Advance Ruling

 

  • Are the Advance ruling, binding on taxpayers or tax authorities?

An advance ruling pronounced by the Authority is binding on the follows :-

  • The Applicant.
  • The Commissioner.
  • Commissioner of Income-tax (Appeals).
  • Income-tax authorities who are subordinate to Commissioner
  • In respect of transaction for which ruling had been sought​
  • What is the purpose of Advance rulings?

​The purpose of Advance rulings is to provide clarity on important issues to taxpayers, so that they have a clear-cut idea of their tax liability in advance for a given set of transactions.​​

  • Who can apply for an advance ruling?

“​​Applicant” can be any person who is :-

  1. A non-resident desirous of setting-up a joint venture in India in collaboration with a non-resident or a resident; or.
  2. A resident desirous of  setting-up a joint venture in India in collaboration with a non-resident; or
  3. A resident;
  4. Public Sector Company. (PSU)
  • When can a resident apply for an advance ruling?

​​A resident can apply to AAR for advance ruling in relation to his tax liability only if transaction(s) undertaken or proposed to be undertaken is equal to 100 crores or more​

  • What is the meaning of advance ruling?

Advance ruling means the determination of a question of law or fact specified in the application in relation to tax liability of an applicant arising out of transactions which have been undertaken or proposed to be undertaken

  • What are requirements of an application for Advance Ruling?

An applicant desirous of obtaining an advance ruling may make an application in such form and in such manner as may be prescribed :-

  • Stating the question on which the advance ruling is sought.
  • Application should be in quadruplicate (4 Copy).
  • With prescribed fee.
  • What fees is to be paid along with application for advance ruling?

​The fees to be paid along with application shall be as follows ​

Category of case Fee
Amount of transaction(s) does not exceed Rs. 100 crore. Rs. 2 Lacs
Amount of transaction(s) exceeds Rs. 100 crore but does not exceed Rs.300 crore. Rs. 5 Lacs
Amount of transaction(s) exceeds Rs. 300 crore. Rs. 10 Lacs
Other Cases Rs. 10,000
  • Can I pay the application fees in cash?

No, the application fees payable should be in the form of a demand draft in favour of Authority for Advance Ruling.​

  • Can I withdraw the Application for Advance Ruling, once I have filed it ?

​Yes, you may withdraw the application within 30 days from the date of such application. If you withdrawl after such period, you can withdraw it only with the permission of the Authority.​

 

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