Form 120 Income Tax Rules 2026 pdf download and Key points
FORM NO. 120
[see rule 200]
Form of application for obtaining an advance ruling section 383(1) of the Act
Under the new Income-tax Rules, 2026, Form No. 120 is a single, unified digital application form used to seek a determination or ruling from the Board for Advance Rulings (BAR). It consolidates and replaces five old forms used under the 1961 rules (Forms 34C, 34D, 34DA, 34E, and 34EA).
Here are all the key points regarding Form No. 120:
1. Purpose of the Form Form 120 allows taxpayers to obtain advance rulings on questions of law or fact regarding proposed or already undertaken transactions. This provides clarity and certainty on tax liabilities in advance, helping to avoid future disputes and litigation.
2. Who Can File and the Prescribed Application Fees The form dynamically adapts to different categories of applicants. The required fee depends on the applicant type and the aggregate value of the transaction:
- Non-Resident Applicants: For determining tax liability on a transaction undertaken or proposed in India.
- Resident Transacting with a Non-Resident: To determine the tax liability of the non-resident.
- Specified Resident Applicants (High-Value): For residents with transactions aggregating to ₹100 crore or more.
- Fee Structure for the above three categories: ₹2 lakhs (for transactions up to ₹100 crores), ₹5 lakhs (₹100 crores to ₹300 crores), and ₹10 lakhs (exceeding ₹300 crores).
- Public Sector Companies: For seeking rulings on issues pending before any tax authority or tribunal. Fee is a flat ₹10,000.
- GAAR Applicants (Any Person): To determine if an arrangement is an impermissible avoidance arrangement under General Anti-Avoidance Rules (GAAR). Fee is a flat ₹10,000.
3. Timelines, Frequency, and Restrictions
- When to File: There is no fixed frequency or statutory last date. It is entirely transaction-driven and can be filed before or after entering into a transaction.
- Pending Cases Restriction: Form 120 cannot be filed for questions or transactions that are already pending before any Income Tax Authority, Appellate Tribunal, or court (except for Public Sector Companies).
- Withdrawal: An applicant can withdraw their application within 30 days from the date of filing.
4. Mode of Filing and Processing
- Online Only: The form must be submitted electronically through the Income Tax e-Filing Portal. It must be digitally signed or verified by an authorized person.
- No Editing: Once successfully submitted and an acknowledgment is generated, the form cannot be edited.
- Defective Applications: If the application lacks required documents or is defective, the Secretary of the BAR will notify the applicant and grant a reasonable opportunity to rectify the defects before rejecting it.
5. Structure of the Form The form is highly structured to capture all relevant details transparently:
- Part A (Basic Information): Captures details like Name, PAN, Status, Contact, Country of Residence, and Authorized Representative details.
- Part B (Purpose): Captures Residential Status, applicable Double Taxation Avoidance Agreements (DTAA), the determination required, and a summary of the questions asked.
- Part C (Specific Details and Annexures): Requires extensive disclosures including statements of facts, interpretation of law, fee payment details, and details of related proceedings.
- Verification: A mandatory section where the applicant must certify the accuracy of the information and declare that the issue is not pending before any tax authority or court.
6. Mandatory Documents Required Applicants must upload several supporting documents:
- Proof of fee payment (challan).
- Copy of PAN (or TIN for non-residents).
- Certificate of Incorporation, Trust Deed, or Partnership Deed.
- Copies of relevant agreements or arrangements.
- Group Structure & Beneficial Ownership: Comprehensive diagrams and details of the immediate/ultimate parent companies and beneficial owners (mandatory for non-residents and specified entities).
7. Key Updates and Simplifications in the 2026 Rules
- Consolidation: Replaced five separate, old forms with a single, drop-down-based digital form.
- Enhanced Disclosures: Solved the issue of insufficient information in old forms by making it mandatory to disclose detailed group structures, transaction parties, and beneficial ownership in alignment with the Companies Act and PMLA.