Income Tax Notification 126/2025 Dated 28/07/2025 – CBDT amends Income Tax Rule 21AK expanding the scope of financial instruments and entities

The sub-rule 21AK(1)(b) now includes ‘over-the-counter derivatives’ along with ‘offshore derivative instruments, and extends applicability to Foreign Portfolio Investors (FPIs) operating as units within International Financial Services Centres (IFSCs). Sub-rule 21AK(2) has also been updated to recognize FPIs in addition to offshore banking units. 

(Link: Income Tax Notification 126/2025 Dated 28/07/2025)