Rule 45 — Conditions to be fulfilled by a resident company for purposes of section 61(2) [Table: Sl. No. 6]. Made under s.61 of the Income-tax Act, 2025.
Rule 45 gives effect to Section 61 of the Income-tax Act, 2025. A rule cannot go beyond the section it serves: where the two seem to differ, the section governs.
Sub-rule (1) sets the two conditions a resident company must satisfy for section 61(2) [Table: Sl. No. 6]. It must be establishing or operating an electronics manufacturing facility, or a connected facility, for manufacturing or producing electronic goods, article or thing in India under any scheme notified by the Central Government in the Ministry of Electronics and Information Technology, as modified from time to time. And it must not become ineligible for that scheme at any time of the tax year for which tax is to be calculated for the income of the non-resident.
Sub-rule (2) defines "electronics goods" for the rule as goods covered under any scheme referred to in sub-rule (1), including their supply chain ecosystem.
The presumptive entry at section 61(2) [Table: Sl. No. 6] turns on the resident company the non-resident deals with, and the section leaves the qualifying conditions to be prescribed. This rule anchors them to a scheme of another Ministry rather than to a tax test, and makes the qualification continuous: eligibility has to hold through the tax year in question, not merely at the start of it.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Period over which eligibility must hold | At any time of the tax year for which tax is to be calculated for the income of the non-resident | The company must not become ineligible for the scheme during that period | Rule 45(1)(b) |
The test is not a tax test. Whether the company qualifies is decided by the Ministry of Electronics and Information Technology scheme it operates under, and sub-rule (1)(a) picks up that scheme as modified from time to time, so a change to the scheme changes the tax position without any amendment to this rule. Sub-rule (1)(b) is a negative and continuing condition: it is not enough to have been eligible when the arrangement began, because ineligibility at any time in the relevant tax year defeats the condition for that year. The definition in sub-rule (2) is deliberately wide — goods covered under the scheme including their supply chain ecosystem — so components and inputs within the scheme's ambit are electronics goods for this rule.
A resident company operates a component plant under a notified Ministry of Electronics and Information Technology scheme and buys technical services from a non-resident whose income is to be calculated under section 61(2) [Table: Sl. No. 6]. If the company is dropped from the scheme in December of that tax year, sub-rule (1)(b) is not met for that year, because it became ineligible at a time within the tax year for which the non-resident's tax is to be calculated.
The non-resident meets it in the computation of its own tax under section 61(2), and in any query about whether the Indian counterparty qualified. The resident company meets it when it is asked to evidence its standing under the notified scheme for the whole of the tax year.
not become ineligible for the such scheme at any time of the tax year for which tax is to be calculated for the income of the non-resident
'electronics goods' shall mean goods covered under any scheme referred to in sub-rule (1), including their supply chain ecosystem