CBDT Notification 92/2021: Income tax (23rd Amendment), Rules, 2021

CBDT notifies the Income tax (23rd Amendment), Rules, 2021, to insert new IT Rule 10RB for prescribing the procedure/ methodology for re-computation of book profit u/s 115JB of the Income tax Act, 1961, to provide relief in MAT payable in certain cases of increased book profits due to Advance Pricing Agreements (APA)/ Secondary Adjustments, vide Notification 92/2021 dt. 10/08/2021.

CBDT Income Tax Notification 92/2021 dt. 10/08/2021: Income tax (23rd Amendment), Rules, 2021 notified to insert new IT Rule 10RB

New IT Rule 10RB on ‘Relief in tax payable u/s 115JB(1) due to operation of section 115JB(2D)’ along with new FORM No. 3CEEA for ‘annual furnishing of particulars of re-computation for any adjustment on account of income of past year(s) included in books of account of previous year by a Company on account of secondary adjustment u/s 92CE or on account of an Advance Pricing Agreement entered u/s 92CC’ have been introduced/ inserted in the Income Tax Rules, 1962.

Earlier, new IT Section 115JB(2D) was inserted vide the Finance Act, 2021, which  prescribes for re-computation of tax relief when there is an increase in book profits due to APA/ secondary adjustments.

Accordingly, new IT Rule 10RB provides for re-computation of book profits by the AO, in respect of past year(s) and tax payable by the taxpayer during the previous year u/s 115JB(1), in the prescribed manner.

Now a Taxpayer can file an application before the AO for re-computation for any adjustment on account of income of past year(s) included in books of account of previous year by a Company on account of secondary adjustment under section 92CE or on account of an Advance Pricing Agreement entered under section 92CC, to rationalize the book profits under MAT and to reduce ambiguity and disputes in MAT relief claims by taxpayers.

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