A communication issued by the Central Board of Direct Taxes, as F. No. 370142/24/2019-TPL, dated 31 December 2019.
An office memorandum of the Tax Policy and Legislation division putting a draft amendment of the Income-tax Rules out for public comment. The Finance (No. 2) Act, 2019 amended section 195 to let the Board prescribe the form and manner of an application to the assessing officer for determining the proportion of a payment to a non-resident that is chargeable to tax. This memorandum proposes a new rule 29BA and a new Form 15E to carry that amendment into effect.
This one does not fall neatly into the Board's usual classes — it is a letter, a memorandum, a consultation paper or something else the department has published in this collection. What it is, and what weight it carries, is set out below.
The memorandum explains that sub-section (2) of section 195 allows a person paying a sum to a non-resident to apply to the assessing officer for a determination of the appropriate proportion chargeable to tax, and that sub-section (7) allows the Central Government to specify classes of persons or cases who must apply, but that no format had been prescribed for making either application. An applicant therefore had to draft on plain paper and submit it physically, with the uncertainty that follows. The Finance (No. 2) Act, 2019 amended section 195 to empower the Board to prescribe the form and manner of the application; consequential amendments to the Rules and Forms are required, and a new Form 15E is proposed to operationalise the provisions. Comments were invited by e-mail within fifteen days of publication of the document on the department's website.
An application under section 195(2) decides how much of a cross-border payment is taxable and therefore how much the payer must deduct. Until this proposal it was made on plain paper and filed physically, so what an applicant had to say, and what an officer could ask for, varied from case to case. The 2019 amendment gave the Board power to prescribe a form; this consultation is the step between that power and the rule that followed.
This is a consultation document, not an order, and it binds nobody. The department is not obliged to accept any comment received, and no assessee acquires a right from it. What governs is section 195 and the rule and form as finally notified. A court or the Tribunal reading rule 29BA or Form 15E is not bound by anything said here, and neither is the Board itself.
Issued on 31st December, 2019. Comments were to be sent by e-mail to the address given, within fifteen days of the document's publication on www.incometaxindia.gov.in.
Do not cite this as authority. It is a proposal, and what governs is the rule and form as eventually notified, which may differ from the draft. Its value lies in the reasoning: it records that no format existed for applications under sections 195(2) and 195(7) before the amendment, which matters where an older application is questioned for its form.
a new Form 15E is proposed to be introduced in the Rules to operationalize the provisions
— the Central Board of Direct Taxes, communication F. No. 370142/24/2019-TPL, 31 December 2019. Read it in the department’s own PDF.
| Under the Income-tax Act, 1961 | Now, in the Income-tax Act, 2025 |
|---|---|
| section 195 | section 393, section 395, section 397, section 400 |
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What here is the Board’s and what is ours. The document is the Central Board of Direct Taxes’ own. Its number, its date and the words quoted above are reproduced from the Board’s own PDF, which is here. Everything else on this page is ours: the plain-English account of what the document is and what it does, the reading of which provision it turns on, the note on what to watch, and the choice of cases. Where our account and the document part, the document governs.
An order of the Board binds the department, not you and not a court. The Board writes to its own officers. An assessee may hold the department to an order or an instruction that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves. This is the most common mistake made with this material, and it is worth making twice: a direction of the Board is not a section of the Act.
What we could not settle. The precise text of the proposed rule 29BA and the contents of the draft Form 15E were not transcribed.