CBDT Amends Income Tax Rules and Introduces Form 10-IEA [Read Notification]

The Central Board of Direct Taxes (CBDT) amended the Income Tax Rules, 1962 by inserting new Rule 21 AGA and also a new Form 10-IEA through vide notification no. G.S.R. 452(E) published on 21st June 2023.

The new amendment may called the Income Tax (Tenth Amendment) Rules, 2023 which came into force on 21st June 2023. The board has made insertion in the sub-rule (3) of Rule 2BB of the Income Tax Rules.

In rule 2BB, for sub-rule (3), the following sub-rule shall be substituted that notwithstanding anything contained in sub-rule (1) and (2), an employee being an assessee who has exercised option under sub-section (5) of section 115BAC; or  whose income is chargeable to tax under sub-section (1A) of section 115BAC, shall be entitled to exemption only in respect of the allowances mentioned in sub-clauses (a) to (c) of sub-rule (1) and at serial no. 11 of the Table below sub-rule (2) to the extent and subject to the conditions, if any, specified therein.

1n rule 3, in sub-rule (7), in clause (iii), for the second proviso, following was substituted:

“Provided further that the provisions of the first proviso in respect of free food and non-alcoholic beverage provided by the employer through paid voucher shall not apply to an employee, being an assessee, who has exercised an option under sub-section (5) of section 115BAC or whose income is chargeable to tax under sub-section (1A) of section 115BAC.”

This amendment also made certain changes in sub rule (1) of Rule 5.

Also, the board has inserted a new Rule  21 AGA right after the rule 21AG.  The new Rule states accordingly:

“21AGA. Exercise of option under sub-section (6) of section 115BAC.-

(1) The option to be exercised in accordance with the provisions of sub-section (6) of section 115BAC by a person, being an individual or Hindu undivided family, or an association of persons (other than a co-operative society) or a body of individuals, whether incorporated or not, or an artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2, for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2024, shall be, –

(a) in Form No. 10-IEA on or before the due date specified under sub-section (1) of section 139 for furnishing the return of income for such assessment year, in the case of a person having income from business or profession;

(b) in the return of income to be furnished under sub-section (1) of section 139 for such assessment year, in the case of a person not having income from business or profession as referred to in clause (i).

(2) The withdrawal of option under the proviso to sub-section (6) of section 115BAC shall also be in Form No. 10-IEA.

(3) Form No. 10-IEA shall be furnished electronically either under digital signature or electronic verification code.

(4) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, shall, –

1. specify the procedure for furnishing of Form No. 10-IEA;
2. specify the data structure, standards and manner of generation of electronic verification code, referred to in sub-rule (3), for verification of the person furnishing the said Form; and
3. be responsible for formulating and implementing appropriate security, archival and retrieval policies in relation to the Form so furnished.

Explanation.—For the purposes of this rule “electronic verification code” means a code generated for the purpose of electronic verification of the person furnishing the Form as per the data structure and standards specified by the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) as the case may be.”

(e) In the principal rules, in the Appendix, after Form No. 10IE, the following form shall be inserted, namely:-

Form 10-IEA

The Form 10-IEA has been inserted according to the Rule 21AGA. It is for the application for exercise of option under clause (i) of sub-section (6) of section 115BAC or withdrawal of option under the proviso to sub-section (6) of section 115BAC of the Income-tax Act, 1961.

The information you need to provide in the Form 10-IEA addressing to the Assessing Officer are name, PAN number, Status of the person referred to in sub-section(1A) of section 115BAC, Assessment year for which the form is being furnished, whether opting out of or re-entering the regime provided under subsection (1A) of section 115BAC, whether having any Unit in International Financial Services Centre (IFSC), as referred to in subsection (1A) of section 80LA ( if reentering as per row 5)… etc.

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