Income-tax (23rd Amendment) Rules, 2005
Notification No. 220/2005, dated 3-11-2005
In exercise of the 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) These Rules may be called the Income-tax (23rd Amendment) Rules, 2005.
(2) They shall be deemed to have come into force with effect from the first day of April, 2005.
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,
TABLE INVESTMENT PATTERN
| S.No. | Investment | Minimum Percentage of Investible moneys to be invested in items referred to in column (2) |
| (1) | (2) | (3) |
| (i) | In Central Government securities as defined in section 2 of the Public Debt Act, 1944 (18 of 1944); and/or units of such Mutual Funds which have been set up as dedicated funds for investment in Government securities and which are regulated by the securities and Exchange Board of India; | Twenty five Percent. |
| (ii) | (a) in Government securities as defined in section 2 of the Public Debt Act, 1944 (18 of 1944), created and issued by any state Government, and/or units of such mutual funds which have been set up as dedicated funds for investment in Government securities and which are regulated by the securities and Exchange Board of India: and/or
(b) in any other negotiable securities the principle whereof the interest whereon is fully and unconditionally guaranteed by the Central Government or any State Government except those covered under (iii)(a) below; |
Fifteen per cent. |
| (iii) | (a) in bonds/securities of a public financial institution or of a public sector company or of a public sector bank, which have an investment grade rating from at least two credit rating agencies; and/or
(b) Term Deposit Receipts (TDR) up to three years issued by public sector banks; and/ or (c) in Collateral Borrowing and Lending Obligation (CBLO) issued by Clearing Corporation of India Limited and approved by the Reserve Bank of India |
Thirty per cent. |
| (iv) | to be investment in any of the above three categories, as decide by their Trustees. | Thirty per cent. |
Provided that any moneys received on the maturity of investments made prior to the 1st day of April, 2005, reduced by obligatory outgoings, shall be invested in accordance with the manner of investment specified in this sub rule:
Provided further that the trustees, subject to their assessment of the risk-return prospects, may, if they so decide, divide the total portfolio referred to in clause (i) and sub-clause (a) of clause (ii) of the said table into tradable and non-tradable categories and sup to ten per cent. of the said portfolio at the end of the preceding financial year can be treated as tradable and may be used for active management:
Provide also that the tradable portfolio of Government securities mentioned in the second proviso shall be marked to the marked and the mutual funds, which have been set up as dedicated funds for investment in Government securities, shall be valued at Net Asset Value at the end of the financial year:
Provided also that irrespective of the proportion of investments stated in clause (i) and (ii) of the said Table, exposure of a trust to any individual mutual fund which has been set up as a dedicated fund for investment in Government securities, shall not exceed five per cent. Of its total portfolio at any point of time:
Provided also that the trustees may invest an amount not exceeding five per cent. Out of the amount referred to in clause (iii) of the said Table in the shares of any company which has an investment grade debt 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 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 debt instruments of any company, other than a public sector company, which has 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) and / or in equity linked scheme of mutual funds regulated by Securities and Exchange Board of India:
Provided also that in the event of the rating of any instruments mentioned in this sub-rule for being rated and their rating 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, 2005, 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, 2005, 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 investible 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.”
F. No. 142/25/2005-TPL
