Section 286 of Income Tax Act 1961: Country by Country Reporting for International Groups
Section 286 establishes India's country by country reporting framework for qualifying international groups. It requires prescribed notifications and, in specified cases, a country by country report containing jurisdiction-wise financial, tax, employee, asset and constituent-entity information.
Purpose of Section 286
Section 286 was introduced as part of India's implementation of country by country reporting under the international transfer-pricing and base erosion and profit shifting framework. It gives the tax administration a high-level view of the global allocation of income, taxes and economic activity of a qualifying multinational group.
Section 286(1) - Notification by Indian constituent entity
Where a constituent entity resident in India belongs to an international group whose parent entity is not resident in India, the Indian constituent entity must notify the prescribed income-tax authority, in the prescribed form, manner and time:
- whether it is the alternate reporting entity of the international group; or
- the details of the parent entity or alternate reporting entity, if any, and the country or territory in which that entity is resident.
Rule 10DB prescribes the procedural framework. Form 3CEAC is used for the Section 286(1) notification. Under the current official guidance, the notification is generally due at least two months before the due date for the country by country report, which corresponds to ten months from the end of the reporting accounting year.
Section 286(2) - Report by Indian parent or alternate reporting entity
Every parent entity or alternate reporting entity resident in India must furnish the prescribed country by country report for each reporting accounting year in respect of the international group of which it is a constituent. The statutory filing period is twelve months from the end of the reporting accounting year.
The prescribed country by country report is furnished in Form 3CEAD under Rule 10DB.
Section 286(3) - Information contained in the report
The country by country report contains prescribed information about the international group, including:
- aggregate revenue for each country or territory;
- profit or loss before income-tax;
- income-tax paid and income-tax accrued;
- stated capital and accumulated earnings;
- number of employees;
- tangible assets other than cash or cash equivalents;
- details of each constituent entity and its jurisdiction of incorporation, organisation or establishment and residence;
- the main business activity or activities of each constituent entity; and
- other prescribed information.
Section 286(4) - When an Indian constituent entity must file the report
An Indian resident constituent entity other than an entity already covered by Section 286(2) may itself have to furnish the country by country report where the foreign parent is resident in a country or territory in any of the following circumstances:
- the foreign parent is not obligated to file a report of the required nature in its jurisdiction;
- India does not have an agreement with that jurisdiction providing for exchange of the report; or
- there has been a systemic failure of that jurisdiction and the prescribed authority has intimated that failure to the Indian constituent entity.
If more than one constituent entity of the same international group is resident in India, one of them may furnish the report on behalf of all Indian constituent entities where the group has designated it for that purpose and the prescribed authority has been informed in writing.
Section 286(5) - Alternate reporting entity exception
The local filing requirement under Section 286(4) does not apply where an alternate reporting entity of the international group has furnished the required report in its jurisdiction within the applicable time and the statutory conditions are satisfied. These conditions include a legal reporting requirement in that jurisdiction, an exchange agreement with India, absence of an intimated systemic failure, proper notification of the alternate reporting status and compliance with the Indian notification requirement.
Section 286(6) - Notice for information and documents
For determining the accuracy of a report, the prescribed authority may issue a written notice requiring the reporting entity to produce specified information and documents within thirty days from receipt of the notice. On an application by the entity, the authority may extend that period by a further period not exceeding thirty days.
Section 286(7) and Rule 10DB - Revenue threshold
Section 286 does not apply to an international group for an accounting year if its total consolidated group revenue, as reflected in the consolidated financial statement for the immediately preceding accounting year, does not exceed the prescribed amount. Rule 10DB currently prescribes the threshold at Rs. 6,400 crore.
Where the consolidated group revenue is stated in foreign currency, Rule 10DB provides the prescribed conversion mechanism for determining the rupee value.
Section 286(8) - Prescribed guidelines and conditions
The section is applied in accordance with the prescribed guidelines and subject to prescribed conditions. Rule 10DB and the prescribed forms therefore form an essential part of Section 286 compliance.
Important definitions under Section 286(9)
| Expression | Meaning in Section 286 |
|---|---|
| Accounting year | Generally the previous year where the relevant parent entity is resident in India; otherwise the annual accounting period for which the foreign parent prepares its financial statements under applicable law or accounting standards. |
| Agreement | The combination of an agreement under Section 90(1) or 90A(1) and a notified agreement for exchange of the country by country report. |
| Alternate reporting entity | A constituent entity designated by the international group, in place of the parent entity, to furnish the report in its jurisdiction on behalf of the group. |
| Constituent entity | Includes entities included or potentially includible in the consolidated financial statement, entities excluded solely for size or materiality, and qualifying permanent establishments preparing separate financial statements. |
| Group | A parent entity and entities whose ownership or control requires, or would require in the specified listing circumstance, consolidated financial statements. |
| Consolidated financial statement | A financial statement presenting assets, liabilities, income, expenses and cash flows of the parent and constituent entities as those of a single economic entity. |
| International group | A group containing enterprises resident in two or more countries or territories, or an enterprise resident in one jurisdiction carrying on business through a permanent establishment in another jurisdiction. |
| Parent entity | The top-level constituent entity meeting the statutory ownership and consolidated-financial-statement conditions and not itself controlled by another constituent entity required to consolidate it. |
| Permanent establishment | Has the meaning assigned in Section 92F(iiia). |
| Reporting accounting year | The accounting year whose financial and operational results are required to be reflected in the country by country report. |
| Reporting entity | The constituent entity, including a parent or alternate reporting entity, required to furnish the country by country report. |
| Systemic failure | Broadly, failure by an exchange partner jurisdiction to automatically exchange the report despite an applicable agreement, through suspension in violation of the agreement or persistent failure to provide reports to India. |
Forms and practical compliance
| Compliance | Relevant form or rule |
|---|---|
| Notification by an Indian constituent entity where the parent is not resident in India | Form 3CEAC under Rule 10DB |
| Country by country report by the reporting entity | Form 3CEAD under Rule 10DB |
| Revenue threshold for Section 286 | Rule 10DB - Rs. 6,400 crore |
| Authority and electronic filing procedure | Rule 10DB and the Income Tax e-Filing system |
Related penalty provisions
Failure to comply with the country by country reporting requirements may attract the specific penalty provisions of the Income Tax Act applicable to Section 286 reporting and information requirements. The nature and duration of the default, whether the default continues after service of an order, and whether inaccurate information was furnished can affect the applicable consequence. The penalty provision in force for the relevant year should be checked before determining liability.
Evidence law before Bharatiya Sakshya Adhiniyam, 2023
For evidentiary questions arising before 1 July 2024, the Indian Evidence Act, 1872 and the Information Technology Act, 2000 governed proof of documentary and electronic records, subject to the special provisions of the Income Tax Act and Income-tax Rules. Relevant records in a Section 286 matter can include consolidated financial statements, entity and ownership records, tax-residence material, permanent-establishment records, Forms 3CEAC and 3CEAD, electronic acknowledgements, exchange-of-information records, notices and supporting documents.
The evidentiary rules should be distinguished from the substantive reporting obligation: whether a report or notification was legally required is determined under Section 286 and Rule 10DB, while proof of a document or electronic record in a pre-1 July 2024 dispute is considered under the then-applicable evidence framework.
Income-tax Act 2025 transition
The official Income Tax Department section mapping maps Section 286 of the Income Tax Act, 1961 to Section 511 of the Income-tax Act, 2025. The Income-tax Act, 2025 applies from 1 April 2026. For reporting periods spanning the transition, verify the applicable Act, Rules, forms and savings provisions for the relevant tax year and reporting accounting year.
Official references
- Section 286 - Income Tax Department
- Rule 10DB - Income Tax Department
- Form 3CEAC - Income Tax Department
- Income Tax Acts and official resources
- Income-tax Act 2025 and transition resources
- Official section mapping navigator
- Income Tax e-Filing Portal
- India Code
Compliance note: Always verify the reporting accounting year, consolidated group revenue, identity and residence of the parent and reporting entities, exchange agreement status, any systemic-failure notification, applicable form and current filing deadline before submission.