New Rule 21AK inserted under the Income-tax Rules, 1962

New Rule 21AK inserted under the Income-tax Rules, 1962- These rules may be called the Income-tax (33rd Amendment) Rules, 2021- NOTIFICATION

G.S.R. 851(E).—In exercise of the powers conferred by clause (4E) 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:─

1. Short title and commencement.—
   (1) These rules may be called the Income-tax (33rd Amendment) Rules, 2021.
   (2) They shall come into force from the date of their publication in the Official Gazette.
   
2. In the Income-tax Rules, 1962, after rule 21AJ, the following rule shall be inserted, namely:—
   
   “21AK. Conditions for the purpose of clause (4E) of section 10.-
   
   (1) The income accrued or arisen to, or received by, a non-resident as a result of transfer of non-deliverable forward contracts under clause (4E) of section 10 of the Act, shall be exempted subject to fulfillment of the following conditions, namely:─
   (i) the non-deliverable forward contract is entered into by the non-resident with an offshore banking unit of an International Financial Services Centre which holds a valid certificate of registration granted under International Financial Services Centres Authority (Banking) Regulations, 2020 by the International Financial Services Centres Authority; and
   (ii) such contract is not entered into by the non-resident through or on behalf of its permanent establishment in India .
   
   (2) The offshore banking unit shall ensure that the condition provided in clause (ii) of sub-rule (1) is complied with.
   
   Explanation.- For the purpose of this rule, the expression,-
   (i) “permanent establishment” shall have the meaning assigned to it in clause (iiia) of section 92F;
   (ii) “a non-deliverable forward contract” shall mean a contract for the difference between an exchange rate agreed before and the actual spot rate at maturity, with the spot rate being taken as the domestic rate or a market determined rate and such contract being settled with a single payment in a foreign currency; and
   (iii) “offshore banking unit” means a banking branch Unit located in an International Financial Services Centre, as referred to in sub-section (1A) of section 80LA of the Act.”.

Note : The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section-3, Subsection (ii), vide notification number S.O. 969 (E) dated the 26th March, 1962 and were last amended vide notification number G.S.R. 831(E) dated 23rd November, 2021.

Notification

Also Read:

• Guidelines under sub-section (4) of section 194-O, sub-section (3) of section 194Q and subsection (1-I) of section 206C of the Income-tax Act, 1961.
• No Dues Certificate from the Income Tax Department
• Introduction of the new Form 52A under the Income-tax Rules
• Notification under section 80C of the Income-tax Act, 1961

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