Form 163 Income Tax Rules 2026 pdf download and Key points
FORM NO. 163
[See rule 235]
Information and Documents to be furnished by an Indian concern under section 506
Under the new Income-tax Rules, 2026, Form No. 163 replaces the old Form 49D. It is governed by Section 506 of the Income-tax Act, 2025, and Rule 235 of the Income-tax Rules, 2026.
Here are all the key points regarding Form No. 163:
1. Purpose of the Form Form 163 is a mandatory reporting document used to disclose the indirect transfer of assets located in India. It provides the tax department with critical information regarding the basis of determining the location of the transferred share/interest and the valuation of assets, which is essential for computing capital gains arising for a non-resident.
2. Applicability (Who Should File) It must be filed by an Indian concern or its representative, whose assets are being indirectly transferred by a non-resident.
3. Frequency and Due Dates The due date for filing Form 163 depends on the nature of the transfer:
- Standard Transfers: It must be filed within 90 days from the end of the tax year in which the transfer of the share or interest in a foreign entity took place.
- Transfers of Control: If the transaction directly or indirectly transfers the rights of management or control of the Indian concern, the form must be filed within 90 days of the transaction itself.
4. Mode of Filing and Process
- Electronic Filing: The form must be filed electronically through the e-filing portal and digitally signed by an authorized person.
- No Edits Allowed: Once the form is submitted and an acknowledgment is generated, it cannot be edited.
- PAN Requirement: The form cannot be submitted without a valid PAN. However, Aadhaar is no longer required in the personal details section.
- No Tax Proof Required: Because this is purely a reporting requirement and no tax liability arises directly for the Indian concern filing it, no proof of tax payment is required to be attached.
5. Structure of the Form The form is divided into four main parts:
- Part A: Standard template for basic information.
- Part B: Details of the group.
- Part C: Details regarding the transfer of share/interest where the income is deemed to accrue or arise in India under section 9(10) of the Income-tax Act, 2025.
- Part D: Specific details for transactions that resulted in the transfer of the rights of management or control.
6. Mandatory Documents Required To successfully file Form 163, the Indian concern must attach:
- The structure of the group (the holding pattern of entities in India).
- The holding structure in respect of shares/interest in the entity before and after the transfer.
- The basis of valuation of the assets (e.g., valuation reports, annual financial statements, or audit reports).
- Documents relating to the break-up of the assets.
7. Outcomes and Consequences of Non-Compliance
- Outcome: The processed Form 163 forms the basis for the taxpayer’s Form No. 4 and the resultant return of income, ensuring proper assessment of international taxation.
- Penalties: Failure to file Form 163 or adhering to the timelines can result in a penalty under Section 458 of the Income-tax Act, 2025, alongside other appropriate actions for proper income assessment.
8. Key Updates in the 2026 Rules Under the new rules, Form 163 now specifically mandates the collection of the PAN of both the transferor and the transferee. This structural update allows the system to easily tag the transaction with the corollary Form No. 4 and smoothly transmit the data to the Assessing Officer (International Taxation) who holds jurisdiction over the transferor.