The Central Board of Direct Taxes (CBDT), under the Ministry of Finance, has issued Notification No. 55/2026 dated March 31, 2026, introducing the Income-tax (Amendment) Rules, 2026 to amend the Income-tax Rules, 2026.
Key Highlights
- The amendment modifies Rule 128, particularly provisions relating to applicability of anti-avoidance rules under Chapter XI.
- It clarifies that income arising from transfer of investments made before April 1, 2017 shall be excluded from the scope of such provisions.
- Further, the rules provide that:
- Anti-avoidance provisions will apply to any arrangement irrespective of when it was entered into,
- But only where tax benefit arises on or after April 1, 2017.
- However, exception is carved out for legacy investments (pre-2017), ensuring that income from their transfer is not subjected to these provisions.
Effective Date
- The amendment will come into force from April 1, 2026.
Impact
The amendment provides clarity and certainty regarding the applicability of anti-avoidance provisions under the new Income-tax framework, while protecting grandfathered investments made prior to April 1, 2017.
The Notification can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2026/03/CBDT-NN-55-Income-tax-Amendment-Rules-2026.pdf
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