CBDT Notifies the Income-tax (10th Amendment) Rules, 2020

The Central Board of Direct Taxes (CBDT) vide notification dated 27th May, 2020 has notified the Income-tax (10th Amendment) Rules, 2020 further to amend the Income-tax Rules, 1962. The changes brought by this amendment are as follows-

  1. Provisions of Rule 10V (5) to 10V(10) shall not apply on or after the 1st day of April, 2019.
  2. For application of Section 9A, the amendment provides that the amount of remuneration to be paid by the fund to a fund manager, in case the fund is Category-I foreign portfolio investor, the amount of remuneration shall be 0.10 per cent of the asset under management.
  3. The amount of remuneration to be paid by the fund to a fund manager, in other case shall be 0.30 per cent. of the asset under management; or 10 per cent. of profits derived by the fund in excess of the specified hurdle rate from the fund management activity undertaken by the fund manager; or 50 per cent. of the management fee.
  4. Assets management is defined as the annual average of the opening and closing balances of the value of such part of the fund which is managed by the fund manager.
  5. Management fee is defined as the amount mentioned in the certificate obtained from an accountant defined in clause (i)of Explanation to rule 11UB.
  6. Specified hurdle rate mean a pre-defined threshold beyond which the fund agrees to pay a share of the profits earned by the fund from the fund management activity undertaken by the fund manager.
  7. The fund manager shall, in addition to any report required to be furnished by it under section 92E, obtain a report from the accountant in respect of activity undertaken for the fund and furnish such report on or before the specified date in the Form No. 3CEJA. The new Form 3CEJA is also attached with the notification.

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