The Central Board of Direct Taxes (CBDT) has amneded the Income-tax Rules 1962, vide Income Tax Notification 51/2023 (Income-tax Thirteenth Amendment Rules, 2023), dated 18th July, 2023. These amendments specifically address the issue of relocation of funds and movable property to an International Financial Services Centre (IFSC).
New I-T Rule 11UAC(5) Inserted
The new income tax rule, 11UAC(5) has been inserted which deals with movable property like shares or units that are received by the fund management entity of the new fund in exchange for shares or units held by the investment manager entity in the original fund during the relocation process.
The new rule lays out specific conditions for this exchange to happen. These conditions include the proportion of shares or units held by the same entities or persons. The rule also provides definitions for terms like “relocation,” “original fund,” “resultant fund,” “fund management entity” and “investment manager entity.”
Amendment in I-T Rule 11UAC(4)
Sub-rule (4) of rule 11UAC has also been amendded to replace the words “this clause” with “this sub-rule” in the Explanation of sub-rule (4).
CBDT Income Tax Notification 51/2023 dated 18/07/2023: Amendment in I-T Rule 11UAC (Relocation of Funds & Movable Property to IFSC)