The Central Board of Direct Taxes (CBDT) has notified a new set of rules under which assessees will have to submit an electronic form for determining the taxable portion of any amount – other than salary – paid to an non-resident Indian or a foreign company in cases where assessee believes that the entire amount is not taxable.

The rules will be applicable from April 1, 2021, the Board said in a notification.

The rules, that prescribe a fixed format for application under Form 15E, specify that the assessing officer will examine whether the amount paid or credited is chargeable to tax under the provisions of the Act read with the relevant Double Taxation Avoidance Agreement.

In case of taxability, the amount which is liable to tax will be determined. In case of non-taxability, a certificate specifying the amount for tax deduction will be issued. The officer will specify the period of the certificate’s validity.

The officer will consider tax payable on estimated income of the previous year relevant to the assessment year, tax payable on the assessed or returned or estimated income of preceding four previous years, the existing liability under the income-tax and wealth-tax Acts and advance tax payment, tax deducted at source and tax collected at source for the assessment year relevant to the previous year till the date of making application.

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