The Central Board of Direct Taxes (CBDT) vide Notification No. 31/2021 in G.S.R 250(E) dated 5th April 2021 by Income-tax (9th Amendment) Rules, 2021, carried amendments to Rule 10DA and Rule 10DB of the Income Tax Rules, 1962 (“Rules”). These amendments are applicable from the Financial Year (FY) 2020-21 relevant to the Assessment Year (AY) 2021-22.
Section 92D of the Income-tax Act, 1961 (“Act”) requires a constituent entity of an international group, shall keep and maintain such information and document in respect of an international group as may be prescribed. The same is prescribed in Rule 10DA of the Income Tax Rules, 1962.
Rule 10DA(1) prescribes which constituent entity is required to maintain what information and documents of the international group.
Rule 10DA(2) requires furnishing of the information in Form 3CEAA to the Joint Commissioner on or before the due date for furnishing the return of income as specified under sub-section (1) of section 139.
The 9th Amendment Rules has substituted the word ‘Commissioner’ to ‘Director’. Hence, Rule 10DA(2) requires furnishing of the information in Form 3CEAA to the Joint Director on or before the due date for furnishing the return of income as specified under sub-section (1) of section 139.
Rule 10DA(4) provides that where there are more than one constituent entities resident in India of an international group required to file the information and document under Rule 10DA(2), the Form 3CEAA may be furnished by any one constituent entity under the following circumstances-
(i) the international group has designated such entity for this purpose; and
(ii) the information has been conveyed in Form No. 3CEAB to the Joint Commissioner on this behalf thirty days before the due date of furnishing Form No. 3CEAA.
The 9th Amendment Rules, 2021 substituted the ‘constituent entities resident in India of an international group’ with ‘constituent entities’.
Thus Rule 10DA(4) henceforth covers all the constituent entities whether are resident in India or not of the international group. Hence, with this amendment, Form 3CEAA is now required to be filed by any one of the entities designated in Form 3CEAB for both resident and non-resident entities.
Corresponding amendment is notified in Form 3CEAB to modify the heading of the form to omit the words ‘resident in India’.
Further, similar to sub-rule(1), the amendment in sub-rule (4) provides for the furnishing of information to the Joint Director in place of the Joint Commissioner.
In addition to Rule 10DA, an amendment is carried on in Rule 10DB also.
Rule 10DB deals with the furnishing of Report in respect of an International Group under section 286 of the Act.
Rule 10DB(1) prescribes that the income-tax authority for the purposes of section 286 shall be the Joint Commissioner as may be designated by the Director-General of Income-tax (Risk Assessment). This is now substituted with a new sub-rule from 1-4-2021.
As per the amendment, Joint Commissioner is substituted with the Joint Director and Director General of Income-tax (Risk Assessment) with Principal Director General of Income-tax (Systems) or the Director-General of Income-tax (Systems).
Section 286(7) provides that an international group shall furnish the report if the total consolidated group revenue, as reflected in the consolidated financial statement for the accounting year preceding such accounting year does not exceed the amount, as may be prescribed. Rule 10DB(6) prescribed the limit. The present limit of the total consolidated group revenue of the international group prescribed is Rs. 5500 crore. The amendment has increased the limit to Rs. 6400 crore. Thus, for CbCR (Country-by-Country Reporting) related compliances to be applicable, the International group's consolidated group revenue shall have to exceed Rs. 6400 crore applicable from 1-4-2021.
Read the full text of the Notification No. 31/2021 dated 5-4-2021 on Amendment of Rule 10DA and Rule 10DB
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 5th April, 2021
Income-tax
G.S.R 250(E).—In exercise of the powers conferred by sub-section (1) and sub-section (4) of section 92D and sub-section (8) of section 286 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 (9th Amendment) Rules, 2021.
(2) They shall come into force on the 1st day of April, 2021.
2. In the Income-tax Rules, 1962 (hereinafter referred to as the principal rules), in rule 10DA,−
(a) in sub-rule (2), for the word “Commissioner”, the word “Director” shall be substituted;
(b) in sub-rule (4), −
(i) for the words “constituent entities resident in India of an international group” the words, brackets and figure “constituent entities of an international group required to file the information and document under sub-rule (2),” shall be substituted;
(ii) in clause (b), for the word “Commissioner”, the word “Director” shall be substituted.
3. In the principal rules, in rule 10DB, −
(a) for sub-rule (1) the following sub-rule shall be substituted, namely: −
“(1) The income-tax authority for the purposes of section 286 shall be the Joint Director as may be designated by the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be.”;
(b) in sub-rule (6), for the words “five thousand five hundred” the words “six thousand four hundred” shall be substituted.
4. In the principal rules, in the Appendix II, in Form No. 3CEAB, in the heading, the words “, resident in India,” shall be omitted.
[Notification No. 31/2021 / F.No.370142/19/2019-TPL]
NEHA SAHAY, Under Secy. (Tax Policy Legislation Division)
Explanatory Memorandum: It is hereby certified that no person is being adversely affected by giving retrospective effect to this notification.
Note. The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii) vide notification number S.O. 969(E), dated the 26th March, 1962 and was last amended vide notification number G.S.R 246(E), dated 1st April, 2021.
Download Copy of Notification No. 31/2021 dated 5-4-2021 on Amendment of Rule 10DA and Rule 10DB in pdf format.
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