§ 306
Chapter XVII — Special Provisions Relating To Certain Persons
Who may be regarded as agent
Income-tax Act, 2025
An "agent" for a non‑resident includes any person in India who works for, has a business connection with, receives income on behalf of, or acts as trustee for the non‑resident, as well as anyone who acquires a capital asset in India by transfer.
A broker who only deals with another non‑resident broker, not directly with the non‑resident principal, is not considered an agent if both parties are acting in the ordinary course of their business.
Before being classified as an agent, the person must be given a chance to be heard by the Assessing Officer.
📜 Official text of the section +
306. (1) For the purposes of this Act, “agent”, in relation to a non-resident, includes—
( a) any person in India—
( i) who is employed by or on behalf of the non-resident; or
( ii) who has any business connection with the non-resident; or
( iii) from or through whom the non-resident is in receipt of any income,
whether directly or indirectly; or
( iv) who is the trustee of the non-resident;
( b) any other person who, whether a resident or non-resident, has acquired
by means of a transfer, a capital asset in India.
(2) 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:—
( a) the transactions are carried on in the ordinary course of business through
the first-mentioned broker; and
( b) the non-resident broker is carrying on such transactions in the ordinary
course of his business and not as a principal.
(3) A person shall not 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.
(4) For the purposes of this section, “business connection” shall have the meaning
assigned to it in section 9(9)(a).
Charge of tax where share of beneficiaries unknown.
Plain-language summary — not the official text. Refer to the bare Act and confirm with a professional for your specific case.