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CA Final · Direct Tax Laws & International Taxation · Non Resident Taxation

The Assessing Officer issued a certificate under Rule 214 of the Income-tax Rules, 2026 to Kaveri Traders Ltd for payments to a non-resident, Mr. Olsen, valid for 1 April to 30 September of the tax year. Which statement is correct?

The certificate is valid only for payments to Mr. Olsen, the named non-resident, and only for the specified period, unless the Assessing Officer cancels it earlier. It cannot be used for other recipients, and cancellation before expiry is permitted under Rule 214(4).

  1. AThe certificate is valid only for payments to Mr. Olsen for the period specified, unless cancelled earlier by the Assessing OfficerCorrect
  2. BThe certificate can be used for payments to any non-resident for the whole tax year
  3. CA fresh application can be made only after one year from expiry of the certificate
  4. DThe certificate cannot be cancelled once issued

Explanation

Rule 214(4) states the certificate is valid only for payment to the non-resident named and for the period specified, unless cancelled by the Assessing Officer before expiry. Rule 214(5) allows a fresh application after expiry or within three months before expiry, so the one-year restriction is wrong. Use for other non-residents is not permitted.

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