Income-tax (35th Amendment) Rules, 2021
Income-tax (35th Amendment) Rules, 2021
The Central Board of Direct Taxes on 29th December 2021 has introduced the Income-tax (35th Amendment) Rules, 2021 to further amend the Income-tax Rules, 1962. With this amendment, the CBDT has notified Rule 16DD and Form 56FF, which is required to be furnished by the assessee along with the return of income to claim deduction under section 10A of the Income Tax Act. The Rule 16DD is applicable retrospectively from 29-07-2021. The current article briefs the Income-tax (35th Amendment) Rules, 2021.
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Section 10A of the Income Tax Act
The Income Tax Act, 1961 contains several special beneficial provisions that allow for deductions in order to promote certain activities. One such provision is Section 10A of the Income Tax Act, which seeks to promote and boost new business undertakings situated in free trade zones by providing suitable deductions.
- It provides for a 100 percent deduction of profits and gains derived by undertakings engaged in the export of articles or computer software.
- The deduction is available for ten assessment years from the year in which the entity commences operations.
- These profits are to be determined based on the ratio of export turnover to the total turnover of the undertaking
New rule 16DD of Income Tax Rules
As mentioned above, through this Income-tax (35th Amendment) Rules, 2021, CBDT has notified a new rule 16DD which deals with ‘Form of particulars to be furnished along with the return of income for claiming deduction under clause (b) of sub-section (1B) of section 10A’.
The particulars, which are required to be furnished by the assessee, shall be in Form No. 56FF.
Form 56FF
The Form 56FF shall include the following Details:
- Special Economic Zone Reinvestment Allowance Reserve Account
- Amounts of eligible profits debited to the profit and loss account and credited to the Special Economic Zone Reinvestment Allowance Reserve Account
- Amounts are withdrawn from the Special Economic Zone Reinvestment Allowance Reserve Account:
- The net amount outstanding the Special Economic Zone Reinvestment Allowance Reserve Account on the last day of the current previous year
- Details of new plant/machinery purchased out of amounts withdrawn from Special Economic Zone Reinvestment Allowance Reserve Account
- Details of new plant/machinery purchased out of amounts withdrawn from Special Economic Zone Reinvestment Allowance Reserve Account.
- Details of the new plant/ machinery
- Name and address of the supplier of the new plant/ machinery
- Date of acquisition of plant/ machinery
- The date on which the new plant/ machinery was first put to use
The new Form 56FF is attached here for reference:
notification_no_140_2021-2-3