MANU/DTCR/0006/2000

Ministry : Ministry of Finance

Department / Board :CBDT

Circular No : 790

Date : 20.04.2000

Notification/ Circulars Referred: Circular No. 769 dated 6th August, 1998 MANU/DTCR/0011/1998

Referred IN

Subject: Direct Taxation

Procedure for Refund of Tax Deducted at Source Under Section 195 to the Person Deducting the Tax

All Chief Commissioners of Income-tax ;

All Directors-General of Income-tax.

1. The Board has issued Circular No. 769 dated 6th August, 1998, laying down procedure for refund of tax deducted under section 195, in certain situations to the person deducting the tax at source from the payment to the non-resident. After reconsideration, Circular No. 769 is revoked with immediate effect and refund to the person deducting tax at source under section 195 shall be allowed in accordance with the provisions of this circular.

2. The Board had received representations for approving grant of refund to the persons deducting tax at source under section 195 of the Income-tax Act, 1961. The cases referred to the Board mainly related to circumstances where after the deposit into Government account of tax deducted at source under section 195,

(a) the contract is cancelled and no remittance is made to the nonresident ;

(b) the remittance is duly made to the non-resident, but the contract is cancelled. In such cases, the remitted amount may have been returned to the person responsible for deducting tax at source.

In the cases mentioned above, income does not accrue to the non-resident. The amount d........