CBDT vide Notification No. 28/2023 dated 22.05.2023 in G.S.R. 379(E) through Income-tax (Fifth Amendment) Rules, 2023 amended Rule 31A of the Income-tax Rules, 1962 (“Rules”) to substitute the reporting requirement in the quarterly statement of tax deducted as per section 200(3) of the Act in respect of tax not deducted as per various provisos of section 194N of the Income-tax Act, 1961 (“Act”).
Further, CBDT has also made changes to Form 16 to include the deduction for contribution to Agnipath Scheme. The new Form 16 is made effective from AY 2024-25.
This notification has also inserted a new Rule 133 to calculate net winnings from online games.
Changes in Rule 31A
Rule 31A provides for the quarterly furnishing of statement of tax deduction in the prescribed forms (Form 24Q/Form 26Q/Form 27Q) within the stipulated due dates.
Two changes are notified for Rule 31A. One is in clause (ix) of Rule 31A(4) and another one is in clause (xvii) of the even sub-rule.
Sub-rule (4) of the Rule prescribes reporting of certain particulars in the statement of tax deduction to be furnished every quarter in the prescribed forms.
Clause (ix) of Rule 31A(4) requires reporting of tax not deducted as per various provisos to section 194N of the Act.
Prior to the amendment Rule 31A(4)(ix) reads as under:
“furnish particulars of amount paid or credited on which tax was not deducted or deducted at lower rate in view of the notification issued under second proviso to section 194N or in view of the exemption provided in third proviso to section 194N or in view of the notification issued under fourth proviso to section 194N”
which is substituted with this amendment as mentioned below with effect from 01.07.2023-
“(ix) furnish particulars of amount paid or credited on which tax was not deducted or deducted at lower rate in view of the notification issued under second proviso to section 194N or in view of the exemption provided in fourth proviso to section 194N or in view of the notification issued under fifth proviso to section 194N;”;
Comments:
Basically, the amendment has only changed the provisos number related to section 194N. Finance Act, 2023 has amended section 194N and inserted a third proviso after the second proviso. As a result, the number of provisos appearing thereafter has changed. The above amendment in Rule 31A(4)(ix) is consequent to the amendment in section 194N. Neither the reporting requirements have changed nor have any new reporting requirements been introduced.
Clause (xvii) of Rule 31A(4) requires reporting the amount deposited being prerequisite for releasing-
(a) winnings in terms of proviso to section 194B;
(b) benefit or perquisite in terms of first proviso to section 194R(1); and
(c) consideration in terms of proviso to section 194S(1).
The 5th Amendment Rules has inserted a new sub-clause (aa) to clause (xvii) to report winnings from online games in terms of section 194BA(2).
The amendment to clause (xvii) reads as under-
(b) in clause (xvii), after sub-clause (a), the following sub-clause shall be inserted, namely:-
“(aa) winnings in terms of sub-section (2) of section 194BA;”.
The above changes in clause (xvii) shall come into effect from 01.07.2023.
Comments
Finance Act, 2023 has introduced TDS on net winnings from online games under section 194BA. The above amendment in Rule 31A(4)(xvii) is consequent to the amendment in section 194BA. This is a new reporting requirement.
Changes in Form 16
CBDT has substituted Form 16 in the Appendix II of the Rules with effect from 1st July 2023 and the same is made applicable from assessment year 2024-25.
Hence, Form 16 as existing before the amendment shall be continued for assessment year 2023-24 even if the same is issued on or after 1st July 2023.
Changes introduced in Form 16 for AY 2024-25
Where Form 16 is issued to employees for tax deduction under section 192
In Column No. 10 having the heading ‘Deductions under Chapter VI-A’, new items of deductions for contribution to the Agnipath Scheme by the employee and the Central Government are included. For these, item (i) & (j) is substituted with the followings-
(i) Deduction in respect of contribution by the employee to Agnipath Scheme under section 80CCH
(j) Deduction in respect of contribution by the Central Government to Agnipath Scheme under section 80CCH
Consequently, other items of deductions have been re-numbered in column 10.
Where Form 16 is issued to specified senior citizen for tax deduction under section 194P
The relevant part of existing Form 16 for section 194P contains mistakes in the serial numbering of columns which is now rectified and made sequential.
Comments
No major changes are introduced in Form 16 compared to the existing Form 16 for AY 2023-24. Finance Act, 2023 has allowed a deduction for contributions to Agnipath Scheme by the employee as well as by the Central Government which is expressly included in the new Form 16.
Download new Form 16 as applicable from AY 2024-25 and onwards.
Insertion of New Rule 133
This notification has also inserted a new Rule 133 to calculate net winnings from online games which is detailed in this post.
Read the full text of CBDT Notification No. 28/2023 dated 22.05.2023 on Changes in Rule 31A and Form 16
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 22nd May, 2023
INCOME-TAX
G.S.R. 379(E).–In exercise of the powers conferred by section 295 read with section 115BBJ, section 194BA, sub-section (3) of section 200 and proviso to sub-section (3) of section 206C of the Income-tax Act 1961 (hereinafter referred to as ‘Act’), 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 (Fifth Amendment) Rules, 2023.
(2) Save as otherwise provided, they shall come into force from date of their publication in the Official Gazette.
2. In the Income-tax Rules, 1962 (hereinafter referred to as the principal rules), in rule 31A, in sub-rule(4) with effect from 1st July 2023,––
(a) for clause (ix), the following clause shall be substituted namely:-
“(ix) furnish particulars of amount paid or credited on which tax was not deducted or deducted at lower rate in view of the notification issued under second proviso to section 194N or in view of the exemption provided in fourth proviso to section 194N or in view of the notification issued under fifth proviso to section 194N;”;
(b) in clause (xvii), after sub-clause (a), the following sub-clause shall be inserted, namely:-
“(aa) winnings in terms of sub-section (2) of section 194BA;”.
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4. In the principal rules, in Appendix II,–
(a) for Form No. 16 the following form shall be substituted with effect from 1st July 2023 and shall be applicable for the assessment year 2024-25 and subsequent assessment years, namely:–
“FORM NO. 16
[See rule 31(1)(a)]
PART A
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[Notification No. 28/2023 / F.No. 370142/12/2023-TPL]
MRINALINI KAUR SAPRA, Director
Download CBDT Notification No. 28/2023 dated 22.05.2023 on Changes in Rule 31A and Form 16 in PDF format
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