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

Under Rule 214(3) of the Income-tax Rules, 2026, while issuing the certificate for the appropriate proportion of a sum chargeable in the hands of a non-resident recipient, which of the following must the Assessing Officer take into consideration?

The Assessing Officer must consider tax on the estimated income of the relevant year, tax on the preceding four tax years' income, existing liability under the 2025 Act and the repealed 1961 Act, and advance tax, TDS and TCS paid. So the option covering four preceding years and existing liabilities is correct.

  1. ATax payable on the assessed or returned or estimated income of the preceding four tax years, and existing liability under the Act and the earlier 1961 ActCorrect
  2. BOnly the estimated income of the relevant tax year, ignoring earlier years
  3. CTax payable on the income of the preceding ten tax years only
  4. DOnly the advance tax paid, without considering tax deducted or collected at source

Explanation

Rule 214(3) lists estimated income tax of the relevant year, tax on assessed/returned/estimated income of the preceding four tax years, existing liability under both Acts, and advance tax, TDS and TCS for the year. The other options narrow or alter this list wrongly, for example using ten years instead of four.

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