The Central Board of Direct Taxes (CBDT) has notified the circumstances/conditions for the exemption of the pension fund as per section 10(23FE) and has substituted Form bearing number 10BBA.
The Board has notified the Income-tax (Eleventh Amendment) Rules, 2021 which further seeks to modify the Income-tax Rules, 1962.
In rule 2DB of the Income-tax Rules, 1962, – after clause (ii), the new provision has been inserted, which says that the condition mentioned in clause (ii) will be deemed to be satisfied with regard to the assets that are being invested or administered if the below-mentioned three conditions are satisfied.
The First condition being that the value of the aforesaid assets should not be more than 10% of the entire/total value of the assets invested or administered by said funds.
The second condition being said assets have been wholly owned that may be directly or indirectly by the foreign government overseas.
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And Thirdly, such assets are vested in the government of such foreign countries after the process of dissolution.
Then after proviso to the clause (iii), the new provision shall be inserted i.e.
“Provided further that the provisions of clause (iii) shall not apply to earning from the assets referred to in the proviso of clause (ii) if the said earning are credited either to the account of the Government of that foreign country or to any other account designated by such Government so that no portion of the earnings inures any benefit to any private person.”
Lastly, in Form bearing number 10BBA, the principal rules in APPENDIX II shall be replaced which is in regard to the application for notification released under sub-clause (iv) of clause (c) of Explanation 1 to the clause (23FE) of section 10 of the Income-tax Act, 1961.
