Form 129 when the whole payment should not be taxed

Form 129 (formerly Form 15E) is the payer's application. The form header says it is an application under section 395(2) and section 400(3) for determination of the appropriate proportion of a sum, other than salary, payable to a non-resident, which is chargeable in the recipient's hands. Rule 214 is the rule the form cites. The note's header maps it from section 195(2) and section 195(7), and from Rules 29BA and 37BB.

The note says two people can file it. First, any person paying a non-resident (not being a company) or a foreign company a sum other than salary, who wants the chargeable amount determined before remittance. Second, a person or class the Board notifies under section 400(3).

Form 128 (formerly Form 13) is the other certificate. The payee files that one, under section 395(1), for a lower or nil rate on income that is already subject to deduction. Use Form 129 when the open question is how much of this remittance is chargeable at all: a mixed contract, a capital gain, or a claim that the profit is not taxable in India. Use Form 128 when the payee wants a lower rate on income that is taxable and can estimate its own tax. Either certificate, once issued, is what puts the remittance in Part B of Form 145 rather than Part C.

The note splits the form into the payer and the payee, the remittance (country, nature, amount, proposed date, tax year, earlier section 395(2) certificates), taxability under the Act if no treaty applies, and taxability under the treaty if it does. The treaty part asks for the tax residency certificate and Form 41.

The attachments the note lists include the contract, a capital-gains computation where that is the payment, the payee's income details for the preceding four tax years, the estimated income and tax for this tax year, the tax residency certificate, Form 41, a note on business connection, a note on why the payment is or is not taxable, and the working of the chargeable amount.

There is no time limit in the note. It says the form should be filed before the remittance. The certificate the note describes is valid for the recipient named in it and for the period it states.

The note's process is on the TRACES portal: file Form 129, verify it, and track it. DSC is mandatory for companies, LLPs and other entities on a TAN login. The note says the application is assigned to the TDS Assessing Officer in the International Taxation charge. If the officer wants something more, the applicant answers on TRACES. The officer then generates the certificate on the TRACES portal for the applicant to download.

The note says the applicant can withdraw the form at any time before the officer passes an order. It does not state a number of days in which the order will come.

If the certificate is issued, Part B of Form 145 is the part that carries its number, date, section, amount and rate. Part C is not filed for that remittance.