Notification No. 16/2020 [F.No.370142/22/2019-TPL] / SO 986(E)

Last updated: 08 March 2020

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The Central Board of Direct Taxes has issued a notification specifying certain securities that are now recognised for the purposes of sub-clause (d) of clause (viiab) of section 47 of the Income-tax Act, 1961. These include foreign currency denominated bonds and shares, units of Mutual Funds, business trusts, and Alternative Investment Funds. These securities must be listed on a recognised stock exchange within an International Financial Services Centre. This notification comes into effect from April 1, 2020.

MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 5th March, 2020
INCOME-TAX

S.O. 986(E).—In exercise of the powers conferred by sub-clause (d) of clause (viiab) of section 47 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies the following securities for the purposes of the said sub-clause, namely:-

(i) foreign currency denominated bond;
(ii) unit of a Mutual Fund;
(iii) unit of a business trust;
(iv) foreign currency denominated equity share of a company;
(v) unit of Alternative Investment Fund,

which are listed on a recognised stock exchange located in any International Financial Services Centre in accordance with the regulations made by the Securities and Exchange Board of India under the Securities and Exchange Board of India Act 1992 (15 of 1992) or the International Financial Services Centres Authority under the International Financial Services Centres Authority Act 2019 (50 of 2019), as the case may be.

Explanation.- For the purposes of this notification,─

(a) “Mutual Fund” means a Mutual Fund specified under clause (23D) of section 10 of the Income-tax Act, 1961.
(b) “Alternative Investment Fund” shall have the meaning assigned to it in clause (b) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012.

2. This notification shall come into force with effect from 1st April 2020.

[Notification No. 16/2020, F.No.370142/22/2019-TPL]

GUDRUN NEHAR,
Director (Tax Policy & Legislation)

FAQ :

This notification specifies certain securities that are now recognised under the Income-tax Act, 1961, for the purposes of sub-clause (d) of clause (viiab) of section 47.

The notified securities include foreign currency denominated bonds, units of Mutual Funds, units of business trusts, foreign currency denominated equity shares of a company, and units of Alternative Investment Funds.

These securities must be listed on a recognised stock exchange located in any International Financial Services Centre.

This notification comes into force with effect from 1st April 2020.

A 'Mutual Fund' for this notification means a Mutual Fund specified under clause (23D) of section 10 of the Income-tax Act, 1961.