• Notification Date: 26-02-2025
• Notification No: N/A

CBDT introduces new regulations for business trusts and investment funds to tighten compliance

The Central Board of Direct Taxes (CBDT) has issued new rules for investment funds and business trusts, tightening compliance and streamlining tax return filings. Business trusts must file their income distribution statements with the Commissioner of Income Tax (CIT) by June 15, a change from the previous November 30 deadline.

The revised tax returns, including Form 64A for business trusts, now call for the separate reporting of dividend income from corporations with a lower rate of taxation and capital gains income. The investment fund forms, Forms 64C and 64D, have also been amended to provide for changes in the rates of capital gains taxation.

The new rules affect different investment vehicles such as Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs), Alternative Investment Funds (AIFs), and Asset Reconstruction Company (ARC) trusts. The reforms seek to enhance transparency, with the consolidated income statement to be submitted online, with a form being generated for unit holders.

These changes represent an important step towards streamlining tax compliance for investment funds and business trusts, providing more precise reporting and timely disclosure.