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Meaning of Agent Under Income Tax and Representative Assessees for NRI

Who is Treated as Agent for Non Resident India (NRI) under Income Tax? Following Person are treated as Agent for NRI under Income Tax Act.

  1. Person Employed by or on behalf of NRI
  2. Person having Business Connection with NRI (Business Connection defined in Section 9)
  3. Person from or through whom NRI receives any sum
  4. Trustee of NRI

and includes also any other person who, whether a resident or non-resident, has acquired by means of a transfer, a capital asset in India :

Provided that a broker in India who, in respect of any transactions, does not deal directly with or on behalf of a non-resident principal but deals with or through a non-resident broker shall not be deemed to be an agent under this section in respect of such transactions, if the following conditions are fulfilled, namely:—

  1. the transactions are carried on in the ordinary course of business through the first-mentioned broker; and
  2. the non-resident broker is carrying on such transactions in the ordinary course of his business and not as a principal.

Who may be regarded as agent : Representative assessees NRI Special cases

163. (1) For the purposes of this Act, “agent”, in relation to a non-resident, includes any person in India—

(a)  who is employed by or on behalf of the non-resident; or

(b)  who has any business connection with the non-resident; or

(c)  from or through whom the non-resident is in receipt of any income, whether directly or indirectly; or

(d)  who is the trustee of the non-resident;

and includes also any other person who, whether a resident or non-resident, has acquired by means of a transfer, a capital asset in India :

Provided that a broker in India who, in respect of any transactions, does not deal directly with or on behalf of a non-resident principal but deals with or through a non-resident broker shall not be deemed to be an agent under this section in respect of such transactions, if the following conditions are fulfilled, namely:—

(i)  the transactions are carried on in the ordinary course of business through the first-mentioned broker; and

(ii)  the non-resident broker is carrying on such transactions in the ordinary course of his business and not as a principal.

Explanation.—For the purposes of this sub-section, the expression “business connection” shall have the meaning assigned to it in Explanation 2 to clause (i) of sub-section (1) of section 9 of this Act.

(2) No person shall be treated as the agent of a non-resident unless he has had an opportunity of being heard by the Assessing Officer as to his liability to be treated as such.

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