Tax residency certificates will do fine – until GAAR
Chidambaram clarified that the proposed introduction of a clause in the Income Tax Act saying TRC is “essential but not sufficient” for investors to avail of benefits under DTAA does not mean these certificates would be questioned. Market players had pointed out that the language in the proposed sub-clause could mean that the TRC could be questioned by the Indian tax department. “The government wishes to make it clear that that is not the intention of the proposed sub-section (5) of Section 90,” the minister said in a clarification.
“TRC produced by a resident of a contracting state will be accepted as evidence that he is a resident of that contracting state and the Income Tax Authorities in India will not go behind
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