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UPSC 2022: Which one of the following situations best reflects "Indirect Transfers" often talked about in media recently with reference to India?
(a)An Indian company investing in a foreign enterprise and paying taxes to the foreign country on the profits arising out of its investment
(b)A foreign company investing in India and paying taxes to the country of its base on the profits arising out of its investment
(c)An Indian company purchases tangible assets in a foreign country and sells such assets after their value increases and transfers the proceeds to India
(d)A foreign company transfers shares and such shares derive their substantial value from assets located in India
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Not attemptedCorrect Answer: (d) A foreign company transfers shares and such shares derive their substantial value from assets located in India
‘Indirect transfer’ refers to a foreign company transferring shares whose substantial value is derived from assets located in India; capital gains on such offshore share deals are deemed to arise in India (Vodafone-type cases). Options (a), (b) and (c) involve direct investments or asset sales, not indirect share transfers. Hence option (d) best reflects “Indirect Transfers”. ([vajiramandravi.com](https://vajiramandravi.com/upsc-exam/which-one-of-the-following-situations-best-reflects-indirect-transfers-often-talked-about-in-media-recently-with-reference-to-india/?utm_source=openai))
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Frequently Asked Questions
What is the correct answer to this UPSC 2022 Indian Economy question?▼
The correct answer is option (d): A foreign company transfers shares and such shares derive their substantial value from assets located in India. Watch the detailed video explanation in our Sherlocking Prelims course on UnlockIAS.
Which year was this Taxation question asked in UPSC Prelims?▼
This question was asked in UPSC CSE Prelims 2022, GS Paper 1, as Question 8. It falls under Indian Economy > Taxation.
What is the difficulty level of this UPSC question?▼
This question is rated "moderate". It requires sound conceptual understanding of the topic.
How many UPSC Prelims questions have been asked from Taxation?▼
UPSC has asked 19 questions from Taxation (under Indian Economy) across multiple years. Visit the topic page to see the full list and year-wise trends.