Submission of statement by a non-resident having liaison office
[Section-505 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Every person, being a non-resident, having a liaison office in India set up as per the guidelines issued by the Reserve Bank of India under the Foreign Exchange Management Act, 1999, shall, in respect of its activities in a tax year, prepare and deliver to the Assessing Officer having jurisdiction, within sixty days from the end of such tax year, a statement, in such form and containing such particulars, as prescribed.
FAQs on Section 505 of Income Tax Act 2025
Who is required to submit a statement under Section 505?
Every non-resident having a liaison office in India established in accordance with RBI guidelines under FEMA, 1999 must submit the statement.
What is a liaison office in the context of Section 505?
A liaison office refers to a place of business in India of a non-resident company permitted by the RBI to undertake limited activities such as communication and representation, without engaging in commercial or trading operations.
What is the due date for submitting the statement under Section 505?
The statement must be submitted within sixty days from the end of the relevant tax year.
Who should the statement be submitted to?
The statement should be delivered to the Assessing Officer having jurisdiction over the non-resident’s liaison office.
What should the statement contain?
The statement must be in the prescribed form and contain the particulars as specified in the rules under the Income Tax Act, 2025.
Is Section 505 applicable to all types of offices of non-residents in India?
No, it applies specifically to liaison offices set up in accordance with the RBI guidelines under FEMA, 1999.
From which date is Section 505 effective?
Section 505 is effective from 1st April, 2026.
What happens if the non-resident fails to submit the statement under Section 505?
Non-compliance may lead to penalties and consequences as provided under other relevant provisions of the Income Tax Act, 2025.
Is electronic submission of the statement permitted under Section 505?
The mode of submission (electronic or physical) would be as prescribed in the rules framed under the Income Tax Act, 2025.
Does Section 505 apply to project offices or branch offices of non-residents?
No, Section 505 applies only to liaison offices, not to project offices or branch offices.
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