Chapter XVIII - Appeals, Revisions and Alternate Dispute Resolutions
Section 380
Section 380: interpretation clause for advance rulings
Section 380 opens the Act's advance rulings provisions with the key definitions - what counts as an "advance ruling", who is an eligible "applicant", and what "application", "Board for Advance Rulings" and "Member" mean for this Chapter.
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This article is for general information. Refer to the Income-tax Act, 2025 as amended by the Finance Act, 2026 and the Taxation and Other Laws (Amendment) Act, 2026 for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
For the purposes of this Chapter,— (a) “advance ruling” means— (i) a determination by the Board for Advance Rulings in relation to a transaction which has been undertaken or is proposed to be undertaken by a non-resident applicant; or (ii) a determination by the Board for Advance Rulings in relation to the tax liability of a non-resident arising out of a transaction which has been undertaken or is proposed to be undertaken by a resident applicant with such non-resident; or (iii) a determination by the Board for Advance Rulings in relation to the tax liability of a resident applicant, arising out of a transaction which has been undertaken or is proposed to be undertaken by such applicant; and such determination shall include the determination of any question of law or of fact specified in the application; or (iv) a determination or decision by the Board for Advance Rulings in respect of an issue relating to computation of total income which is pending before any income-tax authority or the Appellate Tribunal and such determination or decision shall include the determination or decision of any question of law or of fact relating to such computation of total income specified in the application; or (v) a determination or decision by the Board for Advance Rulings whether an arrangement, which is proposed to be undertaken by any person being a resident or a non-resident, is an impermissible avoidance arrangement as referred to in Chapter XI or not;
(b) “applicant” means any person who— (i) is a non-resident referred to in clause (a)(i); or (ii) is a resident referred to in clause (a)(ii); or (iii) is a resident referred to in clause (a)(iii) falling within any such class or category of persons as the Central Government may, by notification, specify; or (iv) is a resident falling within any such class or category of persons as the Central Government may, by notification, specify in this behalf; or (v) is referred to in clause (a)(v), and makes an application under section 383(1);
(c) “application” means an application made to the Board for Advance Rulings under section 383(1);
(d) “Board for Advance Rulings” means the Board for Advance Rulings constituted by the Central Government under section 381;
(e) “Member” means a Member of the Board for Advance Rulings.
Introduction
Section 380 is a definitions provision for the advance-ruling part of Chapter XVIII. Its categories distinguish a non-resident’s transaction, a resident’s transaction involving a non-resident, notified resident classes, pending total-income computation issues and proposed avoidance arrangements.
A person does not become an “applicant” merely by having a tax question. The person must fit the relevant clause, satisfy any notification requirement, and make an application under section 383(1).
Key takeaways
Ruling has several forms
The definition covers specified non-resident, resident, pending-computation and proposed avoidance-arrangement questions.
Applicant is defined
Eligibility follows the categories in clause (b), including notified resident classes where applicable.
Question may be factual
The defined advance ruling can decide a question of law or fact specified in the application.
What is an 'advance ruling'
"Advance ruling" means:
- A determination by the Board for Advance Rulings on a transaction undertaken, or proposed to be undertaken, by a non-resident applicant
- A determination on the tax liability of a non-resident, arising from a transaction undertaken or proposed with a resident applicant
- A determination on the tax liability of a resident applicant, arising from a transaction they have undertaken or propose to undertake - including determination of any question of law or fact specified in the application
- A determination or decision on an issue relating to computation of total income that is pending before an income-tax authority or the Appellate Tribunal - including any related question of law or fact specified in the application
- A determination or decision on whether a proposed arrangement (by a resident or non-resident) is an impermissible avoidance arrangement under Chapter XI
Who can be an 'applicant'
"Applicant" means a person who:
- Is a non-resident falling within clause (a)(i) above
- Is a resident falling within clause (a)(ii) above
- Is a resident falling within clause (a)(iii) above, of a class or category the Central Government specifies by notification
- Is a resident falling within a class or category the Central Government specifies by notification for this purpose
- Is a person referred to in clause (a)(v) above (regarding impermissible avoidance arrangements)
Other defined terms
"Application" means an application made to the Board for Advance Rulings under section 383(1).
"Board for Advance Rulings" means the Board for Advance Rulings constituted by the Central Government under section 381.
"Member" means a Member of the Board for Advance Rulings.
Step-by-step flow for identifying an advance ruling and applicant under Section 380
- 1
Is the question whether a proposed arrangement is an impermissible avoidance arrangement under Chapter XI?
- Yes: Clause (a)(v); any person, resident or non-resident, can be the applicant under clause (b)(v).
- No: Go to the next step.
- 2
Is the applicant a non-resident asking about its own transaction (undertaken or proposed)?
- Yes: Clause (a)(i); applicant under clause (b)(i).
- No: Go to the next step.
- 3
Is a resident asking about a non-resident's tax liability from a transaction with that non-resident?
- Yes: Clause (a)(ii); applicant under clause (b)(ii).
- No: Go to the next step.
- 4
Is a resident asking about its own tax liability from its own transaction?
Clause (a)(iii), which includes questions of law or fact in the application. The resident must fall in a class or category notified by the Central Government (clause (b)(iii)).
- Yes, and in a notified class: Covered by clause (a)(iii).
- No: Go to the next step.
- 5
Is the issue about computation of total income pending before an income-tax authority or the Appellate Tribunal?
Clause (a)(iv). The applicant for this would be a resident in a class or category notified by the Central Government "in this behalf" (clause (b)(iv)). In every case the application is made under section 383(1).
Practical checklist
Do
- Identify the exact clause (a) ruling category and matching clause (b) applicant category before preparing an application.
- For a notified resident class, verify the operative Central Government notification.
- Frame the precise question of law or fact for the section 383(1) application and check section 384 admission limits separately.
Avoid
- Do not assume all residents can apply for every kind of advance ruling.
- Do not confuse this definitions section with an approval of the application or with the ruling procedure itself.
Illustrative example
Worked example: an Indian company paying a foreign service provider
Hypothetical facts (illustration only, not a real taxpayer): An Indian company proposes to pay a non-resident foreign company for services. It wants certainty on (1) the foreign company's tax liability on these payments and (2) its own tax liability arising from the same transaction.
Question 1
This is a resident seeking a ruling on a non-resident's tax liability from a proposed transaction with it. It falls under clause (a)(ii), and the Indian company is an applicant under clause (b)(ii).
Question 2
This is a resident's own tax liability from its own transaction, under clause (a)(iii). The company can apply only if it falls in a class or category notified by the Central Government under clause (b)(iii).
Foreign company's own option
The foreign company could itself apply under clause (a)(i) as a non-resident for its own transaction.
Forum
The ruling is given by the Board for Advance Rulings constituted under section 381, on an application under section 383(1).
Outcome
- Question 1 is within the definition of advance ruling for this company.
- Question 2 depends on whether the company falls in a notified class; Section 380 does not list the classes.
Glossary
- Board for Advance Rulings
- The Board constituted by the Central Government under section 381.
- Application
- An application to that Board under section 383(1).
Frequently asked questions
Can a resident taxpayer apply for an advance ruling, or is it only for non-residents?
A resident can be an eligible applicant in specific circumstances under Section 380 - for their own transactions with a non-resident, for their own tax liability if they fall within a Central Government-notified class, or in relation to an impermissible avoidance arrangement question - not just non-residents generally.
Does an advance ruling cover GAAR (impermissible avoidance arrangement) questions?
Yes - Section 380(a)(v) includes, within the definition of "advance ruling", a determination by the Board for Advance Rulings on whether a proposed arrangement is an impermissible avoidance arrangement under Chapter XI.
Need help applying this provision to your situation?
Talk to our team about seeking an advance rulingLast updated 9 October 2026