RBI will not issue clarifications on Tax matters
IN Circular No. 56 dated November 26, 2002 and Circular No. 3 dated July 19, 2007, RBI issued certain instructions regarding the procedure to be followed in respect of deduction of tax at source while allowing remittances to the non-residents.
RBI informs the Authorised Dealers that the Central Board of Direct Taxes (CBDT) has revised the existing instructions to be followed while allowing remittances to the non-residents, with effect from October 1, 2013. It has issued Income Tax (14th Amendment) Rules, 2013 vide Notification No. S.O 2659(E) dated September 2, 2013 on furnishing of information under Section 195(6) of the Income Tax Act, 1961 and prescribed the rules and forms to this effect .
Reserve Bank of India has reviewed the policy relating to issue of instructions under Foreign Exchange Management Act, 1999 (FEMA), clarifying tax issues. It has now been decided that Reserve Bank of India will not issue any instructions under the FEMA, in this regard. It shall be mandatory on the part of Authorised Dealers to comply with the requirement of the tax laws, as applicable.
A P (DIR Series) CIRCULAR No. 151/RBI., Dated: June 30, 2014