New Rule 21AIA inserted in the Income-tax Rules
G.S.R. 455(E).—In exercise of the powers conferred by the proviso to item (III) of sub-clause (i) of clause (c) of the Explanation to clause (4D) of section 10 read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct taxes hereby makes the following rules further to amend the Income-tax Rules,1962, namely:─
- Short title and commencement.— (1) These rules may be called the Income-tax (Seventeenth Amendment), Rules, 2022.
(2) They shall come into force from the date of their publication in the Official Gazette. - In the Income-tax Rules, 1962 (hereafter referred to as the principal rules),—
(i) in rule 21AI, after sub-rule rule (2), the following sub-rule shall be inserted, namely:-
“(2A) The income attributable to units held by non-resident (not being the permanent establishment of a nonresident in India) in a specified fund shall not be exempt under clause (4D) of section 10 of the Act unless the specified fund complies with sub-rule (2).”;
(ii) after rule 21AI, the following rule shall be inserted, namely:—
“21AIA. Other conditions required to be fulfilled by a specified fund referred to in clause (4D) of section 10 of the Act.—
(1) For the purposes of the proviso to item (III) of sub-clause (i) of clause (c) of the Explanation to clause (4D) of section 10 of the Act, the “other conditions” required to be fulfilled by a specified fund shall be that —
(a) the unit holder of the specified fund, other than the sponsor or manager of such fund, who becomes a resident under clause (1) or clause (1A) of section 6 of the Act during any previous year subsequent to the previous year in which such unit or units were issued, shall cease to be a unit holder of such specified fund within a period of three months from the end of the previous year in which he becomes a resident;
(b) for the purposes of clause (a), the specified fund shall maintain the following documents in respect of its unit holders,—
i. name of the unit holder;
ii. tax identification number of the unit holder in the country of residence at the time the units were issued;
iii. permanent account number, if available;
iv. total number of units held;
v. total value of units held;
vi. whether unit holder is a sponsor or a manager;
vii. the previous year in which the unit holder became resident and;
viii. date of exit from specified fund.
(2) The specified fund shall certify that it has fulfilled the conditions under sub-rule (1) and furnish information in respect of units held by residents in the annual statement of exempt income in Form No. 10-IG.
(3) The income attributable to units held by non-resident (not being the permanent establishment of a non resident in India) in a specified fund shall not be exempt under clause (4D) of section 10 unless the specified fund complies with sub-rule (2).
Explanation.-For the purpose of this rule, “specified fund” shall have the same meaning as assigned to it in sub-clause (i) of clause (c) of the Explanation to clause (4D) of section 10 of the Act.”;
(iii) in rule 21AJ, after sub-rule rule (3), the following sub-rule shall be inserted, namely:-
“(3A) The income of a specified fund referred to in clause (a) and clause (b) of sub-section (1) of section 115AD, attributable to the units held by a non-resident (not being the permanent establishment of a non-resident in India), shall not be eligible for tax rates specified in section 115AD unless it furnishes the annual statement of income eligible for concessional taxation in Form No. 10-IH in accordance with the provision of sub- rule (3).”;
(iv) in rule 21AJA, after sub-rule rule (3), the following sub-rule shall be inserted, namely:-
“(3A) The income of a specified fund attributable to an eligible investment division shall not be exempt under clause (4D) of section 10 unless it furnishes the annual statement of exempt income in Form No. 10-IK and the report of audit in Form 10-IL in accordance with the provisions of sub-rule (2).”;
(v) in rule 21AJAA, after sub-rule (2) , the following sub-rule shall be inserted, namely:-
“(2A) The income of an eligible investment division referred to in clause (a) and clause (b) of sub section (1) of section 115AD shall not be eligible for tax rates specified under section 115AD unless the eligible investment division furnishes an annual statement of income, eligible for taxation under sub-section (1B) of section 115AD of the Act, in Form No. 10-IK in accordance with sub-rule (2).”. - In the principal rules, in the APPENDIX for Form No. 10-IG, the following Form shall be substituted, namely: — “Form No.10-IG”
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