Which one of the following situations best reflects “Indirect Transfers” often talked about in media recently with reference to India?

Explicitly names a distinct term—'Overseas Direct Investment (ODI)'—for when an Indian company invests abroad, showing there is specific terminology for outbound investment.

A student could compare the formal meaning of ODI with media/tax uses of 'Indirect Transfer' to see if they are conflated or distinct.

Gives a plain definition of FDI as 'an investment that a parent company makes in a foreign country...to increase capacity or change management control', which is the usual commercial phenomenon when a resident invests abroad.

Using this, a student can ask whether 'Indirect Transfer' language in tax law refers to FDI/ODI transactions or to a different legal mechanism (e.g., transfer of shares of foreign companies).

Describes 'Round Tripping' where money flows out to a foreign jurisdiction (e.g., for tax advantages) and returns as FDI, indicating cross-border routing for tax reasons is recognised in these texts.

A student could use this pattern to investigate whether 'Indirect Transfers' refers to such routed transactions (i.e., transfers structured through foreign entities) rather than a simple domestic investor paying tax abroad on profits.

States that companies pay corporate tax on profits and that domestic corporations are liable to Indian corporate tax, highlighting that profit taxation has residence/source rules.

A student could combine this with knowledge of residence/source tax principles to test whether profits from an Indian resident’s foreign investment would typically be taxed abroad, in India, or both—thus assessing the plausibility of the statement.

Defines Net Factor Income from Abroad (NFIA) as the difference between factor income earned by residents abroad and by non-residents in India, showing that income arising from cross-border investments is a recognized category in national accounts.

A student could use NFIA concept plus a world map or tax treaty basics to judge whether profits from an Indian entity’s foreign investment are likely to be treated as foreign-source income (and thus taxed abroad) or as Indian-source for 'Indirect Transfer' rules.

Explains the Place of Effective Management (PoEM) rule: if PoEM is in India a foreign company is treated as Indian resident and its global income becomes taxable in India.

A student can use this to infer that tax treatment of foreign companies depends on residence/management location — so 'indirect' cross-border profit allocation issues (like indirect transfers) relate to where the company is taxed.

Distinguishes equalization levy (direct tax on revenue for non-resident digital suppliers) from income tax payable when a foreign firm has a permanent establishment in India.

One can extend this to see that whether profits are taxed in India vs taxed abroad depends on physical presence/PE — relevant to whether an investment's profits are taxed in the resident country or India.

Gives the general distinction between direct and indirect taxes: who legally pays vs who bears the burden (and examples).

A student could apply this rule to ask whether 'indirect transfer' is a nomenclature about tax incidence or a specific anti-avoidance concept affecting cross-border income.

Defines 'Foreign Investment' as investment by non-residents into capital instruments of Indian companies — clarifies the transactional subject (foreign company investing in India).

Using this, a student can map scenarios where a foreign entity holds Indian capital and then ask whether profit taxation occurs in India or only in the investor's residence.

States that companies registered in India are liable to corporate tax on profits (i.e., registration/residence affects where corporate profits are taxed).

A student can combine this with PoEM/PE rules to judge whether a foreign investor's profits from Indian investments might instead be taxed in the investor's country of residence.

Explains that purchase and sale of foreign assets are recorded on the capital account and that purchase of assets abroad is treated as an outflow (debit).

A student could use this rule plus a map of ownership flows to see that an Indian buyer owning foreign assets creates cross‑border asset holdings that could generate taxable repatriated proceeds.

Defines FDI as purchase of assets in the rest of the world (example: purchase of firms abroad), i.e., foreign acquisition of control over assets.

One could extend this to ask whether a sale of such foreign assets by an Indian investor would be treated under tax rules for cross‑border asset transfers (potentially relevant to 'indirect transfer' debates).

Distinguishes portfolio investment (no control) from FDI (control) when purchasing foreign assets, indicating different legal/tax character depending on stake/control.

A student might combine this with knowledge of who owned the foreign asset (controlling vs non‑controlling stake) to judge if a cross‑border sale could be treated differently under 'indirect transfer' concepts.

Notes that multinationals remit profits abroad and that profit remittances are a common cross‑border flow tied to asset ownership and sale.

Using this pattern, a student could infer that proceeds repatriated after sale of foreign assets are a typical cross‑border income flow that tax authorities might scrutinize as part of 'indirect transfers'.

Gives the concept of 'Round Tripping' where funds move abroad and return as FDI, illustrating layered cross‑border structures used for tax/ownership purposes.

A student could apply this pattern to suspect that indirect transfer rules often concern transactions that use foreign jurisdictions or intermediaries to alter tax consequences of owning/selling assets.

Mentions 'Round Tripping' and 'Shell Company' concepts showing use of foreign entities to route investments into India, a pattern behind indirect structures.

A student could use this to suspect that transfers of foreign‑incorporated vehicles (shells) might be taxed if they effectively move India‑linked economic value.

Explains that purchasing shares abroad is a capital account transaction, indicating shares of foreign companies are treated as assets for cross‑border tax/accounting purposes.

One could extend this to check whether Indian tax rules treat transfer of such foreign shares as taxable when underlying value comes from Indian assets.

Defines related‑party/intra‑group transactions and transfer pricing, highlighting scrutiny of cross‑border group deals that shift value between jurisdictions.

A student might infer that transfers within groups (e.g., sale of a foreign holding company) could be examined for India‑linked value under indirect transfer concepts.

Notes regulatory distinctions (FEMA/DPIIT) for foreign investment and also the term 'Overseas Direct Investment' when Indian companies invest abroad, showing legal attention to cross‑border share holdings.

This suggests checking statutory/regulatory regimes to see if transfers of foreign shareholdings affecting India are captured as indirect transfers.

Differentiates portfolio investment (shares) from FDI (control), emphasizing that shares of foreign companies are recognized investment instruments and may be treated differently based on control.

A student could use this to explore whether indirect transfer rules apply more to transfers that convey effective control/value derived from Indian assets rather than passive portfolio trades.