Application by payer for grant of certificate under section 395(2) or section 400(3) for determination of appropriate proportion of sum (other than salary), payable to non-resident, chargeable in case of recipients

The application (sub-rule 1). An application for determination of the appropriate proportion of a sum chargeable in the case of a non-resident recipient under section 395(2) or section 400(3) is made in Form No. 129.

Examination (sub-rule 2). The Assessing Officer examines whether the sum is chargeable under the Act read with the relevant Double Taxation Avoidance Agreement, if any. Where the whole sum would not be the recipient's income, the officer determines the chargeable proportion and issues a certificate for tax deduction under section 393(2) [Table: Sl. No. 17].

Factors, in relation to the recipient (sub-rule 3).

• (a) tax payable on estimated income of the relevant tax year;
• (b) tax payable on assessed, returned or estimated income of the preceding four tax years;
• (c) existing liability under the Act and under the Income-tax Act, 1961 as it existed before repeal; and
• (d) advance tax, tax deducted and tax collected at source for the relevant tax year, up to the date of application or of issue of the certificate.

Validity and renewal (sub-rules 4 and 5). The certificate is valid only for payment to the non-resident named in it and for the period of the tax year specified, unless cancelled earlier. A fresh application may be made after expiry, or within three months before expiry.