The Finance Act, 2011 introduced section 285 in the Income Tax Act, 1961 with effect from 1 June 2011 to provide for filing of an annual statement by a non-resident having a Liaison Office (LO) in India with the jurisdictional Assessing Officer within 60 days from the end of a financial year in the prescribed form.
In connection with the above, the Central Board of Direct Taxes (CBDT) has provided for Rule 114DA in the Income Tax Rules 1962 and prescribed the annual statement, Form No. 49C, to provide for the information and particulars to be furnished by the non-resident having LO in India. The salient features of the said rule are:
Signing of Annual statement: Annual statement is required to be verified by a Chartered Accountant or by a Signatory duly authorised in this behalf by the non-resident.
Format for filing of annual statement: Annual statement is required to be furnished in electronic form along with the digital signature following the procedure to be prescribed by the Director General of Income-tax (Systems).
Prescribed Information - The form prescribes information to be provided, amongst others on:
‒ India specific financial details for the financial year i.e., receipts, income and expenses of the non-resident person from or in India and not only of the LO;
‒ Details of all purchases, sales of material, and services from/to Indian parties during the year by the non-resident person (not limited to transactions made by LO.
‒ Details of any salary or compensation of any sort payable outside India to any employee working in India or for services rendered in India
‒ Total Number of employees working in the LO/LOs during the year
‒ Details of agents/representative/distributors of the non-resident person in India and names & addresses of the top five parties in India with whom the L.O. has been doing the liaisoning
‒ Details of Products or services for which liaisoning activity is done by the LO
‒ Details of any other entity for which liaisoning activity is done by the LO
‒ Details of Group entities present in India as Branch Office/Companies/LLPs etc., incorporated in India and nature their business activities
‒ Details of other LOs of the Group entities in India
‒ Other Group entities operating from the same premises as the office of the LO
The detailed procedure for filing of the annual statement in Form No 49C is yet to be notified.
It may also be noted that a LO is also required to furnish the Annual Activity Certificate to the designated Authorised Dealer (AD) Category – I bank
In connection with the above, the Central Board of Direct Taxes (CBDT) has provided for Rule 114DA in the Income Tax Rules 1962 and prescribed the annual statement, Form No. 49C, to provide for the information and particulars to be furnished by the non-resident having LO in India. The salient features of the said rule are:
Signing of Annual statement: Annual statement is required to be verified by a Chartered Accountant or by a Signatory duly authorised in this behalf by the non-resident.
Format for filing of annual statement: Annual statement is required to be furnished in electronic form along with the digital signature following the procedure to be prescribed by the Director General of Income-tax (Systems).
Prescribed Information - The form prescribes information to be provided, amongst others on:
‒ India specific financial details for the financial year i.e., receipts, income and expenses of the non-resident person from or in India and not only of the LO;
‒ Details of all purchases, sales of material, and services from/to Indian parties during the year by the non-resident person (not limited to transactions made by LO.
‒ Details of any salary or compensation of any sort payable outside India to any employee working in India or for services rendered in India
‒ Total Number of employees working in the LO/LOs during the year
‒ Details of agents/representative/distributors of the non-resident person in India and names & addresses of the top five parties in India with whom the L.O. has been doing the liaisoning
‒ Details of Products or services for which liaisoning activity is done by the LO
‒ Details of any other entity for which liaisoning activity is done by the LO
‒ Details of Group entities present in India as Branch Office/Companies/LLPs etc., incorporated in India and nature their business activities
‒ Details of other LOs of the Group entities in India
‒ Other Group entities operating from the same premises as the office of the LO
The detailed procedure for filing of the annual statement in Form No 49C is yet to be notified.
It may also be noted that a LO is also required to furnish the Annual Activity Certificate to the designated Authorised Dealer (AD) Category – I bank
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