Detailed Overview of Income Tax Form 120 for Advance Rulings

The Income-tax Act, 2025 has introduced Form No. 120 as a consolidated application for obtaining advance rulings from the Board for Advance Rulings (BAR) under section 383(1). This single, standardized form has replaced earlier advance ruling forms like Form 34C, 34D, 34DA, 34E and 34EA, and is backed by the new procedural framework in the Income Tax Rules, 2026.

This guide explains the purpose, scope, eligibility, fee structure, documentation, filing process, and legal consequences associated with Form No. 120, along with practical insights from the FAQs and Guidance Note issued by the Income Tax Department, Ministry of Finance.

The new regime for advance rulings under the Income-tax Act, 2025 has been structurally aligned with the earlier provisions of the Income-tax Act, 1961 and the Income-tax Rules, 1962. The key correspondences are:

  • Earlier form numbers: 34C, 34D, 34DA, 34E, 34EA
  • New unified form: Form No. 120
  • Earlier Act provisions: sections 245N to 245W
  • New Act provisions: sections 380 to 389
  • Earlier Rules: Rule 44E, Rule 44F, Rule 44FA
  • New Rules: Rule 200 to Rule 202 of the Income Tax Rules, 2026

Note: While the procedural architecture has been redesigned, the substantive concept of advance rulings and their binding nature continues in a similar spirit under the new law.

What is Form No. 120?

Form No. 120 is the statutory application prescribed under section 383(1) of the Income Tax Act, 2025 for seeking an advance ruling from the BAR. It is meant to obtain a binding determination on:

  • Questions of law
  • Questions of fact
  • Mixed questions of law and fact

These questions must relate to transactions already undertaken or transactions proposed to be undertaken by the applicant.

The core objective is to give the assessee tax certainty in advance, especially in complex or cross-border situations, thereby reducing the scope for future disputes, reassessment, and prolonged litigation.

Who Can File Form No. 120? – Eligible Categories

Form No. 120 can be used by multiple classes of applicants. The primary categories are:

  1. Non-residents

    • Non-resident assessees seeking clarity on their income-tax liability in India arising out of a specific transaction or series of transactions undertaken or proposed to be undertaken in India.

  2. Residents transacting with non-residents

    • Residents who have entered into, or plan to enter into, transactions with non-residents, and wish to determine the tax liability of the non-resident in relation to such transactions.

  3. Specified resident applicants / high-value residents

    • Residents who have completed or propose to complete one or more transactions with an aggregate value of Rs. 100 crore or more, and seek certainty on tax treatment.

  4. Public Sector Companies

    • Public Sector Companies (PSUs) intending to obtain an advance ruling, even where similar issues are already pending before Income-tax authorities or appellate forums.

  5. GAAR-related applicants (resident or non-resident)

    • Any person (whether resident or non-resident) who wishes to obtain a ruling on whether a proposed or entered-into arrangement constitutes an “impermissible avoidance arrangement” under GAAR.

These earlier categories mapped to old Forms 34C, 34D, 34DA, 34E and 34EA. Now Form No. 120 is the single, common interface for all of them.

Prescribed Fees for Form No. 120

The fee depends on the category of applicant and, in most cases, the aggregate value of the relevant transaction(s):

1. Non-resident applicants

Fee is based on aggregate transaction value:

  • Up to and including Rs. 100 crores – ₹2 lacs
  • More than Rs. 100 crores but not exceeding Rs. 300 crores – ₹5 lacs
  • Exceeding Rs. 300 crores – ₹10 lacs

2. Resident applicants dealing with non-residents

Same slab-wise fee structure as non-residents:

  • Up to and including Rs. 100 crores – ₹2 lacs
  • More than Rs. 100 crores but not exceeding Rs. 300 crores – ₹5 lacs
  • Exceeding Rs. 300 crores – ₹10 lacs

3. Specified residents/high-value residents

For residents with high-value transactions:

  • Up to and including Rs. 100 crores – ₹2 lacs
  • More than Rs. 100 crores but not exceeding Rs. 300 crores – ₹5 lacs
  • Exceeding Rs. 300 crores – ₹10 lacs

4. Public Sector Companies

  • Flat fee – ₹10,000 (irrespective of transaction value)
  • Flat fee – ₹10,000 (for applications on GAAR-related questions)

Important: Proof of fee payment must be attached with the application. Without this, the application is treated as defective.

When and How Often Should Form No. 120 Be Filed?

Timing

  • There is no statutory deadline or cut-off date for filing Form No.