Income-Tax Clearance Certificate/No Objection Certificate
AP (DIR Series) (2002-2003) Circular No. 27, dated 28-9-2002
Attention
of Authorised Dealers is invited to the Notification F.No.500/152/96-FID
dated November 18, 1997, issued by the Central Board of Direct Taxes (copy
enclosed) in terms of which a person making remittance of foreign exchange
could submit an undertaking in duplicate addressed to the Assessing Officer,
which should be signed by a person authorised to sign the Income-tax Return of
the applicant together with a certificate in duplicate from the Accountant.
2. Accordingly,
authorised dealers are advised that they may accept an undertaking made in
accordance with the Notification dated November 18, 1997, referred to above, in
lieu of an ‘Income-tax Clearance Certificate’ or a ‘No Objection Certificate’
as prescribed in the respective Notifications and related circulars issued
under Foreign Exchange Management Act, 1999 and allow remittance of foreign
exchange.
3. It is
clarified that in case of NRIs/PIOs who do not maintain NRO account and have no
taxable income in India, authorised dealers may allow remittances after
obtaining a simple declaration from them, as per the procedure prescribed in AP
(DIR Series) Circular No.26 dated September 28, 2002.
4. Authorised
Dealers may bring the contents of this Circular to the notice of their
constituents concerned.
5. The
directions contained in this circular have been issued under section 10(4) and
section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999).
Subject : Remittance to a non-resident - deduction of tax at source - Submission of No Objection Certificate - Dispensing with - regarding
1. Section 196
of the Income-tax Act, 1961 provides that any person responsible for paying to
a non-resident any sum chargeable under the Act shall, at the time of credit of
such income to the account of the payee or at the time of repayment thereof in
cash or by cheque or draft or any other mode, whichever is earlier, deduct
income-tax thereon at the rates in force.
2. The Reserve
Bank of India have provided in their Office Manual that no remittance shall be
allowed unless a No Objection Certificate has been obtained from the Income-tax
Department. It has since been decided that henceforth remittances may be
allowed by the Reserve Bank of India without insisting upon a No Objection
Certificate from the Income-tax Department and on the person making the
remittance furnishing an undertaking (in duplicate) addressed to the Assessing
Officer accompanied by a certificate from an Accountant (other than an
employee) as defined in the Explanation below section 288 of the
Income-tax Act, 1961 in the form annexed to this circular. The person making
the remittances shall submit the undertaking along with the said certificate of
the Accountant to the Reserve Bank of India, who in turn shall forward a copy
thereof to the Assessing Officer.
3. The contents
of this Circular may be brought to the notice of all the officers working in
your charge.
To
..................................................................................................................................................................................
(Designation of the Assessing Officer),
..................................................................................................................................................................................
..................................................................................................................................................................................
I/We..........................................................................................................................................................................
(Name, address
& Permanent Account Number) propose to make a remittance
of....................................................………… (Amount) being.............................................................
(Nature
of payment) to.............................................................................................................................................................(Name &
complete address of the person to whom the remittance has been made) after
deducting a sum of Rs.....……………being the tax @.........……., which is the
appropriate rate of tax deductible at source on the said amount of remittance.
2. A
certificate from the accountant as defined in Explanation below section 288 of
the Income-tax Act certifying the nature and amount of income, amount of tax
payable and the amount actually paid, is also annexed.
3. In case
it is found that the tax actually payable on the amount of remittance made has
either not been paid or has not been paid in full, I/we undertake to pay the
said amount of tax along with interest found due in accordance with the
provision of the Income-tax Act.
4. I/we
will also be subject to the provisions of penalty and prosecution for the said
default as per the Income-tax Act.
5. I/we
also undertake to submit the requisite documents etc. for enabling the
Income-tax Department to determine the nature and amount of income and tax,
interest, penalty etc. payable thereon.
(Name and signature)
Date :
Place :
(The
Undertaking shall be signed by the person authorised to sign the return of
income of the person making the payment)
I/we
have examined the books of account of
M/s..................................................................................................................................
(Name,
address and Permanent Account Number of person making the remittance) for
ascertaining the nature of the remittance,
of......................................................................................................................................................
(Amount of remittance) to....................................................................................................................................
(Name and complete address of the person to whom the
remittance is being made) and the rate at which the tax is deductible at source
thereon and hereby certify that a sum of
Rs. ............................... has been deducted as tax at the appropriate
rate and has been paid to the credit of the Government.
................................
(Accountant)
Place
:
Date
: