[भाग II—खण्ड 3(i)]
भारतकाराजपत्र:असाधारण
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MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 20th March, 2026
G.S.R. 198(E).—In exercise of powers conferred by section 533 of the Income-tax Act, 2025 (30 of 2025),
the Central Board of Direct Taxes hereby makes the following rules, namely:–
1. Short title and commencement.–(1) These rules may be called the Income-tax Rules, 2026.
(2) They shall come into force on the 1st April, 2026.
2. Definitions.– (1) In these rules, unless the context otherwise requires,—
(a) "Act" means the Income-tax Act, 2025 (30 of 2025);
(b) "authorised bank" means any bank as may be appointed by the Reserve Bank of India as its agent under the
provisions of sub-section (1) of section 45 of the Reserve Bank of India Act, 1934 (2 of 1934);
(c) ―Form‖ means a Form in Appendix III appended to these rules;
(d) "section" means a section of the Act.
(2) Words and expressions used herein and not defined but defined in the Act shall have the meanings respectively
assigned to them in the Act.
3. Arrangements for declaration and payment of dividends within India.–The arrangements referred to in section
2(42) to be made by a company for the declaration and payment of dividends (including dividends on preference
shares) within India shall be as follows:
(a) the share-register of the company for all shareholders shall be regularly maintained at its principal place
of business within India, in respect of any tax year from a date not later than the 1st April of such year;
(b) the general meeting for passing the accounts of the tax year and for declaring any dividends in respect
thereof shall be held only at a place within India; and
(c) the dividends declared, if any, shall be payable only within India to all shareholders.
4. Conditions that a stock exchange is required to fulfil to be notified as a recognised stock exchange under
section 2(92).– For the purposes of section 2(92), a stock exchange shall fulfil the following conditions in respect of
trading in derivatives:-
(a) the stock exchange shall have the approval of the Securities and Exchange Board of India established
under the Securities and Exchange Board of India Act, 1992 (15 of 1992) in respect of trading in derivatives
and shall function in accordance with the guidelines or conditions laid down in this behalf by the Securities
and Exchange Board of India;
(b) the stock exchange shall ensure that the particulars of the client (including unique client identity number
and Permanent Account Number) are duly recorded and stored in its databases;
(c) the stock exchange shall maintain a complete audit trail of all transactions (in respect of cash and
derivative market) for a period of seven tax years on its system;
(d) the stock exchange shall ensure that transactions (in respect of cash and derivative market) once
registered in the system are not erased;
(e) the stock exchange shall ensure that the transactions (in respect of cash and derivative market) once
registered in the system, are modified only in cases of genuine error; and
(f) the stock exchange shall maintain data regarding all transactions (in respect of cash and derivative
market) registered in the system which have been modified and submit a monthly statement in Form No. 1 to
the Director General of Income-tax (Systems), within fifteen days from the last day of each month to which
such statement relates.
5. Procedure for notification of a recognised stock exchange for the purposes of section 2(92).– (1) An
application for notification of a stock exchange as a recognised stock exchange for the purposes of section 2(92) may
be made to the Member (Income Tax), Central Board of Direct Taxes, New Delhi.
(2) The application referred to in sub-rule (1) shall be accompanied with the following documents,:-
(a) approval granted by the Securities and Exchange Board of India for trading in derivatives;
(b) up-to-date rules, bye-laws and trading regulations of the stock exchange;
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THE GAZETTE OF INDIA : EXTRAORDINARY
[PART II—SEC. 3(i)]
(c) confirmation regarding fulfilling the conditions referred to in clause (b) to (f) of rule 4; and
(d) such other information as the stock exchange may like to place before the Central Government.
(3) The Central Government may call for such other information from the applicant as it deems necessary for taking a
decision on the application.
(4) The Central Government, after examining the information furnished by the stock exchange under sub-rule (2) or
sub-rule (3), shall notify the stock exchange as a recognised stock exchange for the purposes of section 2(92) or issue
an order rejecting the application before the expiry of six months from the end of the month in which the application
is received.
(5) The notification referred to in sub-rule (4) shall be effective until the approval granted by the Securities and
Exchange Board of India is withdrawn or expires, or the said notification is rescinded by the Central Government.
6. Method of determination of period of holding of capital assets in certain cases.– (1) For the purposes of section
2(101)(c)(D), the period for which such capital asset is held by an assessee, shall be determined in accordance with
the provisions of this rule.
(2) For the capital asset mentioned in column B of the Table below, the period for which the capital asset is held by
the assessee shall be determined in accordance with column C thereof:
Table
Sl.No.
Nature of Assets
Period of holding
A
B
C
1.
Shares or debentures of a company, which
becomes the property of the assessee under
the circumstances mentioned in section
70(1)(z).
The period of holding shall include the period for which the
bond, debenture, debenture-stock or deposit certificate, as
the case may be, was held by the assessee prior to the
conversion.
2.
Capital asset declared under the Income
Declaration Scheme, 2016 made under the
Finance Act, 2016 (28 of 2016).
(i) In the case of an immovable property, the period for
which such property is held is to be reckoned from the
date on which such property is acquired, if the date of
acquisition is evidenced by a deed registered with any
authority of a State Government; and
(ii) in any other case, the period for which such asset is held
shall be reckoned from the 1st June, 2016.
3.
Capital asset which became the property of
the
Indian
subsidiary
company
in
consequence to conversion of a branch of a
foreign company referred to in section
219(1).
The period of holding shall include the following:
(i) the period for which the asset was held by the said
branch of the foreign company; or
(ii) the period for which the asset was held by the previous
owner, if any, who has acquired the capital asset by a
mode of acquisition referred to in section 73(1)
[Sl.No.1. C.A] or section 219(1).
(3) In case of the amount which is chargeable to income-tax as income of a specified entity under section 67(10)
under the head ―Capital gains‖,–
(a) the amount or a part of it shall be considered to be from transfer of short-term capital asset, if it is
attributed to,–
(i) the capital asset which is short-term capital asset at the time of taxation of amount under section
67(10); or
(ii) capital asset forming part of block of asset; or
(iii) capital asset being self-generated asset and self-generated goodwill as defined in section
67(11); and
(b) the amount or a part of it shall be considered to be from transfer of long-term capital asset or assets, if it
is attributed to capital asset which is not covered by sub-clause (i) of clause (a) and is long-term capital asset
at the time of taxation of amount section 67(10).
7. Procedure for notification of zero coupon bond.– (1) An application by an entity, being an infrastructure capital
company or infrastructure capital fund or infrastructure debt fund or a public sector company under section 2(112),
for notification of any zero coupon bond proposed to be issued by it shall be made in Form No.2 at least three months
before the date of issue of such bond.
(2) An application made under sub-rule (1) shall not be made for notification of a bond which is to be issued beyond a
period of two financial years following the financial year in which such application is made.
