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Section56
The Finance Act, 2016

Insertion of new Chapter XII-BC

In force As on 10 Oct 2026

Ministry Finance Enacted 27 Jun 2016 Cited by 1 provision

Section 56 of the Finance Act, 2016 deals with insertion of new Chapter XII-BC. Insertion of new Chapter XII-BC. 56. After Chapter XII-BB of the Income-tax Act, the following Chapter shall be inserted with effect from the 1st day of April, 2017, namely:— "CHAPTER XII-BC SPECIAL PROVISIONS RELATING TO FOREIGN COMPANY SAID TO BE RESIDENT IN INDIA 115JH. The Act was enacted on 27 Jun 2016.

Insertion of new Chapter XII-BC.

56. After Chapter XII-BB of the Income-tax Act, the following Chapter shall be inserted with effect from the 1st day of April, 2017, namely:—

"CHAPTER XII-BC

SPECIAL PROVISIONS RELATING TO FOREIGN COMPANY SAID TO BE RESIDENT IN INDIA

115JH. Foreign company said to be resident in India.—(1) Where a foreign company is said to be resident in India in any previous year and such foreign company has not been resident in India in any of the previous years preceding the said previous year, then, notwithstanding anything contained in this Act and subject to the conditions as may be notified by the Central Government in this behalf, the provisions of this Act relating to the computation of total income, treatment of unabsorbed depreciation, set off or carry forward and set off of losses, collection and recovery and special provisions relating to avoidance of tax shall apply with such exceptions, modifications and adaptations as may be specified in that notification for the said previous year:

Provided that where the determination regarding foreign company to be resident in India has been made in the assessment proceedings relevant to any previous year, then, the provisions of this sub-section shall also apply in respect of any other previous year, succeeding such previous year, if the foreign company is resident in India in that previous year and the previous year ends on or before the date on which such assessment proceeding is completed.

(2) Where, in a previous year, any benefit, exemption or relief has been claimed and granted to the foreign company in accordance with the provisions of sub-section (1), and, subsequently, there is failure to comply with any of the conditions specified in the notification issued under sub-section (1), then,—

(i)such benefit, exemption or relief shall be deemed to have been wrongly allowed;
(ii)the Assessing Officer may, notwithstanding anything contained in this Act, re-compute the total income of the assessee for the said previous year and make the necessary amendment as if the exceptions, modifications and adaptations referred to in sub-section (1) did not apply; and
(iii)the provisions of section 154 shall, so far as may be, apply thereto and the period of four years specified in sub-section (7) of that section being reckoned from the end of the previous year in which the failure to comply with the condition referred to in sub-section (1) takes place.

(3) Every notification issued under this section shall be laid before each House of Parliament."

Section 56, The Finance Act, 2016.

Cross-references

Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.

This section refers to

  1. s. 154 Amendment of section 78A

Referred to by 1

  1. s. 35 Amendment of section 56

Questions about Section 56

What does Section 56 of the Finance Act deal with?

Section 56 of the Finance Act is headed "Insertion of new Chapter XII-BC". Insertion of new Chapter XII-BC. 56. After Chapter XII-BB of the Income-tax Act, the following Chapter shall be inserted with effect from the 1st day of April, 2017, namely:— "CHAPTER XII-BC SPECIAL PROVISIONS RELATING TO FOREIGN COMPANY SAID TO BE RESIDENT IN INDIA 115JH.

How do I find court cases under Section 56 of the Finance Act?

In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Finance Act 2016 56, section 56 Finance Act 2016, section 56 of the Finance Act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome.

What should I read with Section 56 of the Finance Act, and has it changed?

Its own text turns on section 154 (Amendment of section 78A), so none of them can safely be read on its own. 1 other provision in this corpus refers back to it.

When was Section 56 of the Finance Act enacted?

Section 56 of the Finance Act, cited as Finance Act 2016 56, was enacted on 27 Jun 2016. It is in force as at the date shown on this page.

Other sections of this Act

Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Harvested from the Income Tax Department's own portal at incometaxindia.gov.in, which publishes the Finance Acts section by section. India Code carries none of them: its Central community holds the Acts that stand as general law, and a Finance Act is an amending and rate-fixing instrument. This page is not a substitute for legal advice.