Streamlining the procedure for obtaining authorisation for payment of sums to non-residents after deduction of tax at source under section 195(1) of the Income-tax Act, 1961

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....he head "Salaries", is required to deduct tax at source at the rates in force. Such deduction should be made at the time of the credit of the income to the account of the payee or at the time of payment thereof, whichever is earlier. The proviso to section 195(1), however, lays down that in the case of interest payable by the Government or a public sector bank or a public financial institution within the meaning of section 10(23D) of the Act, deduction of tax at source will be made at the time of payment. 3. The Department of Economic Affairs, Ministry of Finance issued a Press Note dated May 17, 1988*, laying down the procedure for remittances to foreign companies by way of royalty and fees for technical services under approved agreements....

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.... of the payers in the light of the Income-tax Act, the Double Taxation Avoidance Agreements and the specific facts of the transactions, before authorising the remittance. (Sd.) Siddhartha Mukherjee, Secretary, Central Board of Direct Taxes. Application seeking authorisation for payments to non-resident [See section 195(1) of the Income-tax Act, 1961] Notes: 1. This application relates to payments to a non-resident not being a company, or to a foreign company. 2. The payments covered by this application may be of interest (not being interest on securities) or any other sum chargeable to income-tax (excluding income chargeable under the head 'Salaries'). 3. An authorisation from the income-tax authority will not be required for th....

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............. Designation Authorisation for payment of sums to non-residents after deduction of tax at source under section 195(1) of the Income-tax Act, 1961 Income-tax Office, ...................................... Dated...............19....... To .................................... .................................... .................................... Sir, Please refer to your application dated ..................................................... requesting for authorisation to remit the sum of.............................................................being in the nature of........................................................................................to..................…..............................................