**Executive Summary:**
This notification, issued by the Central Board of Direct Taxes, declares NSE IFSC Limited, Gandhinagar, Gujarat, as a recognized stock exchange under the Income-tax Act, 1961 for derivative trading. The recognition is effective from the date of publication in the Official Gazette and is subject to specific conditions. The notification remains valid until the Securities and Exchange Board of India (SEBI) approval is withdrawn or expires.
**Key Points / Main Content:**
* **Recognition of Stock Exchange:**
* NSE IFSC Limited, Gandhinagar, Gujarat, is notified as a recognized stock exchange.
* **Conditions for Recognition:**
* The stock exchange must have SEBI approval for derivative trading and function according to SEBI guidelines.
* Client particulars, including unique client identity number and PAN, must be recorded and stored in databases.
* A complete audit trail of all derivative market transactions must be maintained for seven years.
* Registered derivative market transactions must not be erased from the system.
* Modifications to registered transactions are allowed only for genuine errors, with data on all modified transactions maintained.
* **Reporting Requirement:**
* A monthly statement in Form No. 3BB regarding modified transactions must be submitted to the Director General of Incometax Intelligence and Criminal Investigation, New Delhi, within 15 days of the end of each month.
* **Validity and Rescinding:**
* The notification is valid until SEBI approval is withdrawn or expires.
* Violation of the conditions may lead to rescinding of the notification by the Central Government.
**Impact Analysis:**
**Stakeholder:** NSE IFSC Limited, Gandhinagar, Gujarat
* *Impact:* Granted recognition as a stock exchange for the purpose of derivative trading under specific conditions outlined in the notification.
* *Action Required:* Ensure compliance with all conditions stipulated in the notification, including SEBI guidelines, data recording and storage, audit trail maintenance, transaction modification protocols, and monthly reporting requirements.
**Stakeholder:** Central Board of Direct Taxes (CBDT)
* *Impact:* Responsible for monitoring compliance with the conditions outlined in the notification and has the authority to rescind the notification if conditions are violated.
* *Action Required:* Oversee the implementation of the notification and monitor NSE IFSC Limited's compliance with the stated conditions.
**Stakeholder:** Director General of Incometax Intelligence and Criminal Investigation, New Delhi
* *Impact:* Receives monthly statements regarding modified derivative transactions from NSE IFSC Limited.
* *Action Required:* Review and analyze the monthly statements submitted by NSE IFSC Limited.
**Stakeholder:** Securities and Exchange Board of India (SEBI)
* *Impact:* Continued oversight of NSE IFSC Limited's derivative trading activities and approval authority.
* *Action Required:* Maintain oversight of NSE IFSC Limited's derivative trading activities and inform CBDT if approval is withdrawn or expires.
Key Entities Referenced
Income-tax Act, 1961: Indian legislation governing income tax.
Incometax Rules, 1962: Rules pertaining to the Income-tax Act.
Central Board of Direct Taxes: A department of the Ministry of Finance responsible for direct tax administration in India.
NSE IFSC Limited, Gandhinagar, Gujarat: A recognized stock exchange located in Gandhinagar, Gujarat.
Securities and Exchange Board of India: Regulatory body for securities markets in India.
Securities and Exchange Board of India Act, 1992: Act that established the Securities and Exchange Board of India.
Director General of Incometax Intelligence and Criminal Investigation, New Delhi: The authority to which a monthly statement needs to be submitted.
New Delhi: Location of Ministry of Finance.
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परीUा बनाए रखना चािहए।
4742 GI/2018 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)]
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[अिधसूचना सं. 36/2018/फा. सं. 225/112/2018-आइZटीए- II ]
राजराजे(cid:5) वरी आर., अवर सिचव (आईटीए-II), सीबीडीटी
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 31st July, 2018
S.O. 3969(E).—In exercise of the powers conferred under clause(ii) of Explanation 1 of clause
(d) of proviso to sub-section (5) of Section 43 of the Income-tax Act, 1961 (43 of 1961) read with
sub-rule (4) of Rule 6DDB of the Income-tax Rules,1962, the Central Government hereby notifies
NSE IFSC Limited, Gandhinagar, Gujarat (PAN: AAFCN4161P) as a ‘recognised stock
exchange’ for the purpose of said clause with effect from the date of publication of this notification
in the Official Gazette, subject to fulfilment of following conditions in respect of trading in
derivatives, namely;
(i) the stock exchange shall have the approval of the Securities and Exchange Board of
India established under the Securities and Exchange Board of India Act, 1992(15 of 1992)
in respect of trading in derivatives and it shall function in accordance with the guidelines
or conditions laid down by the Securities and Exchange Board of India;
(ii) it shall ensure that the particulars of the client (including unique client identity
number and PAN) are duly recorded and stored in its databases;
(iii) It shall maintain a complete audit trail of all transactions (in respect of
derivative market) for a period of seven years on its system;
(iv) it shall ensure that transactions (in respect of derivative market) once registered in
the system are not erased;
(v) it shall ensure that the transactions (in respect of derivative market) once registered in
the system are modified only in cases of genuine error and maintain data regarding all
transactions (in respect of derivative market) registered in the system which have been¹Hkkx IIµ[k.M 3(ii)º Hkkjr dk jkti=k % vlk/kj.k 3
modified and submit a monthly statement in Form No. 3BB to the Director General of
Income-tax (Intelligence and Criminal Investigation), New Delhi within fifteen days from
the last day of each month to which such statement relates.
3. This notification shall remain in force until the approval granted by the Securities and
Exchange Board of India is withdrawn or expires. Further, if any of the conditions stipulated in para
above are violated, it may lead to rescinding of this notification by the Central Government.
[Notification No.36/2018/F. No. 225/112/2018-ITA-II]
RAJARAJESWARI R., Under Secy. (ITA-II), CBDT.
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.