Budget 2017-Definition of ‘person responsible for paying’ in case of payments covered under sub-section (6) of section 195

The existing provisions of section 204 of Act, has defined the meaning of ‘person responsible for paying‘ to include employer, company or its principal officer or the payer. Further clause (iii) of section 204 of the Act, inter alia, provides that in the case of credit or payment of any sum chargeable under the provisions of this Act, the ‘person responsible for paying’ shall be the payer himself, or, if the payer is a company, the company itself including the principal officer thereof. However, the said section does not cover in respect of payment of any sum as per sub-section (6) of section 195. Which mandates the ‘person responsible for paying’ to furnish information relating to payment of any sum, whether chargeable to tax or not.

Thus in order to bring clarity to the meaning of ‘person responsible for paying’ in case of payment by a resident to a non-resident in accordance with section 195(6) of the Act, it is proposed to amend the said section of the Act to provide that in the case of furnishing of information relating to payment to a non-resident, not being a company, or to a foreign company, of any sum, whether or not chargeable under the provisions of this Act, ‘person responsible for paying’ shall be the payer himself, or, if the payer is a company, the company itself including the principal officer thereof.

This amendment will take effect from 1st April, 2017.

[Clause 70]

Extract of relevant clause from Finance Bill, 2017

Amendment of section 204.

70. In section 204 of the Income-tax Act, after clause (iia), the following clause shall be inserted, namely:—

“(iib) in the case of furnishing of information relating to payment to a non-resident, not being a company, or to a foreign company, of any sum, whether or not chargeable under the provisions of this Act, the payer himself, or, if the payer is a company, the company itself including the principal officer thereof;”.

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Category : Income Tax (24916)
Type : Articles (13961)
Tags : Budget (1473) Budget 2017 (351) section 195 (136) Withholding tax (53)

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