Income tax new rule 6DDC 6DDD and new form 3BC

Income tax department amend income tax rules 2013 which is the 9th amendment and inserted two new rules 9DDC and 9DDD. There is a new form 3BC is also introduced. Income tax department issued a notification no. 51/2013 dated 4 July 2013 about this new amendment. Full notification is as under.

S.O. 2017(E).— In exercise of the powers conferred by clause (e) of the proviso to clause (5) of section 43 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 (9th Amendment) Rules, 2013.
(2) They shall come into force on the date of their publication in the Official Gazette.


2. In the Income-tax Rules, 1962, in Part II, in sub-part C, after rule 6DDB, the following rules shall be inserted, namely :—


“6DDC. Conditions that a recognised association is required to fulfil to be notified as a recognised association for the purposes of clause (e) of the proviso to clause (5) of section 43.—For the purposes of clause (e) of the proviso to clause(5) of section 43, a recognised association shall fulfil the following
conditions in respect of trading in derivatives, namely:—

(i) the recognised association shall have the approval of the Forward Markets Commission established under the Forward Contracts (Regulation) Act, 1952 (74 of 1952) in respect of trading  in derivatives and shall function in accordance with the guidelines or conditions laid down by the Forward Markets Commission;

(ii)   the  recognised  association  shall  ensure  that  the  particulars  of  the  client (including unique client identity number and PAN) are duly recorded and stored in its databases;

(iii) the recognised association shall maintain a complete audit trail of all transactions (in respect of derivative market) for a period of seven years on its system;

(iv)  the recognised association shall ensure that transactions (in respect of derivative market) once registered in the system are not erased;

(v) the recognised association shall ensure that the transactions (in respect of derivative market) once registered in the system are modified only in cases of genuine error and maintain data regarding all transactions (in respect of derivative market) registered in the system which have been modified  and submit a monthly statement in Form No. 3BC to the Director General of Income-tax (Intelligence and Criminal Investigation), New Delhi within fifteen days fromthe last day of each month to which such statement relates.

6DDD. Notification of a recognised association for the purposes of clause (e) ofthe proviso to clause (5) of section 43.— (1) An application for notification of a recognised association (as per clause (j) of section 2 of the Forward Contracts (Regulation) Act, 1952) as a recognized association for the purposes of clause (e) of the proviso to clause (5) of section 43 may be made to the Member (Legislation), Central Board of Direct Taxes, North Block, New Delhi.

(2) The application referred to in sub-rule (1) shall be accompanied with the following documents, namely :

(i)  approval granted by Forward Markets Commission for trading in derivatives;

(ii) up-to-date rules, bye-laws and trading regulations of the recognised association;

(iii)  confirmation regarding fulfilling the conditions referred to in clause (ii) to clause (v) of rule 6DDC;

(iv)  such other information as the recognised association may like to place before the Central Government.

(3) The Central Government may call for such other information from the applicant as it deems necessary for taking a decision on the application.

(4) The Central Government, after examining the information furnished by the recognised association under sub-rule (2) or sub-rule (3), shall notify the recognised association as a recognised association for the purposes of clause (e) of the proviso to clause (5) of section 43 or issue an order rejecting the application before the expiry of four months from the end of the month in which the application is received.

(5) The notification referred to in sub-rule (4) shall be effective until the approval granted by the Forward Markets Commission is withdrawn or expired, or the notification is rescinded by the Central Government.”.

 3.   In the said rules, in Appendix-II, after Form No. 3BB, the following Form shall be inserted, namely:-

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