The revenue tax division has exempted sure non-residents and international buyers from submitting Income Tax Return (ITR) from 2020-21 onwards, a transfer aimed toward easing compliance burden. Through a notification, the Central Board of Direct Taxes (CBDT) stated non-residents (corporates/ in any other case) who don’t earn any revenue apart from revenue from funding in ‘specified fund’, being Alternate Investment Fund Category III positioned in International Financial Services Centres (IFSC) or GIFT metropolis shall not be required to file ITR.
Further, eligible international buyers (non-residents who function in accordance with SEBI directions), who in the course of the monetary 12 months, have solely transacted in capital asset like Global Depository Receipts, Rupee Denominated Bonds, derivatives or different notified securities, listed on recognised inventory alternate in IFSC, have additionally been exempted from ITR submitting. This is topic to the situation that the consideration for switch of such asset is discharged in international forex and no different revenue is earned by such class of individuals in India.
However, in each the circumstances above, these courses of non-residents shall have to make sure that they’re exempted from the requirement of acquiring PAN. As per I-T guidelines, PAN is just not required if tax has been duly deducted on revenue of non-residents and remitted to the federal government by the ‘specified fund’.
Additionally, 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 be topic to deduction of tax at supply, this transfer would not influence the federal government kitty.
“Exempting such non-residents from the obligation of filing the return of income, simply eases their compliance burden. Reducing the compliance burden on taxpayers reflects on the country’s efficient tax administration, which will further improve investor confidence,” Malhotra stated. Tax and consulting agency AKM Global, Tax Partner Amit Maheshwari stated the notification has supplied that the abroad buyers who put money into a fund working in Gift City 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 investors are not required to have PAN in India and the relaxation further makes it easier to invest without much compliance hassles and this will help in further boosting the status of Gift city as a preferable investment destination,” Maheshwari added. BDO India Associate Partner (Tax & Regulatory Services) Raghunathan Parthasarathy stated in each the circumstances the place ITR submitting exemption has been given, the tax officer might entry the data of the entities as transactions are topic to Securities Transaction Tax and are carried out within the inventory alternate.
“The notification aims at reducing the compliance burden of non-resident taxpayers in India and is a welcome move from the Government of India, and will promote the government’s ‘Ease of Doing Business’ initiative,” Parthasarathy stated. Dhruva Advisors LLP Partner Sandeep Bhalla stated the notification supplies exemption to following assessees to file their return of revenue — non-resident unit holders of a Category 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 also provides similar exemption to investors that are solely earning income from trading in debt and derivative securities listed on IFSC exchange, the income from which is exempted from tax u/s 47(viiab) of the Act,” Bhalla added.