CBDT clarifies that Investments made prior to 1 April 2017 will not be subject to GAAR

Background

The General Anti-Avoidance Rule (“GAAR”), contained in Chapter X-A of the Income-tax Act, 1961 and now provided under Chapter XI of the Income-tax Act, 2025, serves as a key anti-abuse framework empowering the tax authorities to deny tax benefits arising from impermissible avoidance arrangements. Since its introduction, GAAR has been accompanied by specific carve-outs and grandfathering provisions, particularly in respect of investments made prior to 1 April 2017, to provide certainty to taxpayers and protect legacy structures.

Over time, interpretational issues have arisen regarding the scope and applicability of such grandfathering provisions, especially in cases involving the transfer of pre-1 April 2017 investments and whether the protection extends to income arising therefrom. In order to provide clarity and align the position under both the Income-tax Act, 1961 and the Income-tax Act, 2025, the Central Board of Direct Taxes (“CBDT”) has issued Notification No. 54/2026 and 55/2026 dated 31 March 2026, amending Rule 10U of the Income-tax Rules, 1962 and Rule 128 of the Income-tax Rules, 2026, respectively. Reference may also be drawn to the Supreme Court ruling in the case of Tiger Global, wherein the scope of GAAR applicability vis-à-vis pre-1 April 2017 investments and their subsequent transfers was a matter of judicial consideration.

In this Newsflash, we provide a brief overview of the amendments introduced vide Notification Nos. 54/2026 and 55/2026 clarifying the scope and applicability of GAAR, particularly in relation to grandfathering of pre-1 April 2017 investments under the Income-tax Rules, 1962 and 2026.

2.0 Notification 55/ 2026 dated 31 March 2026

The CBDT vide Notification No. 55/2026 dated 31 March 2026, has amended Rule 128 of the Income-tax Rules, 2026, which prescribes the circumstances in which the provisions of GAAR shall not apply.

The notification has brought in a change in Rule 128 of the IT Rules, 2026 (erstwhile Rule 10U of the IT Rules 1962), clarifying and substituting the following –

Prior to Amendment	Amended Rule
Rule 128(1)(d) of the IT Rules, 2026 (erstwhile Rule 10U(1)(d) of IT Rules 1962)
“any income accruing or arising to, or deemed to accrue or arise to, or received or deemed to be received by, any person from transfer of investments made before the 1st day of April, 2017 by such person.”	“any income accruing or arising to, or deemed to accrue or arise to, or received or deemed to be received by, any person from the transfer of such investments* which were made before* 1 April 2017 shall not be subject to GAAR.”

Rule 128(2) of the IT Rules, 2026 (erstwhile Rule 10U(2) of IT Rules 1962)

“Without prejudice to the provisions of clause (d) of sub-rule (1), the provisions of Chapter X-A shall apply to any arrangement, irrespective of the date on which it has been entered into, in respect of the tax benefit obtained from the arrangement on or after the 1st day of April, 2017.”

“The provisions of Chapter XI shall apply to any arrangement, irrespective of the date on which it has been entered into, in respect of the tax benefit obtained from the arrangement on or after the 1st April, 2017, except for that income which accrues or arises to, or deemed to accrue or arise to, or is received or deemed to be received by, any person from transfer of such investments which were made before the 1st April, 2017 by such person.”

Prior to the amendment, Rule 128(1)(d) provided that GAAR shall not apply to income arising from the transfer of investments made before 1 April 2017, thereby incorporating the principle of grandfathering of legacy investments. However, Rule 128(2) stated that GAAR provisions would apply to any arrangement, irrespective of the date on which such arrangement was entered into, in respect of tax benefits obtained on or after 1 April 2017.

The interplay of these provisions, particularly the earlier use of the phrase “without prejudice” in sub-rule (2), gave rise to interpretational ambiguity as to whether the grandfathering protection under Rule 128(1)(d) would continue to hold good in cases where the tax benefit from such investments was realised after 1 April 2017.

Moreover, the Hon’ble Supreme Court in the case of Tiger Global ruling examined the scope of GAAR vis-à-vis treaty entitlement and grandfathering, and observed that GAAR may be invoked to deny tax benefits arising on or after 1 April 2017, even in respect of structures involving investments made prior to such date, particularly where the arrangement lacks commercial substance.

For a detailed reading of the judgement, please refer to our Newsflash – Supreme Court rules on GAAR, TRC and Treaty entitlement in Tiger Global–Flipkart case (dt 23 January 2026).

To address the above ambiguity, the Notification substitutes clause (d) of sub-rule (1) to more comprehensively cover income “accruing or arising, or deemed to accrue or arise, or received or deemed to be received” from transfer of investments made prior to 1 April 2017. This expanded scope ensures that the exemption is aligned with the charging provisions and covers all possible modes of taxation of such income.

Further, sub-rule (2) has been revised to clarify that although GAAR will apply to arrangements giving rise to tax benefits on or after 1 April 2017, a specific exception has been retained for income arising from the transfer of investments made prior to that date. This change helps bring clarity and ensures consistency in the application of the provisions.

This may reduce potential litigation risk and enhance tax certainty for taxpayers, particularly foreign investors and fund structures that have historically relied on the grandfathering provisions while structuring their investments in India.

2.0 Notification 54/ 2026 dated 31 March 2026

Similar amendments have also been carried out in Rule 10U(1)(d), and Rule 10(2) of the Income Tax Rules, 1962 vide Notification No. 54/2026.

Further, the accompanying Explanatory Memorandum states that the effect of the amendment is that the provisions of Chapter X-A “shall not be invoked on or after” the date of publication of the rules in cases where such income arises from the transfer of pre-1 April 2017 investments.

This is relevant as it provides insight into the intended operation of the amendment and suggests a restriction on the invocation of GAAR in such cases.

3.0 Our Comments

The Notification brings in some sigh of relief for foreign investors, but they still need to be mindful that Judicial Anti Avoidance Rules and Principal Purpose Test still continue to operate in parallel with GAAR. The same may be invoked by the Indian Tax Authorities to examine the structure where treaty abuse or shell/ conduit structures exist, and tax avoidance is the primary objective.

Further, the Explanatory Memorandum indicates that the effect of the amendment is such that the provisions of Chapter X-A shall not be invoked on or after the date of publication of the rules in cases where income arises from the transfer of investments made prior to 1 April 2017.

While the rules are stated to come into effect from the date of notification i.e. 31 March 2026, the extent to which such an amendment would apply to ongoing proceedings may need to be evaluated.

By RSM India Newsflash

Notification: CBDT Clarifies Eligibility of NBFCs for Income Tax Deductions on Actual Payment Basis

Central Board of Direct Taxes (CBDT) has notified classes of Non-Banking Financial Companies (NBFCs) which will be eligible for provision of Income Tax Act related with certain deductions to be only on actual payment. This is a crucial notification concerning the payment of interest on loans to NBFCs.

Based on the changes made in the Finance Act 2023, new classification will come into effect from September 22. “In exercise of the powers conferred by clause (da) of section 43B of the Income-tax Act, 1961, the Central Government, hereby, notifies the following classes of NBFCs, for the purpose of the said clause, namely, all NBFCs classified in the top layer, in the upper layer and in the middle layer,” the notification read.

Further, it read, “A deposit taking non-banking financial company or systemically important non-deposit taking non-banking financial company”, the words “such class of non-banking financial companies as may be notified by the Central Government in the Official Gazette in this behalf” shall be substituted.”

This change has now been made effective with the new notification.

Section 43, IT Act

Section 43 of the Income Tax Act prescribes deductions to be only on actual payment and clause (da) is related with any sum payable by the assessee as interest on any loan or borrowing from deposit taking certain class of NBFCs, in accordance with the terms and conditions of the agreement governing such loan or borrowing. Under this section, a taxpayer, in this case a NBFC, is only permitted to claim statutory expenses under the section only in the year of payment and not in the year of its accrual.

The notification also mentioned that definition of middle layer, the upper layer and the top layer as prescribed by RBI will be used. According to RBI circular, the middle layer consists of all deposit taking NBFCs (NBFC-Ds), irrespective of asset size, non-deposit taking NBFCs with asset size of ₹1,000 crore and above and NBFCs undertaking the activities such as standalone primary dealers (SPDs), infrastructure debt fund – non-banking financial companies (IDF-NBFCs), core investment companies (CICs), housing finance companies (HFCs) and infrastructure finance companies (NBFC-IFCs).

Similarly, the upper layer comprises of those NBFCs which are specifically identified by the Reserve Bank as warranting enhanced regulatory requirement based on a set of parameters and scoring methodology. The top ten eligible NBFCs in terms of their asset size shall always reside in the upper layer, irrespective of any other factor.

The RBI circular mentioned that he top layer will ideally remain empty. This layer can get populated if the RBI is of the opinion that there is a substantial increase in the potential systemic risk from specific NBFCs in the upper layer. Such NBFCs shall move to the top layer from the upper layer, it clarified.

Big Update! Central Board of Direct Taxes (CBDT) said, “Don’t delay, do it today!”

All the Permanent Account Numbers (PAN) holders who do not fall under ‘exempt category’ should link their PAN card to Aadhaar before March 31, failure of which will make it ‘inoperative’ from April 1. The Central Board of Direct Taxes (CBDT) said, “Don’t delay, do it today!”

Income-tax Act, 1961, it is mandatory for all PAN holders, who do not fall under the exempt category, to link their PAN with Aadhaar before 31.3.2023. From 1.04.2023, the unlinked PAN shall become inoperative,” an advisory by the Income Tax Department read.

What happens if PAN becomes ‘inoperative’ The person will be unable to file an I-T return using the inoperative PAN; pending returns will not be processed; pending refunds will not be issued to inoperative PANs; pending proceedings, such as in the case of defective returns, will be unable to be completed once the PAN is inoperative; and tax will be deducted at a higher rate.

Steps to link PAN-Aadhar via portal:

> Go to the Income Tax e-filing official websites- eportal.incometax.gov.in or incometaxindiaefiling.gov.in

> Register on the portal if you haven’t already. The PAN number will be the user ID.

> Log into the portal by entering your user id, password and date of birth.

> A pop-up window will appear, asking you to link your PAN with Aadhaar.

> If the window doesn’t appear, go to ‘Profile Settings’ on the Menu bar and click on Link Aadhaar.

> Information such as name, date of birth, and gender will already be mentioned as per your PAN card details.

> Verify the PAN details on the screen with the ones mentioned on Aadhaar.

> If there is a mismatch, you need to get the same corrected in either of the documents.

> If the details match, enter your Aadhaar number and click on the link now button.

> A pop-up message will inform you that your Aadhaar has been successfully linked to your PAN.

Income Tax: Faceless Penalty Order 2022

Notification No. 55/2022 Dated 27th May 2022

CBDT Notifies Faceless Penalty (Amendment) Scheme 2022

Vide Notification No. 54/2022 Dated 27th May 2022, the CBDT has notified Faceless Penalty (Amendment) Scheme, 2022.

It shall come into force on the date of its publication in the Official Gazette.

In this notification, amendments are made in Faceless Penalty Scheme, 2021.

To Download the Notification, Please Click Here

CBDT Notifies Income Tax (Fourteenth Amendment) Rules 2022

Vide Notification No. 51/2022 Dated 9th May 2022, the CBDT has notified Income Tax (Fourteenth Amendment) Rules 2022.

Following forms are changed through this amendment:

Form 3CF

Form 10A

Form 10AB

Form 10BD

And other sections/ sub-sections/ clauses as notified in the notification.

To Download the Notification, Please Click Here

CBDT Inserted Rule 114BA And 114BB in Income Tax Rules

Vide Notification No. 53/2022 Dated 10th May 2022, the CBDT has inserted rule 114BA and 114BB in the Income Tax Rules.

Section 114BA deals with transactions for the purposes of clause (vii) of sub-section (1) of section 139A.

Section 114BB deals with transactions for the purposes of sub-section (6A) of section 139A and prescribed person for the purposes of clause (ab) of Explanation to section 139A.

To Download the Notification, Please Click Here

CBDT Notifies Mandatory Conditions For Filing Income Tax Return

Vide Notification dated 21st April 2022, the CBDT has notified some more mandatory conditions for filing income tax return (ITR).

The conditions for furnishing return of income in respect of persons referred to in clause (b) of sub-section (1) of section 139 in terms of clause (iv) of the seventh proviso to sub-section (1) of section 139 shall be the following, namely: –
(i) if his total sales, turnover or gross receipts, as the case may be, in the business exceeds sixty lakh rupees during the previous year; or
(ii) if his total gross receipts in profession exceeds ten lakh rupees during the previous year; or
(iii) if the aggregate of tax deducted at source and tax collected at source during the previous year, in the case of the person, is twenty-five thousand rupees or more; or
(iv) the deposit in one or more savings bank account of the person, in aggregate, is rupees fifty lakh or more during the previous year:

Provided that in the case of an individual resident in India who is of the age of sixty years or more, at any time during the relevant previous year, the provision of clause (iii) shall have effect as if for the words “twenty-five thousand”, the words “fifty thousand” had been substituted.’.

To Download the Notification, Please Click Here

CBDT Notifies ITR-7 For A.Y. 2022-23 (F.Y. 2021-22)

Vide Notification dated 1st April, 2022, the CBDT has notified ITR-7 for the Assessment Year 2022-23 (Financial Year 2021-22).

Income Tax (5th Amendment) Rules, 2022 have been notified for this purpose.

To Download the Notification, Please Click Here

CBDT Notifies ITR-1 To ITR-6 For A.Y. 2022-23 (F.Y. 2021-22)

Vide Notification dated 30th March 2022, the CBDT has notified SAHAJ ITR-1, ITR-2, ITR-3, SUGAM ITR-4, ITR-5 and ITR-6, ITR-V and ITR- Ack for the Assessment Year 2022-23 (Financial Year 2021-22).

Income Tax (Fourth Amendment) Rules, 2022 have been notified for this purpose.

To Download the Notification, Please Click Here

CBDT Notifies Annexure For Audit Report To Be Filed By Sovereign Wealth Fund

Vide Notification No. 11/2022, Dated 25th January 2022, the CBDT has notified Annexure for Audit report to be filed by the Sovereign Wealth Fund claiming exemption under clause (23FE) of section 10 of the Income-tax Act, 1961.

For this purpose, Annexure notified vide Notification No. 89/2020, Dated 2nd November 2020 has been substituted with the new Annexure as prescribed in the new notification.

Clauses (vii), (viii), (ix), (x), (xi) and (xii) of Notification No. 89/2020, Dated 2nd November 2020 have been substituted with new clauses.

To Download the Notification, Please Click Here

CBDT Notifies Provisions For Collection And Payment Of Securities Transaction Tax (STT) in Case Of Insurance Company

Vide Notification No. 9/2022, Dated 18th January 2022, CBDT has inserted rule 5A in the Securities Transaction Tax Rules 2004 which contains provisions related to collection and payment of securities transaction tax in case of Insurance Company.

Securities Transaction Tax (1st Amendment), Rules, 2022 have been notified for this purpose.

To Download the Notification, Please Click Here

CBDT Notifies Provisions For Computation Of Capital Gains Under Section 45(1B) Of Income Tax Act

Vide Notification No. 8/2022, Dated 18th January 2022, the CBDT has inserted rule 8AD in the income tax rules 1962 which contains provisions for computation of capital gains under section 45(1B) of income tax act.

Income Tax (2nd Amendment) Rules 2022 have been notified for this purpose.

To Download the Notification, Please Click Here

No Personal Hearing At Faceless Appeal Centres: CBDT

Vide Notification Number 139/2021, Dated 28th December 2021, CBDT has notified Faceless Appeal Scheme 2021.

It has stated in the notification that:

(1) A person shall not be required to appear either personally or through authorised representative in connection with any proceedings under this Scheme before the income-tax authority at the National Faceless Appeal Centre or appeal unit set up under this Scheme.

(2) The appellant or his authorised representative, as the case may be, may request for personal hearing so as to make his oral submissions or present his case before the Commissioner (Appeals), through the National Faceless Appeal Centre, under this Scheme.

(3) The concerned Commissioner (Appeals) shall allow the request for personal hearing and communicate the date and time of hearing to the appellant through the National Faceless Appeal Centre.

(4) Such hearing shall be conducted through video conferencing or video telephony, including use of any telecommunication application software which supports video conferencing or video telephony, to the extent technologically feasible, in accordance with the procedure laid down by the Board.

(5) Any examination or recording of the statement of the appellant or any other person shall be conducted by Commissioner (Appeals) under this Scheme, exclusively through video conferencing or video telephony, including use of any telecommunication application software which supports video conferencing or video telephony, to the extent technologically feasible, in accordance with the procedure laid down by the Board.

(6) The Board shall establish suitable facilities for video conferencing or video telephony including telecommunication application software which supports video conferencing or video telephony at such locations as may be necessary, so as to ensure that the appellant, or his authorised representative, or any other person is not denied the benefit of this Scheme merely on the ground that such appellant or his authorised representative, or any other person does not have access to video conferencing or video telephony at his end.

To Download the Notification, Please Click Here

CBDT Notifies Authorities To Perform e-Appeal Functions Under Faceless Appeal Scheme

Notification Number 141/ 2021, Dated 29th December 2021

In exercise of powers conferred by sub sections (1) and (2) of section 120 of the Income-tax Act, 1961 (43 of 1961 (hereinafter referred to as the Act) and in supersession of the notification No. 81 of 2020 of Government of India in the Ministry of Finance, Department of Revenue, number S.O. 3309(E) dated the 25th September, 2020 under the Faceless Appeal Scheme 2020, (except as respects things done or omitted to be done before such supersession) and to give effect to the Faceless Appeal Scheme, 2021 (hereinafter referred to as the Scheme) made under sub section (6B) and 6(C) of section 250 of the Act and published vide Notification No. 139/2021 of Government of India in the Ministry of Finance, Department of Revenue, number S.O. 5429(E), dated the 28th December, 2021 in the Gazette of India, Extraordinary, Part II, Section 3, sub section (ii), the Central Board of Direct Taxes (hereinafter referred to as the Board) hereby directs that the following Income tax authorities as specified in column (2) of the Schedule below, having their headquarters at the places mentioned in column (3) of the said Schedule, shall exercise the powers and perform functions, in order to facilitate the conduct of e-appeal Proceedings, in respect of such territorial area or persons or class of persons or incomes or class of incomes or cases or class of cases as specified by the Board in paragraph 3 of the Scheme, with respect to appeals filed under section 246A or 248 of the Act, pending or instituted on or after 29th December, 2021.

To Download the Notification, Please Click Here

CBDT Notifies Bureau of Indian Standards (BIS) For Availing Exemption Under Section 10(46) Of The Income Tax Act

Vide Notification No. 142/2021, dated 31st December 2021, CBDT has notified BIS to avail exemption under section 10(46) of the Income Tax Act 1961.

The notification reads as follows:

In exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies for the purposes of the said clause, the Bureau of Indian Standards (BIS)(PAN:AAATB0431G), set up by the Bureau of Indian Standards Act, 1986 (63 of 1986) in respect of the following specified income arising to that Bureau, namely:-

(i) Certification fee;

(ii) Sale of standards, provided there is no profit involved; and

(iii) Income from interest;

This notification shall be effective subject to the following conditions, namely:-

(a) the Bureau of Indian Standards (BIS) does not engage in any commercial activity

(b) the activities and the nature of the specified income of the Bureau of Indian Standards (BIS) remain unchanged throughout the financial years; and

(c) the Bureau of Indian Standards (BIS) files return of income in accordance with the provision of clause (g) of sub-section (4C) of section 139 of the Income-tax Act, 1961.

This notification shall be applicable for the Assessment Years 2021-22, 2022-23, 2023-24, 2024-25 and 2025-26.

Explanatory Memorandum

It is certified that no person is being adversely affected by giving retrospective effect to this notification.

(To download the notification,

Pdf 232334 Download

CBDT Notifies Rules For Claiming Deduction Under Section 10A(1B)(b) Of The Income Tax Act 1961

Vide Notification Dated 29th December 2021, the CBDT has notified rules for claiming deduction under Section 10A(1B)(b) of the Income Tax Act 1961.

Income Tax (35th Amendment) Rules 2021 have been notified for this purpose.

The amendment reads as under:

2.) In the Income-tax Rules, 1962 (hereinafter referred to as principal rules), after rule 16D, the following rule shall be inserted, namely:–

“16DD. Form of particulars to be furnished along with return of income for claiming deduction under clause (b) of sub-section (1B) of section 10A.– The particulars, which are required to be furnished by the assessee along with the return of income under clause (b) of sub section (1B) of section 10A shall be in Form No. 56FF.”

3.) In the principal rules, in rule 130,–

(a) in sub-rule (1), the figures and letters ―16DD‖ shall be omitted;

(b) in sub-rule (2), the figures and letters ―56FF‖ shall be omitted.

4.) In the principal rules, in Appendix II, after Form No. 56F, the following Form shall be inserted, namely:–

“Form No. 56FF (Particulars to be furnished under clause (b) of sub-section (1B) of section 10A of the Income-tax Act 1961)”

To Download the Notification,

Pdf Download

CBDT Notifies Revised Faceless CIT Appeal Scheme. Check Details Here

Vide Notification Dated 28th December 2021, the CBDT has notified Faceless Appeal Scheme 2021.

As per the new scheme, a personal hearing through Video Conference can be requested and when request is made the same shall be allowed. No discretion with the CIT (A) to refuse such request of oral hearing through VC.

The relevant part of scheme reads as under:-

“12.) No personal appearance in the Centres or Units

(3) The concerned Commissioner (Appeals) shall allow the request for personal hearing and communicate the date and time of hearing to the appellant through the National Faceless Appeal Centre.

To Download the Notification,

CBDT Notifies Revised Faceless CIT Appeal Scheme_pdf Download

Re-open Assessments For Assessment Years 2015-16 To 2018-19: CBDT Asks Tax Officers

By issuing a circular, the CBDT has asked tax officials to re-open assessments under section 148 of the Income Tax Act 1961 for the assessment years 2015-16 to 2018-19.

“It is directed that the information pertaining to assessment year 2015-16 and assessment year 2018-19, which requires action under Section 148 of the Income Tax Act shall be identified and uploaded on the Insight portal only as per the provisions of section 149(1)(b) of the Act. The exercise of identifying and uploading the information along with the underlying documents in the above categories of cases must be completed by 20 December 2021,”, the CBDT said in the circular.

CBDT Rolls Out Scheme For E-Verification Of Taxpayer Information. Know About its Scope And Procedure

Vide notification dated 13th December 2021, the CBDT has launched E-Verification Scheme 2021.

The notification contains following information:

Short title and commencement
Definitions under the scheme
Scope of the scheme
Electronic Collection and Verification
Random Allocation of Information
Issue and service of notice
Response to notice
No personal appearance
Communication exclusively by electronic mode
Authentication of electronic record
Power to specify procedure and processes.

To Download the Notification, Please Click Here

CBDT Notifies Income Tax e Verification Scheme, 2021

Pdf Download

CBDT Extends Last Date For Updation Of UDINs At Income Tax Portal

UDIN Directorate

The Institute of Chartered Accountants of India

30th November 2021

Last Date of updation of UDINs at e-filing Portal The CBDT has extended the last date for updating UDINs for all the IT forms at the e-filing portal to 31st January, 2022.

For any clarification, please write us at udin@icai.in. UDIN Directorate

CBDT Notifies Income Tax Rules Which Seeks to Withdraw Tax Demands on Indirect Transfer of Indian Assets Prior to 28th May 2012

Vide Income Tax (31st Amendment) Rules 2021, the CBDT has inserted Rule 11UE and 11UF in the Income Tax Rules 1962.

These rules are notified in order to give effect to The Taxation Laws (Amendment) Bill 2021 which seeks to withdraw tax demands made on indirect transfer of Indian assets prior to 28th May 2012 and which was approved by Lok Sabha and Rajya Sabha in August 2021.

The copy of notification is attached here for your kind reference.

[embeddoc url=”https://incometaxindia.gov.in/news/notification_no_118_2021.pdf”%5D

CBDT clarification – Businesses need not deduct TDS on share/commodity purchases via exchanges

Overview :-

The I-T department has introduced a provision relating to Tax Deducted at Source (TDS) from July 1, 2021, which would be applicable to businesses with turnover of Over Rs 10 crore.

Such businesses while making any payments for purchase of goods exceeding Rs 50 lakh in a financial year to a resident would be required to deduct a 0.1 percent TDS.

As per Income tax provision

Section 194Q relating to TDS deduction by businesses was introduced in the 2021-22 Budget and has come into effect beginning July 1, 2021.

The CBDT has also clarified that only those entities having turnover from the business of more than Rs 10 crore in the preceding financial year would be required to deduct TDS @ the time of purchase of goods over Rs 50 lakh.

Buyer is defined to be person whose total sales or gross receipts or turnover from the business carried on by him exceed Rs 10 crore during the financial year immediately preceding the financial year in which the purchase of good is carried out.

Issue involved

Whether Businesses of buying shares or commodities traded through recognised stock or commodity exchanges for any value
even above Rs 50 lakh is liable for TDS.

Clarification on above issue

Above provision would not be applicable on share or commodity transactions done through stock exchanges,the Central Board of Direct Taxes (CBDT) has said.

The tax department said it had received representations saying that there are practical difficulties in implementing
the provisions of TDS contained in Section 194Q of the I-T Act in case of transaction via certain exchanges and clearing corporations as sometime in these transactions there is no one to one contract between the buyers and
the sellers.

In order to remove such difficulties, it is provided that the provisions of section 194Q of the Act shall not be applicable in relation to transactions in securities and commodities which are traded through recognised stock exchanges or cleared and settled by the recognised clearing corporation as per CBDT guidelines issue on dated June 30.

CBDT Notifies Income Tax (21st Amendment) Rules 2021. Know What Changes are Made through this Amendment

Vide Notification dated 29th June 2021, the CBDT has notified Income Tax (21st Amendment) Rules 2021.

Notification attached for your kind reference:

INCOME TAX: CBDT Circular No. 11/2021 dt 21.06.2021) facilitates tax deductors/ collectors to verify if a person is a “Specified Person”

Compliance Check functionality for Section 206AB & 206CCA (refer CBDT Circular No. 11/2021 dt 21.06.2021) facilitates tax deductors/collectors to verify if a person is a “Specified Person”. Procedure for using the functionality is available at

[embeddoc url=”https://taxconcept.net/wp-content/uploads/2021/06/notification01_2021-compliance-check-functionality.pdf” download=”all”]

Income Tax (CBDT) Due Date Extended beyond May, 2021 [Extension Table]

The Board of Direct Taxes (Income Tax Department) vide circular No. 09/2021, (F. NO.225/49/2021-ITA-1I dated 20.05.2021, in exercise of its power under section 119 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) has issued circular w.r.t. Extension of time limits of certain compliances to provide relief to taxpayers in view of the severe pandemic and spike in Covid-19 cases:

Extension Table

SrNo	NatureofExtension	Originalduedate	NewDueDates
1	Statement of Financial Transact ions u/s 285BA (SFT)	31.05.2021	30.06.2021
2	Statement of Reportable Account under Rule 114G	31.05.2021	30.06.2021
3	Statement of Tax deduction at source for the quarter ending 3151 March 2021	31.05.2021	30.06.2021
4	Issue of TDS certificates in Form 16 for the Financial Year 2020- 21	15.06.2021	15.07.2021
5	TDS/TCS Book adjustment statement in Form 24G for the month of May 2021	15.06.2021	30.06.2021
6	Statement of Deduction of Tax in the case of superannuationfund for FY 2021	31.05.2021	30.06.2021
7	Statement of Income paid or credited by an investment fund to its unit’s holder in Form 64D for FY 2021	15.06.2021	30.06.2021
8	Statement of Income paid or credited by an investment fundto its unit’s holder in Form 64C for FY 2021	30.06.2021	15.07.2021
9	Income Tax Returns – Normal assessee without audits – FY2021	31.07.2021	30.09.2021
10	Filing of Audit Reports viz. Tax Audit Reports, Form 67 etc. – FY 2021	30.09.2021	31.10.2021
11	Due date of Furnishing Report from Accountant in respect ofInternational Transactions covered u/s 92E	31.10.2021	30.11.2021
12	Corporate assessee or Firm covered whose accounts required to be audited or Partner of Firm whose accounts are required to be audited or any assessee other than Corporate and Firm whose accounts are required to be audited	31.10.2021	30.11.2021
13	Assessee required to furnish return u/s 92E in respect of international Transactions	30.11.2021	31.12.2021
14	Belated Returns and Revised Returns	31.12.2021	31.01.2021

Kindly Note that:Note: all above extensions is planned in view of New ITD portal to belaunched from June 7,,2021.

Clarifications by CBDT:

1. Non – Applicability: the extension of the dates as referred to in clauses(9), (12) and (13) above shall not apply to Explanation 1 to section 234A of the Act, incases where the amount of tax on the total income as reduced by the amount asspecified in clauses (i) to (vi) of sub-section (1) of that section exceeds one lakhrupees.

2. For the purpose of Clarification 1, in case of an individual resident inIndia referred to in sub-section (2) of section 207 of the Act, the tax paid by him undersection 140A of the Act within the due date (without extension under this Circular)provided in that Act, shall be deemed to be the advance tax.

Source: Click Here

FSSAI Revised Product Labelling Requirements Norms- FSSAI Update

CS LALIT RAJPUT

Disclaimer:

Every effort has been made to avoid errors or omissions in this material. In spite of this, errors may creep in. Any mistake, error or discrepancy noted may be brought to our notice which shall be taken care of in the next edition. In no event the author shall be liable for any direct, indirect, special or incidental damage resulting from or arising out of or in connection with the use of this information.

CBDT amends Income Tax rule 2DB & Form No. 10BBA [Notification No. 32/2021]

CBDT amends Income Tax rule 2DB which relates to conditions to be satisfied by the pension fund for exemption under section 10(23FE) and substitutes/amends Form No. 10BBA – Application for notification under sub-clause (iv) of clause (c) of Explanation 1 to the clause (23FE) of section 10 of the Income-tax Act, 1961 (Pension Fund)

MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
New Delhi

Notification No. 32/2021- Income Tax Dated: 15th April, 2021

G.S.R. 274(E).—In exercise of the powers conferred by sub-clause (iii) of clause (c) of Explanation 1 to the clause (23FE) 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 (10th Amendment) Rules, 2021.

(2) They shall come into force from the date of their publication in the Official Gazette.

In the Income-tax Rules, 1962 (hereinafter referred to as the principal rules), in rule 2DB,-

(i) after clause (iii), the following proviso shall be inserted, namely:−

“Provided that the provisions of clause (iii) shall not apply to any payment made to creditors or depositors for loan taken or borrowing for the purposes other than for making investment in India;”;

(ii) clause (iv) shall be omitted;

(iii) after clause (vi), the following Explanation shall be inserted, namely:−

‘Explanation: For the purposes of this rule, “loan and borrowing” shall have the same meaning as assigned to it in sub-clause (b) of clause (ii) of Explanation 2 to clause (23FE) of section 10.’.

In the principal rules, in rule 2DC, in sub-rule (1), for the word “Explanation”, the word and figure “Explanation 1” shall be substituted.
In the principal rules, in the APPENDIX II, for Form No. 10BBA the following Form shall be substituted, namely:-

“Form No. 10BBA

[See sub-rule (1) of rule 2DC]

Application for notification under sub-clause (iv) of clause (c) of Explanation 1 to the clause (23FE) of section 10 of the Income-tax Act, 1961

(Pension Fund)

To,

The Member (Legislation), CBDT (For application during Financial Year 2020-2021)**/

The Member (Having control over the Foreign Tax and Tax Research Division) (For application during other financial year)**

Madam/ Sir,

The applicant is a Pension Fund and interested in making investment in terms of clause (23FE) of section 10 of the Income-tax Act, 1961 and therefore, it is requested that necessary notification may kindly be issued, the details for which are as under:

(a) Name of the Pension Fund	:
(b) Address of the Pension Fund	:
(c) Tax Identification Number of the country of residence	:
(d) Country of residence	:
(e) Permanent Account Number (PAN)	:

It is hereby certified that-

(a) the Pension Fund is created or established under the law of______ (please mention the name of the foreign country including any of its political constituents like province/ state/ local body etc.) and is regulated under that law;

(b) the Pension Fund is not liable to tax in the foreign country mentioned at (a) above or if liable to tax, exemption from taxation for all its income has been provided by such foreign country;

(c) the Pension Fund is responsible for administering or investing the assets for meeting the statutorily obligations and defined contributions of one or more funds or plans established for providing retirement, social security, employment, disability, death benefits or any similar compensation to the participants or beneficiaries of such funds or plans, as the case may be;

(d) the earnings and assets of the Pension Fund are used only for meeting statutory obligations and defined contributions for participants or beneficiaries of funds or plans referred to in (c) above and no portion of the earnings or assets of the pension fund inures any benefit to any other private person barring any payment made to the creditors or depositors or loan or borrowing taken for purposes other than for making investment in India; and

(e) the Pension Fund does not participate in the day to day operations of investee ^ barring any monitoring mechanism to protect the investment with the investee including the right to appoint directors or executive director .

In support of the claims made above, the following documents are attached:

(a) documents constituting the Pension Fund and any later amendment thereto, and

(b) any other relevant document or information.

Verification*

I, _____________ , son/ daughter/ wife** of Shri _____________ , solemnly

declare that to the best of my knowledge and belief, the information given in this application and the annexures and documents, if any, accompanying it are correct and complete and particulars shown therein are truly stated.

I further declare that to the best of my knowledge; I have not concealed any fact or information which could be relevant for this application.
I also declare that I am making this application in my capacity as ____________ (designation) and that I am
holding PAN/ Aadhaar** _____ and I am competent to make this application and verify it.

Verified today the__________ day of_____________

Place

(Signature)

Name

Notes: 1. **Delete whichever is not applicable.

*To be signed by the person competent to verify the return of income under section 140 of the Income-tax Act, 1961.

3.^ An “investee” shall have the same meaning as in clause (i) of Explanation 2 to clause (23FE) of section 10 of the Income-tax Act, 1961.

¥ loan and borrowing shall have the same meaning as in sub-clause (b) of clause (ii) of Explanation 2 to clause (23FE) of section 10 of the Income-tax Act, 1961.”.

[Notification No. 32/2021/ F. No.370142/28/2020-TPL]

NEHA SAHAY, Under Secy. (Tax Policy and Legislation Division)

Note: – The principal rules were published in the Gazette of India Extraordinary, Part III, section 3, sub-section (ii), vide notification number S.O. 969(E), dated the 26th March, 1962 and last amended vide

CBDT amends Rule 10DA (Requirements in relation to Master File) and Rule 10DB (Procedure and details relating to CbCR) [Read Notification]

CBDT amends Rule 10DA (Requirements in relation to Master File) and Rule 10DB (Procedure and details relating to CbCR) w.e.f. April 1, 2021 vide Notification No 31/2021/F No 370142/19/2019-TPL

Amends Rules 10DA and 10DB of the Income-tax Rules dealing with Master file and CbCR reporting for specified transactions of constituent entities of an international group;
Increases consolidated group revenue threshold to determine reporting eligibility from INR 5,500 crores to INR 6,400 crores.

CBDT revised Form No. 12BA (Read Notification)

CBDT revised Form No. 12BA (Statement showing particulars of perquisites, other fringe benefits or amenities and profits in lieu of salary with value thereof), Part B to Form 16 (Details of Salary Paid and any other income and tax deducted) and Annexure II to Form No. 24Q vide Notification No. 15/2021-Income Tax and which shall come into force from 1st April 2021 onwards.

Key points of the amendments are:

1️⃣Form 12BA has been revised to include additional reporting by the employer which included the details of –
(a) Contribution by employer to recognized provident fund, pension scheme of Central Government or approved superannuation fund in respect of the assessee, to the extent it exceeds seven lakhs and fifty thousand rupees under section 17(2)(vii) of Income Tax Act and also annual accretion by way of interest, dividend etc. to the balance at the credit of fund and scheme;

(b) Stock options (ESOP) allotted or transferred by an employer being an eligible start-up;

2️⃣Part B of Form No.16 has been revised to include details as to whether the option to pay tax at lower rate for an Individuals or HUF’s u/s 115BAC is exercised or not.

3️⃣Annexure II of Form 24Q has been revised in order to insert a column where the employer would be required to answer that whether the employee is opting for taxation u/s 115BAC or not.

For further details and substituted Forms please refer the notification released by CBDT (Central Board of Direct Taxes).

Background

2.0 Notification 55/ 2026 dated 31 March 2026

2.0 Notification 54/ 2026 dated 31 March 2026

3.0 Our Comments

Section 43, IT Act

Steps to link PAN-Aadhar via portal:

Other methods of linking PAN with Aadhar:

Notification No. 32/2021- Income Tax Dated: 15th April, 2021