Rule-21AI (of Income Tax Rules, 1962), Computation of exempt income of specified fund for the purposes of clause (4D) of section 10 (of Income Tax Act, 1961)

(1) For the purpose of clause (4D) of section 10 (of Income Tax Act, 1961), income attributable to units held by non-resident (not being the permanent establishment of a non-resident in India) in a specified fund shall be computed in accordance with the following formula, namely:-

Income exempt under clause (4D) of section 10 (of Income Tax Act, 1961)= A×C1 + B×C2 +D×FI+E×F2, where

A = any income accrued or arisen to, or received by a specified fund as a result of transfer of capital asset referred to in clause (viiab) of section 47 (of Income Tax Act, 1961) , on a recognised stock exchange located in any International Financial Services Centre and where the consideration for such transaction is paid or payable in convertible foreign exchange;

B = any income accrued or arisen to, or received by a specified fund as a result of transfer of securities (other than shares in a company resident in India);

C1 = ratio of the aggregate of daily 'assets under management' of the specified fund held by non-resident unitholders (not being the permanent establishment of a non-resident in India) to the aggregate of daily total 'assets under management' of the specified fund, from the date of acquisition of the capital asset referred to in clause (viiab) of section 47 (of Income Tax Act, 1961) to the date of transfer of such capital asset.

C2 = ratio of the aggregate of daily 'assets under management' of the specified fund held by non-resident unitholders (not being the permanent establishment of a non-resident in India) to the aggregate of daily total 'assets under management' of the specified fund, from the date of acquisition of the security (other than shares in a company resident in India) to the date of transfer of such security.

D = any income accrued or arisen to, or received by a specified fund from securities issued by a non-resident (not being a permanent establishment of a non-resident in India) and where such income otherwise does not accrue or arise in India;

E = any income accrued or arisen to, or received by a specified fund from a securitisation trust which is chargeable under the head "profits and gains of business or profession"; and

F1 = ratio of the 'assets under management' in the specified fund held by non-resident unitholders (not being the permanent establishment of a non-resident in India) to the total 'asset under management' of the specified fund, as on the date of receipt of such income from securities issued by a non-resident(not being a permanent establishment of a non-resident in India) and where such income otherwise does not accrue or arise in India.

F2 = ratio of the 'assets under management' in the specified fund held by non-resident unitholders (not being the permanent establishment of a non-resident in India) to the total 'asset under management' of the specified fund, as on the date of receipt of such income from a securitisation trust which is chargeable under the head "profits and gains of business or profession".

(2) The specified fund shall furnish an annual statement of exempt income in Form No. 10IG electronically under digital signature on or before the due date, which is duly verified in the manner indicated therein.

(3) 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. 10IG 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.- For the purpose of this rule, the expressions,-

(a) "assets under management" means the closing balance of the value of assets or investments of the specified fund as on a particular date;

(b) "International Financial Services Centre" shall have the same meaning as assigned to it in clause (q) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005);

(c) "permanent establishment" shall have the same meaning as assigned to it in clause (iiia) of section 92F (of Income Tax Act, 1961);

(d) "securities" shall have the meaning as assigned to it in clause (bb) of the Explanation to clause (4D) of section 10 (of Income Tax Act, 1961);

(e) "due date" shall have the same meaning as assigned to it in the Explanation 2 to sub-section (1) of section 139 (of Income Tax Act, 1961);

(f) "specified fund" shall have the same meaning as assigned to it in sub-clause (i) of clause (c) of the Explanation to clause (4D) of section 10 (of Income Tax Act, 1961); and

(g) "unit" shall have the same meaning assigned to it in clause (f) of Explanation to clause (4D) of section 10 (of Income Tax Act, 1961).]