Further, eligible foreign investors (non-residents who act as per SEBI directives), who have transacted during the financial year only in capital assets such as Global Depository Receipts, Rupee Bonds, derivatives or other notified securities of the denomination listed in IFSC are also exempted from ITR filing.
This is subject to the condition that the consideration for the transfer of such property is issued in foreign currency and no other income is earned by such class of persons in India.
However, in both the above cases, these classes of non-residents have to ensure that they are exempted from the requirement of obtaining PAN.
As per IT rules, PAN is not required if tax on income of non-residents has been duly deducted and remitted to the government by ‘specified fund’.
In addition, necessary details and documents such as contact information, TIN and residential status declaration are submitted by the non-resident to the ‘Specified Fund’.
Neha Malhotra, Director, Nangia Andersen LLP, said that since the government has all the tax related information with respect to taxpayers who are exempted from filing ITR and their income is also subject to deduction of tax at source, the move will take the government’s kitty. is not affected.
Malhotra said, “Exemption of such non-residents from the obligation to file income returns eases their compliance burden. Reducing compliance burden on taxpayers reflects the efficient tax administration of the country, which will further improve investor confidence. ”
Amit Maheshwari, tax partner, tax and consulting firm AKM Global, said the notification provides that foreign investors who invest in a fund operating in GIFT City and receive income from such fund, shall be entitled to return tax returns in India. will not be required to file, provided they do not have any other income in India.
Maheshwari said, “Anyway, such investors are not required to hold PAN in India and the exemption makes it easy to invest without any compliance hassles and thereby boost GIFT City’s position as a better investment destination. Will help.”
BDO India Associate Partner (Tax and Regulatory Services) Raghunathan Parthasarathy said that in both the cases where exemption has been given in filing of ITR, the tax authorities can access the records of the entities as the transactions are subject to securities transaction tax and are done in stock. Huh. transaction.
Parthasarathy said, “The notification is aimed at reducing the compliance burden of non-resident taxpayers in India and is a welcome move by the Government of India, and will boost the government’s ‘Ease of Doing Business’ initiative.”
Dhruv Advisors LLP Partner Sandeep Bhalla said that the notification provides exemption to the following assessees for filing return of income – non-resident entity holders of a Category III AIF set-up in IFSC, while earlier exempted from obtaining PAN . In India, they were not given any special exemption for filing return of income in India.
Bhalla said, “The notification also provides for similar exemptions to investors who are solely earning income from trading in debt and derivative securities listed on the IFSC exchange, the income from which is taxable under section 47 (viiab) of the Act. free from.”