Indian tax authorities on Friday granted relaxation from compulsory e-filing of return of income for assessment year 2012-13 for representative assesses or agents of non-resident persons including foreign companies where total income exceeds Rs 1 million. A tax expert told this scribe that the Central Board of Direct Taxes, India has issued instructions to the filed formations here on Friday.
According to the Indian tax authorities, Rule 12 of the Income-tax Rules, 1962 mandates that an individual or Hindu undivided family, if his or its total income or the total income in respect of which he is or it is assessable under the Act, during the previous year, exceeds Rs 1 million, shall furnish the return electronically for the assessment year 2012-13 and subsequent assessment years.
It has been brought to the notice of the Board that the agents of non-residents, within the meaning of section 160(1) (i) of the Income tax Act, are facing difficulties in electronically furnishing the returns of non-residents. This is because there may be more than one agent of the non-resident in India for different transactions or a person in India may be an agent of more than one non-resident. Such situations are not covered by the existing e-filing software which functions on the principle of one assessee-one Permanent Account Number (PAN)-one return. The PAN is a 10-digit alphanumeric number, issued in the form of a laminated card, by the Income Tax Department, to any "person" who applies for it or to whom the department allots the number without an application.
It has also been brought to the notice of the Board that 'private discretionary trusts' having total income exceeding Rs 1 million are facing problems in filing their return of income electronically in cases where they are filing their return in the status of an individual. This is because status of a private discretionary trust has been held in law as that of an 'individual'. The existing e-filing software does not accept the return of a private discretionary trust in the status of an 'individual'.
Accordingly it has been decided by the Board that: (i) it will not be mandatory for agents of non-residents, within the meaning of section 160(1) (i) of the Income -tax Act, if his or its total income exceeds Rs 1 million, to electronically furnish the return of income of non-residents for assessment year 2012-13; (ii) it will not be mandatory for 'private discretionary trusts', if its total income exceeds Rs 1 million, to electronically furnish the return of income for assessment year 2012-13, instructions added.
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