2. Income Tax Rules

 [DA. Application of General Anti Avoidance Rule

10U. Chapter X-A not to apply in certain cases.—(1) The provisions of Chapter X-A shall not apply to—

(a)  an arrangement where the tax benefit in the relevant assessment year arising, in aggregate, to all the parties to the arrangement does not exceed a sum of rupees three crore;

(b)  a Foreign Institutional Investor,—

 (i)  who is an assessee under the Act;

(ii)  who has not taken benefit of an agreement referred to in section 90 or section 90A as the case may be; and

(iii) who has invested in listed securities, or unlisted securities, with the prior permission of the competent authority, in accordance with the Securities and Exchange Board of India (Foreign Institutional Investor) Regulations, 1995 and such other regulations as may be applicable, in relation to such investments;

(c)  a person, being a non-resident, in relation to investment made by him by way of offshore derivative instruments or otherwise, directly or indirectly, in a Foreign Institutional Investor;

(d)  any income accruing or arising to, or deemed to accrue or arise to, or received or deemed to be received by, any person from transfer of investments made before the 30th day of August, 2010 by such person.

(2) Without prejudice to the provisions of clause (d) of sub-rule (1), the provisions of Chapter X-A shall apply to any arrangement, irrespective of the date on which it has been entered into, in respect of the tax benefit obtained from the arrangement on or after the 1st day of April, 2015.

(3) For the purposes of this rule,—

(i)  “Foreign Institutional Investor” shall have the same meaning as assigned to it in the Explanation to section 115AD;

(ii) “off shore derivative instrument” shall have the same meaning as assigned to it in the Securities and Exchange Board of India (Foreign Institutional Investor) Regulations, 1995 issued under Securities and Exchange Board of India Act, 1992 (15 of 1992) ;

(iii) “Securities and Exchange Board of India” shall have the same meaning as assigned to it in clause (a) of sub-section (1) of section 2 of the Securities and Exchange Board of India Act, 1992 (15 of 1992);

(iv) “tax benefit” as defined in clause (10) of section 102 and computed in accordance with Chapter X-A shall be with reference to—

(a)  sub-clauses (a) to (e) of the said clause, the amount of tax; and

(b)  sub-clause (f) of the said clause, the tax that would have been chargeable had the increase in loss referred to therein been the total income.]

[Determination of consequences of impermissible avoidance arrangement.

10UA . For the purposes of sub-section (1) of section 98, where a part of an arrangement is declared to be an impermissible avoidance arrangement, the consequences in relation to tax shall be determined with reference to such part only.]

 [Notice, Forms for reference under section 144BA.

10UB(1) For the purposes of sub-section (1) of section 144BA, the Assessing Officer shall, before making a reference to the Commissioner, issue a notice in writing to the assessee seeking objections, if any, to the applicability of provisions of Chapter X-A in his case.

(2) The notice referred to in sub-rule (1) shall contain the following:—

 (i)  details of the arrangement to which the provisions of Chapter X-A are proposed to be applied;

(ii)  the tax benefit arising under the arrangement;

(iii) the basis and reason for considering that the main purpose of the identified arrangement is to obtain tax benefit;

(iv) the basis and the reasons why the arrangement satisfies the condition provided in clause (a), (b), (c) or (d) of sub-section (1) of section 96; and

(v)  the list of documents and evidence relied upon in respect of (iii) and (iv) above.

(3) The reference by the Assessing Officer to the Commissioner under sub-section (1) of section 144BA shall be in Form No. 3CEG.

(4) Where the Commissioner is satisfied that the provisions of Chapter X-A are not required to be invoked with reference to an arrangement after considering—

 (i)  the reference received from the Assessing Officer under sub-section (1) of section 144BA; or

(ii)  the reply of the assessee in response to the notice issued under sub-section (2) of section 144BA,

he shall issue directions to the Assessing Officer in Form No. 3CEH.

(5) Before a reference is made by the Commissioner to the Approving Panel under sub-section (4) of section 144BA, he shall record his satisfaction regarding the applicability of the provisions of Chapter X-A in Form No. 3CEI and enclose the same with the reference.]

 [Time limits.

10UC(1) For the purposes of section 144BA,—

(i)  no directions under sub-section (3) of section 144BA shall be issued by the Commissioner after the expiry of one month from the end of the month in which the date of compliance of the notice issued under sub-section (2) of section 144BA falls;

(ii) no reference shall be made by the Commissioner to the Approving Panel under sub-section (4) of section 144BA after the expiry of two months from the end of the month in which the final submission of the assessee in response to the notice issued under sub-section (2) of section 144BA is received;

(iii) the Commissioner shall issue directions to the Assessing Officer in Form No.3CEH,—

 (a)  in the case referred to in clause (i) of sub-rule (4) of rule 10UB, within a period of one month from the end of month in which the reference is received by him; and

(b)  in the case referred to in clause (ii) of sub-rule (4) of rule 10UB, within a period of two months from the end of month in which the final submission of the assessee in response to the notice issued under sub-section (2) of section 144BA is received by him.]

Determination of income from transactions with non-residents.

11. [Omitted by the IT (Twenty-first Amdt.) Rules, 2001, w.e.f. 21-8-2001.]

E.—Deductions to be made in computing total income

[Medical authority for certifying autism, cerebral palsy and multiple disabilities and certificate to be obtained from the medical authority for the purposes of deduction under section 80DD and section 80U.

11A. (1) For the purposes of clause (e) of the Explanation to sub-section (4) of section 80DD and clause (d) of the Explanation to sub-section (2) of section 80U, the medical authority for certifying “autism”, “cerebral palsy”, “multiple disabilities”, “person with disability” and “severe disability” referred to in clauses (a), (c), (h), (j) and (o) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999), shall consist of the following,—

 (i)  a Neurologist having a degree of Doctor of Medicine (MD) in Neurology (in case of children, a Paediatric Neurologist having an equivalent degree); or

(ii)  a Civil Surgeon or Chief Medical Officer in a Government hospital.

(2) For the purposes of sub-section (4) of section 80DD and sub-section (2) of section 80U, the assessee shall furnish along with the return of income, a copy of the certificate issued by the medical authority,—

 (i)  in Form No. 10-IA, where the person with disability or severe disability is suffering from autism, cerebral palsy or multiple disability; or

(ii)  in the form prescribed vide notification No. 16-18/97-NI.1, dated the 1st June, 2001 published in the Gazette of India, Part I, Section 1, dated the 13th June, 2001 and Notification No. 16-18/97-NI.1, dated the 18th February, 2002 published in the Gazette of India, Part I, Section 1, dated the 27th February, 2002 and notified under the Guidelines for evaluation of various disabilities and procedure for certification, keeping in view the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996), in any other case.

(3) Where the condition of disability is temporary and requires reassessment after a specified period, the certificate shall be valid for the period starting from the assessment year relevant to the previous year during which the certificate was issued and ending with the assessment year relevant to the previous year during which the validity of the certificate expires.]

 [Requirements for approval of an institution or fund under section 80G.

11AA. (1) The application for approval of any institution or fund under clause (vi) of sub-section (5) of section 80G shall be in Form No. 10G and shall be made in triplicate.

(2) The application shall be accompanied by the following documents, namely :—

 (i)  Copy of registration granted under section 12A or copy of notification issued under section 10(23) or 10(23C) ;

(ii)  Notes on activities of institution or fund since its inception or during the last three years, whichever is less ;

(iii)  Copies of accounts of the institution or fund since its inception or during the last three years, whichever is less.

(3) The Commissioner may call for such further documents or information from the institution or fund or cause such inquiries to be made as he may deem necessary in order to satisfy himself about the genuineness of the activities of such institution or fund.

(4) Where the Commissioner is satisfied that all the conditions laid down in clauses (i) to (v) of sub-section (5) of section 80G are fulfilled by the institution or fund, he shall record such satisfaction in writing and grant approval to the institution or fund specifying the assessment year or years for which the approval is valid.

(5) Where the Commissioner is satisfied that one or more of the conditions laid down in clauses (i) to (v) of sub-section (5) of section 80G are not fulfilled, he shall reject the application for approval, after recording the reasons for such rejection in writing :

Provided that no order of rejection of an application shall be passed without giving the institution or fund an opportunity of being heard.

(6) The time limit within which the Commissioner shall pass an order either granting the approval or rejecting the application shall not exceed six months from the date on which such application was made :

Provided that in computing the period of six months, any time taken by the applicant in not complying with the directions of the Commissioner under sub-rule (3) shall be excluded.]

 [Conditions for allowance for deduction under section 80GG.

11B. The deduction to be allowed under section 80GG in respect of any expenditure incurred by an assessee towards payment of rent for any furnished or un-furnished accommodation occupied by him for the purposes of his own residence shall be allowed subject to the condition that the assessee files the declaration in Form No. 10BA.]

 [Prescribed fields for the purposes of deduction in respect of remuneration received from foreign employers or Indian concerns under section 80RRA.

11C. For the purposes of clause (vi) of Explanation  [2] to section 80RRA, the prescribed fields shall be,—

(a)  the profession of actuaries ;

(b)  banking ;

(c)  insurance; and

(d)  journalism.]

Permanent physical disabilities for the purposes of deduction under section 80U.

11D. [Omitted by the IT (Twentieth Amdt.) Rules, 2003, w.r.e.f. 1-4-2003.]

[Specified diseases and ailments for the purpose of deduction under section 80DDB.

11DD. (1) For the purposes of section 80DDB, the following shall be the eligible diseases or ailments :

 (i)  Neurological Diseases where the disability level has been certified to be of 40% and above,—

(a)  Dementia ;

(b)  Dystonia Musculorum Deformans ;

(c)  Motor Neuron Disease ;

(d)  Ataxia ;

(e)  Chorea ;

(f)  Hemiballismus ;

(g)  Aphasia ;

(h)  Parkinsons Disease ;

(ii)  Malignant Cancers ;

(iii)  Full Blown Acquired Immuno-Deficiency Syndrome (AIDS) ;

(iv)  Chronic Renal failure ;

(v)  Hematological disorders :

(i) Hemophilia ;

(ii) Thalassaemia.

(2) The certificate in respect of the diseases or ailments specified in sub-rule (1) shall be issued by the following specialists working in a Government hospital—

(a)  for diseases or ailments mentioned in clause (i) of sub-rule (1) – a Neurologist having a Doctorate of Medicine (D.M.) degree in Neurology or any equivalent degree, which is recognised by the Medical Council of India;

(b)  for diseases or ailments mentioned in clause (ii) of sub-rule (1) – an Oncologist having a Doctorate of Medicine (D.M.) degree in Oncology or any equivalent degree which is recognised by the Medical Council of India;

(c)  for diseases or ailments mentioned in clause (iv) of sub-rule (1) – a Nephrologist having a Doctorate of Medicine (D.M.) degree in Nephrology or a Urologist having a Master of Chirurgiae (M.Ch.) degree in Urology or any equivalent degree, which is recognised by the Medical Council of India;

(d)  for diseases or ailments mentioned in clause (v) of sub-rule (1) – a specialist having a Doctorate of Medicine (D.M.) degree in Hematology or any equivalent degree, which is recognised by the Medical Council of India :

Provided that where in respect of any diseases or ailments specified in sub-rule (1), no specialist has been specified or where the specialist specified is not posted in the Government hospital in which the patient is receiving the treatment, such certificate, with prior approval of the Head of that hospital, may be issued by any other specialist working full-time in that hospital and having a post-graduate degree in General or Internal Medicine, which is recognised by the Medical Council of India.

(3) The certificate from the prescribed authority to be furnished along with the return of income shall be in Form No. 10-I.]

Application for approval of agreement under section 80-O.

11E. [Omitted by the IT (Thirty-second Amdt.) Rules, 1999, w.e.f. 19-11-1999.]

 [Guidelines for specifying industrially backward districts for the purpose of deduction under  [sub-section (5) of section 80-IB].

11EA. [(1)] In specifying a district for notification as an industrially backward district  [of Category ‘A’] under  [sub-section (5) of section 80-IB], the Central Government shall satisfy itself that,—

(a)  the district has a “Total Weighted Index Count” of 250 or less in the “All India Gradation List” appended in Appendix III of these rules; or

(b)  the district is a “no industry” district as indicated in the “All India Gradation List” mentioned in clause (a); or

(c)  the district is an inaccessible hill area district as indicated in the Eighth Plan Document and has a “Total Weighted Index Count” of 500 or less in the “All India Gradation List” mentioned in clause (a); or

(d)  the district has no railhead as on 1-4-1994 and has a “Total Weighted Index Count” of 500 or less in the “All India Gradation List” mentioned in clause (a).

Explanation : A district notified under these rules, shall be based on the districts as they stood in the Census Report of 1991. Where a district notified under these rules, is reorganised, either by split or otherwise, after the Census Report of 1991 all the areas comprised in the district as it existed in the Census Report of 1991 will qualify for the purpose of these rules.]

 [(2) In specifying a district for notification as an industrially backward district of category ‘B’ under  [sub-section (5) of section 80-IB,] the Central Government shall satisfy itself that,—

(a)  the district has a “Total Weighted Index Count” of more than 250 but less than or equal to 500 in the “All India Gradation List” as indicated in the “All India Gradation List” mentioned in clause (a) of sub-rule (1) :

Provided that no district shall be notified under this sub-rule if such district has been notified under sub-rule (1).]

 [EE.—Statement under the simplified procedure for taxation of retail traders, etc., under Chapter XII-C

Form of statement to be furnished under section 115K.

11EE. [Omitted by the IT (Thirty-second Amdt.) Rules, 1999, w.e.f. 19-11-1999.]

 [F.—National Committee for Promotion of Social and Economic Welfare

General

11F. In this sub-part “National Committee” means the National Committee defined in section 35AC.

Composition of the National Committee.

11G. (1) The National Committee shall consist of fourteen members appointed by the Central Government from amongst persons of eminence in public life.

(2) The term of office of a member shall be for three years commencing on the date of notification.

 [(3) One of the members of the National Committee shall be appointed as Chairman by the Central Government. In the event of vacancy of the office of Chairman for any reason and until a new Chairman is appointed, no meeting of the National Committee shall be held :

Provided that if for any meeting, the Chairman is absent, the members present for the meeting may elect one amongst themselves to preside over the day’s sitting.]

(4) The National Committee may appoint one or more sub-committees from among its members for looking into specific areas of activity from time to time. The National Committee may invite any expert to examine any matter of technical nature.

Headquarters and Secretariat.

11H. (1) The headquarters of the National Committee shall be at New Delhi. Its sittings shall take place at New Delhi or such other place as the Central Government may decide.

(2) Secretariat to the Committee will be provided by the Department of Revenue, Ministry of Finance, Government of India and a Joint Secretary to the Government of India, in the Department of Revenue shall act as Secretary to the Committee.

11-I. The functions of the National Committee shall be—

 (i)  to approve associations and institutions for the purpose of carrying out any eligible project or scheme; and

(ii)  to recommend to the Central Government projects and schemes of any company including a public sector company, a local authority or an approved association or institution, for being notified as eligible projects or schemes for the purposes of section 35AC.

Guidelines for approval of associations and institutions.

11J. In according approval to any association or institution, the National Committee shall satisfy itself that,—

 (i)  the association or institution is—

(a)  constituted as a public charitable trust; or

(b)  registered under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India; or

(c)  registered under section 25 of the Companies Act, 1956 (1 of 1956);

(ii)  persons managing the affairs of the association or institution are persons of proven integrity;

(iii)  the activities of the association or institution are open to citizens of India without any distinction of religion, race, caste, sex, place of birth or any of them and are not expressed to be for the benefit of any individual or community;

(iv)  the association or institution maintains regular accounts of its receipts and expenditure; and

 (v)  the instrument under which the association or institution is constituted does not or the rules or regulations governing the association or institution do not contain any provision for the transfer or application, at any time, of the whole or any part of the income or assets of the association or institution for any purpose other than a charitable purpose.

Guidelines for recommending projects or schemes.

11K. In making recommendations to the Central Government with regard to any project or scheme for being notified in the Official Gazette as an eligible project or scheme, the National Committee shall satisfy itself that,—

 (i)  the project or scheme relates to the provisions of one or more of the following :—

(a)  construction and maintenance of drinking water projects in rural areas and in urban slums including installation of pump-sets, digging of wells, tube-wells and laying of pipes for supply of drinking water;

(b)  construction of dwelling units for the economically weaker sections;

(c)  construction of school buildings primarily for children belonging to the economically weaker sections of the society;

(d)  establishment and running of non-conventional and renewable source of energy systems;

(e)  construction and maintenance of bridges, public highways and other roads;

(f)  any other programme for uplift of the rural poor or the urban slum dwellers, as the National Committee may consider fit for support;

 [(g)  promotion of sports;]

 [(h)  pollution control;]

 [(i)  establishment and running of educational institutions in rural areas, exclusively for women and children upto 12 years of age;

 (j)  establishment and running of hospitals and medical facilities in rural areas, exclusively for women and children upto 12 years of age;

(k)  establishment and running of creches and schools for the children of workers employed in factories or at building sites;

 (l)  encouraging the production of bacteria induced fertilisers;

(m)  any programme that promotes road safety, prevention of accidents and traffic awareness;]

 [(n)  construction of hostel accommodation for women or handicapped individuals or individuals who are of the age of sixty-five years or more;]

 [(o)  establishment and running of institutions for vocational education and training in rural areas or towns which consist of population of less than five lakhs;]

 [(p)  establishment and running of institutions imparting education in the field of engineering and medicine in rural areas or towns which consist of population of less than 5 lakhs;]

 [(q)  plantation of softwood on degraded non-forest land;

(r)  any programme of conservation of natural resources or of afforestation;]

 [(s)  relief and rehabilitation of handicapped individuals;]

(ii)  the benefit of the project or scheme shall flow to the public in general or to individuals belonging to the economically weaker sections of the society;

(iii)  the applicant has the necessary expertise, personnel and other facilities for efficient implementation of the project or scheme;

(iv)  the applicant shall maintain separate accounts in respect of the eligible project or scheme.

Application for approval of an association or institution or for recommendation of a project or scheme by the National Committee.

11L. (1) An application for approval of an association or institution or for recommendation of a project or scheme by the National Committee for the purposes of section 35AC may be made to the Secretary to the National Committee for Promotion of Social and Economic Welfare, Department of Revenue, Government of India, North Block, New Delhi – 110 001.

(2) The application should be submitted in 2 sets, written either in English or Hindi, and should be accompanied with details about the name, address and status of applicant, the district/ward/circle where assessed/registered, permanent account number, audited balance sheet and profit and loss account or income and expenditure account for the latest year for which these are available and two preceding years.

(3) The application for approval of an association or institution should contain the following particulars and be accompanied with relevant documents :—

 (i)  Name and address of the association or institution;

(ii)  How constituted (whether as a trust, society, etc.) supported by relevant documents like trust deed, rules and regulations, memorandum of association, etc., and registration certificate, if any ;

(iii)  Names and addresses of the persons managing the affairs of the association or institution, including those who had, at any time, during the three years preceding the date of application, managed the affairs of the association or institution;

(iv)  If the association or the institution is notified by the Central Government for the purposes of sub-clause (iv) or (v) of clause (23C) of section 10 of the Income-tax Act, 1961 (43 of 1961), or is approved for the purposes of section 80G, the particulars of the approval granted;

 [(v)  Brief particulars of the activities of the association or institution during three years preceding the date of application :

Provided that when an association or institution has been in existence for a period of less than 3 years, in that case, that association or institution may furnish particulars of its activities for the period of its existence;]

(vi) Such other information as the association or institution may like to place before the National Committee.

(4) The application for recommendation of a project or scheme should contain the following particulars and be accompanied with relevant documents,—

 (i)  Title of project or scheme;

(ii)  Date of commencement;

(iii)  Duration and the likely date of completion;

(iv)  Estimated cost of the project or scheme duly supported by a copy of the resolution of the Managing Committee of the association, institution or the local authority or, as the case may be, the Board of Directors of the company;

(v)  Categories or classes of persons who are likely to be benefited from the project or scheme;

(vi)  Affirmation that no benefit from the project or scheme, other than remuneration or honorarium for whole time or part-time work done or for reimbursement of actual expenses related to the project will accrue to the persons managing the affairs of the association or institution or to individuals not belonging to the economically weaker sections of the society;

(vii)  Where the project or scheme is to be executed by a company, information about whether the project or scheme is such which the company is required to execute under any law for the time being in force or under agreement with employees or otherwise;

(viii)  Such other particulars as the applicant may like to place before the National Committee.

Procedure before the National Committee.

11M. (1) All applications under rule 11L should be circulated by the Secretary to the National Committee to all the members of the Committee and will be considered by the National Committee at its sitting held at least seven days after the date on which the application is circulated. In exceptional cases, the Chairman may curtail the period of notice and may also direct consideration of the application by circulation only.

(2) The National Committee may call for such other information from the applicant as it deems necessary for taking a decision on the application and may also direct its Secretary to make or cause to be made enquiries on any matter relating to the application.

(3) The quorum for taking a decision on an application shall be at least five members, including Chairman. If a meeting is adjourned without taking a decision for lack of quorum, the  [decision to adjourn the meeting] may be taken by the members present, even without the requisite quorum.  [This decision would be conveyed to the absentee members along with notice about the date, time and place for re-holding the adjourned meeting.]

(4) Approval of an association or institution shall be for such period as the National Committee may decide, generally not exceeding a period of three years at a time. Subsequent approvals, if required, for a further period, can be granted only if the National Committee is satisfied about the activities of the association or institution during the preceding period of approval.

(5) The National Committee shall recommend ordinarily to the Central Government a project or scheme for being notified as an eligible project or scheme for an initial period up to three financial years. If the project or scheme is likely to extend beyond three financial years, the National Committee shall make further recommendations for a period of three years at a time after being satisfied that the project or, as the case may be, scheme is being executed properly. For this purpose, the National Committee may monitor the execution of project or scheme and call for such information as it deems necessary.

[Form of report by an approved association or institution under clause (ii) of sub-section (4) of section 35AC.

11MA. (1) The report to be furnished by the approved association or institution under clause (ii) of sub-section (4) of section 35AC shall be in Form No. 58C.

(2) The report referred to in sub-rule (1) shall be furnished to the National Committee before the expiry of three months from the end of the financial year.

(3) The National Committee, after receipt of the report referred to in sub-rule (2) may, at any time, undertake to inspect or verify the information furnished by the association or institution.

Form of report by public sector company or local authority or association or institution, which is carrying out a notified eligible project or scheme, under clause (ii) of sub-section (5) of section 35AC.

11MAA. (1) The report to be furnished by a public sector company or local authority or an association or institution in respect of the eligible project or scheme, under clause (ii) of sub-section (5) of section 35AC shall be in Form No. 58D.

(2) The report referred to in sub-rule (1) shall be furnished to the National Committee before the expiry of three months from the end of the financial year.

(3) The National Committee, after receipt of the report referred to in sub-rule (2) may, at any time, undertake to inspect or verify the information furnished by the public sector company or local authority or association or institution.]

Other provisions.

11N. (1) The members of the National Committee shall not be entitled to any remuneration.

 [(2) The members and Chairman of the National Committee shall be entitled to—

 (i)  Sitting fee of Rs.  [3000] per day for attending a meeting of the National Committee or any Subordinate Committee set up by the Chairman of the National Committee. However, sitting fee would not be payable where applications are considered by circulation or when a member is on tour.

(ii)  Reimbursement of actual expenditure incurred by way of travel by rail, road or air, for attending any meeting of the National Committee or its Subordinate Committee. The entitlement of air travel would be restricted to the amount charged by Indian Airlines for its economy class for the members and to the amount charged for the executive class of the Indian Airlines for the Chairman. Members including Chairman may travel by any class on train. Members and Chairman would also be entitled to the reimbursement of [air-conditioned] taxi fare for reaching the venue of the meeting from their place of stay and for going back to the place of stay after the meeting.

(iii)   [***]

 [(iv)  The out-station Chairman or Member may stay and claim reimbursement of rent in any State guest house or for single room in medium range ITDC hotel like Lodi Hotel, Qutab Hotel, Janpath Hotel, Ashoka Yatri Niwas or State Government run tourist hotels/hostels or residential accommodation provided by registered societies like India International Centre or India Habitat Centre. They would separately be entitled for reimbursement of food allowance at the rate of Rs. 500 per day.]

(v)  Members and Chairman would have the same entitlement for travel, boarding and lodging in respect of tours undertaken in pursuance of a decision taken by the National Committee. However, sitting fee would not be admissible while on tour.

(vi)  Sitting fee would not be admissible in case the National Committee takes decisions by circulation of the application alone. Actual postal charges and other expenses incurred by Members and Chairman for circulating the application would be reimbursed.

(vii)  Reimbursement of any other expenditure with the approval of Secretary (Revenue) and the Financial Advisor, Department of Revenue, Ministry of Finance.]

(3) In granting approval to any project or scheme undertaken by a company, the National Committee shall satisfy itself that, where any expenditure is to be incurred in the acquisition or erection of a capital asset, the applicant-company has made adequate arrangements for divesting itself of the ownership of such asset without consideration in cash or otherwise immediately on completion of the eligible project, in the following manner :—

 (i)  in the case of drinking water projects, to individuals belonging to the economically weaker sections or to the local authority or the village panchayat, as the case may be;

(ii)  in the case of dwelling units, to individuals belonging to the economically weaker sections, or to the local authority, village panchayat or an authority constituted under any law for the purpose of satisfying the need for housing accommodation or for the purpose of development or improvement of cities, towns and villages, as the National Committee may decide;

(iii)  in the case of school buildings, to an educational institution existing solely for educational purposes and not for profit or to the State Government, local authority or a village panchayat;

(iv)  in the case of non-conventional or renewable energy systems, to the district administration, local authority, village panchayat or to indivi-duals belonging to the economically weaker sections, or such other statutory body as the National Committee may decide;

(v)  in the case of bridges, public highways or other roads to the Central or the State Government, local authority or such other statutory body as the National Committee may decide;

(vi)  in the case of equipment purchased for the purpose of eligible project or scheme, to the State Government, local authority or such other statutory body as the National Committee may decide having regard to the capacity of the authority concerned to gainfully utilise such equipments;

Note : Where before the completion of any eligible project/scheme, the company undertakes other eligible project(s)/scheme(s) and transfers the equipments to such subsequent project/scheme, the company will be required to divest itself of the ownership of the equipment only after the completion of the last eligible project/scheme.

(vii)  in any other case, to such authority as the National Committee may decide.

(4) Immediately on completion of an eligible project/scheme, the company shall furnish details of the execution thereof to the National Committee. The National Committee shall satisfy itself that the project/scheme has been completed in accordance with the approval granted and that the company has divested itself of the assets in the manner prescribed by the National Committee. If the National Committee is not so satisfied, it may, after giving an opportunity of being heard on the proposed action, order withdrawal of the approval which shall then be deemed never to have been granted.]

 [Certificate of payment or expenditure in respect of eligible projects or schemes notified under section 35AC.

11-O. (1) The certificate referred to in clause (a) of sub-section (2) of section 35AC shall be in Form No. 58A.

(2) The certificate referred to in clause (b) of sub-section (2) of section 35AC shall be in Form No. 58B.

(3) Every public sector company or a local authority or an association or institution, as the case may be, who issues a certificate referred to in sub-rule (1) or sub-rule (2) shall, in respect of the 31st March in each financial year, deliver or cause to be delivered to the Secretary, National Committee, an annual report indicating the progress of work relating to the project/scheme during the year as well as the following information (please specify the information in respect of each contributor separately) :—

 (i)  Names of the contributors and their addresses.

(ii)  Permanent Account Number/G.I.R. Number of the contributors.

(iii)  Amount(s) of contribution.

(iv)  The project/scheme for which contribution was made.

 (v)  Total amount of contribution received during the previous year.

(vi)  Total cost of the project approved by the National Committee (with date of Committee’s approval).

(4) Every public sector company or a local authority or an association or institution, as the case may be, who issues a certificate referred to in sub-rule (1) or sub-rule (2) shall send an annual statement of donation received and the details of the project to the National Committee and to each contributor by 30th June, following the financial year in which the amounts are received.]

 [Guidelines for notification of affordable housing project as specified business under section 35AD.

11-OA. (1) The form and manner in respect of notification of an affordable housing project as a specified business under sub-clause (vii) of clause (c) of sub-section (8) of section 35AD of the Act shall be as follows:—

(a)  the applicant shall apply for notification of the project in Form No. 3CN to Member (IT), Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, North Block, New Delhi;

(b)  if any defect is noticed in the application in Form No. 3CN or if any relevant document is not attached thereto, a deficiency letter may be served on the applicant;

(c)  the applicant shall remove the deficiency within a period of fifteen days from the date of service of the deficiency letter or within such further period which, on an application made in this behalf may be extended;

(d)  if the applicant fails to remove the deficiency within the period so allowed, the Board, if satisfied, may pass an order treating the application as invalid;

(e)  the Board may, before granting approval, call for such documents or information from the applicant as it may consider necessary and may call for further details or information from the applicant as well as from the income-tax authorities and other Departments or agencies, as it may deem fit;

(f)  the Board may issue the notification to be published in the Official Gazette granting approval to the project or for reasons to be recorded in writing, reject the application;

(g)  the Board may withdraw the approval if it is satisfied that the assessee has ceased its activities relating to the specified business or its activities are not genuine or are not being carried out in accordance with all or any of the conditions under this rule;

(h)  no order treating the application as invalid or rejecting the application or withdrawing the approval or cancellation of the notification, shall be passed without giving an opportunity of being heard to the assessee;

(i)  a copy of the order invalidating or rejecting the application or withdrawing the approval shall be communicated to the applicant as well as the Assessing Officer and the Commissioner having jurisdiction over the assessee.

(2) A project shall be considered for notification if it fulfils all of the following conditions, namely: —

(a)  the project shall have prior sanction of the competent authority empowered under the Scheme of Affordable Housing in Partnership framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India;

(b)  the date of commencement of operations of the project shall be on or after the 1st day of April 2011;

(c)  the project shall be on a plot of land which has a minimum area of one acre;

(d)  at least thirty per cent of the total allocable rentable area of the project shall comprise of affordable housing units of EWS category;

(e)  at least sixty per cent of the total allocable rentable area of the project shall comprise of affordable housing units of EWS and LIG categories;

(f)  at least ninety per cent of the total allocable rentable area of the project shall comprise of affordable housing units of EWS, LIG and MIG categories;

(g)  the remaining ten per cent or less of the total allocable rentable area of the project may comprise of other residential or commercial units;

(h)  the layout and specifications including design of the project to be developed and built shall be approved by the State or Union territory Government or its designated implementing agency;

(i)  the project shall be completed within a period of five years from the end of the financial year in which the project is sanctioned by the competent authority empowered under the Scheme of Affordable Housing in Partnership framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India.

(3) The assessee shall maintain separate books of accounts for the project with complete details of all capital expenditure incurred during the previous year on which it intends to claim the said deduction under section 35AD and shall file the relevant income-tax returns by the due date to the Income-tax Department to avail the tax benefit under section 35AD.

(4) A project notified under sub-clause (vii) of clause (c) of sub-section (8) of section 35AD shall continue to be governed by the provisions of this rule to the extent it is not in contravention with the provisions of the Act, as amended from time to time.

(5) In this rule,—

(a)  “affordable housing units” shall be of the following categories:-

Category Rentable Area (in square meters)
 Specified cities Other cities
 Economically Weaker Section (EWS) Up to 25 Up to 30
 Lower Income Group (LIG) Greater than 25 and up to 50 Greater than 30 and up to 60
 Middle Income Group (MIG) Greater than 50 and up to 70 Greater than 60 and up to 85

(b)  “date of commencement of operations” means the date on which the project is sanctioned by the competent authority empowered under the Scheme of Affordable Housing in Partnership framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India;

(c)  “housing unit” means an independent residential unit with separate facilities for living, cooking and sanitary requirements, distinctly separated from other residential units within the building – (i) directly accessible from an outer door or through an interior door in a shared hallway and not by walking through another household’s living space and (ii) excluding any shared dining areas;

(d)  “project” means an affordable housing project;

(e)  “rentable area” means the carpet area at any floor level, including the carpet area of kitchen, pantry, store, lavatory, bathroom, fifty per cent of unglazed verandah and hundred per cent of glazed verandah, in accordance with the provisions of the Indian Standard – Method of Measurement of Plinth, Carpet and rentable Areas of Buildings, IS 3861 : 2002, formulated and published by the Bureau of Indian Standards;

(f)  “specified cities” shall mean the following—

 (i)  Greater Mumbai urban agglomeration;

(ii)  Delhi urban agglomeration;

(iii)  Kolkata urban agglomeration;

(iv)  Chennai urban agglomeration;

(v)  Hyderabad urban agglomeration;

(vi)  Bangalore urban agglomeration;

(vii)  Ahmedabad urban agglomeration;

(viii)  District of Faridabad;

(ix)  District of Gurgaon;

(x)  District of Gautam Budh Nagar;

(xi)  District of Ghaziabad;

(xii)  District of Gandhinagar; and

(xiii)  City of Secunderabad;

Explanation —For the purposes of this clause,—

the area comprising an urban agglomeration shall be the area included in such urban agglomeration on the basis of the latest census;

(g) “total allocable rentable area” means the total rentable area of all the proposed housing units or non-housing units but excluding the areas earmarked for common facilities and services.]

[G.—Tonnage tax scheme for shipping companies

Application for exercising or renewing the option for tonnage tax scheme.

11P. An application under sub-section (1) of section 115VP for exercising an option for the tonnage tax scheme or under sub-section (1) of section 115VR for renewing the option for the tonnage tax scheme, as the case may be, shall be made in Form No. 65 and shall be verified in the manner provided therein.]

 [Computation of deemed tonnage.

11Q. (1) For the purpose of the Explanation to sub-section (4) of section 115VG, deemed tonnage in respect of an arrangement of purchase of slots and slot charter shall be computed (illustrative formula given in Note 3 appearing after the corresponding Form No. 66) on the following basis :

2.5 TEU = 1 Net Tonnage (1 NT)

where TEU is Twenty foot Equivalent Unit (Container of this size)

(2) Computation of deemed tonnage (illustrative formula given in Note 4 appearing after the corresponding Form No. 66) in respect of an arrangement of sharing of break-bulk vessel shall be made on the following basis :

 (i)  in case where cargo is restricted by volume :

19 cubic meter (cbm) = 1 net tonnage (1 NT); and

(ii)  in case where cargo is restricted by weight

14 metric tons = 1 net tonnage (1 NT)

Incidental activities for purposes of relevant shipping income.

11R. The incidental activities (details given in Note 5 appearing after the corresponding Form No. 66) referred to in sub-section (5) of section 115V-I shall be the following, namely :—

 (i)  maritime consultancy charges;

(ii)  income from loading or unloading of cargo;

(iii)  ship management fees or remuneration received for managed vessels; and

(iv)  maritime education or recruitment fees.

Computation of average of net tonnage for charter-in of tonnage.

11S. The limit for charter-in of tonnage of the qualifying ships referred to in section 115VV (to be worked out according to the illustration explained in Note 6 appearing after the corresponding Form No. 66) during any previous year shall be computed by dividing the total number of chartered-in ton days by the total number of ton days operated by the company.

Form of report of an accountant under clause (ii) of section 115VW.

11T. The report of audit of accounts of a qualified company which is required to be furnished under clause (ii) of section 115VW shall be in Form No. 66.]

 [H.—Determination of fair market value of the property other than immovable property

Meaning of expressions used in determination of fair market value.

11U. For the purposes of this rule and rule 11UA,—

 [(a) “accountant” ,—

 (i)  for the purposes of sub-rule (2) of rule 11UA, means a fellow of the Institute of Chartered Accountants of India within the meaning of the Chartered Accountants Act, 1949 (38 of 1949) who is not appointed by the company as an auditor under section 44AB of the Act or under section 224 of the Companies Act, 1956 (1 of 1956); and

(ii)  in any other case, shall have the same meaning as assigned to it in the Explanation below sub-section (2) of section 288 of the Act;

(b)  “balance-sheet”, in relation to any company, means,—

 (i)  for the purposes of sub-rule (2) of rule 11UA, the balance-sheet of such company (including the notes annexed thereto and forming part of the accounts) as drawn up on the valuation date which has been audited by the auditor of the company appointed under section 224 of the Companies Act, 1956 (1 of 1956) and where the balance-sheet on the valuation date is not drawn up, the balance-sheet (including the notes annexed thereto and forming part of the accounts) drawn up as on a date immediately preceding the valuation date which has been approved and adopted in the annual general meeting of the shareholders of the company; and

 (ii)  in any other case, the balance-sheet of such company (including the notes annexed thereto and forming part of the accounts) as drawn up on the valuation date which has been audited by the auditor appointed under section 224 of the Companies Act, 1956 (1 of 1956);]

(c)  “merchant banker” means category I merchant banker registered with Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992);

(d)  “quoted shares or securities” in relation to share or securities means a share or security quoted on any recognized stock exchange with regularity from time to time, where the quotations of such shares or securities are based on current transaction made in the ordinary course of business;

(e)  “recognized stock exchange” shall have the same meaning as assigned to it in clause (f) of section 298 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);

(f)  “registered dealer” means a dealer who is registered under Central Sales Tax Act, 1956 or General Sales Tax Law for the time being in force in any State including value added tax laws;

(g)  “registered valuer” shall have the same meaning as assigned to it in section 34AB of the Wealth-tax Act, 1957 (27 of 1957) read with rule 8A of Wealth-tax Rules, 1957;

(h)  “securities” shall have the same meaning as assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);

(i)  “unquoted shares and securities”, in relation to shares or securities, means shares and securities which is not a quoted shares or securities;

 [(j) “valuation date” means the date on which the property or consideration, as the case may be, is received by the assessee.]

Determination of fair market value.

 [11UA. (1)] For the purposes of section 56 of the Act, the fair market value of a property, other than immovable property, shall be determined in the following manner, namely,—

(a)  valuation of jewellery,—

  (i)  the fair market value of jewellery shall be estimated to be the price which such jewellery would fetch if sold in the open market on the valuation date;

 (ii)  in case the jewellery is received by the way of purchase on the valuation date, from a registered dealer, the invoice value of the jewellery shall be the fair market value;

(iii)  in case the jewellery is received by any other mode and the value of the jewellery exceeds rupees fifty thousand, then assessee may obtain the report of registered valuer in respect of the price it would fetch if sold in the open market on the valuation date;

(b) valuation of archaeological collections, drawings, paintings, sculptures or any work of art,—

  (i)  the fair market value of archaeological collections, drawings, paintings, sculptures or any work of art (hereinafter referred as artistic work) shall be estimated to be price which it would fetch if sold in the open market on the valuation date;

 (ii)  in case the artistic work is received by the way of purchase on the valuation date, from a registered dealer, the invoice value of the artistic work shall be the fair market value;

(iii)  in case the artistic work is received by any other mode and the value of the artistic work exceeds rupees fifty thousand, then assessee may obtain the report of registered valuer in respect of the price it would fetch if sold in the open market on the valuation date;

(c) valuation of shares and securities,—

(a)  the fair market value of quoted shares and securities shall be determined in the following manner, namely,—

(i)  if the quoted shares and securities are received by way of transaction carried out through any recognized stock exchange, the fair market value of such shares and securities shall be the transaction value as recorded in such stock exchange;

(ii)  if such quoted shares and securities are received by way of transaction carried out other than through any recognized stock exchange, the fair market value of such shares and securities shall be,—

(a)  the lowest price of such shares and securities quoted on any recognized stock exchange on the valuation date, and

(b)  the lowest price of such shares and securities on any recognized stock exchange on a date immediately preceding the valuation date when such shares and securities were traded on such stock exchange, in cases where on the valuation date there is no trading in such shares and securities on any recognized stock exchange;

 [(b) the fair market value of unquoted equity shares shall be the value, on the valuation date, of such unquoted equity shares as determined in the following manner, namely:—

the fair market value of unquoted equity shares = (A – L) × (PV),
(PE)

where,

A= book value of the assets in the balance-sheet as reduced by any amount of tax paid as deduction or collection at source or as advance tax payment as reduced by the amount of tax claimed as refund under the Income-tax Act and any amount shown in the balance-sheet as asset including the unamortised amount of deferred expenditure which does not represent the value of any asset;

L= book value of liabilities shown in the balance-sheet, but not including the following amounts, namely :-

 (i)  the paid-up capital in respect of equity shares;

(ii)  the amount set apart for payment of dividends on preference shares and equity shares where such dividends have not been declared before the date of transfer at a general body meeting of the company;

(iii) reserves and surplus, by whatever name called, even if the resulting figure is negative, other than those set apart towards depreciation;

(iv) any amount representing provision for taxation, other than amount of tax paid as deduction or collection at source or as advance tax payment as reduced by the amount of tax claimed as refund under the Income-tax Act, to the extent of the excess over the tax payable with reference to the book profits in accordance with the law applicable thereto;

(v)  any amount representing provisions made for meeting liabilities, other than ascertained liabilities;

(vi) any amount representing contingent liabilities other than arrears of dividends payable in respect of cumulative preference shares;

PE = total amount of paid up equity share capital as shown in the balance-sheet;

PV = the paid up value of such equity shares;

 (c)  the fair market value of unquoted shares and securities other than equity shares in a company which are not listed in any recognized stock exchange shall be estimated to be price it would fetch if sold in the open market on the valuation date and the assessee may obtain a report from a merchant banker or an accountant in respect of such valuation.]

 [(2) Notwithstanding anything contained in sub-clause (b) of clause (c) of sub-rule (1), the fair market value of unquoted equity shares for the purposes of sub-clause (i) of clause (a) of Explanation to clause (viib) of sub-section (2) of section 56 shall be the value, on the valuation date, of such unquoted equity shares as determined in the following manner under clause (a) or clause (b), at the option of the assessee, namely:—

(a) the fair market value of unquoted equity shares = (A – L) × (PV),
(PE)

where,

A= book value of the assets in the balance-sheet as reduced by any amount of tax paid as deduction or collection at source or as advance tax payment as reduced by the amount of tax claimed as refund under the Income-tax Act and any amount shown in the balance-sheet as asset including the unamortised amount of deferred expenditure which does not represent the value of any asset;

L= book value of liabilities shown in the balance-sheet, but not including the following amounts, namely :-

 (i)  the paid-up capital in respect of equity shares;

(ii)  the amount set apart for payment of dividends on preference shares and equity shares where such dividends have not been declared before the date of transfer at a general body meeting of the company;

(iii) reserves and surplus, by whatever name called, even if the resulting figure is negative, other than those set apart towards depreciation;

(iv) any amount representing provision for taxation, other than amount of tax paid as deduction or collection at source or as advance tax payment as reduced by the amount of tax claimed as refund under the Income-tax Act, to the extent of the excess over the tax payable with reference to the book profits in accordance with the law applicable thereto;

(v)  any amount representing provisions made for meeting liabilities, other than ascertained liabilities;

(vi) any amount representing contingent liabilities other than arrears of dividends payable in respect of cumulative preference shares;

PE = total amount of paid up equity share capital as shown in the balance-sheet;

PV = the paid up value of such equity shares; or

(b) the fair market value of the unquoted equity shares determined by a merchant banker or an accountant as per the Discounted Free Cash Flow method.]

PART III

ASSESSMENT PROCEDURE10

[Return of income and return of fringe benefits*.

12. (1) The return of income required to be furnished under sub-section (1) or sub-section (3) or sub-section (4A) or sub-section (4B) or sub-section (4C) or sub-section (4D) of section 139 or clause (i) of sub-section (1) of section 142 or sub-section (1) of section 148 or section 153A 12[***] relating to the assessment year commencing 13[on the 1st day of April,14[2014]] shall,—

15[(a) in the case of a person being an individual where the total income includes income chargeable to income-tax, under the head,—

(i) “Salaries” or income in the nature of family pension as defined in the Explanation to clause (iia) of section 57; or

(ii) “Income from house property”, where assessee does not own more than one house property and does not have any brought forward loss under the head; or

(iii) “Income from other sources, except winnings from lottery or income from race horses 16[and does not have any loss under the head],

be in Form [SAHAJ] (ITR-1) and be verified in the manner indicated therein:]

[Provided that the provisions of this clause shall not apply to a person who,—

(I) is a resident, other than not ordinarily resident in India within the meaning of sub-section (6)* of section 6 and has,—

(i) assets (including financial interest in any entity) located outside India; or

(ii) signing authority in any account located outside India;

(II) has claimed any relief of tax under section 90 or 90A or deduction of tax under section 91; or

(III) has income not chargeable to tax, exceeding five thousand rupees;]

(b) in the case of a person being an individual [not being an individual to whom clause (a) applies] or a Hindu undivided family where the total income does not include any income chargeable to income-tax under the head “Profits or gains of business or profession”, be in Form No. ITR-2 and be verified in the manner indicated therein;

(c) in the case of a person being an individual or a Hindu undivided family who is a partner in a firm and where income chargeable to income-tax under the head “Profits or gains of business or profession” does not include any income except the income by way of any interest, salary, bonus, commission or remuneration, by whatever name called, due to, or received by him from such firm, be in Form No. ITR-3 and be verified in the manner indicated therein;

[(ca) in the case of a person being an individual or a Hindu undivided family deriving business income and such income is computed in accordance with special provisions referred to in section 44AD and section 44AE of the Act for computation of business income, be in Form SUGAM (ITR-4S) and be verified in the manner indicated therein:]

[Provided that the provisions of this clause shall not apply to a person who,—

(I) is a resident, other than not ordinarily resident in India within the meaning of sub-section (6)* of section 6 and has,—

(i) assets (including financial interest in any entity) located outside India; or

(ii) signing authority in any account located outside India;

(II) has claimed any relief of tax under section 90 or 90A or deduction of tax under section 91; or
(III) has income not chargeable to tax, exceeding five thousand rupees;] 
(d) in the case of a person being an individual or a Hindu undivided family other than the individual or Hindu undivided family referred to in clause (a) or clause (b) or clause (c21[or clause (ca)] and deriving income from a proprietory business or profession, be in Form No. ITR-4 and be verified in the manner indicated therein;
(e) in the case of a person not being an individual or a Hindu undivided family or a company or a person to which clause (g) applies, be in Form No. ITR-5 and be verified in the manner indicated therein; 
(f) in the case of a company not being a company to which clause (g) applies, be in Form No. ITR-6 and be verified in the manner indicated therein; 
(g) in the case of a person including a company whether or not registered under section 25 of the Companies Act, 1956 (1 of 1956), required to file a return under sub-section (4A) or sub-section (4B) or sub-section (4C) or sub-section (4D) of section 139, be in Form No. ITR-7 and be verified in the manner indicated therein; 
(h) 22[***] 

23[(2) The return of income required to be furnished in Form SAHAJ (ITR-1) or Form No. ITR-2 or Form No. ITR-3 or Form SUGAM (ITR-4S) or Form No. ITR-4 or Form No. ITR-5 or Form No. ITR-6 23a[or Form No. ITR-7] shall not be accompanied by a statement showing the computation of the tax payable on the basis of the return, or proof of the tax, if any, claimed to have been deducted or collected at source or the advance tax or tax on self-assessment, if any, claimed to have been paid or any document or copy of any account or form or report of audit required to be attached with the return of income under any of the provisions of the Act:]

23b[Provided that where an assessee is required to furnish a report of audit specified under sub-clause (iv), (v), (vi) or (via) of clause (23C) of section 10, section 10A 23bb[, section 10AA], clause (b) of sub-section (1) of section 12A, section 44AB 23bc[, section 44DA, section 50B], section 80-IA, section 80-IB, section 80-IC, section 80-ID, section 80JJAA, section 80LA, section 92E, 23bd[section 115JB or section 115VW ]23c[or to give a notice under clause (a) of sub-section (2) of section 11] of the Act, he shall furnish the same electronically.]

(3) The return of income 24[***] referred to in sub-rule (1) may be furnished in any of the following manners, namely:—

(i) furnishing the return in a paper form;

(ii) furnishing the return electronically under digital signature;

(iii) transmitting the data in the return electronically and thereafter submitting the verification of the return in Form ITR-V25;

(iv) furnishing a bar-coded return in a paper form:

Provided that-

26[(a[a person, other than a company and a person required to furnish the return in Form ITR-7], if his or its total income, or the total income in respect of which he is or it is assessable under the Act during the previous year, exceeds 26b[fivelakh rupees, shall furnish the return for the assessment year 26c[2013-14] and subsequent assessment years in the manner specified in clause (ii) or clause (iii);

(aa) an individual or a Hindu undivided family, being a resident, 27[other than not ordinarily resident in India within the meaning of sub-section (6)* of section 6] having assets (including financial interest in any entity) located outside India or signing authority in any account located outside India and required to furnish the return in Form ITR-2 or ITR-3 or ITR-4, as the case may be, shall furnish the return for assessment year 2012-13 and subsequent assessment years in the manner specified in clause (ii) or clause (iii);]

28[29[(aaa)a firm required to furnish the return in Form ITR-5 or an individual or Hindu Undivided Family (HUF) required to furnish the return in Form ITR-4 and to whom provisions of section 44AB are applicable, shall furnish the return for assessment year 2011-12 and subsequent assessment years in the manner specified in clause (ii);]

29a[(aaba person claiming any relief of tax under section 90 or 90A or deduction of tax under section 91 of the Act, other than a person to whom clause (aaa) or clause (ab) is applicable, shall furnish the return for assessment year 2013-14 and subsequent assessment years in the manner specified in clause (ii) or clause (iii);]

29b[(aaca person required to furnish the return in Form ITR-5, other than a firm to which clause (aaa) is applicable, shall furnish the return for the assessment year 2014-15 and subsequent assessment years in the manner specified in clause (ii) or clause (iii);]

30[(ab) a company required to furnish the return in Form ITR-6 shall furnish the return for assessment year 2010-11 and subsequent assessment years in the manner specified in clause (ii);]

30a[(b) a person required to furnish the return in Form ITR-7 shall furnish the return for assessment year 2014-15 and subsequent assessment years,—

(A) in case it is furnished under sub-section (4B) of section 139, in the manner specified in clause (ii);

(B) in other cases, in the manner specified in clause (i) or clause (ii) or clause (iii):]

30b[Provided further that a person who is required to furnish any report of audit referred to in proviso to sub-rule (2) electronically, other than a person to whom clause (aaa) or clause (ab) of the first proviso is applicable, shall furnish the return, in Form as applicable to him, in the manner specified in clause (ii) or clause (iii).]

(4) The Director-General of Income-tax (Systems) shall specify the procedures, formats and standards for ensuring secure capture and transmission of data and shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to furnishing the returns in the manners specified in clauses (ii), (iii) and (iv) of sub-rule (3) 30c[and the report of audit 30d[or notice] in the manner specified in proviso to sub-rule (2)].

(5) Where a return of income 31[***] relates to the assessment year commencing on the 1st day of April, 32[2013] or any earlier assessment year, it shall be furnished in the appropriate form as applicable in that assessment year.]


10. See also Circular Nos. 3/2007, dated 25-5-2007; 5/2007, dated 26-7-2007; Circular No. 6/2008, dated 18-7-2008; Circular No. 8/2008, dated 22-9-2008; Instruction No. 14/2008, dated 1-10-2008; Circular No. 3/2009, dated 21-5-2009 and Circular No. 6/2012, dated 3-8-2012.

For details, see Taxmann’s Master Guide to Income-tax Rules.

11. Substituted by the IT (Fourth Amdt.) Rules, 2007, w.e.f. 14-5-2007. Prior to its substitution, rule 12 was amended by the IT (Seventh Amdt.) Rules, 2006, w.e.f. 24-7-2006, IT (Eleventh Amdt.) Rules, 2006, w.e.f. 19-10-2006, IT (Fifth Amdt.) Rules, 2006, w.e.f. 1-6-2006, IT (Fifth Amdt.) Rules, 2004, w.e.f. 1-4-2004, IT (Sixth Amdt.) Rules, 2003, w.e.f. 14-5-2003, IT (First Amdt.) Rules, 2003, w.e.f. 28-1-2003 [as corrected by Notification No. SO 258(E), dated 5-3-2003], IT (Thirteenth Amdt.) Rules, 2002, w.e.f. 24-6-2002, IT (Tenth Amdt.) Rules, 2001, w.e.f. 2-7-2001, IT (Thirteenth Amdt.) Rules, 1998, w.e.f. 9-9-1998, IT (Fourth Amdt.) Rules, 1998, w.e.f. 1-4-1998, IT (Eighth Amdt.) Rules, 1997, w.e.f. 27-6-1997 [as corrected by Notification No. SO 870(E), dated 15-12-1997], IT (Sixteenth Amdt.) Rules, 1995, w.e.f. 23-8-1995, IT (Fourth Amdt.) Rules, 1995, w.e.f. 1-6-1995, IT (Third Amdt.) Rules, 1994, w.e.f. 1-6-1994, IT (Eighth Amdt.) Rules, 1991, w.r.e.f. 1-4-1989, IT (Amdt.) Rules, 1981, w.e.f. 1-4-1981, IT (Second Amdt.) Rules, 1979, w.e.f. 1-4-1979, IT (Fifth Amdt.) Rules, 1976, w.e.f. 21-6-1976, IT (Amdt.) Rules, 1976, w.e.f. 1-4-1976, IT (Second Amdt.) Rules, 1972, IT (Amdt.) Rules, 1971, IT (Amdt.) Rules, 1968, IT (Second Amdt.) Rules, 1967, IT (Third Amdt.) Rules, 1964 and IT (Amdt.) Rules, 1962.

*Words “and return of fringe benefits” should be omitted.

12. Words “or the return of fringe benefits required to be furnished under sub-section (1) or sub-section (2) of section 115WD” omitted by the IT (Third Amdt.) Rules, 2011, w.r.e.f. 1-4-2011.

13. Substituted for “on the 1st day of April, 2007 or any subsequent assessment year” by the IT (Sixth Amdt.) Rules, 2008, w.e.f. 1-4-2008.

14. Substituted for “2013” by the IT (Fourth Amendment) Rules, 2014, w.e.f. 1-4-2014. Prior to its substitution “2013” was substituted for “2012” by the IT (Third Amendment) Rules, 2013, w.r.e.f. 1-4-2013. Prior thereto, the quoted figure was substituted for “2011” by the IT (Third Amendment) Rules, 2012, w.e.f. 1-4-2012, “2011” was substituted for “2010” by the IT (Third Amendment) Rules, 2011, w.r.e.f. 1-4-2011, “2010” was substituted for “2009” by the IT (Third Amendment)/(Fourth Amendment) Rules, 2010, w.r.e.f. 1-4-2010 and “2009” was substituted for “2008” by the IT (Ninth Amendment) Rules, 2009, w.e.f. 1-4-2009.

15. Substituted by the IT (Fourth Amdt.) Rules, 2010, w.r.e.f. 1-4-2010.

16. Inserted by the IT (Third Amdt.) Rules, 2013, w.r.e.f. 1-4-2013.

17. Substituted for “SARAL-II” by the IT (Third Amdt.) Rules, 2011, w.r.e.f. 1-4-2011.

18. Substituted by the IT (Third Amdt.) Rules, 2013, w.r.e.f. 1-4-2013. Prior to its substitution, proviso, as amended by the IT (Seventh Amdt.) Rules, 2012, w.e.f. 2-7-2012 and IT (Third Amdt.) Rules, 2012, w.e.f. 1-4-2012, read as under:

Provided that the provisions of this clause shall not apply to a person who is a resident, other than not ordinarily resident in India within the meaning of sub-section (6)* of section 6 and has,—

(i) assets (including financial interest in any entity) located outside India; or
(ii) signing authority in any account located outside India;”

*Should be read as clause (6).

19. Inserted by the IT (Third Amdt.) Rules, 2011, w.r.e.f. 1-4-2011.

20. Substituted by the IT (Third Amdt.) Rules, 2013, w.r.e.f. 1-4-2013. Prior to its substitution, proviso, as amended by the IT (Seventh Amdt.) Rules, 2012, w.e.f. 2-7-2012 and IT (Third Amdt.) Rules, 2012, w.e.f. 1-4-2012, read as under:

Provided that the provisions of this clause shall not apply to a person who is a resident, other than not ordinarily resident in India within the meaning of sub-section (6)* of section 6and has,—

(i) assets (including financial interest in any entity) located outside India; or
(ii) signing authority in any account located outside India.”

21. Inserted by the IT (Third Amdt.) Rules, 2011, w.r.e.f. 1-4-2011.

*Should be read as ‘clause (6)’.

22. Omitted by the IT (Third Amdt.) Rules, 2011, w.r.e.f. 1-4-2011.

23. Substituted by the IT (Third Amdt.) Rules, 2011, w.r.e.f. 1-4-2011. Earlier, sub-rule (2) was amended by the IT (Fourth Amdt.) Rules, 2010, w.r.e.f. 1-4-2010.

23a. Inserted by the IT (Seventh Amdt.) Rules, 2013, w.r.e.f. 1-4-2013.

23b. Substituted by the IT (Seventh Amdt.) Rules, 2013, w.r.e.f. 1-4-2013. Prior to its substitution, proviso, as inserted by the IT (Third Amdt.) Rules, 2013, w.r.e.f. 1-4-2013, read as under :

Provided that where an assessee is required to furnish a report of audit under section 44AB, 92E or 115JB of the Act, he shall furnish the same electronically.”

23bb. Inserted by the IT (Sixth Amendment) Rules, 2014, w.r.e.f. 1-4-2014.

23bc. Inserted by the IT (Sixth Amendment) Rules, 2014, w.r.e.f. 1-4-2014.

23bd. Substituted for “or section 115JB” by the IT (Sixth Amendment) Rules, 2014, w.r.e.f. 1-4-2014.

23c. Inserted by the IT (Fourth Amendment) Rules, 2014, w.e.f. 1-4-2014.

24. Words “or return of fringe benefits” omitted by the IT (Third Amdt.) Rules, 2011, w.r.e.f. 1-4-2011.

25. See Centralised Processing of Return Scheme, 2011.

26. Inserted by the IT (Third Amdt.) Rules, 2012, w.e.f. 1-4-2012.

26a. Substituted for “an individual or a Hindu undivided family” by the IT (Third Amdt.) Rules, 2013, w.r.e.f. 1-4-2013.

26b. Substituted for “ten” by the IT (Third Amdt.) Rules, 2013, w.r.e.f. 1-4-2013.

26c. Substituted for “2012-13” by the IT (Third Amdt.) Rules, 2013, w.r.e.f. 1-4-2013.

27. Inserted by the IT (Seventh Amdt.) Rules, 2012, w.e.f. 2-7-2012.

*Should be read as ‘clause (6)’.

28. Clause (a) substituted for clauses (a) and (aa) by the IT (Sixth Amdt.) Rules, 2011, w.e.f. 1-7-2011. Earlier, clauses (a) and (aa) were amended by the IT (Seventh Amdt.) Rules, 2010, w.e.f. 9-7-2010.

29. Clause (a) renumbered as clause (aaa) by the IT (Third Amdt.) Rules, 2012, w.e.f. 1-4-2012.

29a. Substituted by the IT (Seventh Amdt.) Rules, 2013, w.r.e.f. 1-4-2013. Prior to its substitution, clause (aab), as inserted by the IT (Third Amdt.) Rules, 2013, w.r.e.f. 1-4-2013, read as under:

“(aab) a person claiming any relief of tax under section 90 or 90A or deduction of tax under section 91 of the Act, shall furnish the return for assessment year 2013-14 and subsequent assessment years in the manner specified in clause (ii) or clause (iii);”

29b. Inserted by the IT (Fourth Amendment) Rules, 2014, w.e.f. 1-4-2014.

30. Inserted by the IT (Seventh Amdt.) Rules, 2010, w.e.f. 9-7-2010.29b. Inserted by the IT (Fourth Amendment) Rules, 2014, w.e.f. 1-4-2014.

30a. Substituted by the IT (Fourth Amendment) Rules, 2014, w.e.f. 1-4-2014. Prior to its substitution, clause (b), as amended by the IT (Third Amendment) Rules, 2013, w.r.e.f. 1-4-2013, read as under :

“(b) a person required to furnish the return in Form ITR-7 shall furnish the return in the manner specified in clause (i) or clause (ii) or clause (iii).”

30b. Inserted by the IT (Seventh Amdt.) Rules, 2013, w.r.e.f. 1-4-2013.

30c. Inserted by the IT (Third Amdt.) Rules, 2013, w.r.e.f. 1-4-2013.

30d. Inserted by the IT (Fourth Amendment) Rules, 2014, w.e.f. 1-4-2014.

31. Words “or return of fringe benefits,” omitted by the IT (Third Amdt.) Rules, 2011, w.r.e.f. 1-4-2011.

32. Substituted for “2012” by the the IT (Fourth Amendment) Rules, 2014, w.e.f. 1-4-2014. Prior to its substitution “2012” was substituted for “2011” by the IT (Third Amendment) Rules, 2013, w.r.e.f. 1-4-2013 was substituted for “2010” by the IT (Third Amdt.) Rules, 2012, w.e.f. 1-4-2012, “2010” was substituted for “2009” by the IT (Third Amdt.) Rules, 2011, w.r.e.f. 1-4-2011, “2009” was substituted for “2008” by the IT (Third Amdt.)/(Fourth Amdt.) Rules, 2010, w.r.e.f. 1-4-2010, “2008” was substituted for “2007” by the IT (Ninth Amdt.) Rules, 2009, w.e.f. 1-4-2009 and “2007” was substituted for “2006” by the IT (Sixth Amdt.) Rules, 2008, w.e.f. 1-4-2008.

 [Preparation of return by authorised representative.

12A. Every authorised representative of an assessee, being an authorised representative specified in clause (iii) or clause (iv) or clause (v) or clause (vi) or clause (vii) of sub-section (2) of section 288, who has prepared the return of income furnished by the assessee shall, either before making an appearance before the  [Assessing Officer] having jurisdiction to assess that assessee, or immediately after making such appearance, furnish to that officer—

(a)  particulars of accounts, statements or other documents supplied to him by the assessee for the preparation of the return of income; and

(b)  where the authorised representative has for the purpose of preparation of the return of income carried out any examination of such accounts, statements or documents, a report on the scope and results of such examination.]

 [Statement under sub-section (3A) of section 115R.

12B. (1) The statement of income distributed shall be furnished as provided in sub-rules (2) and (3) to,—

(i)  the Assessing Officer so designated by the Chief Commissioner or Commissioner of Income-tax, within whose area of jurisdiction, the principal office of the Unit Trust of India or the concerned Mutual Fund is situated;

(ii)  in any other case, to the Assessing Officer within whose area of jurisdiction, the principal office of the Unit Trust of India or the concerned Mutual Fund is situated.

(2) The statement of distributed income which is to be furnished under sub-section (3A) of section 115R by the Unit Trust of India shall be in Form No. 63, duly verified by an accountant in the manner indicated therein.

(3) The statement of distributed income which is to be furnished under sub-section (3A) of section 115R by a Mutual Fund shall be in Form No. 63A, duly verified by an accountant in the manner indicated therein.]

 [Statement under sub-section (3) of section 115TA.

12BA. (1) The statement of income distributed by the securitisation trust shall be furnished as provided in sub-rule (2) to

(i) the Assessing Officer so designated by the Chief Commissioner or Commissioner of Income-tax, within whose area of jurisdiction, the principal office of the securitisation trust is situated;

(ii) in any other case, to the Assessing Officer within whose area of jurisdiction, the principal office of the securitisation trust is situated.

(2) The statement of distributed income which is to be furnished under sub-section (3) of section 115TA by the securitisation trust shall be in Form No. 63AA, duly verified by an accountant in the manner indicated therein.]

 [Statement under sub-section (2) of section 115U.

12C. (1) The statement of income paid or credited shall be furnished by the 30th November of the financial year following the previous year during which such income is paid or credited, to the Chief Commissioner or Commissioner of Income-tax, within whose jurisdiction, the principal office of the Venture Capital Company or the Venture Capital Fund, as the case may be, is situated.

(2) The statement of income paid or credited which is to be furnished under sub-section (2) of section 115U by the Venture Capital Company or the Venture Capital Fund, as the case may be, shall be in Form No. 64, duly verified by an accountant in the manner indicated therein and shall be furnished electronically under digital signature.

(3) The Director General of Income-tax (Systems) shall specify the procedure for filing of Form No. 64 and shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to the statements so furnished.]

Prescribed authority under section 133C

12D. The prescribed authority under section 133C shall be the principal director general or director general or principal director or director, as the case may be.

Explanation- For the purposes of this rule, “Principal director general or director general or principal director or director” means the principal director general of income tax or director general of income tax or the principal director of income tax or the director of income tax to whom the CBDT may authorise to act as prescribed authority for the purpose of section 133C.

Application for extension of time for filing return of income.

13. [Omitted by the IT (Fifth Amdt.) Rules, 1989, w.e.f. 18-5-1989.]

Form of verification under section 142.

14. The information which a person is required by the  [Assessing Officer] to furnish under clause (ii) of sub-section (1) of section 142 shall be verified in the following manner, namely :—

“I declare that to the best of my knowledge and belief, the information furnished in the statement/statements is correct and complete and other particulars shown therein are truly stated.”

 [Form of audit report under section 142(2A).

14A. The report of audit of the accounts of an assessee which is required to be furnished under sub-section (2A) of section 142 shall be in Form No. 6B.]

 [Guidelines for the purposes of determining expenses for audit.

14B. (1) Every Chief Commissioner shall maintain a panel of accountants, out of the persons referred to in the Explanation to sub-section (2) of section 288, for the purposes of sub-section (2A) of section 142.

(2) Where the Assessing Officer directs for audit under sub-section (2A) of section 142 on or after the 1st day of June, 2007, the expenses of, and incidental to, audit (including the remuneration of the Accountant, qualified Assistants, semi-qualified and other Assistants who may be engaged by such Accountant) shall not be less than rupees three thousand seven hundred and fifty and not more than rupees seven thousand and five hundred for every hour of the period as specified by the Assessing Officer under sub-section (2C) of section 142.

(3) The period referred to in sub-rule (2) shall be specified in terms of the number of hours required for completing the report.

(4) The Accountant referred to in sub-section (2A) of section 142 shall maintain a time-sheet and shall submit it to the Chief Commissioner or Commissioner, along with the bill.

(5) The Chief Commissioner or the Commissioner shall ensure that the number of hours claimed for billing purposes is commensurate with the size and quality of the report submitted by the Accountant.]

Notice of demand for regular assessment, etc.

15. (1) Subject to the provisions of  [rules  [* * *] 38 and 48A], the notice of demand under section 156 shall be in Form No. 7.

(2) [Omitted by the IT (Third Amdt.) Rules, 1964.]

 [PART IIIA

AVOIDANCE OF REPETITIVE APPEALS

Declaration under section 158A.

16. (1) The declaration referred to in sub-section (1) of section 158A shall be in Form No. 8 and shall be verified in the manner indicated therein.

(2) The declaration and the verification referred to in sub-rule (1) shall be signed by the person specified in sub-rule (2) of rule 45.

(3) The declaration referred to in sub-rule (1) shall,—

(a)  in a case where it is furnished to the  [Deputy Commissioner (Appeals)] or the Commissioner (Appeals), be in duplicate, and

(b)  in a case where it is furnished to the Appellate Tribunal, be in triplicate.]

PART IV

TAX EXEMPTIONS  [AND RELIEFS]

[Prescribed authority for approving any institution or body established for scientific research.

16A. For the purposes of sub-clause (viia) of clause (6) of section 10, the “prescribed authority” shall be the Secretary, Department of  [Scientific and Industrial Research], Government of India :

Provided that every case pending on or before the 1st day of June, 1982, with any authority, other than the said Secretary, shall stand transferred to the said Secretary for disposal.]

 [Prescribed authority for the purposes of clauses (8A) and (8B) of section 10.

16B. For the purposes of clauses (8A) and (8B) of section 10, the “prescribed authority” shall be the Additional Secretary, Department of Economic Affairs in the Ministry of Finance, Government of India in concurrence with Member (Income-tax) of the Board.]

[Requirements for approval of a fund under section 10(23AAA).

16C. (1) The fund shall be formed under a trust and it shall be evidenced by a trust deed.

(2) The contributions to the fund are to be made by the employees by way of periodical subscription.

(3) The application for approval of any fund under clause (23AAA) of section 10 shall be made in Form No. 9 to the Commissioner having jurisdiction over the area or territory in which the accounts are kept and such application shall be accompanied by the documents mentioned therein.

(4) Where the Commissioner is satisfied that all the conditions laid down in clause (23AAA) of section 10 are fulfilled in the case of the fund, he shall record such satisfaction in writing and grant approval to the fund specifying the assessment year or years for which the approval is valid so however that such approval shall, at one time, have effect for such assessment year or years not exceeding three assessment years.

(5) Where the Commissioner is satisfied that one or more of the conditions laid down in clause (23AAA) of section 10 are not fulfilled, he shall reject the application for approval, after recording the reasons for such rejection in writing :

Provided that no order of rejection of an application shall be passed without giving an opportunity of being heard.]

Form of report of audit prescribed under tenth proviso to section 10(23C).

 [16CC. The report of audit of the accounts of a fund or trust or institution or any university or other educational institution or any hospital or other medical institution which is required to be furnished under the tenth proviso to clause (23C) of section 10 shall be in Form No. 10BB.]

 [Form of report for claiming deduction under section 10A.

16D. The report of an accountant which is required to be furnished by the assessee along with the return of income, under sub-section (5) of section 10A shall be in Form No. 56F.]

 [Form of particulars to be furnished along with return of income for claiming deduction under clause (b) of sub-section (1B) of section 10A.

16DD. The particulars, which are required to be furnished by the assessee along with the return of income under clause (b) of sub-section (1B) of section 10A shall be in Form No. 56FF.]

 [Form of report for claiming deduction under section 10B.

16E. The report of an accountant which is required to be furnished by the assessee along with the return of income, under sub-section (5) of section 10B shall be in Form No. 56G.]

 [Form of report for claiming deduction under section 10BA.

16F. The report of an accountant which is required to be furnished by the assessee along with the return of income, under sub-section (5) of section 10BA shall be in Form No. 56H.]

 [Notice for accumulation of income by charitable or religious trust or institution or association referred to in clauses (21) and (23) of section 10.

17. The notice to be given to the Assessing Officer or the prescribed authority under sub-section (2) of section 11 or under the said provision as applicable under clause (21) or clause (23) of section 10 shall be in Form No. 10 and shall be delivered before the expiry of the time allowed under sub-section (1) of section 139, for furnishing the return of income.]

 [Application for registration of charitable or religious trusts, etc.

17A. An application under  [clause (aa) of sub-section (1)] of section 12A for registration of a charitable or religious trust or institution shall be made in duplicate in Form No. 10A and shall be accompanied by the following documents, namely :—

(a)  where the trust is created, or the institution is established, under an instrument, the instrument in original, together with one copy thereof; and where the trust is created, or the institution is established, otherwise than under an instrument, the document evidencing the creation of the trust or the establishment of the institution, together with one copy thereof :

Provided that if the instrument or document in original cannot conveniently be produced, it shall be open to the [ [***] Commissioner] to accept a certified copy in lieu of the original;

(b) where the trust or institution has been in existence during any year or years, prior to the financial year in which the application for registration is made, two copies of the accounts of the trust or institution relating to such prior year or years (not being more than three years immediately preceding the year in which the said application is made) for which such accounts have been made up.]

[Audit report in the case of charitable or religious trusts, etc.

17B. The report of audit of the accounts of a trust or institution which is required to be furnished under clause (b) of section 12A, shall be in Form No. 10B.]

[Forms or modes of investment or deposits by a charitable or religious trust or institution.

17C.  The forms and modes of investment or deposits under clause (xii) of sub-section (5) of section 11 shall be the following, namely :—

(i)   investment in the units issued under any scheme of the mutual fund referred to in clause (23D) of section 10 of the Income-tax Act, 1961;

 [* * *]

(ii)  any transfer of deposits to the Public Account of India;]

[(iii)  deposits made with an authority constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both;]

[(iv)  investment by way of acquiring equity shares of a depository as defined in clause (e) of sub-section (1) of section 2of the Depositories Act, 1996 (22 of 1996);]

[(v)  investment made by a recognised stock exchange referred to in clause (f) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) (hereafter referred to as investor) in the equity share capital of a company (hereafter referred to as investee)—

(A)  which is engaged in dealing with securities or mainly associated with the securities market;

(B)  whose main object is to acquire the membership of another recognised stock exchange for the sole purpose of facilitating the members of the investor to trade on the said stock exchange through the investee in accordance with the directions or guidelines issued under the Securities and Exchange Board of India Act, 1992 (15 of 1992) by the Securities and Exchange Board of India established under section 3 of that Act; and

(C)  in which at least fifty-one per cent of equity shares are held by the investor and the balance equity shares are held by members of such investor;]

 [(vi)  investment by way of acquiring equity shares of an incubatee by an incubator.

Explanation.— For the purposes of this clause,—

(a)  “incubatee” shall mean such incubatee as may be notified by the Government of India in the Ministry of Science and Technology;

(b)  “incubator” shall mean such Technology Business Incubator or Science and Technology Entrepreneurship Park as may be notified by the Government of India in the Ministry of Science and Techno-logy;]

 [(vii)  investment by way of acquiring shares of National Skill Development Corporation.]

 [(viii) investment in debt instruments issued by any infrastructure Finance Company registered with the Reserve Bank of India.]

 [Functions of electoral trusts.

17CA. (1) The functions of an electoral trust referred to in section 13B shall be as provided in this rule.

(2) The electoral trust may receive voluntary contributions from —

(a)  an individual who is a citizen of India;

(b)  a company which is registered in India; and

(c)  a firm or Hindu undivided family or an Association of persons or a body of individuals, resident in India.

(3) A receipt indicating the following shall be issued by the trust immediately on receipt of any contribution indicating the following:—

(a)  name and address of the contributor;

(b)  Permanent account number of the contributor or passport number in the case of a citizen who is not a resident;

(c)  amount and mode of contribution including name and branch of the Bank and date of receipt of such contribution;

(d)  name of the electoral trust;

(e)  Permanent account number of the electoral trust;

(f)  date and number of approval by the prescribed authority; and

(g) Name and designation of the person issuing the receipt.

(4) The electoral trust shall not accept contributions—

(a)  from an individual who is not a citizen of India or from any foreign entity whether incorporated or not; and

(b)  from any other electoral trust which has been registered as a company under section 25 of the Companies Act, 1956 (1 of 1956) and approved as an electoral trust under the Electoral Trusts Scheme, 2013.

(5) The electoral trust shall accept contributions only by way of an account payee cheque drawn on a bank or account payee bank draft or by electronic transfer to its bank account and shall not accept any contribution in cash.

(6) The electoral trust shall not accept any contribution without the permanent account number of the contributor, who is a resident and the passport number in the case of a citizen of India, who is not a resident.

(7) A political party registered under section 29A of the Representation of the People Act, 1951 (43 of 1951) shall be an eligible political party and an electoral trust shall distribute funds only to the eligible political parties.

(8) (i) The electoral trust may, for the purposes of managing its affairs, spend up to five per cent of the total contributions received in a year subject to an aggregate limit of rupees five hundred thousand in the first year of incorporation and rupees three hundred thousand in subsequent years;

(ii) the total contributions received in any financial year along with the surplus from any earlier financial year, if any, as reduced by the amount spent on managing its affairs, shall be the distributable contributions for the financial year;

(iii) an electoral trust shall be required to distribute the distributable contributions received in a financial year, referred to in item (ii), to the eligible political parties before the 31st day of March of the said financial year, subject to the condition that at least ninety five per cent of the total contributions received during the financial year along with the surplus brought forward from earlier financial year, if any, are distributed.

(9) The trust shall obtain a receipt from the eligible political party indicating the name of the political party, its permanent account number, registration number, amount of fund received from the trust, date of the receipt and name and designation of person signing such receipt.

(10) The electoral trust shall not utilize any contributions for the direct or indirect benefit of the members or contributors, or for any of the following persons, namely:—

(a)  the members (including members of its Executive Committee, Governing Committee or Board of Directors) of the electoral trust;

(b)  any relative of such Members;

(c)  where such member or contributor is a Hindu undivided family, a member of that Hindu undivided family;

(d)  any person who has made a contribution to the trust;

(e)  any person referred to in sub-section (3) of section 13 of the Act; and

(f)  any concern in which any of the persons referred to in clauses (a), (b), (c), (d) and (e) has a substantial interest.

(11) (i) An electoral trust shall keep and maintain such books of account and other documents in respect of its receipts, distributions and expenditure as may enable the computation of its total income in accordance with the provisions of the Act;

(ii) The electoral trust shall also maintain a list of persons from whom contributions have been received and to whom the same have been distributed, containing the name, address and permanent account number of each such person along with the details of the amount and mode of its payment including the name and branch of the bank.

(12) Every electoral trust shall get its accounts audited by an accountant as defined in the Explanation below sub-section (2) of section 288 and furnish the audit report in Form No. 10BC along with particulars forming part of its Annexure, to the Commissioner of Income-tax or the Director of Income-tax, as the case may be, having jurisdiction over the electoral trust, on or before the due date specified for furnishing the return of income by a company under section 139.

(13) An electoral trust shall maintain a regular record of proceedings of all meetings and decisions taken therein.

(14) Every electoral trust shall furnish a certified copy of list of contributors and a list of political parties, to whom sums were distributed in the manner prescribed in sub-rule (8), to the Commissioner of Income-tax or the Director of Income-tax, as the case may be, every year along with the audit report as stipulated under sub-rule (12).

(15) Any change in the shareholders, subsequent to the approval granted under the Electoral Trusts Scheme, 2013 shall be intimated to the Board within thirty days of such change.]

[Prescribed foreign projects for the purposes of deduction in respect of profits and gains from projects outside India under section 80HHB.

17D. For the purposes of sub-clause (iii) of clause (b) of sub-section (2) of section 80HHB, any project for execution of work of exploration, exploitation, development and production of hydrocarbons outside India shall be a foreign project.]

Accommodation and amenities to be provided by hotels.

18. [Omitted by the IT (Third Amdt.) Rules, 1973, w.e.f. 1-4-1974. Prior to its omission, original rule 18 was amended by the IT (Third Amdt.) Rules, 1964/1967 and IT (Second Amdt.) Rules, 1968.]

Prescribed authority to certify the daily average number of rehabilitated employees in an industrial undertaking.

18A. [Omitted by the IT (Third Amdt.) Rules, 1976, w.e.f. 1-4-1976. Original rule 18A was inserted by the IT (Fourth Amdt.) Rules, 1968 and later amended by the IT (Second/Third Amdt.) Rules, 1970.]

Prescribed authority for approval of a hotel under section 80CC.

18AA. [Omitted by the IT (Fifth Amdt.) Rules, 1996, w.r.e.f. 1-4-1993.]

 [Prescribed authority for approval of a University or any educational institution of national eminence for the purpose of section 80G.

18AAA. For the purpose of sub-clause (iiif) of clause (a) of sub-section (2) of section 80G, the prescribed authority,—

(a)  in relation to a university or any non-technical institution of national eminence, shall be the Director General (Income-tax Exemptions), who shall grant approval with the concurrence of the Secretary, University Grants Commission;

(b)  in relation to any technical institution of national eminence, shall be the Director General (Income-tax Exemptions) who shall grant approval with the concurrence of the Secretary, All India Council of Technical Education.

Explanation : For the purposes of this rule,—

(1)  “All India Council of Technical Education” means the All India Council of Technical Education established under section 3 of the All India Council for Technical Education Act, 1987 (52 of 1987);

(2)  “University Grants Commission” means the University Grants Commission established under section 4 of the University Grants Commission Act, 1956 (3 of 1956).]

[Prescribed authority for the purpose of receiving separate accounts from trusts or funds or institutions for providing relief to the victims of earthquake in Gujarat.

18AAAA. (1) For the purpose of sub-section (5C) of section 80G, the prescribed authority shall be the Director General of Income-tax (Exemptions).

(2) The trust, the fund or the institution, which is established in India for a charitable purpose and is approved in terms of clause (vi) of sub-section (5) shall maintain separate accounts of income and expenditure for providing relief to the victims of earthquake in Gujarat and get such accounts audited by an accountant, as defined in the Explanation to sub-section (2) of section 288 and furnish the report of such audit, duly signed and verified by such accountant to the Director General of Income-tax (Exemptions) in Form No. 10AA. Such authority, on receipt of the accounts in the said form, shall give the finding as to whether the donations received for the purpose of providing relief to the victims of earthquake in Gujarat are chargeable to tax in the hands of the trusts or the fund or the institution under clause (23C) of section 10 or under section 12 or not, as the case may be, and determine the extent thereof.

(3) Where the findings of the Director General of Income-tax (Exemptions) are not beneficial to the assessee, such authority shall give an opportunity to the assessee before making the findings.

(4) The Director General of Income-tax (Exemptions) shall bring his findings to the knowledge of the concerned Assessing Officer within one month of making such findings.]

[Guidelines for specifying an association or institution for the purposes of notification under clause (c) of sub-section (2) of section 80G.

18AAAAA. In specifying an association or institution for notification under clause (c) of sub-section (2) of section 80G, the Central Government shall satisfy itself that,—

(a)  the association or institution has as its object the control, supervision, regulation or encouragement in India of the games or sports notified under Explanation 4 to section 80G;

(b)  the association or institution has a proven record of its dedication towards development of infrastructure of sports or games or promotion of sports or games for at least a period of three years;

(c)  the association or institution does not distribute any part of its income in any manner to its members except as grants to any association or institution affiliated to it;

(d)  the association or institution applies the amount received by way of donation referred to in clause (c) of sub-section (2) of section 80G for purposes of development of infrastructure for games or sports in India or for sponsoring of games or sports in India;

(e)  the association or institution maintains regular accounts of its receipt and expenditure;

(f)  the association or institution files its return of income regularly;

(g)  the notification issued by the Central Government under clause (c) of sub-section (2) of section 80G shall have effect in relation to the assessment year or years, not exceeding three assessment years (including an assessment year or years commencing before the date on which such notification is issued), as may be specified in such notification.]

[Prescribed authority for approval of companies engaged in Scientific and Industrial Research and Development for the purposes of section 80-IA.

18AAB. For the purposes of sub-section (4B) of section 80-IA, the prescribed authority shall be the Secretary, Department of Scientific and Industrial Research, Ministry of Science and Technology, Government of India.]

 [Form of audit report for claiming deduction under section 80HH.

18B. The report of audit of the accounts of an assessee, other than a company or a co-operative society, which is required to be furnished under sub-section (5) of section 80HH shall be in Form No. 10C.]

[Form of audit report for claiming deduction under section 80HHA.

18BB. The report of the audit of the accounts of an assessee, other than a company or a co-operative society, which is required to be furnished under sub-section (4) of section 80HHA shall be in Form No. 10CC.]

[ [Form of reports for claiming deduction under section 80HHB or under section 80HHC or under section 80HHD and prescribed authority under section 80HHD.]

18BBA. (1) The report of the audit of the accounts of an assessee, other than a company or a co-operative society, which is required to be furnished under clause (i) of sub-section (3) of section 80HHB shall be in Form No. 10CCA.

 [(1A) The report of the audit of the accounts of an assessee which is required to be furnished under clause (i) of sub-section (2) of section 80HHBA shall be in Form No. 10CCAA.]

 [(1B) The certificate from an accountant which is required to be furnished by the assessee under clause (ia) of sub-section (3) of section 80HHB shall be in Form No. 10CCAH.]

 [(2) The certificate from the Export House or Trading House which is required to be furnished by the supporting manufacturer under clause (b) of sub-section (4A) of section 80HHC shall be in Form No. 10CCAB.]

 [(2A) The certificate from the undertaking in the Special Economic Zone which is required to be furnished under proviso to sub-section (4) of section 80HHC by an undertaking referred to in sub-section (4C) of that section shall be in Form No. 10CCABA.]

(3) The report of an accountant which is required to be furnished by the assessee under sub-section (4) or clause (a) of sub-section (4A) of section 80HHC shall be in Form No. 10CCAC.]

 [(4) The report of the accountant which is required to be furnished by the assessee under sub-section (6) of section 80HHD shall be in Form No. 10CCAD.]

 [(5) For the purposes of section 80HHD, the “prescribed authority” shall be the Director General in the Directorate General of Tourism, Government of India.]

 [(6) The certificate from a person making payment to an assessee, engaged in the business of a hotel or of a tour operator or of a travel agent which is required to be furnished under sub-section (2A) of section 80HHD shall be in Form No. 10CCAE.]

 [(7) The report of an accountant which is required to be furnished by the assessee under sub-section (4)  [or clause (i) of sub-section (4A)] of section 80HHE shall be in Form No. 10CCAF.]

 [(8) The certificate from the exporting company which is required to be furnished by the supporting software developer under clause (ii) of sub-section (4A) of section 80HHE shall be in Form No. 10CCAG.]

 [(9) The report of an accountant which is required to be furnished by the assessee under sub-section (4) of section 80HHF shall be in Form No. 10CCAI.]

[Form of audit report for claiming deduction under section 80-I or 80-IA or [80-IB or section 80-IC].

18BBB. (1) The report of the audit of the accounts of an assessee, which is required to be furnished under sub-section (7) of section 80-IA or sub-section (7) of section 80-I, except in the cases of multiplex theatres as defined in sub-section (7A) of section 80-IB or convention centres as defined in sub-section (7B) of section 80-IB  [or hospitals in rural areas as defined in sub-section (11B) of section 80-IB], shall be in Form No. 10CCB.

(2) A separate report is to be furnished by each undertaking or enterprise of the assessee claiming deduction under section 80-I or 80-IA or 80-IB  [or 80-IC] and shall be accompanied by the Profit and Loss Account and Balance Sheet of the undertaking or enterprise as if the undertaking or the enterprise were a distinct entity.

(3) In the case of an enterprise carrying on the business of developing or operating and maintaining or developing, operating and maintaining an infrastructure facility, the form shall be accompanied by a copy of the agreement of the enterprise with the Central Government or the State Government or the local authority for carrying on the business of developing or operating and maintaining or developing, operating and maintaining the infrastructure facility.

(4) In any other case, the form shall be accompanied by a copy of the agreement, approval or permission, as the case may be, to carry on the activity signed or issued by the Central Government or the State Government or the local authority for carrying on the eligible business.]

[Prescribed authority for approval of hotels located in certain areas.

18BBC. (1) For the purposes of sub-clause (iii) of clause (c) of sub-section (7) of section 80-IB, the prescribed authority,—

(a)  in relation to hotels located in an area or place referred to in clause (a) of that sub-section, shall be the Director General (Income-tax Exemptions) who shall grant approval on the concurrence of the Director General in the Directorate General of Tourism, Government of India;

(b)  in relation to hotels located in any place referred to in clause (b) of that sub-section, shall be the Director General in the Directorate General of Tourism, Government of India.

(2) For the purpose of clause (a) of sub-section (7) of section 80-IB, a hotel shall be approved by the prescribed authority if the following conditions are fulfilled, namely :—

(a)  such hotel is located in an area or place specified under clause (a) of the said sub-section (7);

(b)  there are not more than 300 hotel rooms of 3-star category and above in the aggregate, in areas or places specified under clause (a) of the said sub-section (7) within the jurisdiction of the revenue sub-division in which the hotel is located;

(c)  in case the hotel is located in a place where there is need for development of infrastructure for tourism, such place has been specified by the Central Government under clause (a) of the said sub-section (7) on the recommendations of the Department of Tourism.]

[Prescribed authority for approval of companies carrying on scientific and industrial research and development.

18BBD. For the purposes of sub-section (4B) of section 80-IA, the prescribed authority shall be the Secretary in the Department of Scientific and Industrial Research and Development, Ministry of Science and Technology, Government of India.]

[Computation of profits of certain activities forming integral part of a highway project for the purpose of section 80-IA.

18BBE. (1) For the purpose of sub-section  [(6)] of section 80-IA, the profits of housing or other activities, which are integral part of a highway project, shall be computed on the basis and manner specified below :—

(i)  in a case where the annual profits of the housing or other activities which are integral part of a highway project can be arrived at in accordance with the regular method of accounting followed, the profits so arrived at as computed under the provisions of the Act;

(ii)  in any other case, the amount of profits arrived at based on the percentage of completion of the activities referred to in clause (i) during the relevant previous year.

(2) Every assessee shall maintain separate accounts for the activities referred to in sub-rule (1) and shall submit a certificate from an accountant, specifying the amount credited to the reserve account and the amount utilised during the relevant previous year for the highway project.

Explanation : For the purposes of this rule, “accountant” means,—

(i)  a Chartered Accountant within the meaning of the Chartered Accountants Act, 1949 (38 of 1949); or

(ii)  any person who, in relation to any State, is, by virtue of the provisions in sub-section (2) of section 226 of the Companies Act, 1956 (1 of 1956), entitled to be appointed to act as an auditor of companies registered in that State.

(3) The certificate referred to in sub-rule (2) shall be in Form No. 10CCC.]

[Eligibility of Industrial Parks for benefits under section 80-IA(4)(iii).

18C. (1) The undertaking shall begin to develop, develop and operate or maintain and operate an industrial park any time during the period beginning on the 1st day of April, 2006, and ending on the 31st day of March,  [2011].

(2) The undertaking and the Industrial Park shall be notifiedby the Central Government under the Industrial Park Scheme, 2008.

(3) The undertaking shall continue to fulfil the conditions envisaged in the Industrial Park Scheme, 2008.]

[Prescribed authority for approval of companies carrying on scientific research and development.

18D. (1) For the purposes of sub-section (8A) of section 80-IB, the prescribed authority shall be the Secretary, Department of Scientific and Industrial Research, Ministry of Science and Technology, Government of India.

(2) The prescribed authority shall initially grant approval to a company carrying on scientific research and development for a period of three assessment years and subject to satisfactory performance of that company on periodic review extend the said approval for a further period of three assessment years so that the total period of approval is for ten consecutive assessment years, beginning from the initial assessment year.

Prescribed conditions for deduction under sub-section (8A) of section 80-IB.

18DA. (1) Any company carrying on scientific research and development shall be eligible for deduction specified in sub-section (8A) of section 80-IB, if such company—

(a)  is registered in India;

(b)  has its main object the scientific and industrial research and development;

(c)  has adequate infrastructure such as laboratory facilities, qualified manpower, scale-up facilities and prototype development facilities for undertaking scientific research and development of its own;

(d)  has a well formulated research and development programme comprising of time bound research and development projects with proper mechanism for selection and review of the projects or programme;

(e)  is engaged exclusively in scientific research and development activities leading to technology development, improvement of technology and transfer of technology developed by themselves;

(f)  submits the annual return alongwith statement of accounts and annual report within eight months after the close of each accounting year to the prescribed authority.

(2) Every company which is approved under sub-rule (2) of rule 18D shall—

(a)  sell any prototype or output, if any, from its laboratories or pilot plants with the prior permission of the prescribed authority;

(b)  intimate the change, if any, in its memorandum of association and articles of association relating to its main objects and forward the altered copy of its memorandum of association and articles of association to the prescribed authority;

(c)  apply for extension of the approval at least three months before expiry of the approval already granted by the prescribed authority;

(d)  have a system of monitoring the cost of research and development projects.

(3) If, at any stage, it is found that—

(a)  the approval granted to the company referred to in sub-rule (2) of rule 18D is to avoid payment of taxes by its group companies or companies related to its directors or majority of its shareholders;

(b)  any provisions of the Act or the rules have been violated,

the prescribed authority specified may withdraw the approval so granted.

(4) Every company referred to in sub-rule (1) shall make an application to the prescribed authority for the purposes of obtaining approval.

(5) Every application referred to in sub-rule (4) shall be accompanied by—

(a)  memorandum of association and articles of association incorporating all amendments duly certified by the company secretary or managing director of the company;

(b)  annual report of the company for the last three years, if available;

(c)  photocopies of the memorandum of understanding relating to all on-going and future sponsored research projects or programmes.

(6) The prescribed authority may call for any information or document which may be necessary for consideration of the grant of approval under sub-rule (2) of rule 18D.

(7) The prescribed authority shall grant approval within four months from the date of receipt of the application :

Provided that where the approval is not granted, the decision of the said authority shall be communicated to the applicant within the said period of four months :

Provided further that no approval shall be refused unless the applicant has been given an opportunity of being heard.]

[Prescribed area, facilities and amenities for multiplex theatres and particulars of audit report, for deduction under sub-section (7A) and clause (da) of sub-section (14) of section 80-IB.

18DB. (1) For the purpose of sub-section (7A) and clause (da) of sub-section (14) of section 80-IB, the multiplex theatre shall have the following area, facilities and amenities :—

(a)  The total built-up area occupied by all the cinema theatres comprised in the multiplex shall not be less than 22,500 square feet, and shall consist at least 50% of the total built-up area of the multiplex excluding the area specified for parking.

(b)  The multiplex theatres shall be comprised of at least three cinema theatres and at least three commercial shops.

(c)  Total seating capacity of all the cinema theatres comprised in the multiplex shall be at least 900 seats, and no cinema theatre should consist of less than 100 seats.

(d)  The total built-up area occupied by all the commercial shops comprised in the multiplex theatre shall not be less than 3000 sq. ft., and the minimum built-up area of each shop shall not be less than 250 sq. ft.

(e)  There shall be at least one lobby or foyer in the cinema theatres, whose area shall be at least 3 sq. ft. per seat.

(f)  The multiplex theatre shall have adequate parking, toilet blocks and other public conveniences, as per local building or cinema regulations, and shall also fulfil all local building or cinema regulations in respect of fire and safety.

(g)  The cinema theatres comprised in the multiplex theatre shall use modern stereo projection systems with at least two screen speakers per screen and one surround speaker per 25 seats in a theatre.

(h)  The cinema theatres shall use seats with seat pitch not less than 20″ (centre to centre).

 (i)  Ticketing system employed by the cinema theatres shall be fully computerised.

 (j)  The multiplex theatre cinema shall be centrally air-conditioned.

Explanation —For the purposes of this rule, the expression “modern stereo projection systems” shall consist of xenon lamp, platter and digital sound systems.

(2) A separate report of the audit, shall be furnished along with the return of income in respect of each eligible multiplex theatre, in Form No. 10CCBA and shall be duly signed and verified by an accountant as defined in the Explanation below sub-section (2) of section 288.

(3) In the first year of the claim of deduction, the assessee shall enclose along with the audit report, a copy of approvals for exhibition of cinema given by various State or local authorities, which shall, where applicable, include the following :—

(a)  no-objection certificate with respect to the location of the multiplex by the concerned licensing authority;

(b)  permission for construction of the multiplex by the concerned licensing authority;

(c)  permission to construct the building from the town planning authority or municipal corporation;

(d)  completion certificate or occupation certificate, as the case may be, from the town planning authority or municipal corporation, certifying the completion of the multiplex theatre, during the period commencing on the 1st day of April, 2002 and ending on the 31st day of March, 2005; and

(e)  operating license issued by the concerned licensing authority.

(4) After the first year of claim of deduction, in the subsequent four years, the audit report shall be enclosed with the operating license issued from time to time, by the concerned licensing authority for exhibition of cinema.]

[Prescribed area, facilities and amenities for convention centres and particulars of audit report, for deduction under sub-section (7B) and clause (aa) of sub-section (14) of section 80-IB.

18DC. (1) For the purpose of sub-section (7B) and clause (aa) of sub-section (14) of section 80-IB, the convention centre shall have the following area, facilities and amenities,—

(i)  A convention centre located in a town or city mentioned in column (1) of the table below, shall have a minimum plinth area mentioned in column (2), minimum seating capacity mentioned in column (3) and minimum number of conference or seminar halls mentioned in column (4) of the said Table, as under :—

Town size population (as per 2001 census) Minimum area covered plinth area (in sq. mtrs.) Minimum seating capacity range Minimum number of Conference or Seminar halls
 (1) (2) (3) (4)
 Below 5 lakhs 2000 200-300 2
 5-10 lakhs 5000 500-750 3
 10-40 lakhs 10000 1000-1500 5
Above 40 lakhs : Mega cities 15000 1500-2000 7

(ii)  The convention centre shall have conference or seminar halls, auditorium and exhibition halls for holding seminars, conferences.

(iii)  Each conference, seminar hall, exhibition hall and the auditorium of the convention centre shall be equipped with modern public address system, slide and power point projection system and LCD projector or Video screening facility.

(iv)  The convention centre shall also have a documentation centre with computers and printers, telephone with STD/ISD facilities, E-mail, photocopy and scanning facility along with trained operators to provide these facilities.

(v)  The conference or seminar hall, documentation centre, auditorium and the exhibition hall of the convention centre shall be air-conditioned.

(vi)  The convention centre shall have adequate parking facility and other public conveniences as per the local building regulations and should also fulfil all local building regulations in respect of fire and safety.

(2) In addition to facilities mentioned in sub-rule (1), the convention centres may have,—

(i)  an amphi-theatre, landscaped open spaces for outdoor conference or seminar related activities;

(ii)  a kitchen, dining facility, cafeteria or restaurant only to support events in the convention centre.

(3) A separate report of the audit, shall be furnished along with the return of income in respect of each eligible convention centre, in Form No. 10CCBB and shall be duly signed and verified by an accountant as defined in the Explanation below sub-section (2) of section 288.

(4) In the first year of the claim of deduction, the assessee shall enclose along with the audit report, a copy of approvals for building of convention centre given by State or local authorities, which shall, where applicable, include the following :—

(i)  permission for construction of the convention centre, from the town planning authority or municipal corporation;

(ii)  completion certificate or occupation certificate, as the case may be, from the town planning authority or municipal corporation, certifying the completion of the convention centre, during the period commencing on the 1st day of April, 2002 and ending on the 31st day of March, 2005.]

[Form of report for claiming deduction under sub-section (11B) of section 80-IB.

18DD. The report of an accountant which is required to be furnished by the assessee along with the return of income, under sub-section (11B) of section 80-IB shall be in Form No. 10CCBC.]

[Form of report for claiming deduction under sub-section (11C) of section 80-IB.

18DDA. The report of an accountant which is required to be furnished by the assessee along with the return of income, under sub-section (11C) of section 80-IB shall be in Form No. 10CCBD.]

 [Prescribed area, minimum seating capacity, facilities and amenities for convention centres; minimum number of convention halls in the convention centres; and particulars of audit report, for deduction under section 80-ID.

18DE. (1) For the purposes of clause (a) of sub-section (6) of section 80-ID, the convention centre shall have the following area, facilities and amenities,—

(a)  A convention centre located in the specified area mentioned in column (1) of the Table below, shall have a minimum covered plinth area mentioned in column (2), minimum seating capacity mentioned in column (3) and minimum number of convention halls, for the purpose of holding conferences and seminars, mentioned in column (4) of the said Table.

TABLE

Specified area Minimum covered plinth area (in sq. mtrs.) Minimum seating capacity Minimum number of convention halls
 (1) (2) (3) (4)
 National Capital Territory of Delhi, Faridabad, Gurgaon, Gautam Budh Nagar and Ghaziabad 25000 3000 10

(b)  The convention centre shall have convention halls, whether called conference halls or seminar halls or auditorium or by any other name, for holding seminars and conferences.

(c)  Each convention hall of the convention centre shall be equipped with modern public address system, slide and power point projection system and LCD projector or Video screening facility.

(d)  The convention centre shall have a documentation centre with computers and printers, telephone with STD/ISD facilities, E-mail, photocopy and scanning facility along with trained operators to provide these facilities.

(e)  The convention centre shall be completely centrally air-conditioned.

(f)  The convention centre shall have adequate parking facility and other public conveniences as per the local building regulations and should also fulfil all local building regulations in respect of fire and safety.

(2) In addition to the facilities mentioned in sub-rule (1), the convention centres may have,—

(a)  an amphi-theatre and landscaped open spaces for outdoor conference or seminar related activities;

(b)  a kitchen, dining facility, cafeteria or restaurant only to support events in the convention centre.

(3) For the purposes of clause (iv) of sub-section (3) of section 80-ID, the report of an audit shall be in Form No. 10CCBBA.]

Computation of capital employed in an industrial undertaking or a hotel.

19. [Omitted by the IT (Fifth Amdt.) Rules, 1989, w.e.f. 18-5-1989.]

Computation of capital employed in an industrial undertaking or a ship or the business of a hotel for the purposes of section 80J.

19A. [Omitted by the IT (Thirty-second Amdt.) Rules, 1999, w.e.f. 19-11-1999.]

[Form of report for claiming deduction under section 80JJAA.

19AB. Report of an accountant which is required to be furnished by the assessee along with the return of income under clause (b) of sub-section (2) of section 80JJAA shall be in Form No. 10DA.]

[Form of certificate to be furnished under sub-section (3) of section 80QQB.

19AC. (1) The certificate, which is required to be furnished by the assessee under sub-section (3) of section 80QQB from a person responsible for making payment to the assessee, shall be in Form No. 10CCD.

(2) The certificate in Form No. 10CCD duly verified by the person responsible for making the payment to the assessee is required to be furnished along with the return of income.]

Prescribed authority for purposes of sub-section (2) of section 80RRB and form of certificate to be furnished under sub-section (2) of section 80RRB.

[19AD. (1) For the purposes of sub-section (2) of section 80RRB, the prescribed authority shall be the Controller, referred to in clause (b) of sub-section (1) of section 2 of the Patents Act, 1970 (39 of 1970).

(2) The certificate, which is required to be furnished by the assessee under sub-section (2) of section 80RRB from the prescribed authority shall be in Form No. 10CCE.]

Form of report of accountant to be furnished under sub-section (3) of section 80LA.

[19AE. The report of the accountant, which is required to be furnished by the assessee under sub-section (3) of section 80LA shall be in Form No. 10CCF.]

[Guidelines for approval [under clause (xix) of sub-section (2) of section 80C orunder clause (xvi) of sub-section (2) of section 88.

20. The Board, before granting approval to a public company, [under clause (xix) of sub-section (2) of section 80C or] under clause (xvi) of sub-section (2) of section 88, shall satisfy itself that the application made to it fulfils the following requirements, namely :—

(1)  An application for approval has been made in the Form No. 59 by the public company three months before the  [eligible issue of capital].

[Explanation.—For the purposes of this rule, “the eligible issue of capital” means an issue referred to in clause (i) of the Explanation to clause (xix) in sub-section (2) of section 80C or in clause (i) of the Explanation to clause (xvi) in sub-section (2) of section 88.]

(2) Every application shall be accompanied by the following documents, namely :—

(a)  a copy of the certificate of incorporation under the Companies Act, 1956 (1 of 1956);

(b)  audited balance sheets and profit and loss account for three previous years immediately preceding the previous year in which the application is made :

Provided that where a company has been in existence for a period of less than three years, in that case that company may furnish balance sheet and profit and loss account for the period of its existence.

(3)  Every such public company shall invest its total paid-up capital (hereinafter referred to as such capital) raised through equity issue or debentures in the following manner :—

(i)  twenty-five per cent or more of such capital shall be invested in the infrastructure facility before the end of one year from the date of approval of the Board;

(ii)  the balance of such capital shall be invested within a period of three years from the date of approval.

(4)  Every such public company shall submit a certificate from an accountant, as defined in the Explanation in sub-section (2) of section 288, specifying the amount invested in each year, from the date of approval of the Board.

(5)  The Board shall pass an order in writing granting approval or refusing approval to such public company, as the case may be :

Provided that no order refusing approval shall be passed by the Board before allowing an opportunity of being heard to the public company.

(6)  The Board shall have the power to withdraw the approval granted under sub-rule (5) in the following circumstances, namely :—

(a)  if such public company fails to make investments as per conditions mentioned in sub-rule (3); or

(b)  if such public company fails to file the certificate referred to in sub-rule (4).]

[Guidelines for approval  [under clause (xx) of sub-section (2) of section 80C orunder clause (xvii) of sub-section (2) of section 88.

20A. (1) For the purpose of  [clause (xx) of sub-section (2) of section 80C or] clause (xvii) of sub-section (2) of section 88, the prescribed authority shall be the Central Board of Direct Taxes.

(2) An application for approval shall be made in Form No. 59A by the Mutual Fund to the Board referred in sub-rule (1) three months before the public issue.

(3) Every application for approval under sub-rule (2) shall be accompanied by the following documents, namely :—

(a)  audited balance sheets and profit and loss account for three previous years immediately preceding the previous year in which the application is made :

Provided that where a Mutual Fund has been in existence for a period of less than three years, in that case that company may furnish balance sheet and profit and loss account for the period of its existence;

(b)  a copy of the certificate of registration issued by the Securities and Exchange Board of India.

(4) Every such Mutual Fund shall invest its total paid-up capital (hereinafter referred to as such capital) raised through equity issue or debentures in the following manner :—

(i)  twenty-five per cent or more of such capital shall be invested in the “eligible issue of capital of any company” referred to in  [clause (i) of Explanation to clause (xix) of sub-section (2) of section 80C or in] clause (i) of Explanation to clause (xvi) of sub-section (2) of section 88, before the end of one year from the date of approval of the Board;

(ii)  the balance of such capital shall be invested within a period of three years from the date of approval.

(5) Every such Mutual Fund shall submit a certificate from an accountant, as defined in the Explanation to sub-section (2) of section 288, specifying the amount invested in each year, from the date of approval of the Board.

(6) The Board shall pass an order in writing granting approval or refusing approval to such Mutual Fund, as the case may be :

Provided that no order of refusing approval shall be passed by the Board without an opportunity of being heard given to the Mutual Fund.

(7) The Board shall have the power to withdraw the approval granted under sub-rule (6) under the following circumstances, namely :—

(a)  if such Mutual Fund fails to make investments as mentioned in sub-rule (4); or

(b)  if such Mutual Fund fails to file the certificate referred to in sub-rule (5).]

 [Evidence of payment of security transaction tax for claiming deduction under section 88E.

20AB. The evidence of payment of securities transaction tax which is required to be furnished along with the return of income by the assessee under first proviso to section 88E,—

 (i)  on the value of transaction entered into by him in a recognised stock exchange, shall be in Form No. 10DB and shall be verified in the manner indicated therein;

(ii)  on the value of transaction of sale, by him, of a unit of an equity oriented fund to the Mutual Fund, shall be in Form No. 10DC and shall be verified in the manner indicated therein.]

Limits for life insurance premia in the case of authors, etc.

21. [Omitted by the IT (Fifth Amdt.) Rules, 1989, w.e.f. 18-5-1989.]

[Relief when salary is paid in arrears or in advance, etc.

21A. [(1) Where, by reason of any portion of an assessee’s salary being paid in arrears or in advance or, by reason of any portion of family pension received by an assessee being paid in arrears or, by reason of his having received in any one financial year salary for more than twelve months or a payment which under the provisions of clause (3) of section 17 is a profit in lieu of salary, his income is assessed at a rate higher than that at which it would otherwise have been assessed, the relief to be granted under sub-section (1) of section 89 shall be—

(a)  where any portion of the assessee’s salary is received in arrears or in advance or, any portion of family pension is received by an assessee in arrears, in accordance with the provisions of sub-rule (2);

(b)  where the payment is in the nature of gratuity in respect of past services of the assessee extending over a period of not less than five years, in accordance with the provisions of sub-rule (3);

(c)  where the payment is in the nature of compensation received by the assessee from his employer or former employer at or in connection with the termination of his employment after continuous service for not less than three years and where the unexpired portion of his term of employment is also not less than three years, in accordance with the provisions of sub-rule (4);

(d)  where the payment is in commutation of pension, in accordance with the provisions of sub-rule (5); and

(e)  where the payment is not in the nature of salary paid in arrears or in advance or gratuity in respect of past services or compensation received at or in connection with the termination of employment or in commutation of pension, in accordance with the provisions of sub-rule (6).

(2)(a) In a case referred to in clause (a) of sub-rule (1), the tax payable by the assessee on his total income of the previous year in which the salary is received in arrears or in advance or, in which the family pension is received in arrears (such salary or family pension being hereafter in this sub-rule referred to respectively as the additional salary or additional family pension, as the case may be, and such previous year being hereafter in this sub-rule referred to as the relevant previous year) shall be reduced by the amount, if any, by which the tax on the additional salary or additional family pension, calculated in the manner specified in clause (b), exceeds the tax or the aggregate tax on the additional salary or additional family pension, calculated in the manner specified in clause (c) or clause (d), as the case may be.

(b) Tax shall be calculated on the total income of the relevant previous year as reduced by the additional salary or additional family pension, as the case may be, as if the total income so reduced were the total income of the assessee, and the amount by which the tax so calculated falls short of the tax on the total income before such reduction shall, for the purposes of clause (a), be taken to be the tax on the additional salary or additional family pension, under this clause.

(c) Where the additional salary or additional family pension, as the case may be, relates to only one previous year, tax shall be calculated on the total income of the said previous year as increased by the additional salary or additional family pension, as if the total income so increased were the total income of the assessee, and the amount by which the tax so calculated exceeds the tax payable by the assessee in respect of the total income of the said previous year shall, for the purposes of clause (a), be taken to be the tax on the additional salary or additional family pension, under this clause.

(d) Where the additional salary or additional family pension, as the case may be, relates to more than one previous year,—

(i)  the previous years to which the additional salary or additional family pension relates and the amount relating to each such previous year shall first be ascertained;

(ii)  tax shall, then, be calculated on the total income of each such previous year as increased by the amount relating to such previous year ascertained under sub-clause (i); as if the total income so increased were the total income of that previous year, and the amount by which the aggregate amount of tax in respect of the aforesaid previous years as calculated under sub-clause (ii) exceeds the aggregate amount of tax payable by the assessee in respect of the total income of the said previous years shall, for the purposes of clause (a), be taken to be the aggregate tax on the additional salary or additional family pension, under this clause.]

(3) (a) In a case referred to in clause (b) of sub-rule (1), the tax payable by the assessee on his total income of the previous year in which the payment by way of gratuity is received (such previous year being hereafter in this sub-rule referred to as the relevant previous year) shall be reduced by the amount, if any, by which the tax on the amount of the gratuity included in the total income of the relevant previous year, calculated at the average rate of tax applicable to such total income, exceeds the tax on the amount of such gratuity, calculated at the rate of tax determined under clause (b) or, as the case may be, clause (c).

(b) Where the payment by way of gratuity is made in respect of past services of the assessee extending over a period of not less than five years but less than fifteen years,—

 (i)  the total income of the assessee in respect of each of the two previous years immediately preceding the relevant previous year shall be increased by an amount equal to one-half of the amount of the gratuity included in the total income of the relevant previous year, and the average rate of tax for each of the said two previous years shall be calculated as if the total income so increased were the total income of that previous year; and

(ii)  the average of the average rates of tax for the two previous years immediately preceding the relevant previous year, calculated in accordance with sub-clause (i), shall, for the purposes of clause (a), be the rate of tax determined under this clause.

(c) Where the payment by way of gratuity is made in respect of past services of the assessee extending over a period of not less than fifteen years,—

 (i)  the total income of the assessee in respect of each of the three previous years immediately preceding the relevant previous year shall be increased by an amount equal to one-third of the amount of the gratuity included in the total income of the relevant previous year, and the average rate of tax for each of the said three previous years shall be calculated as if the total income so increased were the total income of that previous year; and

(ii)  the average of the average rates of tax for the three previous years immediately preceding the relevant previous year, calculated in accordance with sub-clause (i), shall, for the purposes of clause (a), be the rate of tax determined under this clause.

(4) (a) In a case referred to in clause (c) of sub-rule (1), the tax payable by the assessee on his total income of the previous year in which the payment by way of compensation is received (such previous year being hereafter in this sub-rule referred to as the relevant previous year) shall be reduced by the amount, if any, by which the tax on the amount of the compensation included in the total income of the relevant previous year, calculated at the average rate of tax applicable to such total income, exceeds the tax on the amount of such compensation, calculated at the rate of tax determined under clause (b).

(b) The total income of the assessee in respect of each of the three previous years immediately preceding the relevant previous year shall be increased by an amount equal to one-third of the amount of the compensation included in the total income of the relevant previous year, and the average rate of tax for each of the said three previous years shall be calculated as if the total income so increased were the total income of that previous year; and the average of the average rates of tax so calculated for the three previous years shall, for the purposes of clause (a), be the rate of tax determined under this clause.

(5) (a) In a case referred to in clause (d) of sub-rule (1), the tax payable by the assessee on his total income of the previous year in which the payment in commutation of pension is received (such previous year being hereafter in this sub-rule referred to as the relevant previous year) shall be reduced by the amount, if any, by which the tax on the payment in commutation of pension included in the total income of the relevant previous year, calculated at the average rate of tax applicable to such total income, exceeds the tax on the amount of such payment, calculated at the rate of tax determined under clause (b).

(b) The total income of the assessee in respect of each of the three previous years immediately preceding the relevant previous year shall be increased by an amount equal to one-third of the amount of payment in commutation of pension included in the total income of the relevant previous year, and the average rate of tax for each of the said three previous years shall be calculated as if the total income so increased were the total income of that previous year; and the average of the average rates of tax so calculated for the three previous years shall, for the purposes of clause (a), be the rate of tax determined under this clause.

(6) In a case referred to in clause (e) of sub-rule (1), the Board may, having regard to the circumstances of the case, allow such relief as it deems fit.]

 [Furnishing of particulars for claiming relief under section 89(1).

21AA. Where the assessee, being a Government servant or an employee in a  [company, co-operative society, local authority, university, institution, association or body], is entitled to relief under sub-section (1) of section 89, he may furnish to the person responsible for making the payment referred to in sub-section (1) of section 192, the particulars specified in Form No. 10E.]

[Certificate for claiming relief under an agreement referred to in sections 90 and 90A.

[21AB.  (1) Subject to the provisions of sub-rule (2), for the purposes of sub-section (5) of section 90 and sub-section (5) of section 90A, the following information shall be provided by an assessee in Form No. 10F, namely:—

(i)   Status (individual, company, firm etc.) of the assessee;

(ii)  Nationality (in case of an individual) or country or specified territory of incorporation or registration (in case of others);

(iii)  Assessee’s tax identification number in the country or specified territory of residence and in case there is no such number, then, a unique number on the basis of which the person is identified by the Government of the country or the specified territory of which the asseessee claims to be a resident;

(iv) Period for which the residential status, as mentioned in the certificate referred to in sub-section (4) of section 90 or sub-section (4) of section 90A, is applicable; and

(v)  Address of the assessee in the country or specified territory outside India, during the period for which the certificate, as mentioned in (iv) above, is applicable.

(2) The assessee may not be required to provide the information or any part thereof referred to in sub-rule (1) if the information or the part thereof, as the case may be, is contained in the certificate referred to in sub-section (4) of section 90 or sub-section (4) of section 90A.

(2A) The assessee shall keep and maintain such documents as are necessary to substantiate the information provided under sub-rule (1) and an income-tax authority may require the assessee to provide the said documents in relation to a claim by the said assessee of any relief under an agreement referred to in sub-section (1) of section 90 or sub-section (1) of section 90A, as the case may be.]

(3) An assessee, being a resident in India, shall, for obtaining a certificate of residence for the purposes of an agreement referred to in section 90 and section 90A, make an application in Form No. 10FA to the Assessing Officer.

(4) The Assessing Officer on receipt of an application referred to in sub-rule (3) and being satisfied in this behalf, shall issue a certificate of residence in respect of the assessee in Form No. 10FB.]

[Furnishing of authorisation and maintenance of documents etc. for the purposes of section 94A.

21AC. (1) For the purposes of clause (a) of sub-section (3) of section 94A, the authorisation to be submitted by the assessee, shall be in Form No.10 FC.

(2) The assessee shall cause the first copy of the duly filled Form No.10FC to be deposited with or transmitted to the financial institution referred to in clause (a) of sub-section (3) of section 94A.

(3) The second copy of the Form No.10FC along with the evidence of the first copy of said Form having been deposited or transmitted to the financial institution shall be submitted by the assessee to the Assessing Officer having jurisdiction over him.

(4) For the purpose of ensuring that the authorisation in Form No.10FC is legally enforceable, the assessee shall take all necessary steps as are required under any law for the time being in force in India or outside India.

(5) For the purposes of clause (b) of sub-section (3) of section 94A, the assessee who has entered into a transaction with a person located in a notified jurisdictional area (hereinafter referred to as the specified person) shall, in addition to information and documents referred to in sub-rule (1) of rule 10D, keep and maintain the following information and documents, namely:

(a)  a description of the ownership structure of the specified person, including name and address of individuals or other entities, whether located in the notified jurisdictional area or outside, having directly or indirectly more than ten per cent shareholding or ownership interests;

(b)  a profile of the multinational group of which the specified person is a part along with the name, address, legal status and country of tax residence of each of the enterprises comprised in the group with whom the assessee has entered into a transaction, and ownership linkage among them;

(c)  a broad description of the business of the specified person and the industry it operates in;

(d)  any other information, data or document, which may be relevant for the transaction with the specified person.

(6) The information and documents specified in sub-rule (5) shall be for the period upto the due date of filing of return of income under sub-section (1) of section 139.

(7) The information and documents specified in sub-rule (5) shall be kept and maintained for a period of eight years from the end of the relevant assessment year.]

Relief when interest on securities is received in arrears.

21B. [Omitted by the IT (Thirty-second Amdt.) Rules, 1999, w.e.f. 19-11-1999.]

PART V

REGISTRATION OF FIRMS

Application for registration of a firm.

22. (1) An application for registration of a firm for the purposes of the Act shall be made in accordance with the provisions of sub-rules (2) to (5).

(2) Where the application is made before the end of the relevant previous year—

 (i)  and where no change in the constitution of the firm or the shares of the partners has taken place during the previous year before the date of the application—

(a)  the application shall be made in Form No. 11; and

(b)  it shall be accompanied by the original instrument evidencing the partnership at the date of the application together with a copy thereof. A certified copy of the instrument together with a duplicate copy thereof may be attached to the application if, for sufficient reason, the original instrument cannot be produced;

 (ii) and where any change or changes in the constitution of the firm or the shares of the partners have taken place during the previous year before the date of the application—

(a)  the application shall be made in Form No. 11A; and

(b)  it shall be accompanied by the original instrument or instruments, evidencing the partnership as in existence from time to time during the previous year up to the date of the application together with copies thereof. A certified copy of the instrument or instruments together with a duplicate copy thereof may be attached to the application if, for sufficient reason, the original instrument or instruments cannot be produced.

(3) Where after the date of making an application under sub-rule (2), any change or changes in the constitution of the firm or the shares of the partners have taken place during the previous year, a fresh application shall be made after each such change takes place in accordance with the provisions of sub-clauses (a) and (b) of clause (ii) of sub-rule (2) and the time-limit prescribed in sub-section (4) of section 184 shall apply to each such application.

(4) Where the application is made after the end of the relevant previous year—

 (i)  and where no change in the constitution of the firm or the shares of the partners has taken place during the said previous year and up to the date of the application, the application shall be made in accordance with the provisions of sub-clauses (a) and (b) of clause (i) of sub-rule (2);

(ii)  and where any change or changes in the constitution of the firm or the shares of the partners have taken place during the said previous year and/or after the end of the previous year but before the date of the application—

(a)  the application shall be made in Form No. 11A; and

(b)  it shall be accompanied by the original instrument or instruments evidencing the partnership as in existence from time to time during the previous year and up to the date of the application together with copies thereof. A certified copy of the instrument or instruments together with a duplicate copy thereof may be attached to the application if, for sufficient reason, the original instrument or instruments cannot be produced.

(5) The application shall be signed personally by all the partners (not being minors) in the firm as constituted at the date of the application and, in the case of a dissolved firm, personally by all the persons (not being minors) who were partners in the firm immediately before its dissolution and by the legal representative of any such partner who is deceased so, however, that in the case of any partner who is absent from India or is a lunatic or an idiot, the application may be signed by any person duly authorised by him in this behalf, or, as the case may be, by a person entitled under law to represent him.

Intimation regarding subsequent changes in constitution, etc.

23. If after the date of the application, or of the last application where more than one application are made, for registration of a firm for any assessment year and before the assessment for that assessment year is completed by the  [Assessing Officer], so far as known to the firm, any change or changes take place in the constitution of the firm or the shares of the partners, the details of such change or changes shall be communicated by the firm to the  [Assessing Officer] as soon as possible after each such change takes place.

Declaration for continuation of registration.

24. The declaration to be furnished under sub-section (7) of section 184 shall be in Form No. 12 and shall be verified in the manner indicated therein and shall be signed by the persons concerned in accordance with sub-rule (5) of rule 22.

[Communication regarding partner who is a benamidar.

24A. (1) The communication required to be made by any partner of a firm under clause (b) of the Explanation below sub-section (1) of section 185 shall be in Form No. 12A.

(2) The communication referred to in sub-rule (1) shall be made,—

(a)  in a case where the firm has not been registered under section 184, before the end of the previous year for the assessment year in respect of which registration of the firm is sought :

Provided that where the registration is sought for the assessment year commencing on the 1st day of April, 1976, the communication may be made before the expiry of the time allowed under sub-section (1) or sub-section (2) of section 139 (whether fixed originally or on extension) for furnishing the return of income for that assessment year;

(b)  in a case where the registration of the firm has effect under sub-section (7) of section 184 for any assessment year, before the expiry of the time allowed under sub-section (1) or sub-section (2) of section 139 (whether fixed originally or on extension) for furnishing the return of income for that assessment year.]

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