Insertion of rule 14C in the Income tax Rules, 1962 prescribing manner of authentication of an electronic record under electronic verification code under sub clause (b) of clause (i) of sub section (7) of section 144B of the Income Tax Act, 1961

## Report on Income-tax (26th Amendment) Rules, 2021 **1. Executive Summary:** This report analyzes the Income-tax (26th Amendment) Rules, 2021, as notified by the Central Board of Direct Taxes (CBDT) on September 6, 2021. The amendment introduces Rule 14C to the Income-tax Rules, 1962, specifying the authentication method for electronic records submitted via the Income-tax Department's designated portal using an electronic verification code (EVC). The key finding is that this amendment aims to streamline and clarify the authentication process for electronic submissions under section 144B of the Income-tax Act, 1961, likely improving efficiency and reducing ambiguity for assessees. **2. Introduction:** This report provides a comprehensive analysis of the Income-tax (26th Amendment) Rules, 2021, based on the official notification issued by the Central Board of Direct Taxes (CBDT). The purpose is to inform stakeholders about the amendment's provisions, objectives, and potential implications derived solely from the provided policy text. **3. Policy Overview:** * This document constitutes an amendment to the Income-tax Rules, 1962. * **Core Objective:** To prescribe the manner of authentication of an electronic record under an electronic verification code (EVC) under subclause (b) of clause (i) of subsection (7) of section 144B of the Income-tax Act, 1961. **4. Background and Rationale:** This amendment addresses the authentication process for electronic records submitted under section 144B of the Income-tax Act, 1961. Section 144B likely deals with procedures related to assessments, and this amendment suggests a need to clarify how electronic records submitted in this context are to be properly authenticated. The rationale is to provide certainty and potentially facilitate easier compliance with the requirements of electronic submission within the income tax assessment framework, focusing on the validity and acceptance of electronic documents. **5. Key Provisions / Changes:** This amendment *specifically* introduces Rule 14C to the Income-tax Rules, 1962. * **What specific part of the original policy is being changed:** The amendment inserts a new rule after Rule 14B in the Income-tax Rules, 1962. * **What the *new* rule/provision *is*:** Rule 14C states that if an assessee or any other person submits an electronic record by logging into their registered account on the designated portal of the Income-tax Department, it will be "deemed that the electronic record has been authenticated under electronic verification code." An Explanation clarifies that "designated portal" has the same meaning as in clause (i) of the Explanation below to section 144B. * **Explain the *difference* or the *effect* of this specific change:** This amendment provides a clear and concise method for authenticating electronic records submitted through the designated portal. By logging into their registered account, the assessee's electronic record is automatically considered authenticated via EVC. This eliminates potential ambiguity about authentication requirements and simplifies the submission process. It creates a 'deemed' authentication, provided the submission is done through the proper channel (registered account on the designated portal). **6. Target Audience and Stakeholders:** The target audience and stakeholders directly affected by this amendment include: * Assessees (taxpayers) who are required to submit electronic records to the Income-tax Department. * Other persons authorized to submit electronic records on behalf of assessees. * The Income-tax Department itself, as the amendment clarifies the authentication process for electronic records they receive. **7. Implementation Aspects (Inferred):** * **Responsible Agency/Bodies:** The Central Board of Direct Taxes (CBDT) is responsible for implementing and administering this amendment. The Income-tax Department is also responsible for maintaining the designated portal and ensuring its functionality. * **Timelines/Procedures:** The amendment came into force on the date of its publication in the Official Gazette, which is September 6, 2021. The procedure involves assessees logging into their registered accounts on the designated portal to submit electronic records. * The implementation of this amendment relies on the existence and proper functioning of the Income-tax Department's designated portal, as defined in the Explanation to section 144B. **8. Expected Outcomes / Impact of Changes:** The likely intended outcome of this amendment is to: * Simplify and clarify the authentication process for electronic records submitted under section 144B of the Income-tax Act, 1961. * Reduce ambiguity and potential disputes regarding the validity of electronic submissions. * Improve efficiency in the processing of electronic records by the Income-tax Department. * Encourage greater adoption of electronic submission methods by assessees. **9. Conclusion:** The Income-tax (26th Amendment) Rules, 2021, introducing Rule 14C, provides a clear and simplified method for authenticating electronic records submitted through the Income-tax Department's designated portal using EVC. This amendment is significant because it clarifies the authentication requirements under section 144B, reduces ambiguity, and is likely to improve efficiency for both assessees and the Income-tax Department. The amendment streamlines processes, encourages greater use of electronic submissions, and ultimately contributes to a more efficient and transparent tax system.

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