MM TAX CLUB

CBDT Circular No. 19 of 2021 Dated: 26th October, 2021

Guidelines under clause (23FE) of section 10 of the Income-tax Act, 1961

Finance Act, 2020, inter-alia, inserted clause (23FE) of section 10 of the Income-tax Act, 1961 (hereinafter referred to as "the Act") to provide for exemption to sovereign wealth funds and pension funds (hereinafter referred to as "specified fund") on their income in the nature of dividend, interest and long-term capital gains arising from investment in infrastructure in India made between 01 .04.2020 and 31.03.2024 subject to fulfillment of certain conditions;

The Finance Act, 2021, inter alia, inserted seventh proviso to clause (23 FE) of section 10 of the Act to provide that in case the specified fund has loans or borrowings, directly or indirectly, for the purposes of making investment in India, such fund shall be deemed to be not eligible for exemption under this clause.

In this regard, concerns have been raised in regard to the term ' indirectly' used in the said proviso of the clause (23 FE) of section 10 of the Act that it is not defined and no clarity has been provided thereon under the extant provisions. Further, concerns have been raised that if the specified fund or its holding entity or any other entity in the chain of holding or any associate thereof (hereinafter referred to as "group concern") has any loans or borrowings, the specified fund may be ineligible to get the exemption under the said clause.

First proviso to clause (23FE) of section 10 of the Act provides that if any difficulty arises regarding interpretation or implementation of the provisions of this clause, the Board may, with the approval of the Central Government, issue guidelines for the purpose of removing the difficulty. In exercise of the powers under this proviso, Board, with the approval of the Central Government, hereby issues the following guidelines:-

Guidelines:

In order to remove the above difficulties mentioned in para 3 of these guidelines, it is hereby clarified that eligibility of exemption under clause (23FE) of section LO of the Act shall be as follows: -

1.  if the loans and borrowings have been taken by the specified fund or any of its group concern, specifically for the purposes of making investment by the specified fund in India, such fund shall not be eligible for exemption under clause (23FE) of section 10 of the Act; and
2. if the loans and borrowings have been taken by the specified fund or any of its group concern, not specifically for the purposes of making investment in India, it shall not be presumed that the investment in India has been made out of such loans and borrowings and such specified fund shall be eligible for exemption under clause 23(FE) of section 10 of the Act, subject to the fulfillment of all other conditions under the said clause, provided that the source of the investment in India is not from such loans and borrowings.

Government of India releases balance amount of ₹ 44,000 crore to States and UTs (with Legislature) under the back-to-back loan facility in-lieu of GST compensation

State/ UTs wise amount released as “Back to Back Loan in lieu of GST Compensation Shortfall” on 28.10.2021

Order under section 28SBB of the Income-tax Act, 1961 read with Rule 114-1 of the Income-tax Rules 1962.

In exercise of powers conferred under section 285BB of the Income-tax Act, 1961 read with sub-rule (2) of Rule 114-1 ofthe Income-tax Rules, 1962, the Central Board of Direct Taxes ('Board'), hereby authorizes the Director General of Income-tax (Systems) to upload information relating to following sources. which is in her/his possession, in the Annual Information Statement in Form 26AS in the electronic filing account registered by the assessee in designated portal, within three months from the end of the month in which the information is received by her/him:

1. Foreign remittance information reported in Form lSCC
2. Information in Annexure II of the 24Q TDS Statement of the last quarter
3. Information in ITR of other taxpayer
4. Interest on Income Tax Refund
5. Information in Form 61/61A where PAN could be populated
6. Off Market Transactions Reported by Depository/ Registrar and Transfer Agent (RTA)
7. Information about dividend of mutual fund reported by Registrar and Transfer Agent (RTA)
8. Information about purchase of mutual fund reported by Registrar and Transfer Agent (RTA)

The Director General of Income-Tax (Systems) shall specify the procedures, formats and standards for the purposes of uploading the information referred to in para above in Annual Information Statement in Form 26 AS.

Relaxations in paying additional fees in case of delay in filing Form 8 (the Statement of Account and Solvency) by Limited Liability Partnerships upto 30th December 2021.

The Ministry has received a representation seeking extension of timeline for filing the Statement of Account and Solvency without paying additional fees by LLPs on account of challenges faced by the LLPs due to COVID-19 pandemic. As part of the Government's constant efforts to promote ease of living and compliances for Micro, Medium and Small Enterprises doing business through the vehicle of LLP, it has been decided to allow LLPs to file Form 8 (the Statement of Account and Solvency) for the Financial Year 2020-2021 without paying additional fees upto 30th December, 2021.