Quick Summary
Harmonisation of Significant Economic Presence applicability with Business Connection Section 9 of the Act provides for income which shall be deemed to accrue or arise in India. Clause (i) of section 9, inter alia, provides that all income accruing or arising, whether directly or indirectly, through or from any business connection in India shall be deemed to accrue or arise in India. 2. Clause (b) of Explanation 1 to clause (i) of sub-section (1) of section 9 provides that in the case of a
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FAQ :
The amendments aim to harmonise the 'significant economic presence' rules with the existing 'business connection' provisions for non-residents, ensuring clarity on income deemed to accrue or arise in India.
Previously, income arising from operations confined to the purchase of goods in India for the purpose of export was not deemed to accrue or arise in India for non-residents.
Changes are proposed because the definition of 'significant economic presence' might have inadvertently removed the specific exclusion for income from purchasing goods in India for export.
The amendment will ensure that transactions or activities of a non-resident in India confined to the purchase of goods for export will not be considered a 'significant economic presence'.
These amendments will take effect from 1st April 2026, applying to the assessment year 2026-27 and subsequent assessment years.
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