The Central Board of Direct Taxes (CBDT) on Monday notified the Income-tax (19th Amendment) Rules, 2020 in respect of non-furnishing of PAN by non-resident and FORM No. 49BA.
The Board seeks to amend the Income-tax Rules, 1962.
In rule 37BC, after sub-rule (2), “the provisions of section 206AA shall not apply in respect of payments made to a person being a non-resident, not being a company, or a foreign company if the provisions of section 139A do not apply to such person on account of rule 114AAB,” sub-rule (3) shall be inserted.
Section 139A of the Income Tax Act provides that every person specified therein, who has not been allotted a PAN, shall apply to the Assessing Officer for allotment of PAN.
However, the amendment in the Principle Rule inserted Rule 114AAB wherein class or classes of person are specified to whom provisions of section 139A shall not apply.
Rule 114AAB says, “section 139A shall not apply to a non-resident, not being a company, or a foreign company, (hereinafter referred to as the non-resident) who has, during a previous year, made an investment in a specified fund.”
The rule further imposes several conditions on the non-residents.
Firstly, the non-resident does not earn any income in India, other than the income from investment in the specified fund during the previous year.
Secondly, any income tax due on the income of non-resident has been deducted at source and remitted to the Central Government by the specified fund at the rates specified in section 194LBB of the Act.
Lastly, the non-resident furnishes the following details and documents to the specified fund, namely, the name, e-mail id, contact number; address in the country or specified territory outside India of which he is a resident; a declaration that he is a resident of a country or specified territory outside India; and Tax Identification Number in the country or specified territory of his residence and in case no such number is available, then a unique number on the basis of which the non- resident is identified by the Government of that country or the specified territory of which he claims to be a resident.
“The specified fund shall furnish a quarterly statement for the quarter of the financial year, in which the details and documents referred to in clause (iii) of sub-rule (1) are received by it, in Form No.49BA to the Principal Director General of Income-tax (Systems) or the Director-General of Income-tax (Systems) or the person authorized by him, electronically and upload the declaration referred to in sub-clause (c) of clause (iii) of sub-rule (1) within fifteen days from the end of the quarter of the financial year to which such statement relates in accordance with the procedures, formats and standards specified by the Principal Director General of Income-tax (Systems) or the Director-General of Income-tax (Systems) under sub-rule (3),” the amendment said.
In the principal rules, in Appendix II, after Form No.49B, the Form 49BA shall be inserted.
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