The Central Board of Direct Taxes vide Notification No. 119/2021/F. No. 225/76/2021-ITA.II dated 11th October 2021 has dispensed requirement of furnishing return of Income u/s 139(1) of Income Tax Act, 1961 from assessment year 2021-2022 onwards in case of non-residents and foriegn companies subject to fulfillment of certain conditions.
The class of persons exempted with conditions thereof are tabulated below for ready reference of our readers:
| Sl. No. | Class of Persons | Conditions |
| 1 | (i) a non-resident, not being a company; or (ii) a foreign company. | (i) The said class of persons does not earn any income in India, during the previous year, other than the income from investment in the specified fund being a trust or a company or a limited liability partnership or a body corporate as referred to in sub-clause (i) of clause (c) of Explanation to clause (4D) of section 10 of the Act; and (ii) The provisions of requirement of PAN is not applicable to the said class of persons subject to fulfillment of the conditions mentioned in sub-rule (1) of rule 114AAB of the Income-tax Rules, 1962. |
| 2 | a non-resident, being an eligible foreign investor. | (i) The said class of persons, during the previous year, has made transaction only in capital asset referred to in clause (viiab) of section 47 of the Act, which are listed on a recognised stock exchange located in any International Financial Services Centre and the consideration on transfer of such capital asset is paid or payable in foreign currency; (ii) The said class of persons does not earn any income in India, during the previous year, other than the income from transfer of capital asset referred to in clause (viiab) of section 47 of the Act; and (iii) The provisions of requirement of PAN is not applicable to the said class of persons subject to fulfillment of the conditions mentioned in sub-rule (2A) of rule 114AAB of the Income-tax Rules, 1962. |
It has also been specified that for the purposes of this Notification. –
(a) “eligible foreign investor” means a non-resident who operates in accordance with the Securities and Exchange Board of India, circular IMD/HO/FPIC/CIR/P/2017/003 dated 04th January, 2017;
(b) “International Financial Services Centre” shall have the same meaning as assigned to it in clause (q) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005);
(c) “recognised stock exchange” shall have the meaning as assigned to it in clause (ii) of Explanation 1 to sub-section (5) of section 43 of the said Act.
Further it has been mandated that the above exemption from the requirement of furnishing a return of income shall not be available to the class of persons mentioned in above Table where a notice under section 142(1) or section 148 or section 153A or section 153C of the IT Act has been issued for filing a return of income for the assessment year specified therein.
The Notification can be Read / downloaded by clicking at: https://egazette.nic.in/WriteReadData/2021/230348.pdf
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