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CBDT Notifies Investment in Shares or Bonds of Digital Commerce Ltd for section 11(5)

cbdt-notifies-investment-in-shares-or-bonds-of-digital-commerce-ltd-for-section-11-5

CBDT vide Notification No. 42/2022 dated 22.04.2022 in G.S.R. 309(E) through Income-tax (10th Amendment) Rules, 2022 notifies investment in the equity share capital or bonds or debentures of Open Network for Digital Commerce Ltd. as any other form or mode of investment or deposit under section 11(5)(xii) of the Income-tax Act, 1961 (‘Act’) by amending Rule 17C of the Income-tax Rules, 1962 (‘Rules’).


A new clause (vb) is inserted in the Rule 17C to provide for the investment made by a person, authorised under section 4 of the Payment and Settlement Systems Act, 2007 (51 of 2007), in the equity share capital or bonds or debentures of Open Network for Digital Commerce Ltd, being a company incorporated under sub-section (2) of section 7 read with sub-section (1) of section 8 of the Companies Act, 2013 (18 of 2013), for participating in network based open protocol models which enable digital commerce and interoperable digital payments in India by exercising its power conferred by clause (xii) of sub-section (5) of section 11.



Rule 17C prescribes the forms or modes of investment or deposits by a charitable or religious trust or institution as required under section 11(5) of the Act.


Section 11(2)(b) of the Act provides that where at least 85 per cent of the income is not applied or is not deemed to have been applied for charitable or religious purposes in India during the previous year but is accumulated or set apart, either in whole or in part, for application to such purposes in India, such income so accumulated or set apart shall not be included in the total income of the previous year of the person in receipt of the income if the Trust invests or deposits in the forms or modes specified in section 11(5).


Section 11(5) lists out the forms and modes of investing or depositing the money referred to in section 11(2)(b) of the Act. It inter-alia includes investment in securities or certificates issued by the Central Government under the Small Savings Schemes, deposits with Post Office Savings Bank, deposits with a scheduled bank or a co-operative bank, etc. Clause(xii) of this sub-section empowers the Board to prescribe any other form or mode of investment or deposit which will be eligible for claiming exemption under section 11 of the Act.


In this context, CBDT has prescribed the forms or modes of investment or deposits by a charitable or religious trust or institution in Rule 17C of the Rules.


Read the full text of CBDT Notification No. 42/2022 dated 22.04.2022 on Notifying Investment in Shares or Bonds of Digital Commerce Ltd for section 11(5)


MINISTRY OF FINANCE 

(Department of Revenue) 


[CENTRAL BOARD OF DIRECT TAXES] 


NOTIFICATION 


New Delhi, the 22nd April, 2022 


INCOME-TAX


G.S.R. 309(E).—In exercise of the powers conferred by clause (xii) of sub-section (5) of section 11 read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Government 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 (10th Amendment) Rules, 2022.


(2) They shall come into force on the date of their publication in the Official Gazette.


2. In the Income-tax Rules, 1962, in rule 17C, after clause (va), the following clause shall be inserted, namely:-


“(vb) investment made by a person, authorised under section 4 of the Payment and Settlement Systems Act, 2007 (51 of 2007), in the equity share capital or bonds or debentures of Open Network for Digital Commerce Ltd, being a company incorporated under sub-section (2) of section 7 read with sub-section (1) of section 8 of the Companies Act, 2013 (18 of 2013), for participating in network based open protocol models which enable digital commerce and interoperable digital payments in India;”.


[Notification No. 42/2022/ F. No. 370142/10/2022-TPL] 

NEHA SAHAY, Under Secy.


Note: The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section-3, Sub-section (ii) vide number S.O. 969 (E) dated the 26th March, 1962 and last amended vide notification number G.S.R.307 (E) dated 21st April, 2022.


Download CBDT Notification No. 42/2022 dated 22.04.2022 on Notifying Investment in Shares or Bonds of Digital Commerce Ltd for section 11(5) in PDF format


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