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ITA 2025 regimeRules 2026 commentaryVolume II1 min read

Income Tax Rules 2026 — Rules 3-14 (Vol II)

Rules 3-14

RULES 3 TO 14 — DEFINITIONAL AND COMPUTATIONAL RULES INCOME-TAX ACT, 2025 INCOME-TAX ACT, 1961 Rule 3 — Indian dividend declaration arrangements ( s. 2(42) ) Rule 27 / similar of 1962 Rules Rules 4-5 — Recognised stock exchange ( s. 2(92) ) Rules 6DDA-6DDB Rule 6 — Period of holding ( s. 2(101) /…

RULES 3 TO 14 — DEFINITIONAL AND COMPUTATIONAL RULES

Volume II — At a Glance

INCOME-TAX ACT, 2025

INCOME-TAX ACT, 1961

Rule 3 — Indian dividend declaration arrangements (s. 2(42))

Rule 27 / similar of 1962 Rules

Rules 4-5 — Recognised stock exchange (s. 2(92))

Rules 6DDA-6DDB

Rule 6 — Period of holding (s. 2(101) / s. 67(10))

Rule 8AA

Rule 7 — Zero coupon bond (s. 2(112))

Rules 8B-8BA

Rule 8 — Seafarer day-count (s. 6(6))

Rule 126

Rule 9 — NR income determination (s. 9)

Rule 10

Rule 10 — Definitions for Rule 11/12

Rule 11U-11UA

Rule 11 — FMV for indirect transfer (s. 9)

Rule 11UB

Rule 12 — Income attribution to Indian assets (s. 9(10))

Rule 11UC

Rule 13 — SEP thresholds (s. 9)

Rule 11UD

Rule 14 — Section 14A disallowance method

Rule 8D

Practitioner notes

  • Rules 4-5: monitor recognised stock exchange list periodically; F&O on listed exchanges = non-speculative under s. 66.
  • Rule 6: bifurcation of partner-firm distributions into ST/LT — track each capital asset's holding period in firm books.
  • Rule 8: maintain CDC entries for seafarer-clients; favourable residence status follows.
  • Rules 11-13: digital-economy NR clients — annual SEP monitoring + indirect-transfer FMV report.
  • Rule 14: own-funds presumption + 1% minimum self-disallowance ex ante.

— End of Rules Volume II —

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