CORAA
લૉગ ઇનમફત ટ્રાયલ શરૂ કરો

Place of Effective Management (POEM) Determination Checklist — Section 6(3)

Tests whether a foreign company's Place of Effective Management is in India under Section 6(3) — the active-business-outside-India carve-out first, then the two-stage test for companies that don't qualify for it.

Free · CORAA original — SA-aligned
Updated 28 Jul 2026
Statutory basis
Section 6(3), CBDT POEM guidelines (Circular 6/2017)
Carve-out
Active Business Outside India (ABOI) — all 4 conditions
Core test
Who makes key decisions, and where, in substance
Consequence if POEM is in India
Company taxed as resident on worldwide income
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What’s inside

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PLACE OF EFFECTIVE MANAGEMENT (POEM) DETERMINATION CHECKLIST

Foreign company: ___, incorporated in ___

Purpose: a company incorporated outside India is resident in India under Section 6(3) if its Place of Effective Management, at any time in the year, is in India. This checklist applies the CBDT POEM guidelines' two-stage approach.

Stage 0 — Active Business Outside India (ABOI) carve-out

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This template follows the format published by the Institute of Chartered Accountants of India (ICAI) in the AASB Audit Working Paper Templates (June 2023), the authoritative reference for Indian statutory-audit documentation. Fill in your firm’s letterhead and the engagement details on the form above, click Download Word file, and you’ll get a fully formatted .docx ready to use.

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Common questions

FAQs.

Does POEM apply to every foreign company doing business with India?
No — POEM residency testing under Section 6(3) applies to determine whether a company incorporated OUTSIDE India is nevertheless resident in India for tax purposes; a company incorporated in India is always resident regardless of POEM. POEM guidelines also explicitly state they are intended to apply to companies engaged in cross-border structuring with the potential for tax avoidance, not to ordinary foreign subsidiaries with genuine overseas operations — though the ABOI carve-out is the mechanism that operationalises this intent.
What is the consequence if a foreign company is found to have its POEM in India?
The company becomes resident in India under Section 6(3) and is taxed in India on its worldwide income (subject to any DTAA relief), not just its India-source income — a materially different and typically much larger tax exposure than the withholding-tax treatment that would otherwise apply to a genuinely non-resident foreign company.
Can video-conference board meetings affect where POEM is found to be?
The CBDT guidelines look at substance over form — merely holding board meetings by video conference does not by itself relocate POEM, but if the guidelines' tests otherwise point to decisions genuinely being made by persons and processes located in India (regardless of the medium used for meetings), that location, not the formal meeting venue, controls the conclusion.
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