Rule 220 — Furnishing of information for payment to a non-resident, not being a company, or to a foreign company. Made under s.395 of the Income-tax Act, 2025.
Rule 220 gives effect to Section 395 of the Income-tax Act, 2025. A rule cannot go beyond the section it serves: where the two seem to differ, the section governs.
Sub-rule (1) requires the person responsible for paying to a non-resident, not being a company, or to a foreign company any sum chargeable under the Act to furnish information in Form No. 145, in the part matched to the size of the payment and the document held. Part A applies where the amount of the payment, or the aggregate of such payments made during the tax year, does not exceed Rs. 5,00,000. Part B applies where it exceeds Rs. 5,00,000 and a certificate or order has been obtained from the Assessing Officer under section 395(1) or (2). Part C applies where it exceeds Rs. 5,00,000 and a certificate in Form No. 146 from an accountant as defined in section 515(3)(b) is obtained, but where information in Part B has been furnished, no information is required in Part C.
Sub-rule (2) requires information in Part D of Form No. 145 where the sum paid is not chargeable under the Act. Sub-rule (3) carves three exceptions out of that, irrespective of sub-rule (2): where the remittance is made by an individual and does not require prior approval of the Reserve Bank of India under section 5 of the Foreign Exchange Management Act, 1999 read with Schedule III to the Foreign Exchange (Current Account Transaction) Rules, 2000; where it is made by a Unit of an International Financial Services Centre referred to in section 147(1)(b); or where it is of a nature specified in the list of thirty-three purpose codes set out in the rule, running from Indian investment abroad in equity capital, debt securities, branches, subsidiaries and real estate, through import payments, operating expenses of Indian shipping and airline companies abroad, travel for business, pilgrimage, medical treatment and education, postal services, construction of projects abroad, freight insurance, maintenance of offices and embassies, family maintenance and savings, personal gifts and donations, donations to religious and charitable institutions and to other Governments, contributions to international institutions, payment or refund of taxes, export refunds and rebates, and payments by residents for international bidding.
Sub-rule (4) fixes the mode. Form No. 145 is to be furnished electronically under digital signature in accordance with the procedures, formats and standards specified by the Director General of Income-tax (Systems) under rule 332, after which the Form is submitted to the authorised dealer electronically or otherwise, prior to remitting the payment; or electronically in accordance with those procedures, after which a signed printout is submitted to the authorised dealer electronically or otherwise, prior to remitting the payment. Sub-rule (5) allows an income-tax authority to require the authorised dealer to furnish a copy of that signed printout for the purposes of any proceedings under the Act.
Sub-rule (6) requires a quarterly statement, for each quarter of the financial year, in respect of all remittances referred to in sub-rules (1), (2) and (3) — by the authorised dealer in Form No. 147, or by a Unit of an International Financial Services Centre referred to in section 147(1)(b) responsible for such payment in Form No. 148 — to the Director General of Income-tax (Systems) or the person authorised by him, within fifteen days from the end of the quarter of the tax year to which the statement relates.
Sub-rule (7) defines "authorised dealer" by reference to section 10(1) of the Foreign Exchange Management Act, 1999, and "International Financial Services Centre" and "Unit" by reference to sections 2(q) and 2(zc) of the Special Economic Zones Act, 2005.
Money leaving India for a non-resident may or may not carry Indian tax, and the decision is taken by the remitter and his banker at the moment of remittance, when the Department is not present. The rule builds a paper trail around that moment: a form graded by the size of the payment and by whether an Assessing Officer's certificate or an accountant's certificate supports it, given to the authorised dealer before the money moves, and a quarterly statement from the dealer covering every remittance it handled. The exceptions in sub-rule (3) keep small personal and routine transfers out of the system.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Threshold for Part A of Form No. 145 | Does not exceed Rs. 5,00,000 | Amount of the payment or the aggregate of such payments made during the tax year | Sub-rule (1)(a) |
| Threshold for Part B of Form No. 145 | Exceeds Rs. 5,00,000 | And a certificate or order is obtained from the Assessing Officer under section 395(1) or (2) | Sub-rule (1)(b) |
| Threshold for Part C of Form No. 145 | Exceeds Rs. 5,00,000 | And a certificate in Form No. 146 from an accountant is obtained; not required where Part B has been furnished | Sub-rule (1)(c) |
| Time for the quarterly statement in Form No. 147 or Form No. 148 | Within fifteen days from the end of the quarter | Of the tax year to which the statement relates, furnished to the Director General of Income-tax (Systems) or the person authorised by him | Sub-rule (6) |
| Number of purpose codes exempted from reporting a non-chargeable remittance | Thirty-three entries | Remittances of the nature specified in column C of the specified list in sub-rule (3)(c) | Sub-rule (3)(c) |
The Rs. 5,00,000 test is not per remittance. Sub-rule (1)(a) speaks of the amount of the payment or the aggregate of such payments made during the tax year, so a series of small payments crosses into Part B or Part C territory once the aggregate is exceeded. Above the threshold the remitter needs a supporting document, and the choice decides the part: an Assessing Officer's certificate or order under section 395(1) or (2) takes it to Part B, an accountant's certificate in Form No. 146 to Part C, and where Part B has been furnished, Part C is not required. Non-chargeable sums are not simply outside the rule — sub-rule (2) requires Part D — and the only escapes are the three in sub-rule (3), one of which turns on the remitter being an individual whose remittance needs no prior Reserve Bank approval, and another on the purpose code of the remittance. Timing is strict in a way that is easy to miss: the Form goes to the authorised dealer prior to remitting the payment, not afterwards, and the dealer's own quarterly statement in Form No. 147 is due within fifteen days from the end of the quarter. The signed printout the dealer holds is not dead paper — under sub-rule (5) an income-tax authority may call for a copy of it in any proceedings.
A company has already remitted Rs 3,00,000 to a foreign company in the tax year and now proposes a further payment of Rs 4,00,000 that is chargeable under the Act. The aggregate exceeds Rs. 5,00,000, so Part A is no longer available; it obtains a certificate in Form No. 146 from an accountant and furnishes Part C of Form No. 145 electronically, submitting it to the authorised dealer before the money is remitted. Had it instead obtained a certificate from the Assessing Officer under section 395(1), it would have furnished Part B and no Part C would be required. The authorised dealer includes both remittances in its Form No. 147 for the quarter, due within fifteen days from the end of that quarter.
A remitter meets it at the bank counter, since the authorised dealer will not release the remittance without Form No. 145 for it, and again if an income-tax authority calls for the copy the dealer holds under sub-rule (5).
information in Part A of Form No. 145, if the amount of payment or the aggregate of such payments, as the case may be, made during the tax year does not exceed Rs. 5,00,000
but where information in Part B of the said Form has been furnished, no information is required to be furnished in Part C of the said Form
within fifteen days from the end of the quarter of the tax year to which such statement relates