CBDT notifies New Rule imposing 'Other Conditions' to Invoke Income Tax Exemption u/s 10(4D), Amends Form 10-IG [Read Notification]

The Central Board of Direct Taxes (CBDT) has notified a new Rule 21AIA prescribing the “other conditions” required to be fulfilled by a specified fund referred to in section 10(4D) of the Income-tax Act, 1961.

The specified fund is also required to certify that it has fulfilled the conditions and furnish information in respect of units held by residents in the annual statement of exempt income in Form No. 10-IG.

The notification issued on Friday provided that “For the purposes of the proviso to item (III) of sub-clause (i) of clause (c) of the Explanation to clause (4D) of section 10 of the Act, the “other conditions” required to be fulfilled by a specified fund shall be that — (a) the unit holder of the specified fund, other than the sponsor or manager of such fund, who becomes a resident under clause (1) or clause (1A) of section 6 of the Act during any previous year subsequent to the previous year in which such unit or units were issued, shall cease to be a unit holder of such specified fund within a period of three months from the end of the previous year in which he becomes a resident; (b) for the purposes of clause (a), the specified fund shall maintain the following documents in respect of its unit holders,— i. name of the unit holder; ii. tax identification number of the unit holder in the country of residence at the time the units were issued; iii. permanent account number, if available; iv. total number of units held; v. total value of units held; vi. whether unit holder is a sponsor or a manager; vii. the previous year in which the unit holder became resident and; viii. date of exit from specified fund.”

To Read the full text of the Order CLICK HERE

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