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F. No. 142/11/2015-TPL 
Government of India 
Ministry of Finance 
Department of Revenue 
Central Board of Direct Taxes 

Circular No 08 of 2017 
Dated 23rd February, 2017 

Subject: Clarification for determination of Place of Effective Management (POEM) of a company, other than an Indian company-reg. 

The concept of POEM for deciding the residential status of a company, other than an Indian company, was introduced by the Finance Act, 2015. The existing provision of clause (ii) of sub-section (3) of section 6 of the Income-tax Act, 1961 (the Act) shall come into effect from 1st April, 2017 and accordingly, applies to Assessment Year 2017-18 and subsequent years. Guiding Principles for determining POEM of a company were issued by Circular No. 6 of 2017 on 24th January, 2017. Press Release on POEM guidelines dated 24th January, 2017 has, inter alio, stated that the POEM guidelines shall not apply to a company having a turnover or gross receipts of Rs. 50 crores or less in a financial year. 

2. In view of above, it is clarified that existing provision of clause (ii) of susub-section3) of section 6 of the Act, shall not apply to a company having t a rnover or gross receipts of Rs. 50 crores or less in a financial year. 

(Rajesh Kumar Kedia) 
Director (Tax Policy & Legislation) 

Copy to:-

1. The Chairman, Members and officers of the CBDT of the rank of Under Secretary and above 

2. PS to the Revenue Secretary 

3. AII Pr. Chief Commissioners of Income-tax & All Directors General of Income-tax with a request to bring to attention of all officers in their regions/ charges 

4. Pr. Director General of Income Tax, NADT, Nagpur 

5. Pr. DGIT (Systems)/ Pr. DGIT (Vigilance)/ Pr. DGIT (Admn)/ Pr. DGIT ( L&R)/ 

6. ADG (PR, Pi& OL), Mayur Bhawan, New Delhi for printing in the quarterly tax bulletin and for circulation as per usual mailing list (100 copies) 

7. C&AG, New Delhi 

8. Web Manager for uploading on www.incometaxindia.gov.in & placing in public domain 

9. Data Base Cell for uploading on www.irsofficersonline.gov.in 

10. Guard File 

Director (Tax Policy & Legislation) 

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