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

Under Rule 214 of the Income-tax Rules, 2026, while issuing a certificate for the appropriate proportion of a sum payable to a non-resident, the Assessing Officer takes into account certain matters relating to the recipient. Which of the following is among them?

The Assessing Officer considers the tax payable on the assessed, returned or estimated income of the preceding four tax years, along with estimated income of the current year, existing liabilities under both Acts, and advance tax, TDS and TCS paid.

  1. ATax payable on assessed or returned or estimated income of the preceding four tax yearsCorrect
  2. BTax payable on income of the preceding ten tax years only
  3. COnly the existing liability under the Income-tax Act, 2025, excluding the Income-tax Act, 1961
  4. DThe payer's turnover in the relevant tax year

Explanation

Rule 214(3) lists the factors: tax on estimated income of the relevant year, tax on assessed, returned or estimated income of the preceding four tax years, existing liability under the 2025 Act and the 1961 Act, and advance tax, TDS and TCS for the year. Ten years is wrong, the 1961 Act liability is also included, and payer turnover is irrelevant.

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