CBDT: New Rules for Non-Furnishing of PAN by Non-Residents is notified.

On Monday in the Official Gazette of India the 19th amendment of Income Tax Rules,2020 got notified by the Central Board Of Direct Taxes (CBDT) in respect of non-furnishing of PAN by non-resident and FORM No.49 BA.

Before talking about the new amendments we should learn about Section 139A of Income Tax Act says that every person for the specified persons, who have not been allotted a PAN should apply to the Assessing Officer for the allotment of PAN.

A new sub-rule (3) got inserted in Rule 37BC after sub-rule (2) in the Income-Tax Rules, 1962 which states, “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.”

Also, a new Rule 114AAB was added after rule 114AAA which says, “The provisions of 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, invested in a specified fund if the following conditions are fulfilled, namely:

(i) The non-resident does not earn any income in India, other than the income from investment in the specified fund during the previous year.

(ii) 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.

(iii) the non-resident furnishes the following details and documents to the specified fund, namely:—

(a) name, e-mail id, contact number;

(b) address in the country or specified territory outside India of which he is a resident;

(c) a declaration that he is a resident of a country or specified territory outside India; and

(d) Tax Identification Number in the country or specified territory of his residence and case no such number is available, then a unique number based on which the non-resident is identified by the Government of that country or the specified territory of which he claims to be a resident.”

Rule 114AAB also added, “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 Principal Director-General of Income-tax or the Director-General of Income-tax shall specify the procedures, formats and standards for furnishing and verification of Form 49BA and they will be responsible for the day-to-day administration with the furnishing and verification of the quarterly statement of the specified fund.

With Warm Regards,

CL Bureau.