FINANCE ACT, 1963

Preamble 1 - FINANCE ACT 1963

THE FINANCE ACT, 1963

[Act No. 13 of 1963]

[28th April 1963]

PREAMBLE

An Act to give effect to the financial proposals of the Central Government for the financial year 1963- 64

Be it enacted by Parliament in the Fourteenth Year of the Republic of India as follows :

Section 1 - Short Title and Commencement

(1)     This Act may be called the Finance Act, 1963.

 

(2)     Save as otherwise provided in this Act, sections 3, 6, 7, 9, 11, 12, 13 and 21 shall be deemed to have come into force on the 1st day of April, 1963.

Section 2 - Income Tax and Super Tax

(1)     Subject to the provisions of sub sections (2), (3), (4) and (5), for the assessment year commencing on the 1st day of April, 1963,

 

(a)      income tax shall be charged at the rates specified in Part I of the First Schedule and,

 

(i)       in the cases to which Paragraphs A, B, C and E of that Part apply, shall be increased by a surcharge for purposes of the Union and, except in the cases to which the said Paragraph E applies, a special surcharge, calculated in either case in the manner provided therein; and

(ii)      in the cases to which Paragraphs A and C of the aforesaid Part apply, shall further be increased by an additional surcharge for purposes of the Union (hereinafter referred to as additional surcharge) calculated in the manner provided in the said Schedule;

?

(b)      super tax shall, for the purposes of section 95 of the Income tax Act, 1961 (43 of 1961) (hereinafter referred to as the Income tax Act), be charged at the rates specified in Part II of the First Schedule, and, in the cases to which Paragraphs A, B and C of that Part apply, shall be increased by a surcharge for purposes of the Union and a special surcharge, calculated in either case in the manner provided therein.

 

(2)     In making any assessment for the assessment year commencing on the 1st day of April, 1963,

 

(a)      where the total income of an assessee, not being a company, includes any income chargeable under the head "Salaries", the income tax payable by the assessee on that part of his total income which consists of such inclusion shall be an amount bearing to the total amount of income tax payable according to the rates applicable under the operation of the Finance (No. 2) Act, 1962 (20 of 1962), on his total income the same proportion as the amount of such inclusion bears to his total income;

 

(b)      where the total income of an assessee, not being a company, includes any income chargeable under the head "Salaries" on which super tax has been or might have been deducted under the provisions of sub section (1) of section 192 of the Income tax Act, the super tax payable by the assessee on that portion of his total income which consists of such inclusion shall be an amount bearing to the total amount of super tax payable according to the rates applicable under the operation of the Finance (No. 2) Act, 1962 (20 of 1962), on his total income the same proportion as the amount of such inclusion bears to his total income.

 

(3)     In making any assessment for the assessment year commencing on the 1st day of April, 1963, where the total income of a company, other than the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956), includes any profits and gains from life insurance business the super tax payable by it shall be the aggregate of the tax calculated

(i) ???on the amount of profits and gains from life insurance business so included at the rate applicable to the Life Insurance Corporation of India in accordance with Paragraph E of Part II of the First Schedule; and

(ii) ???on the remaining part of its total income, at the rate applicable to the company on its total income.

(4)     (a) In cases to which Chapter XII of the Income tax Act applies, the tax chargeable shall be determined as provided in that Chapter, and with reference to the rates imposed by sub section (1) or the rates as specified in that Chapter, as the case may be.

(b) ??In computing under section 209 of the Income tax Act, the advance tax payable by an assessee, the additional surcharge shall be included.

(c) ??The amount of Income tax to be deducted at source under sub section (1) of section 192 of the Income tax Act from income chargeable under the head "Salaries" shall include an additional surcharge equal in amount to the additional surcharge which would have been leviable if the estimated income under that head had been the total income.

(5)     In respect of any assessment for the assessment year commencing on the 1st day of April, 1963

(i) ???an assessee being an Indian company or any other company which has made the prescribed arrangements for the declaration and payment of dividend within India or an assessee (other than a company) whose total income included any profits and gains derived from the export of any goods or merchandise out of India, shall be entitled to a deduction, from the amount of income tax and super tax with which he is chargeable of an amount equal to the income tax and super tax calculated respectively at one tenth of the average rate of income tax and at the average rate of super tax on the amount of such profits and gains included in the total income;

(ii) ??where an assessee of the type referred to in clause (i) is engaged in the manufacture of any articles in an industry specified in the First Schedule to the Industries (Development and Regulation) Act, 1951 (65 of 1951), exports after the 28th day of February, 1963, such articles out of India, he shall be entitled, in addition to the deduction of tax referred to in clause (i), to a further deduction from the amount of tax with which he is chargeable for the assessment year of an amount equal to the income tax and super tax calculated respectively at the average rate of such taxes on an amount equal to two per cent. of the sale proceed in respect of such export;

(iii) ??where an assessee of the type referred to in clause (i) engaged in the manufacture of any articles in an industry specified in the said First Schedule self after the 28th day of February, 1963, such articles to any other person in India who himself export them out of India an evidence is produced before the Income tax Officer of such articles having been so exported, the assessee shall be entitled to a deduction from the amount of income tax and super tax with which he is chargeable for the assessment year of an amount equal to the income tax and super tax calculated respectively at the average rate of such taxes on a such equal to two per cent. of the sale proceeds receivable by him in respect of such articles from the exporter;

(iv) ??the total of the deductions under this sub section shall in no case exceed the amount of income tax and super tax otherwise payable by the assessee;

(v) ??nothing contained in clauses (ii) and (iii) shall apply in relation to fuels, textiles (including those dyed, printed or otherwise processed), sugar, vegetable oils and vanaspathi, cement and gypsum products and cigarettes respectively specified in items 2, 23, 25, 28, 35 and 38 of the First Schedule to the Industries (Development and Regulation) Act, 1951 (65 of 1951), and in relation to such other articles in any other industry specified in that Schedule which may be notified in the Official Gazette by the Central Government having regard to the progress achieved by the industry or any other relevant factors;

(vi) ??the amount of any profits and gains derived from the export of any goods or merchandise out of India in respect of which deduction of income tax and super tax is admissible under clause (i) shall be computed in accordance with the rules made by the Central Board of Revenue in this behalf.

(6)     In cases in which tax has to be deducted under sub section (2) of section 192 and sections 193 to 195 of the Income tax Act at the rates in force, the deduction shall be made at the rates specified in Part III of the First Schedule.

 

(7)     For the purposes of this section, and of the rates of tax imposed thereby, and of section 3

(i) ????the expressions "assessment year", "average rate of income tax", "average rate of super tax", "partner", "tax" and "total income" have the meanings respectively assigned to them under clauses (9), (10), (11), (23), (43) and (45) of section 2 of the Income tax Act;

(ii) ???the expression "earned income" has the same meaning as in section 2 of the Finance (No. 2) Act, 1962 (20 of 1962).

(8)     For the purposes of Paragraphs A and C of Part I of the First Schedule, the expression "residual income" means the amount of the total income as reduced by

 

(a)      the amount of the capital gains, if any, included therein; and

 

(b)      the amount of tax (exclusive of additional surcharge) which would have been chargeable on such reduced total income if it had been the total income no part of which had been exempt from tax and on no portion of which deduction of tax had been admissible under any provisions of the Income tax Act or this Act.

Section 3 - Additional Surcharge Not to be Taken Into Account For Purposes of Deduction, Etc.

Notwithstanding anything contained in the provisions of Chapter VII or Chapter VIII A or section 110 of the Income tax Act or sub section (5) of section 2 of this Act, in calculating any relief, rebate or deduction in respect of income tax payable on the total income of an assessee which includes any income on which no income tax is payable or in respect of which a deduction of income tax is admissible under any the aforesaid provisions, no account shall be taken of the additional surcharge.

Section 4 - Amendment of Section 2

In section 2 of the Income tax Act, for clause (44), the following clause shall be and shall be deemed always to have been, substituted, namely :

"(44) ?Tax Recovery Officer? means

(i)       a Collector or an additional Collector;

 

(ii)      any such officer empowered to effect recovery of arrears of land revenue or other public demand under any law relating to land revenue or other public demand for the time being in force in the State as may be authorised by the State Government, by general or special notification in the Official Gazette, to exercise the powers of a Tax Recovery Officer;

 

(iii)     any Gazetted Officer of the Central or a State Government who may be authorised by the Central Government, by general or special notification in the Official Gazette, to exercise the powers of a Tax Recovery Officer;".

Section 5 - Amendment of Section 13

In section 13 of the Income tax Act, in clause (b), for the words "trust or charitable institution", the words "trust for charitable purposes or a charitable institution" shall be, and shall be deemed always to have been, substituted.

Section 6 - Amendment of Section 40

In section 40 of the Income tax Act, in clause (c),

(1)     Before the Explanation, the following sub clause shall be inserted namely :

"(iii) any expenditure which results directly or indirectly in the provisions of any remuneration or benefit or amenity to an employee who is a citizen of India to the extent such expenditure exceeds the amount calculated at the rate of five thousand rupees per month for any period of his employment after the 28th day of February, 1963 :

Provided that in computing the aforesaid expenditure, any payments by way of gratuity or any sums comprised in the transferred balance of an employee participating in a recognised provident fund referred to in clause (vii) of sub section (1) of section 17, or the amount of any compensation referred to in clause (i) or any payment referred to in clause (ii) of sub section (3) of that section shall not be taken into account.".

(2)     In the Explanation after the words, brackets and figure "referred to in sub clause (i)", the words, brackets and figures "or in sub clause (iii)" shall be inserted.

Section 7 - Amendment of Section 58

In section 58 of the Income tax Act, in clause (b), after the words, brackets and figure "referred to in sub clause (i)", the words, brackets and figures "or in sub clause (iii)" shall be inserted.

Section 8 - Amendment of Section 139

In section 139 of the Income tax Act,

(1)     in sub section (1), in clause (iii) (b) of the proviso, the words "as finally assessed" shall be, and shall be deemed always to have been, omitted;

 

(2)     after sub section (1), the following sub section shall be, shall be deemed always to have been, inserted, namely :

"(1A) Where a s a result of an order under section 154 or section 155 or section 250 or section 254 or section 260 or section 262 or section 264, the amount of tax on which interest was payable under clause (iii) of the proviso to sub section (1) has been reduced, the interest shall be reduced accordingly, and the excess interest paid, if any, shall be refunded.";

(3)     after sub section (7), the following sub section shall be inserted, namely :

"(8) Notwithstanding anything contained in clause (iii) of the proviso to sub section (1), the Income tax Officer may, in such cases and under such circumstances as may be prescribed, reduce or waive the interest payable by any person under any provision of this section.".

Section 9 - Insertion of New Section 141A

After section 141 of the Income tax Act, the following section shall be inserted, namely :

"141A. Relief to be given to, and interest to be recovered from, assessees in certain cases. (1) If any assessee having furnished a return under section 139 before the 1st day of January of the assessment year, pays before that date the tax determined as payable by him in pursuance of a provisional assessment made under section 141 or a regular assessment made under section 143 or section 144, or where neither of such assessments has been made before that date, the tax payable by him on the basis of such return after taking into consideration the tax paid for the assessment year under the provisions of Chapter XVII B, or Chapter XVII C, he shall be entitled to a deduction from the amount of income tax and super tax with which he is chargeable of an amount equal to one per cent. of the amount of tax so paid by him before the said date.

(2) ??If any assessee does not furnish a return under section 139 before the 1st day of January of the assessment year and no regular assessment under section 144 is made before the said date, he shall, in addition to the amount of income tax and super tax with which he is chargeable, be liable to pay an amount calculated at two per cent. per annum from the said 1st day of January to

(i)       in the case where no return is furnished, the date on which a regular assessment is made under section 144;

 

(ii)      in the case where a return is filed after the said 1st day of January, the date on which a provisional assessment under section 141 or a regular assessment under section 143 or section 144, whichever is earlier, is made;

the calculation in the case referred to in clause (i) being made with reference to the tax payable on regular assessment under section 144 and in the case referred to in clause (ii) being made with reference to the tax payable on the basis of the return, and in either case after taking into consideration the tax already paid under the provisions of Chapter XVII B or Chapter XVII C.

(3) ??If any assessee having furnished a return under section 139 before the 1st day of January of the assessment year does not pay before that date the tax payable on the basis of such return after taking into consideration the tax already paid for the assessment year under the provisions of Chapter XVII B or Chapter XVII C and no provisional assessment under section 141 or regular assessment under section 143 or section 144 is made before the said date, he shall, in addition to the amount of income tax and super tax with which he is chargeable, be liable to pay an amount calculated at two per cent. per annum from the said 1st day of January to the date on which a provisional assessment under section 141 or a regular assessment under section 143 or section 144, whichever is earlier, is made, the calculation being made with reference to the tax payable on the basis of the return after taking into consideration the tax already paid under the provisions of the aforesaid Chapters.

(4) ???Any sum paid by an assessee in accordance with the provisions of sub section (1) otherwise than in pursuance of a provisional assessment made under section 141 or a regular assessment under section 143 or section 144, shall be treated as a payment of tax in respect of the relevant assessment year, and credit therefor shall be given to the assessee in the regular assessment.".

Section 10 - Amendment of Section 146

In section 146 of the Income tax Act, for the words and figures "in accordance with the provisions of section 143 or 144" the words and figures "in accordance with the provisions of section 143 or section 144" shall be substituted.

Section 11 - Amendment of Section 209

In section 209 of the Income tax Act, after clause (c) and before the Explanation, the following clause shall be inserted, namely :

"(d) in cases where the Income tax Officer makes an amended order referred to in sub section (3) of section 210 on the basis of a provisional assessment, the total income on the basis of which the relevant provisional assessment had been made shall be substituted for the total income referred to in clause (a).".

Section 12 - Amendment of Section 210

In section 210 of the Income tax Act, for sub section (3), the following sub section shall be substituted, namely :

"(3) If, after the making of an order by the Income tax Officer under this section and before the 15th day of February of the financial year, a regular assessment or a provisional assessment under section 141 of the assessee (or of the registered firm of which he is a partner) is made in respect of a previous year later than that referred to in the order of the Income tax Officer, the Income tax Officer may make an amended order requiring the assessee to pay in one instalment on the specified date, or in equal instalments on the specified dates, if more than one falling after the date of the amended order, the advance tax computed on the basis of the total income determined for the purposes of the regular assessment or the provisional assessment aforesaid as reduced by the amount, if any, paid in accordance with the original order.".

Section 13 - Amendment of Section 215

In section 215 of the Income tax Act, for sub section (2), the following sub section shall be substituted, namely :

"(2) ?Where before the date of completion of a regular assessment, a provisional assessment is made under section 141 or tax is paid by the assessee otherwise than in pursuance of such a provisional assessment

(i)       interest shall be calculated in accordance with the foregoing provision up to the date on which the tax is paid either as provisionally assessed or otherwise and

 

(ii)      thereafter interest shall be calculated at the rate aforesaid on the amount by which the tax as so paid (in so far as it relates to income subject to advance tax) falls short of the said seventy five per cent.".

Section 14 - Amendment of Section 220

In section 220 of the Income tax Act, to sub section (2), the following proviso shall be, and shall be deemed always to have been, added, namely :

"Provided that, where a result of an order under section 154, or section 155, or section 250, or section 254, or section 260, or section 262, or section 264, the amount on which interest was payable under this section had been reduced, the interest shall be reduced accordingly and the excess interest paid, if any, shall be refunded."

Section 15 - Amendment of Section 223

In section 223 of the Income tax Act, in sub section (2), the words "in a district" shall be, and shall be deemed always to have been, omitted.

Section 16 - Amendment of Section 233

In section 233 of the Income tax Act, for the words and figures "assessment made under section 143 or 144", the words and figures "assessment made under section 143 or section 144" shall be substituted.

Section 17 - Amendment of Section 271

In section 271 of the Income tax Act, in sub section (1), in clause (a), the word "his", occurring before the words "total income" shall be omitted.

Section 18 - Amendment of Section 291

In section 291 of the Income tax Act, in sub section (1), after the words "the evasion of payment of tax on income", the words "it is necessary or expedient so to do" shall be inserted.

Section 19 - Amendment of Section 297

In section 297 of the Income tax Act, in sub section (2), in clause (e), before the words, figures and letter "section 23A, of the repealed Act", the words, brackets and letters "subject to the provisions of clause (g) and clause (j) of this sub section" shall be, and shall be deemed always to have been, inserted.

Section 20 - Amendment of the Second Schedule

In the Second Schedule to the Income tax Act,

(1)     in Part I, after rule 19, the following rule shall be, and shall be deemed always to have been, inserted, namely :

"19A. Entrustment of certain functions by Collector or additional Collector. A Tax Recovery Officer, being a Collector or an additional Collector, may, subject to the approval of the State Government, entrust any of his functions as Tax Recovery Officer to any other officer lower than him in rank who is empowered to effect recovery of arrears of land revenue or other public demand under any law relating to land revenue or other public demand for the time being in force in the State and such officer shall, in relation to functions so entrusted to him, be deemed to be a Tax Recovery Officer.";

(2)     in rule 86, for sub rule (1), the following sub rule shall be, and shall be deemed always to have been, substituted, namely :

"(1) ?An appeal from any original order passed by the Tax Recovery Officer under this Schedule, not being an order which is conclusive, shall lie

(a)      in the case of a Tax Recovery Officer, being a Collector or an additional Collector or an officer referred to in sub clause (iii) of clause (44) of section 2, to the revenue authority to which appeals ordinarily lie against the orders of a Collector under the law relating to land revenue of the State concerned; and

 

(b)      in any other case, to the revenue authority to which an appeal or an application for revision would ordinarily lie, if the order passed by him were the order under the law relating to land revenue or other public demand for the time being in force in the State concerned."

Section 22 - Amendment of Act 27 of 1957

In section 5 of the Wealth tax Act, 1957,

(1)     in sub section (1)

 

(a)      clause (xv) shall be omitted;

 

(b)      in clause (xvi), for the words "twelve year national plan savings certificates held by the assessee", the words "twelve year national plan savings certificates, ten year defence deposit certificates and twelve year national defence certificates held by the assessee, to the extent to which the amount of such certificates or deposits do not exceed in each case the maximum amount permitted to be invested or deposited therein" shall be substituted;

 

(2)     to sub section (3), the following proviso shall be added, namely :

"Provided that for the purpose of making any assessment for the financial year commencing on the 1st day of April, 1963, the provisions of clause (b) shall not apply to ten year defence deposit certificates and twelve year national defence certificates held by the assessee on the relevant valuation date."

Schedule I - FIRST SCHEDULE

THE FIRST SCHEDULE

(See section 2)

Part I

Income-tax and surcharges on income-tax

Paragraph A

(i)       In the case of every individual who is married and every Hindu undivided family whose total income does not exceed Rs. 20,000 in either case--

Rates of Income-tax

(ii) ???In the case of every individual who is not married and every individual or Hindu undivided family whose total income in either case exceeds Rs. 20,000 and in the case of every unregistered firm or other association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act not being a case to which any other Paragraph of this Part applies:--

Provided that for the purposes of this Paragraph--

(i)       no income-tax shall be payable on a total income which does not exceed the limit specified below;

 

(ii)      the income-tax payable shall in no case exceed half the amount by which the total income exceeds the said limit;

 

(iii)     the income-tax payable by an individual who is married or a Hindu undivided family whose total income exceeds in either case Rs. 20,000 shall not exceed the aggregate of?

 

(a)      the income-tax which would have been payable if the total income had been Rs. 20,000;

 

(b)      half the amount by which the total income exceeds Rs. 20,000;

The limit aforesaid shall be--

(i) ???Rs. 6,000 in the case of every Hindu undivided family which as at the end of the previous year satisfies either of the following conditions, namely:--

(a)      that it has at least two members entitled to claim partition who are not less than eighteen years of age; or

 

(b)      that it has at least two members entitled to claim partition who are not lineally descended one from the other and who are not lineally descended from any other living member of the family;

(ii) ???Rs. 3,000 in every other case.

Surcharges on income-tax

The amount of income-tax computed at the rates hereinbefore specified shall be increased by the aggregate of the surcharges calculated as under:--

(a)      a surcharge for purposes of the Union equal to the sum of?

 

(i)       two and a half per cent, of the amount of income-tax calculated at the average rate of income-tax on the income under the head "Salaries" included in the total income;

 

(ii)      five per cent, of the amount of income-tax calculated at the average rate of income-tax on the total income as reduced by the income under the head "Salaries" included therein; and

 

(iii)     where the earned income included, in the total income exceeds Rs. 1,00,000, ten per cent, of the difference between the amount of income-tax which would have been payable on the whole of the earned income included in the total income if such earned income had been the total-income and the amount of income-tax payable on a total income of Rs. 1,00,000;

 

(b)      a special surcharge at fifteen per cent, of the difference between the amount of income-tax on the total income and the amount of income-tax on the whole of the earned income, if any, included in the total income if such earned income had been the total income:

Provided that the surcharge for purposes of the Union and the special surcharge, both together, shall not exceed half the amount by which the total income as reduced by the amount of income-tax payable by the assessee exceeds the limit specified below:--

The limit aforesaid shall be--

(i) ???Rs. 6,000 in the case of every Hindu undivided family which as at the end of the previous year satisfies either of the following conditions, namely:-

(a)      that it has at least two members entitled to claim partition who are not less than eighteen years of age; or

 

(b)      that it has at least two members entitled to claim partition who are not lineally descended one from the other and who are not lineally descended from any other living member of the family;

(ii) ???Rs. 3,000 in every other case;

(c)      an additional surcharge for purposes of the Union calculated on the amount of the residual income at the following rates, namely:--

Provided that--

(i) ???no additional surcharge shall be levied where the residual income does not exceed the limit specified below;

[1][]

The limit aforesaid shall be--

(i) ???Rs. 6,000 in the case of every Hindu undivided family which as at the end of the previous year satisfies either of the following conditions, namely:--

(a)      that it has at least two members entitled to claim partition who are not less than eighteen years of age;

or

(b)      that it has at least two members entitled to claim partition who are not lineally descended one from the other and who are not lineally descended from any other living member of the family;

(ii) ???Rs. 3,600 in the case of every individual who has more than one child wholly or mainly dependent on him or in the case of every Hindu undivided family having more than one minor coparcener;

(iii) ??Rs. 3,300 in the case of every individual who has one child wholly or mainly dependent on him or in the case of every Hindu undivided family having one minor coparcener;

(iv) ??Rs. 3,000 in every other case.

Explanation. -- For the purposes of this Paragraph, in the case of "every Hindu undivided family governed by the Mitakshara law, a son shall be deemed to be entitled to claim partition of the coparcenary property against his father or grandfather notwithstanding any custom to the contrary.

Paragraph B

Surcharge on income-tax

The amount of income-tax computed at the rate hereinbefore specified shall be increased by a surcharge for purposes of the Union of five per cent, of the amount of income-tax.

Paragraph C

In every case in which under the provisions of the Income-tax Act, income-tax is to be charged at the maximum rate,--

Rate of income-tax

Surcharges on income-tax

The amount of income-tax computed at the rate hereinbefore specified shall be increased by the aggregate of the surcharges calculated as under:--

(a)      a surcharge for purposes of the Union of five per cent, of the amount of income-tax;

 

(b)      a special surcharge of fifteen per cent, of the amount of income-tax; and

 

(c)      an additional surcharge for purposes of the Union calculated on the

amount of the residual income at the rates as specified in Paragraph A of this Part.

Paragraph D

In the case of every company,--

Rate of income-tax

Paragraph E

In the case of every registered firm,--

Rates of income-tax

Surcharge on income-tax

The amount of income-tax computed at the rates hereinbefore specified shall be increased by a surcharge for purposes of the Union equal to the sum of--

(i)       twenty per cent, of the amount of income-tax payable by the firm on its income from any business carried on by it calculated at the rate of income-tax applicable to it's total income; and

 

(ii)      ten per cent, of the amount of income-tax payable by it on its income from all sources other than from any business carried on by it calculated at the rate of income-tax applicable to its total income.

Part II

Super-tax and surcharges on super-tax

Paragraph A

In the case of every individual, Hindu undivided family, unregistered firm or other association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, not being a case to which any other Paragraph of this Part applies,--

Rates of super-tax

The amount of super-tax computed at the rates hereinbefore specified shall be increased by the aggregate of the surcharges calculated as under:--

(a)      A surcharge for purposes of the Union equal to the sum of?

 

(i)       two and a half per cent, of the amount of super-tax calculated at the average rate of super-tax on the income under the head "Salaries" included in the total income;

?

(ii)      five per cent, of the amount of super-tax calculated at the average rate of super-tax on the total income as reduced by the income under the head "Salaries" included therein; and

 

(iii)     where the earned income included in the total income exceeds Rs. 1,00,000, ten per cent, of the difference between the amount of super-tax which would have been payable on the whole of the earned income included in the total income, if such earned income had been the total income and the amount of super-tax payable on a total income of Rs. 1,00,000;

 

(b)      A special surcharge at fifteen per cent, of the difference between the amount of super-tax on the total income and the amount of super-tax on the whole of the earned income, if any, included in the total income, if such earned income had been the total income.

Paragraph B

In the case of every local authority,--

Rate of super-tax

Surcharge on super-tax

The amount of super-tax computed at the rate hereinbefore specified shall be increased by a surcharge for purposes of the Union of 121/₂ per cent, of the amount of super-tax.

Paragraph C

In the case of every association of persons being a co-operative society as defined in clause (19) of section 2 of the Income-tax Act,--

Rates of super-tax

Surcharge on super-tax

The amount of super-tax computed at the rates hereinbefore specified shall be increased by a surcharge for purposes of the Union of 121/2 per cent, of the amount of super-tax.

Paragraph D

In the case of every company, other than the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956(31 of 1956),--

Rates of Super-tax

Provided that--

(i)       a rebate at the rate of 50 per cent, on so much of the total income as consists of dividends from any Indian company; and at the rate of 35 per cent, on the balance of the total income shall be allowed in the case of any company which?

 

(a)      in respect of its profits liable to tax under the Income-tax Act for the assessment year commencing on the 1st day of April, 1963, has made the prescribed arrangements for the declaration and payment within India of the dividends payable out of such profits in accordance with the provisions of section 194 of that Act; and

 

(b)      is such a company as is referred to in section 108 of the Income-tax Act with a total income not exceeding Rs. 25,000;

 

(ii)      a rebate at the rate of 50 per cent, on so much of the total income as consists of dividends from a subsidiary Indian company formed and registered before the 1st day of April, 1961; at the rate of 45 per cent, on so much of the total income as consists of dividends from any other Indian company; and at the rate of 30 per cent, on the balance of the total income shall be allowed in the case of any company which satisfies condition (a) but not condition (b) of the preceding clause;

 

(iii)     a rebate at the rate of 50 per cent, on so much of the total income as consists of dividends from a subsidiary Indian company formed and registered before the 1st day of April, 1961; at the rate of 30 per cent, on so much of the total income as consists of dividends from an Indian company, not being a subsidiary company, formed and registered before the 1st day of April, 1959; at the rate of 45 per cent, on so much of the total income as consists of dividends from any other Indian company formed and registered on or after the 1st day of April, 1959; at the rate of 30 per cent, on so much of the total income as consists of royalties received from an Indian concern in pursuance of an agreement, made by it with the Indian concern on or after the 1st day of April, 1961 and which has been approved by the Central Government; and at the rate of 17 per cent, on the balance of the total income shall be allowed in the case of any company not entitled to a rebate under either of the preceding clauses:

Provided further that--

(iv)    where the sum arrived at in accordance with clause (i) of this proviso exceeds the amount of the rebate arrived at in accordance with clause (i) or clause (ii), as the case may be, of the preceding proviso, only so much of the amounts of reduction mentioned in sub-clauses (a) and (b) of clause (i) of this proviso as is sufficient, in that order, to reduce the rebate, to nil shall be deemed to have been taken into account for the purpose:

Provided further that the super-tax payable by a company, the total income of which exceeds rupees twenty-five thousand, shall not exceed the aggregate of--

(a)      the super-tax which would have been payable by the company if its total income had been rupees twenty-five thousand;

and

(b)      half the amount by which its total income exceeds rupees twenty-five thousand.

Explanation I. -- For the purposes of this Paragraph, where any portion of the profits and gains of a company is not included in its total income by reason of such portion being agricultural income, the amount representing the face value of any bonus shares and the amount of any bonus issued to its shareholders shall each be deemed to be such proportion thereof as the average of the total income of the company in the five previous years in which the company has been in receipt of taxable income immediately preceding the relevant previous year bears to the average of its total profits and gains (excluding capital receipts) for the preceding five years aforesaid, reduced by such allowances as may be admissible under the Income-tax Act which have not been taken into account by the company in its profit and loss accounts for the preceding five years aforesaid.

Explanation II. -- For the purposes of this Paragraph and Part III of the Schedule, a company shall be deemed to be a subsidiary of another company if that other company holds more than half in nominal value of the equity share capital of the first mentioned company.

Paragraph E

In the case of the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956(31 of 1956),--

Rate of super-tax

Part III

Rates for deduction of tax at source in certain cases

In every case in which under the provisions of sub-section (2) of section 192 and sections 193 to 195 of the Income-tax Act, tax is to be deducted at the rates in force, deduction shall be made from the income subject to deduction at the following rates:--

 

 

 

Schedule II - SECOND SCHEDULE

THE SECOND SCHEDULE

[See section 22(2)]

In the First Schedule to the Tariff Act,--

(i)       in Item No. 24, for the entry in the fourth column, the entry "Rs. 60.00 per kilogram" shall be substituted;

 

(ii)      in Item No. 24(3), for the entry in the fourth column and the entry in the sixth column, the entry "Rs. 50.00 per kilogram" shall be

substituted;

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(iii)     in Item No. 28A, for the entry in the second column, the following entry shall be substituted, namely:--

"Patent or proprietary medicines not containing alcohol, opium,. Indian hemp or other narcotic drugs or other narcotics other than those medicines which are exclusively Ayurvedic, Unani, Sidha or Homoeopathic.

Explanation. -- 'Patent or proprietary medicines' means any drug or medicinal preparation, in whatever form, for use in the internal or external treatment; of, or for the prevention of ailments in, human beings or animals, which bears either on itself or on its container or both, a name which is not specified in a monograph in a Pharmacopoeia, Formulary or other publications notified in this behalf by the Central Government in the Official Gazette, or which is a brand name, that is, a name or a registered trade mark under the Trade and Merchandise Marks Act, 1958 (43 of 1958), or any other mark such as a symbol, monogram, label, signature or invented words or any writing which is used in relation to that medicine for the purpose of indicating or so as to indicate a connection in the course of trade between the medicine and some person having the right either as proprietor or otherwise to use the name or mark with or without any indication of the identity of that person.";

(iv)    in Item No. 29, for the entry in the fourth column, the entry "Rs. 12.00 per 100 linear metres" shall be substituted;

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(v)      in Items Nos. 30, 73, 73(1), 77 and 77(5), for the entries against each of them in the fourth and fifth columns, the entries "60 per cent, ad valorem" and "50 per cent, ad valorem" shall, respectively, be substituted;

?

(vi)    in Item No. 30(1), for the entries in the fourth column against sub-items (a), (b) (i) and (b) (ii), the entry "50 per cent, ad valorem" shall be substituted;

 

(vii)   in Item No. 39, for the entry in the fourth column, the entry "20 per cent, ad valorem" shall be substituted;

 

(viii)  in Items Nos. 63(1), 63(20A) and 63(35), for the entry against each of them in the fourth column, the entry "30 per cent. ad valorem" shall be substituted;

 

(ix)    in Item No. 63(2),--

 

(1)     for the entry in the fourth column against sub-item (a) (i), the following entry shall be substituted, namely:--

"Rs. 22.00 per tonne or 10 per cent, ad valorem, whichever is higher, plus 5 per cent, ad valorem";

(2)     for the entry in the fourth column against sub-item (a) (ii), the following entry shall be substituted, namely:--

"Rs. 64.00 per tonne plus 5 per cent, ad valorem";

(3)     for the entry in the fourth column against sub-item (b), the following entry shall be substituted, namely:--

"Rs. 60.00 per tonne plus 5 per cent, ad valorem";

(x)      in Item No. 63(3),--

 

(1)     for the entry in the fourth column against sub-item (i), the following entry shall be substituted, namely:--

"Rs. 31.00 per tonne or 10 per cent; ad valorem, whichever is higher, plus 5 per cent, ad valorem";

(2)     for the entry in the fourth column against sub-item (ii), the following entry shall be substituted, namely:--

"Rs. 60.00 per tonne or 20 per cent, ad valorem whichever is higher, plus 5 per cent, ad valorem";

(xi)    in Item No. 63(9), for the entry in the fourth column, the following entry shall be substituted namely:--

"Rs. 60.00 per tonne plus 10 per cent, ad valorem";

(xii)   in Item No. 63(10),--

 

(1)     for the entry in the fourth column against sub-item (i), the entry "Rs. 80.00 per tonne plus 5 per cent, ad, valorem" shall be substituted;

 

(2)     for the entry in the fourth column against sub-item (ii), the entry "Rs. 100.00 per tonne plus 5 per cent. ad valorem" shall be substituted;

 

(xiii)  in Item No. 63(12), in the entry in the second column, for the words "Iron or steel bolts and nuts", the words "Iron or steel bolts and nuts, not otherwise specified," shall be substituted;

 

(xiv)  in Item No. 63(14A), for the figures "50" and "40" in the fourth and fifth columns, the figures "55" and "45" shall, respectively, be substituted;

 

(xv)   in Item No. 63(17), for the words and figure "plus 5 per cent, ad valorem" in the entry against each of the sub-items (i) and (ii) in the fourth, column, the words and figures "plus 10 per cent ad valorem" shall be substituted;

 

(xvi)  in Item No. 63(18), for the figures "20" and "40" in the fourth column against sub-items (a) and (b), the figures "25" and "45" shall, respectively, be substituted;

 

(xvii) in Item No. 63(19),--

 

(1)     for the entry in the fourth column against sub-item (a) (i), the following entry shall be substituted, namely:--

"Rs. 15.00 per tonne or 10 per cent, ad valorem, whichever is higher, plus 5 per cent, ad valorem";

(2)     for the entry in the fourth column against sub-item (a)(ii), the following entry shall be substituted, namely:--

"Rs. 40.00 per tonne plus 5 per cent, ad valorem";

(3)     for the entry in the fourth column against sub-item (b), the following entry shall be substituted, namely:--

"Rs. 60.00 per tonne plus 5 per cent, ad valorem";

(xviii)   in Item No. 63(20),--

 

(1)     for the entry in the fourth column against sub-item (a)(1)(i), the following entry shall be substituted, namely:--

"Rs. 29.00 per tonne or 10 per cent, ad valorem, whichever is higher, plus 5 per cent, ad valorem";

(2)     for the entry in the fourth column against sub-item (a)(1)(ii), the following entry shall be substituted, namely:--

"Rs. 50.00 per tonne plus 5 per cent, ad valorem";

(3)     for the entry in the fourth column against sub-item (a)(2)(i), the following entry shall be substituted, namely:--

"Rs. 30.00 per tonne or 10 per cent, ad valorem whichever is higher, plus 5 per cent, ad valorem";

(4)     for the entry in the fourth column against sub-item (a)(2)(ii), the following entry shall be substituted, namely:--

"Rs. 60.00 per tonne plus 5 per cent, ad valorem",

(5)     for the entry in the fourth column against sub-item (b)(1)(i), the following entry shall be substituted, namely:--

"Rs. 32.00 per tonne or 10 per cent, ad valorem, whichever is higher, plus 5 per cent, ad valorem";

(6)     for the entry in the fourth column against sub-item (b)(1)(ii), the following entry shall be substituted, namely:--

"Rs. 55.00 per tonne plus 5 per cent, ad valorem";

(7)     for the entry in the fourth column against sub-item (b)(2)(i), the following entry shall be substituted, namely:--

"Rs. 32.00 per tonne or 10 per cent, ad valorem, whichever is higher, plus 5 per cent, ad valorem";

(8)     for the entry in the fourth column against sub-item (b)(2)(ii), the following entry shall be substituted, namely:--

"Rs. 64.00 per tonne plus 5 per cent, ad valorem";

(xix)  in Item No. 63(21) A,--

?

(1)     for the entry in the fourth column against sub-item (a) (i), the following entry shall be substituted, namely:--

"Rs. 10.00 per tonne of 15 per cent, ad valorem, whichever is higher";

(2)     for the entry in the fourth column against sub-item (a) (ii), the following entry shall be substituted, namely:--

"Rs. 10.00 per tonne or 25 per cent, ad valorem, whichever is higher";

(3)     for the entry in the fourth column against sub-item (b) (i), the following entry shall be substituted, namely:--

"Rs. 31.00 per tonne or 10 per cent, ad valorem, whichever is higher";

(4)     for the entry in the fourth column against sub-item (b) (ii), the following entry shall be substituted, namely:--

"Rs. 60.00 per tonne plus 5 per cent, ad valorem";

(xx)   in Item No. 63(24), for the figures "55" and "45" in the fourth and fifth columns, the figures "60" and "50" shall, respectively, be substituted;

?

(xxi)  in Item No. 63(25),--

 

(1)     for the entry in the fourth column against sub-item (i), the following entry shall be substituted, namely:--

"30 per cent, ad valorem.";

(2)     for the entry in the fourth column against sub-item (ii), the following entry shall be substituted, namely:--

"30 per cent, ad valorem, plus Rs. 35.00 per tonne";

(xxii) in Item No. 63(28), for the figures "55" in the fourth column, the figures "60" shall be substituted;

?

(xxiii)   in Item No. 63(31),--

 

(1)     for the entry in the fourth column against sub-item (a), the following entry shall be substituted, namely:--

"Rs. 29.00 per tonne or 10 per cent, ad valorem, whichever is higher, plus 5 per cent, ad valorem";

(2)     For the entry in the fourth Column against sub-item (b), the following entry shall be substituted, namely:--

"Rs. 50.00, per tonne plus 5 per cent, ad valorem";

(xxiv)   in Item No. 63(32),--

 

(1)     for the entry in the fourth column against sub-item (a), the following entry shall be substituted, namely:--

"Rs. 5000 per tonne plus 5 per cent, ad valorem";

(2)     for the entry in the fourth column against sub-item (b), the following entry shall be substituted, namely:--

"Rs. 84.00 per tonne plus 5 per cent, ad valorem";

(xxv)in Item No. 71,--

 

(1)     for the entry in the fourth column against sub-item (a), the following entry shall be substituted, namely:--

"60 per cent, ad valorem";

(2)     for the entry in the fourth column against sub-item (b), the following entry shall be substituted, namely:--

"100 per cent, ad valorem".

(xxvi)   in Items Nos. 72, 72(1), 72(2) and 72(3), for the entry against each of them in the fourth column, the entry "20 per cent, ad valorem" shall be substituted;

 

(xxvii)  in Item No. 75, for the figures "35" in the fourth column, the figures "50" shall be substituted;

 

(xxviii) in Items Nos. 75(11) and 75(12), for the figures "25" against each of them in the fourth column, the figures "50" shall be substituted; and

 

(xxix)   in Item No. 87, for the figures "50" in the fourth column, the figures "60" shall be substituted.

Statement of Objects and Reasons - FINANCE ACT, 1963

STATEMENT OF OBJECTS AND REASONS

The object of this Bill is to give effect to the financial proposals of the Central Government for the financial year 1963-64 and to provide for certain connected matters. The Notes on Clauses explain the various provisions contained in the Bill.