The Central Board of Direct Tax (CBDT) has vide its Notification No 40/2021 dated 03rd May 2021 inserted the Rule 11UD in the Income Tax Rules 1962 related to thresholds for the purposes of significant economic presence in India under Section 9(1) of the Income Tax Act, 1961.
The full text of the notification is as follows:-
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 3rd May, 2021
INCOME-TAX
G. S. R. 314(E).— In exercise of the powers conferred by the clause (a) and clause (b) of Explanation 2A to sub-section (1) of section 9 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:-
1. Short title and commencement. —(1) These rules may be called the Income-tax (13th Amendment) Rules, 2021.
(2) They shall come into force with effect from the 1st day of April, 2022.
2. In the Income-tax Rules, 1962, after rule 11UC, the following rule shall be inserted, namely:-
“11UD. Thresholds for the purposes of significant economic presence. — (1) For the purposes of clause (a) of Explanation 2A to clause (i) of sub-section (1) of section 9, the amount of aggregate of payments arising from transaction or transactions in respect of any goods, services or property carried out by a non-resident with any person in India, including provision of download of data or software in India during the previous year, shall be two crore rupees;
(2) For the purposes of clause (b) of Explanation 2A to clause (i) of sub-section (1) of section 9, the number of users with whom systematic and continuous business activities are solicited or who are engaged in interaction shall be three lakhs. ”.
[Notification No. 41 /2021/ F. No. 370142/11/2018-TPL] KAMLESH CHANDRA VARSHNEY, Jt. Secy.
Note: The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section-3, Sub-section (ii) vide number S.O. 969 (E), dated the 26th March, 1962 and last amended vide notification number G.S.R. 301(E), dated 30th April,2021.
