Income-tax
(Twentieth Amendment) Rules, 2005 - Insertion of rules 6DDA and 6DDB in Part II
of Income-tax Rules, 1962
Notification No. 181/2005 [F.No.
142/13/2005-TPL-III], dated 1-7-2005
In exercise of the powers conferred by section
295 read with clause (d) of proviso to clause (5) of section 43
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 (Twentieth Amendment) Rules, 2005
(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
6DD, the following rules shall be inserted, namely :—
“6DDA. Conditions that a stock
exchange is required to fulfil to be notified as a recognised stock exchange
for the purposes of clause (d) of proviso to clause (5) of section 43.—For
the purposes of clause (d) of proviso to clause (5) of section
43, a stock exchange shall fulfil the following conditions in respect of
trading in derivatives, namely :—
(i) the stock exchange shall have the approval of
the Securities and Exchange Board of India established under the Securities and
Exchange Board of India Act, 1992 (15 of 1992) in respect of trading in
derivatives and shall function in accordance with the guidelines or conditions
laid down by the Securities and Exchange Board of India;
(ii) the stock exchange 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 stock exchange shall maintain a complete
audit trail of all transactions (in respect of cash and derivative market) for
a period of seven years on its system;
(iv) the stock exchange shall ensure that transactions once registered
in the system cannot be erased or modified.
6DDB. Notification of a
recognised stock exchange for the purposes of clause (d) of proviso to
clause (5) of section 43.—(1) An application for notification of a stock
exchange as a recognised stock exchange for the purposes of clause (d)
of proviso to clause (5) of section 43 may be made to the Member(L),
Central Board of Direct Taxes, North Block, New Delhi - 110001.
(2) The application referred to in
sub-rule (1) shall be accompanied with the following documents, namely:—
(i) approval granted by Securities and Exchange
Board of India for trading in derivatives;
(ii) up-to-date rules, bye-laws and trading
regulations of the stock exchange;
(iii) confirmation regarding fulfilling the
conditions referred to in clause (ii) to clause (iv) of rule
5DDA;
(iv) such other information as the stock exchange 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 stock exchange under sub-rule (2) or
sub-rule (3), shall notify the stock exchange as a recognised stock exchange
for the purposes of clause (d) of 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 Securities
and Exchange Board of India is withdrawn or expired, or the notification is
rescinded by the Central Government”.
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