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CMA Final · Direct Tax Laws and International Taxation · Interest and Fees

Under section 207(8) of the Income-tax Act, 2025, when is a non-resident not required to furnish a return of income for a tax year?

No return is needed when the total income consists only of the special-rate incomes listed in section 207 (dividend, specified interest, fund-unit income, royalty and fees for technical services) and tax was deducted at source at a rate not less than the specified rates. Both conditions must be satisfied.

  1. AWhen its total income consists only of specified special-rate income (dividend, interest, and fund-unit income in the Table serial numbers 1 to 7 of section 207(1), and royalty or fees for technical services under section 207(2)) and tax has been deducted at source at not less than the specified ratesCorrect
  2. BWhen its total income does not exceed Rs 10,00,000 irrespective of the nature of income
  3. CWhen tax has been deducted at source at any rate on any of its income
  4. DWhen its income consists only of business income taxed at rates in force

Explanation

Section 207(8) grants relief only if both conditions are met: total income consists only of the listed special-rate incomes, and tax deductible under Chapter XIX-B has been deducted at a rate not less than the specified rates. Any TDS at any rate, or a monetary threshold, is not the test.

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