Advance Ruling facility extended to domestic tax-payers, too Domestic tax-payers can now apply for an ‘advance ruling’ to understand tax liability on their transactions. The Central Board of Direct Taxes (CBDT) has enabled the facility, which till now was open only to non-resident Indians. With this facility, taxpayers can get a view upfront on the taxability of transactions they intend to undertake or have undertaken during a financial year. The CBDT has spelt out the minimum threshold on transaction value that would be eligible for an advance ruling, and has prescribed the format of the application required, along with the fee schedule. According to the norms, a resident can use the “advance ruling” facility in relation to tax liability arising out of one or more transactions valued at ₹100 crore or more (in aggregate). Finance Minister Arun Jaitley had, while sharing the concerns of taxpayers in his maiden Budget, proposed the introduction of ‘advance ruling’ for resident taxpayers. However, the latest CBDT specification has evoked mixed response, with some tax experts suggesting that the threshold limit to be on the high side and not in the true spirit of the intended facility.
Posted on: Fri, 05 Dec 2014 16:20:01 +0000