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Date: 12-Sep-2023 Category: Extra Ordinary State: Union Government Country: India

Notification under section 47 of Income tax Act 1961

Issued by Ministry of Finance · Department of Revenue

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Executive Summary & Key Takeaways

What it means

  • The notification S.O. 3981(E) issued by the Ministry of Finance (Department of Revenue), Central Board of Direct Taxes, amends notification number 16/2020, dated March 5, 2020, related to Income-tax Act, 1961. The amendment expands the scope of exemptions under Section 47(viiab)(d) of the Income-tax Act, 1961, concerning certain transfers of assets.

Key Changes

  • The notification inserts clauses related to units of investment trusts, units of schemes, and units of Exchange Traded Funds launched under the International Financial Services Centres Authority (Fund Management) Regulations, 2022.
  • Specifically, after clause (vi) in the original notification's first paragraph, the following clauses are added: (vii) unit of investment trust; (viii) unit of a scheme; (ix) unit of a Exchange Traded Fund launched under International Financial Services Centres Authority (Fund Management) Regulations, 2022.
  • The notification also adds definitions for 'Investment Trust' and 'Scheme' by referencing the International Financial Services Centres Authority (Fund Management) Regulations, 2022. 'Investment Trust' is defined as per clause (d) of sub-regulation (1) of regulation 83, and 'Scheme' is defined as per clause (ii) of sub-regulation (1) of regulation 2.
  • The notification comes into effect from the date of its publication in the Official Gazette, which is September 12, 2023.

Impact Analysis

Impact on Investment Trusts and Schemes

  • The inclusion of Exchange Traded Funds (ETFs) launched under IFSCA regulations provides a specific exemption, encouraging the development and promotion of such investment vehicles within IFSCs.

Impact on Investors

  • This may lead to increased participation and diversification of investment portfolios.

Impact on Regulatory Bodies

  • The Central Board of Direct Taxes (CBDT) will need to ensure consistent interpretation and application of these amendments during tax assessments.

Suggested Action Items

  • The CBDT should issue clarifications or guidelines, if necessary, to address any ambiguities in the interpretation of the amended notification.

Key Entities Referenced

Income-tax Act, 1961: The principal legislation governing income tax in India. Section 47 deals with transactions not regarded as transfer. Central Board of Direct Taxes (CBDT): A part of the Department of Revenue in the Ministry of Finance, responsible for policy making and administration of direct taxes. International Financial Services Centres Authority (IFSCA): The unified regulator for the development and regulation of financial services, financial institutions, and financial products in the International Financial Services Centres (IFSCs) in India. International Financial Services Centres Authority (Fund Management) Regulations, 2022: Regulations issued by IFSCA governing the establishment and operation of fund management entities in IFSCs. Notification No. 16/2020, dated March 5, 2020: The original notification being amended, which pertains to exemptions under Section 47 of the Income-tax Act, 1961.
Official Source Record View Original Source →
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रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99 सी.जी.-डी.एल.-अ.-12092023-248655 xxxGIDHxxx CG-DLxx-xEG-I1D2E0x9x2x0 23-248655 असाधारण EXTRAORDINARY भाग II—खण् ड 3—उप-खण्ड (ii) PART II—Section 3—Sub-section (ii) प्राजधकार स ेप्रकाजित PUBLISHED BY AUTHORITY स.ं 3819] नई दिल्ली, मगं लिार, जसतम्ब र 12, 2023/भाद्र 21, 1945 No. 3819] NEW DELHI, TUESDAY, SEPTEMBER 12, 2023/BHADRA 21, 1945 जित्त मत्रं ालय (रािस्ट्ि जिभाग) (केंद्रीय प्रत्यक्ष कर बोडड) अजधसचू ना नई दिल्ली, 12 जसतम्बर, 2023 आयकर का.आ. 3981(अ).—आयकर अजधजनयम, 1961 (1961 का 43) की धारा 47 के खंड (viiकख) के उप-खंड (घ) द्वारा प्रित्त िजियों का प्रयोग करते हुए, केंद्र सरकार , भारत के रािपत्र, असाधारण, भाग II, खंड 3, उप-खंड (ii), संख्या का.आ 986(अ), दिनांक 5 माच,ड 2020 के तहत प्रकाजित, भारत सरकार, जित्त मंत्रालय, (रािस्ट्ि जिभाग) की अजधसूचना संख्या 16/2020, दिनांक 5 माच,ड 2020, में जनम्नजलजखत और संिोधन करती ह,ै अर्ाडत:् - उि अजधसूचना म,ें पहले परै ा में, - (i) खंड (vi) के बाि, जनम्नजलजखत खंड रखा िाए, अर्ाडत:् - "(vii) जनिेि न्यास की इकाई; (viii) दकसी योिना की इकाई; (ix) अंतराडष्ट्रीय जित्तीय सेिा केंद्र प्राजधकरण (जनजध प्रबंधन) जिजनयम, 2022 के तहत िुरु दकए गए एक्सचेंि रेडेड न्यास की इकाई।”; 5773 GI/2023 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)] (ii) व्याख्या के खंड म,ें खंड (ग) के बाि, जनम्नजलजखत खडं रखा िाए, अर्ाडत:् - "(घ) "जनिेि न्यास" का िही अर्ड होगा िो अंतराडष्ट्रीय जित्तीय सेिा केंद्रों के प्राजधकरण (जनजध प्रबंधन) जिजनयम, 2022 के जिजनयम 83 का उप-जिजनयम (1) के उप-खंड (घ) में दिया गया ह।ै (ङ) "योिना" का िही अर्ड होगा िो अंतराडष्ट्रीय जित्तीय सेिा केंद्र प्राजधकरण (न्यास प्रबंधन) जिजनयम, 2022 के जिजनयम 2 के उप-जिजनयम (1) के खंड (ii) में दिया गया ह।ै ” 2. यह अजधसूचना रािपत्र में इसके प्रकािन की तारीख स ेप्रभािी होगी। [अजधसूचना स ं 71/2023, फा. स.ं 225/103/2023-आईटीए-II] कास्त्रो ियप्रकाि. टी, अिर सजचि टटप्पणी : मूल अजधसूचना सं. का. आ 986(अ), दिनांक 5 माचड , 2020 के तहत, भारत के रािपत्र, असाधारण, भाग II, खंड 3, उप-खंड (ii) में प्रकाजित की गई र्ी, जिसे बाि में का.आ. सं. 3652(अ) दिनांक 03 अगस्ट्त 2022 के तहत भारत के रािपत्र, असाधारण, भाग II, खंड 3, उप-खंड (ii) म ें प्रकाजित की गई अजधसूचना सं. 89 द्वारा संिोजधत दकया र्ा। MINISTRY OF FINANCE (Department of Revenue) (CENTRAL BOARD OF DIRECT TAXES) NOTIFICATION New Delhi, the 12th September, 2023 INCOME-TAX S.O. 3981(E).—In exercise of the powers conferred by sub-clause (d) of clause (viiab) of section 47 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following further amendments in the notification of the Government of India, Ministry of Finance, (Department of Revenue), number 16/2020, dated the 5th March, 2020, published in the Gazette of India, Extraordinary, Part-II, Section 3, sub-section (ii), vide number S.O. 986(E), dated 5th March, 2020, namely:- In the said notification, in the first paragraph, - (i) after clause (vi), the following clause shall be inserted, namely: - “(vii) unit of investment trust; (viii) unit of a scheme; (ix) unit of a Exchange Traded Fund launched under International Financial Services Centres Authority (Fund Management) Regulations, 2022,”; (ii) in the Explanation, after clause (c), the following clause shall be inserted, namely: - “(d) “Investment Trust” shall have the meaning assigned to it in clause (d) of sub-regulation (1) of regulation 83 of the International Financial Services Centres Authority (Fund Management) Regulations, 2022. (e) “Scheme” shall have the meaning assigned to it in clause (ii) of sub-regulation (1) of regulation 2 of the International Financial Services Centres Authority (Fund Management) Regulations, 2022.”. 2. This notification shall come into force with effect from the date of its publication in the Official Gazette. [Notification No. 71/2023, F. No. 225/103/2023-ITA-II] CASTRO JAYAPRAKASH T., Under Secy. Note : The principal notification was published in the Gazette of India, Extraordinary, Part II, Section 3, sub-section (ii), vide number S.O. 986(E) dated 5th March, 2020, and subsequently amended by Notification No. 89 of 2022 was published in the Gazette of India, Extraordinary, Part II, Section 3, sub-section (ii), vide number S.O. 3652(E) dated 03rd August, 2022. 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.

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