Section 245N of Income Tax Act for AY 2023-24

Section 245N of Income Tax Act 1961 amended by Finance Act 2022 and Income-tax Rules. Discussion on provisions related to Definitions.

Amended and updated notes on section 245N of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Detail discussion on provisions and rules related to Definitions.

Chapter XIXB (Sections 245N to 245V) of the Income Tax Act 1961 deals with the provisions related to Advance rulings . Section 245N of IT Act 1961 provides for Definitions.

Recently, we have discussed in detail section 245L (Proceedings before Settlement Commission to be judicial proceedings) of IT Act 1961. Today, we learn the provisions of section 245N of Income-tax Act 1961. The amended provision of section 245N is effective for financial year 2022-23 relevant to the assessment year 2023-24.

In this article, you will learn detail of the provisions of section 245N of the Income Tax Act, 1961 Bare Act read with the Income-tax Rules, 1962 as provided by Ministry of Law and Justice, Government of India.

Section-245N: Definitions

In this Chapter, unless the context otherwise requires,—

(a) “advance ruling” means—

  • (i) a determination by the Authority in relation to a transaction which has been undertaken or is proposed to be undertaken by a non-resident applicant; or
  • (ii) a determination by the Authority in relation to the tax liability of a non-resident arising out of a transaction which has been undertaken or is proposed to be undertaken by a resident applicant with such non-resident; or
  • (iia) a determination by the Authority in relation to the tax liability of a resident applicant, arising out of a transaction which has been undertaken or is proposed to be undertaken by such applicant; and such determination shall include the determination of any question of law or of fact specified in the application;
  • (iii) a determination or decision by the Authority in respect of an issue relating to computation of total income which is pending before any income-tax authority or the Appellate Tribunal and such determination or decision shall include the determination or decision of any question of law or of fact relating to such computation of total income specified in the application;
  • (iv) a determination or decision by the Authority whether an arrangement, which is proposed to be undertaken by any person being a resident or a non-resident, is an impermissible avoidance arrangement as referred to in Chapter X-A or not:

Provided that where an advance ruling has been pronounced, before the date on which the Finance Act, 2003 receives the assent of the President, by the Authority in respect of an application by a resident applicant referred to in sub-clause (ii) of this clause as it stood immediately before such date, such ruling shall be binding on the persons specified in section 245S;

(b) “applicant” means—

(A) any person who—

  • (I) is a non-resident referred to in sub-clause (i) of clause (a); or
  • (II) is a resident referred to in sub-clause (ii) of clause (a); or
  • (III) is a resident referred to in sub-clause (iia) of clause (a) falling within any such class or category of persons as the Central Government may, by notification in the Official Gazette, specify; or
  • (IV) is a resident falling within any such class or category of persons as the Central Government may, by notification in the Official Gazette, specify in this behalf; or
  • (V) is referred to in sub-clause (iv) of clause (a),

and makes an application under sub-section (1) of section 245Q;

(B) an applicant as defined in clause (c) of section 28E of the Customs Act, 1962 (52 of 1962); [Omitted by Finance Act 2021 w.e.f. such date as CG notified]

(C) an applicant as defined in clause (c) of section 23A of the Central Excise Act, 1944 (1 of 1944);[Omitted by Finance Act 2021 w.e.f. such date as CG notified]

(D) an applicant as defined in clause (b) of section 96A of the Finance Act, 1994 (32 of 1994);] [Omitted by Finance Act 2021 w.e.f. such date as CG notified]

(c) “application” means an application made to the Authority or the Board for Advance Rulings under sub-section (1) of section 245Q;

[Clause(c) amended (inserted) w.e.f. 1-April-2021 by the Finance Act 2021]

(ca) “Board for Advance Rulings” means the Board for Advance Rulings constituted by the Central Government under section 245-OB;

[Clause(ca) newly inserted w.e.f. 1-April-2021 by the Finance Act 2021]

(d) “Authority” means the Authority for Advance Rulings constituted under section 245-O;

(e) “Chairman” means the Chairman of the Authority;

(f) “Member” means a Member of the Authority and includes the Chairman and Vice-chairman or a Member of the Board for Advance Rulings;

[Clause(f) amended (inserted) w.e.f. 1-April-2021 by the Finance Act 2021]

(g) “Vice-chairman” means the Vice-chairman of the Authority.


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