The Central Board of Direct Taxes (CBDT) on Monday notified the Income-tax (20th Amendment) Rules, 2020, which seeks to amend Income-tax Rules, 1962.
The amendment seeks to insert Rule 2DB which lays down other conditions to be satisfied by the pension fund. For the purposes of clause (23FE) of section 10, the pension fund shall be required to satisfy the 6 other conditions.
Firstly, it is regulated under the law of a foreign country including the laws made by any of its political constituents being a province, state or local body, by whatever name called, under which it is created or established, as the case may be.
Secondly, it is responsible for administering or investing the assets for meeting the statutory obligations and defined contributions of one or more funds or plans established for providing retirement, social security, employment, disability, death benefits or any similar compensation to the participants or beneficiaries of such funds or plans, as the case may be.
Thirdly, the earnings and assets of the pension fund are used only for meeting statutory obligations and defined contributions for participants or beneficiaries of funds or plans referred to in clause (ii) and no portion of the earnings or assets of the pension fund inures any benefit to any other private person.
Fourthly, it does not undertake any commercial activity whether within or outside India.
Fifthly, it shall intimate the details in respect of each investment made by it in India during the quarter within one month from the end of the quarter in Form No. 10BBB.
Sixthly, it shall file return of income on or before the due date specified under sub-section (1) of section 139 and furnish along with such return a certificate in Form No. 10BBC in respect of compliance to the provisions of clause (23FE) of section 10, during the financial year, from an accountant as defined in the Explanation below sub-section (2) of section 288.
The Amendment further seeks to insert Rule 2DC, which elaborate on the guidelines for notification under clause (23FE) of section 10.
In the Income Tax Rules, 1962 in Appendix-II, the Forms No. 10BBA, Form No 10BBB, and Form No 10BBC, shall be inserted.
The Forms No. 10BBA is an Application for notification under sub-clause (iv) of clause (c) of Explanation to the clause (23FE) of section 10 of the Income-tax Act, 1961 in respect of Pension fund.
The Form No. 10BBB is an Intimation by Pension Fund of investment under clause (23FE) of section 10 of the Income-tax Act, 1961.
The Form No 10BBC is a certificate of accountant in respect of compliance to the provisions of clause (23FE) of section 10 of the Income-tax Act, 1961 by the notified Pension Fund.
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