Income Tax:
| Notification No. | Effect of the notification |
| Notification No. 27/2024 Dated 5th March 2024 | The new rules are called the Income-tax (Fourth Amendment) Rules, 2024, and they will become effective as soon as they are published in the Official Gazette, which is a government publication.
Within the Income-tax Rules, there’s a section called Appendix II, under which:
· Changes are being made to a form called Form No. 3CD. a. In Part A of Form No. 3CD, there’s a change to a specific clause (clause 8a). The old reference to “115BAD” is being replaced with “115BAD/115BAE”. b. In Part B of Form No. 3CD: In clause 12, the old reference to “44AD” is being replaced with “44AD, 44ADA”. In clause 18, a sub-clause (ca) is being replaced with new sub-clause that involve adjustments made to the written down value under certain sections of the Income-tax Act for specific assessment years. c. Additionally, there are changes made in clause 19, clause 21, clause 26, and clause 32, which involve amendments to various sections and provisions within the Income-tax Rules to reflect updated information and requirements.
· Changes are being made to a form called Form No. 3CEB. 1. Sr. No. 25 will be renumbered as Sr. No.26 of Part C [Specified Domestic Transaction (SDT)] of Form 3CEB. 2. New Sr. No. 25 will be inserted for reporting of SDT in reference to Section 115BAE(4).
· Changes are being made to a Form no. 65
1. Under the section called “Verification,” after the fourth point, a new point is added. It says: “I confirm that the company applying is a part of an International Financial Services Centre and has submitted the application within three months from when the tax deduction under section 80LA of the Income-tax Act, 1961 is no longer valid.”
2. In the Annexure, in Part A, there’s a substitution to clause number 6, Instead of just one clause 6, there are now two Clause 6 and 6A. Quote: “6. Date on which the company became a qualifying company [to be given only in case of a company which becomes a qualifying company after the initial period] (enclose evidence in support of the claim)
6A. (a) Has the applicant company availed of deduction under section 80LA of the Income- tax Act, 1961? (b) If so, please specify the date on which such deduction is no longer applicable? “
Unquote: Clause 6 : This clause is about the date when the company became eligible for certain benefits. This is only required if the company became eligible after a certain initial period. Evidence to support this claim should be included.
Clause 6A: The second new clause is asking whether the company has previously used a certain tax deduction (section 80LA of the Income-tax Act, 1961), and if so, it asks for the date when that deduction is no longer applicable. |
| Notification No. 28/2024 Dated 07th March 2024 | This notification will be effective from 01st April 2024, as per this notification, certain payments made by a “payer” to a unit of an International Financial Services Centre (referred to as the payee) will not have any tax deducted from them. So, essentially, any payments falling under the specified categories made by a payer to a unit of an International Financial Services Centre will not have tax deducted from them.
Provided they must fulfil the following conditions: a. The person receiving payment (‘payee’) must fill out a form [(Form No. 1) (annexed to the notification)] and give it to the person making the payment (‘payer’). This form should list the previous years for which the payee wants to claim a tax deduction under specific sections of the Income-tax Act (sections 80LA(1A) and 80LA(2)). The payee must do this for each of the ten consecutive assessment years they want to claim the deduction for.
b. The payer, upon receiving this form from the payee, should not deduct any tax from the payments made to the payee after receiving this form. Additionally, the payer must include details of all payments made to the payee without tax deduction because of this notification in the tax deduction statement they file (referred to as the statement of deduction of tax) as per the Income-tax Act’s requirements.
Additionally, it’s important to note that the relaxation mentioned above applies only to the specific previous years declared by the payee in Form No. 1, for which they are opting for the tax deduction under section 80LA. In other words, the payer is only exempt from deducting tax on payments made during these specified years. For any other years not included in the declaration, the payer is still responsible for deducting tax on payments made to the payee as usual.
CBDT has asked the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), to lay down procedures, formats, and standards for ensuring secure capture and transmission of data and uploading of documents. They will also be responsible for evolving and implementing appropriate security, archival and retrieval policies.
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| Circular No. 04/2024 Dated 07th March 2024 | Certain people faced issues and complaints related to tax filings of Form No. 26QE, the Board has decided to help them out. Using its powers under section 119(2)(a) of the law, the Board has decided to extend the deadline for filing a specific form called Form No. 26QE. This extension applies to people who deducted taxes under a particular section of the law (section 194S) but didn’t submit Form No. 26QE on time.
The new deadline for filing Form No. 26QE is now May 30, 2023. This extension is specifically for cases where taxes were deducted by certain people between July 1, 2022, and February 28, 2023. Additionally, any fees charged under section 234E, or interest imposed under section 201(1A)(ii) for the period up to May 30, 2023, will be waived for these cases. Note: As per Section 194S, any person responsible for paying to any resident person any sum by way of consideration for the transfer of a virtual digital asset is required to deduct an amount equal to 1% of such sum as income tax thereon. Further, as per sub-rule (40) of rule 31A, a ‘specified person’ is required to report such deductions in a challan-cum statement electronically in Form No. 26QE within thirty days from the end of the month in which such deduction is made. |
