Income-Tax Amendments 2025: New Compliance Requirements for Trusts

In exercise of the powers granted under sub-section (1A) of section 115AD, sub-section (4) of section 115TCA, sub-section (4) of section 115UA, and sub-section (7) of section 115UB, read with section 295 of the Income-tax Act, 1961, the Central Board of Direct Taxes (CBDT) has introduced important amendments to the Income-tax Rules, 1962.

These amendments, known as the Income-tax (Fifth Amendment) Rules, 2025, shall come into effect from the date of their publication in the Official Gazette.

Key Changes Introduced

1. Amendment to Rule 12CA

A new provision has been introduced regarding the furnishing of statements of income distributed by a business trust to its unit holders. The updated rule states:

The person responsible for making such payments on behalf of the business trust must submit the statement to:

1. The Principal Commissioner or Commissioner of Income-tax (within whose jurisdiction the principal office of the business trust is located) by June 15 of the financial year following the year in which the income was distributed. This submission must be made electronically under a digital signature in Form No. 64A, verified by an accountant.
2. The unit holder by June 30 of the financial year following the year of income distribution, using Form No. 64B. This form must be generated and downloaded from a web portal specified by the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), duly verified by the paying authority of the business trust.

The Principal Director General or Director General of Income-tax (Systems) is responsible for defining:

1. The procedure for filing Form No. 64A and ensuring secure archiving and retrieval of these records.
2. The procedure, format, and standards for generating and downloading Form No. 64B from the specified web portal.

2. Amendment to Rule 12CC

A similar provision has been introduced for income payments made by a securitisation trust to its investors. The revised rule states:

The person responsible for making payments on behalf of a securitisation trust must submit the statement to:

1. The Principal Commissioner or Commissioner of Income-tax (within whose jurisdiction the principal office of the securitisation trust is located) by June 15 of the financial year following the year in which the income was paid or credited. This must be done electronically under a digital signature in Form No. 64E, verified by an accountant.
2. The investor by June 30 of the financial year following the year of income payment, using Form No. 64F. This form must be generated and downloaded from the specified web portal and verified by the person responsible for making the payments.

The Principal Director General or Director General of Income-tax (Systems) is responsible for:

1. Establishing the procedure for filing Form No. 64E and maintaining security and archival policies.
2. Defining the procedure, format, and standards for generating and downloading Form No. 64F.

3. Amendments in Appendix-II - Changes to Form No. 10IH

1. In S.No. 8, the figures "@10%" have been removed.
2. In S.No. 9, the words "and which is chargeable @10%" have been removed.
3. In S.No. 10, the figures "@15%" have been omitted.
4. In Annexure 1:

• In Part A1, the figures "@10%" have been removed.
• In Part A2, the words "and which is chargeable @10%" have been removed.
• In Part A3, the figures "@15%" have been removed.

Conclusion

These amendments bring more clarity and streamline the process of filing income distribution statements for business trusts and securitisation trusts. By implementing digital submissions and web-based downloads, the CBDT aims to enhance efficiency, transparency, and compliance within the tax system. These changes will impact business trusts, securitisation trusts, and their respective investors, requiring them to align with the updated filing procedures.