Module-wise first checks, evidence and escalation triggers.
| No. | Topic | First action | Evidence | Escalate when |
|---|---|---|---|---|
| 01 | Residence, source and cross-border tax nexus | Map the legal person, tax residence and beneficial owner. | Contract and statement of work; Tax residency certificate and prescribed declaration; Invoice, payment and remittance documents | Relying only on invoice description |
| 02 | Permanent establishment and business connection | Test fixed place, service, construction, installation, agency and digital nexus separately. | Travel calendar; Organisation and reporting lines; Office/site access evidence | Counting days without treaty-specific rules |
| 03 | Royalty, software and technical services | Separate software copy/use from transfer of copyright rights. | Licence agreement; End-user restrictions; Architecture note | Copying old opinions without checking contract rights |
| 04 | Non-resident withholding and remittance controls | Create a payment taxonomy and approval matrix. | Vendor tax pack; Tax memo; Form/certificate trail | Applying treaty rate without documents |
| 05 | DTAA, MLI and treaty entitlement | Start with domestic law, then treaty. | TRC and prescribed form; Ownership chart; Board and substance evidence | Using an online treaty rate table as final law |
| 06 | Foreign tax credit and double-tax relief | Map foreign income to Indian heads and tax year. | Foreign return; Tax certificate; Payment evidence | Claiming gross foreign withholding without limitation |
| 07 | Transfer pricing scope and associated enterprises | Map direct and indirect ownership. | Group chart; Intercompany agreements; Ledger extraction | Testing only the 26% shareholding condition |
| 08 | Functional analysis and tested-party selection | Interview operating teams, not only tax personnel. | Interview notes; Decision matrix; Asset/IP register | Template FAR copied year to year |
| 09 | Arm’s-length methods and economic analysis | Define the controlled transaction accurately. | Search strategy; Comparable set; Adjustment workbook | Choosing TNMM by default |
| 10 | Documentation, Form 48 and audit trail | Create a transaction-to-ledger reconciliation. | Form 48 working; Ledger reconciliation; TP study | Using legacy Form 3CEB references for Tax Year 2026-27 |
| 11 | Safe harbour rules | Confirm eligible assessee and transaction. | Eligibility memo; Form 49; Margin computation | Assuming safe harbour eliminates all documentation |
| 12 | Advance pricing agreements and rollback | Choose unilateral, bilateral or multilateral route. | APA application pack; Critical-assumption dashboard; Annual compliance report | Treating APA as a negotiation disconnected from actual conduct |
| 13 | Mutual agreement procedure | Identify the treaty breach and competent authorities. | MAP request; Tax assessment orders; TP reports for both countries | Missing treaty time limit |
| 14 | Master file and country-by-country reporting | Determine constituent-entity and group-reporting status. | Group structure; Consolidated financials; Master file | Threshold calculation errors |
| 15 | Interest limitation and cross-border financing | Identify direct and deemed AE debt. | Loan agreement; Guarantee; Interest model | Looking only at legal lender identity |
| 16 | GAAR, treaty anti-abuse and substance | Document commercial objective before execution. | Commercial rationale memo; Board papers; Employee/substance evidence | Post-facto board minutes |
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