The Central Board of Direct Taxes ( CBDT ) on Friday notified the Form No. 5C regarding details of the amount attributed to capital assets remaining with the specified entity.
The Board has notified the Income-tax Amendment (18th Amendment), Rules, 2021 which seeks to amend the Income Tax Rules, 1962.
In the Income Tax Rules, 1962, in rule 8AA, the sub-rule (4) shall be inserted, which reads “in case of the amount which is chargeable to income-tax as income of specified entity under sub-section (4) of section 45 under the head ‘Capital gains.
The amount or a part of it shall be deemed to be from the transfer of short term capital asset if it is attributed to, a capital asset which is a short term capital asset at the time of taxation of amount under sub-section (4) of section 45; or capital asset forming part of a block of asset, or capital asset being a self-generated asset and self-generated goodwill as defined in clause (ii) of Explanation 1 to sub-section (4) of section 45.
The amount or a part of it shall be deemed to be from the transfer of long term capital asset or assets if it is attributed to the capital asset which is not covered by clause (i) and is a long term capital asset at the time of taxation of amount under sub-section (4) of section 45.
The notification inserted Rule 8AB in relation to the attribution of income taxable under sub-section (4) of section 45 to the capital assets remaining with the specified entity, under section 48.
Rule 8AB reads, “Where the aggregate of the value of money and the fair market value of the capital asset received by the specified person from the specified entity, in excess of the balance in his capital account, chargeable to tax under sub-section (4) of section 45, relates to revaluation of any capital asset or valuation of a self-generated asset or self-generated goodwill, of the specified entity, the amount attributable to the capital asset remaining with the specified entity for purpose of clause (iii) of section 48 shall be the amount which bears to the amount charged under subsection (4) of section 45 the same proportion as the increase in, or recognition of, the value of that asset because of revaluation or valuation bears to the aggregate of increase in, or recognition of, the value of all assets because of the revaluation or valuation.”
It further says that Where the aggregate of the value of money and the fair market value of the capital asset received by the specified person from the specified entity, in excess of the balance in his capital account, charged to tax under sub-section (4) of section 45 does not relate to revaluation of any capital asset or valuation of self- generated asset or self-generated goodwill, of the specified entity, the amount charged to tax under sub-section (4) of section 45 shall not be attributed to any capital asset for the purposes of clause (iii) of section 48.
The specified entity shall furnish the details of amount attributed to capital asset remaining with the specified entity in Form No. 5C.
Form No. 5C shall be furnished electronically either under digital signature or through electronic verification code and shall be verified by the person who is authorised to verify the return of income of the specified entity under section 140.
Form No. 5C shall be furnished on or before the due date referred to in the Explanation 2 below sub- section (1) of section 139 for the assessment year in which the amount is chargeable to tax under sub- section (4) of section 45.
The Principal Director General of Income-tax (Systems) or the Director-General of Income-tax (Systems), as the case may be, shall specify the procedure for filing of Form No. 5C; specify the procedure, format, data structure, standards, and manner of generation of electronic verification code, referred to in sub-rule (6), for verification of the person furnishing the said Form; and be responsible for formulating and implementing appropriate security, archival and retrieval policies in relation to the Form No 5C so furnished.
In the principal rules, in Appendix II, after Form No. 5B, the Form No. 5C shall be inserted which pertains to the details of the amount attributed to capital assets remaining with the specified entity.
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