**Report on Income-tax Eighth Amendment Rules, 2021**
**1. Executive Summary:**
This report analyzes the Income-tax Eighth Amendment Rules, 2021, as notified by the Central Board of Direct Taxes (CBDT). This amendment primarily focuses on revisions to the Income-tax Rules, 1962, specifically addressing the audit report submission process and modifications to Form 3CD. Key changes include allowing for the revision of audit reports under certain conditions and updates to clauses related to taxation under various sections (115BA, 115BAA, 115BAB, 115BAC, 115BAD), transfer of land or building, adjustments to written down value, and details of brought forward loss or depreciation allowance. These amendments aim to provide greater flexibility in reporting and ensure accurate reflection of income tax liabilities under the updated provisions of the Income-tax Act.
**2. Introduction:**
The purpose of this report is to provide a comprehensive analysis of the Income-tax Eighth Amendment Rules, 2021, based solely on the provided policy text. This report outlines the key changes introduced by the amendment, its rationale, and its potential impact on affected stakeholders.
**3. Policy Overview:**
* This amendment modifies the existing Income-tax Rules, 1962.
* Core Objective(s): Based on the text, the primary objective is to refine and update the reporting requirements and procedures under the Income-tax Act, including allowing for revisions to audit reports and updating the reporting formats.
**4. Background and Rationale:**
The amendment likely addresses the need for flexibility and accuracy in income tax reporting. The allowance for revising audit reports suggests a recognition that post-reporting events (specifically, payments necessitating recalculation of disallowances under Section 40 or 43B) may impact tax liabilities. The changes to Form 3CD appear aimed at aligning reporting requirements with new or amended sections of the Income-tax Act, specifically relating to concessional tax rates.
**5. Key Provisions / Changes:**
The Income-tax Eighth Amendment Rules, 2021, introduces the following specific changes:
* **Revision of Audit Reports:** A new sub-rule is inserted in rule 6G, allowing for the revision of audit reports. The amendment states: "The report of audit furnished under this rule may be revised by the person by getting revised report of audit from an accountant, duly signed and verified by such accountant, and furnish it before the end of the relevant assessment year for which the report pertains, if there is payment by such person after furnishing of report under sub rule 1 and 2 which necessitates recalculation of disallowance under section 40 or section 43B." This provides taxpayers with the ability to correct their audit reports if subsequent payments affect disallowances under sections 40 or 43B. The effect is greater accuracy in tax reporting.
* **Amendment to Form 3CD:** Several clauses within Form 3CD (Appendix II of the Income-tax Rules, 1962) are modified.
* **Clause 8A (Part A):** is substituted to include a list of section to report if the assessee has opted for taxation under section 115BA/115BAA/115BAB/115BAC/115BAD.
* **Clause 17 (Part B):** This clause related to transfer of land or building is substituted.
* **Clause 18 (Part B):** Sub-clauses (ca) and (cb) are replaced. The amendment pertains to adjustments made to the written down value under section 115BAC/115BAD and the value of goodwill of a business or profession. This likely stems from changes introduced by the Finance Act concerning these sections and goodwill.
* **Clause 32 (Part B):** Sub-clause (a) related to details of brought forward loss or depreciation allowance is substituted. This requires taxpayers to furnish details of brought forward loss or depreciation allowance, adjusted by withdrawal of additional depreciation on account of opting for taxation under section 115BAC/115BAD. The reporting requirement is for assessment year 2021-2022 only.
* **Clause 36:** is omitted.
**6. Target Audience and Stakeholders:**
Based on the text, the primary stakeholders affected by these amendments are:
* **Assessees:** Taxpayers subject to income tax who are required to obtain and furnish audit reports.
* **Accountants:** Professionals responsible for conducting audits and preparing audit reports.
* **Tax Authorities:** The Central Board of Direct Taxes (CBDT) and other tax administration bodies.
* **Businesses:** Specifically, businesses potentially eligible for concessional tax rates under sections 115BA, 115BAA, 115BAB, 115BAC and 115BAD of the Income-tax Act.
**7. Implementation Aspects (Inferred):**
* **Responsible Agency:** The Central Board of Direct Taxes (CBDT) is the responsible agency, as it issued the notification.
* **Timelines:** The rules came into force on April 1, 2021 (the date of publication in the Official Gazette).
* **Procedures:** The amendment establishes a procedure for revising audit reports, requiring a revised report from an accountant before the end of the relevant assessment year.
**8. Expected Outcomes / Impact of Changes:**
The likely intended outcomes of these changes are:
* **Increased Accuracy:** The ability to revise audit reports should lead to more accurate reporting of income tax liabilities.
* **Simplified Compliance:** The modifications to Form 3CD aim to clarify reporting requirements under the updated provisions of the Income-tax Act.
* **Alignment with Legislative Changes:** The amendments ensure that the Income-tax Rules, 1962, are aligned with the changes introduced by the Finance Act, particularly concerning sections 115BA, 115BAA, 115BAB, 115BAC and 115BAD.
**9. Conclusion:**
The Income-tax Eighth Amendment Rules, 2021, represent a significant update to the Income-tax Rules, 1962. The introduction of a mechanism for revising audit reports and the modifications to Form 3CD are likely to improve the accuracy and efficiency of income tax reporting. These changes demonstrate the government's commitment to adapting tax regulations to reflect evolving economic realities and legislative changes, specifically with respect to sections 40, 43B, 115BA, 115BAA, 115BAB, 115BAC, 115BAD, 43CA or 50C of the Income-tax Act. These amendments will significantly impact assessees, accountants, and tax authorities, requiring them to adapt to the new reporting requirements and procedures.
Key Entities Referenced
NEW DELHI: Location of publication of the Gazette of India
THE GAZETTE OF INDIA: Official government publication
MINISTRY OF FINANCE: Government ministry responsible for financial matters
Department of Revenue: Department within the Ministry of Finance
CENTRAL BOARD OF DIRECT TAXES: Government body responsible for direct taxes
Income-tax Act, 1961: The principal act governing income tax in India
Income-tax Rules, 1962: Rules framed under the Income-tax Act, 1961
Income-tax eighth Amendment Rules, 2021: Amendment to the Income-tax Rules, 1962
section 44AB: Section of the Income-tax Act, 1961 related to tax audit
section 295: Section of the Income-tax Act, 1961 related to power to make rules
section 40: Section of the Income-tax Act, 1961 related to amounts not deductible
section 43B: Section of the Income-tax Act, 1961 related to certain deductions to be allowed only on actual payment
Form 3CD: Form for Tax Audit Report under Section 44AB of the Income Tax Act, 1961
section 115BA: Section of the Income-tax Act, 1961 related to tax on certain domestic companies
section 115BAA: Section of the Income-tax Act, 1961 related to tax on income of certain new manufacturing domestic companies
section 115BAB: Section of the Income-tax Act, 1961 related to tax on income of new manufacturing co-operative societies
section 115BAC: Section of the Income-tax Act, 1961 related to tax in case of individuals and Hindu Undivided Family
section 115BAD: Section of the Income-tax Act, 1961 related to tax in case of co-operative societies
section 43CA: Section of the Income-tax Act, 1961 related to Special provision for full value of consideration for transfer of assets other than capital assets in certain cases
section 50C: Section of the Income-tax Act, 1961 related to Special provision for full value of consideration in certain cases
ANKIT JAIN: Under Secretary, Tax Policy and Legislation
Mayapuri, New Delhi: Location of the Government of India Press
Delhi: Location of the Controller of Publications
रजजस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99
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सी.जी.-डी.एल.-अ.-01042021-226351
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CG-DL-E-01042021-226351
असाधारण
EXTRAORDINARY
भाग II—खण्ड 3—उप-खण्ड (i)
PART II—Section 3—Sub-section (i)
प्राजधकार स ेप्रकाजित
PUBLISHED BY AUTHORITY
स.ं 195] नई ददल्ली, बहृ स्ट्प जतिार, अप्रलै 1, 2021/चत्रै 11, 1943
No. 195] NEW DELHI, THURSDAY, APRIL 1, 2021/CHAITRA 11, 1943
जित्त मत्रं ालय
(राजस्ट्ि जिभाग)
[केन्द्रीय प्रत्यक्ष कर बोड]ड
अजधसचू ना
नई ददल्ली, 1 अप्रैल, 2021
(आयकर)
सा.का.जन. 246(अ).—केन्द्रीय प्रत्यक्ष कर बोड,ड आय- कर अजधजनयम (1961 का 43) की धारा 295 के साथ पठित धारा 44
कख द्वारा प्रदत्त िजियों का प्रयोग करते हुए आय-कर जनयम 1962 का और संिोधन करने के जलए जनम्नजलजखत जनयम बनाती ह,ै
अथाडत:्-
1. संजक्षप्त नाम और प्रारंभ. –
(1) इन जनयमों का संजक्षप्त नाम आय-कर ( संिोधन) जनयम, 2021 ह।ै
(2) ये राजपत्र में प्रकािन की तारीख से प्रिृत्त होंगे।
2. आय-कर जनयम, 1962, - में
(क) जनयम 6 छ म,ें उपजनयम (2) के पश्चात् जनम्नजलजखत उप-जनयम अंत:स्ट्थाजपत दकए जाएंग,े अथातड ् :-
“(3) इस जनयम के अधीन प्रस्ट्ततु ऐसे लेखापरीक्षा ठरपोर्ड लेखापरीक्षक द्वारा सम्यक रूप से हस्ट्ताक्षठरत तथा सत्याजपत करके
लेखापरीक्षक द्वारा लेखापरीक्षक की पुनरीजक्षत ठरपोर्ड प्राप्त करके व्यजि द्वारा पुनरीजक्षत दकया जा सकेगा और सुसंगत जनधाडरण िर्ड जजस
के जलए यह ठरपोर्ड उजचत ह,ै की समाजप्त से पूिड प्रस्ट्तुत करनी होगी, यदद उप-जनयम (1) और (2) के अधीन ठरपोर्ड प्रस्ट्तुत करने के पश्चात
ऐस ेव्यजि द्वारा भुगतान दकया गया ह ैजजसमें धारा 40 या धारा 43ख के तहत अननुजात की पुनगणड ना आिश्यक हो।”;
2019 GI/2021 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)]
(ख) पठरजिष्ट II, में, प्रपत्र 3 गघ म,ें-
(i). भाग क में, खंड 8क के स्ट्थान पर जनम्नजलजखत खंड रखा जाएगा अथाडत्
“8क क्या जनधाडठरती ने धारा 115खक/115खकक/115खकख /115खकग /115खकघ के अधीन कराधान का जिकल्प चुना
ह?ै ”
(ii). भाग ख में, खंड 17 के स्ट्थान पर जनम्नजलजखत खडं रखा जाएगा अथाडत् :-
“17. जहां भूजम या भिन अथिा दोनों धारा 43गक या 50ग में जनर्ददष्ट राज्य सरकार के दकसी प्राजधकारी द्वारा, अंगीकृत या जनधाडठरत
या जनधाडरणीय मूल्य से कम प्रजतफल के जलए पूिड िर्ड के दौरान स्ट्थानांतठरत की गई ह,ै कृपया
संपजत्त का जििरण प्राप्त या अर्जजत प्रजतफल जनधाडठरत या जनधाडरणीय क्या धारा 43 गक की उपधारा
अंगीकृत मल्ू य (1) के दसू रे परंतुक या धारा 56
की उपधारा (2) के चौथे परंतुक के
उपबंध लागू ह?ै (हा/ंनहीं)
।”:
(iii). खंड 18 में, उपखंड (गक) और (गख) के स्ट्थान पर जनम्नजलजखत उपखंड रखे जाएंगे, अथाडत् :-
“(गक) धारा 115 खकग/115 खकघ के अधीन अिजलजखत मल्ू य में दकया गया समायोजन (केिल जनधाडरण िर्ड 2021-22 के
जलए)……….
(गख) कारोबार या व्यिसाय की सददच्छा को अपिर्जजत मल्ू य के कारण अमतू ड आजस्ट्त को अिजलजखत मूल्य में दकया गया समायोजन……
(गग) …….अिजलजखत मल्ू य में दकया गया समायोजजत”;
(iv). खंड 32 में, उपखंड (क) के स्ट्थान पर जनम्नजलजखत उपखंड रखे जाएंग,े अथाडत् :-
(क) उपलब्ध सीमा के जलए जनम्नजलजखत रीजत से अजिम हाजन अथिा अिमल्ू यन भत्ता लाने िाला जििरण :
क्रंम सं. जनधाडरण हाजन/भत्ते की लौर्ाई गई धारा 115खकक/115 धारा 115 खकग/115 जनधाडठरत ठर्प्पणी
िर्ड प्रकृजत रकम*(रू. खकग/115खकघ के अधीन खकघ^ के अधीन रकम
में) समस्ट्त हाजन / नामंजूर भत्ते कराधान के जलए जिकल्प (सुसंगत
(रू. में)
मद्दे अजतठरि अिमल्ू यन आदिे का
के िापस करने के जलए संदभड द)ें
समायोजन के रूप में
रकम
(1) (2) (3) (4) (5) (6) (7) (8)
*यदद जनधाडठरत अिमल्ू यन कम ह ैऔर अपील लंजबत नहीं ह ैतो जनधाडठरत करें।
^ केिल जनधाडरण िर्ड 2021-22 में भरने हते ु।”:
(v) खंड 36 का लोप दकया जाएगा ।
[अजधसूचना स.ं 28/2021/फा सं. 370142/9/2018-र्ीपीएल]
अंदकत जैन, अिर सजचि (कर नीजत जिधान प्रभाग)
ठर्प्प ण : मूल जनयम भारत के राजपत्र, असाधारण, भाग II, खंड 3, उपखंड (ii) में अजधसचू ना का.आ. 969(अ) तारीख 26 माचड,
1962 द्वारा प्रकाजित दकए गए थे और अंजतम संिोधन सा.का.जन . 242 (अ) तारीख 31.3.2021 को दकया गया।[भाग II—खण् ड 3(i)] भारत का राजपत्र : असाधारण 3
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 1st April, 2021
(INCOME-TAX)
G.S.R. 246(E).––In exercise of the powers conferred by section 44AB read with section 295 of the Income-
tax Act (43 of 1961), 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 (eighth Amendment) Rules, 2021.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the Income-tax Rules, 1962,-
(a) in rule 6G, after sub-rule (2), the following sub-rule shall be inserted, namely:-
―(3) The report of audit furnished under this rule may be revised by the person by getting revised report of audit
from an accountant , duly signed and verified by such accountant, and furnish it before the end of the relevant
assessment year for which the report pertains, if there is payment by such person after furnishing of report under sub-
rule (1) and (2) which necessitates recalculation of disallowance under section 40 or section 43B.‖ ;
(b) in Appendix II, in Form 3CD,-
(i) in PART –A for clause 8A, the following clause shall be substituted, namely: -
―8A Whether the assessee has opted for taxation under section 115BA/115BAA/115BAB/ 115BAC/115BAD?.‖ ;
(ii) in PART-B, for clause 17,the following clause shall be substituted, namely:-
―17. Where any land or building or both is transferred during the previous year for a consideration less than value
adopted or assessed or assessable by any authority of a State Government referred to in section 43CAor 50C,please
Details of property Consideration Value adopted or Whether provisions of
received or accrued assessed or assessable second proviso to sub-
section (1) of section 43CA
or fourth proviso to clause
(x) of sub-section (2) of
section 56 applicable?
[Yes/No]
.’’;
(iii) in clause 18, for sub-clauses (ca) and (cb), the following sub-clauses, shall be substituted namely:-
“(ca) Adjustment made to the written down value under section 115BAC/115BAD (for assessment year 2021-2022
only)……
(cb) Adjustment made to written down value of Intangible asset due to excluding value of goodwill of a business or
profession…..
(cc) Adjusted written down value……….”;
(iv) in clause 32, for sub-clause (a), the following sub-clause shall be substituted, namely:-
(a) Details of brought forward loss or depreciation allowance, in the following manner, to the extent available:4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)]
Serial Assessment Nature of Amount All Amount as Amounts Remarks
Number Year loss/ as losses/allowances adjusted by as
allowance returned* not allowed under withdrawal of assessed
(in (in section 115BAA/ additional (give
rupees) rupees) 115BAC/115BAD depreciation on reference
account of opting to
for taxation under relevant
section order)
115BAC/115BAD^
(1) (2) (3) (4) (5) (6) (7) (8)
*If the assessed depreciation is less and no appeal pending then take assessed.
^To be filled in for assessment year 2021-2022 only.’’:
(v) clause 36 shall be omitted.
[Notification No. 28 /2021/F. No 370142/9/2018-TPL]
ANKIT JAIN, Under Secy. (Tax Policy Legislation)
Note: The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii)
vide notification number S.O. 969 (E), dated the 26th March, 1962 and was last amended vide notification
number G.S.R. 242 (E) dated 31.03.2021
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054.