Advance Ruling Authority | Income Tax Act
Are the Advance ruling, binding on taxpayers or tax authorities
An advance ruling pronounced by the Authority is binding on the follows :-

• The Applicant.
• The Commissioner.
• Commissioner of Income-tax (Appeals).
• Income-tax authorities who are subordinate to Commissioner
• In respect of transaction for which ruling had been sought

What is the purpose of Advance rulings
The purpose of Advance rulings is to provide clarity on important issues to taxpayers, so that they have a clear-cut idea of their tax liability in advance for a given set of transactions.
Who can apply for an advance ruling
“Applicant” can be any person who is :-

• 1. A non-resident desirous of setting-up a joint venture in India in collaboration with a non-residentor a resident; or.
  2. Aresidentdesirous of setting-up a joint venture in India in collaboration with a non-resident; or
  3. A resident;
  4. Public Sector Company. (PSU)

When can a resident apply for an advance ruling
A resident can apply to AAR for advance ruling in relation to his tax liability only if transaction(s) undertaken or proposed to be undertaken is equal to 100 crores or more
What is the meaning of advance ruling
Advance ruling means the determination of a question of law or fact specified in the application in relation to tax liability of an applicant arising out of transactions which have been undertaken or proposed to be undertaken
What are requirements of an application for Advance Ruling
An applicant desirous of obtaining an advance ruling may make an application in such form and in such manner as may be prescribed :-

• Stating the question on which the advance ruling is sought.
• Application should be in quadruplicate (4 Copy).
• With prescribed fee.

What fees is to be paid along with application for advance ruling
The fees to be paid along with application shall be as follows

Can I pay the application fees in cash
No, the application fees payable should be in the form of a demand draft in favour of Authority for Advance Ruling.
Can I withdraw the Application for Advance Ruling, once I have filed it
Yes, you may withdraw the application within 30 days from the date of such application. If you withdrawal after such period, you can withdraw it only with the permission of the Authority.

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