CBDT amends Rule 21AIA to align definition of “Specified Fund” with Section 10(4D) of the Income-tax

The Ministry of Finance (Department of Revenue) has recently issued an official notification (No. 136/2025/F. No. 370142/29/2025-TPL), dated August 21, 2025, informing that the Central Board of Direct Taxes (CBDT) has made a few significant amendments to the Income-tax Rules, 1962. CBDT has made these amendments in exercise of powers granted under Section 295 of the Income-tax Act, 1961. The following changes have been introduced:

• These changes in the rule may now be called the Income-tax (Twenty-Fourth Amendment) Rules, 2025.
• These changes come into effect immediately with the date of publication of the notification in the Official Gazette, i.e., August 21, 2025.

Main Change: Rule 21AIA of the Income-tax Rules, 1962

This amendment makes two specific changes to Rule 21AIA of the Income-tax Rules, 1962:

(a) Omission of sub-rule (4)

• The rule previously had a sub-rule (4), which is now being completely removed.
• The exact contents of sub-rule (4) are not mentioned in this notification, but this change means that whatever provision or guideline was earlier given under sub-rule (4) will no longer apply from now onwards.

(b) Replacement of the Explanation

The rule had an Explanation section that helped clarify the meaning of terms used in the rule. Now, the earlier explanation has been replaced by a new one, and the new explanation says, “For the purpose of this rule, the expression ‘specified fund’ shall have the same meaning as assigned to it in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.”

The meaning of this is that the term “specified fund,” as used in Rule 21AIA, will now carry the same meaning as given in a specific part of the Income-tax Act, i.e., in the Explanation to clause (4D) of section 10, more specifically in the sub-clause (i) of clause (c). So, instead of defining “specified fund” separately in Rule 21AIA, the rule now refers to the main act for its definition. This brings uniformity and consistency in interpretation.