TaxTMI 
TaxTMI 
COMPUTATION OF INCOME ATTRIBUTABLE TO A CONTROLLED FOREIGN COMPANY
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....uted in accordance with the formula— A x B/100 x C/D Where A = specified income of the Controlled Foreign Company as computed under paragraph 4; B = percentage of— (i) value of capital, (ii) voting share or interest, whichever is higher, held by the a....
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....dividend is not debited to profit and loss account; D = the loss to the extent it has not been previously taken into account under this paragraph in respect of an earlier accounting period, where there is a net loss of the Controlled Foreign Company for such accounting period; E = number of days during which the company is a Controlled Foreign Company during its accounting period; F = number of days in the accounting period. 285 5. In this Schedule— (a) "Controlled Foreign Company" means a foreign company which satisfies the following conditions, namely:— (i) for the purposes of ....
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....bsp; (iv) such persons, individually or collectively, have, directly or indirectly, sufficient votes to exert a decisive influence in a shareholder meeting of the company. (c) a company shall be regarded as a resident of a territory for the purposes of tax— (i) if in an accounting period it is liable to tax in the territory by reason of its place of incorporation or the place of management; (ii) if in any accounting period there are two or more territories falling in sub-clause (i) above, then, the company shall in that accounting period be regarded for purpose of this Schedule as a "resident" of any one of them— &n....
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.... was a domestic company; (e) a company shall be deemed to be engaged in active trade or business if and only if — (i) it actively participates in industrial, commercial or financial undertakings through employees or other personnel in the economic life of the territory of which it is resident for tax purposes; and (ii) less than fifty per cent. of income of the company during the accounting period is of the following nature, namely:— (A) dividend; (B) interest;  ....
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....; (f) "associated enterprise" shall have the meaning as assigned to it in clause (5) of section 124. 6. (1) Unless otherwise provided, each period of twelve months ending with the 31st day of March shall be the accounting period of a company. (2) Where a company regularly adopts a period of twelve months ending on a day other than the 31st day of March for the purpose of— (i) complying with the tax law of the territory of which it is a resident for tax purposes; or (ii) reporting to its shareholders, then the period of twelve months ending with such other day shall be the accounting period of the company. &....