Amendment in Income Tax Rules in view of IFSC related proposals in Finance Act 2023
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
Notification No. 50/2023
New Delhi, the 17th July, 2023
G.S.R. 514(E).— In exercise of the powers conferred by clause (i) of sub-section (3) of section 80LA, clause (4E) of section 10, sub-section (7) of section 115UB, clause (d) of sub-section (8) of section 139A and clause (ii) of sub-section (7) of section 206AA 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 (Twelvth Amendment) Rules, 2023.
(2) They shall come into force from the date of their publication in the Official Gazette.
2. In the Income-tax Rules, 1962 (hereinafter referred to as the principal rules),
(i) in rule 21AK, for sub-rule (1), the following sub-rule shall be substituted, namely:—
“(1) The income accrued or arisen to, or received by, a non-resident as a result of
(a) transfer of non-deliverable forward contracts or offshore derivative instruments or over-the-counter derivatives; or
(b) distribution of income on offshore derivative instruments,
under clause (4E) of section 10 of the Act, shall be exempted subject to fulfilment of the following conditions, namely:—
(i) the non-deliverable forward contract or offshore derivative instrument or over-the-counter derivative 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, instrument or derivative is not entered into by the non-resident through or on behalf of its permanent establishment in India.”;
(ii) in rule 114AAB, in the Explanation, for clause (a), the following clause shall be substituted, namely:—
‘(a) “specified fund‟‟ means any fund established or incorporated in India in the form of a trust or a company or a limited liability partnership or a body corporate which has been granted a certificate of registration as a Category I or Category II Alternative Investment Fund and is regulated under the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 made under the Securities and Exchange Board of India Act, 1992 (15 of 1992) or regulated under the International Financial Services Centres Authority (Fund Management) Regulations, 2022 made under the International Financial Services Centres Authority Act, 2019 (50 of 2019) and which is located in any International Financial Services Centre or a specified fund referred to in sub-clause (i) of clause (c) of Explanation to clause (4D) of section 10;‟.
3. In the principal rules, in APPENDIX II,—
(i) for Form No. 10CCF, the following Form shall be substituted, namely:-
“FORM NO. 10CCF
[See rule 19AE]
Report under section 80LA(3) of the Income-tax Act, 1961
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