Income-Tax ( Amendment) Rules, 2021

Income-Tax (4th Amendment) Rules, 2021

Central Board of Direct Taxes (CBDT) vide its notification dated March 12, 2021 has mandated pre-filing of return of income a statement of financial transaction under subsection (1) of section 285BA of the Income Tax Act, 1961 for certain person as per the table mentioned below:

Nature of transaction Class of person (reporting person)
Capital gains on transfer of listed securities or units of Mutual Funds
  1. Recognized Stock Exchange;
  2. Depository as defined in clause (e) of sub-section (1) of section 2 of the Depositories Act, 1996 (22 of 1996);
  3. Recognized Clearing Corporation;
  4. Registrar to an issue and share transfer agent registered under subsection (1) section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992).
Dividend income A company
Interest income
  1. A banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act);
  2. Post Master General as referred to in clause (j) of section 2 of the Indian Post Office Act, 1898 (6 of 1898).
  3. Non-banking financial company which holds a certificate of registration under section 45-IA of the Reserve Bank of India Act, 1934 (2 of 1934), to hold or accept deposit from public.

The notification can be accessed here and it shall come into force from March 12, 2021.

Income-Tax (5th Amendment) Rules, 2021

Central Board of Direct Taxes (CBDT) vide its notification dated March 16, 2021, has inserted new Rule 29BA in Income Tax Rules, 1962.

Rule 29BA states that “An application by a person for determination of appropriate proportion of sum chargeable in the case of non-resident recipient under sub-section (2) or sub-section (7) of section 195 shall be made in Form 15E electronically,-

  1. Under digital signature; or through electronic verification code. The Assessing Officer shall examine the application made in Form 15E and shall determine the appropriate proportion of such sum chargeable under the provisions of the Income Tax Act, 1961 (the “Act”) and may issue a certificate determining appropriate proportion of such sum chargeable under the provision of the Act, for the purpose of Tax Deduction at Source.

The Certificate shall be valid only for the payment to non-resident named therein and for such period of the previous year as may be specified in the certificate, unless it is cancelled by the Assessing Officer at any time before the expiry of the specified period.

The notification will be effective from the 1st day of April, 2021.

The notification can be accessed here.

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