FINANCE
ACT, 1988 THE FINANCE ACT, 1988 [Act, No. 26 of 1988] [13th May, 1988] An Act to
give effect to the financial proposals of the Central Government for the
financial year 1988-89 BE it
enacted by Parliament in the Thirty-ninth Year of the Republic of India as
follows :- (1)
This Act may
be called the Finance Act, 1988. (2)
Save as
otherwise provided in this Act, sections 2 to 75 and sections 86 to 88 shall be
deemed to have come into force on the 1st day of April, 1988. (1)
Subject to
the provisions of sub-sections (2) and (3), for the assessment year commencing
on the 1st day of April, 1988, income-tax shall be charged at the rates
specified in Part I of the First Schedule and shall be increased, - (a)
in the cases
to which Paragraphs A, B, C and D of that Part apply, by a surcharge for
purposes of the Union; and (b)
in the cases
to which Paragraph E of that Part applies, by a surcharge, calculated in each
case in the manner provided therein. (2)
In the cases
to which Sub-Paragraph I or Sub-Paragraph II of Paragraph A of Part I of the
First Schedule applies, where the assessee has, in the previous year, any net
agricultural income exceeding six hundred rupees, in addition to total income,
and the total income exceeds, - (i)
in a case to
which the said Sub-Paragraph I applies, eighteen thousand rupees, and (ii)
in a case to
which the said Sub-Paragraph II applies, twelve thousand rupees, then, - (a)
the net
agricultural income shall be taken into account, in the manner provided in
clause (b) [that is to say, as if the net agricultural income were comprised in
the total income after, (i) ???in a case to which the said
Sub-Paragraph I applies, the first eighteen thousand rupees, and (ii)? ?in a case to which the said Sub-Paragraph II
applies, the first twelve thousand rupees, of the total income but without
being liable to tax], only for the purpose of charging income-tax in respect of
the total income; and (b)
the
income-tax chargeable shall be calculated as follows :- (i) ???the total income and the
net agricultural income shall be aggregated and the amount of income-tax shall
be determined in respect of the aggregate income at the rates specified in the
Sub-Paragraph I or, as the case may be, Sub-Paragraph II of the said Paragraph
A, as if such aggregate income were the total income; (ii)? ?the net agricultural income shall be
increased, - (A)
in a case to
which the said Sub-Paragraph I applies, by a sum of eighteen thousand rupees;
and (B)
in a case to
which the said Sub-Paragraph II applies, by a sum of twelve thousand rupees and
the amount of income-tax shall be determined in respect of the net agricultural
income as so increased at the rates specified in Sub-Paragraph I or, as the
case may be, Sub-Paragraph II of the said Paragraph A, as if the net
agricultural income as so increased were the total income; (iii) ??the amount of income-tax
determined in accordance with sub-clause (i) shall be reduced by the amount of
income-tax determined in accordance with sub-clause (ii) and the sum so arrived
at shall be the income-tax in respect of the total income : Provided
that the amount of income-tax so arrived at shall, in the case of every person
having a total income exceeding fifty thousand rupees, be increased by a
surcharge for purposes of the Union calculated at the rate of five per cent. of
such income-tax and the sum so arrived at shall be the income-tax in respect of
the total income. (3)
In cases to
which the provisions of Chapter XII or Chapter XII-A or sub-section (1A)
of section 161 or section 164 or section
164A or section 167A of the Income-tax Act, 1961 (43 of 1961)
(hereinafter referred to as the Income-tax Act) apply, the tax chargeable shall
be determined as provided in that Chapter or that section, and with reference
to the rates imposed by sub-section (1) or the rates as specified in that
Chapter or section, as the case may be : Provided
that in respect of any income chargeable to tax under section 115B or
section 114BB of the Income-tax Act, the income-tax computed under section
115B or section 115BB shall be increased by a surcharge for
purposes of the Union calculated at the rate of five per cent. of such
income-tax. (4)
In cases in
which tax has to be deducted under section 193, 194, 194A, 194B, 194BB, 194D and 195 of
the Income-tax Act at the rates in force, the deduction shall be made at the
rates specified in Part II of the First Schedule and shall be increased, - (a)
in the cases
to which the provisions of sub-item (a) of item 1 of that Part apply, by a
surcharge for purposes of the Union; and (b)
in the cases
to which the provisions of sub-item (a) of item 2 of that Part apply, by a
surcharge, calculated in each case in the manner provided therein. (5)
In cases in
which tax has to be deducted under section 194C of the Income-tax
Act, the deduction shall be made at the rates specified in that section and
shall be increased by a surcharge for purposes of the Union calculated at the
rate of five per cent. of such deduction. ? (6)
In cases in
which tax has to be collected under section 206C of the Income-tax
Act, the collection shall be made at the rate specified in that section and
shall be increased by a surcharge for purposes of the Union calculated at the
rate of five per cent. of such collection. (7)
Subject to
the provisions of sub-section (8), in cases in which income-tax has to be
calculated under the first proviso to sub-section (5) of section
132 of the Income-tax Act or charged under sub-section (4) of section
172 or sub-section (2) of section 174 or section
175 or sub-section (2) of section 176 of the said Act or
deducted under section 192 of the said Act from income chargeable
under the head "Salaries" or in which the "advance tax" payable
under Chapter XVII-C of the said Act has to be computed, at the rate or rates
in force, such income-tax or, as the case may be, "advance tax" shall
be so calculated, charged, deducted or computed at the rate or rates specified
in Part III of the First Schedule and shall be increased, - (a)
in the cases
to which Paragraph A, B, C and D of that Part apply, by a surcharge for
purposes of the Union; and (b)
in the cases
to which Paragraph E of that Part applies, by a surcharge, calculated in each
case in the manner provided therein : Provided that in cases to which the provisions of Chapter XII or Chapter
XII-A or sub-section (1A) of section 161 or section
164 or section 164A or section 167B of the Income-tax
Act apply, "advance tax" shall be computed with reference to the
rates imposed by this sub-section or the rates as specified in that Chapter or
section, as the case may be : Provided further that in respect of any income chargeable to tax
under section 115B of the Income-tax Act, the "advance tax"
computed under the first proviso shall be increased by a surcharge for purposes
of the Union calculated at the rate of five per cent. of such "advance
tax". (8)
In the cases
to which Sub-Paragraph I or Sub-Paragraph II of Paragraph A of Part III of the
First Schedule applies, where the assessee has, in the previous year or, if by
virtue of any provision of the Income-tax Act, income-tax is to be charged in
respect of the income of a period other than the previous year, in such other
period, any net agricultural income exceeding six hundred rupees, in addition
to total income and the total income exceeds, - (i) ???in a case to which the said
Sub-Paragraph I applies, eighteen thousand rupees, and (ii) ??in a
case to which the said Sub-Paragraph II applies, twelve thousand rupees then,
in calculating income-tax under the first proviso to sub-section (5)
of section 132 of the Income-tax Act or in charging income-tax under
sub-section (2) of section 174 or section 175 or
sub-section (2) of section 176 of the said Act or in computing the "advance
tax" payable under Chapter XVII-C of the said Act, at the rate or rates in
force, - (a)
the net
agricultural income shall be taken into account, in the manner provided in
clause (b) [that is to say, as if the net agricultural income were comprised in
the total income after, (i)
in a case to
which the said Sub-Paragraph I applies, the first eighteen thousand rupees, and (ii)
in a case to
which the said Sub-Paragraph II applies, the first twelve thousand rupees, (a)
"company
in which the public are substantially interested" means a company within
the meaning of clause (18) of section 2 of the Income-tax Act, and
includes a subsidiary of such company if the whole of the share capital of such
subsidiary company has been held by the parent company or by its nominees
throughout the previous year; ? (b)
"domestic
company" means an Indian company, or any other company which, in respect
of its income liable to income-tax under the Income-tax Act for the assessment
year commencing on the 1st day of April, 1988, has made the prescribed
arrangements for the declaration and payment within India of the dividends
(including dividends on preference shares) payable out of such income in
accordance with the provisions of section 194 of the Act; (c)
"insurance
commission" means any remuneration or reward, whether by way of commission
or otherwise, for soliciting or procuring insurance business (including
business relating to the continuance, renewal or revival of policies of
insurance); (d)
"investment
company" means a company whose gross total income (as defined in section
80B of the Income-tax Act) consists mainly of income which is chargeable
under the heads "Interest on securities", Income from house
property", "Capital gains" and "Income from other
sources"; (e)
"net
agricultural income", in relation to a person, means the total amount of
agricultural income, from whatever source derived, of that person computed in
accordance with the rules contained in Part IV of the First Schedule; (f)
"tax-free
security" means any security of the Central Government issued or declared
to be income-tax free, or any security of a State Government issued income-tax
free, the income-tax whereon is payable by the State Government; (g)
"trading
company" means a company whose business consists mainly in dealing in
goods or merchandise manufactured, produced or processed by a person other than
that company and whose income attributable to such business included in its
gross total income (as defined in section 80B of the Income-tax Act)
is not less than fifty of the total income but without being liable to tax],
only for the purpose of calculating, charging or computing such income-tax or,
as the case may be, "advance tax" in respect of the total income; and (b)
such
income-tax or, as the case may be, "advance tax" shall be so
calculated, charged or computed as follows :- (i) ???the total income and the
net agricultural income shall be aggregated and the amount of income-tax or
"advance tax" shall be determined in respect of the aggregate income
at the rates specified in Sub-Paragraph I or, as the case may be, Sub-Paragraph
II of the said Paragraph A, as if such aggregate income were the total income; (ii) ???the net agricultural
income shall be increased, - (A)
in a case to
which the said Sub-Paragraph I applies, by a sum of eighteen thousand rupees;
and (B)
in a case to
which the said Sub-Paragraph II applies, by a sum of twelve thousand rupees and the amount of income-tax or "advance tax" shall
be determined in respect of the net agricultural income as so increased at the
rates specified in the said Sub-Paragraph I or, as the case may be, the said
Sub-Paragraph II as if the net agricultural income as so increased were the
total income;
Preamble 1 - FINANCE ACT, 1988PREAMBLE
(iii) ??the amount of income-tax
or "advance tax" determined in accordance with sub-clause (i) shall
be reduced by the amount of income-tax or, as the case may be, "advance
tax" determined in accordance with sub-clause (ii) and the sum so arrived
at shall be the income-tax or, as the case may be, "advance tax" in
respect of the total income :
Provided
that the amount of income-tax or "advance tax" so arrived at shall,
in the case of every person having a total income exceeding fifty thousand
rupees, be increased by a surcharge for purposes of the Union calculated at the
rate of five per cent. of such income-tax or, as the case may be, "advance
tax" and the sum so arrived at shall be the income-tax or, as the case may
be, "advance tax" in respect of the total income.
(9)
For the
purposes of this section and the First Schedule, -one per cent. of the amount
of such gross total income;
(h)
all other
words and expressions used in this section or in the First Schedule but not
defined in this sub-section and defined in the Income-tax Act shall have the
meanings respectively assigned to them in that Act.
Section 3 - Amendment Of Section 2
In section
2 of the Income-tax Act, after clause (28A), the following clause shall be
inserted with effect from the 1st day of April, 1989, namely :-
(28B)
"interest on securities" means -
(i) ????interest on any security
of the Central Government or a State Government;
(ii) ???interest on debentures or
other securities for money issued by or on behalf of a local authority or a
company or a corporation established by a Central, State or Provincial Act;'.
Section 4 - Amendment Of Section 10
In section
10 of the Income-tax Act, -
(a)
in clause
(6), -
(i)
for
sub-clauses (ii) to (v), the following sub-clause shall be substituted with
effect from the 1st day of April, 1989, namely :-
"(ii) ?the remuneration
received by him as an official, by whatever name called, of an embassy, high
commission, legation, commission, consulate or the trade representation of a
foreign State, or as a member of the staff of any of these officials, for
service in such capacity :
Provided
that the remuneration received by him as a trade Commissioner or other official
representative in India of the Government of a foreign State (not holding
office as such in an honorary capacity), or as a member of the staff of any of
those officials, shall be exempt only if the remuneration of the corresponding
officials or, as the case may be, members of the staff, if any, of the
Government resident for similar purposes in the country concerned enjoys a
similar exemption in that country :
Provided
further that such members of the staff are subjects of the country represented
and are not engaged in any business or profession or employment in India
otherwise than as members of such staff;";
(ii) ??in sub-clause (viia), -
(1)
in the
opening paragraph, the brackets, words, figures and letters "(commencing
from a date after the 31st day of March, 1971)" shall be omitted;
(2)
in item (A),
for the brackets, letter and words "(A) such remuneration due to or
received by him", the following shall be substituted, namely :-
"(I) ?where such services
commence from a date after the 31st day of March, 1971, but before the 1st day
of April, 1988, -
(A) ??such remuneration due to or
received by him";
(3)
in the
proviso, for the words "Provided that" the following shall be
substituted, namely :-
'(II) ?where such services
commence from a date after the 31st day of March, 1988, and tax on his income
chargeable under the head "Salaries" is paid to the Central
Government by the employer [which tax, in the case of an employer, being a
company, may be paid notwithstanding anything contained in section
200 of the Companies Act, 1956 (1 of 1956)], the tax so paid by the
employer for a period not exceeding forty-eight months commencing from the date
of his arrival in India :
Provided
that nothing in this item shall relate to a period exceeding twenty-four months
commencing from the date of his arrival in India if the approval of the Central
Government for his employment in India for such period is not obtained before
the 1st day of October of the relevant assessment year :
Provided
further that';
(b)
in clause
(6A), in the Explanation, for the words "For the purposes of this
clause", the words, brackets, figure and letter "For the purposes of
this clause and clause (6B)" shall be substituted;
(c)
after clause
(6A), the following clause shall be inserted, namely :-
"(6B) where in the case of a non-resident (not being a company) or
of a foreign company deriving income (not being salary, royalty or fees for
technical services) from Government or an Indian concern in pursuance of an
agreement entered into by the Central Government with the Government of a
foreign State or an international organisation, the tax on such income is
payable by Government or the Indian concern to the Central Government under the
terms of that agreement or any other related agreement approved by the Central
Government, the tax so paid;";
(d)
in clause
(15), after sub-clause (iib), the following sub-clause shall be inserted with
effect from the 1st day of April, 1989, namely :-
"(iic)
in the case of an individual or a Hindu undivided family, interest on such
Relief Bonds as the Central Government may, by notification in the Official
Gazette, specify in this behalf;";
(e)
in clause
(20), the words '"Interest on securities",' shall be omitted with
effect from the 1st day of April, 1989;
(f)
in clause
(23A), the words '"Interest on securities" or' shall be omitted with
effect from the 1st day of April, 1989;
(g)
in clause
(23D) [as inserted by clause (m) of section 6 of the Direct Tax Laws
(Amendment) Act, 1987 (4 of 1988)], -
(i) ???for the words "any
income from", the words "any income of" shall be substituted;
(ii) ???for the words "the
income from the Mutual Fund shall be distributed to the unit holders", the
words "such income shall be distributed to the holders of its units"
shall be substituted;
(h)
in clause
(24), the words '"Interest on securities",' shall be omitted with
effect from the 1st day of April, 1989;
(i)
after clause
(30), the following clause shall be inserted with effect from the 1st day of
April, 1989, namely :-
'(31) in the case of an assessee who carries on the business of growing
and manufacturing rubber, coffee, cardamom or such other commodity in India, as
the Central Government may, by notification in the Official Gazette, specify in
this behalf, the amount of any subsidy received from or through the concerned
Board under any such scheme for replantation or replacement of rubber plants,
coffee plants, cardamom plants or plants for the growing of such other
commodity or for rejuvenation or consolidation of areas used for cultivation of
rubber, coffee, cardamom or such other commodity as the Central Government may,
by notification in the Official Gazette, specify :
Provided
that the assessee furnishes to the Assessing Officer, along with his return of
income for the assessment year concerned or within such further time as the
Assessing Officer may allow, a certificate from the concerned Board, as to the
amount of such subsidy paid to the assessee during the previous year.
Explanation
: In this clause, "concerned Board" means -
(a)
in relation
to rubber, the Rubber Board constituted under section 4 of the Rubber
Act, 1947 (24 of 1947),
(b)
in relation
to coffee, the Coffee Board constituted under section 4 of the Coffee
Act, 1942 (7 of 1942),
(c)
in relation
to cardamom, the Spices Board constituted under section 3 of the
Spices Board Act, 1986 (10 of 1986),
(d)
in relation
to any other commodity specified under this clause, any Board or other authority
established under any law for the time being in force which the Central
Government may, by notification in the Official Gazette, specify in this
behalf.'.
Section 5 - Amendment Of Section 10A
In section
10A of the Income-tax Act, with effect from the 1st day of April, 1989,
(a)
in
sub-section (7), for the words, brackets and figures "before the expiry of
the time allowed under sub-section (1) or sub-section (2) of section 139,
whether fixed originally or on extension, for furnishing the return of income",
the words, brackets and figures "before the due date for furnishing the
return of income under sub-section (1) of section 139" shall be
substituted;
(b)
in
sub-section (8) [as inserted by section 126 of the Direct Tax Laws (Amendment)
Act, 1987 (4 of 1988)], -
(i)
for the
words "in this section", the words, brackets and figure "in
sub-section (5)" shall be substituted;
(ii)
for the
words "purposes of this section", the words "purposes of that
sub-section" shall be substituted.
Section 6 - Insertion Of New Section 10B
After section
10A of the Income-tax Act, the following section shall be inserted with
effect from the 1st day of April, 1989, namely :-
10B. Special provision in respect of newly established hundred per cent.
export-oriented undertakings-
(1)
Subject to
the provisions of this section, any profits and gains derived by an assessee
from a hundred per cent. export-oriented undertaking (hereafter in this section
referred to as the undertaking) to which this section applies shall not be
included in the total income of the assessee.
(2)
This section
applies to any undertaking which fulfils all the following conditions, namely
:-
(i) ???it manufactures or produces
any article or thing;
(ii) ???it is not formed by the
splitting up, or the reconstruction, of a business already in existence :
Provided
that this condition shall not apply in respect of any undertaking which is
formed as a result of the re-establishment, reconstruction or revival by the
assessee of the business of any such industrial undertaking as is referred to
in section 33B, in the circumstances and within the period specified in that
section;
(iii) ??it is not formed by the
transfer to a new business of machinery or plant previously used for any
purpose.
Explanation
: The provisions of Explanation 1 and Explanation 2 to sub-section (2) of
section 80-I shall apply for the purposes of clause (iii) of this sub-section
as they apply for the purposes of clause (ii) of that sub-section.
(3)
The profits
and gains referred to sub-section (1) shall not be included in the total income
of the assessee in respect of any five consecutive assessment years, falling
within a period of eight years beginning with the assessment year relevant to
the previous year in which the undertaking begins to manufacture or produce
articles or things, specified by the assessee at his option :
Provided
that nothing in this sub-section shall be construed to extend the aforesaid
five assessment years to cover any period after the expiry of the said period
of eight years.
(4)
Notwithstanding
anything contained in any other provision of this Act, in computing the total
income of the assessee of the previous year relevant to the assessment year
immediately succeeding the last of the relevant assessment year, or of any
previous year relevant to any subsequent assessment year, -
(i) ???section 32, section 32A,
section 33 and clause (ix) of sub-section (1) of section 36 shall apply as if
every allowance or deduction referred to therein and relating to or allowable
for any of the relevant assessment years, in relation to any building,
machinery, plant or furniture used for the purposes of the business of the
undertaking in the previous year relevant to such assessment year or any
expenditure incurred for the purposes of such business in such previous year
had been given full effect to for that assessment year itself and accordingly
sub-section (2) of section 32, clause (ii) of sub-section (3) of section 32A,
clause (ii) of sub-section (2) of section 33 or the second proviso to clause
(ix) of sub-section (1) of section 36, as the case may be, shall not apply in
relation to any such allowance or deduction;
(ii) ??no loss referred to in
sub-section (1) of section 72 or sub-section (1) or sub-section (3) of section
74, in so far as such loss relates to the business of the undertaking, shall be
carried forward or set off where such loss relates to any of the relevant
assessment years;
(iii)? ?no deduction shall be allowed under section
80HH or section 80HHA or section 80-I in relation to the profits and gains of
the undertaking; and
(iv) ??in computing the
depreciation allowance under section 32, the written down value of any asset
used for the purposes of the business of the undertaking shall be computed as
if the assessee had claimed and been actually allowed the deduction in respect
of depreciation for each of the relevant assessment years.
(5)
Where the
undertaking has begun to manufacture or produce articles or things in any
previous year relevant to the assessment year commencing before the 1st day of
April, 1989, the assessee may, at his option, before the due date for
furnishing the return of his income under sub-section (1) of section 139 for
the assessment year commencing on the 1st day of April, 1989, furnish to the
Assessing Officer a declaration in writing that the provisions of sub-section
(1) may be made applicable to him for any five consecutive assessment years
falling within a period of eight years beginning with the assessment year
commencing on the 1st day of April, 1989, and if he does so, then, the
provisions of sub-section (1) shall apply to him for each of such assessment
years and the provisions of sub-section (4) shall also apply in computing the
total income of the assessee for the assessment year immediately succeeding the
last of such assessment years and any subsequent assessment year.
(6)
The
provisions of sub-section (8) and sub-section (9) of section 80-I shall, so far
as may be, apply in relation to the undertaking referred to in this section as
they apply for the purposes of the industrial undertaking referred to in
section 80-I.
(7)
Notwithstanding
anything contained in the foregoing provisions of this section, where the
assessee, before the due date for furnishing the return of his income under
sub-section (1) of section 139 furnishes to the Assessing Officer a declaration
in writing that the provisions of this section may not be made applicable to
him, the provisions of this section shall not apply to him for any of the
relevant assessment years.
Explanation
: For the purposes of this section, -
(i) ???"hundred per cent.
export-oriented undertaking" means an undertaking which has been approved
as a hundred per cent. export-oriented undertaking by the Board appointed in
this behalf by the Central Government in exercise of the powers conferred
by section 14 or the Industries (Development and Regulation) Act,
1951 (65 of 1951), and the rules made under that Act;
(ii) ???"relevant assessment
years" means the five consecutive assessment years specified by the
assessee at his option under sub-section (3) or sub-section (5), as the case
may be;
(iii) ??"manufacture"
includes any -
(a)
process, or
(b)
assembling,
or
(c)
recording of
programmes on any disc, tape, perforated media or other information storage
device.'.
Section 7 - Amendment Of Section 13A
In section
13A of the Income-tax Act, the words '"Interest on securities",'
shall be omitted with effect from the 1st day of April, 1989.
Section 8 - Amendment Of Section 14
In section
14 of the Income-tax Act, the letter and words "B. - Interest on
securities." shall be omitted with effect from the 1st day of April, 1989.
Section 9 - Amendment Of Section 16
In section
16 of the Income-tax Act, in clause (i), for the portion beginning with
the words "a sum equal to" and ending with the words "whichever
is less", the following shall be substituted with effect from the 1st day
of April, 1989, namely :-"a sum equal to thirty-three and one-third per
cent. of the salary or twelve thousand rupees, whichever is less.".
Section 10 - Omission Of Sections 18 To 21
Sections 18 to 21 of the Income-tax Act and the sub-heading
'"B. - Interest on securities"' above section 18 shall be omitted
with effect from the 1st day of April, 1989.
Section 11 - Amendment Of Section 40
In section
40 of the Income-tax Act, with effect from the 1st day of April, 1989, -
(i)?? ?in clause (a), for sub-clause (i), the
following sub-clause shall be substituted, namely :-
'(i) ???any interest (not being
interest on a loan issued for public subscription before the 1st day of April,
1938), royalty, fees for technical services or other sum chargeable under this
Act, which is payable outside India, on which tax has not been paid or deducted
under Chapter XVII-B :
Provided
that where in respect of any such sum, tax has been paid or deducted under
Chapter XVII-B in any subsequent year, such sum shall be allowed as a deduction
in computing the income of the previous year in which such tax has been paid or
deducted.
Explanation
: For the purposes of this sub-clause, -
(A)
"royalty"
shall have the same meaning as in Explanation 2 to clause (vi) of sub-section
(1) of section 9;
(B)
"fees
for technical services" shall have the same meaning as in Explanation 2 to
clause (vii) of sub-section (1) of section 9;';
(ii) ???clause (d) shall be
omitted.
Section 12 - Amendment Of Section 43B
In section
43B of the Income-tax Act [as amended by section 15 of the Direct Tax Laws
(Amendment) Act, 1987 (4 of 1988)], with effect from the 1st day of April,
1989, -
(i) ???for clause (a), the
following clause shall be substituted, namely :-
"(a)
any sum payable by the assessee by way of tax, duty, cess or fee, by whatever
name called, under any law for the time being in force, or";
(ii) ???in clause (c), the word
"or" shall be inserted at the end;
(iii) ??after clause (c), the
following clause shall be inserted, namely :-
"(d)
any sum payable by the assessee as interest on any loan or borrowing from any
public financial institution, in accordance with the terms and conditions of
the agreement governing such loan or borrowing.";
(iv) ??in the first proviso, after
the word, brackets and letter "clause (c)", the words, brackets and
letter "or clause (d)" shall be inserted;
(v) ??in Explanation 2, after the
word, brackets and letter "clause (c)", the words, brackets and
letter "or clause (d)" shall be inserted;
(vi)? ?after Explanation 2, the following Explanation
shall be inserted, namely :-
'Explanation
3 : For the purposes of this section, the expression "public financial
institution" shall have the meaning assigned to it section 4A of
the Companies Act, 1956 (1 of 1956).'.
Section 13 - Insertion Of New Section 43C
After section
43B of the Income-tax Act, the following section shall be inserted, namely
:-
43C. Special
provision for computation of cost of acquisition of certain assets. -
(1)
Where an
asset [not being an asset referred to in sub-section (2) of section 45] which
becomes the property of an amalgamated company under a scheme of amalgamation,
is sold after the 29th day of February, 1988, by the amalgamated company as
stock-in-trade of the business carried on by it, the cost of acquisition of the
said asset to the amalgamated company in computing the profits and gains from
the sale of such asset shall be the cost of acquisition of the said asset to
the amalgamating company, as increased by the cost, if any, of any improvement
made thereto, and the expenditure, if any, incurred, wholly and exclusively in
connection with such transfer by the amalgamating company.
(2)
Where an
asset [not being an asset referred to in sub-section (2) of section 45] which
becomes the property of the assessee on the total or partial partition of a
Hindu undivided family or under a gift or will or an irrevocable trust, is sold
after the 29th day of February, 1988, by the assessee as stock-in-trade of the
business carried on by him, the cost of acquisition of the said asset to the
assessee in computing the profits and gains from the sale of such asset shall
be the cost of acquisition of the said asset to the transferor or the donor, as
the case may be, as increased by the cost, if any, of any improvement made
thereto, and the expenditure, if any, incurred, wholly and exclusively in
connection with such transfer (by way of effecting the partition, acceptance of
the gift, obtaining probate in respect of the will or the creation of the
trust), including the payment of gift-tax, if any, incurred by the transferor
or the donor, as the case may be.
Section 14 - Amendment Of Section 44AB
In section
44AB of the Income-tax Act, with effect from the 1st day of April, 1989, -
(a)
in clause
(a) and (b), the words, figures and letters "or years relevant to the
assessment year commencing on the 1st day of April, 1985, or any subsequent
assessment year" shall be omitted;
(b)
for the
words "such previous year or years", the words "such previous
year" shall be substituted;
(c)
in the Explanation,
for clause (ii), the following clause shall be substituted, namely :-
'(ii) ??"specified
date", in relation to the accounts of the previous year relevant to an
assessment year means, -
(a)
where the
assessee is a company, the 31st day of December of the assessment year;
(b)
in any other
case, the 31st day of October of the assessment year.'.
Section 15 - Insertion Of New Section 44AC
After section
44AB of the Income-tax Act, the following section shall be inserted with
effect from the 1st day of April, 1989, namely :-
'44AC. Special provision for computing profits and gains from the
business of trading in certain goods. -(1) Notwithstanding anything to the
contrary contained in sections 28 to 43C, in the case of an assessee, being a
person other than a public sector company (hereafter in this section referred
to as the buyer), obtaining in any sale by way of auction, tender or any other
mode, conducted by any other person or his agent (hereafter in this section
referred to as the seller), -
(a)
any goods in
the nature of alcoholic liquor for human consumption (other than Indian made
foreign liquor), a sum equal to forty per cent. of the amount paid or payable
by the buyer as the purchase price in respect of such goods shall be deemed to
be the profits and gains of the buyer from the business of trading in such
goods chargeable to tax under the head "Profits and gains of business or
profession";
(b)
the right to
receive any goods of the nature specified in column (2) of the Table below, or
such goods, as the case may be, a sum equal to the percentage, specified in the
corresponding entry in column (3) of the said Table, of the amount paid or
payable by the buyer in respect of the sale of such right or as the purchase
price in respect of such goods shall be deemed to be the profits and gains of
the buyer from the business of trading in such goods chargeable to tax under
the head "Profits and gains of business or profession".
TABLE
|
S.No. |
Nature of goods |
Percentage |
|
(1) |
(2) |
(3) |
|
(i) |
Timber
obtained under a forest lease |
Thirty-five
per cent. |
|
(ii) |
Timber
obtained by any mode other than under a forest lease |
Fifteen
per cent. |
|
(iii) |
Any other
forest produce not being |
Thirty-five
per cent. |
|
|
Timber |
|
(2) ??For the removal of doubts, it is
hereby declared that the provisions of sub-section (1) shall not apply to buyer
(other than a buyer who obtains any goods from any seller which is a public
sector company) in the further sale of any goods obtained under or in pursuance
of the sale under sub-section (1).
(3) ??In a case where the business
carried on by the assessee does not consist exclusively of trading in goods to
which this section applies and where separate accounts are not maintained or
are not available, the amount of expenses attributable to such other business
shall be an amount which bears to the total expenses of the business carried on
by the assessee the same proportion as the turnover of such other business
bears to the total turnover of the business carried on by the assessee.
Explanation
: For the purposes of this section, "seller" means the Central
Government, a State Government or any local authority or corporation or
authority established by or under a Central, State or Provincial Act, or any
company or firm.'
Section 16 - Amendment Of Section 44BB
In section
44BB of the Income-tax Act, in sub-section (1), in the opening paragraph,
for the words "in the case of an assessee", the words "in the
case of an assessee, being a non-resident," shall be substituted and shall
be deemed to have been substituted with effect from the 1st day of April, 1983.
Section 17 - Amendment Of Section 47
In section
47 of the Income-tax Act, after clause (v), the following proviso shall be
inserted, namely :-
"Provided
that nothing contained in clause (iv) or clause (v) shall apply to the transfer
of a capital asset made after the 29th day of February, 1988, as
stock-in-trade."
Section 18 - Amendment Of Section 56
In section
56 of the Income-tax Act, in sub-section (2), after clause (ic) [as
inserted by section 26 of the Finance Act, 1987 (11 of 1987)], the
following clause shall be inserted with effect from the 1st day of April, 1989,
namely :-
'(id) income
by way of interest on securities, if the income is not chargeable to income-tax
under the head "Profits and gains of business or profession";'.
Section 19 - Amendment Of Section 57
In section
57 of the Income-tax Act, with effect from the 1st day of April, 1989, -
(a)
in clause
(i), -
(1)
after the
word "dividends", the words "or interest on securities"
shall be inserted;
(2)
after the
words "such dividend", the words "or interest" shall be
inserted;
(b)
the
Explanation shall be omitted.
Section 20 - Amendment Of Section 58
In section
58 of the Income-tax Act, in sub-section (1), with effect from the 1st day
of April, 1989, -
(a)
in clause
(a), in sub-clause (ii), the words and figures "and in respect of which
there is no person in India who may be treated as an agent under section
163" shall be omitted;
(b)
clause (b)
shall be omitted.
Section 21 - Amendment Of Section 79
In section
79 of the Income-tax Act, with effect from the 1st day of April, 1989, -
(a)
in clause
(a), -
(i) ????the word "or"
occurring at the end shall be omitted;
(ii) ???the following proviso
shall be added at the end, namely :-
Provided
that nothing contained in this section shall apply to a case where a change in
the said voting power takes place in a previous year consequent upon the death
of a shareholder or on account of transfer of shares by way of gift to any
relative of the shareholder making such gift.
(b)
clause (b)
shall be omitted.
Section 22 - Amendment Of Section 80CC
In section
80CC of the Income-tax Act, in sub-section (1), after the words
"eligible issue of capital,", the words, brackets, figures and letter
"or units of any Mutual Fund specified under clause (23D) of section 10 if
such Fund subscribes only to eligible issue of capital," shall be inserted
with effect from the 1st day of April, 1989.
Section 23 - Substitution Of New Section For Section 80CCA
23
Substitution Of New Section For .
For section
80CCA of the Income-tax Act [as inserted by section 34 of the
Finance Act, 1987 (11 of 1987)], the following section shall be substituted,
namely :-'80CCA. Deduction in respect of deposits under National Savings Scheme
or payment to a deferred annuity plan. -
(1)
Where an
assessee, being ?
(a)
an
individual, or
(b)
a Hindu
undivided family, or
(c)
an
association of persons or a body of individuals consisting, in either case,
only of husband and wife governed by the system of community of property in
force in the State of Goa and the Union territories of Dadra and Nagar Haveli
and Daman and Diu has in the previous year -
(i) ???deposited any amount in
accordance with such scheme as the Central Government may, by notification in
the Official Gazette, specify in this behalf (hereafter in the section referred
to as the National Savings Scheme); or
(ii) ???paid any amount to effect
or to keep in force a contract for such annuity plan of the Life Insurance
Corporation as the Central Government may, by notification in the Official
Gazette, specify out of his income chargeable to tax, he shall, in accordance
with, and subject to, the provisions of this section, be allowed a deduction in
the computation of his total income of the whole of the amount deposited or
paid (excluding interest or bonus accrued or credited to the assessee's
account, if any) as does not exceed the amount of twenty thousand rupees in the
previous year :
Provided
that in relation to the assessment year commencing on the 1st day of April,
1989 and subsequent assessment years, this sub-section shall have effect as if
for the words "twenty thousand rupees", the words "thirty
thousand rupees" had been substituted.
(2)
Where any
amount ?
(a)
standing to
the credit of the assessee under the National Savings Scheme in respect of
which a deduction has been allowed under sub-section (1) together with the
interest accrued on such amount is withdrawn in whole or part in any previous
year, or
(b)
is received
on account of the surrender of the policy or as annuity or bonus in accordance
with the annuity plan of the Life Insurance Corporation in any previous year an
amount equal to the whole of the amount referred to in clause (a) or clause (b)
shall be deemed to be the income of the assessee of that previous year in which
such withdrawal is made or, as the case may be, amount is received, and shall,
accordingly, be chargeable to tax as the income of that previous year.
Explanation
I : For the removal of doubts, it is hereby declared that interest on the
deposits made under the National Savings Scheme shall not be chargeable to tax
except in the manner and to the extent specified in sub-section (2).
Explanation
II : For the purposes of this section, "Life Insurance Corporation"
shall have the same meaning as in clause (a) of sub-section (8) of section
80C.'.
Section 24 - Amendment Of Section 80HHC
In section
80HHC of the Income-tax Act, with effect from the 1st day of April,1989, -
(a)
for
sub-section (1), the following sub-sections shall be substituted, namely :-
"(1)? Where an assessee,
being an Indian company or a person (other than a company) resident in India,
is engaged in the business of export out of India of any goods or merchandise
to which this section applies, there shall, in accordance with and subject to
the provisions of this section, be allowed, in computing the total income of
the assessee, a deduction of the whole of the income derived by the assessee
from the export of such goods or merchandise :
Provided
that if the assessee, being a holder of an Export House Certificate or a
Trading House Certificate, (hereafter in this section referred to as an Export
House or a Trading House, as the case may be), issues a certificate referred to
in clause(b) of sub-section (4A), that in respect of the amount of the export
turnover specified therein, the deduction under this sub-section is to be
allowed to a supporting manufacturer, then the amount of deduction in the case
of the assessee shall be reduced by such amount which bears to the total
profits of the export business of the assessee the same proportion as the
amount of export turnover specified in the said certificate bears to the total
export turnover of the assessee.
(1A) Where the assessee, being a supporting manufacturer, has during the
previous year, sold goods or merchandise to any Export House or Trading House
in respect of which the Export House or Trading House has issued a certificate
under the proviso to sub-section (1), there shall, in accordance with and
subject to the provisions of this section, be allowed in computing the total
income of the assessee, a deduction of the whole of the income derived by the
assessee from the sale of goods or merchandise to the Export House or Trading
House in respect of which the certificate has been issued by the Export House
or Trading House.";
(b)
after
sub-section (3), the following sub-section shall be inserted, namely :-
'(3A)For the purposes of sub-section (1A), profits derived by a
supporting manufacturer from the sale of goods or merchandise shall be, -
(a)?? in a case where the business
carried on by the supporting manufacturer consists exclusively of sale of goods
or merchandise to one or more Export Houses or Trading Houses, the profits of
the business as computed under the head"Profits and gains of business or
profession";
(b)?? in a case where the business
carried on by the supporting manufacturer does not consist exclusively of sale
of goods or merchandise to one or more Export Houses or Trading Houses, the
amount which bears to the profits of the business (as computed under the head
"Profits and gains of business or profession")the same proportion as
the turnover in respect of sale to the respective Export House or Trading House
bears to the total turnover of the business carried on by the assessee.';
(c)??? after sub-section (4), the
following sub-section shall be inserted, namely :-
"(4A)The deduction under sub-section (1A) shall not be admissible
unless the supporting manufacturer furnishes in the prescribed form along with
his return of income, -
(a)?? the report of an accountant,
as defined in the Explanation below sub-section (2)of section 288, certifying
that the deduction has been correctly claimed on the basis of the income of the
supporting manufacturer in respect of his sale of goods or merchandise to the
Export House or Trading House; and
(b)?? a certificate from the
Export House or Trading House containing such particulars as may be prescribed
and verified in the manner prescribed that in respect of the export turnover
mentioned in the certificate, the Export House or Trading House has not claimed
the deduction under this section :
Provided
that the certificate specified in clause (b) shall be duly certified by the
auditor auditing the accounts of the Export House or Trading House under the
provisions of this Act or under any other law.";
(d)?? in the Explanation, after
clause (c), the following clauses shall be inserted, namely :-
'(d)? "Export House
Certificate" or "Trading House Certificate" means a valid Export
House Certificate or Trading House Certificate, as the case may be, issued by
the Chief Controller of Imports and Exports, Government of India;
(e)?? "supporting
manufacturer" means a person being an Indian company or a person (other
than a company) resident in India, manufacturing goods or merchandise and
selling such goods or merchandise to an Export House or a Trading House for the
purposes of export.'.
Section 25 - Amendment Of Section 80L
In section
80L of the Income-tax Act, in sub-section (1), with effect from the 1st
day of April, 1989, -
(a)
after clause
(iii), the following clause shall be inserted, namely :-
"(iiia)
interest on deposits under the Post Office (Monthly Income Account) Rules,
1987;";
(b)
in clause
(vii), -
(i) ???in the opening paragraph,
the words "or with a public company formed and registered in India with
the main object of carrying on the business of providing long-term finance for
construction or purchase of houses in India for residential purposes"
shall be omitted;
(ii) ???in the proviso, the words
"or, as the case may be, the company" shall be omitted;
(c)
after clause
(ix), the following clause shall be inserted, namely :-
"(x) ?interest on deposits
with, or dividend received from, any public company formed and registered in
India with the main object of carrying on the business of providing long-term
finance for construction or purchase of houses in India for residential
purposes :
Provided
that the company is for the time being approved by the Central Government for
the purpose of clause (viii) of sub-section (1) of section 36,";
(d)
for the
first and second provisos, the following provisos shall be substituted, namely
:-
"Provided
that where the gross total income of the assessee includes any income by way of
interest on any deposits referred to in clause (iia), or income in respect of
units referred to in clause (v) or clause (va), or income by way of interest or
dividend referred to in clause (x), there shall be allowed in computing the
total income of the assessee, a further deduction of an amount equal to so much
of such income as has not been allowed by way of deduction under the foregoing
provisions of this sub-section; so, however, that the amount of such further
deduction shall not exceed three thousand rupees :
Provided
further that where any income by way of interest on any deposits referred to in
clause (iia) or any dividends referred to in clause (iv) remains unallowed
after the deduction under the foregoing provisions of this section, there shall
be allowed in computing the total income of the assessee, an additional
deduction of an amount equal to so much of such income as has remained
unallowed; so, however, that the amount of such additional deduction shall not
exceed three thousand rupees.".
Section 26 - Amendment Of Section 80-O
In section
80-O of the Income-tax Act [as amended by section 36 of the
Finance Act, 1987 (11 of 1987)], -
(a)
in the
opening paragraph, -
(i) ????for
the words "under an agreement approved by the Board in this behalf",
the words "under an agreement approved in this behalf by the Chief
Commissioner or the Director General" shall be substituted with effect
from the 1st day of April, 1989;
(ii) ???for
the portion beginning with the words "and such income is received in
convertible foreign exchange" and ending with the words "in computing
the total income of the assessee", the following shall be substituted,
namely :-
"and
such income is received in convertible foreign exchange in India, or having
been received in convertible foreign exchange outside India, or having been
converted into convertible foreign exchange outside India, is brought into
India, by or on behalf of the assessee in accordance with any law for the time
being in force for regulating payments and dealings in foreign exchange, there
shall be allowed, in accordance with and subject to the provisions of this
section, a deduction of an amount equal to fifty per cent. of the income so
received in, or brought into, India, in computing the total income of the
assessee";
(b)
for the
first and second provisos, the following provisos shall be substituted with
effect from the 1st day of April, 1989, namely :-
"Provided
that the application for the approval of the agreement referred to in this
section is made to the Chief Commissioner or, as the case may be, the Director
General in the prescribed form and verified in the prescribed manner before the
1st day of October of the assessment year in relation to which the approval is
first sought :
Provided
further that the approval of the Chief Commissioner or, as the case may be, the
Director General shall not necessary in the case of any such agreement which
has been approved for the purposes of the deduction under this section by the
Central Government before the 1st day of April, 1972, or by the Board before
the 1st day of April, 1989, and every application for such approval of any such
agreement pending with the Board immediately before the 1st day of April, 1989,
shall stand transferred to the Chief Commissioner or the Director General for
disposal :".
Section 27 - Amendment Of Section 80P
In section
80P of the Income-tax Act, in sub-section (2), in clause (f), the words
and figures "chargeable under section 18" shall be omitted with
effect from the 1st day of April, 1989.
Section 28 - Omission Of Section 86A
Section
86A of the Income-tax Act shall be omitted with effect from the 1st day of
April, 1989.
Section 29 - Amendment Of Section 89
In section
89 of the Income-tax Act, sub-section (2) shall be omitted with effect
from the 1st day of April, 1989.
Section 30 - Omission Of Section 112A
Section
112A of the Income-tax Act shall be omitted with effect from the 1st day
of April, 1989.
Section 31 - Amendment Of Section 115B
Section
115B of the Income-tax Act shall be renumbered as sub-section (1) thereof,
and after sub-section (1) as so renumbered, the following sub-section shall be
inserted with effect from the 1st day of April, 1989, namely :-
"(2) ?Notwithstanding
anything contained in sub-section (1) or in any other law for the time being in
force or any instrument having the force of law, the assessee shall, in
addition to the payment of income-tax computed under sub-section (1), deposit,
during the previous year relevant to the assessment year commencing on the 1st
day of April, 1989, an amount equal to thirty-three and one-third per cent. of
the amount of income-tax computed under clause (i) of sub-section (1), in such
social security fund (hereafter in this sub-section referred to as the security
fund), as the Central Government may, by notification in the Official Gazette,
specify in this behalf :
Provided
that where the assessee makes during the said previous year any deposit of an
amount of not less than two and one-half per cent. of the profits and gains of
the life insurance business in the security fund, the amount of income-tax
payable by the assessee under the said clause (i) shall be reduced by an amount
equal to two and one-half per cent. of such profits and gains and, accordingly,
the deposit of thirty-three and one-third per cent. required to be made under
this sub-section shall be calculated on the income-tax as so reduced."
Section 32 - Amendment Of Section 115F
In section
115F of the Income-tax Act, in sub-section (1), with effect from the 1st
day of April, 1989, -
(a)
in the
opening portion, -
(i)
the words
"or deposited" shall be omitted;
(ii)
the words,
brackets, figures and letter "or in an account referred to in clause
(4A)," shall be omitted;
(iii)
the words
"or such deposit in the account aforesaid" shall be omitted;
(b)
in the
Explanation, in clause (i), the words, brackets, figures and letter
"referred to in clause (4A) of section 10 or" shall be omitted.
Section 33 - Amendment Of Section 131
In section
131 of the Income-tax Act, with effect from the 1st day of June, 1988, -
(a)
in
sub-section (1A), for the words "If the Assistant Director of
Inspection", the words, brackets and figures "If the Director General
or Director or Deputy Director or Assistant Director, or the authorised officer
referred to in sub-section (1) of section 132 before he takes action under
clauses (i) to (v) of that sub-section," shall be substituted;
(b)
in
sub-section (3), in the proviso, in clause (b) [as amended by section 2 of the
Direct Tax Laws (Amendment) Act, 1987 (4 of 1988)], for the words "the
Chief Commissioner or Commissioner therefore", the words "the Chief
Commissioner or Director General or Commissioner or Director therefore, as the
case may be" shall be substituted.
Section 34 - Amendment Of Section 132
In section
132 of the Income-tax Act, with effect from the 1st day of April, 1989,
(a)
in
sub-section (1), after the proviso, the following proviso shall be inserted,
namely :-
"Provided
further that where it is not possible or practicable to take physical
possession of any valuable article or thing and remove it to a safe place due
to its volume, weight or other physical characteristics or due to its being of
a dangerous nature, the authorised officer may serve an order on the owner or
the person who is in immediate possession or control thereof that he shall not
remove, part with or otherwise deal with it, except with the previous
permission of such authorised officer and such action of the authorised officer
shall be deemed to be seizure of such valuable article or thing under clause
(iii).";
(b)
in
sub-section (3), after the words "other valuable article or thing,",
the words, brackets and figure "for reasons other than those mentioned in
the second proviso to sub-section (1)," shall be inserted.
Section 35 - Amendment Of Section 139
In section
139 of the Income-tax Act, with effect from the 1st day of April, 1989,
(a)
in
sub-section (6A), after the words "require him to furnish", the
words, figures and letters "the report of any audit obtained under section
44AB, the" shall be inserted;
(b)
in the
Explanation below sub-section (9), after clause (b), the following clause shall
be inserted, namely :-
"(bb)
the return is accompanied by the report of the audit obtained under section
44AB;".
Section 36 - Omission Of Section 181
Section
181 of the Income-tax Act and the sub-heading "O. - Liability of
State Governments" above that section shall be omitted with effect from
the 1st day of April, 1989.
Section 37 - Amendment Of Section 193
In section
193 of the Income-tax Act, with effect from the 1st day of April, 1989,
(a)
in the
opening paragraph, for the words 'chargeable under the head "Interest on
securities"', the words "by way of interest on securities" shall
be substituted;
(b)
in the
proviso, clause (ii) shall be omitted.
Section 38 - Amendment Of Section 194C
In section
194C of the Income-tax Act, after sub-section (2), the following
Explanation shall be inserted with effect from the 1st day of June, 1988,
namely :-
'Explanation
: For the purposes of this section, where any sum referred to in sub-section
(1) or sub-section (2) is credited to any account, whether called
"Suspense account" or by any other name, in the books of account of
the person liable to pay such income, such crediting shall be deemed to be
credit of such income to the account of the payee and the provisions of this
section shall apply accordingly.'.
Section 39 - Amendment Of Section 195
In section
195 of the Income-tax Act, in the sub-section (2), for the words "in
the prescribed manner", the words "by general or special order"
shall be substituted and shall be deemed to have been substituted with effect
from the 1st day of March, 1988.
Section 40 - Insertion Of New Section 206C
After section
206B of the Income-tax Act, the following sub-heading and section shall be
inserted with effect from the 1st day of June, 1988, namely :-
"BB. -
Collection at source
206C. Profits and gains from the business of trading in alcoholic
liquor, forest produce, scrap, etc. -(1) Every person, being a seller referred
to in section 44AC, shall, at the time of debiting of the amount payable by the
buyer referred to in that section to the account of the buyer or at the time of
receipt of such amount from the said buyer in cash or by the issue of a cheque
or draft or by any other mode, whichever is earlier, collect from the buyer of
any goods of the nature specified in column (2) of the Table below, a sum equal
to the percentage, specified in the corresponding entry in column (3) of the
said Table, of such amount as income-tax on income comprised therein.
TABLE
|
S. No. |
Nature of goods |
Percentage |
|
(1) |
(2) |
(3) |
|
(i) |
Alcoholic liquor for human consumption (other than Indian-made foreign
liquor) |
Fifteen per cent. |
|
(ii) |
Timber obtained under a forest lease |
Fifteen per cent. |
|
(iii) |
Timber
obtained by any mode other than under a forest lease |
Ten per
cent. |
|
(iv) |
Any other
forest produce not being timber |
Fifteen
per cent. : |
Provided that where the Assessing Officer, on an
application made by the buyer, gives a certificate in the prescribed form that
to the best of his belief any of the goods referred to in the aforesaid Table
are to be untilised for the purposes of manufacturing, processing or producing articles or things and not for trading
purposes, the provisions of this sub-section shall not apply so long as the
certificate is in force.
(2) ??The power to recover tax by
collection under sub-section (1) shall be without prejudice to any other mode
of recovery.
(3) ??Any person collecting any
amount under sub-section (1) shall pay within seven days the amount so
collected to the credit of the Central Government or as the Board directs.
(4) ??Any amount collected in
accordance with the provisions of this section and paid under sub-section (3)
shall be deemed as payment of tax on behalf of the person from whom the amount
has been collected and credit shall be given to him for the amount so collected
on the production of the certificate furnished under sub-section (5) in the
assessment made under this Act for the assessment year for which such income is
assessable.
(5) ??Every person collecting tax
in accordance with the provisions of this section shall within ten days from
the date of debit or receipt of the amount furnish to the buyer to whose
account such amount is debited or from whom such payment is received, a
certificate to the effect that tax has been collected, and specifying the sum
so collected, the rate at which the tax has been collected and such other
particulars as may be prescribed.
(6) ??Any person responsible for
collecting the tax who fails to collect the tax in accordance with the
provisions of this section, shall, notwithstanding such failure, be liable to
pay the tax to the credit of the Central Government in accordance with the
provisions of sub-section (3).
(7) ??Without prejudice to the
provisions of sub-section (6), if the seller does not collect the tax or after
collecting the tax fails to pay it as required under this section, he shall be
liable to pay simple interest at the rate of two per cent. per month or part
thereof on the amount of such tax from the date on which such tax was
collectable to the date on which the tax was actually paid.
(8) ??Where the tax has not been
paid as aforesaid, after it is collected, the amount of the tax together with
the amount of simple interest thereon referred to in sub-section (7) shall be a
charge upon all the assets of the seller.".
Section 41 - Amendment Of Section 230A
In section
230A of the Income-tax Act, in sub-section (1), for the words "fifty
thousand rupees", the words "two lakh rupees", shall be
substituted.
Section 42 - Insertion Of New Section 245DD
After section
245D of the Income-tax Act, the following section shall be inserted,
namely :-
"245DD.
Power of Settlement Commission to order provisional attachment to protect
revenue. -
(1)
Where,
during the pendency of any proceeding before it, the Settlement Commission is
of the opinion that for the purpose of protecting the interests of the revenue
it is necessary so to do, it may, by order, attach provisionally any property
belonging to the applicant in the manner provided in the Second Schedule :
Provided that
where a provisional attachment made under section 281B is pending immediately
before an application is made under section 245C, an order under this
sub-section shall continue such provisional attachment up to the period up to
which an order made under section 281B would have continued if such application
had not been made :
Provided
further that where the Settlement Commission passes an order under this
sub-section after the expiry of the period referred to in the preceding
proviso, the provisions of sub-section (2) shall apply to such order as if the
said order had originally been passed by the Settlement Commission.
(2)
Every
provisional attachment made by the Settlement Commission under sub-section (1)
shall cease to have effect after the expiry of a period of six months from the
date of the order made under sub-section (1) :
Provided
that the Settlement Commission may, for reasons to be recorded in writing,
extend the aforesaid period by such further period or periods as it thinks fit,
so, however, that the total period of extension shall not in any case exceed
two years.".
Section 43 - Amendment Of Section 246
In section
246 of the Income-tax Act, -
(a)
in
sub-section (1), in clause (o), in sub-clause (iva), after the word, figures
and letter "section 272B", the words, figures and letters "or
section 272BB" shall be inserted and shall be deemed to have been inserted
with effect from the 1st day of June, 1987;
(b)
in
sub-section (2), in clause (a), the words, figures and letters "or an
order under section 104, as it stood immediately before the 1st day of April,
1988, in respect of any assessment for the assessment year commencing on the
1st day of April, 1987 or any earlier assessment years, made against the
assessee, being a company" shall be inserted at the end.
Section 44 - Amendment Of Section 263
In section
263 of the Income-tax Act, in sub-section (1), for the Explanation, the
following Explanation, shall be substituted with effect from the 1st day of
June, 1988, namely :-
'Explanation
: For the removal of doubts, it is hereby declared that, for the purposes of
this sub-section, -
(a)
an order
passed by the Assessing Officer shall include -
(i) ???an order of assessment made
by the Assistant Commissioner or the Income-tax Officer on the basis of the
directions issued by the Deputy Commissioner under section 144A;
(ii) ??an order made by the Deputy
Commissioner in exercise of the powers or in the performance of the functions
of an Assessing Officer conferred on, or assigned to, him under the orders or
directions issued by the Board or by the Chief Commissioner or Director General
or Commissioner authorised by the Board in this behalf under section 120;
(b)
"record"
includes all records relating to any proceeding under this Act available at the
time of examination by the Commissioner;
(c)
where any
order referred to in this sub-section and passed by the Assessing Officer had
been the subject matter of any appeal, the powers of the Commissioner under
this sub-section shall extend to such matters as had not been considered and
decided in such appeal.'.
In section 246 of the Income-tax Act, -
(a)
in
sub-section (1), in clause (o), in sub-clause (iva), after the word, figures
and letter "section 272B", the words, figures and letters "or
section 272BB" shall be inserted and shall be deemed to have been inserted
with effect from the 1st day of June, 1987;
(b)
in
sub-section (2), in clause (a), the words, figures and letters "or an
order under section 104, as it stood immediately before the 1st day of April,
1988, in respect of any assessment for the assessment year commencing on the
1st day of April, 1987 or any earlier assessment years, made against the
assessee, being a company" shall be inserted at the end.
Section 45 - Amendment Of Section 271B
In section
271B of the Income-tax Act, after the words, figures and letters "or
obtain a report of such audit as required under section 44AB", the words,
brackets and figures "or furnish the said report along with the return of
his income filed under sub-section (1) of section 139, or along with the return
of income furnished in response to a notice under clause (i) of sub-section (1)
of section 142" shall be inserted with effect from the 1st day of April,
1989.
Section 46 - Insertion Of New Section 276BB
After section
276B of the Income-tax Act, the following section shall be inserted with
effect from the 1st day of June, 1988, namely :-
"276BB.
Failure to pay the tax collected at source. -If a person fails to pay to the
credit of the Central Government, the tax collected by him as required under
the provisions of section 206C, he shall be punishable with rigorous
imprisonment for a term which shall not be less than three months but which may
extend to seven years and with fine.".
Section 47 - Amendment Of Section 279
In section
279 of the Income-tax Act, with effect from the 1st day of April, 1989, -
(a)
for
sub-section (1), the following sub-section shall be substituted, namely :-
'(1) ?A person shall not be
proceeded against for an offence under section 275A, section 276, section 276A,
section 276B, section 276BB, section 276C, section 276CC, section 276D, section
277 or section 278 except with the previous sanction of the Chief Commissioner
or Director General or Commissioner :
Provided
that no such sanction shall be required if the prosecution is at the instance
of the Commissioner (Appeals) or the appropriate authority.
Explanation
: For the purposes of this section, "appropriate authority" shall
have the same meaning as in clause (c) of section 269UA.';
(b)
for
sub-section (2), the following sub-section shall be substituted, namely :-
"(2) ?Any offence under this
Chapter may, either before or after the institution of proceedings, be
compounded by -
(a)
the Board or
a Chief Commissioner or a Director General authorised by the Board in this
behalf, in a case where the prosecution would lie at the instance of the
Commissioner (Appeals) or the appropriate authority;
(b)
the Chief
Commissioner or Director General or Commissioner, in any other case.".
Section 48 - Omission Of Chapter XXIIA
Chapter
XXIIA of the Income-tax Act shall be omitted.
Section 49 - Amendment Of Section 281B
In section
281B of the Income-tax Act, -
(a)
in
sub-section (1), the following Explanation shall be inserted at the end, namely
:-
"Explanation
: For the purposes of this sub-section, proceedings under sub-section (5) of
section 132 shall be deemed to be proceedings for the assessment of any income
or for the assessment or reassessment of any income which has escaped
assessment.";
(b)
in
sub-section (2), after the first proviso, the following proviso shall be
inserted, namely :-
"Provided
further that where an application for settlement under section 245C is made,
the period commencing from the date on which such application is made and
ending with the date on which an order under sub-section (1) of section 245D is
made shall be excluded from the period specified in the preceding
proviso."
Section 50 - Omission Of Section 285A
Section
285A of the Income-tax Act shall be omitted.
Section 51 - Amendment Of Section 293
In section
293 of the Income-tax Act, for the words "any order made", the
words "any proceeding taken or order made" shall be substituted and
shall be deemed to have been substituted with effect from the 1st day of March,
1988.
Section 52 - Amendment Of First Schedule
In the First
Schedule to the Income-tax Act, in rule 5, clause (b) shall be omitted with
effect from the 1st day of April, 1989.
Section 53 - Amendment Of Eleventh Schedule
In the
Eleventh Schedule to the Income-tax Act, for item 9, the following item shall
be substituted with effect from the 1st day of April, 1989, namely :-
"(9)
Projectors.".
Section 54 - Consequential amendments
The
following amendments (being amendments of a consequential nature) shall be made
in the Income-tax Act, namely :-
(i)
in section
2, in clause (24), sub-clause (viii) shall be omitted;
(ii)
in section
18, in sub-section (1), in clause (i), the words, figures and letters "not
being interest payable under section 280D in respect of any annuity deposit
made under Chapter XXIIA" shall be omitted;
?
(iii)
in section
29 [as amended by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988)], for
the words, figures and letter "sections 30 to 43B", the words,
figures and letter "sections 30 to 43C" shall be substituted;
(iv)
in section
33, in sub-section (2) and the Explanation there under, the words, figures and
letter "or section 280-O" shall be omitted;
(v)
in section
33A, in sub-section (2) and the Explanation there under, the words, figures and
letter "or section 280-O" shall be omitted;
(vi)
in section
80B, in clause (5), the words, figures and letter "or under section
280-O" shall be omitted;
(vii)
in section
80J, in sub-section (3), the words, figures and letter "or section
280-O" shall be omitted;
(viii)
in section
80L, in sub-section (1), in clause (i), the brackets, words, figures and
letters "(not being interest payable under section 280D in respect of any
annuity deposit made under Chapter XXIIA)" shall be omitted;
(ix)
in section
194A, in sub-section (1), for the words 'chargeable under the head
"Interest on securities"', the words "by way of interest on
securities" shall be substituted with effect from the 1st day of April,
1989;
(x)
in section
253 in sub-section (1), in clause (c), the words, figures and letter "or
under section 285A, shall be omitted".
Section 55 - Amendment Of Section 5
In section
5 of the Wealth-tax Act, 1957 (27 of 1957) [(hereinafter referred to as
Wealth-tax Act, -
(a)
in
sub-section (1), -
(i) ???after clause (xvie) and the
Explanation thereto, the following clause shall be inserted, namely :-
"(xvif)
in the case of an individual or a Hindu undivided family, such Relief Bonds as
the Central Government may, by notification in the Official Gazette, specify in
this behalf;";
(ii) ??for clause (xxxa), the
following clause shall be substituted with effect from the 1st day of April,
1989, namely :-
"(xxxa)
the value of one or more dwelling units (each having a plinth area of eighty
square meters or less) belonging to the assessee and used solely for the
purpose of residence of persons employed by the assessee in any plantation or
industrial undertaking belonging to the assessee;";
(b)
in
sub-section (1A), with effect from the 1st day of April, 1989, -
(i) ????in the opening paragraph,
after the brackets and figures "(xvi),", the brackets, figures and
letter "(xvie)," shall be inserted;
(ii)?? ?after the first proviso, the following proviso
shall be inserted, namely :-
"Provided
further that nothing contained in this sub-section shall apply to any assets
referred to in clause (xvie) which are sold by a public sector company before
the 1st day of June, 1988.";
(iii) ??in the second proviso, for
the words "Provided further that", the words "Provided also
that" shall be substituted;
(c)
in
sub-section (3), -
(i) ???in the opening portion,
after the brackets, figures and letter "(xvie),", the brackets,
figures and letter "(xvif)," shall be inserted;
(ii) ??in clause (aa), -
(1)
after the
word, brackets, figures and letter "clause (xvie),", the words,
brackets, figures and letter "or Relief Bonds referred to in clause
(xvif)," shall be inserted.
(2)
after the
words "Bonds or debentures", the words "or Relief Bonds"
shall be inserted.
Section 56 - Insertion Of New Section 22DD
After section
22D of the Wealth-tax Act, the following section shall be inserted, namely
:-
"22DD. Power of Settlement Commission to order provisional
attachment to protect revenue. -(1) Where, during the pendency of any
proceeding before it, the Settlement Commission is of the opinion that for the
purpose of protecting the interests of the revenue it is necessary so to do, it
may, by order, attach provisionally any property belonging to the applicant in
the manner provided in the Second Schedule to the Income-tax Act as made
applicable to this Act by section 32 :
Provided
that where a provisional attachment made under section 34C is pending
immediately before an application is made under section 22C, an order under
this sub-section shall continue such provisional attachment up to the period up
to which an order made under section 34C would have continued if such
application had not been made :
Provided
further that where the Settlement Commission passes an order under this
sub-section after the expiry of the period referred to in the preceding
proviso, the provisions of sub-section (2) shall apply to such order as if the
said order had originally been passed by the Settlement Commission.
(2) ??Every provisional attachment
made by the Settlement Commission under sub-section (1) shall cease to have
effect after the expiry of a period of six months from the date of the order
made under sub-section (1) :
Provided
that the Settlement Commission may, for reasons to be recorded in writing,
extend the aforesaid period by such further period or periods as it thinks fit,
so, however, that the total period of extension shall not in any case exceed
two years.".
Section 57 - Amendment Of Section 25
In section
25 of the Wealth-tax Act, in sub-section (2), for the Explanation, the
following Explanation shall be substituted, with effect from the 1st day of
June, 1988, namely :-
'Explanation
: For the removal of doubts, it is hereby declared that, for the purposes of
this sub-section, -
(a)
an order
passed by the Assessing Officer shall include an order made by the Deputy
Commissioner in exercise of the powers or in the performance of the functions
of an Assessing Officer conferred on or assigned to him under orders or
directions issued by the Board or by the Chief Commissioner or Director General
or Commissioner authorised by the Board in this behalf under section
120 of the Income-tax Act read with section 8 of this Act;
(b)
"record"
includes all records relating to any proceeding under this Act available at the
time of examination by the Commissioner;
(c)
where any
order referred to in this sub-section and passed by the Assessing Officer had
been the subject matter of any appeal, the powers of the Commissioner under
this sub-section shall extend to such matters as had not been considered and
decided in such appeal.'.
Section 58 - Amendment Of Section 34AB
In section
34AB of the Wealth-tax Act, in sub-sections (1) and (2), for the word
"Board", the words "Chief Commissioner or Director General"
shall be substituted with effect from the 1st day of June, 1988.
Section 59 - Amendment Of Section 34ACC
In section
34ACC of the Wealth-tax Act, for the words "to the Board",
occurring at the end, the words "to the Chief Commissioner or Director
General" shall be substituted with effect from the 1st day of June, 1988.
Section 60 - Amendment Of Section 34AD
In section
34AD of the Wealth-tax Act, with effect from the 1st day of June, 1988, -
(a)
in sub-section
(1), -
(i)
for the word
"Board", at both the places where it occurs, the words "Chief
Commissioner or Director General" shall be substituted;
(ii)
for the
words "it is satisfied", the words "he is satisfied" shall
be substituted;
(iii)
for the
words "it thinks fit", the words "he thinks fit" shall be
substituted;
(b)
in
sub-section (2), for the word "Board", the words "Chief
Commissioner or Director General" shall be substituted;
(c)
after
sub-section (2), the following sub-sections shall be inserted, namely :-
"(3) ?Without prejudice to
the provisions of sub-sections (1) and (2), the Chief Commissioner or Director
General shall, once in three years, review the performance of all the
registered valuers and may remove the name of any person from the Register of
Valuers where he is satisfied, after giving that person a reasonable
opportunity of being heard and after such further inquiry, if any, as he thinks
fit to make, that his performance is such that his name should not remain on
the Register of Valuers.
(4) ??The Chief Commissioner or
Director General may himself conduct the inquiry referred to in sub-section (1)
or sub-section (3) or appoint an Inquiry Officer not below the rank of a
Commissioner to conduct such inquiry, and for the purposes of such inquiry, the
Chief Commissioner or Director General and the Inquiry Officer so appointed
shall have the same powers as are vested in a court under the Code of Civil
Procedure, 1908 (5 of 1908) when trying a suit in respect of the following
matters, namely :-
(a)
discovery
and inspection;
(b)
enforcing
the attendance of any person including any officer of a banking company and
examining him on oath;
(c)
compelling
the production of books of account and other documents;
(d)
issuing
commission.".
Section 61 - Insertion Of New Section 34AE
In Chapter
VIIB of the Wealth-tax Act, after section 34AD, the following section
shall be inserted with effect from the 1st day of June, 1988, namely :-
"34AE. Existing registered valuers to apply afresh. -(1)
Notwithstanding anything contained in this Chapter, every person whose name is
included in the Register of Valuers immediately before the 1st day of June,
1988, shall, if he intends to continue to be registered under this Act, make an
application under sub-section (2) of section 34AB within a period of
three months from that date, for being registered afresh as a valuer under this
Chapter and the provisions of sub-section (3) of that section and the rules
made thereunder shall be applicable in respect of the verification of the
application, the fees that shall accompany such application and the declaration
to be made by the applicant.
(2) ??The provisions of this
Chapter regarding the registration of a person as a valuer and other matters
shall, so far as may be, apply to every application made under sub-section (1).
(3) ??Every application pending
before the Board immediately before the 1st day of June, 1988, shall be deemed
to be an application received by the Chief Commissioner or Director General
under sub-section (1).".
Section 62 - Amendment Of Section 34C
In section
34C of the Wealth-tax Act, -
(a)
in
sub-section (1), the following Explanation shall be inserted at the end, namely
:-
"Explanation
: For the purposes of this sub-section, the proceedings under sub-section (5)
of section 37A shall be deemed to be proceedings for the assessment of any net
wealth or for the assessment or reassessment of any net wealth which has
escaped assessment.";
(b)
in
sub-section (2), after the first proviso, the following proviso shall be
inserted, namely :-
"Provided
further that where an application for settlement under section 22C is made, the
period commencing from the date on which such application is made and ending
with the date on which an order under sub-section (1) of section 22D is made
shall be excluded from the period specified in the preceding proviso.".
Section 63 - Substitution Of New Section For Section 35-I
For section
35-I of the Wealth-tax Act, the following section shall be substituted
with effect from the 1st day of April, 1989, namely :-
"35-I. Prosecutions to be with the previous sanction of certain
wealth-tax authorities and their power to compound offences. - (1) A
person shall not be proceeded against for an offence under this Act except with
the previous sanction of the Chief Commissioner or Director General or
Commissioner :
Provided
that no such sanction shall be required if the prosecution is at the instance
of the Commissioner (Appeals).
(2) ??Any
such offence may, either before or after the institution of proceedings, be
compounded by -
(a)
the Board or
a Chief Commissioner or a Director General authorised by the Board in this
behalf, in a case where the prosecution would lie at the instance of the
Commissioner (Appeals);
(b)
the Chief
Commissioner or Director General or Commissioner, in any other case.".
Section 64 - Amendment Of Section 37
In section
37 of the Wealth-tax Act, with effect from 1st day of June, 1988, -
(a)
after
sub-section (1), the following sub-section shall be inserted, namely :-
"(1A) If the Director General or Director or Deputy Director or
Assistant Director, or the authorised officer referred to in sub-section (1) of
section 37A before he takes action under clauses (i) to (vi) of that sub-section,
has reason to suspect that any net wealth has been concealed, or is likely to
be concealed, by any person or class of persons within his jurisdiction, then,
for the purposes of making any inquiry or investigation relating thereto, it
shall be competent for him to exercise the powers conferred under sub-section
(1) on the wealth-tax authorities referred to in that sub-section,
notwithstanding that no proceedings with respect to such person or class of
persons are pending before him or any other wealth-tax authority.";
(b)
in
sub-section (3), in the proviso, in clause (b) [as amended by section 127 of
the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988)], for the words "the
Chief Commissioner or Commissioner therefore", the words "the Chief
Commissioner or Director General or Commissioner or Director therefore, as the
case may be" shall be substituted.
Section 65 - Amendment Of Section 43
In section
43 of the Wealth-tax Act, for the words "any order made", the
words "any proceeding taken or order made" shall be substituted and
shall be deemed to have been substituted with effect from the 1st day of March,
1988.
Section 66 - Amendment Of Schedule I
In Schedule
I to the Wealth-tax Act, in Part I, the following shall be added at the end,
namely :-
"Surcharge
on wealth-taxThe amount of wealth-tax computed in accordance with the
provisions of this Part shall, in relation to the assessment year commencing on
the 1st day of April, 1988, be increased by a surcharge calculated at the rate
of ten per cent. of such wealth-tax.".
Section 67 - Amendment Of Section 5
In section
5 of the Gift-tax Act, 1958 (18 of 1958), (hereinafter referred to as the
Gift-tax Act), in sub-section (1), after clause (iiic), the following clause
shall be inserted, namely :-
"(iiid)
being an individual or a Hindu undivided family, of property in the form of
such Relief Bonds, as the Central Government may, by notification in the
Official Gazette, specify in this behalf subject to a maximum of rupees five
lakhs in value in the aggregate in one or more previous years :
Provided
that the exemption conferred by this clause shall be available only to a person
who has initially subscribed to the said Bonds;".
Section 68 - Amendment Of Section 24
In section
24 of the Gift-tax Act, in sub-section (2), for the Explanation, the
following Explanation shall be substituted with effect from the 1st day of
June, 1988, namely :-
'Explanation
: For the removal of doubts, it is hereby declared that, for the purposes of
this sub-section, -
(a)
an order
passed by the Assessing Officer shall include an order passed by the Deputy
Commissioner in exercise of the powers or in performance of the functions an
Assessing Officer conferred on or assigned to him under orders or directions
issued by the Board or by the Chief Commissioner or Director General or
Commissioner authorised by the Board in this behalf under section
120 of the Income-tax Act read with section 7 of this Act;
(b)
"record"
includes all records relating to any proceeding under this Act available at the
time of examination by the Commissioner;
(c)
where any
order referred to in this sub-section and passed by the Assessing Officer had
been the subject matter of any appeal, the powers of the Commissioner under
this sub-section shall extend to such matters as had not been considered and
decided in such appeal.'.
Section 69 - Amendment Of Section 35
In section
35 of the Gift-tax Act, for sub-sections (3) and (4), the following
sub-sections shall be substituted with effect from the 1st day of April, 1989,
namely :-
"(3) ?A person shall not be
proceeded against for an offence under this Act except with the previous
sanction of the Chief Commissioner or Director General or Commissioner :
Provided that no such sanction shall be required if the prosecution is
at the instance of the Commissioner (Appeals).
(4) ??Any such offence may, either
before or after the institution of proceedings, be compounded by -
(a)
the Board or
a Chief Commissioner or a Director General authorised by the Board in this
behalf, in a case where the prosecution would lie at the instance of the
Commissioner (Appeals);
(b)
the Chief
Commissioner or Director General or Commissioner, in any other case.".
Section 70 - Amendment Of Section 36
In section
36 of the Gift-tax Act, after sub-section (1), the following sub-section
shall be inserted with effect from the 1st day of June, 1988, namely :-
"(1A) If the Director General or Director or Deputy Director or
Assistant Director has reason to suspect that any gifts chargeable to tax under
this Act have been concealed, or are likely to be concealed, by any person or
class of persons within his jurisdiction, then, for the purposes of making any
inquiry or investigation relating thereto, it shall be competent for him to
exercise the powers conferred under sub-section (1) on the gift-tax authorities
referred to in that sub-section, notwithstanding that no proceedings with
respect to such person or class of persons are pending before him or any other
gift-tax authority.".
Section 71 - Amendment Of Section 42
In section
42 of the Gift-tax Act, for the words "any order made", the
words "any proceeding taken or order made" shall be substituted and
shall be deemed to have been substituted with effect from the 1st day of March,
1988.
Section 72 - Substitution Of New Authorities
In the
Expenditure-tax Act, 1987 (35 of 1987) (hereinafter referred to as the
Expenditure-tax Act, save as otherwise expressly provided herein, the
references to any authorities specified in column (1) of the Table below shall
be substituted by references to the authority or authorities specified in the
corresponding entries in column (2) of the said Table and such consequential
changes, as the rules of grammar may require, shall also be made.
TABLE
|
(1) |
(2) |
|
Commissioner |
Chief
Commissioner or Commissioner |
|
Inspecting
Assistant Commissioner |
Deputy
Commissioner |
|
Income-tax
Officer |
Assessing
Officer : |
Provided
that nothing contained in this section shall apply to the reference to
"Commissioner" occurring in sections 21 and 23.
Section 73 - Amendment Of Section 6
In section
6 of the Expenditure-tax Act, -
(a)
for
sub-section (1), the following sub-section shall be substituted, namely :-
"(1) Every Director General of Income-tax, Chief Commissioner of
Income-tax, Director of Income-tax, Commissioner of Income-tax, Commissioner of
Income-tax (Appeals), Deputy Director of Income-tax, Deputy Commissioner of
Income-tax, Assistant Director of Income-tax, Assistant Commissioner of
Income-tax, Income-tax Officer, Tax Recovery Officer and Inspector of
Income-tax shall have the like powers and perform the like functions under this
Act as he has and performs under the Income-tax Act, and for the exercise of
his powers and the performance of his functions, his jurisdiction under this
Act shall be the same as he has under the Income-tax Act.";
(b)
in
sub-section (3), for the words "Director of Inspection or by the
Commissioner", the words "Director General or Director or by the
Chief Commissioner or Commissioner" shall be substituted.
Section 74 - Amendment Of Section 13
In section
13 of the Expenditure-tax Act, in sub-section (3), for the words and
figures "the Commissioner, or, as the case may be, the order under section
22 or section 23 is received by the Commissioner", the words and figures
"the Commissioner, or the order is received by the Chief Commissioner or
Commissioner, as the case may be, under section 22 or section 23" shall be
substituted.
Section 75 - Amendment Of Section 24
In section
24 of the Expenditure-tax Act, -
(a)
for the
figures, brackets, letters and words "2(43B) and (44), 118, 125, 125A, 128
to 136 (both inclusive)", the figures, brackets and words "2(44),
118, 120, 129, 131 to 136 (both inclusive)" shall be substituted;
(b)
the figures
"231," shall be omitted.
Section 76 - Amendment of Act 51 of 1975
The Customs
Tariff Act, 1975 (hereinafter referred to as the Customs Tariff Act), shall he
amended in the manner specified in the Second Schedule.
Section 77 - Auxiliary duties of customs
(1)
In the case
of goods mentioned in the First Schedule to the Customs Tariff Act, or in that
Schedule, as amended from time to time, there shall be levied and collected as
an auxiliary duty of customs an amount equal to fifty per cent. of the value of
the goods as determined in accordance with the provisions of section 14 of the
Customs Act, 1962 (52 of 1962) (hereinafter referred to as the Customs Act).
(2)
Sub-section
(1) shall cease to have effect after the 3lst day of March, 1989, except as
respects things done or omitted to, be done before such cesser; and section
6"of the General Clauses Act, 1897 (10 of 1897), shall apply upon such
cesser as if the said sub-section had then been repealed by a Central Act.
(3)
The
auxiliary duties of customs referred to in sub-section (1) shall be in addition
to any duties of customs chargeable on such goods under the Customs Act, or any
other law for the time being in force.
(4)
The
provisions of the Customs Act and the rules and regulations made thereunder,
including those relating to refunds and exemptions from duties, shall, as far
as may be, apply in relation to the levy and collection of the auxiliary duties
of customs leviable under this section in respect of any goods as they apply in
relation to the levy and collection of the duties of customs on such goods
under that Act or those rules and regulations, as the case may be
Section 78 - Amendment of section 27
In section
27 of the Customs Act, after sub-section (4), the following sub-section shall
be inserted, namely:--
"(5) Notwithstanding anything contained in any other law, the
provisions of this section shall also apply to a claim for refund of any amount
collected as duty of customs made on the ground that the goods in respect of
which such amount was collected were not leviable to such duty or were entitled
to exemption from duty and no: court shall have any jurisdiction in respect of
such claim,".
Section 79 - Amendment of section 115
In section
115 of the Customs Act, in sub-section (2), in the opening paragraph, the words
"and that each of them had taken all such precautions against such use. as
are for the time being specified in the rules" shall be omitted.
Section 80 - Amendment of section 156
In section
156 of the Customs Act, in sub-section (2), clause (c) shall be omitted.
Section 81 - Amendment of Act 5 of 1986
The Central
Excise Tariff Act 1985 (hereinafter, referred to as the Central Excise Tariff
Act), shall be amended in the manner specified in the Third Schedule.
Section 82 - Special duties of excise
(1)
In the case
of goods chargeable with a duty of excise under the Central Excises and Salt
Act, 1944 (1 of 1944) (hereinafter referred to as the Central Excises Act), as
amended from time to time, read with any notification for the time being in
force issued by the Central Government in relation to the duty so chargeable
(hot being a notification providing for any exemption for giving credit with
respect to, or reduction of duty of excise under the said Act on such goods
equal to, any duty of excise under the said Act, or the additional duty under
section 3 of the Customs Tariff Act, already paid on the raw material of
component parts used in the production or manufacture of such goods), there
shall be levied and collected a special duty of excise equal to five per cent.
of the amount so chargeable on such goods.
(2)
Sub-section
(I) shall cease to have effect after the 31st day of March, 1989, except as
respects things done or omitted to be done before such cesser; and section 6 of
the General Clauses, Act, 1897 (10 of 1897) shall apply upon such cesser as if
the said sub-section had then been repealed by a Central Act.
(3)
The special
duties of excise referred to in sub-section (1) shall be in addition to any
duties of excise chargeable on such goods under the Central Excises Act, or any
other law for the time being in force.
(4)
The
provisions of the Central Excises Act, and the rules made thereunder, including
those relating to refunds and exemptions from duties, shall, as far as may be,
apply in relation to the levy and collection of the special duties of excise
leviable under this section in respect of any goods as they apply in relation
to the levy and collection of the duties of excise on such goods under that Act
er those rules, as the ease may be
Section 83 - Amendment of Act 58 of 1957
The
Additional Duties of Excise (Goods of Special importance) Act, 1957
(hereinafter referred to as the Additional Duties of Excise Act), shall be
amended in the manner specified in the Fourth Schedule.
Section 84 - Provision as to additional duties of excise on certain varieties of sugar in relation to a certain period and validation
(1)
The
notification of the Government of India in the Ministry of Finance (Department
of Revenue) No. G.S.R. 97(E), dated the 23rd day of February, 1988, which was
issued in exercise of the powers conferred by sub-rule (1) of rule 8 of the
Central Excise Rules, 1944, read with sub-section (3) of section 3 of the
Additional Duties of Excise Act, providing for withdrawal of exemptions from
additional Duty of excise in relation to certain parieties of sugar (hereafter
in this section referred to as sugar), shall be deemed to have and to have
always had, effect on and from the 10th day of September, 1986.
(2)
Any action
or things taken or done or purported to have been taken or done on or after the
10th day of September 1986 and before the 23rd day of February, 1988, in
relation to sugar under the Additional Duties of Excise Act, shall be deemed to
be, and to have always been, for all purposes as validly and effectively taken
or done as if the pro-visions of sub-section (1) had been in force at all
material times and such action or thing had been taken or done under the
Additional Duties of Excise Act read with the notification dated the 23rd day
of February, 1988, referred to in sub-section (1), and, accordingly,
notwithstanding anything contained in any judgment, decree or order of any
court, tribunal or other authority,--
(a)
all
additional duties of excise levied, assessed or collected or purporting to have
been levied, assessed or collected on or after the 10th day of September, 1986
and before the 23rd day of February, 1988, on sugar, shall be deemed to be, and
shall be deemed to have always been, as validly levied, assessed or collected
as if the provisions of this section had been in force at all material times;
(b)
no suit or
other proceeding shall be maintained or continued in any court, tribunal or
other authority, for the refund of, and no enforcement shall be made by any
court tribunal or other authority, of any decree or order directing the refund
of any such additional duties of excise which have been collected and which
would have been validly collected if the provisions of this section had been in
force at all material times;
(c)
recovery
shall be made of all such additional duties of excise which have not been
collected or, as the case may be, which have been refunded but which would have
been collected or, as the case may be, would not have been refunded, if
the provisions of this section had been in force at all material times.
Explanations-For
the removal of doubts, it is hereby declared that no act or omission on the
part of any person shall be punishable as an offence which would not have been
so punishable if this section had not come into force.
Section 85 - Amendment of Act 74 of 1956
In section
14 of the Central Sales Tax Act, 1956,--
(a)
for item
(iia), the following item shall be substituted, namely; --
"(iia)
cotton fabrics covered under heading Nos. 52.05, 52.06, 52.07, 52.08, 52.09,
52.10, 52.11, 52.12, 58.01, 58.02, 58.03, 58.04, 58.05, 59.01, 59.03, 59.05,
59.06 and 60.01 of the Schedule to the Central Excise Tariff Act, 1985 (5 of
1986);";
(b)
for items
(vii), (viii), (ix) and (x), the following items shall be substituted,
namely:--
"(vii) man-made fabrics covered under heading Nos. 54.08, 54.09,
54.10, 54.11, 54.12, 55.07, 55.08, 55.09, 55.10, 55.11, 55.12, 58.01, 58.02,
58.03, 58.04, 58.05, 59.01, 59.02, 59.03, 59.05, 59.06 and 60.01 of the
Schedule to the Central Excise Tariff Act, 1985 (5 of 1986);
(viii) sugar covered under sub-heading Nos. 1701.20, 1701.31, 1701.39
and 1702.11 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986);
(ix) ??unmanufactured tobacco and
tobacco refuse covered under sub-heading No. 2401.00, cigars and cheroots of
tobacco covered under heading No. 24.02, cigarettes and cigarillos of tobacco
covered under sub-heading Nos. 2403.11 and 2403.21, and other manufactured
tobacco cavered under sub-heading Nos. 2404.11, 2404.12, 2404.13, 2404.19,
2404.21, 2404.29, 2404.31, 2404.39, 2404.41 and 2404.50, of the Schedule to the
Central Excise Tariff Act, 1985 (5 of 1986);
(x) ??woven fabrics of wool covered under heading
Nos. 51.06, 51.07, 58.01, 58.02, 58.03 and 58.05 of the Schedule to the Central
Excise Tariff Act, 1985 (5 of 1986).".
Section 86 - Amendment Of Act 57 Of 1972
After section
35 of the General Insurance Business (Nationalisation) Act, 1972, the
following section shall be inserted with effect from the 1st day of June, 1988,
namely :-
"35A.
Deduction of income-tax not to be made on interest or dividend payable to the
Corporation, etc. - Notwithstanding anything contained in section
193 or section 194 of the Income-tax Act, 1961 (43 of 1961), no
deduction of income-tax shall be made on any interest or dividend payable to
the Corporation or to any of the new companies formed by virtue of the schemes
framed under sub-section (1) of section 16, in respect of any securities
or shares owned by the Corporation or such company or in which the Corporation
or such company has full beneficial interest."
Section 87 - Amendment Of Act 11 Of 1983
In section
40 of the Finance Act, 1983, -
(i) ???in sub-section (1), before
the Explanation, the following proviso shall be inserted, namely :-
"Provided
that the amount of wealth-tax computed in accordance with the provisions of
this sub-section shall, in relation to the assessment year commencing on the
1st day of April, 1988, be increased by a surcharge calculated at the rate of
ten per cent. of such wealth-tax.";
(ii)? ?in sub-section (3), with effect from the 1st
day of April, 1989, -
(a)
in clause
(i), the words ", not being any such precious metal or alloy held for use
as raw material in industrial production" shall be inserted at the end;
(b)
to clause
(v), the following proviso shall be added, namely :-
"Provided
that nothing in this clause shall apply to any unused land held by the assessee
for industrial purposes for a period of two years from the date of its
acquisition by him;";
(c)
for clause
(vi), the following clauses shall be substituted, namely :-
'(vi) building or land appurtenant thereto, other than building or part
thereof used by the assessee as factory, go down, warehouse, cinema house,
hotel or office for the purposes of its business or as a hospital, creche,
school, canteen, library, recreational center, shelter, rest-room or lunch room
mainly used for the welfare of its employees or used as residential
accommodation, except as provided in clauses (via) and (vib), and the land
appurtenant to such building or part;
(via) any building used as residential accommodation in the nature of a
guest house and land appurtenant thereto;
(vib) any building and the land appurtenant to such building used as
residential accommodation by any director, manager, secretary or any other
employee of the assessee, such employee holding not less than one per cent. of
the equity share of the assessee or by any relative of any person who holds not
less than one per cent. of the equity share of the assessee.
Explanation : For the purposes of this clause, "relative"
shall have the meaning assigned to it in clause (b) of Explanation 1
to section 80F of the Income-tax Act.';
(d)
after clause
(viii), the following proviso and Explanation shall be inserted, namely :-
"Provided that this section shall not apply to any asset referred
to in clause (i), (ii), (iii), (iv), (v) or (vi), which is held by the assessee
as stock-in-trade in a business carried on by it or, in the case of motor-cars
referred to in clause (vii), they are held as stock-in-trade in such business
or registered as taxies and used as such in a business of running motor-cars on
hire carried on by the assessee.
Explanation : Where any question arises as to whether all or any of the
assets referred to in clause (i), (ii), (iii), or (iv) are held by the assessee
as stock-in-trade in a business carried on by it, the question shall be decided
in accordance with such directions as the Board may, by general or special
order, issue for the guidance of the Assessing Officer, having regard to the
ratio which the yearly turnover of a business of trading in such assets bears
to the average of the stocks of such assets held from time to time during the
year in such business ordinarily and other relevant factors.".
Section 88 - Amendment Of Act 4 Of 1988
In the
Direct Tax Laws (Amendment) Act, 1987, -
(a)
in section
36, clause (a) shall be omitted;
(b)
in section
37, -
(i) ????in clause (a), after the
words, brackets and figure in sub-section (1),, the words, figures and letters
with effect from the 1st day of April, 1988, shall be inserted;
(ii)? ?in clause (b), the words, figures and letters
with effect from the 1st day of April, 1988 shall be inserted at the end;
(c)
in section
38, the words, figures and letters with effect from the 1st day of April, 1988
shall be inserted at the end;
?
(d)
section 92
shall be omitted;
(e)
in section
128, -
(i) ???in clause (i), the words,
figures and letters with effect from the 1st day of April, 1988 shall be
inserted at the end;
(ii)?? ?in clause (ii), after the words shall be
inserted, the words, figures and letters with effect from the 1st day of April,
1988 shall be inserted;
(iii) ??in clause (iii), the
words, figures and letters with effect from the 1st day of April, 1988 shall be
inserted at the end;
(iv) ??in clause (vii), after the
words shall be substituted, the words, figures and letters with effect from the
1st day of April, 1988 shall be inserted;
(f) ???in section 153, clause (a)
shall be omitted;
(g) ??in section 154, -
(i) ???in clause (1), -
(A)
in
sub-clause (b), the words, figures and letters with effect from the 1st day of
April, 1988 shall be inserted at the end;
(B)
in
sub-clause (f), the words, figures and letters with effect from the 1st day of
April, 1988 shall be inserted at the end;
(ii) ??in clause (2), in
sub-clause (b), the words, figures and letters with effect from the 1st day of
April, 1988 shall be inserted at the end;
(h) ??in section 155, in clause
(a), in sub-clause (ii), the words, figures and letters with effect from the
1st day of April, 1988 shall be inserted at the end;
(i) ????in section 158, after the
words shall be inserted, the words, figures and letters with effect from the
1st day of April, 1988 shall be inserted;
(j) ???in section 162, -
(i)?? ?in clause (a), the words, figures and letters
with effect from the 1st day of April, 1988 shall be inserted at the end;
(ii)? ?in clause (b), after the words shall be
inserted, the words, figures and letters with effect from the 1st day of April,
1988 shall be inserted;
(iii)? ?for clause (c), the following clause shall be
substituted, namely :-
(c)(i) clauses (vi), (via), (viia), (xiii), (xv), (xvi) and (xvia) shall
be omitted with effect from the 1st day of April, 1988; (ii) in clause (xvii)
shall be omitted;;
(iv) ??in clause (g), after the
words shall be inserted, the words, figures and letters with effect from the
1st day of April, 1988 shall be inserted;
(k) ??in section 182, clause (a)
shall be omitted.
Schedule I - FIRST SCHEDULE
THE FIRST SCHEDULE
[See section 2]
PART I
Income-Tax
Paragraph A
Sub-Paragraph
I
In the case
of every individual or Hindu undivided family or 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
Sub-Paragraph II of this Paragraph or any other Paragraph of this Part applies,
-
RATES OF INCOME-TAX
|
(1) |
where the
total income does not exceed Rs. 18,000 |
Nil; |
|
(2) |
where the
total income exceeds Rs. 18,000 but does not exceed Rs. 25,000 |
25 per
cent. of the amount by which the total income exceeds Rs. 18,000; |
|
(3) |
where the
total income exceeds Rs. 25,000 but does not exceed Rs. 50,000 |
Rs. 1,750
plus 30 per cent. of the amount by which the total income exceeds Rs. 25,000; |
|
(4) |
where the
total income exceeds Rs. 50,000 but does not exceed Rs. 1,00,000 |
Rs. 9,250
plus 40 per cent. of the amount by which the total income exceeds Rs. 50,000; |
|
(5) |
where the
total income exceeds Rs. 1,00,000. |
Rs. 29,250
plus 50 per cent. of the amount by the which the total income exceeds Rs.
1,00,000. |
Surcharge on income-tax
The amount
of income-tax computed in accordance with the preceding provisions of this
Sub-Paragraph shall, in the case of every person having a total income
exceeding fifty thousand rupees, be increased by a surcharge for purposes of
the Union calculated at the rate of five per cent. of such income-tax :
Provided
that no such surcharge shall be payable by a non-resident.
Sub-Paragraph
II
In the case
of every Hindu undivided family which at any time during the previous year has
at least one member whose total income of the previous year relevant to the
assessment year commencing on the 1st day of April, 1988, exceeds Rs. 18,000, -
RATES OF INCOME-TAX
|
(1) |
where the
total income does Not exceed Rs. 12,000 |
Nil; |
|
(2) |
where the
total income exceeds Rs. 12,000 but does not exceed Rs. 20,000 |
25 per
cent. of the amount by which the total income exceeds Rs. 12,000; |
|
(3) |
where the
total income exceeds Rs. 20,000 but does not exceed Rs. 40,000 |
Rs. 2,000
plus 30 per cent. of the amount by which the total income exceeds Rs. 20,000; |
|
(4) |
where the
total income exceeds Rs. 40,000 but does not exceed Rs. 60,000 |
Rs. 8,000
plus 40 per cent. of the amount by which the total income exceeds Rs. 40,000; |
|
(5) |
where the
total income exceeds Rs. 60,000 but does not exceed Rs. 1,00,000 |
Rs. 16,000
plus 50 per cent. of the amount by which the total income exceeds Rs. 60,000; |
|
(6) |
where the
total income exceeds Rs. 1,00,000 |
Rs. 36,000
plus 55 per cent. of the amount by which the total income exceeds Rs.
1,00,000. |
Surcharge on income-tax
The amount
of income-tax computed in accordance with the preceding provisions of this
Sub-Paragraph shall, in the case every person having a total income exceeding
fifty thousand rupees, be increased by a surcharge for purposes of the Union
calculated at the rate of five per cent. of such income-tax :
Provided
that no such surcharge shall be payable by a non-resident.
Paragraph B
In the case
of every co-operative society, -
RATES OF INCOME-TAX
|
(1) |
where the
total income does not exceed Rs. 10,000 |
15 per
cent. of the total income; |
|
(2) |
where the
total income exceeds Rs. 10,000
but does not exceed Rs. 20,000 |
Rs. 1,500
plus 25 per cent. of the amount by which the total income exceeds Rs. 10,000; |
|
(3) |
where the
total income exceeds Rs. 20,000 |
Rs. 4,000
plus 40 per cent. of the amount by which the total income exceeds Rs. 20,000. |
Surcharge on income-tax
The amount
of income-tax computed in accordance with the preceding provisions of this
Paragraph shall, in the case of every person having a total income exceeding
fifty thousand rupees, be increased by a surcharge for purposes of the Union
calculated at the rate of five per cent. of such income-tax.
Paragraph C
Sub-Paragraph
I
In the case
of every registered firm, not being a case to which Sub-Paragraph II of this
Paragraph applies, -
RATES OF INCOME-TAX
|
(1) |
where the
total income does not exceed Rs. 10,000 |
Nil; |
|
(2) |
where the
total income exceeds Rs. 10,000 but does not exceed Rs. 25,000 |
5 per
cent. of the amount by which the total income exceeds Rs. 10,000; |
|
(3) |
where the
total income exceeds Rs. 25,000 but does not exceed Rs. 50,000 |
Rs. 750
plus 7 per cent. of the amount by which the total income exceeds Rs. 25,000; |
|
(4) |
where the
total income exceeds Rs. 50,000 but does not exceed Rs. 1,00,000 |
Rs. 2,500
plus 15 per cent. of the amount by which the total income exceeds Rs. 50,000; |
|
(5) |
where the total
income exceeds Rs. 1,00,000 |
Rs. 10,000
plus 24 per cent. of the amount by which the total income exceeds Rs.
1,00,000. |
Surcharge on income-tax
The amount
of income-tax computed in accordance with the preceding provisions of this
Sub-Paragraph shall, in the case of every person having a total income
exceeding fifty thousand rupees, be increased by a surcharge for purposes of
the Union calculated at the rate of five per cent. of such income-tax.
Sub-Paragraph
II
In the case
of every registered firm whose total income includes income derived from a
profession carried on by it and the income so included is not less than
fifty-one per cent. of such total income, -
RATES OF INCOME-TAX
|
(1) |
where the
total income does not exceed Rs. 10,000 |
Nil; |
|
(2) |
where the
total income exceeds Rs. 10,000 but does not exceed Rs. 25,000 |
4 per
cent. of the amount by which the total income exceeds Rs. 10,000; |
|
(3) |
where the
total income exceeds Rs. 25,000 but does not exceed Rs. 50,000 |
Rs. 600
plus 7 per cent. of the amount by which the total income exceeds Rs. 25,000; |
|
(4) |
where the
total income exceeds Rs. 50,000 but does not exceed Rs. 1,00,000 |
Rs. 2,350
plus 13 per cent. of the amount by which the total income exceeds Rs. 50,000; |
|
(5) |
where the
total income exceeds Rs. 1,00,000 |
Rs. 8,850
plus 22 per cent. of the amount by which the total income exceeds Rs.
1,00,000. |
Surcharge on income-tax
The amount
of income-tax computed in accordance with the preceding provisions of this
Sub-Paragraph shall, in the case of every person having a total income
exceeding fifty thousand rupees, be increased by a surcharge for purposes of
the Union calculated at the rate of five per cent. of such income-tax.
Explanation
: For the purposes of this Paragraph, "registered firm" includes an
unregistered firm assessed as a registered firm under clause (b)
of section 183 of the Income-tax Act.
Paragraph D
In the case of
every local authority, -
RATE OF INCOME-TAX
|
On the
whole of the total income |
50 per
cent. |
Surcharge on
income-tax
The amount
of income-tax computed at the rate hereinbefore specified shall, in the case of
every person having a total income exceeding fifty thousand rupees, be
increased by a surcharge for purposes of the Union calculated at the rate of
five per cent. of such income-tax.
Paragraph E
In the case
of a company, -
RATES OF INCOME-TAX
I. In the
case of a domestic company, -
|
(1) |
where the
company is a company in which the public are substantially interested (2)
where the company is not a company in which the public are substantially
interested - |
50 per
cent. of the total income; |
|
|
(i) in the
case of a trading company or an investment company |
60 per
cent. of the total income; |
|
|
(ii) in
any other case |
55 per
cent. of the total income. |
II. In the case of a company other than a domestic company, -
(i) ???on so much of the total
income as consists of -
|
(a) |
royalties
received from Government or an Indian concern in pursuance of an agreement
made by it with the Government or the Indian concern after the 31st day of
March, 1961, but before the 1st day of April, 1976,or |
|
|
(b) |
fees for
rendering technical services received from Government or an Indian concern in
pursuance of an agreement made by it with the Government or the Indian
concern after the 29thday of February, 1964, but before the 1st
day of April, 1976, and where such agreement has, in either case, been
approved by the Central Government |
|
|
|
(ii) on
the balance, if any, of the |
Surcharge on income-tax
The amount
of income-tax computed in accordance with the provisions of item I of this
Paragraph shall, in the case of every person having a total income exceeding
fifty thousand rupees, be increased by a surcharge calculated at the rate of
five per cent. of such income-tax.
PART II
Rates For Deduction Of Tax At Source In Certain Cases
In every
case in which under the provisions of sections
193, 194, 194A, 194B, 194BB, 194D and 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 :-
RATE OF INCOME-TAX
1.
In the case
of a person other than a company ?
(a)
where the
person is resident in India -
|
(i) |
on income
by way of interest other than "Interest on securities" |
10 per
cent.; |
|
(ii) |
on income
by way of winnings from lotteries and crossword puzzles |
40 per
cent.; |
|
(iii) |
on income
by way of winnings from horse races |
40 per
cent.; |
|
(iv) |
on income
by way of insurance Commission |
10 per
cent.; |
|
(v) |
on income
by way of interest payable on - |
10 per
cent.; |
|
(A) |
any
security, other than a tax-free security, of the Central or a State
Government; |
|
|
(B) |
any
debentures or other securities for money issued by or on behalf of any local
authority or a corporation established by a Central, State or Provincial Act; |
|
|
(C) |
any
debentures issued by a company where such debentures are listed on a
recognised stock exchange in India in accordance with the Securities
Contracts (Regulation) Act, 1956, and any rules made thereunder; |
|
|
|
(vi) on
any other income (excluding interest payable on a tax-free security) |
20 per
cent.; |
(b) ??where the person is not resident
in India -
(i) ???in the case of a
non-resident Indian -
|
(A) |
on investment income and long-term capital gains |
20 per cent.; |
|
(B) |
on income
by way of interest payable on a tax-free security |
15 per
cent.; |
|
(C) |
on income
by way of winnings from lotteries and crossword Puzzles |
40 per
cent.; |
|
(D) |
on income
by way of winnings from horse races |
40 per
cent.; |
|
(E) |
on the
whole of other income |
income-tax
at 30 per cent. of the amount of income or income-tax in respect of the
income at the rates prescribed in Sub-Paragraph I of Paragraph A of Part III
of this Schedule, if such inco me had been the total income, |
whichever is higher;
(ii) ??in the case of any other
person -
|
(A) |
on income
by way of interest payable on a tax-free security |
15 per
cent.; |
|
(B) |
on income
by way of winnings from lotteries and crossword puzzles |
40 per
cent.; |
|
(C) |
on income
by way of winnings from horse races |
40 per cent.; |
|
(D) |
on the
whole of the other |
income-tax
at 30 per cent. of the amount of income or income-tax in respect of the
income at the rates prescribed in Sub-Paragraph I of Paragraph A of Part III
of this Schedule, if such income had been the total income, whichever is
higher; |
2.
In the case of a company ?
(a)
where the
company is a domestic company -
|
(i) |
on income by way of interest other than "Interest on
securities" |
20 per cent.; |
|
(ii) |
on income
by way of winnings from lotteries and crossword puzzles |
40 per
cent.; |
|
(iii) |
on income
by way of winnings from, horse races |
40 per
cent.; |
|
(iv) |
on any
other income (excluding interest payable on tax-free security) |
21.5 per
cent.; |
(b)
where the company is not a domestic company -
|
(i) |
on income
by way of dividends payable by any domestic company |
25 per
cent.; |
|
(ii) |
on income
by way of winnings from lotteries and crossword puzzles |
40 per
cent.; |
|
(iii) |
on income
by way of winnings from horse races |
40 per
cent.; |
|
(iv) |
on income
by way of interest payable by Government or an Indian concern on moneys
borrowed or debt incurred by Government or the Indian concern in foreign
currency |
25 per
cent.; |
|
(v) |
on income
by way of royalty payable by Government or an Indian concern in pursuance of
an agreement made by it with the Government or the Indian concern after the
31st day of March, 1976, where such royalty is in consideration for the
transfer of all or any rights (including the granting of a licence) in
respect of copyright in any book on a subject referred to in the proviso to
sub-section (1A) of section 115A of the Ncome-tax Act, to the ndian
concern. |
30 per
cent.; |
|
(vi) |
on income
by way of royalty [not being royalty of the nature referred to in sub-item
(b)(v)] payable by Government or an Indian concern in pursuance of an
agreement made by it with the Government or the Indian concern and which has
been approved by the Central Government, - |
|
|
(A) |
where the
agreement is made after the 31st day of March, 1961, but before the 1st day
of April, 1976 |
50 per
cent.; |
|
(B) |
where the
agreement is made after the 31st day of March, 1976 |
30 per
cent.; |
|
(vii) |
on income
by way of Fees for technical services payable by Government or an Indian
concern in pursuance of an agreement made by it with the Government or the
Indian concern and which has been approved by the Central Government - |
|
(A) |
where the
agreement is made after the 29th day of February, 1964, but before the 1st
day of April, 1976 |
50 per
cent.; |
|
(B) |
where the
agreement is made after the 31st day of March, 1976 |
30 per
cent.; |
|
(viii) |
on income
by way of interest payable on a tax-free security |
44 per
cent.; |
|
(ix) |
on any
other income |
65 per
cent. |
Explanation : For the
purposes of this Part, "investment income", "long-term capital gains" and "non-resident Indian" shall have the meanings
assigned to them in Chapter XII-A of the Income-tax Act.
Surcharge on
income-tax
The amount
of income-tax deducted in accordance with the provisions of -
(a)
sub-item (a)
of item 1 of this Part shall be increased by a surcharge for purposes of the
Union, and
(b)
sub-item (a)
of item 2 of this Part shall be increased by a surcharge, calculated at the
rate of five per cent. of such income-tax.
PART III
Rates For
Calculating Or Charging Income-Tax In Certain Cases, Deducting Income-Tax From
Income Chargeable Under The Head "Salaries" Or Any Payment Referred
To In Sub-Section (1) Of Section 194e And Computing "Advance
Tax"
In cases in
which income-tax has to be calculated under the first proviso to sub-section
(5) of section 132 of the Income-tax Act or charged under sub-section
(4) of section 172 or sub-section (2) of section
174 or section 175 or sub-section (2) of section
176 of the said Act or deducted under section 192 of the said
Act from income chargeable under the head "Salaries" or in which the
"advance tax" payable under Chapter XVII-C of the said Act has to be
computed at the rate or rates in force, such income-tax or, as the case may be,
"advance tax" [not being "advance tax" in respect of any
income chargeable to tax under Chapter XII or Chapter XII-A or sub-section (1A)
of section 161 or section 164 or section
164A or section 167B of the Income-tax Act at the rates as
specified in that Chapter or section or surcharge on such "advance
tax" in respect of any income chargeable to tax under section 115B],
shall be calculated, charged, deducted or computed at the following rate or
rates :-
Paragraph A
Sub-Paragraph
I
In the case
of every individual or Hindu undivided family or 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 Sub-Paragraph
II of this Paragraph or any other Paragraph of this Part applies, -
RATES OF INCOME-TAX
Surcharge on income-tax
The amount
of income-tax computed in accordance with the preceding provisions of this
Sub-Paragraph shall, in the case of every person having a total income
exceeding fifty thousand rupees, be increased by a surcharge for purposes of
the Union calculated at the rate of five per cent. of such income-tax :
Provided
that no such surcharge shall be payable by a non-resident.
Sub-Paragraph
II
In the case
of every Hindu undivided family which at any time during the previous year has
at least one member whose total income of the previous year relevant to the
assessment year commencing on the 1st day of April, 1989, exceeds Rs. 18,000, -
RATES OF INCOME-TAX
|
(1) |
where the total income does not exceed Rs. 12,000 |
Nil; |
|
(2) |
where the total income exceeds Rs. 12,000 but
does not exceed Rs. 20,000 |
25 per cent. of the amount by which the total
income exceeds Rs. 12,000; |
|
(3) |
where the total income exceeds Rs. 20,000 but
does not exceed Rs. 40,000 |
Rs. 2,000 plus 30 per cent. of the amount by
which the total income exceeds Rs. 20,000; |
|
(4) |
where the total income exceeds Rs. 40,000 but
does not exceed Rs. 60,000 |
Rs. 8,000 plus 40 per cent. of the amount by
which the total income exceeds Rs. 40,000 |
|
(5) |
where the total income exceeds Rs. 60,000 but
does not exceed Rs. 1,00,000 |
Rs. 16,000 plus 50 per cent. of the amount by
which the total income exceeds Rs. 60,000; |
|
(6) |
where the total income exceeds Rs. 1,00,000 |
Rs. 36,000 plus 55 per cent.of the amount by
which the total income exceeds Rs. 1,00,000. |
Surcharge on income-tax
The amount
of income-tax computed in accordance with the preceding provisions of this
Sub-Paragraph shall, in the case of every person having a total income
exceeding fifty thousand rupees, be increased by a surcharge for purposes of
the Union calculated at the rate of five per cent. of such income-tax :
Provided
that no such surcharge shall be payable by a non-resident.
Paragraph B
In the case
of every co-operative society, -
RATES OF INCOME-TAX
Surcharge on income-tax
The amount
of income-tax computed in accordance with the preceding provisions of this
Paragraph shall, in the case of every person having a total income exceeding
fifty thousand rupees, be increased by a surcharge for purposes of the Union
calculated at the rate of five per cent. of such income-tax.
Paragraph C
Sub-Paragraph
I
In the case
of every registered firm, not being a case to which Sub-Paragraph II of this
Paragraph applies, -
RATES OF INCOME-TAX
|
(1) |
where the
total income does not exceed Rs. 10,000 |
Nil; |
|
(2) |
where the
total income exceeds Rs. 10,000 but does not exceed Rs. 25,000 |
5 per
cent. of the amount by which the total income exceeds Rs. 10,000; |
|
(3) |
where the
total income exceeds Rs. 25,000 but does not exceed Rs. 50,000 |
Rs. 750
plus 7 per cent. of the amount by which the total income exceeds Rs. 25,000; |
|
(4) |
where the
total income exceeds Rs. 50,000 but does not exceed Rs. 1,00,000 |
Rs. 2,500
plus 15 per cent. of the amount by which the total income exceeds Rs. 50,000; |
|
(5) |
where the total
income exceeds Rs. 1,00,000 |
Rs. 10,000
plus 24 per cent. of the amount by which the total income exceeds Rs.
1,00,000. |
Surcharge on income-tax
The amount
of income-tax computed in accordance with the preceding provisions of this
Sub-Paragraph shall, in the case every person having a total income exceeding
fifty thousand rupees, be increased by a surcharge for purposes of the Union
calculated at the rate of five per cent. of such income-tax.
Sub-Paragraph
II
In the case
of every registered firm whose total income includes income derived from a
profession carried on by it and the income so included is not less than
fifty-one per cent. of such total income, -
RATES OF INCOME-TAX
|
(1) |
where the
total income does not exceed Rs. 10,000 |
Nil; |
|
(2) |
where the
total income exceeds Rs. 10,000 but does not exceed Rs. 25,000 |
4 per
cent. of the amount by which the total income exceeds Rs. 10,000; |
|
(3) |
where the total
income exceeds Rs. 25,000 but does not exceed Rs. 50,000 |
Rs. 600
plus 7 per cent. of the amount by which the total income exceeds Rs. 25,000; |
|
(4) |
where the
total income exceeds Rs. 50,000 but does not exceed Rs. 1,00,000 |
Rs. 2,350
plus 13 per cent. of the amount by which the total income exceeds Rs. 50,000; |
|
(5) |
where the
total income exceeds Rs. 1,00,000 |
Rs. 8,850
plus 22 per cent. of the amount by which the total income exceeds Rs.
1,00,000. |
Surcharge on income-tax
The amount
of income-tax computed in accordance with the preceding provisions of this
Sub-Paragraph shall, in the case of every person having a total income
exceeding fifty thousand rupees, be increased by a surcharge for purposes of
the Union calculated at the rate of five per cent. of such income-tax.
Explanation
: For the purposes of this Paragraph, "registered firm" includes an
unregistered firm assessed as a registered firm under clause (b)
of section 183 of the Income-tax Act.
Paragraph D
In the case of
every local authority, -
RATE OF INCOME-TAX
|
On the
whole of the total income |
50 per
cent. |
Surcharge on
income-tax
The amount
of income-tax computed at the rate hereinbefore specified shall, in the case of
every person having a total income exceeding fifty thousand rupees, be
increased by a surcharge for purposes of the Union calculated at the rate of
five per cent. of such income-tax.
Paragraph E
In the case
of a company, -
RATES OF INCOME-TAX
I.
In the case
of a domestic company, -
II ??In the case of a company other
|
than a
domestic company, - |
|
|
(i) on so
much of the total income as consists of - |
|
|
(a)
royalties received from Government or an Indian concern in pursuance of an
agreement made by it with the Government or the Indian concern after the 31st
day of March, 1961, but before the 1st day of April, 1976, or |
|
|
received
from Government or an Indian concern in pursuance of an agreement made by it
with the Government or the Indian concern after the 29th day of February,
1964, but before the 1st day of April, 1976, and where such agreement has, in
either case, been approved by the Central Government |
50 per
cent.; |
|
(ii) on
the balance, if any, of the total income |
65 per
cent. |
Surcharge on
income-tax
The amount
of income-tax computed in accordance with the provisions of item I of this
Paragraph shall, in the case of every person having a total income exceeding
fifty thousand rupees, be increased by a surcharge calculated at the rate of
five per cent. of such income-tax.
PART IV
[See section 2(9)(e)]
Rules For Computation Of Net Agricultural Income
Rule 1 -
Agricultural income of the nature referred to in sub-clause (a) of clause (1)
of section 2 of the Income-tax Act shall be computed as if it were
income chargeable to income-tax under that Act under the head "Income from
other sources" and the provisions of sections 57 to 59 of that Act shall,
so far as may be, apply accordingly :
Provided
that sub-section (2) of section 58 shall apply subject to the modification that
the reference to section 40A therein shall be construed as not including a
reference to sub-sections (3) and (4) of section 40A.
Rule 2 -
Agricultural income of the nature referred to in sub-clause (b) or sub-clause
(c) of clause (1) of section 2 of the Income-tax Act [other than
income derived from any building required as a dwelling house by the receiver
of the rent or revenue or the cultivator or the receiver of rent-in-kind
referred to in the said sub-clause (c)] shall be computed as if it were income
chargeable to income-tax under that Act under the head "Profits and gains
of business or profession" and the provisions of sections
30, 31, 32, 36, 37, 38, 40, 40A [other
than sub-sections (3) and (4)
thereof], 41, 43, 43A and 43B of the Income-tax
Act shall, so far as may be, apply accordingly.
Rule 3 -
Agricultural income of the nature referred to in sub-clause (c) of clause (1)
of section 2 of the Income-tax Act, being income derived from any
building required as a dwelling house by the receiver of the rent or revenue or
the cultivator or the receiver of rent-in-kind referred to in the said
sub-clause (c) shall be computed as if it were income chargeable to income-tax
under that Act under the head "Income from house property" and the
provisions of sections 23 to 27 of that Act shall, so far as may be, apply
accordingly.
Rule 4 -
Notwithstanding anything contained in any other provisions of these rules, in a
case here the assessee derives income from sale of tea grown and manufactured
by him in India, such income shall be computed in accordance with rule 8 of the
Income-tax Rules, 1962, and sixty per cent. of such income shall be regarded as
the agricultural income of the assessee.
Rule 5 -
Where the assessee is a partner of a registered firm or an unregistered firm
assessed as a registered firm under clause (b) of section 183 of the
Income-tax Act, which in the previous year has any agricultural income, or is a
partner of an unregistered firm which has not been assessed as a registered
firm under clause (b) of the said section 183 and which in the
previous year has either no income chargeable to tax under the Income-tax Act
or has total income not exceeding the maximum amount not chargeable to tax in
the case of an unregistered firm but has any agricultural income, then, the
agricultural income or loss of the firm shall be computed in accordance with
these rules and his share in the agricultural income or loss of the firm shall
be computed in the manner laid down in sub-section (1), sub-section (2) and
sub-section (3) of section 67 of the Income-tax Act and the share so
computed shall be regarded as the agricultural income or loss of the assessee.
Rule 6 -
Where the assessee is a member of an association of persons or a body of
individuals (other than a Hindu undivided family, a company or a firm) which in
the previous year has either no income chargeable to tax under the Income-tax
Act or has total income not exceeding the maximum amount not chargeable to tax
in the case of an association of persons or a body of individuals (other than a
Hindu undivided family, a company or a firm) but has any agricultural income,
then, the agricultural income or loss of the association or body shall be
computed in accordance with these rules and the share of the assessee in the
agricultural income or loss so computed shall be regarded as the agricultural
income or loss of the assessee.
Rule 7 -
Where the result of the computation for the previous year in respect of any
source of agricultural income is a loss, such loss shall be set off against the
income of the assessee, if any, for that previous year from any other source of
agricultural income :
Provided
that where the assessee is a partner of an unregistered firm which has not been
assessed as a registered firm under clause (b) of section 183 of the
Income-tax Act or is a member of an association of persons or a body of
individuals and the share of the assessee in the agricultural income of the
firm, association or body, as the case may be, is a loss, such loss shall not
be set off against any income of the assessee from any other source of
agricultural income.
Rule 8 - Any
sum payable by the assessee on account of any tax levied by the State
Government on the agricultural income shall be deducted in computing the
agricultural income.
Rule 9 - (1)
Where the assessee has, in the previous year relevant to the assessment year
commencing on the 1st day of April, 1988, any agricultural income and the net
result of the computation of the agricultural income of the assessee for any
one or more of the previous years relevant to the assessment years commencing
on the 1st day of April, 1980 or the 1st day of April, 1981 or the 1st day of
April, 1982 or the 1st day of April, 1983 or the 1st day of April, 1984 or the
1st day of April, 1985 or the 1st day of April, 1986 or the 1st day of April,
1987, is a loss, then, for the purposes of sub-section (2) of section 2 of
this Act, -
(a)
the loss so
computed for the previous year relevant to the assessment year commencing on
the 1st day of April, 1980, to the extent, if any, such loss has not been set
off against the agricultural income for the previous year relevant to the assessment
year commencing on the 1st day of April, 1981 or the 1st day of April, 1982 or
the 1st day of April, 1983 or the 1st day of April, 1984 or the 1st day of
April, 1985 or the 1st day of April, 1986 or the 1st day of April, 1987,
(b)
the loss so
computed for the previous year relevant to the assessment year commencing on
the 1st day of April, 1981, to the extent, if any, such loss has not been set
off against the agricultural income for the previous year relevant to the
assessment year commencing on the 1st day of April, 1982 or the 1st day of
April, 1983 or the 1st day of April, 1984 or the 1st day of April, 1985 or the
1st day of April, 1986 or the 1st day of April, 1987,
(c)
the loss so
computed for the previous year relevant to the assessment year commencing on
the 1st day of April, 1982, to the extent, if any, such loss has not been set
off against the agricultural income for the previous year relevant to the
assessment year commencing on the 1st day of April, 1983 or the 1st day of
April, 1984 or the 1st day of April, 1985 or the 1st day of April, 1986 or the
1st day of April, 1987,
(d)
the loss so
computed for the previous year relevant to the assessment year commencing on
the 1st day of April, 1983, to the extent, if any, such loss has not been set
off against the agricultural income for the previous year relevant to the
assessment year commencing on the 1st day of April, 1984 or the 1st day of
April, 1985 or the 1st day of April, 1986 or the 1st day of April, 1987,
(e)
the loss so
computed for the previous year relevant to the assessment year commencing on
the 1st day of April, 1984, to the extent, if any, such loss has not been set
off against the agricultural income for the previous year relevant to the
assessment year commencing on the 1st day of April, 1985 or the 1st day of
April, 1986 or the 1st day of April, 1987,
?
(f)
the loss so
computed for the previous year relevant to the assessment year commencing on
the 1st day of April, 1985, to the extent, if any, such loss has not been set
off against the agricultural income for the previous year relevant to the
assessment year commencing on the 1st day of April, 1986 or the 1st day of
April, 1987,
(g)
the loss so
computed for the previous year relevant to the assessment year commencing on
the 1st day of April, 1986, to the extent, if any, such loss has not been set
off against the agricultural income for the previous year relevant to the
assessment year commencing on the 1st day of April, 1987, and
(h)
the loss so
computed for the previous year relevant to the assessment year commencing on
the 1st day of April, 1987 shall be set off against the agricultural income of
the assessee for the previous year relevant to the assessment year commencing
on the 1st day of April, 1988.
(2) ??Where the assessee has, in
the previous year relevant to the assessment year commencing on the 1st day of
April, 1989 or, if by virtue of any provision of the Income-tax Act, income-tax
is to be charged in respect of the income of a period other than that previous
year, in such other period, any agricultural income and the net result of the
computation of the agricultural income of the assessee for any one or more of
the previous years relevant to the assessment years commencing on the 1st day
of April, 1981 or the 1st day of April, 1982 or the 1st day of April, 1983 or
the 1st day of April, 1984 or the 1st day of April, 1985 or the 1st day of
April, 1986 or the 1st day of April, 1987 or the 1st day of April, 1988, is a
loss, then, for the purposes of sub-section (8) of section 2 of this Act,
-
(i)
the loss so
computed for the previous year relevant to the assessment year commencing on
the 1st day of April, 1981, to the extent, if any, such loss has not been set
off against the agricultural income for the previous year relevant to the assessment
year commencing on the 1st day of April, 1982 or the 1st day of April, 1983 or
the 1st day of April, 1984 or the 1st day of April, 1985 or the 1st day of
April, 1986 or the 1st day of April, 1987 or the 1st day of April, 1988,
(ii)
the loss so
computed for the previous year relevant to the assessment year commencing on
the 1st day of April, 1982, to the extent, if any, such loss has not been set
off against the agricultural income for the previous year relevant to the
assessment year commencing on the 1st day of April, 1983 or the 1st day of
April, 1984 or the 1st day of April, 1985 or the 1st day of April, 1986 or the
1st day of April, 1987 or the 1st day of April, 1988,
(iii)
the loss so
computed for the previous year relevant to the assessment year commencing on
the 1st day of April, 1983, to the extent, if any, such loss has not been set
off against the agricultural income for the previous year relevant to the
assessment year commencing on the 1st day of April, 1984 or the 1st day of
April, 1985 or the 1st day of April, 1986 or the 1st day of April, 1987 or the
1st day of April, 1988,
(iv)
the loss so
computed for the previous year relevant to the assessment year commencing on
the 1st day of April, 1984, to the extent, if any, such loss has not been set
off against the agricultural income for the previous year relevant to the
assessment year commencing on the 1st day of April, 1985 or the 1st day of
April, 1986 or the 1st day of April, 1987 or the 1st day of April, 1988,
?
(v)
the loss so
computed for the previous year relevant to the assessment year commencing on
the 1st day of April, 1985, to the extent, if any, such loss has not been set
off against the agricultural income for the previous year relevant to the
assessment year commencing on the 1st day of April, 1986 or the 1st day of
April, 1987 or the 1st day of April, 1988,
(vi)
the loss so
computed for the previous year relevant to the assessment year commencing on
the 1st day of April, 1986, to the extent, if any, such loss has not been set
off against the agricultural income for the previous year relevant to the
assessment year commencing on the 1st day of April, 1987 or the 1st day of
April, 1988,
(vii)
the loss so
computed for the previous year relevant to the assessment year commencing on
the 1st day of April, 1987, to the extent, if any, such loss has not been set
off against the agricultural income for the previous year relevant to the
assessment year commencing on the 1st day of April, 1988, and
(viii)
the loss so
computed for the previous year relevant to the assessment year commencing on
the 1st day of April, 1988 shall be set off against the agricultural income of
the assessee for the previous year relevant to the assessment year commencing
on the 1st day of April, 1989.
(3) ??Where a change has occurred
in the constitution of a firm, nothing in sub-rule (1) or sub-rule (2) shall
entitle the firm to set off so much of the loss proportionate to the share of a
retired or deceased partner computed in the manner laid down in sub-section
(1), sub-section (2) and sub-section (3) of section 67 of the
Income-tax Act as exceeds his share of profits, if any, of the previous year in
the firm, or entitle any partner to the benefit of any portion of the said loss
(computed in the manner aforesaid) which is not apportionable to him.
(4) ??Where any person deriving
any agricultural income from any source has been succeeded in such capacity by
another person, otherwise than by inheritance, nothing in sub-rule (1) or
sub-rule (2) shall entitle any person, other than the person incurring the
loss, to have it set off under sub-rule (1) or, as the case may be, sub-rule
(2).
(5) ??Notwithstanding anything
contained in this rule, no loss which has not been determined by the Assessing
Officer under the provisions of these rules or the rules contained in Part IV
of the First Schedule to the Finance (No. 2) Act, 1980 (44 of 1980), or of the
First Schedule to the Finance Act, 1981 (16 of 1981), or of the First Schedule
to the Finance Act, 1982 (14 of 1982), or of the First Schedule to the Finance
Act, 1983 (11 of 1983), or of the First Schedule to the Finance Act, 1984 (21
of 1984), or of the First Schedule to the Finance Act, 1985 (32 of 1985), or of
the First Schedule to the Finance Act, 1986 (23 of 1986), or of the First
Schedule to the Finance Act, 1987 (11 of 1987), shall be set off under sub-rule
(1) or, as the case may be, sub-rule (2).
Rule 10 -
Where the net result of the computation made in accordance with these rules is
a loss, the loss so computed shall be ignored and the net agricultural income
shall be deemed to be nil.
Rule 11 -
The provisos of the Income-tax Act relating to procedure for assessment
(including the provisions of section 288A relating to rounding off of
income) shall, with the necessary modifications, apply in relation to the
computation of the net agricultural income of the assessee as they apply in
relation to the assessment of the total income.
Rule 12 -
For the purposes of computing the net agricultural income of the assessee, the
assessing Officer shall have the same powers as he has under the Income-tax Act
for the purposes of assessment of the total income.
Statement of Objects and Reasons - FINANCE ACT, 1988
STATEMENT OF OBJECTS AND REASONS
The object
of the Bill is to give effect to the financial proposals of the Central
Government for the financial year 1988-89, The notes on clauses explain the
various provisions contained in the Bill.