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Rule 11UC of Income Tax Rules 1962: Determination of Income Attributable to Assets in India

Rule 11UC : Determination of Income attributable to assets in India
(Chapter: II, Part I. - Determination of value of assets and apportionment of income in certain cases)


(1) The income from transfer outside India of a share of, or interest in, a company or an entity referred to in clause (i) of sub-section (1) of section 9, attributable to assets located in India, shall be determined in accordance with the following formula, namely:—

A × B / C

  Where;
  A = Income from the transfer of share of, or interest in, the company or the entity computed in accordance with the provisions of the Act, as if, such share or interest is located in India;
  B = Fair Market Value of assets located in India as on the specified date, from which the share or interest referred to in A derives its value substantially, computed in accordance with rule 11UB;
  C = Fair Market Value of all the assets of the company or the entity as on the specified date, computed in accordance with rule 11UB:
  Provided that if the transferor of the share of, or interest in, the company or the entity fails to provide the information required for the application of the aforesaid formula then the income from the transfer of such share or interest attributable to the assets located in India shall be determined in such manner as the Assessing Officer may deem suitable.

(2) The transferor of the share of, or interest in, a company or an entity that derives its value substantially from assets located in India, shall obtain and furnish along with the return of income a report in Form No.3CT duly signed and verified by an accountant providing the basis of the apportionment in accordance with the formula and certifying that the income attributable to assets located in India has been correctly computed.



Extra Notes for Readers:

- Rule 11UC was introduced by the Income Tax (19th Amendment) Rules, 2016 w.e.f. 28-6-2016



Reference/Source: Check at Income Tax site for latest version of the Rules - link

This page was last updated on 17th October 2016.
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