The Central Board of Direct Taxes (CBDT) has notified that the Safe Harbour Rules are retrospectively applicable for Assessment Year 2021-22.
The Board has notified the Income-tax (30th Amendment) Rules, 2021 which seeks to amend Income-tax Rules, 1962.
In the Income-tax Rules, 1962, in rule 10TD, in sub-rule (3B), for the words and figures “the assessment year 2020-21”, the words and figures “assessment years 2020-21 and 2021-22” shall be substituted.
Rule 10TD of the Income Tax Rules, 1962 relates to Safe Harbour Rules and its procedure. CBDT notified changes to these rules and stated that rates applicable from Assessment Year 2017-18 to 2020-21 will continue to apply for Assessment Year 2021-22.
As per Rule 10TD(1), where an eligible assessee has entered into an eligible international transaction and the option exercised by the said assessee is not held to be invalid under rule 10TE, the transfer price declared by the assessee in respect of such transaction shall be accepted by the income-tax authorities, if it is in accordance with the circumstances as specified in sub-rule (2) or (2A) as the case may be. However, only Rule 2A was applicable for Assessment Year 2017-18 to 2020-21 and in the recent notification, this has been extended to Assessment Year 2021-22 as well.
They shall be deemed to have come into force from the 1st day of April 2021.
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