Rule 235 requires an Indian concern covered by section 506 to furnish Form No. 163 within ninety days of the financial year end — or of the transaction where management or control passes — when shares of or interests in a foreign company or entity under section 9(10)(a) are transferred, to keep eleven categories of documents, and to retain them for eight years.
235
Rules 2026 · Rule 235
Information or documents to be furnished under section 506
Rules 201-260
Furnishing (sub-rules 2, 4 to 6). The information is furnished in Form No. 163, electronically under digital signature, to the Assessing Officer having jurisdiction over the Indian concern, within ninety days from the end of the financial year in which the transfer took place; where the transaction has the effect of directly or indirectly transferring rights of management or control of the Indian concern, within ninety days of that transaction. Where several Indian concerns belong to a group, any one may furnish it if the group has designated it and told the Assessing Officer in writing; the rule has no effect if the designated concern fails to furnish it properly. The Director General of Income-tax (Systems) sends one copy of Form No. 163 to the Assessing Officer of the transferor whose income is chargeable under section 9(10).
Documents to maintain (sub-rule 3). With English translation as required, and to be produced on request: details of the immediate, intermediate and ultimate holding companies or entities and of other group entities in India; the holding structure of the shares or interest before and after the transfer; any transfer contract or agreement; the financial and accounting statements of the foreign company or entity for two years before the transfer; information on the decision and implementation of the arrangement; information on the foreign entity and its subsidiaries (business, personnel, finance and properties, audit or valuation reports); the valuation report and evidence on where the share or interest is located; details of tax paid outside India on the transfer; a valuation report on Indian assets and total assets certified by a merchant banker or accountant; and documents issued in connection with the transactions under accounting practices followed.
Retention and definitions (sub-rules 7 and 8). Kept for eight years from the end of the relevant tax year. "Constituent entity" and "group" are as in section 511(10)(d) and (e); the rule also defines immediate, intermediate and ultimate holding company or entity.