Our group's consolidated revenue crossed the country-by-country threshold this year but was below it last year. Do we have to file for this year?
No — and the reason is the year the test looks at. Section 286(7) provides that the section does not apply to an international group for an accounting year "if the total consolidated group revenue, as reflected in the consolidated financial statement for the accounting year preceding such accounting year does not exceed the amount, as may be prescribed". The prescribed amount is in Rule 10DB(6), which fixes it at six thousand four hundred crore rupees. So the test is applied to the consolidated group revenue of the year BEFORE the reporting accounting year, not to the reporting accounting year's own revenue. A group whose consolidated revenue was below Rs 6,400 crore in the preceding accounting year is outside s.286 for the year in question however large its revenue becomes in that year; a group that was above it in the preceding year is inside s.286 for the year in question even if its revenue collapses. Rule 10DB(7) supplies the conversion rule where the consolidated revenue is in a foreign currency: the telegraphic transfer buying rate on the last day of the accounting year preceding the accounting year.
Decided by the CBDT Circulars & Instructions (Not applicable — statutory text) on 2021-04-01, reported as Section 286(7) of the Income-tax Act, 1961, transcribed from incometaxindia.gov.in/w/section-286-60 (Year: 2022), incometaxindia.gov.in/w/section-286-62 (Year: 2024 (No. 1)) and incometaxindia.gov.in/w/section-286-64 (Year: 2025); Rule 10DB(6) and (7) transcribed from incometaxindia.gov.in/w/rule-10db (Income-tax Rules, 1962, no "Year:" stamp) on two separate fetches. It bears on section 286, section 286(7), section 286(9), section 271GB, section 92D, section Rule 10DB, section Rule 10DA, section Rule 26 of the Income Tax Act 1961, in Assessment & Scrutiny and How Tax Law Is Read matters.
Getting the year wrong changes who has to file, and the penalty for not filing under s.271GB is a daily one that escalates. Two further points a reader needs. First, the figure has changed. Rule 10DB(6) originally prescribed five thousand five hundred crore rupees; the departmental page's own footnote records that "six thousand four hundred" was "Substituted for 'five thousand five hundred' by the IT (Ninth Amdt.) Rules, 2021, w.r.e.f. 1-4-2021". A group testing an accounting year before that retrospective date must satisfy itself which figure governs, and anyone reading an older source — including indiankanoon's own page for rule 10DB, which still prints five thousand five hundred crore rupees — will get the old number. Second, and this is a real hazard, the DEPARTMENT'S OWN section 286 page is stale on this point: the footnote to s.286(7) on the page stamped Year 2024 (No. 1) still says "Rule 10DB(6) provides that for the purposes of section 286(7), the total consolidated group revenue of the international group shall be five thousand five hundred crore rupees". The footnote contradicts the rule it purports to summarise. Read the rule, not the footnote. Third, note that the threshold is expressed in rupees and the conversion date under Rule 10DB(7) is the last day of the PRECEDING accounting year, consistently with the year the test looks at — a group converting at the wrong year-end rate can land on the wrong side of the line.
Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them.
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Section 286(7), as printed identically on three departmental pages stamped Year 2022, Year 2024 (No. 1) and Year 2025, reads: "(7) The provisions of this section shall not apply in respect of an international group for an accounting year, if the total consolidated group revenue, as reflected in the consolidated financial statement for the accounting year preceding such accounting year does not exceed the amount, as may be prescribed." Rule 10DB(6) reads: "For the purposes of sub-section (7) of section 286, the total consolidated group revenue of the international group shall be six thousand four hundred crore rupees", the words "six thousand four hundred" being marked with a footnote reading "Substituted for 'five thousand five hundred' by the IT (Ninth Amdt.) Rules, 2021, w.r.e.f. 1-4-2021." Rule 10DB(7) reads: "Where the total consolidated group revenue of the international group, as reflected in the consolidated financial statement, is in foreign currency, the rate of exchange for the calculation of the value in rupees of such total consolidated group revenue shall be the telegraphic transfer buying rate of such currency on the last day of the accounting year preceding the accounting year." The Explanation to Rule 10DB provides that "telegraphic transfer buying rate" has the meaning assigned in the Explanation to rule 26 and that "accounting year", "alternate reporting entity", "consolidated financial statement", "international group" and "reporting accounting year" have the meanings assigned in s.286(9). Section 286(9)(a) defines "accounting year" as a previous year where the parent entity is resident in India, and otherwise as the annual accounting period with respect to which the parent entity prepares its financial statements under the law or accounting standards of the country of which it is resident; s.286(9)(j) defines "reporting accounting year" as the accounting year in respect of which the financial and operational results are required to be reflected in the report referred to in sub-sections (2) and (4).
Not a judgment. The statutory position is that s.286 does not apply to an international group for an accounting year if the total consolidated group revenue reflected in the consolidated financial statement for the accounting year PRECEDING that accounting year does not exceed the prescribed amount, which Rule 10DB(6) fixes at six thousand four hundred crore rupees, that figure having been substituted for five thousand five hundred crore rupees by the Income-tax (Ninth Amendment) Rules, 2021 with retrospective effect from 1 April 2021; and that a foreign-currency figure is converted at the telegraphic transfer buying rate on the last day of the accounting year preceding the accounting year.
Not a judgment; no judicial reasoning is stated for the provision.
(7) The provisions of this section shall not apply in respect of an international group for an accounting year, if the total consolidated group revenue, as reflected in the consolidated financial statement for the accounting year preceding such accounting year does not exceed the amount, as may be prescribed.
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Handle my notice → Ask a CA on WhatsAppNo — and the reason is the year the test looks at. Section 286(7) provides that the section does not apply to an international group for an accounting year "if the total consolidated group revenue, as reflected in the consolidated financial statement for the accounting year preceding such accounting year does not exceed the amount, as may be prescribed". The prescribed amount is in Rule 10DB(6), which fixes it at six thousand four hundred crore rupees. So the test is applied to the consolidated group revenue of the year BEFORE the reporting accounting year, not to the reporting accounting year's own revenue. A group whose consolidated revenue was below Rs 6,400 crore in the preceding accounting year is outside s.286 for the year in question however large its revenue becomes in that year; a group that was above it in the preceding year is inside s.286 for the year in question even if its revenue collapses. Rule 10DB(7) supplies the conversion rule where the consolidated revenue is in a foreign currency: the telegraphic transfer buying rate on the last day of the accounting year preceding the accounting year. This was decided by the CBDT Circulars & Instructions (Not applicable — statutory text) and bears on section 286, section 286(7), section 286(9), section 271GB, section 92D, section Rule 10DB, section Rule 10DA, section Rule 26 of the Income Tax Act 1961. It is reported as Section 286(7) of the Income-tax Act, 1961, transcribed from incometaxindia.gov.in/w/section-286-60 (Year: 2022), incometaxindia.gov.in/w/section-286-62 (Year: 2024 (No. 1)) and incometaxindia.gov.in/w/section-286-64 (Year: 2025); Rule 10DB(6) and (7) transcribed from incometaxindia.gov.in/w/rule-10db (Income-tax Rules, 1962, no "Year:" stamp) on two separate fetches. Getting the year wrong changes who has to file, and the penalty for not filing under s.271GB is a daily one that escalates. Two further points a reader needs. First, the figure has changed. Rule 10DB(6) originally prescribed five thousand five hundred crore rupees; the departmental page's own footnote records that "six thousand four hundred" was "Substituted for 'five thousand five hundred' by the IT (Ninth Amdt.) Rules, 2021, w.r.e.f. 1-4-2021". A group testing an accounting year before that retrospective date must satisfy itself which figure governs, and anyone reading an older source — including indiankanoon's own page for rule 10DB, which still prints five thousand five hundred crore rupees — will get the old number. Second, and this is a real hazard, the DEPARTMENT'S OWN section 286 page is stale on this point: the footnote to s.286(7) on the page stamped Year 2024 (No. 1) still says "Rule 10DB(6) provides that for the purposes of section 286(7), the total consolidated group revenue of the international group shall be five thousand five hundred crore rupees". The footnote contradicts the rule it purports to summarise. Read the rule, not the footnote. Third, note that the threshold is expressed in rupees and the conversion date under Rule 10DB(7) is the last day of the PRECEDING accounting year, consistently with the year the test looks at — a group converting at the wrong year-end rate can land on the wrong side of the line. If it applies to you, the first step is this: Take the consolidated financial statement for the accounting year IMMEDIATELY PRECEDING the reporting accounting year and read the total consolidated group revenue off it. That, and not the current year's figure, is the number the threshold is applied to.
Section 286(7), as printed identically on three departmental pages stamped Year 2022, Year 2024 (No. 1) and Year 2025, reads: "(7) The provisions of this section shall not apply in respect of an international group for an accounting year, if the total consolidated group revenue, as reflected in the consolidated financial statement for the accounting year preceding such accounting year does not exceed the amount, as may be prescribed." Rule 10DB(6) reads: "For the purposes of sub-section (7) of section 286, the total consolidated group revenue of the international group shall be six thousand four hundred crore rupees", the words "six thousand four hundred" being marked with a footnote reading "Substituted for 'five thousand five hundred' by the IT (Ninth Amdt.) Rules, 2021, w.r.e.f. 1-4-2021." Rule 10DB(7) reads: "Where the total consolidated group revenue of the international group, as reflected in the consolidated financial statement, is in foreign currency, the rate of exchange for the calculation of the value in rupees of such total consolidated group revenue shall be the telegraphic transfer buying rate of such currency on the last day of the accounting year preceding the accounting year." The Explanation to Rule 10DB provides that "telegraphic transfer buying rate" has the meaning assigned in the Explanation to rule 26 and that "accounting year", "alternate reporting entity", "consolidated financial statement", "international group" and "reporting accounting year" have the meanings assigned in s.286(9). Section 286(9)(a) defines "accounting year" as a previous year where the parent entity is resident in India, and otherwise as the annual accounting period with respect to which the parent entity prepares its financial statements under the law or accounting standards of the country of which it is resident; s.286(9)(j) defines "reporting accounting year" as the accounting year in respect of which the financial and operational results are required to be reflected in the report referred to in sub-sections (2) and (4). The matter was decided on 2021-04-01 by the CBDT Circulars & Instructions (Not applicable — statutory text). On those facts the CBDT Circulars & Instructions held as follows. Not a judgment. The statutory position is that s.286 does not apply to an international group for an accounting year if the total consolidated group revenue reflected in the consolidated financial statement for the accounting year PRECEDING that accounting year does not exceed the prescribed amount, which Rule 10DB(6) fixes at six thousand four hundred crore rupees, that figure having been substituted for five thousand five hundred crore rupees by the Income-tax (Ninth Amendment) Rules, 2021 with retrospective effect from 1 April 2021; and that a foreign-currency figure is converted at the telegraphic transfer buying rate on the last day of the accounting year preceding the accounting year.
Not a judgment; no judicial reasoning is stated for the provision. In the words reproduced by the source cited on this page: "(7) The provisions of this section shall not apply in respect of an international group for an accounting year, if the total consolidated group revenue, as reflected in the consolidated financial statement for the accounting year preceding such accounting year does not exceed the amount, as may be prescribed."
It was decided by the CBDT Circulars & Instructions on 2021-04-01 and is reported as Section 286(7) of the Income-tax Act, 1961, transcribed from incometaxindia.gov.in/w/section-286-60 (Year: 2022), incometaxindia.gov.in/w/section-286-62 (Year: 2024 (No. 1)) and incometaxindia.gov.in/w/section-286-64 (Year: 2025); Rule 10DB(6) and (7) transcribed from incometaxindia.gov.in/w/rule-10db (Income-tax Rules, 1962, no "Year:" stamp) on two separate fetches. Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them. A CBDT circular or instruction binds officers of the department but not the assessee and not the courts. Where a circular helps you, you may hold the department to it. Where it hurts you, it cannot override the Act or a judgment. On section 286, section 286(7), section 286(9), section 271GB, section 92D, section Rule 10DB, section Rule 10DA, section Rule 26, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It cuts both ways and is cited by both sides. Not a judgment. The statutory position is that s.286 does not apply to an international group for an accounting year if the total consolidated group revenue reflected in the consolidated financial statement for the accounting year PRECEDING that accounting year does not exceed the prescribed amount, which Rule 10DB(6) fixes at six thousand four hundred crore rupees, that figure having been substituted for five thousand five hundred crore rupees by the Income-tax (Ninth Amendment) Rules, 2021 with retrospective effect from 1 April 2021; and that a foreign-currency figure is converted at the telegraphic transfer buying rate on the last day of the accounting year preceding the accounting year. It arises in Assessment & Scrutiny and How Tax Law Is Read matters, on section 286, section 286(7), section 286(9), section 271GB, section 92D, section Rule 10DB, section Rule 10DA, section Rule 26 of the Income Tax Act 1961, and was decided by Not applicable — statutory text. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Apply six thousand four hundred crore rupees to any accounting year from 1 April 2021, that figure having been substituted for five thousand five hundred crore rupees by the Income-tax (Ninth Amendment) Rules, 2021 (CBDT Notification No. 31/2021 dated 5 April 2021) with retrospective effect from 1 April 2021; for an earlier year, apply five thousand five hundred crore rupees. Where the consolidated revenue is in foreign currency, convert at the telegraphic transfer buying rate on the LAST DAY OF THE ACCOUNTING YEAR PRECEDING the accounting year, as Rule 10DB(7) requires, and keep the rate source on file. Do not take the threshold from the footnote printed under s.286(7) on the departmental section page; it still prints the superseded figure of five thousand five hundred crore rupees. Take it from Rule 10DB(6). Remember that failing the s.286(7) test only takes you out of s.286. The master file obligations under s.92D(4) and Rule 10DA, including the Part A filing that every constituent entity must make, are separate and are not switched off by being below the country-by-country threshold.
Validity check could not be completed. Validity check could not be completed. Section 286(7) is verified on three departmental pages with different "Year:" stamps. The Rs 6,400 crore figure is verified three ways: the departmental Rule 10DB page read on separate fetches with different prompts, that page's footnote 7 recording the substitution for "five thousand five hundred" by the IT (Ninth Amdt.) Rules, 2021 w.r.e.f. 1-4-2021, and CBDT Notification No. 31/2021 dated 5 April 2021 which made that substitution. The department's own footnote under s.286(7) still prints the superseded Rs 5,500 crore figure and is wrong. Section 286(7) itself is unchanged since at least 2019: /w/section-286-66 (Year: 2019 (No. 1)) prints it in the same words as the Year 2025 page. Whether Rule 10DB(6) has been amended again since 2021 could not be established because departmental rule pages carry no "Year:" stamp. I found no judicial decision on s.286(7) and did not check judicial treatment. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
A GENUINE CONFLICT BETWEEN TWO GOVERNMENT PAGES, resolved in favour of the rule. The departmental Rule 10DB page prints sub-rule (6) as "For the purposes of sub-section (7) of section 286, the total consolidated group revenue of the international group shall be [7][six thousand four hundred] crore rupees", and its footnote 7, transcribed verbatim on a second fetch, reads "Substituted for 'five thousand five hundred' by the IT (Ninth Amdt.) Rules, 2021, w.r.e.f. 1-4-2021." The departmental section 286 page stamped Year 2024 (No. 1) carries a footnote against sub-section (7) reading "Rule 10DB(6) provides that for the purposes of section 286(7), the total consolidated group revenue of the international group shall be five thousand five hundred crore rupees" — that footnote is STALE and should not be relied on. Indiankanoon's own page for rule 10DB, fetched separately, also still prints "five thousand five hundred crore rupees", which is consistent with the substitution having happened and with that site being out of date, and is a check that Rs 5,500 crore was genuinely the original figure. THE SUBSTITUTION HAS SINCE BEEN TRACED TO ITS NOTIFICATION. The Income-tax (Ninth Amendment) Rules, 2021 were notified by CBDT Notification No. 31/2021 dated 5 April 2021, which in rule 10DB provides that "in sub-rule (6), for the words 'five thousand five hundred' the words 'six thousand four hundred' shall be substituted", with effect from 1 April 2021, the same notification also amending rule 10DA and Form No. 3CEAB. The Rs 6,400 crore figure therefore rests on three things: the departmental rule page read on separate fetches with different prompts, that page's own footnote 7, and the notification that made the substitution. An exact-phrase search on indiankanoon for "six thousand four hundred crore rupees" returned nothing; a nil return there is not proof of absence and is recorded only as a search result. `decided_on` is 2021-04-01, the retrospective effective date of that substitution, taken from the footnote; it is not a page vintage. Departmental rule pages carry no "Year:" stamp and the rule has not been dated from the page. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
Not a judgment. The statutory position is that s.286 does not apply to an international group for an accounting year if the total consolidated group revenue reflected in the consolidated financial statement for the accounting year PRECEDING that accounting year does not exceed the prescribed amount, which Rule 10DB(6) fixes at six thousand four hundred crore rupees, that figure having been substituted for five thousand five hundred crore rupees by the Income-tax (Ninth Amendment) Rules, 2021 with retrospective effect from 1 April 2021; and that a foreign-currency figure is converted at the telegraphic transfer buying rate on the last day of the accounting year preceding the accounting year.
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