CBDT Notifies New Income Tax Rule 21AIA & Revised Form No.10-IG

The Central Board of Direct Taxes (CBDT) notifies New Income Tax Rule 21AIA & Revised Form No.10-IG vide Notification No. 64/2022 dated 16th June 2022.

New Rule 21AIA specifies the “other conditions” that must be met by a specified fund under section 10(4D) of the Income-tax Act of 1961.

The Notification Relevant Text is Given Below:

After rule 21AI, the following rule shall be inserted, namely:—

“21AIA. Other conditions required to be fulfilled by a specified fund referred to in clause (4D) of section 10 of the Act.—(1) For the purposes of the proviso to item (III) of sub-clause (i) of clause (c) of the Explanation to clause (4D) of section 10 of the Act, the “other conditions” required to be fulfilled by a specified fund shall be that —

(a) the unit holder of the specified fund, other than the sponsor or manager of such fund, who becomes a resident under clause (1) or clause (1A) of section 6 of the Act during any previous year subsequent to the previous year in which such unit or units were issued, shall cease to be a unit holder of such specified fund within a period of three months from the end of the previous year in which he becomes a resident;

(b) for the purposes of clause (a), the specified fund shall maintain the following documents in respect of its unit holders,—

i. name of the unit holder;

ii. tax identification number of the unit holder in the country of residence at the time the units were issued;

iii. permanent account number, if available;

iv. total number of units held;

v. total value of units held;

vi. whether unit holder is a sponsor or a manager;

vii. the previous year in which the unit holder became resident and;

viii. date of exit from specified fund.

(2) The specified fund shall certify that it has fulfilled the conditions under sub-rule (1) and furnish information in respect of units held by residents in the annual statement of exempt income in Form No. 10-IG.

(3) The income attributable to units held by non-resident (not being the permanent establishment of a non-resident in India) in a specified fund shall not be exempt under clause (4D) of section 10 unless the specified fund complies with sub-rule (2).

Explanation.-For the purpose of this rule, “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.”;

(iii) in rule 21AJ, after sub-rule rule (3), the following sub-rule shall be inserted, namely:-

“(3A) The income of a specified fund referred to in clause (a) and clause (b) of sub-section (1) of section 115AD, attributable to the units held by a non-resident (not being the permanent establishment of a non-resident in India), shall not be eligible for tax rates specified in section 115AD unless it furnishes the annual statement of income eligible for concessional taxation in Form No. 10-IH in accordance with the provision of sub- rule (3).”;

For Official Notification Download PDF Given Below: