RBI/2013-14/669
A.P. (DIR Series) Circular No.151
June 30, 2014
To
All Category – I Authorised Dealer Banks
Madam/ Sir,
Remittances to non-residents – Deduction of Tax at Source
Attention of Authorised Dealers in Foreign Exchange is invited to
A.P
(DIR Series) Circular No. 56 dated November 26, 2002 read with
A. P. (DIR
Series) Circular No. 3 dated July 19, 2007 regarding the procedure to be
followed in respect of deduction of tax at source while allowing remittances to
the non-residents.
- The Central Board of Direct Taxes (CBDT) has revised the existing
instructions to be followed while allowing remittances to the non residents,
with effect from October 1, 2013. It has issued Income Tax (14th Amendment)
Rules, 2013 vide Notification No. S.O 2659(E) dated September 2, 2013 on
furnishing of information under Section 195(6) of the Income Tax Act, 1961
and prescribed the rules and forms to this effect.
- Reserve Bank of India has reviewed the policy relating to issue of
instructions under Foreign Exchange Management Act, 1999 (FEMA), clarifying
tax issues. It has now been decided that Reserve Bank of India will not
issue any instructions under the FEMA, in this regard. It shall be mandatory
on the part of Authorised Dealers to comply with the requirement of the tax
laws, as applicable.
- Authorised Dealers may bring the content of this circular to the notice
of their constituents concerned. Further, they may also be advised to
approach CBDT for any clarification in this regard.
- The directions contained in this circular have been issued under Section
10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of
1999) and are without prejudice to permissions/approvals, if any, required
under any other law.
Yours faithfully
(C.D. Srinivasan)
Chief General Manager