Conditions to be satisfied by pension fund for exemption u/s 10(23FE). Guidelines for notification
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
Notification No. 67/2020
New Delhi, the 17th August, 2020
INCOME-TAX
G.S.R. 508(E).—In exercise of the powers conferred by sub-clause (iii) of clause (c) of Explanation 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 (20th Amendment) Rules, 2020.
(2) They shall come into force from the date of their publication in the Official Gazette.
2. In the Income-tax Rules, 1962,-
(i) after rule 2DA, the following rules shall be inserted, namely: –
“2DB. Other conditions to be satisfied by the pension fund. –
For the purposes of clause (23FE) of section 10, the pension fund shall be required to satisfy the following other conditions, namely: –
(i) it is regulated under the law of a foreign country including the laws made by any of its political constituents being a province, state or local body, by whatever name called, under which it is created or established, as the case may be;
(ii) it is responsible for administering or investing the assets for meeting the statutory 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;
(iii) 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 clause (ii) and no portion of the earnings or assets of the pension fund inures any benefit to any other private person;
(iv) it does not undertake any commercial activity whether within or outside India;
(v) it shall intimate the details in respect of each investment made by it in India during the quarter within one month from the end of the quarter in Form No. 10BBB;
(vi) it shall file return of income on or before the due date specified under sub-section (1) of section 139 and furnish along with such return a certificate in Form No. 10BBC in respect of compliance to the provisions of clause (23FE) of section 10, during the financial year, from an accountant as defined in the Explanation below sub-section (2) of section 288.
2DC. Guidelines for notification under clause (23FE) of section 10.-
(1) For the purposes of notification under sub-clause (iv) of clause (c) of Explanation to the clause (23FE) of section 10, the pension fund shall make an application in Form No. 10BBA enclosing therewith relevant documents and evidence, to the,-
(i) Member (Legislation), Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, North Block, New Delhi during the financial year 2020-2021
(ii) Member, Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, North Block, New Delhi having supervision and control over the work of Foreign Tax and Tax Research Division during the other financial years.
(2) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, shall lay down the data structure, standards and procedure of furnishing and verification of Form No 10BBB and Form No 10BBC, and shall be responsible for formulating and implementing appropriate security, archival and retrieval policies in relation to the said forms so furnished under this sub-rule.”;
(ii) in Appendix-II, after Form No. 10BB, the following forms shall be inserted, namely: –
“Form No.10BBA
[See sub rule (1) of rule 2DC]
Application for notification under sub-clause (iv) of clause (c) of Explanation to the clause (23FE) of section 10 of the Income-tax Act, 1961
Form No 10BBB
[See rule 2DB]
Intimation by Pension Fund of investment under clause (23FE) of section 10 of the Income-tax Act,1961
Form No 10BBC
[See rule 2DB]
Certificate of accountant in respect of compliance to the provisions of clause (23FE) of section 10 of the Income-tax Act, 1961 by the notified Pension Fund
[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 notification number G.S.R. No. 499(E) dated the 10th August, 2020.
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