Annual Information Statement – Interest from specified company by a non-resident

Annual Information Statement (AIS) – Interest from specified company by a non-resident u/s 115A(1)(a)(iiaa)

Section 285BB of the Income Tax Act, 1961 read with rule 114-I of the Income Tax Rules covers the provisions relating to ‘Annual Information Statement’. An annual Information Statement is a comprehensive statement that contains various detailed information. One such information category is ‘Interest from specified company by a non-resident u/s 115A(1)(a)(iiaa)’. The present article covers a briefing of the said information category.

Source of information under AIS category ‘Interest from specified company by a non-resident’-

The specified company or business trust paying interest to a non-resident is liable to deduct TDS under section 194LC of the Income Tax Act. TDS is to be deducted @5% within earlier of the following-

• At the time of credit of income to the account of the non-resident; or
• At the time of payment via cash or cheque or draft or any other mode.

The person deducting tax under section 194LC is required to furnish a TDS return/ statement in Form 27Q on a quarterly basis. Further, the deductor is also required to issue a TDS certificate in Form 16A to the non-resident.

AIS will take the information furnished by the specified company/ business trust via Form 27Q as a source of information under the category ‘interest from specified company by a non-resident’.

Processing of AIS under the information category ‘interest from specified company by a non-resident’-

Information fetched by AIS from Form 27Q, filed by the specified company/ business trust, will be processed in the following manner-

• Interest earned by the non-resident from the specified company/ business trust will be taxable in the hands of the non-resident; and
• The same will be taxable under the head ‘income from other sources’.