CBDT Notifies Changes in Declaration Form 60 For Non-Pan Holders including a Foreign Company to carry out Transactions Specified in Rule 114B: Amends Income Tax Rules

On October 10, 2023, the Central Board of Direct Taxes (CBDT) issued notification no. G.S.R. 728(E), announcing modifications to Form 60 declaration. These changes pertain to individuals without a PAN (Permanent Account Number) or a foreign company involved in transactions outlined in Rule 114B of the Income Tax Rules, 1962. The CBDT has officially introduced the Income-tax (Twenty-fourth Amendment) Rules, 2023, effective from October 10, 2023.

Pursuant to the authority granted by clause (vii) of sub-section (1), clause (c) of sub-section (5), and sub-section (6A) of section 139A, in conjunction with section 295 of the Income-tax Act, 1961 (43 of 1961), the CBDT has introduced the subsequent regulations to modify the Income-tax Rules, 1962.

In the Income-tax Rules, 1962, the following changes have been made to rule 114B:

1. In the second proviso, the phrase “Provided further that any person” is replaced with “Provided further that any person, not being a company or a firm.”
2. A new proviso is added, stating that foreign companies without taxable income in India and lacking a Permanent Account Number (PAN) must declare transactions detailed in entries 2 or 12 of the Table in an IFSC banking unit by submitting Form No. 60.
3. In the Explanation section, clause (1) is renumbered as (1A), and a new clause (1) is inserted defining “IFSC banking unit” as per the International Financial Services Centres Authority Act, 2019.

In the principle rules, in rule 114BA, the following shall be inserted at the end, namely:-

“Provided that the provisions of this rule shall not apply in a case,––

1. where the person, making the deposit or withdrawal of an amount otherwise than by way of cash as per clause (a) or (b), or opening a current account not being a cash credit account as per clause (c) of this rule, is a non-resident (not being a company) or a foreign company;
2. the transaction is entered into with an IFSC banking unit; and
3. such non-resident (not being a company) or the foreign company does not have any income chargeable to tax in India.

Explanation.–– For the purposes of this rule, “IFSC banking unit” shall have the same meaning as assigned to it in clause (1) of the Explanation to rule 114B.”;

In the principle rules, in rule 114BB, after the proviso, the following shall be inserted, namely:––

“Provided further that the provisions of this sub-rule shall not apply in a case,––

1. where the person, making the deposit or withdrawal of an amount otherwise than by way of cash as per Sl. No. 1 or Sl. No. 2 of column (2), or opening a current account not being an cash credit account as per Sl. No. 3 of column (2) of the Table, is a non-resident (not being a company) or a foreign company;
2. the transaction is entered into with an IFSC banking unit; and
3. such non-resident (not being a company) or the foreign company does not have any income chargeable to tax in India.

Explanation.–– For the purposes of this sub-rule, “IFSC banking unit” shall have the same meaning as assigned to it in clause (1) of the Explanation to rule 114B.”

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