is defined as the place where key management and commercial decisions necessary for the conduct of the entity's business as a whole are, in substance, made. The change replaces the prior requirement that control and management be wholly situated in India for the entire year and aims to align domestic rules with DTAA and OECD principles; guiding principles for POEM determination will be issued. (AI Summary)