Introduction
The Central Board of Direct Taxes (CBDT) vide its Notification No.88/2023 Dated.10th October 2023 has notified some amendments in Rules 114B, 114BA and 114BB of the Income Tax Rules 1962. These Rules may be called the Income Tax (Twenty Fourth Amendment) Rules 2023 and they shall come into force from the date of their publication in the official gazette.
Let us now discuss over some basics about these three rules before delving into the amendments brought in these rules vide this Notification no. 88/2023.
Brief About Rule 114B
Rule 114B mandates about the specified transactions in relation to which permanent account number (PAN) is to be quoted in all documents for the purpose of clause (c) of sub-section (5) of section 139A. Every person specified under this rule shall quote his permanent account number in all documents pertaining to the transactions specified under the rule.
Brief About Rule 114BA
Rule 114BA specifies the list of transactions, for the purposes of clause (vii) of sub-section (1) of section 139A, when entered into by any person who has not been allotted a permanent account number, shall within such time, as may be prescribed, apply to the Assessing Officer for the allotment of a permanent account number.
Brief About Rule 114BB
Rule 114BB mandates that every person shall, at the time of entering into a specified transaction for the purpose of sub-section (6A) of section 139A, quote his permanent account number or Aadhaar number, as the case may be, in documents pertaining to such transaction, and every specified person for the purpose of clause (ab) of Explanation to section 139A, who receives such document, shall ensure that the said number has been duly quoted and authenticated.
Let us delve into the specific amendments brought under these three rules vide this Notification:
Amendments in Rule 114B through Notification 88/2023
(a) in the second proviso, for the words “Provided further that any person”, the words “Provided further that any person, not being a company or a firm,” shall be substituted;
(b) after second proviso, the following proviso shall be inserted, namely: “Provided also that a foreign company who, (i) does not have any income chargeable to tax in India; and (ii) does not have a permanent account number, and enters into any transaction referred to at Sl. No. 2 or 12 of the Table, in an IFSC banking unit, shall make a declaration in Form No. 60:”;
(c) in the Explanation, clause (1) shall be re-numbered as (1A) and before the said clause as so re-numbered, the following clause shall be inserted, namely: “(1) “IFSC banking unit” means a financial institution defined under clause (c) of sub-section (1) of section 3 of the International Financial Services Centres Authority Act, 2019 (50 of 2019), that is licensed or permitted by the International Financial Services Centres Authority to undertake permissible activities under the International Financial Services Centres Authority (Banking) Regulations, 2020;”.
Amendments in Rule 114BA through Notification 88/2023
Following are the amendments brought under Rule 114BA through the Notification No.88/2023:
In the principal rules, in rule 114BA, the following shall be inserted at the end, namely: “Provided that the provisions of this rule shall not apply in a case, (a) where the person, making the deposit or withdrawal of an amount otherwise than by way of cash as per clause (a) or (b), or opening a current account not being a cash credit account as per clause (c) of this rule, is a non-resident (not being a company) or a foreign company; (b) the transaction is entered into with an IFSC banking unit; and (c) such non-resident (not being a company) or the foreign company does not have any income chargeable to tax in India.
Explanation- For the purposes of this rule, “IFSC banking unit” shall have the same meaning as assigned to it in clause (1) of the Explanation to rule 114B.”.
Amendments in Rule 114BB through Notification 88/2023
Following are the amendments brought under Rule 114BB through the Notification No. 88/2023:
In the principle rules, in rule 114BB, after the proviso, the following shall be inserted, namely: “Provided further that the provisions of this sub-rule shall not apply in a case,
(a) where the person, making the deposit or withdrawal of an amount otherwise than by way of cash as per Sl. No. 1 or Sl. No. 2 of column (2), or opening a current account not being an cash credit account as per Sl. No. 3 of column (2) of the Table, is a non-resident (not being a company) or a foreign company;
(b) the transaction is entered into with an IFSC banking unit; and
(c) such non-resident (not being a company) or the foreign company does not have any income chargeable to tax in India.
Explanation-For the purposes of this sub-rule, “IFSC banking unit” shall have the same meaning as assigned to it in clause (1) of the Explanation to rule 114B.”.
Amendment in Form No. 60 in the Appendix II of the principal rules
In addition to the amendments brought by this notification under the three rules as described above, this notification has also brought a change in the Form No -60 in the Appendix II of the principal rule. This new form-60 is available in the notification which can be accessed by following the link given at the end of this article. Form No.60 is a Form for declaration to be filed by any person (other than a company or firm) or a foreign company covered by the third proviso to rule 114B, who does not have a permanent account number and who enters into any transaction specified in rule 114B.
Conclusion
For a clear understanding of the amendments in these rules brought by this notification, having an idea about the rules existing prior to this amendment and the section 139A will definitely be helpful. So, the Links of the rules which existed before this amendment along with a Link of the section 139A has been given below for the ready reference of the readers.
To access the Rule 114B prior to this 24th amendment CLICK HERE
To access the Rule 114BA prior to this 24th amendment CLICK HERE
To access the Rule 114BB prior to this 24th amendment CLICK HERE
To access the provisions under Section 139A CLICK HERE
To access the Notification No.88/2023 dated 10 October 2023 CLICK HERE
To Read the Article on CBDT Circular No.17/2023 CLICK HERE
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