Dewan P. N. Chopra & Co.
Central Board of Direct Taxes (CBDT) vide Notification No. 13/2021, dated March 9, 2021, has inserted third and fourth proviso to rule 10V(12) of Income-tax Rules, 1962 ('the Rules') w.e.f. March 9, 2021.
Third proviso to rule 10V(12) of the Rules contains that sub-rules (3) to (12) of rule 10VA will mutatis mutandis apply to the application made under rule 10V as it applies to rule 10VA.
Further, Fourth proviso contains that sub-rule (3) of rule 10VA will not apply to application made under second proviso of rule 10V, if the application is for previous year beginning on April 1, 2021 i.e., for th relevant Assessment Year AY 2022-23 and is made before February 1, 2021.
Please note that Section 9A of the Income Tax Act, 1961 ('the Act') provides that in cases of eligible investment fund, the eligible fund manager carrying on the fund management activity will not constitute business connection in India. Further, section 9A(3)(m) of the Act, provides that remuneration paid by the fund to an eligible fund manager in respect of fund management activity undertaken by him on its behalf should not be less than amount prescribed under sub-rule (12) of rule 10V of the Rules. Further, rule 10V(12) of the Rules, provides for the calculation of the amount of remuneration to be paid by the fund to a fund manager.
A copy of aforesaid CBDT notification is attached herewith for your kind reference.
Should you require any further information/clarification in this regard, please feel free to contact us.