Notification No. 18/2021 [F. No. 370142/24/2019-TPL] /GSR 194(E)

Last updated: 18 March 2021

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The Central Board of Direct Taxes has issued Notification No. 18/2021, introducing the Income-tax (5th Amendment) Rules, 2021. These rules, effective from 1st April 2021, amend the Income-tax Rules, 1962. A new rule, 29BA, has been inserted, detailing the process for non-residents to apply for a certificate to determine the appropriate proportion of sums (other than salary) payable to them that are chargeable to tax in India.

MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 16th March, 2021
(INCOME-TAX)

G.S.R. 194(E).—In exercise of the powers conferred by section 195 read with section 295 of the Income- tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes, hereby, makes the following rules further to amend the Income-tax Rules, 1962, namely:-

1. Short title and commencement.- (1) These rules may be called the Income-tax (5th Amendment) Rules,2021. (2) They shall come into force with effect from the 1st day of April, 2021.

2. In the Income-tax Rules, 1962 (hereinafter referred to as the principal rules), after rule 29B, the following rule shall be inserted, namely, —

“29BA. Application for grant of certificate for determination of appropriate proportion of sum (other than Salary), payable to non-resident, chargeable in case of the recipients.

(1) An application by a person for determination of appropriate proportion of sum chargeable in the case of non-resident recipient under sub-section (2) or sub-section (7) of section 195 shall be made in Form 15E electronically,-

(i) under digital signature; or

(ii) through electronic verification code.

(2) The Assessing Officer, in order to satisfy himself, shall examine whether the sum being paid or credited is chargeable to tax under the provisions of the Act read with the relevant Double Taxation Avoidance Agreement, if any, and if the sum is chargeable to tax he shall proceed to determine the appropriate proportion of such sum chargeable to tax.

(3) The Assessing Officer shall examine the application and on being satisfied that the whole of such sum would not be the income chargeable in case of the recipient, may issue a certificate determining appropriate proportion of such sum chargeable under the provision of this Act, for the purposes of tax deduction under sub-section (1) of section 195.

(4) While examining the application, the Assessing Officer shall also take into consideration, following information in relation to the recipient:-

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FAQ :

The Income-tax (5th Amendment) Rules, 2021, come into force with effect from the 1st day of April, 2021.

Rule 29BA outlines the procedure for a person to apply for a certificate to determine the appropriate proportion of a sum (other than salary) payable to a non-resident that is chargeable to tax in India.

An application under Rule 29BA must be made in Form 15E electronically, either under digital signature or through an electronic verification code.

The Assessing Officer will examine whether the sum being paid or credited is chargeable to tax under the Income-tax Act and any relevant Double Taxation Avoidance Agreement. If chargeable, they will determine the appropriate proportion of that sum.

While examining the application, the Assessing Officer will take into consideration specific information related to the non-resident recipient.