Application by payer for grant of certificate under section 395(2) or section 400(3) for determination of appropriate proportion of sum (other than salary), payable to non-resident, chargeable in case of recipients

Application by payer for grant of certificate under section 395(2) or section 400(3) for determination of appropriate proportion of sum (other than salary), payable to non-resident, chargeable in case of recipients.

214. (1) An application by a person for determination of appropriate proportion of sum chargeable in the case of non-resident recipient under section 395(2) or section 400(3), shall be made in Form No. 129.

(2) The Assessing Officer shall examine, whether the sum being paid or credited by such person to the non-resident is chargeable to tax under the provisions of the Act read with the relevant Double Taxation Avoidance Agreement, if any, and—

(a) where the whole of such sum would not be the income chargeable in case of the non-resident recipient, he shall proceed to determine the appropriate proportion of such sum chargeable to tax; and

(b) issue a certificate thereof for tax deduction under section 393(2) [Table: Sl. No. 17].

(3) The Assessing Officer shall issue the certificate specified in sub-rule (2), after taking into consideration the following in relation to the recipient:—

(a) tax payable on estimated income of the relevant tax year;

(b) tax payable on the assessed or returned or estimated income, as the case may be, of preceding four tax years;

(c) existing liability under the Act, and the Income-tax Act, 1961 (43 of 1961)(as it existed prior to its repeal); and

(d) advance tax payment, tax deducted at source and tax collected at source for the relevant tax year, till the date of making application or till the date of issuance of certificate.

(4) The certificate shall be valid only for the payment to non-resident named therein and for such period of the tax year as may be specified in the certificate, unless it is cancelled by the Assessing Officer at any time before the expiry of the specified period.

(5) An application for a fresh certificate may be made by the assessee after the expiry of the period of validity of the earlier certificate, or within three months before the expiry thereof.