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Assessee companies receive tax relief under section 115JB for past income included in book profit due to advance pricing agreements or secondary adjustments. The assessee company calculates the tax reduction using a specific formula based on current and past tax amounts. If the formula value is negative, the value becomes zero. The assessee company reduces the tax credit allowed under section 115JAA by the amount of the reduction. The assessee company submits a claim for relief electronically in Form No. 3CEEA. An authorised person verifies the Form.
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MINISTRY OF FINANCE (Department of Revenue) (CENTRAL BOARD OF DIRECT TAXES) NOTIFICATION New Delhi, the 10th August, 2021
G.S.R. 551(E).—In exercise of the powers conferred by sub-section (2D) of section 115JB 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:─
Short title.-These rules may be called the Income tax (23rd Amendment), Rules, 2021.
In the Income-tax Rules, 1962, (hereinafter referred to as principal rules) after rule 10RA, the following rule shall be inserted, namely:—
“10RB. Relief in tax payable under sub-section (1) of section 115JB due to operation of sub-section (2D) of section 115JB.- (1) For the purposes of sub-section (2D) of section 115JB, the tax payable by the assessee company under sub-section (1) of section 115JB, for the previous year referred to in that section, shall be reduced by the following amount, namely:-
(A-B) – (D-C), where,
A = tax payable by the assessee company under sub-section (1) of section 115JB on the book profit of the previous year including the past income;
B = tax payable by the assessee company under sub-section (1) of section 115JB on the book profit of the previous year after reducing the book profit with the past income;
C = Aggregate of tax payable by the assessee company under sub-section (1) of section 115JB on the book profit of those past year or years to which the past income belongs;
D = Aggregate of tax payable by the assessee company under sub-section (1) of section 115JB on the book profit of past year or years, referred to in item C, after increasing the book profit with the relevant past income of such year or years:
Provided that if the value of (A-B)-(D-C) in the formula is negative, its value shall be deemed to be zero.
(2) For the purposes of sub-rule (1) past income shall be the amount of income of past year or years included in the book profit or the previous year on account of an advance pricing agreement entered into by the assessee under section 92CC or on account of secondary adjustment required to be made under section 92CE.
(3) On application of provision of sub-rule (1), the tax credit allowed to the assessee under section 115JAA shall be reduced by the amount which is equal to the amount of reduction that has been allowed under sub-rule (1).
(4) The assessee company shall make a claim for relief under sub-section (2D) of section 115JB in Form No. 3CEEA electronically by uploading signed printout of said Form in the manner specified by the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be.
(5) Form No.3CEEA shall be verified by the person who is authorised to verify the return of income of the assessee company under section 140.
(6) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, shall specify the procedure for filing of the Form No. 3CEEA and shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to the statements so furnished under this rule.
Explanation 1.- The value of amount “A” in the formula shall be deemed to be zero, if there is no tax payable under sub-section (1) of section 115JB on the book profit of that previous year including the past income.
Explanation 2.- The value of amount “B” in the formula shall be deemed to be zero, if there is no tax payable under sub-section (1) of section 115JB on the book profit of that previous year after reducing the book profit with the past income.
Explanation 3.- For the purposes of calculation of amount “C” in the formula, if in any past year or years there is no tax payable under sub-section (1) of section 115JB on the book profit of that year or years, the tax payable for that year or years shall be deemed to be zero.
Explanation 4.-For the purposes of calculation of amount “D” in the formula, if in any past year or years there is no tax payable under sub-section (1) of section 115JB on the book profit of that year or years after increasing the book profit with the relevant past income of such year or years, the tax payable for that year or years shall be deemed to be zero.
“FORM No 3CEEA
[See sub-rule (4) of rule 10RB]
Form for furnishing particulars for the year ending 31st March,………for recomputation for any adjustment on account of income of past year(s) included in books of account of previous year by a Company on account of secondary adjustment under section 92CE or on account of an Advance Pricing Agreement entered under section 92CC
| Sr. No. | Particulars | Details | ||
|---|---|---|---|---|
| 1. | Name and address of the Company | |||
| 2. | Permanent Account Number | |||
| 3. | Residential status | |||
| 4. | Relevant previous year | |||
| 5. | Is it a case of APA or secondary adjustment | |||
| 6. | Details of past income [refer sub-rule (2) of rule 10RB] | Relevant previous year | Amount of past income | Total amount of past income |
| 7. | Amount A of formula in sub-rule (1) of rule 10RB (tax payable on book profit of the previous year including past income) | |||
| 8. | Amount B of formula in sub-rule (1) of rule 10RB (tax payable on book profit of the previous year excluding past income) | |||
| 9. | A-B (amount at item 7 minus amount at item 8) | |||
| 10. | Amount C of formula in sub-rule (1) of rule 10RB with details of tax payable | (I) Amount C of formula in sub-rule (1) of rule 10RB | ||
| (II) Details of tax payable on the book profit of past years | ||||
| Relevant previous year | Amount of tax payable | Aggregate of tax payable on the book profit of past years | ||
| 11. | Amount D of formula in sub-rule (1) of rule 10RB with details of tax payable | (I) Amount D of formula in sub-rule (1) of rule 10RB | ||
| (II) Details of tax payable on the book profit of past years including past income | ||||
| Relevant previous year | Amount of tax payable | Aggregate of tax payable on the book profit of past years including past income | ||
| 12. | D-C (amount at item 11 minus amount at item 10) | |||
| 13. | Relief in tax under section 115JB (2D) (amount at item 9 minus amount at item 12) | |||
