Income Tax (6th Amendment), Rules, 2017, notified

G.S.R 325(E).— In exercise of the powers conferred by clause (c) of sub-section (2) of Section 80JJAA read with Section 295 of the Income Tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income Tax Rules, 1962, namely:—

1. (1) These rules may be called the Income Tax (6th Amendment), Rules, 2017.

(2) They shall come into force from the 1st day of April, 2017.

2. In the Income Tax Rules, 1962 (hereafter referred to as the Principal rules), for the existing Rule 19AB, the following rule shall be substituted, namely:—

19AB. Form of report for claiming deduction under Section 80JJAA. -Report of an accountant which is required to be furnished by the assessee along with the return of income under clause (c) of sub-section (2) of Section 80JJAA shall be in Form No. 10DA.”

3. In the principal rules, in Appendix II, for the ‘Form No. 10DA’, the following Form shall be substituted, namely:—

FORM NO. 10DA

[See Rule 19AB]

Report under Section 80JJAA of the Income-tax Act, 1961

1. I/We* have examined the accounts and records of _____________ (Name and address of the assessee with permanent account number) engaged in the business of

of ____________ during the year ended on 31st day of March ____________.

2. I/We* certify that the deduction to be claimed by the assessee under sub-section (1) of Section 80JJAA of Income-tax Act, 1961, in respect of the assessment year ____________ is Rs. ____________ determined on the basis of additional employee cost incurred in the case of said business by the assessee in the previous year. The said amount has been worked out on the basis of details given in annexure to this form.

Place: ____________

Date: ____________

(Signature and Stamp/Seal of the Accountant)

Name of the Signatory____________

Full Address____________

Membership No. ____________

Notes:

1. *Delete whichever is not applicable.

2. This report is to be given by a chartered accountant within the meaning of the Chartered Accountants Act, 1949 who holds a valid certificate of practice under Section 6(1) of that Act and is not a person referred to in clause (a) or clause (b) of the Explanation below sub-section (2) of Section 288.

3. Where any of the matter stated in this report is answered in the negative or with a qualification, the report shall state the reasons therefor.

ANNEXURE

(See paragraph 2 of Form No. 10DA)

1.

Name of the assessee

2.

Address of the assessee

3.

Permanent Account Number of the assessee

4.

Assessment Year

5.

Additional employee cost incurred

(I)

In case of an existing business:

(a) Number of employee as on the last day of the preceding year.

(b) Number of employee as on the last date of the previous year.

(c) Increase in the number of employee from the total number of employee employed as on the last day of the preceding year (a)-(b).

(d) Number of additional employee* employed during the year.

(e) Number of additional employee entitled for deduction i.e not exceeding the number of increase in number of employee as computed in (c).

(f) Emoluments** paid or payable to additional employee entitled for deduction as computed in (e)#.

(II)

In case of a new business, emoluments paid or payable to additional employees employed during the first year of business.

6.

30% of the amount computed in 5(I)(f) or 5(II).

7.

Remarks.

Notes:

1.* “additional employee” means an employee who has been employed during the previous year and whose employment has the effect of increasing the total number of employees employed by the employer as on the last day of the preceding year, but does not include,—

(a) an employee whose total emoluments are more than twenty-five thousand rupees per month; or

(b) an employee for whom the entire contribution is paid by the Government under the Employees’ Pension Scheme notified in accordance with the provisions of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952); or

(c) an employee employed for a period of less than two hundred and forty days (one hundred and fifty days in case of an assessee engaged in the business of manufacturing of apparel) during the previous year; or

(d) an employee who does not participate in the recognised provident fund;

2.** “emoluments” means any sum paid or payable to an employee in lieu of his employment by whatever name called, but does not include—

(a) any contribution paid or payable by the employer to any pension fund or provident fund or any other fund for the benefit of the employee under any law for the time being in force; and

(b) any lump-sum payment paid or payable to an employee at the time of termination of his service or superannuation or voluntary retirement, such as gratuity, severance pay, leave encashment, voluntary retrenchment benefits, commutation of pension and the like”.

3. # the amount shall be nil if the emoluments are paid otherwise than by an account payee cheque or account payee bank draft or by way of a electronic clearing system through a bank account.”.

Ministry of Finance

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