Notification No. : 180
Section(s) Referred : s. 295(1)
Date of Issue : 25/7/2003
Notification No. 180 of 20031/S.O. No. 855(E), dt. 25th July, 2003
In exercise of powers conferred by sub-section (1) of 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 (Tenth Amendment) Rules, 2003.
(2) They shall be deemed to have come into force with effect from the first day of April, 2003.
2. In the Income-tax Rules, 1962, in rule 67, for sub-rule (2) the following shall be substituted, namely:–
“(2) The manner of investment referred to in sub-rule (1) shall be in accordance with the following Table, namely:
Provided that any moneys received on the maturity of investments made prior to the 1st day of April, 2003, reduced by obligatory outgoings, shall be invested in accordance with the manner of investment specified in this sub-rule:
Provided further that the trustees may invest an amount not exceeding one-third out of the amount referred to in clause (iv) of the said Table in the bonds or securities of any company, other than a public sector company, which have an investment grade rating from at least two credit rating agencies registered under sub-section (1A) of section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992):
Provided also that in the event of the rating of any instruments mentioned in the second proviso to this sub-rule falling below the investment grade, as certified by at least two credit rating agencies registered under sub-section (1A) of section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), then the option of exit from such instruments can be exercised and the released funds shall be invested in accordance with the manner provided in the Table of this sub-rule:
Provided also that any amount invested after 31st March, 2003, but on or before the date of issue of this notification in accordance with the manner of investment in force in this behalf from the 1st day of April, 1997, to 31st March, 2003, shall be deemed to have been invested in the manner specified in this sub-rule.
Explanation 1.–The manner of investment specified in this sub-rule shall apply to the aggregate amount of investable moneys with the fund in the previous year.
Explanation 2.–For the purposes of this sub-rule;
(i) the expression “public financial institutions” shall have the meaning assigned to it in section 4A of the Companies Act, 1956 (1 of 1956);
(ii) the expression “public sector company” shall have the meaning assigned to it in clause (36A) of section 2 of the Income-tax Act; and
(iii) the expression “public sector bank” shall have the meaning assigned to it in clause (23D) of section 10 of the Income-tax Act.”.
Explanatory Memorandum
The Central Government in the Department of Economic Affairs has specified by Notification No. F5(18)/ECB/2001, dated 6th March, 2003, the pattern of investment to be made by recognised provident funds, approved superannuation funds and approved gratuity funds. The said notification has come into force on the 1st day of April, 2003. rule 67 of the Income-tax Rules, 1962 contains provisions relating to investment of fund moneys in the manner specified from time to time by the Department of Economic Affairs. It is, therefore, proposed to amend rule 67 of the Income-tax Rules, 1962 so as to provide in the said rule the pattern of investment notified by Notification No. F5(18)/ECB/2001 of Department of Economic Affairs, with effect from 1st April, 2003, being the date from which the said Notification No. F5(18)/ECB/2001, dated 6th March, 2003 came into force.
It is certified that the retrospective operation of this notification shall not prejudicially affect the interests of the assessees.
[F.No. 149/84/2003-TPL]
