The Central Board of Direct Taxes (CBDT) recently issued Notification No. 35/2023-Income Tax, introducing amendments to the Income-tax Rules, 1962. The notification, which came into effect on April 1, 2023, and is applicable for the assessment year 2023-2024 and subsequent years, focuses on the amendment of rule 11UAC related to movable property. Specifically, the amendment pertains to equity shares of a public sector company, or a company received through strategic disinvestment from a public sector company, the Central Government, or any State Government. Let’s explore the details of this important notification.
Key Details of CBDT Notification No. 35/2023-Income Tax:
- Amendment to Rule 11UAC: Clause (4) of rule 11UAC of the Income-tax Rules, 1962, has been substituted by this notification. The new clause now covers any movable property, particularly equity shares, of a public sector company or a company received through strategic disinvestment from a public sector company, the Central Government, or any State Government.
- Definition of Strategic Disinvestment: The notification includes an explanation for the term “strategic disinvestment.” As per the explanation, strategic disinvestment carries the same meaning as assigned to it in clause (iii) of the Explanation to clause (d) of sub-section (1) of section 72A of the Income-tax Act, 1961.
- Short Title and Applicability: The amended rules are referred to as the Income-tax (Eighth Amendment) Rules, 2023. They came into effect on April 1, 2023, and are applicable for the assessment year 2023-2024 and subsequent assessment years.
- Explanatory Memorandum: The notification includes an explanatory memorandum that certifies that no person is adversely affected by giving retrospective effect to this notification. This ensures that the changes made do not negatively impact any individual or entity.
CBDT Notification No. 35/2023-Income Tax introduces significant amendments to the Income-tax Rules, 1962, specifically related to movable property, particularly equity shares received through strategic disinvestment. The notification aims to streamline the taxation process and bring clarity regarding the treatment of such assets. Businesses and individuals should carefully review the amended rules to ensure compliance and proper reporting of movable property under the Income-tax Act.
