The CBDT vide Notification No. 76/2021 dated 2nd July 2021 has promulgated ‘the Income Tax Amendment (18th Amendment), Rules, 2021’ to further amend the Income-tax Rules, 1962. The amendment made in the Income Tax Rules is briefed as under:
- Rule 8AA(5) of the IT Rules has been inserted regarding when the amount which is chargeable to income-tax as income of specified entity under subsection (4) of section 45 (firm, AOP, BOI) under the head ‘Capital gains’, would be regarded as short term capital and when same would be regarded as long term capital gain has been elaborated.
- New Rule 8AB of the IT Rules has been inserted which mandates that for the purposes of clause (iii) of section 48, where the amount is chargeable to income-tax as income of specified entity under sub-section (4) of section 45, the specified entity shall attribute such amount to capital asset remaining with the specified entity in a manner provided in this rule.
- As per new Rule 8AB the specified entity shall furnish the details of amount attributed to capital asset remaining with the specified entity in Form No. 5C which shall be furnished electronically either under digital signature or through electronic verification code and shall be verified by the person who is authorised to verify the return of income of the specified entity under section 140. Further Form No. 5C shall be furnished on or before the due date referred to in the Explanation 2 below section 139(1) for the assessment year in which the amount is chargeable to tax under section 45(4). Accordingly new Form No. 5C “Details of amount attributed to capital asset remaining with the specified entity” has been inserted in the Income Tax Rules..
For accessing the Notification click at: https://www.incometaxindia.gov.in/communications/notification/notification_76_2021.pdf
Also Read: Guidelines for Taxing Partnership Firms on its Reconstitution issued by CBDT [Read Circular]
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Frah Saeed is a law graduate specializing in the core field of indirect taxes and is the Co-founder of taxwallah.com. She has authored many publications on GST and is into full-time consultancy on GST to big corporates. She as a part of taxwallah.com heads a team comprising of Chartered Accountants and Advocates and plays a key role in our mission to disseminate GST knowledge to all.
