Section 285A supports the indirect-transfer rule. It applies where a share of, or interest in, a company or entity registered or incorporated outside India derives its value substantially from assets located in India, as referred to in Explanation 5 to s. 9(1)(i), and that company or entity holds those assets, directly or indirectly, through or in an Indian concern.
In such a case the Indian concern must furnish, within the prescribed period, to the prescribed income-tax authority, the prescribed information or documents, for the purpose of determining any income accruing or arising in India under section 9(1)(i).
Operative consequences
The reporting duty falls on the Indian concern, not on the offshore seller or buyer.
Under s. 271GA, failure to furnish attracts a penalty of two per cent of the value of the transaction where the transaction had the effect of transferring, directly or indirectly, the right of management or control in relation to the Indian concern.
In any other case the penalty under section 271GA is five hundred thousand rupees.
Status
Section 285A is operative for assessment year 2026-27. It is not time-limited. The Finance Act, 2026 did not amend this section.
The 1961 Act governs assessment year 2026-27 and earlier; the Income-tax Act, 2025 governs tax year 2026-27 onwards. For this subject the 2025 Act provision is s. 506.
Function in the statutory architecture
Section 285A supports the indirect-transfer rule. It applies where a share of, or interest in, a company or entity registered or incorporated outside India derives its value substantially from assets located in India, as referred to in Explanation 5 to s. 9(1)(i), and that company or entity holds those assets, directly or indirectly, through or in an Indian concern.
In such a case the Indian concern must furnish, within the prescribed period, to the prescribed income-tax authority, the prescribed information or documents, for the purpose of determining any income accruing or arising in India under section 9(1)(i).
Operative consequences
Status
Section 285A is operative for assessment year 2026-27. It is not time-limited. The Finance Act, 2026 did not amend this section.
The 1961 Act governs assessment year 2026-27 and earlier; the Income-tax Act, 2025 governs tax year 2026-27 onwards. For this subject the 2025 Act provision is s. 506.