The Central Board of Direct Taxes (CBDT) has notified the Income Tax (26th Amendment) Rules, 2023 to amend the income tax rules relating to the claim of deduction under Section 10AA of the Income Tax Act, 1961. Here are the key highlights:
Highlights of the Notification
i) The notification is deemed to have come into force retrospectively from July 29, 2021.
ii) It inserts Rule 16D in the Income Tax Rules, 1962 regarding the form of accountant’s report for claiming deduction under Section 10AA.
iii) The report will be in Form 56F.
iv) It omits references to Form 56F in Rule 130 related to audit report.
v) Form 56F contains details like name and PAN of the assessee, location of the SEZ unit, amount of deduction claimed under Section 10AA, certification by the accountant, etc.
Background
i) Section 10AA of the Income Tax Act provides for a deduction for SEZ units on export profits.
ii) An accountant’s report in Form 56F is required to be furnished by the assessee claiming the deduction.
iii) The new rules prescribe the format of Form 56F to bring uniformity.
Implications
i) The notification provides clarity on the accountant’s report to claim deduction under Section 10AA.
ii) SEZ units can now file the report in prescribed Form 56F to claim the deduction.
iii) The retrospective applicability from July 2021 gives relief from past procedural issues.
iv) Overall, the notification aims to streamline the process of availing deduction under Section 10AA.
The notification helps bring procedural clarity for taxpayers and accountants regarding the deduction claim process under Section 10AA. This will improve compliance and avoid litigation on technical grounds.
CBDT Income Tax Notification 91/2023 dated 19/10/2023: New IT Rule 16D/ Form 56F for Claiming Section 10AA Deduction