Meaning:-
Advance ruling is a written decision of an Authority for Advance Rulings (now Boards for Advance Rulings) with regard to tax consequences of a transaction.
Definition:-
According to section 245N(a):- Advance ruling means:-
A determination or decision by the Authority :-
(i) in relation to a transaction which has been undertaken or is proposed to be undertaken by a non-resident applicant.
(ii) in relation to tax liability of non-resident arising out of a transaction which has been undertaken by a resident.
(iia) in relation to tax liability of a resident applicant arising out of a transaction which has been undertaken (determination shall include any question of law/fact specified in the application).
(iii) in respect of an issue relating to computation of total income which is pending before any income tax authority/Tribunal.
(iv) arrangement which is proposed to be undertaken by any person resident or a non-resident, is an impermissible avoidance arrangement.
Applicant:- who can be applicant
According to section 245N(b), Applicant means any person who is non-resident, resident, a public sector company.
Constitution of Board for Advance Rulings:-
The Central Government has constituted three Boards for Advance Rulings:-
- headquarter of Board for Advance Rulings-I,II&III in Delhi/Mumbai.