Notification No. 32/2021 [F. No.370142/28/2020-TPL] / G.S.R. 274(E)

Last updated: 17 April 2021

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The Central Board of Direct Taxes has issued Notification No. 32/2021, introducing amendments to the Income-tax Rules, 1962. These changes, effective from their publication date, include modifications to Rule 2DB regarding loans and borrowings, the omission of clause (iv), and the insertion of an Explanation defining 'loan and borrowing'. Rule 2DC and Appendix II, Form No. 10BBA, have also been amended.

MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 15th April, 2021
INCOME-TAX

G.S.R. 274(E).—In exercise of the powers conferred by sub-clause (iii) of clause (c) of Explanation 1 to the clause (23FE) of section 10 read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-

1. Short title and commencement. -

(1) These rules may be called the Income-tax (10th Amendment) Rules, 2021.

(2) They shall come into force from the date of their publication in the Official Gazette.

2. In the Income-tax Rules, 1962 (hereinafter referred to as the principal rules), in rule 2DB,-

(i) after clause (iii), the following proviso shall be inserted, namely:− “Provided that the provisions of clause (iii) shall not apply to any payment made to creditors or depositors for loan taken or borrowing for the purposes other than for making investment in India;”;

(ii) clause (iv) shall be omitted;

(iii) after clause (vi), the following Explanation shall be inserted, namely:− ‘Explanation: For the purposes of this rule, "loan and borrowing" shall have the same meaning as assigned to it in sub-clause (b) of clause (ii) of Explanation 2 to clause (23FE) of section 10.’.

3. In the principal rules, in rule 2DC, in sub-rule (1), for the word “Explanation”, the word and figure “Explanation 1” shall be substituted.

4. In the principal rules, in the APPENDIX II, for Form No. 10BBA the following Form shall be substituted, namely:-

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FAQ :

The notification makes amendments to the Income-tax Rules, 1962, further to the provisions of section 10 and section 295 of the Income-tax Act, 1961.

These rules come into force from the date of their publication in the Official Gazette.

A proviso has been inserted stating that the provisions of clause (iii) shall not apply to payments made to creditors or depositors for loans taken or borrowings for purposes other than investment in India. Clause (iv) has been omitted, and an Explanation defining 'loan and borrowing' has been inserted.

In Rule 2DC, sub-rule (1), the word 'Explanation' has been substituted with 'Explanation 1'.

Yes, in Appendix II, Form No. 10BBA has been substituted with a new form.