Amendment in Form 3CD, Form 3CEB, Form ITR-6 and Introduction of new rules

The Central Board of Direct Taxes (‘CBDT’) vide notification 82/2020 dated 01.10.2020 has brought in certain amendments with effect from 01.10.2020, as per the following:

• Amendment in Rule 5 of the Income-tax Rules, 1962 (‘Rules’);
• Introduction of two new rules, namely, Rule 21AG and Rule 21AH for concessional tax regime under section 115BAC and section 115BAD respectively.
• Amendment in Form 3CD, Form 3CEB, and Form ITR-6;

Amendment in Rule 5 of the Income-tax Rules, 1962;

Rule 5 prescribes the manner and rate for computation of depreciation under section 32(1)(ii) of the Income-tax Act, 1961 (‘Act’) in respect of block of assets. The existing proviso to this Rule restricts the rate of depreciation to 40% where any domestic company exercises an option u/s 115BA(4) of the Act. Presently, the proviso covers only section 115BA. 

Vide this notification, the existing proviso has been replaced by new proviso to incorporate options under section 115BAA, section 115BAB, section 115BAC and section 115BAD, and therefore, persons opting for section 115BAA, section 115BAB, section 115BAC and section 115BAD would not be able to claim depreciation for more than 40%. 

Introduction of two new rules, namely, Rule 21AG and Rule 21AH for concessional tax regime under section 115BAC and section 115BAD respectively

Rule 21AG prescribes that option u/s 115BAC shall be exercised in Form 10-IE, and Rule 21AH prescribes that option u/s 115BAD shall be exercised in Form 10-IF for AY 2021-22. Both these Forms shall be filed electronically. 

Amendment in Form 3CD, Form 3CEB and Form ITR-6

Form 3CD, Form 3CEB and Form ITR-6 have been suitably amended to incorporate the newly introduced sections 115BA, section 115BAA and section 115BAB. 

• Form 3CD has been amended to provide for reporting of the adjustment once the option under those section is exercised;
• Form 3CEB has been amended to provide for reporting of transactions made with the persons opted for section 115BAB which has resulted in more than ordinary profits;
•  Schedule-DPM, Schedule CFL, Schedule UD of the ITR-6 has been amended to incorporate adjustment on account of depreciation, brought forward losses, and unabsorbed depreciation once the option under section 115BAA is exercised. 

Read full text of the Notification No. 82/2020 dated 1 October 2020. 

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