613. Procedure regarding grant of approval under section 80 RRA
Circular No. 705 was issued by the Central Board of Direct Taxes on 20 June 1995. Its subject is 613. Procedure regarding grant of approval under section 80 RRA.
Tightens up the paperwork for approval of the terms and conditions of service under section 80RRA, which allows a technician a deduction from gross total income of remuneration received in foreign currency for services rendered outside India, at 50 per cent of the remuneration or 75 per cent of so much of it as is brought into India, whichever is higher. The approving authority is the Joint Secretary (Foreign Tax and Tax Research), Department of Revenue, and for officers and seamen of the Indian merchant navy on ships of Indian companies approval is given three years at a time to avoid repeated applications. The Board found applications lacking a complete postal address, lacking or carrying incomplete assessment particulars, and carrying employer certificates that were not signed, and directs that an application be signed by the applicant and filed in duplicate with his own complete postal address, that of an authorised representative not being enough; that it state the income-tax authority who assesses or will assess him and his Permanent Account Number, or where he is not assessed, that he apply for a number and name the authority with whom the application was filed; that Indian seamen on ships of Indian companies furnish the employer's signed certificate in original showing total remuneration and the remuneration in foreign currency in the first year of application and others for the years applied for; and that a letter of authority accompany an application filed through a representative.
A review of the system of filing applications under section 80RRA disclosed defects that were delaying processing.
613. Procedure regarding grant of approval under section 80 RRA
1. Section 80RRA of the Income-tax Act, 1961 provides, inter alia, for deduction from the gross total income, in respect of remuneration received in foreign currency by a technician for services rendered outside India. The deduction is at the rate of 50 per cent of the remuneration or 75 per cent of the remuneration as is brought into India, whichever is higher. The terms and conditions of services outside India of such technician are to be approved for the purposes of claiming the deduction. The authority to grant the approval for this purpose has been delegated to the Joint Secretary (F.T. & T.R.), Department of Revenue, Ministry of Finance.
2. In respect of officers and seamen of the Indian merchant navy employed on ships of the Indian companies, such approval is granted for three years at a time to avoid repetitive applications.
3. On a review of the system of filing applications under section 80RRA, the following features have been noticed :—
(i) The applications do not contain the complete postal address of the applicant.
(ii) In many cases, the details relating to the income-tax assessment of the applicant are either not furnished or are incomplete.
(iii) The certificates from the employer confirming the payment of remuneration in foreign currency for services rendered outside India is not signed by the employer.
These infirmities delay the processing of the applications.
4. In order to expedite processing of applications seeking approval under section 80RRA, the following guidelines are issued :—
(i) The application should be signed by the applicant and filed in duplicate and should state the complete postal address of the applicant. Furnishing the address of any authorised representative is not sufficient.
(ii) The applicant should indicate the income-tax authority in whose jurisdiction he is either assessed to tax or is assessable to tax, and his Permanent Account Number (PAN). If he is not assessed, he should apply for a PAN and indicate the authority before whom he has filed the application.
(iii) In respect of applications from Indian seamen employed on ships of Indian companies, the signed certificate (in original) of the employer indicating the total remuneration as well as the remuneration received in foreign currency should invariably be furnished in the first year for which the application is made. In respect of other applications, the certificate should be for the years for which the application is made.
(iv) If the application is filed through an authorised representative, a letter of authority should be filed along with it.
Circular: No. 705, dated 20-6-1995.
A refusal or delay of approval under section 80RRA, and the consequent disallowance of the deduction in the technician's assessment.
Source: the Income Tax Department’s own published text — its page for this instrument.