Clarifications on the Safe Harbour Rules for sale of rough diamonds in Special Notified Zones (SNZs)

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....n 9(9)(c)(ii)(C) of the Income- tax Act, 2025 (the Act). Certain queries have been received by the Board about the implementation of Safe Harbour Rules for sale of rough diamonds in Special Notified Zones. After considering the queries, the Board, in exercise of powers under section 239 of the Act, issues the following clarifications, namely :- Q.1 Whether all diamonds (sorted and unsorted) imported with a Kimberley Process Certificate are covered within the definition of 'raw diamonds'? Ans. Rule 99(f) of the Income-tax Rules, 2026 defines "raw diamonds". According to the said definition, raw diamonds means diamonds that are, - (i) uncut or unpolished; (ii) unassorted; (iii) unwork....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ail the benefits of deductions while benefiting from safe harbour rules. This position is clearly laid out under rule 100(3) of Income-tax Rules, 2026. Q.3 Whether the foreign mining companies, who opt for the safe harbour rules, would also be able to claim benefit under the double taxation avoidance agreement (DTAA) between India and their country of jurisdiction? Ans. Once a company has exercised safe harbour under the provisions of the Act, it means that it has paid taxes in accordance with such rules. Where such a company wants to avail any tax credit for such taxes in its home jurisdiction, it may do so depending upon the provisions of the DTAA between India and such country and the domestic law of that country.....