CBDT notifies Income Tax Rule 5G on Option form (3CFA) for taxation of income from patent under section 115BBF; Income-tax (5th Amendment) Rules, 2017
The CBDT has notified the Income-tax (5th Amendment) Rules, 2017 applicable w.e.f. 1 Apr. 2017 and has inserted Rule 5G in respect of Option form (Income Tax Form No. 3CFA) for concessional taxation of royalty income from patent under section 115BBF, as under:
G.S.R. 318(E).—In exercise of the powers conferred by sub-section (3) of section 115BBF, 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. (1) These rules may be called the Income-tax (5th Amendment) Rules, 2017. (2) They shall come into force on the 1st day of April, 2017.
2. In the Income-tax Rules, 1962 (hereafter referred to as the principal rules), after rule 5F, the following rule shall be inserted, namely:-
“5G. Option form for taxation of income from patent under section 115BBF.-
(1) For the purposes of exercising the option for taxation of income by way of royalty in respect of a patent developed and registered in India, by an eligible assessee under section 115BBF, the eligible assessee shall furnish Form No. 3CFA duly verified in the manner indicated therein, and the same shall be furnished by the eligible assessee in the following manner, namely:-
(i) electronically under digital signature; or
(ii) electronically through electronic verification code.
(2) The form referred in sub-rule (1) shall be complete in all respects and furnished on or before the due date specified in Explanation 2 below sub-section (1) of section 139 for furnishing the return of income for the relevant assessment year, in case the option is exercised for that assessment year.
(3) The Director General of Income-tax (Systems) shall specify the procedures, formats and standards for the purposes for ensuring secure capture and transmission of data and shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to furnishing and verification of the Form referred in sub-rule (1).”
3. In the principal rules, in Appendix II, after ‘Form No. 3CF-III’, the following Form shall be inserted, namely:-
Form No. 3CFA
(See sub‐section (3) of section 115BBF Read with rule 5G)
Form for Opting for taxation of income by way of royalty in respect of Patent
(please refer attachment for complete Form 3CFA)
Note: The principal rules were published in the Gazette of India vide notification No. S.O. 969(E), dated the 26th March, 1962 and were last amended vide notification number S.O. 1006(E), dated the 30th March, 2017.