India to relax requirements for payments to NRIs

invNRIThe Finance Ministry has announced that an amendment in the Income Tax Rules has been made in order to ‘strike a balance between reducing the burden of compliance and collection of information in cases of payments made by domestic entities to non-residents’.

The rules now say a Chartered Accountant certificate will be required only in respects of payments made to NRIs that are chargeable to tax, and the amount of payment during the year exceeds Rs.500,000.

Also the requirement of two types of Forms for remittances that do not require RBI approval has been done away with.

The Income Tax Act empowers the Central Board of Direct Taxes to capture information on payments made to NRIs, whether chargeable to tax or not.