Insertion of new Chapter XII-EA
30. After Chapter XII-E of the Income-tax Act, the following Chapter shall be inserted with effect from the 1st day of June, 2013, namely:––
‘CHAPTER XII-EA
SPECIAL PROVISIONS RELATING TO TAX ON
DISTRIBUTED INCOME BY SECURITISATION TRUSTS
Tax on distributed income to investors
115TA. (1) Notwithstanding anything contained in any other provisions of the Act, any amount of income distributed by the securitisation trust to its investors shall be chargeable to tax and such securitisation trust shall be liable to pay additional income-tax on such distributed income at the rate of––
(i) twenty-five per cent. on income distributed to any person being an individual or a Hindu undivided family;
(ii) thirty per cent. on income distributed to any other person:
Provided that nothing contained in this sub-section shall apply in respect of any income distributed by the securitisation trust to any person in whose case income, irrespective of its nature and source, is not chargeable to tax under the Act.
(2) The person responsible for making payment of the income distributed by the securitization trust shall be liable to pay tax to the credit of the Central Government within fourteen days from the date of distribution or payment of such income, whichever is earlier.
(3) The person responsible for making payment of the income distributed by the securitization trust shall, on or before the 15th day of September in each year, furnish to the prescribed income-tax authority, a statement in the prescribed form and verified in the prescribed manner, giving the details of the amount of income distributed to investors during the previous year, the tax paid thereon and such other relevant details, as may be prescribed.
(4) No deduction under any other provisions of this Act shall be allowed to the securitisation trust in respect of the income which has been charged to tax under sub-section (1).
Interest payable for non-payment of tax
115TB. Where the person responsible for making payment of the income distributed by the
securitisation trust and the securitisation trust fails to pay the whole or any part of the tax referred to in sub-section (1) of section 115TA, within the time allowed under sub-section (2) of that section, he or it shall be liable to pay simple interest at the rate of one per cent. every month or part thereof on the amount of such tax for the period beginning on the date immediately after the last date on which such tax was payable and ending with the date on which the tax is actually paid.
Securitisation trust to be assessee in default
115TC. If any person responsible for making payment of the income distributed by the securitisation trust and the securitisation trust does not pay tax, as referred to in sub-section (1) of section 115TA, then, he or it shall be deemed to be an assessee in default in respect of the amount of tax payable by him or it and all the provisions of this Act for the collection and recovery of income-tax shall apply.
Explanation.––For the purposes of this Chapter,––
(a) “investor” means a person who is holder of any securitised debt instrument or securities issued by the securitisation trust;
(b) “securities” means debt securities issued by a Special Purpose Vehicle as referred to in the guidelines on securitisation of standard assets issued by the Reserve Bank of India;
(c) “securitised debt instrument” shall have the same meaning as assigned to it in clause (s) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Public Offer and Listing of Securitised Debt Instruments) Regulations, 2008 made under the Securities and Exchange Board of India Act, 1992 (15 of 1992) and the Securities Contracts (Regulation) Act, 1956;( 42 of 1956)
(d) “securitisation trust” means a trust, being a—
(i) “special purpose distinct entity” as defined in clause (u) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Public Offer and Listing of Securitised Debt Instruments) Regulations, 2008 made under the Securities and Exchange Board of India Act,1992 (15 of 1992) and the Securities Contracts (Regulation) Act, 1956, (42 of 1956)and regulated under the said regulations; or
(ii) “Special Purpose Vehicle” as defined in, and regulated by, the guidelines on securitization of standard assets issued by the Reserve Bank of India,
which fulfils such conditions, as may be prescribed.'.
Notes on Clauses:
Clause 30 of the Bill seeks to insert a new Chapter XII-EA consisting of new sections 115TA, 115TB and 115TC in the Income-tax Act relating to special provisions relating to tax on distributed income by securitisation trusts.
The provisions of the proposed new section 115TA provide that notwithstanding anything contained in any other provisions of the Act any distributed income to an investor by a securitization trust shall be liable to the levy of additional income-tax at the rate of twenty-five per cent. on the distributed income if such income is paid to a person being an individual or Hindu undivided family. The additional income-tax shall be levied at the rate of thirty per cent., if such distributed income is paid to a person other than individual and Hindu undivided family. No additional income-tax shall be levied, if the distributed income is paid to any person who is exempt under the Act. It also provides that the amount of tax shall be remitted within fourteen days of the date of payment or distribution of income. It is provided that no deduction under any provisions of the Act shall be allowed to securitisation trust in respect of the said income. The section provides that the securitisation trust shall, before the 15th day of September in each year, furnish a statement in the prescribed form providing the details regarding the amount of income distributed to the investors and the tax paid in the previous year.
The proposed new section 115TB provides for the levy of interest, in case of failure to pay tax within the time provided, at the rate of one per cent. for every month and part thereof on such failure.
The proposed new section 115TC provides that in case of failure on payment of tax, the person responsible for making payment of income distributed by the securitisation trust and the securitisation trust shall be deemed to be an assessee in default in respect of the amount of tax payable and all provisions of the Act relating to recovery and collection of taxes shall apply.
This amendment will take effect from 1st June, 2013.
