NRI IT remittance norms eased

Section 195 of the Income Tax Act provides that any person responsible for paying to a non-resident any sum chargeable under the Act shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by cheque or draft or any other mode, whichever, is earlier, deduct income tax thereon at the rates in force.

To give effect to this provision, the RBI has provided in its manual that no remittance shall be allowed unless a no objection certificate has been obtained from the income tax department.

However, according to an official press note released here, it has now been decided that "henceforth remittances may be allowed by the Reserve Bank of India without insisting upon a no objection certificate from the income tax department and on the person making the remittance furnishing an undertaking (in duplicate) addressed to the assessing officer accompanied by a certificate from an accountant (other than an employee) as defined in the section 288 of the Income Tax Act."

The person making the remittance shall be required to submit the undertaking along with the certificate of the accountant to the RBI, which in turn shall forward a copy thereof to the assessing officer.