**Policy Analysis Report: Income Tax 23rd Amendment, Rules, 2021**
**1. Executive Summary:**
This report analyzes the Income Tax 23rd Amendment Rules, 2021, as notified by the Central Board of Direct Taxes (CBDT) on August 10, 2021. This amendment introduces Rule 10RB to the Income Tax Rules, 1962, providing a mechanism for relief in tax payable under subsection 1 of section 115JB due to the operation of sub section 2D of section 115JB. The amendment focuses on providing tax relief to assessee companies concerning past income included in their book profits due to Advance Pricing Agreements (APAs) or secondary adjustments. It also specifies a new form (Form No. 3CEEA) for claiming this relief and outlines the procedure for its electronic filing. The key finding is that this amendment aims to address potential double taxation issues arising from the inclusion of past income in current year's book profits.
**2. Introduction:**
This report provides an informative analysis of the Income Tax 23rd Amendment Rules, 2021, based solely on the text of the official notification. The purpose is to provide clarity on the amendment's objectives, key provisions, target audience, and potential impact for affected companies.
**3. Policy Overview:**
* **Amendment:** This is an amendment to the Income Tax Rules, 1962.
* **Core Objective(s):** The core objective of this amendment is to provide a mechanism for tax relief under Section 115JB of the Income-tax Act, 1961 specifically when past income is included in the book profit of the current year, which is a consequence of either an Advance Pricing Agreement (APA) under section 92CC or secondary adjustment under section 92CE.
**4. Background and Rationale:**
This amendment likely addresses a potential issue of double taxation or undue tax burden on companies. When past income, attributable to previous years, is included in the current year's book profit due to APAs or secondary adjustments, it can lead to higher tax liability under Section 115JB. This amendment seeks to provide relief by allowing a reduction in the tax payable to account for the tax already paid or payable in the past.
**5. Key Provisions / Changes:**
This amendment introduces a new rule, Rule 10RB, to the Income Tax Rules, 1962. The key changes introduced by the amendment are:
* **Introduction of Rule 10RB:** This rule provides a formula (AB-DC) to calculate the amount of tax relief available to the assessee company.
* **Definition of A, B, C, and D in the Formula:**
* A: Tax payable under subsection 1 of section 115JB on the book profit of the current year *including* past income.
* B: Tax payable under subsection 1 of section 115JB on the book profit of the current year *excluding* past income.
* C: Aggregate of tax payable under subsection 1 of section 115JB on the book profit of *past* year(s) to which the past income belongs.
* D: Aggregate of tax payable under subsection 1 of section 115JB on the book profit of past year(s) *including* the relevant past income of such year(s).
* **Definition of 'Past Income':** Past income is defined as the income of past years included in the book profit of the current year due to an APA under section 92CC or secondary adjustment under section 92CE.
* **Reduction of Tax Credit under Section 115JAA:** The tax credit allowed to the assessee under section 115JAA shall be reduced by the amount of reduction allowed under subrule 1 (the AB-DC formula result).
* **Introduction of Form No. 3CEEA:** The amendment mandates the use of Form No. 3CEEA for claiming the tax relief. This form must be filed electronically.
* **Verification of Form 3CEEA:** The form needs to be verified by a person authorized to verify the return of income under section 140.
* **Responsibility for Filing Procedure and Security:** The Principal Director General of Income-tax Systems or the Director General of Income-tax Systems is responsible for specifying the filing procedure, security, archival, and retrieval policies related to Form No. 3CEEA.
**6. Target Audience and Stakeholders:**
The primary target audience for this amendment is *assessee companies* that have entered into Advance Pricing Agreements (APAs) under Section 92CC or are subject to secondary adjustments under Section 92CE of the Income-tax Act, 1961. These companies are directly affected as they are eligible to claim the tax relief as detailed in the amendment, where past incomes are included. Tax professionals advising these companies are also key stakeholders.
**7. Implementation Aspects (Inferred):**
* **Responsible agency/bodies:** The Central Board of Direct Taxes (CBDT) is the issuing authority. The Principal Director General of Income-tax Systems or the Director General of Income-tax Systems is responsible for the electronic filing procedure, security, archival and retrieval of the forms.
* **Timelines or procedures:** The amendment mandates the electronic filing of Form No. 3CEEA to claim the relief. The specific procedure for filing will be specified by the Principal Director General of Income-tax Systems or the Director General of Income-tax Systems.
* **Changes Specific to the Amendment:** The most significant implementation aspect is the requirement for electronic filing of Form 3CEEA and the adherence to the procedures established by the designated authorities.
**8. Expected Outcomes / Impact of Changes:**
The intended outcome of these amendments is to provide tax relief to companies that would otherwise face a higher tax liability due to the inclusion of past income in their current year's book profit. This should prevent potential double taxation and ensure a fairer tax assessment. This should facilitate compliance and reduce disputes related to APA and secondary adjustment.
**9. Conclusion:**
The Income Tax 23rd Amendment Rules, 2021, introduces a crucial mechanism for providing tax relief to assessee companies facing increased tax liabilities due to the inclusion of past income in their book profits as a result of APAs or secondary adjustments. The introduction of Rule 10RB and Form No. 3CEEA provides a structured process for claiming this relief and ensures compliance with the relevant provisions of the Income-tax Act, 1961. This amendment is significant because it aims to correct potential tax inequities and promotes a more equitable tax environment for businesses involved in international transactions.
Key Entities Referenced
NEW DELHI: Capital of India, place of publication of the gazette notification.
Income-tax Act, 1961: The primary legislation being amended.
Central Board of Direct Taxes: The issuing authority for the notification.
Incometax Rules, 1962: The rules being amended by this notification.
Income tax 23rd Amendment, Rules, 2021: The title of the amendment rules.
section 115JB: Section of the Income-tax Act, 1961 related to Minimum Alternate Tax (MAT).
section 295: Section of the Income-tax Act, 1961, granting rule-making powers.
section 92CC: Section of the Income-tax Act, 1961 related to Advance Pricing Agreement.
section 92CE: Section of the Income-tax Act, 1961 related to Secondary Adjustment.
Form No. 3CEEA: Form for furnishing particulars for recomputation for any adjustment on account of income of past years.
section 140: Section of the Income-tax Act, 1961 related to verification of return of income.
Principal Director General of Incometax Systems: Authority responsible for specifying the procedure for filing Form No. 3CEEA.
Director General of Incometax Systems: Authority responsible for specifying the procedure for filing Form No. 3CEEA.
RAJESH KUMAR BHOOT: Jt. Secy., Tax Policy and Legislation.
Ministry of Finance: Ministry under which the Department of Revenue and Central Board of Direct Taxes function.
Department of Revenue: Department of the Ministry of Finance.
रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99
सी.जी.-डी.एल.-अ.-10082021-228881
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CG-DL-E-10082021-228881
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असाधारण
EXTRAORDINARY
भाग II—खण् ड 3—उप-खण्ड (i)
PART II—Section 3—Sub-section (i)
प्राजधकार स ेप्रकाजित
PUBLISHED BY AUTHORITY
स.ं 451] नई दिल्ली, मगं लिार, अगस्ट्त 10, 2021/श्रािण 19, 1943
No. 451] NEW DELHI, TUESDAY, AUGUST 10, 2021/SHRAVANA 19, 1943
जित्त मंत्रालय
(रािस्ट्ि जिभाग)
(केन्द्रीय प्रत्यक्ष कर बोडड)
अजधसचू ना
नई दिल्ली, 10 अगस्ट्त, 2021
सा.का.जन. 551(अ).—केंरीय प्रत्यक्ष कर बोड,ड आयकर अजधजनयम, 1961(1961 का 43) की धारा 295 के साथ
पठित धारा 115ञख की उप-धारा (2घ) द्वारा प्रित्त िजियों का प्रयोग करते हुए, आयकर जनयम, 1962 में आगे संिोधन
करने के जलए जनम्नजलजखत जनयम बनाता ह ैअथाडत:् ─
1. सजं क्षप्त िीर्-ड इन जनयमों का संजक्षप्त नाम आयकर (तेईसिााँ संिोधन), जनयम, 2021 ह।ै
2. आयकर जनयम, 1962 (जिसे इसमें इसके पश् चात् उत जनयम कहा गया ह)ै के जनयम 10िक के पश्चात, जनम्नजलजखत
जनयम अंत:स्ट्थाजपत दकया िा सकेगा, अथाडत:् -
"10िख. धारा 115ञख की उप-धारा (2घ) के प्रचालन के कारण धारा 115 ञख की उप-धारा (1) के अधीन िेय कर म ें
राहत- (1) धारा 115ञख की उप-धारा (2डघ) के प्रयोिनों के जलए, धारा 115ञख की उप-धारा (1) के अधीन जनधाडठरती
कंपनी द्वारा िेय कर, उस धाराके बारे में जपछल ेिर्ड के जलए, जनम्नजलजखत राजि स ेकम दकया िा सकेगा, अथाडत्: -
(क-ख) - (घ-ग), िहां,
क = जपछली आय सजहत जपछल े िर्ड के बही लाभ पर धारा 115ञख की उप-धारा (1) के अधीन जनधाडठरती कंपनी द्वारा
िेय कर;
ख = जपछली आय के साथ बही लाभ को कम करने के पश्चात जपछले िर् ड के बही लाभ पर धारा 115ञख की उप-धारा (1)
के अधीन जनधाडठरती कंपनी द्वारा िेय कर;
4436 GI/2021 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)]
ग = िे जपछले िर् ड या िर्ों जिनसे जपछली आय संबंजधत ह,ै के बही लाभ पर धारा 115ञख की उप-धारा (1) के अधीन
जनधाडठरती कंपनी द्वारािेय करका योग;
घ = ऐसे िर् ड या िर्ों की सुसंगत जपछली आय के साथ बही लाभ में िृजि के पश्चात, मि ग के बारे म,ें जपछल े िर् ड या िर्ों
के बही लाभ परधारा 115ञख की उप-धारा (1) के अधीन जनधाडठरती कंपनी द्वारा िेय कर का योग:
परंत ु यदि फामूडला म ें(क-ख)-(घ-ग) का मान ऋणात्मक ह,ै तो उसका मान िून्द्य समझा िा सकेगा ।
(2) उप-जनयम (1) के प्रयोिनों के जलए जपछली आय, जपछले िर्ड या बही लाभ म ें सजममजलत िर्ों की आय की राजि धारा
92गग के अधीन जनधाडठरती द्वारा अजिम मूल्यांकन करार करने के कारण जपछल े िर् ड या धारा 92गड़ के अधीन अपेजक्षत
जद्वतीय समायोिन के कारण होगी।
(3) उप-जनयम (1) के उपबंध के आिेिन पर, धारा 115ञकक के अधीन जनधाडठरती को अनमु त टैस क्रेजडट उस राजि से
कम दकया िा सकेगा िो कटौती की राजि के समान ह ैजिसे उप-जनयम (1) के अधीन अनुज्ञात दकया गया ह।ै
(4) जनधाडठरती कंपनी प्रधान आयकर महाजनिेिक (प्रणाली) या आयकर महाजनिेिक (प्रणाली), िैसा भी मामला हो द्वारा
जनर्िष्टड रीजत में उि प्ररूप के हस्ट्ताक्षठरत प्प्रंटआउट को प्ररूप संख्या 3 गङङकको इलेरॉजनक रूप से अपलोड करके धारा
115ञख की उप-धारा (2घ) के अधीन राहत के जलए िािा करेगी।
(5) प्ररूप संख्या 3 गङङक को उस व्यजि द्वारा सत्याजपत दकया िा सकेगा िो धारा 140 के अधीन जनधाडठरती कंपनी की
आय की जििरणी को सत्याजपत करन े के जलए अजधकृत ह।ै
(6) प्रधान आयकर महाजनिेिक (प्रणाली) या आयकर महाजनिेिक (प्रणाली), िैसा भी मामला हो, प्ररूप संख्या 3 गङङक
को फाइल करने की प्रदक्रया को जनर्िष्टड करेगा और इस जनयम के अधीन प्रस्ट्ततु दकए गए कथनों के संबंध में उपयुि सुरक्षा,
अजभलेखीय और पुनप्राडजप्त नीजतयों को जिकजसत करने और दक्रयान्द्यजित करन े के जलए उत्तरिायी होगा ।
स्ट्पष्टीकरण 1.- फामूडला म ें राजि "क" का मल्ू य िून्द्य समझा िा सकेगा , यदि जपछली आय सजहत उस जपछल े िर्ड के बही
लाभ पर धारा 115ञख की उप-धारा (1) के अधीन कोई कर िये नहीं ह।ै
स्ट्पष्टीकरण 2.- फामूडला में राजि "ख" का मल्ू य िून्द्य समझा िा सकेगा , यदि जपछली आय के साथ बही लाभ को कम करन े
के पश्चात उस जपछल ेिर्ड के बही लाभ पर धारा 115ञख की उप-धारा (1) के अधीन कोई कर िेय नहीं ह।ै
स्ट्पष्टीकरण 3.- फामूडला म ेंराजि "ग" की गणना के प्रयोिनों के जलक, यदि दकसी जपछले िर् ड या िर्ों में उस िर्ड या िर्ों के
बही लाभ पर धारा 115ञख की उप-धारा (1) के अधीन कोई कर िेय नहीं ह,ै तो उस िर्ड या िर्ों के जलए िेय कर िन्द्ू य
समझा िा सकेगा ।
स्ट्पष्टीकरण 4.- फामूडला म ें "घ" राजि की गणना के प्रयोिनों के जलए, यदि दकसी जपछल े िर् ड या िर्ों म ें उस िर् ड या िर्ों की
सुसंगत जपछली आय के साथ बही लाभ में िृजि के पश्चात, उस िर्ड या िर्ों के बही लाभ पर धारा 115ञख की उप-धारा
(1) के अधीन कोई कर िेय नहीं है,तो ऐसे िर्ड या िर्ों के जलए िेय कर िून्द्य समझा िा सकेगा ।
3. मलू जनयम की पठरजिष्ट 2म,ें प्ररूप संख्या 3गङङ के पश्चात, जनम्नजलजखत प्ररूपअतं :स्ट्थाजपत दकया िा सकेगा , अथाडत:्-
"प्ररूप सख्ं या 3गङङङ"
[जनयम 10िख का उप-जनयम (4) िेख]ें
धारा 92गङ के अधीन जद्वतीय समायोिन के कारण दकसी कंपनी द्वारा या धारा 92गग के अधीन िि ड दकए गए अजिम
मल्ू याकं न करार के कारण जपछल े िर् ड के लखे ा बही म ें सजममजलत जपछल े िर्(ड िर्ों) की आय के कारण दकसी भी समायोिन
के जलए पनु गणड ना हते ु31 माच.ड....... को समाप्त होन ेिाल ेिर् डके जलए जिजिजष्टया ाँ प्रस्ट्ततु करन ेके जलए प्ररूप
क्र.सं. जिजिजष्टयााँ ब्यौरा
1. कंपनी का नाम और पता
2. स्ट्थायी खाता संख्या
3. आिागय जस्ट्थजत
4. सुसंगत जपछल ेिर् ड
5. या यह एपीए या जद्वतीय समायोिन का मामला ह ै[भाग II—खण् ड 3(i)] भारत का रािपत्र : असाधारण 3
6. जपछली आय का ब्यौरा [जनयम 10िख के उप-जनयम (2) सुसंगत जपछली आय जपछली आय की कुल
का जनिेि ]ब्यौरा जपछल े की राजि राजि
िर्ड
7. जनयम 10िख के उप-जनयम (1) में फामूडला की राजि क
(जपछली आय सजहत जपछले िर् ड के बही लाभ पर िेय
कर)
8. जनयम 10िख के उप-जनयम (1) में फामूडला की राजि ख
(जपछली आय को छोड़कर जपछले िर् ड के बही लाभ पर
िेय कर)
9. क-ख (मि 7 पर राजि घटा मि 8 पर राजि)
10. िेय कर के ब्यौरा के साथ जनयम 10िख के उप-जनयम (I) जनयम 10िख के उप-
(1) म ेंफामूडला की राजि ग जनयम (1) म ेंफामूडला की
राजि ग
(II) जपछले िर्ों के बही लाभ पर िेय कर का ब्यौरा
सुसंगत जपछली आय जपछले िर्ों के बही लाभ
जपछल े की राजि पर िेय कर का योग
िर्ड
11. िेय कर के ब्यौरा के साथ जनयम 10िख के उप-जनयम (I) जनयम 10िख के उप-
(1) म ेंफामूडला की राजि घ जनयम (1) म ेंफामूडला की
राजि ग
(II) जपछले िर्ों के बही लाभ पर िेय कर का ब्यौरा
सुसंगत जपछली आय जपछल ेिर्ों के बही लाभ
जपछल े की राजि पर िेय कर का योग
िर्ड
12. घ-ग (मि 11 पर राजि घटा मि 10 पर राजि)
13. धारा 115ञख (2घ) के अधीन कर में राहत (मि 9 पर
राजि घटा मि 12 पर राजि)4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)]
सत्यापन
मैं ____, घोर्णा करता ह ं दक ऊपर िो कथन दकया गया ह ै िह मेरे सिोत्तम ज्ञान और जिश्वास के अनुसार सत्य ह।ै आि
_____ के दिन सत्याजपत दकया िाता ह।ै
स्ट्थान:
तारीख:
…………………………….
अजधकृत हस्ट्ताक्षरकताड के हस्ट्ताक्षर।”।
[अजधसूचना स.ं 92/2021/फा. स.ं 370142/21/2021-टीपीएल (भाग)]
रािेि कुमार भूत, संयुि सजचि (कर नीजत और जिधान)
ठटप्पण : मूल जनयम भारत के रािपत्र, असाधारण, भाग-II, खंड-3, उप-खंड (ii) में क्रम संख्या का.आ. 969(अ), तारीख
26 माच,ड 1962 द्वारा प्रकाजित दकए गए थ े और अजधसूचना संख्या सा.का.जन. 545(अ), तारीख 9 अगस्ट्त,
2021 के द्वारा अंजतम बार संिोजधत दकया गया।
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 10th August, 2021
G.S.R. 551(E).—In exercise of the powers conferred by sub-section (2D) of section 115JB
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.-These rules may be called the Income tax (23rd Amendment), Rules, 2021.
2. In the Income-tax Rules, 1962, (hereinafter referred to as principal rules) after rule 10RA, the
following rule shall be inserted, namely:—
“10RB. Relief in tax payable under sub-section (1) of section 115JB due to operation of sub-
section (2D) of section 115JB.- (1) For the purposes of sub-section (2D) of section 115JB, the tax
payable by the assessee company under sub-section (1) of section 115JB, for the previous year
referred to in that section, shall be reduced by the following amount, namely:-
(A-B) – (D-C), where,
A = tax payable by the assessee company under sub-section (1) of section 115JB on the book profit of
the previous year including the past income;
B = tax payable by the assessee company under sub-section (1) of section 115JB on the book profit of
the previous year after reducing the book profit with the past income;
C = Aggregate of tax payable by the assessee company under sub-section (1) of section 115JB on the
book profit of those past year or years to which the past income belongs;
D = Aggregate of tax payable by the assessee company under sub-section (1) of section 115JB on the
book profit of past year or years, referred to in item C, after increasing the book profit with the
relevant past income of such year or years:
Provided that if the value of (A-B)-(D-C) in the formula is negative, its value shall be deemed
to be zero.[भाग II—खण् ड 3(i)] भारत का रािपत्र : असाधारण 5
(2) For the purposes of sub-rule (1) past income shall be the amount of income of past year or years
included in the book profit or the previous year on account of an advance pricing agreement entered
into by the assessee under section 92CC or on account of secondary adjustment required to be made
under section 92CE.
(3) On application of provision of sub-rule (1), the tax credit allowed to the assessee under section
115JAA shall be reduced by the amount which is equal to the amount of reduction that has been
allowed under sub-rule (1).
(4) The assessee company shall make a claim for relief under sub-section (2D) of section 115JB in
Form No. 3CEEA electronically by uploading signed printout of said Form in the manner specified by
the Principal Director General of Income-tax (Systems) or the Director General of Income-tax
(Systems), as the case may be.
(5) Form No.3CEEA shall be verified by the person who is authorised to verify the return of income
of the assessee company under section 140.
(6) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax
(Systems), as the case may be, shall specify the procedure for filing of the Form No. 3CEEA and shall
also be responsible for evolving and implementing appropriate security, archival and retrieval policies
in relation to the statements so furnished under this rule.
Explanation 1.- The value of amount “A” in the formula shall be deemed to be zero, if there is no tax
payable under sub-section (1) of section 115JB on the book profit of that previous year including the
past income.
Explanation 2.- The value of amount “B” in the formula shall be deemed to be zero, if there is no tax
payable under sub-section (1) of section 115JB on the book profit of that previous year after reducing
the book profit with the past income.
Explanation 3.- For the purposes of calculation of amount “C” in the formula, if in any past year or
years there is no tax payable under sub-section (1) of section 115JB on the book profit of that year or
years, the tax payable for that year or years shall be deemed to be zero.
Explanation 4.-For the purposes of calculation of amount “D” in the formula, if in any past year or
years there is no tax payable under sub-section (1) of section 115JB on the book profit of that year or
years after increasing the book profit with the relevant past income of such year or years, the tax
payable for that year or years shall be deemed to be zero.
3. In the principal rules, in Appendix II, after Form No.3CEE, the following form shall be inserted,
namely:––
“FORM No 3CEEA
[See sub-rule (4) of rule 10RB]
Form for furnishing particulars for the year ending 31st March,………for recomputation for
any adjustment on account of income of past year(s) included in books of account of previous
year by a Company on account of secondary adjustment under section 92CE or on account of
an Advance Pricing Agreement entered under section 92CC
Sr. No. Particulars Details
1. Name and address of the Company
2. Permanent Account Number
3. Residential status
4. Relevant previous year
5. Is it a case of APA or secondary
adjustment6 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)]
6. Details of past income [refer sub-rule (2) of Relevant Amount of Total amount of past
rule 10RB] previous past income income
year
7. Amount A of formula in sub-rule (1) of
rule 10RB (tax payable on book profit of
the previous year including past income)
8. Amount B of formula in sub-rule (1) of
rule 10RB (tax payable on book profit of
the previous year excluding past income)
9. A-B (amount at item 7 minus amount at
item 8)
10. Amount C of formula in sub-rule (1) of (I) Amount C of formula in
rule 10RB with details of tax payable sub-rule (1) of rule 10RB
(II) Details of tax payable on the book profit of past
years
Relevant Amount of tax Aggregate of tax
previous payable payable on the book
year profit of past years
11. Amount D of formula in sub-rule (1) of (I) Amount D of formula in
rule 10RB with details of tax payable sub-rule (1) of rule 10RB
(II) Details of tax payable on the book profit of past
years including past income
Relevant Amount of tax Aggregate of tax
previous payable payable on the book
year profit of past years
including past income[भाग II—खण् ड 3(i)] भारत का रािपत्र : असाधारण 7
12. D-C (amount at item 11 minus amount at
item 10)
13. Relief in tax under section 115JB (2D)
(amount at item 9 minus amount at item
12)
Verification
I ____, do hereby declare that what is stated above is true to the best of my
knowledge and belief. Verified today, the day of _____
Place:
Date:
…………………………….
Signature of the Authorised Signatory.”.
[Notification No. 92/2021/F. No.370142/21/2021-TPL (Part)]
RAJESH KUMAR BHOOT, Jt. Secy. (Tax Policy and Legislation)
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.545 (E), dated, 9th August,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.