The Income Tax department has activated the Board for Advance Rulings in both Delhi and Mumbai, as stated in an official announcement on Saturday. In September 2021, the Central Board of Direct Taxes (CBDT) established three Boards for Advance Rulings. Additionally, the E-advance Ruling Scheme was introduced to streamline the advance rulings process, aiming for minimal direct interaction and enhanced efficiency, transparency, and accountability.
As outlined by the CBDT release, these Boards have initiated operations using email-based procedures and conducting hearings via video conferencing. This framework enables non-resident investors to ascertain their income tax obligations even before initiating investments in India. Moreover, resident entities can also seek a Ruling on the tax implications of transactions, thus avoiding protracted legal battles. This opportunity is accessible to resident taxpayers seeking advance rulings on tax liabilities arising from transactions valued at Rs. 100 crore or more in total, as indicated in the release.
Public Sector Undertakings can benefit from obtaining advance rulings on matters of law or fact that are pending before income-tax authorities or the Appellate Tribunal. In an effort to offer comprehensive guidance and support to taxpayers on the process of seeking Advance Rulings, the Board for Advance Rulings has published a handbook. This handbook was unveiled on August 18, 2023, by Nitin Gupta, the Chairman of CBDT.
During this event, the CBDT Chairman underscored the government's priorities in the realm of dispute prevention and swift dispute resolution. The establishment of mechanisms like the Board for Advance Rulings represents a significant stride in this direction.
