CA Final · Direct Tax Laws & International Taxation · Non Resident Taxation
Meera Traders in Pune wants to pay a sum (other than salary) to a non-resident, only part of which is chargeable to tax in India. Meera applies to the Assessing Officer for a certificate of the appropriate proportion chargeable. Under the Income-tax Rules, 2026 (Rule 214), which statement is correct?
The payer applies in Form No. 129, and where the whole sum is not chargeable the Assessing Officer determines the appropriate proportion chargeable to tax and issues a certificate for deduction of tax. The certificate is valid only for the named non-resident and the specified period.
- AThe application is made in Form No. 129 and the Assessing Officer determines the appropriate proportion of the sum chargeable to taxCorrect
- BThe application is made by the non-resident recipient and the certificate is valid for any payer
- CThe certificate is valid for the whole tax year irrespective of the period specified in it
- DThe Assessing Officer considers only the estimated income of the relevant tax year
Explanation
Rule 214(1) requires the payer's application in Form No. 129, and rule 214(2)(a) directs the Assessing Officer to determine the appropriate proportion where the whole sum is not chargeable. The certificate is valid only for the named non-resident and the specified period. The Officer also considers the preceding four tax years, existing liability and advance tax, TDS and TCS paid, not just estimated income.
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