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CBDT amends Rule 29B and Form 15C to Allow Non-resident Insurers for applying No TDS Certificate



CBDT has amended Rule 29B of the Income Tax Rules, 1962 by issuing Income-tax (21st Amendment) Rules, 2020 vide Notification No. 75/2020 dated 22.09.2020. With this amendment, CBDT has allowed foreign insurers to apply in Form 15C for a certificate u/s 195(3) for non-deduction of TDS in line of a foreign banking company. 

As of now, only a banking company is eligible to make an application for receiving interest and other income except dividend income without deduction of tax in Form 15C to the Assessing Officer. This benefit has now been extended to a non-resident insurance company.

Under section 195(3), any person entitled to receive any interest or other sum on which income-tax has to be deducted under section 195(1) may make an application in the prescribed form (Form 15C) to the Assessing Officer for the grant of a certificate authorising him to receive such interest or other sum without deduction of tax, and where any such certificate is granted, every person responsible for paying such interest or other sum to the person to whom such certificate is granted shall, so long as the certificate is in force, make payment of such interest or other sum without deducting tax thereon under section 195(1).

Further, section 195(4) prescribes that a certificate granted under section 195(3) shall remain in force till the expiry of the period specified therein or, if it is cancelled by the Assessing Officer before the expiry of such period, till such cancellation.

Rule 29B deals with making an application for a certificate authorising receipt of interest and other sums without deduction of tax under section 195(1).

Notification No. 75 of 2020 has substituted the words ‘banking company’ with the “banking company or an insurer” in the said Rule 29B.

Further, an explanation has been inserted after Rule 29B(5) (which specifies the validity of the certificate) to define the term ‘insurer’. As per the newly inserted explanation, “for the purposes of this rule, “insurer” shall have the same meaning as assigned to it in sub-clause (d) of clause (9) of section 2 of the Insurance Act, 1939 (4 of 1938).

The amended Rules has also amended the Form 15C.

Read the full text of the Notification No. 75/2020 dated 22.09.2020 to amend Rule 29B.

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