CBDT Mandates E-Filing for Business Trusts & AIFs Under New Tax Rules

The Central Board of Direct Taxes (CBDT) has issued Notification No. 17/2025, introducing amendments to the Income-Tax Rules, 1962 under the Income-Tax Act, 1961. The amendments primarily focus on Sections 115UB, 115TD, 115TA, and 115TCA, ensuring greater clarity in the reporting and taxation of business trusts, investment funds, and related entities.

Key Highlights of the Notification

1. Revised Reporting for Business Trusts

• Rule 12UB has been revised, mandating business trusts to electronically furnish income distribution details to unit holders using Form 64B.
• The reporting deadline has been set as June 15 of the subsequent financial year for income distributed during the previous financial year.
• Business trusts must also issue income distribution statements in Form 64C to unit holders by June 30.

2. Changes in Reporting for Investment Funds

• Rule 12UC has been amended to specify that investment funds must provide income distribution details to unitholders using Form 64D.
• Investment funds are required to file details electronically by June 15 and issue statements to beneficiaries by June 30 in Form 64E.

3. Revised Tax Treatment for Trusts and Funds

• The amendment clarifies tax rates and deductions applicable to business trusts, REITs, and AIFs.
• Specific capital gains tax adjustments have been made under Sections 112A and 111A, removing previously specified 10% and 15% tax rates for certain capital gains, aligning them with new rules.

4. Digital Compliance and E-Filing Mandates

• The notification emphasizes the use of digital signatures and electronic filing of forms on designated tax portals.
• The Principal Director General of Income Tax (Systems) has been empowered to define the procedures and security protocols for electronic filing.

Implications for Taxpayers and Businesses

• Increased Compliance Burden: Trusts and investment funds must ensure timely and accurate filing of income distribution statements.
• Stronger Digital Filing Framework: The push towards paperless compliance aligns with India's broader digital governance initiatives.
• Potential Tax Liabilities: Investors and unit holders should be aware of the revised tax rates and deductions applicable to their investments.

This notification underscores the government's commitment to simplifying tax compliance while strengthening the regulatory framework for business trusts, investment funds, and beneficiaries.

Official copy of the notification has been attached