Advance Ruling refers to the facility of obtaining a judgment in advance from the Authority for Advance Rulings. The facility is used when the assess expects that the income tax assessment will involve disputed issues. The assess might get a final ruling from the Authority for Advance Rulings through an advance ruling. The judgement being sought often relates to the tax repercussions of a completed or prospective transaction. The purpose of the Income Tax Act’s advance rulings programme is to give non-residents who intend to invest in India the ability to know with certainty whether they would be subject to income ta
The Authority for Advance Rulings is a separate quasi-judicial organization from the Income Tax department. A former judge of the Indian Supreme Court serves as its chief. Two retired senior officers of the Indian government make up the Authority for Advance Rulings, which has its headquarters in New Delhi.
A non-resident may ask for an advance ruling whether they are an individual, business, firm, group of people, or other type of legal entity. Advance rulings can be made regarding the tax liabilities associated with a transaction that has already been completed or that is planned to be completed. If the transaction involves a non-resident, an Indian resident may also ask for an advance ruling.
In the format required, you can submit your request for an advance ruling to the Authority for Advance Rulings together with a justification for your position on the issue(s) at hand, as well as a presentation of the relevant facts and supporting evidence. Entities that wish to represent the case before the Authority for Advance Rulings either individually or through an authorised representative are considered applicants for advance rulings.
Before pronouncing an advance ruling, the authority will scrutinise the application to check the residency status of the applicant. Non-residents can apply only through a resident representative. An Advance Ruling pronounced by the Authority for Advance Rulings is binding on the applicant. It is also binding on the Income Tax department. The advance ruling will not be valid if the facts of the transaction actually executed are materially different. The difference is determined in relation to the facts on the basis of which the ruling was pronounced.