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

Zenith Components Ltd. wants to pay a non-resident supplier a sum of which only part may be chargeable to tax in India. It applies to the Assessing Officer in the prescribed form for determining the appropriate proportion of the sum chargeable, so that tax is deducted only on that portion. Under Rule 214 of the Income-tax Rules, 2026, which statement is correct?

The payer applies in Form No. 129, and the certificate is valid only for the named non-resident and the period specified in it. The Assessing Officer may cancel it earlier, and a fresh application can be made after expiry or within three months before expiry.

  1. AThe application is made in Form No. 129 and the certificate is valid only for the named non-resident and the period specified in itCorrect
  2. BThe application is made by the non-resident recipient and the certificate is valid for all payees of the payer
  3. CThe certificate, once issued, cannot be cancelled by the Assessing Officer before its period ends
  4. DA fresh certificate can be applied for only after six months from expiry of the earlier one

Explanation

Rule 214(1) requires the payer to apply in Form No. 129. Rule 214(4) says the certificate is valid only for the non-resident named in it and for the period specified, unless cancelled earlier by the Assessing Officer. So cancellation is possible, and a fresh application may be made after expiry or within three months before expiry.

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