Through Notification No. 126/2025, the Central Board of Direct Taxes (CBDT) has issued the Income‑tax (Twentieth Amendment) Rules, 2025. These amendments update Rule 21AK to align with changes introduced by the Finance Act, 2025 and reflect evolving financial instruments in International Financial Services Centres (IFSCs).

In rule 21AK, ––

(a) in sub-rule (1), clause (b),-

(i) in the opening portion, after the words “offshore derivative instruments”, the words “or over-the-counter derivatives” shall be inserted;

(ii) in sub-clause (i), after the words “by the International Financial Services Centres Authority’’, the words “or any Foreign Portfolio Investor being a unit of an International Financial Services Centre” shall be inserted;

(b) in sub-rule (2), after the words “offshore banking unit”, the words “or the Foreign Portfolio Investor” shall be inserted.

(c) in the Explanation, –

(i) in clause (v), for the words “a purchaser and a seller; and”, the words “a purchaser and a seller;” shall be substituted;

(ii) in clause (vi), the word “and” shall be inserted at the end; and

(iii) after clause (vi,) the following clause shall be inserted, namely:-

‘(vii), “Foreign Portfolio Investor” means a person registered under the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019 made under the Securities and Exchange Board of India Act, 1992 (15 of 1992).’.