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Income tax dept exempts certain non-residents, foreign investors from filing I-T returns. Check details


The revenue tax division has exempted sure non-residents and overseas buyers from submitting Revenue Tax Return (ITR) from 2020-21 onwards, a transfer aimed toward easing compliance burden.

By way of a notification, the Central Board of Direct Taxes (CBDT) stated non-residents (corporates/ in any other case) who don’t earn any revenue aside from revenue from funding in ‘specified fund’, being Alternate Funding Fund Class III situated in Worldwide Monetary Providers Centres (IFSC) or GIFT metropolis shall not be required to file ITR.

Additional, eligible overseas buyers (non-residents who function in accordance with SEBI directions), who throughout the monetary 12 months, have solely transacted in capital asset like International Depository Receipts, Rupee Denominated Bonds, derivatives or different notified securities, listed on recognised inventory alternate in IFSC, have additionally been exempted from ITR submitting.

That is topic to the situation that the consideration for switch of such asset is discharged in overseas forex and no different revenue is earned by such class of individuals in India.

Nonetheless, in each the instances above, these lessons of non-residents shall have to make sure that they’re exempted from the requirement of acquiring PAN.

As per I-T guidelines, PAN will not be required if tax has been duly deducted on revenue of non-residents and remitted to the federal government by the ‘specified fund’.

Moreover, requisite particulars and paperwork like contact data, TIN and residential standing declaration, are submitted by the non-resident to the ‘specified fund’.

Nangia Andersen LLP Director Neha Malhotra stated for the reason that authorities has all of the tax associated data relating to the taxpayers exempted from submitting ITR and their revenue can also be topic to deduction of tax at supply, this transfer does not affect the federal government kitty.

“Exempting such non-residents from the duty of submitting the return of revenue, merely eases their compliance burden. Decreasing the compliance burden on taxpayers displays on the nation’s environment friendly tax administration, which can additional enhance investor confidence,” Malhotra stated.

Tax and consulting agency AKM International, Tax Accomplice Amit Maheshwari stated the notification has supplied that the abroad buyers who put money into a fund working in Present Metropolis and having revenue from such funds shall not be required to file the tax return in India supplied they haven’t any different revenue in India.

“Anyway, such buyers should not required to have PAN in India and the comfort additional makes it simpler to speculate with out a lot compliance hassles and it will assist in additional boosting the standing of Present metropolis as a preferable funding vacation spot,” Maheshwari added.

BDO India Affiliate Accomplice (Tax & Regulatory Providers) Raghunathan Parthasarathy stated in each the instances the place ITR submitting exemption has been given, the tax officer may entry the data of the entities as transactions are topic to Securities Transaction Tax and are carried out within the inventory alternate.

“The notification goals at decreasing the compliance burden of non-resident taxpayers in India and is a welcome transfer from the Authorities of India, and can promote the federal government’s ‘Ease of Doing Enterprise’ initiative,” Parthasarathy stated.

Dhruva Advisors LLP Accomplice Sandeep Bhalla stated the notification supplies exemption to following assessees to file their return of revenue –non-resident unit holders of a Class III AIF set-up in IFSC, whereas an exemption had been supplied earlier from acquiring a PAN in India, there was no particular exemption granted to them for submitting return of revenue in India.

“The notification additionally supplies related exemption to buyers which might be solely incomes revenue from buying and selling in debt and by-product securities listed on IFSC alternate, the revenue from which is exempted from tax u/s 47(viiab) of the Act,” Bhalla added.

This story has been revealed from a wire company feed with out modifications to the textual content. Solely the headline has been modified.

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