## Report on Income-tax Amendment (18th Amendment) Rules, 2021
**1. Executive Summary:**
This report analyzes the Income-tax (18th Amendment) Rules, 2021, as notified by the Central Board of Direct Taxes (CBDT) on July 2, 2021. This amendment modifies the Income-tax Rules, 1962, primarily focusing on the attribution of income taxable under subsection 4 of section 45 of the Income-tax Act, 1961, to capital assets. The key provision introduces rules for determining whether gains are from short-term or long-term capital assets and specifies procedures for attributing income to capital assets remaining with a specified entity. A new form, Form No. 5C, is introduced for reporting these attributions. The amendment aims to provide clarity and procedural guidance for the taxation of income arising from specific capital asset transfers.
**2. Introduction:**
This report provides an informative overview and analysis of the Income-tax (18th Amendment) Rules, 2021, based solely on the provided policy text. The purpose is to inform affected industries about the key changes introduced by this amendment to the Income-tax Rules, 1962, and their implications.
**3. Policy Overview:**
* **Original Policy Being Amended:** Income-tax Rules, 1962
* **Core Objective(s):** The core objective of this amendment is to provide specific rules for:
* Determining whether capital gains are short-term or long-term when taxed under sub-section 4 of section 45 of the Income-tax Act, 1961.
* Attributing income taxable under sub-section 4 of section 45 to the capital assets remaining with the specified entity, for the purpose of calculating capital gains.
* Establishing a reporting mechanism (Form No. 5C) for detailing the attributed amounts.
**4. Background and Rationale:**
The amendment addresses the complexities in attributing income to capital assets, specifically in situations taxable under subsection 4 of section 45 of the Income-tax Act. This section likely deals with deemed transfers in specific scenarios. The need for this amendment likely arises from the ambiguity in the existing rules on how to determine whether gains are short-term or long-term and how to allocate these gains to remaining capital assets within a specified entity. The introduction of Form 5C suggests a need for greater transparency and standardized reporting in these transactions.
**5. Key Provisions / Changes:**
This amendment introduces the following specific changes to the Income-tax Rules, 1962:
* **Insertion of Sub-rule 5 in Rule 8AA:** This new sub-rule clarifies how to classify capital gains as short-term or long-term when income is taxed under sub-section 4 of Section 45:
* If the income is attributable to a capital asset that is a short-term capital asset, part of a block of assets, or a self-generated asset/goodwill at the time of taxation, it is deemed to be from the transfer of a short-term capital asset.
* If the income is attributable to a capital asset that is *not* in the above categories and is a long-term capital asset at the time of taxation, it is deemed to be from the transfer of a long-term capital asset.
* **Insertion of Rule 8AB:** This new rule outlines the process of attributing income taxable under subsection 4 of section 45 to the capital assets remaining with the specified entity, under section 48:
* It establishes the methodology for attributing income to capital assets based on revaluation, valuation of self-generated assets or goodwill. If the income relates to revaluation, the attribution is proportional to the increase or recognition of value of that asset.
* Specifies that when the income charged to tax under subsection 4 of section 45 does not relate to revaluation of any capital asset or valuation of self-generated asset or self-generated goodwill, of the specified entity, the amount charged to tax shall not be attributed to any capital asset.
* Provides that no attribution to remaining capital asset occurs if the amount charged relates only to the capital asset received by the specified person from the specified entity.
* **Introduction of Form No. 5C:** This new form requires specified entities to furnish details of the amount attributed to capital assets remaining with the entity.
* The form must be furnished electronically, either with a digital signature or through an electronic verification code.
* The form is due by the due date for filing income tax returns under section 139(1).
* The Principal Director General of Income-tax Systems or the Director General of Income-tax Systems will specify the procedures for filing, verification, and security of Form No. 5C.
**6. Target Audience and Stakeholders:**
The primary target audience for these amendments is:
* **Specified entities:** These are entities whose income is taxable under subsection 4 of section 45 of the Income-tax Act, 1961.
* **Specified persons:** Those receiving money or capital assets from specified entities, leading to tax implications under Section 45(4).
* **Tax Professionals:** Accountants, auditors, and tax advisors who assist these entities in complying with income tax regulations.
* **Registered Valuers:** These professionals are involved in providing valuation reports which are relevant for determining the attribution of income.
**7. Implementation Aspects (Inferred):**
* **Responsible Agency:** The Central Board of Direct Taxes (CBDT) is responsible for issuing and administering these rules. The Principal Director General of Income-tax Systems or the Director General of Income-tax Systems is responsible for specifying procedures related to Form No. 5C.
* **Timelines and Procedures:**
* Form No. 5C must be furnished electronically by the due date for filing income tax returns under Section 139(1).
* The procedure for filing Form No. 5C will be specified by the relevant income tax authorities.
* **Specific to the Amendments:** The implementation relies heavily on the valuation reports prepared by registered valuers (as defined in rule 11U(g)). The accuracy and completeness of Form No. 5C are critical for proper tax assessment.
**8. Expected Outcomes / Impact of Changes:**
The likely intended outcomes of these amendments are:
* **Greater Clarity:** The amendments aim to provide clarity and reduce ambiguity regarding the taxation of income under subsection 4 of section 45.
* **Standardized Reporting:** The introduction of Form No. 5C promotes standardized reporting and transparency in the attribution of income to capital assets.
* **Improved Tax Compliance:** By providing clear guidelines and procedures, the amendments may lead to improved tax compliance by specified entities.
* **Reduced Litigation:** Clearer rules on income attribution could potentially reduce disputes and litigation related to capital gains taxation.
**9. Conclusion:**
The Income-tax (18th Amendment) Rules, 2021, represent a significant update to the Income-tax Rules, 1962, particularly concerning the taxation of income under subsection 4 of section 45 of the Income-tax Act, 1961. By clarifying the classification of capital gains and establishing a detailed framework for income attribution to capital assets, these amendments provide essential guidance for specified entities and tax professionals. The introduction of Form No. 5C further emphasizes the importance of transparency and standardized reporting. These amendments are expected to streamline the taxation process and improve overall tax compliance in this specific area of income tax law.
Key Entities Referenced
NEW DELHI: Location of publication, likely the city in Delhi, India.
Income-tax Act, 1961: A legal act referred to within the document.
Central Board of Direct Taxes: The issuing authority for the notification.
Income-tax Rules, 1962: A set of rules amended by this notification.
Income tax Amendment 18th Amendment, Rules, 2021: Short title of the rules being introduced.
section 45: A section of the Income-tax Act, 1961.
section 48: A section of the Income-tax Act, 1961.
Form No. 5C: A form for details of amount attributed to capital asset remaining with the specified entity.
section 140: A section of the Income-tax Act, 1961.
section 139: A section of the Income-tax Act, 1961.
Principal Director General of Incometax Systems: Position of authority for filing of Form No. 5C.
Director General of Incometax Systems: Position of authority for filing of Form No. 5C.
Appendix II: Location of Form 5C to be inserted.
Government of India Press, Ring Road, Mayapuri, New Delhi110064: The printing location.
Controller of Publications, Delhi110054: The publisher location.
रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99
सी.जी.-डी.एल.-अ.-02072021-228084
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CG-DL-E-02072021-228084
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ऄसाधारण
EXTRAORDINARY
भाग II—खण् ड 3—ईप-खण्ड (i)
PART II—Section 3—Sub-section (i)
प्राजधकार स ेप्रकाजित
PUBLISHED BY AUTHORITY
स.ं 380] नइ ददल्ली, िुक्रिार, िुलाइ 2, 2021/अर्ाढ़ 11, 1943
No. 380] NEW DELHI, FRIDAY, JULY 2, 2021/ASHADHA 11, 1943
जित्त मंत्रालय
(रािस्ट्ि जिभाग)
(केन्द्रीय प्रत्यक्ष कर बोडड)
ऄजधसचू ना
नइ ददल्ली, 2 िुलाइ, 2021
सा.का.जन. 470(ऄ).—केंरीय प्रत्यक्ष कर बोडड, अय-कर ऄजधजनयम, 1961 (1961 का 43) की धारा 48 और
धारा 295 द्वारा प्रदत्त िजियों का प्रयोग करत े हुए, अय-कर जनयम, 1962 का और संिोधन करन े के जलए जनम्नजलजखत
जनयम बनाता ह,ै ऄथाडत:् --
1. संजक्षप्त नाम – आन जनयमों का संजक्षप्त नाम अय-कर (ऄठारहिााँ संिोधन) जनयम, 2021 ह ै।
2. अय-कर जनयम, 1962 (जिसे आसमें आसके पश्चात् मूल जनयम कहा गया ह)ै के जनयम 8कक के ईपजनयम (4) के
पश्चात् जनम्नजलजखत ईपजनयम ऄंतःस्ट्थाजपत दकया िाएगा, ऄथाडत ् :--
“(5) ईस रकम के मामल े म ें जिसे िीर् ड “पूंिी लाभ” के ऄधीन धारा 45 की ईपधारा (4) के ऄधीन जिजनर्ददष्ट ऄजस्ट्तत्ि की
अय के रूप में अय-कर से प्रभायड दकया िाता ह,ै
(i) रकम या ईसका एक भाग लघु ऄिजध पूंिी अजस्ट्त के ऄतं रण स े समझा िाएगा, यदद यह जनम्नजलजखत स े हुअ
माना िा सकता हो,--
(क) पूंिी अजस्ट्त िो धारा 45 की ईपधारा (4) के ऄधीन रकम के कराधान के समय लघु ऄिजध पूंिी अजस्ट्त है;
या
3695 GI/2021 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)]
(ख) अजस्ट्त के खडं का जहस्ट्सा बनन ेिाली पूंिी अजस्ट्त; या
(ग) धारा 45 के खंड (4) के स्ट्पर्टीकरण के खंड (ii) म ें यथा पररभाजर्त पूंिी अजस्ट्त िो स्ट्ि-सृजित अजस्ट्त या
स्ट्ि-सृजित गुडजिल ह;ै और
(ii) रकम या ईसका एक भाग दीघ ड ऄिजध पूंिी अजस्ट्त या अजस्ट्तयों के ऄंतरण से समझा िाएगा, यदद िह ईस
पूंिी अजस्ट्त से हुअ माना िा सकता हो िो खंड (i) के ऄंतगतड नहीं अती तथा धारा 45 की ईपधारा (4) के ऄधीन
रकम के कराधान के समय दीघ ड ऄिजध पूंिी अजस्ट्त ह।ै ”।
3. मूल जनयमों म,ें जनयम 8कक के पश्चात,् जनम्नजलजखत जनयम ऄतं ःस्ट्थाजपत दकया िाएगा, ऄथाडत:्-
''8कख. धारा 48 के ऄधीन जिजनर्ददष्ट अजस्ट्त की िर्े पिूं ी अजस्ट्तयों स े धारा 48 की ईपधारा (4) के ऄधीन कराधये
अय माना िा सकना
(1) धारा 48 के खंड (iii) के प्रयोिनों के जलए, िहा ं धारा 45 की ईपधारा (4) के ऄधीन जिजनर्ददष्ट ऄजस्ट्तत्ि की अय
के रूप में रकम अय-कर से प्रभायड ह,ै िहां जिजनर्ददष्ट ऄजस्ट्तत्ि ऐसी रकम को आस जनयम में ईपबंजधत रीजत म ें
जिजनर्ददष्ट ऄजस्ट्तत्ि की िेर् पूंिी अजस्ट्त से हुअ मानगे ा ।
(2) िहां धन के मूल्य का कुल योग और जिजनर्ददष्ट ऄजस्ट्तत्ि स े जिजनर्ददष्ट व्यजि द्वारा प्राप्त पूंिी अजस्ट्त का ऋि ु
बािार मूल्य, ईसके पूंिी खात के बकाया के अजधक्य में, धारा 45 की ईपधारा (4) के ऄधीन कर से प्रभायड
होकर, जिजनर्ददष्ट ऄजस्ट्तत्ि की दकसी पूंिी अजस्ट्त के पुनमल्ूड यांकन या स्ट्ि-सृजित अजस्ट्त या स्ट्ि-सृजित गडु जिल के
मूल्यांकन से संबंजधत ह,ै तो धारा 48 के खंड (iii) के प्रयोिन के जलए जिजनर्ददष्ट ऄजस्ट्तत्ि की िेर् पूंिी अजस्ट्त स े
मानी िा सकने िाली रकम िह रकम होगी िो धारा 45 की ईपधारा (4) के ऄधीन भाररत रकम का ईसी
ऄनुपात म ें िहन करती ह ै िो पुनःमूल्यांकन या मल्ू यांकन के कारण ईस अजस्ट्त के मल्ू य म ें बढ़ोतरी या मान्द्यता
ऄथिा पुनःमल्ू यांकन या मूल्याकं न के कारण सभी अजस्ट्तयों के मूल्य में बढ़ोतरी या मान्द्यता के कुल योग का
िहन करती ह ै।
(3) िहां धन के मूल्य का कुल योग और जिजनर्ददष्ट ऄजस्ट्तत्ि स े जिजनर्ददष्ट व्यजि द्वारा प्राप्त पूंिी अजस्ट्त का ऋि ु
बािार मूल्य, ईसके पूंिी खात े के बकाया के अजधक्य में धारा 45 की ईपधारा (4) के ऄधीन कर से प्रभाररत
होकर, जिजनर्ददष्ट ऄजस्ट्तत्ि की दकसी पूंिी अजस्ट्त के पुनमल्ूड यांकन या स्ट्ि-सृजित अजस्ट्त या स्ट्ि-सृजित गडु जिल के
मूल्यांकन से संबंजधत नहीं ह,ै तो धारा 45 की ईपधारा (4) के ऄधीन कर से प्रभाररत रकम धारा 48 के खंड (iii)
के प्रयोिनों के जलए दकसी पूंिी अजस्ट्त से नहीं मानी िाएगी ।
(4) ईपजनयम (2) या ईपजनयम (3) म ें दकसी बात के होत े हुए भी, िहा ं धन के मल्ू य का कुल योग और जिजनर्ददष्ट
ऄजस्ट्तत्ि स े जिजनर्ददष्ट व्यजि द्वारा प्राप्त पूंिी अजस्ट्त का ऋिु बािार मूल्य, ईसके पूंिी खाते के बकाया के
अजधक्य म,ें धारा 45 की ईपधारा (4) के ऄधीन कर स े प्रभाररत होकर केिल जिजनर्ददष्ट ऄजस्ट्तत्ि से जिजनर्ददष्ट
व्यजि द्वारा प्राप्त पूंिी अजस्ट्त से संबंजधत ह,ै तो धारा 45 की ईपधारा (4) के ऄधीन कर से प्रभाररत रकम धारा
48 के खंड (iii) के प्रयोिनों के जलए दकसी पूंिी अजस्ट्त से नहीं मानी िाएगी ।
(5) जिजनर्ददष्ट ऄजस्ट्तत्ि प्ररुप सं. 5ग म ें जिजनर्ददष्ट ऄजस्ट्तत्ि की िर्े पूंिी, अजस्ट्त स े मानी िा सकने िाली रकम के
ब्यौरे प्रस्ट्तुत करेगा ।
(6) प्ररुप सं. 5ग को आलैक्रॉजनक ढंग से या तो जडजिटल हस्ट्ताक्षर करके या आलैक्रॉजनक सत्यापन कूट के माध्यम स े
प्रस्ट्तुत दकया िाएगा तथा ईस व्यजि द्वारा सत्याजपत दकया िाएगा िो धारा 140 के ऄधीन जिजनर्ददष्ट ऄजस्ट्तत्ि
के अय की जििरणी का सत्यापन करने के जलए प्राजधकृत ह ैं।
(7) प्ररुप सं. 5ग को ईस जनधाडरण िर्ड के जलए जिसमें रकम धारा 45 की ईपधारा (4) के ऄधीन कर स े प्रभाय ड ह,ै
धारा 139 की ईपधारा (1) के नीचे स्ट्पष्टीकरण 2 म ें जनर्ददष्ट तारीख को या ईसके पूिड प्रस्ट्ततु दकया िाएगा ।
(8) यथाजस्ट्थत, अय-कर (प्रणाली) का प्रधान महाजनदेिक या अय-कर (प्रणाली) का महाजनदके करेगा –
(i) प्ररुप स.ं 5ग फाआल करन े के जलए प्रदक्रया जिजनर्ददष्ट करना;
(ii) प्रदक्रया, रुप जिधान, अकं डा सरंचना, मानकों और ईि प्ररुप प्रस्ट्तुत करन े के जलए दकसी व्यजि के सत्यापन के जलए
ईप-जनयम 6 में जनर्ददष्ट आलैक्राजनक सत्यापन कोड के सृिन की रीजत को जिजनर्ददष्ट करना; और[भाग II—खण् ड 3(i)] भारत का रािपत्र : ऄसाधारण 3
(iii) आस प्रकार प्रस्ट्ततु प्ररुप सं. 5 ग के संबंध म ें नीजतयों को पुनःप्राजप्त और दक्रयान्द्ियन समुजचत सुरक्षा और परु ालेखीय
और प्रजतपादन के जलए ईत्तरदायी होना ।
स्ट्पष्टीकरण 1:आस जनयम के प्रयोिनों के जलए धारा 45 की ईप-धारा (4) के ऄधीन कर के जलए प्रभायड रकम जिजनर्ददष्ट
ऄजसतत्ि का कोइ पूंिी अजस्ट्त या स्ट्िय सृजित अजस्ट्त का पुनमूडल्यन या स्ट्ियं सृजित गडु जिल के पुनमल्ूड यन के जलए संबंद्ध
होगा यदद जनयम 11प म ेंयथापररभाजर्त रजिस्ट्रीकृत मूल्यांकक से ऄजभप्राप्त मल्ू यांकन ररपोटड पर अधाररत पुनमल्ूड यन ह ै।
स्ट्पष्टीकरण 2 : संदेह हटाने के जलए स्ट्पष्ट दकया िाता ह ै दक कोइ अजस्ट्त का पुनमल्ूड यन या स्ट्ियं सृजित मूल्यांकन या स्ट्िय ं
सृजित गडु जिल आसके मल्ू यांकन के कारण स्ट्िय ं सृजित अजस्ट्त के मूल्य की मान्द्यता या आसके पुनमुडल्यन कारण से ईस अजस्ट्त
के मूल्य बढ़ोत्तरी के ऄिक्षयण के जलए पात्र नहीं होता ह ै।
स्ट्पष्टीकरण 3 : आस जनयम के प्रयोिनों के जलए पद “स्ट्ियं सृजित अजस्ट्त” या “स्ट्ियं सृजित गडु जिल” का ऄथ ड िही होगा िो
धारा 45 की ईप-धारा (4) म ेंईनको समनुदेजित दकया गया है।”।
4. मूल जनयमों म ें पररजिष्ट II में प्ररुप ख के पश्चात ्जनम्नलजलखत प्ररुप ऄंतःस्ट्थाजपत दकया िाएगा, ऄथाडत ् :-
“प्ररुप स.ं 5ग
(जनयम 8कख देख)ें
जिजनर्ददष्ट ऄजस्ट्तत्ि के साथ िर्े पिूं ी अजस्ट्त के जलए प्रदान दकए गए रकम के ब्यौरे
1. जिजनर्ददष्ट ऄजस्ट्तत्ि का नाम
2. स्ट्थायी लेखा संख्या
3. जनधाडरण िर् ड
4. धारा 45 की ईपधारा (4) के ऄधीन करादेय की रकम
5. िेर् पूंिी अजस्ट्तयों के जलए धारा 45 की ईप-धारा (4) के ऄधीन करादेय रकम का योगदान
क्रम पूंिी अजस्ट्त बजहयों का स्ट्ियं सृजित के जलए योगदान म ेंरकम लघु ऄिजध/ दीघ ड
सं. मूल्य पुनमूडल्यांदकत रकम ऄिजध
मूल्यांदकत रकम
नाम क्या स्ट्िय ं
सृजित ह ै
हा/ं नहीं
कुल
6. िो अधाररत पर मल्ू यांकक का नाम और रजिस्ट्रीकरण संख्या क्रम संख्या 5 पर मूल्यांकन ररपोटड ईपबंजधत ह ै।
सत्यापन
म,ैं ........................................पुत्र/पुत्री..............................................सत्यजनष्टा स े घोर्णा करता ह ं दक मेरे
सिेत्तम ज्ञान और जिश्वास के ऄनुसार दी गइ सूचना सही और पूणड ह ै । अय-कर ऄजधजनयम, 1961 के ईपबंधों के ऄनुसार
म ैं और घोर्णा करता ह ं दक म ैं ...................................(इ-फाआल करन े म ें ईपयोजगता म ें नीच े ईपबंजधत दकया िाए)4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)]
ऄपनी हजै सयत स े प्ररुप प्रस्ट्ततु करता ह ं और म ैं आस प्ररुप और आस े सत्यापन प्रस्ट्तुत करने के जलए भी सक्षम ह ं ।
म.ैं ....................स्ट्थायी लेखा संख्या धृजत ह ं।
स्ट्थान:
तारीख: हस्ट्ताक्षर ……………………………”.
[ऄजधसूचना स.ं 76 /2021/फा. स.ं 370142/22/2021-टीपीएल]
ऄंदकत िैन, ऄिर सजचि
रटप्पण : मूल जनयम संख्या का.अ. 969(ऄ), तारीख 26 माचड, 1962 द्वारा भारत के रािपत्र, भाग II खंड 3, ईपखंड (ii)
म ें प्रकाजित दकए गए थ े और ऄंजतम बार ऄजधसूचना संख्या सा.का.जन. 395(ऄ) तारीख, 8 िून 2021 द्वरा
संिोधन दकया गया ।
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 2nd July, 2021
G.S.R. 470(E).—In exercise of the powers conferred by section 48 read with section 295 of
the Income-tax Act, 1961 (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:- (1)These rules may be called the Income tax Amendment (18th Amendment), Rules,
2021.
2. In the Income-tax Rules, 1962, (hereinafter referred to as the principal rules) in rule 8AA, after
sub-rule (4), the following sub-rule shall be inserted, namely:-
―(5). In case of the amount which is chargeable to income-tax as income of specified entity under sub-
section (4) of section 45 under the head ―Capital gains‖,-
(i) the amount or a part of it shall be deemed to be from transfer of short term capital asset, if it is
attributed to,-
(a) capital asset which is short term capital asset at the time of taxation of amount under sub-
section (4) of section 45; or
(b) capital asset forming part of block of asset; or
(c) capital asset being self-generated asset and self-generated goodwill as defined in clause (ii) of
Explanation 1 to sub-section (4) of section 45; and
(ii) the amount or a part of it shall be deemed to be from transfer of long term capital asset or assets,
if it is attributed to capital asset which is not covered by clause (i) and is long term capital asset at the
time of taxation of amount under sub-section (4) of section 45.‖.
3. In the principal rules, after rule 8AA, the following rule shall be inserted, namely:—
“8AB. Attribution of income taxable under sub-section (4) of section 45 to the capital assets
remaining with the specified entity, under section 48.-[भाग II—खण् ड 3(i)] भारत का रािपत्र : ऄसाधारण 5
(1) For the purposes of clause (iii) of section 48, where the amount is chargeable to income-tax as income
of specified entity under sub-section (4) of section 45, the specified entity shall attribute such amount to
capital asset remaining with the specified entity in a manner provided in this rule.
(2) Where the aggregate of the value of money and the fair market value of the capital asset received by the
specified person from the specified entity, in excess of the balance in his capital account, chargeable to tax
under sub-section (4) of section 45,relates to revaluation of any capital asset or valuation of self-generated
asset or self-generated goodwill, of the specified entity, the amount attributable to the capital asset
remaining with the specified entity for purpose of clause (iii) of section 48 shall be the amount which bears
to the amount charged under sub-section (4) of section 45 the same proportion as the increase in, or
recognition of, value of that asset because of revaluation or valuation bears to the aggregate of increase in,
or recognition of, value of all assets because of the revaluation or valuation.
(3) Where the aggregate of the value of money and the fair market value of the capital asset received by the
specified person from the specified entity, in excess of the balance in his capital account, charged to tax
under sub-section (4) of section 45 does not relate to revaluation of any capital asset or valuation of self-
generated asset or self-generated goodwill, of the specified entity, the amount charged to tax under
sub-section (4) of section 45 shall not be attributed to any capital asset for the purposes of clause (iii) of
section 48.
(4) Notwithstanding anything contained in sub-rules (2) or (3), where the aggregate of the value of money
and the fair market value of the capital asset received by the specified person from the specified entity, in
excess of the balance in his capital account, charged to tax under sub-section (4) of section 45 relate only to
the capital asset received by the specified person from the specified entity, the amount charged to tax under
sub-section (4) of section 45 shall not be attributed to any capital asset for the purposes of clause (iii) of
section 48.
(5) The specified entity shall furnish the details of amount attributed to capital asset remaining with the
specified entity in Form No. 5C.
(6) Form No. 5C shall be furnished electronically either under digital signature or through electronic
verification code and shall be verified by the person who is authorised to verify the return of income of the
specified entity under section 140.
(7) Form No. 5C shall be furnished on or before the due date referred to in the Explanation 2 below sub-
section (1) of section 139 for the assessment year in which the amount is chargeable to tax under sub-
section (4) of section 45.
(8) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax
(Systems), as the case may be, shall -
(i) specify the procedure for filing of Form No. 5C;
(ii) specify the procedure, format, data structure, standards and manner of generation of electronic
verification code, referred to in sub-rule (6), for verification of the person furnishing the said Form;
and
(iii) be responsible for formulating and implementing appropriate security, archival and retrieval
policies in relation to the Form No 5C so furnished.
Explanation 1: For the purposes of this rule, the amount chargeable to tax under sub-section (4) of section
45 shall relate to revaluation of any capital asset or valuation of self-generated asset or self-generated
goodwill, of the specified entity, if the revaluation is based on a valuation report obtained from a registered
valuer as defined in clause (g) of rule 11U.
Explanation 2: For the removal of doubt it is clarified that revaluation of an asset or valuation of self-
generated asset or self-generated goodwill does not entitle the specified entity for the depreciation on the
increase in value of that asset on account of its revaluation or recognition of the value of self-generated
asset or self-generated goodwill due to its valuation.
Explanation 3: For the purposes of this rule, the expressions ―self-generated asset‖ and ―self-generated
goodwill‖ shall have the same meaning as assigned to them in clause (ii) of Explanation 1 to sub-section
(4) of section 45.‖.6 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)]
4. In the principal rules, in Appendix II, after Form No. 5B, the following Form shall be inserted,
namely:––
“Form No. 5C
(See rule 8AB)
Details of amount attributed to capital asset remaining with the specified entity
1. Name of the specified entity
2. Permanent Account number
3. Assessment Year
4. Amount taxable under sub-section (4) of section 45
5. Attribution of amount taxable under sub-section (4) of section 45 to capital assets remaining
Sr.No. Capital Asset Book Revalued Amount Short term/ long
Value amount/valued attributed term
name Whether self
amount for self-
generated
generated asset
yes/no
Total
6. Name and registration number of the valuer based on whose valuation report information at serial no 5 is
provided.
VERIFICATION
I, ____________________________________________son/ daughter of
__________________________________ solemnly declare that to the best of my knowledge and belief,
the information given in the form is correct and complete and is in accordance with the provisions of the
Income-tax Act, 1961. I further declare that I am furnishing the form in my capacity as ___________ (drop
down to be provided in e-filing utility) and I am also competent to furnish this form and verify it. I am
holding permanent account number ____________.
Place:
Date : Signature……………….‖.
[Notification No. 76/2021/F. No. 370142/22/2021-TPL]
ANKIT JAIN, Under Secy.
Note: The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section-3,
Sub-section (ii) vide number S.O. 969 (E), dated the 26th March, 1962 and last amended vide
notification number G.S.R. 395 (E), dated 8th June, 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.