Advance Ruling by a Resident


Advance Ruling by a Resident

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Advance ruling can now be obtained by a resident also [Section 245N]

Advance ruling can now be obtained by a resident also [Section 245N] [W.e.f. 1-10-2014]

Existing provisions relating to meaning of Advance Ruling is as under:

(a) "Advance ruling" means:

(i) a determination by the Authority in relation to a transaction which has been undertaken or is proposed to be undertaken by a non-resident applicant; or

(ii) a determination by the Authority in relation to the tax liability of a non-resident arising out of a transaction which has been undertaken or is proposed to be undertaken by resident applicant with such non-resident. In both the above cases, such determination shall include the determination of any question of law or of fact specified in the application;

(iii) a determination or decision by the Authority in respect of an issue relating to computation of total income which is pending before any income-tax authority or the Appellate Tribunal;

(iv) a determination or decision by the Authority whether an arrangement, which is proposed to be undertaken by any person being a resident or a non-resident, is an impermissible avoidance arrangement as referred to in Chapter X-A or not (applicable w.e.f. 01- 04- 2015).

Further, such determination or decision shall include the determination or decision of any question of law or of fact relating to such computation of total income specified in the application.

Amendment made by the Finance (No. 2) Act, 2014 [W.e.f. 1-10-2014]

The Act has inserted the following clause (iia) in the above definition of advance ruling:

"a determination by the Authority in relation to the tax liability of a resident applicant, arising out of a transaction which has been undertaken or is proposed to be undertaken by such applicant"

Hence, certain class or category of resident applicant will now also be allowed to obtain advance ruling. Similarly, existing provisions relating to meaning of "applicant" is as under:

(b) "Applicant" means any person who—

(i) is a non-resident for a transaction which has been undertaken or is proposed to be undertaken by him; or

(ii) is a resident for a transaction which has been undertaken or is proposed to be undertaken by him with a non-resident; or

(iii) is a resident falling within any such class or category of persons as the Central Government may, by notification in the Official Gazette, specify in this behalf, or (iv) a resident or non-resident referred to in clause

(iv) above i.e. the person who proposes to undertake an arrangement referred to in Chapter XA.

and makes an application under sub-section (1) of section 245Q.

Amendment made by the Finance (No. 2) Act, 2014 [01-10-2014]

The Act has inserted the following clause (iia) to the above definition of applicant:

"is a resident (referred to in sub-clause (iia) of clause (a) of the meaning of advance ruling given above) falling within any such class or category of persons as the Central Government may, by notification in the Official Gazette, specify".BACK

 

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