Key Changes to the Income-tax Fifth Amendment Rules for 2025

Notification No. 17/2025 [F. No. 370142/28/2024-TPL] / G.S.R. 145(E) - Income-tax (Fifth Amendment) Rules, 2025

Introduction

The Central Board of Direct Taxes (CBDT) issued Notification No. 17/2025 on February 24, 2025, to establish the Income-tax (Fifth Amendment) Rules, 2025. These revisions largely affect the reporting requirements for business trusts and securitization trusts under Sections 115UA and 115TCA of the Income Tax Act of 1961. Let us take a deeper look at the significant changes and their implications.

Key Amendments Introduced

1. Changes to Rule 12CA: Reporting for Business Trusts

(Applicable to REITs and InvITs)

New Reporting Timeline:

• Business trusts must provide a statement of income distribution to unit holders by June 15th of the next fiscal year.
• Unitholders will receive a statement in the specified format by June 30th.

Form Updates:

• Form No. 64A (to file with the Income Tax Department).
• Form No. 64B (to provide information to unit holders).

E-Filing Mandate:

Filing must be done online and validated using an accountant's digital signature.

Role of IT Authorities:

The Principal Director General of Income-tax (Systems) manages the electronic filing and retrieval system.

2. Changes to Rule 12CC - Reporting for Securitisation Trusts

Who is Impacted?

Securitisation trusts distribute income to investors.

New Reporting Timeline:

• These trusts must file income distribution statements with the Income Tax Department by June 15th.
• Send investor statements by June 30th.

Form Updates:

• Form No. 64E (to submit to tax authorities).
• Form Number 64F (for investors).

E-Filing Mandate:

All filings must be completed online and validated digitally.

Role of IT Authorities:

Similar to business trusts, the Principal Director General of Income-tax (Systems) will be in charge of e-filing and record management.

3. Changes to Appendix II (Revised Forms)

Several forms in Appendix II have been changed to comply with the amended reporting rules:

• Form 10IH (relating to tax on Virtual Digital Assets (VDA)) has been updated to eliminate references to the 10% and 15% tax rates.
• Forms 64A to 64F have been updated to provide more detailed income reporting for business and securitization trusts.

The Impact of the Amendments

For Business and Securitization Trusts:

• Stricter compliance and reporting deadlines.
• Mandatory digital filing and verification will reduce manual paperwork.
• Increased transparency in income distribution to unit holders and investors.

For Investors and Unitholders:

• Access to tax-related statements in a timely manner allows for proper submission of income tax returns.
• Clearer information about distribution income and tax liabilities.

For Tax Authorities:

• Improved tracking and monitoring of income allocations.
• Automated filing method to assure compliance and minimize inconsistencies.

Final Thoughts

The Income-tax (Fifth Amendment) Rules, 2025, prioritize digital compliance, transparency, and timely reporting for business and securitization trusts. These modifications are intended to facilitate tax reporting and increase investor understanding of dispersed income.

If you are a business trust, securitization trust, or investor, make sure you meet these new dates to avoid fines and guarantee a seamless tax filing process.

Contact myITRonline immediately for experienced assistance with ITR filing, tax compliance, and financial reporting!

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