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TMI BlogIncome-tax (12th Amendment) Rules, 2017X X X X Extracts X X X X X X X X Extracts X X X X ..... amely:- (I) if he is a member or partner in any entity engaged in rendering accountancy or valuation services then,- (i) the entity or its affiliates have presence in more than two countries; and (ii) the annual receipt of the entity in the year preceding the year in which cost certification is undertaken exceeds ten crore rupees; (II) if he is pursuing the profession of accountancy individually or is a valuer then,- (i) his annual receipt in the year preceding the year in which cost certification is undertaken, from the exercise of profession, exceeds one crore rupees; and (ii) he has professional experience of not less than ten years." (ii) the existing clause (a) shall be read as clause (aa); (iii) in clause (aa) so amended, in sub-clause (viii), after the word "principal" the words ", except where the source code has been made available to carry out routine functions like debugging of the software" shall be inserted; (iv) after clause (c), the following clause shall be inserted, namely:- '(ca) "employee cost" includes,- (i) salaries and wages; (ii) gratuities; (iii) contribution to Provident Fund and other funds; (iv) the value of perquisites as specified in claus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are development) services; (iv) knowledge process outsourcing services; (v) business process outsourcing services; (vi) purchasing activities of raw materials or other materials that are used in the manufacturing or production process; (vii) sales, marketing and distribution activities; (viii) financial transactions; (ix) extraction, exploration, or processing of natural resources; and (x) insurance and reinsurance;" (vi) in clause (j),- (A) in the long line, after the words "operations including" the words "costs relating to Employee Stock Option Plan or similar stock-based compensation provided for by the associated enterprises of the assessee to the employees of the assessee, reimbursement to associated enterprises of expenses incurred by the associated enterprises on behalf of the assessee, amounts recovered from associated enterprises on account of expenses incurred by the assessee on behalf of those associated enterprises and which relate to normal operations of the assessee and" shall be inserted; (B) after item (viii), the following provisos shall be inserted, namely:- "Provided that reimbursement to associated enterprises of expenses incurred by the associated e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sum of one hundred crore rupees; or (ii) not less than 18 per cent., where the value of international transaction exceeds a sum of one hundred crore rupees but does not exceed a sum of two hundred crore rupees. 2. Provision of information technology enabled services referred to in item (ii) of rule 10TC. The operating profit margin declared by the eligible assessee from the eligible international transaction in relation to operating expense is - (i) not less than 17 per cent., where the aggregate value of such transactions entered into during the previous year does not exceed a sum of one hundred crore rupees; or (ii) not less than 18 per cent., where the aggregate value of such transactions entered into during the previous year exceeds a sum of one hundred crore rupees but does not exceed a sum of two hundred crore rupees. 3. Provision of knowledge process outsourcing services referred to in item (iii) of rule 10TC. The value of international transaction does not exceed a sum of two hundred crore rupees and the operating profit margin declared by the eligible assessee from the eligible international transaction in relation to operating expense is - (i) not less than 24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, where credit rating of the associated enterprise is not available and the amount of loan advanced to the associated enterprise including loans to all associated enterprises does not exceed a sum equivalent to one hundred crore Indian rupees in the aggregate as on 31st March of the relevant previous year. 6. Providing corporate guarantee referred to in sub-item (a) or sub-item (b) of item (v) of rule 10TC. The commission or fee declared in relation to the eligible international transaction is at the rate not less than one per cent. per annum on the amount guaranteed. 7. Provision of contract research and development services wholly or partly relating to software development referred to in item (vi) of rule 10TC. The operating profit margin declared by the eligible assessee from the eligible international transaction in relation to operating expense incurred is not less than 24 per cent., where the value of the international transaction does not exceed a sum of two hundred crore rupees. 8. Provision of contract research and development services wholly or partly relating to generic pharmaceutical drugs referred to in item (vii) of rule 10TC. The operating profit margin de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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