DT Amendments – Dec 21 Exams 1

1 Chapter 2 Residential status of certain individuals under Income-tax Act, 1961 (Circular No. 2
Basics & Dated March 3, 2021)
Residential
Status
The Board has received various representations requesting for relaxation in
determination of residential status for previous year 2020-21 from individuals who had
come on a visit to India during the previous year 2019-20 and intended to leave India
but could not do so due to suspension of international flights.

So is has been decided that if any individual is facing double taxation even after taking
into consideration the relief provided by the respective DTAAs, he may furnish the
information in Form -NR annexed to this circular by 31st March, 2021. This form shall
be submitted electronically to the Principal Chief Commissioner of Income-tax
(International Taxation).

2 Chapter 2
Significant economic presence creates Business connection in India.So the income is
Basics & deemed to be accrued in India.
Residential
The threshold limit has been notified –
Status

“The amount of aggregate of payments arising from transaction or transactions in respect

of any goods, services or property carried out by a non-resident with any person in
India, including provision of download of data or software in India during the previous
year, shall be 2 crore rupees.”
Further, the number of users with whom systematic and continuous business activities are
solicited or who are engaged in interaction shall be 3,00,000”

3 Chapter 4 LTC Cash Voucher Scheme

Background
Salary
To compensate and incentivize consumption by employees thereby giving a
boost to consumption expenditure, it has been decided that cash equivalent of
LTC, comprising Leave Encashment and LTC fare of the entitled LTC may be
paid by way of reimbursement.
Limit for CG employees –
Deemed LTC fare per person (Round Trip)
Employees who are entitled to business class of Rs. 36,000
airfare
Employees who are entitled to economy class of Rs. 20,000
airfare
Employees who are entitled to Rail fare of any class Rs. 6,000

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 DT Amendments – Dec 21 Exams 2

Limit for other than CG employees (state governments, public sector

enterprises, banks and private sector)
Payment of cash allowance, subject to maximum of Rs 36,000 per person as
Deemed LTC fare per person (Round Trip) to non-Central Government
employees.
New Rules added
Under Rule 2B of Income Tax Rules as follows:
Sub-Rule 1A
Maximum amount exempt shall be lower of –
Rs. 36,000 per person
Or
1/3rd of the specified expenditure
Specified expenditure – Buying goods/Services having minimum 12%
GST Rate.
Sub-Rule 1B
Where an exemption is claimed and allowed, shall have effect as if for the
words “two journeys” , the words “one journey” has been substituted.”

4. Chapter 4 – Salary
CBDT Notifies Rule 3B Prescribing Computation of Perquisite for Annual Accretion in PF and Other Funds u/s
17(2)(viia) for excess contribution by Employer Over Rs. 750000 [Notification No. 11 Dated March 5, 2021]

Finance Act, 2020 inserted a new sub-clause (viia) in section 17(2) so as to provide that annual accretion by
way of interest, dividend or any other amount of similar nature during the previous year to the balance at
the credit of the fund or scheme referred to in sub-clause (vii) may also be treated as perquisite.

In Simple words the accretion amount will be calculated as –

Employer's Current year's

contribution > 7.5 lacs / 2 x Rate

Plus

Past Contribution >7.5 lacs +

Past Taxable amount x Rate

Simplified form of formula given

TP= (PC/2)*R + (PC1+ TP1)*R

Terms Meaning
TP Final answer which will be calculated
PC Employers' Contribution > 7.5 lacs during the current year
Employers' Contribution > 7.5 lacs during the current year other than of current
PC1 year

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 DT Amendments – Dec 21 Exams 3

R I/ Favg
I Income accrued during the current previous
Funds Average
Favg (opening + Closing Balance )/2
TP1 Aggregate of taxable perquisite other than the current previous year

Example
Opening balance of NPS/RPF etc. 20,00,000
During the year contribution of
Employer 10,00,000
Employee 10,00,000
Interest earned during the year 8,00,000

5 Chapter 12 Extension of Time for Intimation of Aadhaar and Certain Other Time Limits (PIB
Dated March 31, 2021)
PAN –
Return Extending the last date for the intimation of Aadhaar number and linking thereof with
Filing PAN to 30th June, 2021.
6 Chapter 12
PAN is not required
PAN – Return
Filing
CBDT relaxes PAN requirement for a non-resident eligible foreign investor making
transaction only in a capital asset listed on a recognised stock exchange located in any
IFSC and consideration paid in Foreign Currency.

7 Chapter 13 With effect from the 1st day of October, 2020 and thereby amending Tax Collected at
Source (TCS) Rules.
TDS – TCS Rule 31AA [Statement of collection of tax u/s 206C(3)]: To furnish the particulars of amount
– Advance received or debited on which TCS was not collected from the buyer is to be reported.
Tax

8 Chapter 13
Clarification on doubts arising on account of new TCS provisions (PIB September 30,
TDS – TCS 2020)
– Advance Section 206C(1H)
Tax
With effect from 1st October, 2020 to provide that seller of goods shall collect tax @ 0.1 per
cent (0.075% up to 31.03.2021)
if the receipt of sale consideration from a buyer exceeds Rs. 50 lakh in the financial year.
Person would be required to collect tax only if his turnover exceeds Rs. 10 crore in the last
financial year.

asas

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 DT Amendments – Dec 21 Exams 4

TCS shall be applicable only on

The amount received on or after 1st October, 2020.
For example, a seller who has received Rs. 1 crore before 1st October, 2020 from a
particular buyer and receives Rs. 5 lakh after 1st October, 2020 would be required to
collect tax on Rs. 5 lakh only and not on Rs. 55 lakh [i.e Rs.1.05 crore - Rs. 50 lakh
(threshold)] by including the amount received before 1st October, 2020.

9 Chapter 15
Form Nos. Notified
Companies

• FORM No. 10-IE– Application for exercise of option under clause (i) of sub-section (5)
of Section 115BAC - Individual & HUF (Saasu Maa) of the Income-tax Act, 1961
• FORM No. 10-IF– Application for exercise of option under sub- section (5) of Section
115BAD (For Co-operative society) of the Income-tax Act, 1961.

Chapter 16 Faceless Appeal (Amendment) Scheme, 2021 (Notification No. 26 Dated March 31, 2021)

10 Assessment – For the expression “National e-Assessment Centre”, wherever it occurs, the expression
Appeals - “National Faceless Assessment Centre” shall be substituted.
Compliance

11 Chapter 16 CBDT has issued guidelines to relevant entities for submission of Statement of Financial
Transactions (SFT) for

Assessment – ✓ Dividend paid to share holders

Appeals -
✓ Interest received by investors
Compliance
✓ Capital gains arising to investors on transfer of shares & Units of Mutual Funds

12 Chapter 3 & 6 Miscellaneous

Exempt Income 1. Few Entities notified whose income will be exempt under section 10 –
& PGBP
• Real Estate RegulatoryAuthority ‘RERA’
• Tamil Nadu e- Governance Agency
• District Mineral Foundation Trust
• L&T Infra Debt Fund
• Haryana State Pollution Control Board

2. Notified as eligible entity for research under Section 35 (PGBP)

• M/s Bennett University, GreaterNoida, Uttar Pradesh

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 DT Amendments – Dec 21 Exams 5

13 Chapter 3 Background –
Exempt Section 10(23FE)
Income
• Specified persons will get exemption in Income Tax
• Incomes Exempt - Dividend, interest or long-term capital gains
• Investment made by it in India
• whether in the form of debt or equity
• In a company or enterprise engaged in infrastructure facility of section
80-IA
• Investment should be made between 1st April 20 upto 31st March,
2024
• Lock-in Period of 3 years.
Person already Notified
•Exemption of certain income in respect of the wholly owned
subsidiary of Abu Dhabi Investment Authority and Sovereign
Wealth Fund (IASWF)
[Notification No. 33 Dated April 19, 2021]
CBDT notifies the following as ‘as sovereign wealth fund
• Norfund, Government of Norway’
• Anahera Investment Pte. Ltd
• Dagenham Investment Pte. Ltd.
• Stretford Investment Pte. Ltd.
• Chiswick Investment Pte. Ltd
• CDC Group Plc
• Ministry of Economy and Finance (of the Republic of Korea)
• Bricklayers Investment Pte. Ltd

Few Pension Funds have also been notified for exemption

• OMERS Administration Corporation
• Government Employees Superannuation Board
• Public Sector Pension Investment Board
• CDPQ Fixed Income XI Inc.
• Ivanhoe Logistics India Inc
• CDPQ Infrastructures Asia III Inc.
• Caisse de dépôt et placement du Québec
• Canada Pension Plan Investment Board Private Holdings (4) Inc
• Canada Pension Plan Investment Board

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