Rule 124 of Income explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Rule 124 of the Income-tax Rules, 2026 operationalises section 511 — the country-by-country report. Form No. 58 is the notification, due two months before the report; Form No. 59 is the report itself, filed by a resident parent or alternate reporting entity; Form No. 60 conveys a designated constituent entity; the consolidated group revenue threshold is Rs 6,400 crore; and a constituent entity filing under section 511(4) has twelve months.
The authority — sub-rule (1)
The income-tax authority for the purposes of section 511 shall be the Joint Director, as may be designated by the Director General of Income-tax (Systems). This is the same officer to whom the master file under rule 123 is furnished, so both international-group filings go to a single designated authority.
The three forms
| Form | What it is | Who files it | When |
|---|---|---|---|
| Form No. 58 | The notification under section 511(1) | The constituent entity | Two months prior to the due date for furnishing the report under section 511(2) |
| Form No. 59 | The report under section 511(2) | Every parent entity or alternate reporting entity resident in India, for every reporting accounting year | Per section 511(2) |
| Form No. 60 | The information under section 511(5) regarding the designated constituent entity | The international group's constituent entities in India | Per section 511(5) |
Sub-rule (2) fixes the notification at two months prior to the report's due date. It is the earliest date in the whole country-by-country calendar and the one most often missed, because the substantive report is what the group is focused on. Build the calendar backwards from the section 511(2) due date: notification at minus two months, master file designation under rule 123(4) at minus thirty days from its own due date, then the filings.
The two extended periods — sub-rules (4) and (5)
| Situation | Period |
|---|---|
| A constituent entity filing under section 511(4) | Twelve months from the end of the reporting accounting year |
| The parent entity is resident in a country or territory where there has been a systemic failure, and that failure has been intimated to the constituent entity | Six months from the end of the month in which the systemic failure was intimated |
The systemic-failure period is measured from intimation, not from the failure itself and not from the year end. Until the intimation reaches the constituent entity, the clock has not started; once it does, six months run from the end of that month.
The Rs 6,400 crore threshold — sub-rules (7) and (8)
For the purposes of section 511(8), the total consolidated group revenue of the international group shall be Rs 6,400 crore.
Where that revenue is in foreign currency, the conversion rate is the telegraphic transfer buying rate of that currency on the last day of the accounting year preceding the accounting year.
Rule 123(6) converts the master file revenue threshold at the TT buying rate on the last day of the accounting year. Rule 124(8) converts the country-by-country threshold at the rate on the last day of the accounting year preceding it. The difference is deliberate — the country-by-country test looks at the prior year's revenue — and using one date for both tests will produce a wrong threshold conclusion for a group sitting near the line.
Revising a filed report — sub-rule (9)
Any revision or correction in the report furnished in Form No. 59 shall be made by furnishing an intimation to the Director General of Income-tax (Systems).
Note where the intimation goes. The report itself is filed to the designated Joint Director under sub-rule (1); the correction intimation goes to the Director General (Systems). Sending a correction to the filing officer alone does not meet sub-rule (9).
Definitions — sub-rule (10)
- "accounting year", "consolidated financial statement" and "international group" — as assigned in section 511(10).
- "telegraphic transfer buying rate" — as assigned in rule 207.
Rule 10DB and rule 124 compared
| Point | Rule 10DB (1962) | Rule 124 (2026) |
|---|---|---|
| Parent provision | Section 286 | Section 511 |
| Notification | Form 3CEAC | Form No. 58 |
| The report | Form 3CEAD | Form No. 59 |
| Designated entity intimation | Form 3CEAE | Form No. 60 |
| Notification lead time | Two months | Two months |
| Revenue threshold | Rs 6,400 crore | Rs 6,400 crore |
| Constituent entity period | Twelve months | Twelve months from the end of the reporting accounting year |
| Systemic failure period | Six months | Six months from the end of the month of intimation |
| Authority | Prescribed authority | Joint Director designated by DGIT (Systems) |
How rules 123 and 124 fit together
- Rule 84 — the local transfer pricing documentation every taxpayer with an international transaction keeps.
- Rule 123 — the master file, group-level, Rs 500 crore plus Rs 50 crore or Rs 10 crore, Form No. 56 with Form No. 57 designation.
- Rule 124 — the country-by-country report, Rs 6,400 crore, Forms No. 58, 59 and 60.
The three tiers correspond to the standard local-file, master-file and country-by-country architecture. A group can be inside rule 123 and outside rule 124, but not the reverse in any practical case — the Rs 6,400 crore threshold sits well above the Rs 500 crore one.
Compliance checklist
- Build the calendar backwards from the section 511(2) due date; Form No. 58 sits two months before it.
- Test the Rs 6,400 crore threshold using the TT buying rate on the last day of the preceding accounting year.
- Confirm whether the Indian entity is a parent, alternate reporting entity or ordinary constituent entity — the form and the period differ.
- Where a designated constituent entity is used, file Form No. 60.
- Where the parent's jurisdiction has a systemic failure, diarise six months from the end of the month of intimation and keep the intimation.
- Send any correction to Form No. 59 as an intimation to the Director General (Systems).
- Cite rule 124 and section 511, not rule 10DB and section 286.
Common mistakes
- Filing Form No. 58 with the report rather than two months earlier.
- Converting the Rs 6,400 crore threshold at the current year end.
- Counting the systemic-failure six months from the year end.
- Correcting Form No. 59 by refiling with the Joint Director instead of intimating the Director General (Systems).
- Assuming a master file obligation implies a country-by-country obligation. The thresholds are more than twelve times apart.