Section 61 - Revocable transfer of assets

All income arising to any person by virtue of a revocable transfer of assets shall be chargeable to income-tax as the income of the transferor and shall be included in his total income.

Section 62 - Transfer irrevocable for a specified period

1. The provisions of section 61 shall not apply to any income arising to any person by virtue of a transfer -

1. by way of trust which is not revocable during the lifetime of the beneficiary, and, in the case of any other transfer, which is not revocable during the lifetime of the transferee; or

2. made before the 1st day of April, 1961, which is not revocable for a period exceeding six years:

Provided that the transferor derives no direct or indirect benefit from such income in either case.

2. Notwithstanding anything contained in sub-section (1), all income arising to any person by virtue of any such transfer shall be chargeable to income-tax as the income of the transferor as and when the power to revoke the transfer arises, and shall then be included in his total income.

Section 63 - Transfer and revocable transfer defined

For the purposes of sections 60, 61 and 62 and of this section, -

1. a transfer shall be deemed to be revocable if -

1. it contains any provision for the re-transfer directly or indirectly of the whole or any part of the income or assets to the transferor, or

2. it, in any way, gives the transferor a right to re-assume power directly or indirectly over the whole or any part of the income or assets;

2. “transfer” includes any settlement, trust, covenant, agreement or arrangement.

Section 64 - Income of individual to include income of spouse minor child etc

1. In computing the total income of any individual, there shall be included all such income as arises directly or indirectly -

1. 1[***];

2. to the spouse of such individual by way of salary, commission, fees or any other form of remuneration whether in cash or in kind from a concern in which such individual has a substantial interest:

Provided that nothing in this clause shall apply in relation to any income arising to the spouse where the spouse possesses technical or professional qualifications and the income is solely attributable to the application of his or her technical or professional knowledge and experience;

3. [***]2;

4. subject to the provisions of clause (i) of section 27, to the spouse of such individual from assets transferred directly or indirectly to the spouse by such individual otherwise than for adequate consideration or in connection with an agreement to live apart;

5. [***]3;

6. to the son’s wife, of such individual, from assets transferred directly or indirectly on or after the 1st day of June, 1973, to the son’s wife by such individual otherwise than for adequate consideration;

7. to any person or association of persons from assets transferred directly or indirectly otherwise than for adequate consideration to the person or association of persons by such individual, to the extent to which the income from such assets is for the immediate or deferred benefit of his or her spouse; and

8. to any person or association of persons from assets transferred directly or indirectly on or after the 1st day of June, 1973, otherwise than for adequate consideration, to the person or association of persons by such individual, to the extent to which the income from such assets is for the immediate or deferred benefit of his son’s wife.

Explanation 1: For the purposes of clause (ii), the individual in computing whose total income the income referred to in that clause is to be included, shall be the husband or wife whose total income (excluding the income referred to in that clause) is greater; and where any such income is once included in the total income of either spouse, any such income arising in any succeeding year shall not be included in the total income of the other spouse unless the Assessing Officer is satisfied, after giving that spouse an opportunity of being heard, that it is necessary so to do.

Explanation 2: For the purposes of clause (ii) an individual shall be deemed to have a substantial interest in a concern “

1. in a case where the concern is a company, if its shares (not being shares entitled to a fixed rate of dividend whether with or without a further right to participate in profits) carrying not less than twenty per cent of the voting power are, at any time during the previous year, owned beneficially by such person or partly by such person and partly by one or more of his relatives;

2. in any other case, if such person is entitled, or such person and one or more of his relatives are entitled in the aggregate, at any time during the previous year, to not less than twenty per cent of the profits of such concern.

Explanation 2A: [Omitted by the Finance Act, 1992, with effect from 1st April, 1993.]

Explanation 3: For the purposes of clauses (iv) and (vi), where the assets transferred directly or indirectly by an individual to his spouse or son’s wife (hereafter in this Explanation referred to as “the transferee”) are invested by the transferee, “

1. in any business, such investment being not in the nature of contribution of capital as a partner in a firm or, as the case may be, for being admitted to the benefits of partnership in a firm, that part of the income arising out of the business to the transferee in any previous year, which bears the same proportion to the income of the transferee from the business as the value of the assets aforesaid as on the first day of the previous year bears to the total investment in the business by the transferee as on the said day;

2. in the nature of contribution of capital as a partner in a firm, that part of the inteòdst receivable by the transædòde from the firm in any previous year, which bears the same proportion to the interest receivable by the transferee from the firm as the value of investment aforesaid as on the first day of the previous year bears to the total investment by way of capital contribution as a partner in the firm as on the said day, shall be included in the total income of the individual in that previous year.

(1A) In computing the total income of any individual, there shall be included all such income as arises or accrues to his minor child, not being a minor child suffering from any disability of the nature specified in section 80U:

Provided that nothing contained in this sub-section shall apply in respect of such income as arises or accrues to the minor child on account of any “

1. manual work done by him; or

2. activity involving application of his skill, talent or specialised knowledge and experience.

Explanation: For the purposes of this sub-section, the income of the minor child shall be included, “

1. where the marriage of his parents subsists, in the income of that parent whose total income (excluding the income includible under this sub-section) is greater; or

2. where the marriage of his parents does not subsist, in the income of that parent who maintains the minor child in the previous year, and where any such income is once included in the total income of either parent, any such income arising in any succeeding year shall not be included in the total income of the other parent, unless the Assessing Officer is satisfied, after giving that parent an opportunity of being heard, that it is necessary so to do.

2. Where, in the case of an individual being a member of a Hindu undivided family, any property having been the separate property of the individual has, at any time after the 31st day of December, 1969, been converted by the individual into property belonging to the family through the act of impressing such separate property with the character of property belonging to the family or throwing it into the common stock of the family or been transferred by the individual, directly or indirectly, to the family otherwise than for adequate consideration (the property so converted or transferred being hereinafter referred to as the converted property), then, notwithstanding anything contained in any other provision of this Act or in any other law for the time being in force, for the purpose of computation of the total income of the individual under this Act for any assessment year commencing on or after the 1st day of April, 1971, “

   1. the individual shall be deemed to have transferred the converted property, through the family, to the members of the family for being held by them jointly;

   2. the income derived from the converted property or any part thereof shall be deemed to arise to the individual and not to the family;

   3. where the converted property has been the subject matter of a partition (whether partial or total) amongst the members of the family, the income derived from such converted property as is received by the spouse on partition shall be deemed to arise to the spouse from assets transferred indirectly by the individual to the spouse and the provisions of sub-section (1) shall, so far as may be, apply accordingly:

Provided that the income referred to in clause (b) or clause (c) shall, on being included in the total income of the individual, be excluded from the total income of the family or, as the case may be, the spouse of the individual.

Explanation 1: For the purposes of sub-section (2), - “property” includes any interest in property, movable or immovable, the proceeds of sale thereof and any money or investment for the time being representing the proceeds of sale thereof and where the property is converted into any other property by any method, such other property.

Explanation 2: For the purposes of this section, “income” includes loss.

Section 65 - Liability of person in respect of income included in the income of another person

Where, by reason of the provisions contained in this Chapter or in clause (i) of section 27, the income from any asset or from membership in a firm of a person other than the assessee is included in the total income of the assessee, the person in whose name such asset stands or who is a member of the firm shall, notwithstanding anything to the contrary contained in any other law for the time being in force, be liable, on the service of a notice of demand by the Assessing Officer in this behalf, to pay that portion of the tax levied on the assessee which is attributable to the income so included, and the provisions of Chapter XVIID shall, so far as may be, apply accordingly:

Provided that where any such asset is held jointly by more than one person, they shall be jointly and severally liable to pay the tax which is attributable to the income from the assets so included.

Section 66 - Total income

In computing the total income of an assessee, there shall be included all income on which no income-tax is payable under Chapter VII.

Section 67 Method of computing a partners share in the income of the firm

4[***]

Section 67A - Method of computing a members share in income of association of persons or body of individuals

1. In computing the total income of an assessee who is a member of an association of persons or a body of individuals wherein the shares of the members are determinate and known [other than a company or a co-operative society or a society registered under the Societies Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act in force in any part of India], whether the net result of the computation of the total income of such association or body is a profit or a loss, his share (whether a net profit or net loss) shall be computed as follows, namely:

1. any interest, salary, bonus, commission or remuneration by whatever name called, paid to any member in respect of the previous year shall be deducted from the total income of the association or body and the balance ascertained and apportioned among the members in the proportions in which they are entitled to share in the income of the association or body;

2. where the amount apportioned to a member under clause (a) is a profit, any interest, salary, bonus, commission or remuneration aforesaid paid to the member by the association or body in respect of the previous year shall be added to that amount, and the result shall be treated as the member’s share in the income of the association or body;

3. where the amount apportioned to a member under clause (a) is a loss, any interest, salary, bonus, commission or remuneration aforesaid paid to the member by the association or body in respect of the previous year shall be adjusted against that amount, and the result shall be treated as the member’s share in the income of the association or body.

   2. The share of a member in the income or loss of the association or body, as computed under sub-section (1), shall, for the purposes of assessment, be apportioned under the various heads of income in the same manner in which the income or loss of the association or body has been determined under each head of income.

   3. Any interest paid by a member on capital borrowed by him for the purposes of investment in the association or body shall, in computing his share chargeable under the head “Profits and gains of business or profession” in respect of his share in the income of the association or body, be deducted from his share.

Explanation: In this section, “paid” has the same meaning as is assigned to it in clause (2) of section 43.

Section 68 - Cash credits

Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year.

5[Provided that where the sum so credited consists of loan or borrowing or any such amount, by whatever name called, any explanation offered by such assessee shall be deemed to be not satisfactory, unless,

1. the person in whose name such credit is recorded in the books of such assessee also offers an explanation about the nature and source of such sum so credited; and

2. such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory:

Provided further that] where the assessee is a company, (not being a company in which the public are substantially interested) and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such assessee-company shall be deemed to be not satisfactory, unless--

1. the person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and

2. such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory:

6[Provided also] nothing contained in the first proviso 7[first proviso or second proviso] shall apply if the person, in whose name the sum referred to therein is recorded, is a venture capital fund or a venture capital company as referred to in clause (23FB) of section 10.]

Section 69 - Unexplained investments

Where in the financial year immediately preceding the assessment year the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year.

Section 69A - Unexplained money etc

Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery, or other valuable article may be deemed to be the income of the assessee for such financial year.

Section 69B - Amount of investments etc not fully disclosed in books of account

Where in any financial year the assessee has made investments or is found to be the owner of any bullion, jewellery or other valuable article, and the Assessing Officer finds that the amount expended on making such investments or in acquiring such bullion, jewellery or other valuable article exceeds the amount recorded in this behalf in the books of account maintained by the assessee for any source of income, and the assessee offers no explanation about such excess amount or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the excess amount may be deemed to be the income of the assessee for such financial year.

Section 69C - Unexplained expenditure etc

Where in any financial year an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part thereof, or the explanation, if any, offered by him is not, in the opinion of the Assessing Officer, satisfactory, the amount covered by such expenditure or part thereof, as the case may be, may be deemed to be the income of the assessee for such financial year.

8 [Provided that, notwithstanding anything contained in any other provision of this Act, such unexplained expenditure which is deemed to be the income of the assessee shall not be allowed as a deduction under any head of income.]

Section 69D - Amount borrowed or repaid on hundi

Where any amount is borrowed on a hundi from, or any amount due thereon is repaid to, any person otherwise than through an account payee cheque drawn on a bank, the amount so borrowed or repaid shall be deemed to be the income of the person borrowing or repaying the amount aforesaid for the previous year in which the amount was borrowed or repaid, as the case may be:

Provided that, if in any case any amount borrowed on a hundi has been deemed under the provisions of this section to be the income of any person, such person shall not be liable to be assessed again in respect of such amount under the provisions of this section on repayment of such amount.

Explanation: For the purposes of this section, the amount repaid shall include the amount of interest paid on the amount borrowed.

Section 70 - Set off of loss from one source against income from another source under the same head of income

9[(1) Save as otherwise provided in this Act, where the net result for any assessment year in respect of any source falling under any head of income, other than “Capital gains”, is a loss, the assessee shall be entitled to have the amount of such loss set-off against his income from any other source under the same head.

(2) Where the result of the computation made for any assessment year under sections 48 to 55 in respect of any short-term capital asset is a loss, the assessee shall be entitled to have the amount of such loss set-off against the income, if any, as arrived at under a similar computation made for the assessment year in respect of any other capital asset.

(3) Where the result of the computation made for any assessment year under sections 48 to 55 in respect of any capital asset (other than a short-term capital asset) is a loss, the assessee shall be entitled to have the amount of such loss set-off against the income, if any, as arrived at under a similar computation made for the assessment year in respect of any other capital asset not being a short-term capital asset.]

Section 71 - Set off of loss from one head against income from another

1. Where in respect of any assessment year the net result of the computation under any head of income other than “Capital gains”, is a loss and the assessee has no income under the head “Capital gains”, he shall, subject to the provisions of this Chapter, be entitled to have the amount of such loss set-off against his income, if any, assessable for that assessment year under any other head.

2. Where in respect of any assessment year, the net result of the computation under any head of income, other than “Capital gains”, is a loss and the assessee has income assessable under the head “Capital gains”, such loss may, subject to the provisions of this Chapter, be set-off against his income, if any, assessable for that assessment year under any head of income including the head “Capital gains” (whether relating to short-term capital assets or any other capital assets).

10 [(2A) Notwithstanding anything contained in sub-section (1) or sub-section (2), where in respect of any assessment year, the net result of the computation under the head “Profits and gains of business or profession” is a loss and the assessee has income assessable under the head “Salaries”, the assessee shall not be entitled to have such loss set-off against such income.]

3. Where in respect of any assessment year, the net result of the computation under the head “Capital gains” is a loss and the assessee has income assessable under any other head of income, the assessee shall not be entitled to have such loss set-off against income under the other head.

11[(3A) Notwithstanding anything contained in sub-section (1) or sub-section (2), where in respect of any assessment year, the net result of the computation under the head "Income from house property" is a loss and the assessee has income assessable under any other head of income, the assessee shall not be entitled to set off such loss, to the extent the amount of the loss exceeds two lakh rupees, against income under the other head.]

4. Where the net result of the computation under the head “Income from house property” is a loss, in respect of the assessment years commencing on the 1st day of April, 1995 and the 1st day of April, 1996, such loss shall be first set-off under sub-sections (1) and (2) and thereafter the loss referred to in section 71A shall be set-off in the relevant assessment year in accordance with the provisions of that section.

Section 71A - Transitional provisions for set off of loss under the head Income from house property

Where in respect of the assessment year commencing on the 1st day of April, 1993 or the 1st day of April, 1994, the net result of the computation under the head “Income from house property” is a loss, such loss in so far as it relates to interest on borrowed capital referred to in clause (vi) of sub-section (1) of section 24 and to the extent it has not been set-off shall be carried forward and set-off in the assessment year commencing on the 1st day of April, 1995, and the balance, if any, in the assessment year commencing on the 1st day of April, 1996, against the income under any head.

Section 71B - Carry forward and set off of loss from house property

12[Where for any assessment year the net result of computation under the head “Income from house property” is a loss to the assessee and such loss cannot be or is not wholly set-off against income from any other head of income in accordance with the provisions of section 71, so much of the loss as has not been so set-off or where he has no income under any other head, the whole loss shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year and -

1. be set-off against the income from house property assessable for that assessment year, and

2. the loss, if any, which has not been set-off wholly, the amount of loss not so set-off shall be carried forward to the following assessment year, not being more than eight assessment years immediately succeeding the assessment year for which the loss was first computed.]

Section 72 - Carry forward and set off of business losses

1. Where for any assessment year, the net result of the computation under the head “Profits and gains of business or profession” is a loss to the assessee, not being a loss sustained in a speculation business, and such loss cannot be or is not wholly set-off against income under any head of income in accordance with the provisions of section 71, so much of the loss as has not been so setoff or, where he has no income under any other head, the whole loss shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year, and -

1. it shall be set-off against the profits and gains, if any, of any business or profession carried on by him and assessable for that assessment year:

13 [Proviso omitted by the Finance Act, 1999, with effect from 1st April, 2000]; and

2. if the loss cannot be wholly so set-off, the amount of loss not so setoff shall be carried forward to the following assessment year and so on:

Provided that where the whole or any part of such loss is sustained in any such business as is referred to in section 33B which is discontinued in the circumstances specified in that section, and thereafter, at any time before the expiry of the period of three years referred to in that section, such business is re-established, reconstructed or revived by the assessee, so much of the loss as is attributable to such business shall be carried forward to the assessment year relevant to the previous year in which the business is so re-established, reconstructed or revived, and -

1. it shall be set-off against the profits and gains, if any, of that business or any other business carried on by him and assessable for that assessment year; and

2. if the loss cannot be wholly so set-off, the amount of loss not so setoff shall, in case the business so re-established, reconstructed or revived continues to be carried on by the assessee, be carried forward to the following assessment year and so on for seven assessment years immediately succeeding.

   2. Where any allowance or part thereof is, under sub-section (2) of section 32 or sub-section (4) of section 35, to be carried forward, effect shall first be given to the provisions of this section.

   3. No loss (other than the loss referred to in the proviso to sub-section (1) of this section) shall be carried forward under this section for more than eight assessment years immediately succeeding the assessment year for which the loss was first computed.

Section 72A - Provisions relating to carry forward and set off of accumulated loss and unabsorbed depreciation allowance in amalgamation or demerger etc

14 [15 [(1) Where there has been an amalgamation of “

1. a company owning an industrial undertaking or a ship or a hotel with another company; or

2. a banking company referred to in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949) with a specified bank; or

   16[(c) one or more public sector company or companies with one or more public sector company or companies; or

   (d) an erstwhile public sector company with one or more company or companies, if the share purchase agreement entered into under strategic disinvestment restricted immediate amalgamation of the said public sector company and the amalgamation is carried out within five year from the end of the previous year in which the restriction on amalgamation in the share purchase agreement ends;]

   then, notwithstanding anything contained in any other provision of this Act, the accumulated loss and the unabsorbed depreciation of the amalgamating company shall be deemed to be the loss or, as the case may be, allowance for unabsorbed depreciation of the amalgamated company for the previous year in which the amalgamation was effected, and other provisions of this Act relating to set off and carry forward of loss and allowance for depreciation shall apply accordingly:

   17[Provided that the accumulated loss and the unabsorbed depreciation of the amalgamating company, in case of an amalgamation referred to in clause (d), which is deemed to be the loss or, as the case may be, the allowance for unabsorbed depreciation of the amalgamated company, shall not be more than the accumulated loss and unabsorbed depreciation of the public sector company as on the date on which the public sector company ceases to be a public sector company as a result of strategic disinvestment.

   Explanation.—For the purposes of clause (d),—

1. “control” shall have the same meaning as assigned to in clause (27) of Section 2 of the Companies Act, 2013 (18 of 2013);

2. “erstwhile public sector company” means a company which was a public sector company in earlier previous years and ceases to be a public sector company by way of strategic disinvestment by the Government;

3. “strategic disinvestment” means sale of shareholding by the Central Government or any State Government in a public sector company which results in reduction of its shareholding to below fifty-one per cent. along with transfer of control to the buyer.]

18 [(2) Notwithstanding anything contained in sub-section (1), the accumulated loss shall not be set-off or carried forward and the unabsorbed depreciation shall not be allowed in the assessment of the amalgamated company unless “

1. the amalgamating company “

1. has been engaged in the business, in which the accumulated loss occurred or depreciation remains unabsorbed, for three or more years;

2. has held continuously as on the date of the amalgamation at least three-fourths of the book value of fixed assets held by it two years prior to the date of amalgamation;

   2. the amalgamated company-

      1. holds continuously for a minimum period of five years from the date of amalgamation at least three-fourths of the book value of fixed assets of the amalgamating company acquired in a scheme of amalgamation;

      2. continues the business of the amalgamating company for a minimum period of five years from the date of amalgamation;

      3. fulfils such other conditions as may be prescribed19 to ensure the revival of the business of the amalgamating company or to ensure that the amalgamation is for genuine business purpose.]

(3) In a case where any of the conditions laid down in sub-section (2) are not complied with, the set-off of loss or allowance of depreciation made in any previous year in the hands of the amalgamated company shall be deemed to be the income of the amalgamated company chargeable to tax for the year in which such conditions are not complied with.

(4) Notwithstanding anything contained in any other provisions of this Act, in the case of a demerger, the accumulated loss and the allowance for unabsorbed depreciation of the demerged company shall “

1. where such loss or unabsorbed depreciation is directly relatable to the undertakings transferred to the resulting company, be allowed to be carried forward and set-off in the hands of the resulting company;

2. where such loss or unabsorbed depreciation is not directly relatable to the undertakings transferred to the resulting company, be apportioned between the demerged company and the resulting company in the same proportion in which the assets of the undertakings have been retained by the demerged company and transferred to the resulting company, and be allowed to be carried forward and set-off in the hands of the demerged company or the resulting company, as the case may be.

(5) The Central Government may, for the purposes of this Act, by notification in the Official Gazette, specify such conditions as it considers necessary to ensure that the demerger is for genuine business purposes.

(6) Where there has been reorganisation of business, whereby, a firm is succeeded by a company fulfilling the conditions laid down in clause (xiii) of section 47 or a proprietary concern is succeeded by a company fulfilling the conditions laid down in clause (xiv) of section 47, then, notwithstanding anything contained in any other provision of this Act, the accumulated loss and the unabsorbed depreciation of the predecessor firm or the proprietary concern, as the case may be, shall be deemed to be the loss or allowance for depreciation of the successor company for the purpose of previous year in which business reorganisation was effected and other provisions of this Act relating to set-off and carry forward of loss and allowance for depreciation shall apply accordingly:

Provided that if any of the conditions laid down in the proviso to clause (xiii) or the proviso to clause (xiv) to section 47 are not complied with, the set-off of loss or allowance of depreciation made in any previous year in the hands of the successor company, shall be deemed to be the income of the company chargeable to tax in the year in which such conditions are not complied with.

20 [(6A) Where there has been reorganisation of business whereby a private company or unlisted public company is succeeded by a limited liability partnership fulfilling the conditions laid down in the proviso to clause (xiiib) of section 47, then, notwithstanding anything contained in any other provision of this Act, the accumulated loss and the unabsorbed depreciation of the predecessor company, shall be deemed to be the loss or allowance for depreciation of the successor limited liability partnership for the purpose of the previous year in which business reorganisation was effected and other provisions of this Act relating to set off and carry forward of loss and allowance for depreciation shall apply accordingly :

Provided that if any of the conditions laid down in the proviso to clause (xiiib) of section 47 are not complied with, the set off of loss or allowance of depreciation made in any previous year in the hands of the successor limited liability partnership, shall be deemed to be the inome of the limited liability partnership chargeable to tax in the year in which such conditions are not complied with.]

 (7) For the purposes of this section, “

21 [(a) "accumulated loss" means so much of the loss of the predecessor firm or the proprietary concern or the private company or unlisted public company before conversion into limited liability partnership or the amalgamating company or the demerged company, as the case may be, under the head "Profits and gains of business or profession" (not being a loss sustained in a speculation business) which such predecessor firm or the proprietary concern or the company or amalgamating company or demerged company, would have been entitled to carry forward and set off under the provisions of section 72 if the reorganisation of business or conversion or amalgamation or demerger had not taken place.]

22 [(aa) “industrial undertaking” means any undertaking which is engaged in -

1. the manufacture or processing of goods; or

2. the manufacture of computer software; or

3. the business of generation or distribution of electricity or any other form of power; or

23 [(iiia) the business of providing telecommunication services, whether basic or cellular, including radio paging, domestic satellite service, network of trunking, broadband network and internet services; or]

4. mining; or

5. the construction of ships, aircrafts or rail systems;]

24 [(b) "unabsorbed depreciation" means so much of the allowance for depreciation of the predecessor firm or the proprietary concern or the private company or unlisted public company before conversion into limited liability partnership or the amalgamating company or the demerged company, as the case may be, which remains to be allowed and which would have been allowed to the predecessor firm or the proprietary concern or the company or amalgamating company or demerged company, as the case may be, under the provisions of this Act, if the reorganisation of business or conversion or amalgamation or demerger had not taken place;]] 

25 [(c) “specified bank” means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955) or a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959) or a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970) or under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980).] 

Section 72AA Carry forward and set off of accumulated loss and unabsorbed depreciation allowance in scheme of amalgamation in certain cases

Notwithstanding anything contained in sub-clauses (i) to (iii) of clause (1B) of section 2 or section 72A, where there has been an amalgamation of -

1. one or more banking company with any other banking institution under a scheme sanctioned and brought into force by the Central Government under sub-section (7) of section 45 of the Banking Regulation Act, 1949; (10 of 1949); or

2. one or more corresponding new bank or banks with any other corresponding new bank under a scheme brought into force by the Central Government under section 9 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970) or under section 9 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980; (40 of 1980) or both, as the case may be; or

3. one or more Government company or companies with any other Government company under a scheme sanctioned and brought into force by the Central Government under section 16 of the General Insurance Business (Nationalisation) Act, 1972, (57 of 1972);

the accumulated loss and the unabsorbed depreciation of such banking company or companies or amalgamating corresponding new bank or banks or amalgamating Government company or companies shall be deemed to be the loss or, as the case may be, allowance for depreciation of such banking institution or amalgamated corresponding new bank or amalgamated Government company for the previous year in which the scheme of amalgamation was brought into force and other provisions of this Act relating to set off and carry forward of loss and allowance for depreciation shall apply accordingly.

Explanation. - For the purposes of this section,-

1. "accumulated loss" means so much of the loss of the amalgamating banking company or companies or amalgamating corresponding new bank or banks or amalgamating Government company or companies under the head "Profits and gains of business or profession" (not being a loss sustained in a speculation business) which such amalgamating banking company or companies or amalgamating corresponding new bank or banks or amalgamating Government company or companies, would have been entitled to carry forward and set off under the provisions of section 72, if the amalgamation had not taken place;

2. "banking company" shall have the meaning assigned to it in clause (c) of section 5 of the Banking Regulation Act, 1949; 10 of 1949.

3. "banking institution" shall have the meaning assigned to it in sub-section (15) of section 45 of the Banking Regulation Act, 1949; 10 of 1949.

4. "corresponding new bank" shall have the meaning assigned to it in clause (d) of section 2 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970); or, as the case may be, clause (b) of section (2) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980; 40 of 1980.

5. "general insurance business" shall have the meaning assigned to it in clause (g) of section 3 of the General Insurance Business (Nationalisation) Act, 1972; 57 of 1972.

6. "Government company" means a Government company as defined in clause (45) of section 2 of the Companies Act, 2013, (18 of 2013); which is engaged in the general insurance business and which has come into existence by operation of section 4 or section 5 or section 16 of the General Insurance Business (Nationalisation) Act, 1972; (57 of 1972).

7. "unabsorbed depreciation" means so much of the allowance for depreciation of the amalgamating banking company or companies or amalgamating corresponding new bank or banks or amalgamating Government company or companies which remains to be allowed and which would have been allowed to such banking company or companies or amalgamating corresponding new bank or banks or amalgamating Government company or companies, if the amalgamation had not taken place.] 26

Section 72AB - Provisions relating to carry forward and set off of accumulated loss and unabsorbed depreciation allowance in business reorganisation of co-operative banks

27 [(1) The assessee, being a successor co-operative bank, shall, in a case where the amalgamation has taken place during the previous year, be allowed to set off the accumulated loss and the unabsorbed depreciation, if any, of the predecessor co-operative bank as if the amalgamation had not taken place, and all the other provisions of this Act relating to set off and carry forward of loss and allowance for depreciation shall apply accordingly.

(2) The provisions of this section shall apply if -

1. the predecessor co-operative bank -

1. has been engaged in the business of banking for three or more years; and

2. has held at least three-fourths of the book value of fixed assets as on the date of the business reorganisation, continuously for two years prior to the date of business reorganisation;

2. the successor co-operative bank -

   1. holds at least three-fourths of the book value of fixed assets of the predecessor co-operative bank acquired through business reorganisation, continuously for a minimum period of five years immediately succeeding the date of business reorganisation;

   2. continues the business of the predecessor co-operative bank for a minimum period of five years from the date of business reorganisation; and

3. fulfils such other conditions as may be prescribed to ensure the revival of the business of the predecessor co-operative bank or to ensure that the business reorganisation is for genuine business purpose.

(3) The amount of set-off of the accumulated loss and unabsorbed depreciation, if any, allowable to the assessee being a resulting co-operative bank shall be, -

1. the accumulated loss or unabsorbed depreciation of the demerged co-operative bank if the whole of the amount of such loss or unabsorbed depreciation is directly relatable to the undertakings transferred to the resulting co-operative bank; or

2. the amount which bears the same proportion to the accumulated loss or unabsorbed depreciation of the demerged co-operative bank as the assets of the undertaking transferred to the resulting cooperative bank bears to the assets of the demerged co-operative bank if such accumulated loss or unabsorbed depreciation is not directly relatable to the undertakings transferred to the resulting co-operative bank.

(4) The Central Government may, for the purposes of this section, by notification in the Official Gazette, specify such other conditions as it considers necessary, other than those prescribed under sub-clause (iii) of clause (b) of sub-section (2), to ensure that the business reorganisation is for genuine business purposes.

(5) The period commencing from the beginning of the previous year and ending on the date immediately preceding the date of business reorganisation, and the period commencing from the date of such business reorganisation and ending with the previous year shall be deemed to be two different previous years for the purposes of set off and carry forward of loss and allowance for depreciation.

(6) In a case where the conditions specified in sub-section (2) or notified under sub-section (4) are not complied with, the set off of accumulated loss or unabsorbed depreciation allowed in any previous year to the successor co-operative bank shall be deemed to be the income of the successor cooperative bank chargeable to tax for the year in which the conditions are not complied with.

(7) For the purposes of this section, -

1. “accumulated loss” means so much of loss of the amalgamating cooperative bank or the demerged co-operative bank, as the case may be, under the head “Profits and gains of business or profession” (not being a loss sustained in a speculation business) which such amalgamating co-operative bank or the demerged co-operative bank, would have been entitled to carry forward and set-off under the provisions of section 72 as if the business reorganisation had not taken place;

2. “unabsorbed depreciation” means so much of the allowance for depreciation of the amalgamating co-operative bank or the demerged co-operative bank, as the case may be, which remains to be allowed and which would have been allowed to such bank as if the business reorganisation had not taken place:

3. the expressions “amalgamated co-operative bank”, “amalgamating cooperative bank”, “amalgamation”, “business reorganisation”, “cooperative bank”, “demerged cooperative bank”, “demerger”, “predecessor co-operative bank”, “successor co-operative bank” and “resulting cooperative bank” shall have the meanings respectively assigned to them in section 44DB.]

Section 73 - Losses in speculation business

1. Any loss, computed in respect of a speculation business carried on by the assessee, shall not be set-off except against profits and gains, if any, of another speculation business.

2. Where for any assessment year any loss computed in respect of a speculation business has not been wholly set-off under sub-section (1), so much of the loss as is not so set-off or the whole loss where the assessee had no income from any other speculation business, shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year, and “

1. it shall be set-off against the profits and gains, if any, of any speculation business carried on by him assessable for that assessment year; and

2. if the loss cannot be wholly so set-off, the amount of loss not so set-off shall be carried forward to the following assessment year and so on.

   4. In respect of allowance on account of depreciation or capital expenditure on scientific research, the provisions of sub-section (2) of section 72 shall apply in relation to speculation business as they apply in relation to any other business.

   5. No loss shall be carried forward under this section for more than 28 [four assessment years] immediately succeeding the assessment year for which the loss was first computed.

Explanation: Where any part of the business of a company (other than a company whose gross total income consists mainly of income which is chargeable under the heads “Interest on securities”, “Income from house property”, “Capital gains” and “Income from other sources”, or a company 29 [the principal business of which is the business of trading in shares or banking] or the granting of loans and advances) consists in the purchase and sale of shares of other companies, such company shall, for the purposes of this section, be deemed to be carrying on a speculation business to the extent to which the business consists of the purchase and sale of such shares.

Section 73A - Carry forward and set off of losses by specified business

30 [(1) Any loss, computed in respect of any specified business referred to in section 35AD shall not be set off except against profits and gains, if any, of any other specified business.

(2) Where for any assessment year any loss computed in respect of the specified business referred to in sub-section (1) has not been wholly set off under subsection (1), so much of the loss as is not so set off or the whole loss where the assessee has no income from any other specified business, shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year, and -

1. it shall be set off against the profits and gains, if any, of any specified business carried on by him assessable for that assessment year; and

2. if the loss can not be wholly so set off, the amount of loss not so set off shall be carried forward to the following assessment year and so on.]

Section 74 - Losses under the head Capital gains

31 [(1) Where in respect of any assessment year, the net result of the computation under the head “Capital gains” is a loss to the assessee, the whole loss shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year, and -

1. in so far as such loss relates to a short-term capital asset, it shall be set-off against income, if any, under the head “Capital gains” assessable for that assessment year in respect of any other capital asset;

2. in so far as such loss relates to a long-term capital asset, it shall be set-off against income, if any, under the head “Capital gains” assessable for that assessment year in respect of any other capital asset not being a short-term capital asset;

3. if the loss cannot be wholly so set-off, the amount of loss not so setoff shall be carried forward to the following assessment year and so on.]

(2) No loss shall be carried forward under this section for more than eight assessment years immediately succeeding the assessment year for which the loss was first computed.

(3)  32[Omitted by the Finance Act, 2002, with effect from 1st April, 2003.]

Section 74A - Losses from certain specified sources falling under the head Income from other sources

(1)     and (2) [***]33

(3) In the case of an assessee, being the owner of horses maintained by him for running in horse races (such horses being hereafter in this sub-section referred to as race horses), the amount of loss incurred by the assessee in the activity of owning and maintaining race horses in any assessment year shall not be set-off against income, if any, from any source other than the activity of owning and maintaining race horses in that year and shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year, and -

1. it shall be set-off against the income, if any, from the activity of owning and maintaining race horses assessable for that assessment year:

Provided that the activity of owning and maintaining race horses is carried on by him in the previous year relevant for that assessment year; and

2. if the loss cannot be wholly so set-off, the amount of loss not so setoff shall be carried forward to the following assessment year and so on; so, however, that no portion of the loss shall be carried forward for more than four assessment years immediately succeeding the assessment year for which the loss was first computed.

Explanation: For the purposes of this sub-section -

1. “amount of loss incurred by the assessee in the activity of owning and maintaining race horses” means -

1. in a case where the assessee has no income by way of stake money, the amount of expenditure (not being in the nature of capital expenditure) laid out or expended by him wholly and exclusively for the purposes of maintaining race horses;

2. in a case where the assessee has income by way of stake money, the amount by which such income falls short of the amount of expenditure (not being in the nature of capital expenditure) laid out or expended by the assessee wholly and exclusively for the purposes of maintaining race horses;

2. “horse race” means a horse race upon which wagering or betting may be lawfully made;

3. “income by way of stake money” means the gross amount of prize money received on a race horse or race horses by the owner thereof on account of the horse or horses or any one or more of the horses winning or being placed second or in any lower position in horse races.

Section 75 - Losses of firms

Where the assessee is a firm, any loss in relation to the assessment year commencing on or before the 1st day of April, 1992, which could not be set-off against any other income of the firm and which had been apportioned to a partner of the firm but could not be set-off by such partner prior to the assessment year commencing on the 1st day of April, 1993, then such loss shall be allowed to be set-off against the income of the firm subject to the condition that the partner continues in the said firm and to be carried forward for setoff under sections 70, 71, 72, 73, 74 and 74A.

Section 76 - Omitted

34[***]

Section 77 - Omitted

35[***]

Section 78 - Carry forward and set off of losses in case of change in constitution of firm or on succession

1. Where a change has occurred in the constitution of a firm, nothing in this Chapter shall entitle the firm to have carried forward and set-off so much of the loss proportionate to the share of a retired or deceased partner as exceeds his share of profits, if any, in the firm in respect of the previous year.

2. Where any person carrying on any business or profession has been succeeded in such capacity by another person otherwise than by inheritance, nothing in this Chapter shall entitle any person other than the person incurring the loss to have it carried forward and set-off against his income.

Section 79 - Carry forward and set off of losses in the case of certain companies

1. Notwithstanding anything contained in this Chapter, where a change in shareholding has taken place during the previous year in the case of a company, not being a company in which the public are substantially interested, no loss incurred in any year prior to the previous year shall be carried forward and set off against the income of the previous year, unless on the last day of the previous year, the shares of the company carrying not less than fifty-one per cent of the voting power were beneficially held by persons who beneficially held shares of the company carrying not less than fifty-one per cent of the voting power on the last day of the year or years in which the loss was incurred-

Provided that even if the said condition is not satisfied in case of an eligible start-up as referred to in section 80-IAC, the loss incurred in any year prior to the previous year shall be allowed to be carried forward and set off against the income of the previous year if all the shareholders of such company who held shares carrying voting power on the last day of the year or years in which the loss was incurred, continue to hold those shares on the last day of such previous year and such loss has been incurred during the period of seven years beginning from the year in which such company is incorporated.

2. Nothing contained in sub-section (1) shall apply,—

1. to a case where a change in the said voting power and shareholding 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;

2. to any change in the shareholding of an Indian company which is a subsidiary of a foreign company as a result of amalgamation or demerger of a foreign company subject to the condition that fifty-one per cent shareholders of amalgamating or demerged foreign company continue to be the shareholders of the amalgamated or the resulting foreign company;

3. to a company where a change in the shareholding takes place in a previous year pursuant to a resolution plan approved under the Insolvency and Bankruptcy Code, 2016 (31 of 2016), after affording a reasonable opportunity of being heard to the jurisdictional Principal Commissioner or Commissioner;

4. to a company, and its subsidiary and the subsidiary of such subsidiary, where,—

1. the Tribunal, on an application moved by the Central Government under section 241 of the Companies Act, 2013 (18 of 2013), has suspended the Board of Directors of such company and has appointed new directors nominated by the Central Government, under section 242 of the said Act; and

2. a change in shareholding of such company, and its subsidiary and the subsidiary of such subsidiary, has taken place in a previous year pursuant to a resolution plan approved by the Tribunal under section 242 of the Companies Act, 2013 (18 of 2013) after affording a reasonable opportunity of being heard to the jurisdictional Principal Commissioner or Commissioner;

36[(e) to a company to the extent that a change in the shareholding has taken place during the previous year on account of relocation referred to in the Explanation to clauses (viiac) and (viiad) of section 47;]

37[(f) to an erstwhile public sector company subject to the condition that the ultimate holding company of such company, immediately after the completion of strategic disinvestment, continues to hold, directly or through its subsidiary or subsidiaries, at least fifty-one per cent of the voting power of such company in aggregate.]

38[(3) Notwithstanding anything contained in sub-section (2), if the condition specified in clause (f) of the said sub-section is not complied with in any previous year after the completion of strategic disinvestment, the provisions of sub-section (1) shall apply for such previous year and subsequent previous years.]

Explanation.—For the purposes of this section,—

1. a company shall be a subsidiary of another company, if such other company holds more than half in nominal value of the equity share capital of the company;

39[(ia) "erstwhile public sector company" shall have the same meaning as assigned to it in clause (ii) of the Explanation to clause (d) of sub-section (1) of section 72A;

 (ib) "strategic disinvestment" shall have the same meaning as assigned to it in clause (iii) of the Explanation to clause (d) of sub-section (1) of section 72A;]

2.   "Tribunal" shall have the meaning assigned to it in clause (90) of section 2 of the Companies Act, 2013 (18 of 2013).] 40

Section 79A No set off of losses consequent to search requisition and survey

41[Notwithstanding anything contained in this Act, where consequent to a search under section 132 or a requisition under section 132A or a survey under section 133A other than under sub-section (2A) of that section, the total income of any previous year of an assessee includes any undisclosed income, no set off, against such undisclosed income, of any loss, whether brought forward or otherwise, or unabsorbed depreciation under sub-section (2) of section 32, shall be allowed to the assessee under any provision of this Act in computing his total income for such previous year.

Explanation. For the purposes of this section, the expression “undisclosed income” means,

1. any income of the previous year represented, either wholly or partly, by any money, bullion, jewellery or other valuable article or thing or any entry in the books of account or other documents or transactions found in the course of a search under section 132 or a requisition under section 132A or a survey under section 133A other than under sub-section (2A) of that section, which has,

   1. not been recorded on or before the date of search or requisition or survey, as the case may be, in the books of account or other documents maintained in the normal course relating to such previous year; or

   2. not been disclosed to the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner before the date of search or requisition or survey, as the case may be; or

2. any income of the previous year represented, either wholly or partly, by any entry in respect of an expense recorded in the books of account or other documents maintained in the normal course relating to the previous year which is found to be false and which would not have been found to be so, had the search not been initiated or the survey not been conducted or the requisition not been made.]

Section 80 - Submission of return for losses

Notwithstanding anything contained in this Chapter, no loss which has not been determined in pursuance of a return filed in accordance with the provisions of sub-section (3) of section 139, shall be carried forward and setoff under sub-section (1) of section 72 or sub-section (2) of section 73 42[or sub-section (2)] of section 73A] or subsection (1) or sub-section (3) of section 74 or sub-section (3) of section 74A.

Section 80A - Deductions to be made in computing total income

1. In computing the total income of an assessee, there shall be allowed from his gross total income, in accordance with and subject to the provisions of this Chapter, the deductions specified in sections 80C to 80U.

2. The aggregate amount of the deductions under this Chapter shall not, in any case, exceed the gross total income of the assessee.

3. Where, in computing the total income of an association of persons or a body of individuals, any deduction is admissible under section 80G or 43 [section 80GGA or section 80GGC] or section 80HH or section 80HHA or section 80HHB or section 80HHC or section 80HHD or section 80-I or section 80-IA 44[or section 80-IB] 45 [or section 80-IC] 46 [or section 80-ID or section 80-IE] or section 80J47 or section 80JJ, no deduction under the same section shall be made in computing the total income of a member of the association of persons or body of individuals in relation to the share of such member in the income of the association of persons or body of individuals.

48 [(4) Notwithstanding anything to the contrary contained in section 10A or section 10AA or section 1 0B or section 10BA or in any provisions of this Chapter under the heading “C-Deductions in respect of certain incomes”, where, in the case of an assessee, any amount of profits and gains of an undertaking or unit or enterprise or eligible business is claimed and allowed as a deduction under any of those provisions for any assessment year, deduction in respect of, and to the extent of, such profits and gains shall not be allowed under any other provisions of this Act for such assessment year and shall in no case exceed the profits and gains of such undertaking or unit or enterprise or eligible business, as the case may be.]

49 [(5) Where the assessee fails to make a claim in his return of income for any deduction under section 10A or section 10AA or section 10B or section 10BA or under any provision of this Chapter under the heading “C.--Deductions in respect of certain incomes”, no deduction shall be allowed to him thereunder.]

50 [(6) Notwithstanding anything to the contrary contained in section 10A or section 10AA or section 10B or section 10BA or in any provisions of this Chapter under the heading “C-Deductions in respect of certain incomes”, where any goods or services held for the purposes of the undertaking or unit or enterprise or eligible business are transferred to any other business carried on by the assessee or where any goods or services held for the purposes of any other business carried on by the assessee are transferred to the undertaking or unit or enterprise or eligible business and, the consideration, if any, for such transfer as recorded in the accounts of the undertaking or unit or enterprise or eligible business does not correspond to the market value of such goods or services as on the date of the transfer, then, for the purposes of any deduction under this Chapter, the profits and gains of such undertaking or unit or enterprise or eligible business shall be computed as if the transfer, in either case, had been made at the market value of such goods or services as on that date.

Explanation.--For the purposes of this sub-section, the expression “market value”,--

1. in relation to any goods or services sold or supplied, means the price that such goods or services would fetch if these were sold by the undertaking or unit or enterprise or eligible business in the open market, subject to statutory or regulatory restrictions, if any;

2. in relation to any goods or services acquired, means the price that such goods or services would cost if these were acquired by the undertaking or unit or enterprise or eligible business from the open market, subject to statutory or regulatory restrictions, if any.]

3. 51 [in relation to any goods or services sold, supplied or acquired means the arm's length price as defined in clause (ii) of section 92F of such goods or services, if it is a specified domestic transaction referred to in section 92BA.]

52 [(7) Where a deduction under any provision of this Chapter under the heading "C.--Deductions in respect of certain incomes" is claimed and allowed in respect of profits of any of the specified business referred to in clause (c) of sub-section (8) of section 35AD for any assessment year, no deduction shall be allowed under the provisions of section 35AD in relation to such specified business for the same or any other assessment year.]

Section 80AA Computation of deduction under section 80M

53 [***]

Section 80AB - Deductions to be made with reference to the income included in the gross total income

Where any deduction is required to be made or allowed under any section included in this Chapter under the heading C. “Deductions in respect of certain incomes” in respect of any income of the nature specified in that section which is included in the gross total income of the assessee, then, notwithstanding anything contained in that section, for the purpose of computing the deduction under that section, the amount of income of that nature as computed in accordance with provisions of this Act (before making any deduction under this Chapter) shall alone be deemed to be the amount of income of that nature which is derived or received by the assessee and which is included in his gross total income.

Section 80AC Deduction not to be allowed unless return furnished

Where in computing the total income of an assessee of any previous year relevant to the assessment year commencing on or after--

1. the 1st day of April, 2006 but before the 1st day of April, 2018, any deduction is admissible under section 80-IA or section 80-IAB or section 80-IB or section 80-IC or section 80-ID or section 80-IE;

2. the 1st day of April, 2018, any deduction is admissible under any provision of this Chapter under the heading "C.--

Deductions in respect of certain incomes", no such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under sub-section (1) of section 139.] 54

Section 80B - Definitions

In this Chapter “

1. 55 [***];

2. 56 [***];

3. 57 [***];

4. 58 [***];

5. “gross total income” means the total income computed in accordance with the provisions of this Act, before making any deduction under this Chapter.

6. 59 [***];

7. 60 [***];

8. 61 [***];

9. 62 [***].

Section 80C - Deduction in respect of life insurance premia deferred annuity contributions to provident fund subscription to certain equity shares or debentures etc

63 [(1) In computing the total income of an assessee, being an individual or a Hindu undivided family, there shall be deducted, in accordance with and subject to the provisions of this section, the whole of the amount paid or deposited in the previous year, being the aggregate of the sums referred to in sub-section (2), as does not exceed 64 [one hundred and fifty thousand rupees].

(2) The sums referred to in sub-section (1) shall be any sums paid or deposited in the previous year by the assessee “

1. to effect or to keep in force an insurance on the life of persons specified in sub-section (4);

2. to effect or to keep in force a contract for a deferred annuity, not being an annuity plan referred to in clause (xii), on the life of persons specified in sub-section (4):

Provided that such contract does not contain a provision for the exercise by the insured of an option to receive a cash payment in lieu of the payment of the annuity;

3. by way of deduction from the salary payable by or on behalf of the Government to any individual being a sum deducted in accordance with the conditions of his service, for the purpose of securing to him a deferred annuity or making provision for his spouse or children, in so far as the sum so deducted does not exceed one-fifth of the salary;

4. as a contribution by an individual to any provident fund to which the Provident Funds Act, 1925 (19 of 1925), applies;

5. as a contribution to any provident fund set-up by the Central Government and notified by it in this behalf in the Official Gazette, where such contribution is to an account standing in the name of any person specified in sub-section (4);

6. as a contribution by an employee to a recognised provident fund;

7. as a contribution by an employee to an approved superannuation fund;

8. 15[as subscription, in the name of any person specified in sub-section (4), to] any such security of the Central Government or any such deposit scheme as that Government may, by notification in the Official Gazette, specify in this behalf;

9. as subscription to any such savings certificate as defined in clause (c) of section 2 of the Government Savings Certificates Act, 1959 (46 of 1959), as the Central Government may, by notification in the Official Gazette, specify in this behalf;

10. as a contribution, in the name of any person specified in sub-section (4), for participation in the Unit-linked Insurance Plan, 1971 (hereafter in this section referred to as the Unit-linked Insurance Plan) specified in Schedule II of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002);

11. as a contribution in the name of any person specified in sub-section (4) for participation in any such unit-linked insurance plan of the LIC Mutual Fund 65 [referred to in clause (23D)] of section 10, as the Central Government may, by notification in the Official Gazette, specify in this behalf;

12. to effect or to keep in force a contract for such annuity plan of the Life Insurance Corporation or any other insurer as the Central Government may, by notification in the Official Gazette, specify;

13. as subscription to any units of any Mutual Fund [referred to in clause (23D)] of section 10 or from the Administrator or the specified company under any plan formulated in accordance with such scheme as the Central Government may, by notification in the Official Gazette, specify3 in this behalf;

14. as a contribution by an individual to any pension fund set up by any Mutual Fund 2[referred to in clause (23D)] of section 10 or by the Administrator or the specified company, as the Central Government may, by notification in the Official Gazette, specify in this behalf;

15. as subscription to any such deposit scheme of, or as a contribution to any such pension fund set up by, the National Housing Bank established under section 3 of the National Housing Bank Act, 1987 (53 of 1987) (hereafter in this section referred to as the National Housing Bank), as the Central Government may, by notification in the Official Gazette, specify in this behalf;

16. as subscription to any such deposit scheme of”

    1. a public sector company which is engaged in providing long-term finance for construction or purchase of houses in India for residential purposes; or

    2. any authority constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both, as the Central Government may, by notification in the Official Gazette, specify in this behalf;

17. as tuition fees (excluding any payment towards any development fees or donation or payment of similar nature), whether at the time of admission or thereafter,”

    3. to any university, college, school or other educational institution situated within India;

    4. for the purpose of full-time education of any of the persons specified in sub-section (4);

18. for the purposes of purchase or construction of a residential house property the income from which is chargeable to tax under the head “Income from house property” (or which would, if it had not been used for the assessee’s own residence, have been chargeable to tax under that head), where such payments are made towards or by way of “

    5. any installment or part payment of the amount due under any self-financing or other scheme of any development authority, housing board or other authority engaged in the construction and sale of house property on ownership basis; or

    6. any installment or part payment of the amount due to any company or co-operative society of which the assessee is a shareholder or member towards the cost of the house property allotted to him; or

    7. repayment of the amount borrowed by the assessee from “

       1. the Central Government or any State Government, or

       2. any bank, including a co-operative bank, or

       3. the Life Insurance Corporation, or

       4. the National Housing Bank, or

       5. 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 which is eligible for deduction under clause (viii) of sub-section (1) of section 36, or

       6. any company in which the public are substantially interested or any co-operative society, where such company or cooperative society is engaged in the business of financing the construction of houses, or

       7. the assessee’s employer where such employer is an authority or a board or a corporation or any other body established or constituted under a Central or State Act, or

       8. the assessee’s employer where such employer is a public company or a public sector company or a university established by law or a college affiliated to such university or a local authority or a co-operative society; or

    8. stamp duty, registration fee and other expenses for the purpose of transfer of such house property to the assessee,but shall not include any payment towards or by way of “

       1. the admission fee, cost of share and initial deposit which a shareholder of a company or a member of a co-operative society has to pay for becoming such shareholder or member; or

       2. the cost of any addition or alteration to, or renovation or repair of, the house property which is carried out after the issue of the completion certificate in respect of the house property by the authority competent to issue such certificate or after the house property or any part thereof has either been occupied by the assessee or any other person on his behalf or been let out; or

       3. any expenditure in respect of which deduction is allowable under the provisions of section 24;

19. as subscription to equity shares or debentures forming part of any eligible issue of capital approved66 by the Board on an application made by a public company or as subscription to any eligible issue of capital by any public financial institution in the prescribed67 form.

Explanation : For the purposes of this clause,”

1. “eligible issue of capital” means an issue made by a public company formed and registered in India or a public financial institution and the entire proceeds of the issue are utilised wholly and exclusively for the purposes of any business referred to in sub-section (4) of section 80-IA;

2. “public company” shall have the meaning assigned to it in section 3 of the Companies Act, 1956 (1 of 1956);

3. “public financial institution” shall have the meaning assigned to it in section 4A of the Companies Act, 1956 (1 of 1956);

20. as subscription to any units of any mutual fund referred to in clause (23D) of section 10 and approved68 by the Board on an application made by such mutual fund in the prescribed69 form:

Provided that this clause shall apply if the amount of subscription to such units is subscribed only in the eligible issue of capital of any company.

Explanation : For the purposes of this clause “eligible issue of capital” means an issue referred to in clause (i) of the Explanation to clause (xix) of sub-section (2);

70 [(xxi) as term deposit -

1. for a fixed period of not less than five years with a scheduled bank; and

2. which is in accordance with a scheme framed and notified71, by the Central Government, in the Official Gazette for the purposes of this clause.

Explanation : For the purposes of this clause, “scheduled bank” means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), or a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), or a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980), or any other bank, being a bank included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934);]

72[(xxii) as subscription to such bonds issued by the National Bank for Agriculture and Rural Development, as the Central Government may, by notification in the Official Gazette, specify in this behalf;]

73[(xxiii) in an account under the Senior Citizens Savings Scheme Rules, 2004;]

74[(xxiv) as five year time deposit in an account under the Post Office Time Deposit Rules, 1981.]

(3) The provisions of sub-section (2) shall apply only to so much of any premium or other payment made on an 75 [insurance policy, other than a contract for a deferred annuity, issued on or before the 31st day of March, 2012] as is not in excess of twenty per cent of the actual capital sum assured.

Explanation : In calculating any such actual capital sum assured, no account shall be taken “

1. of the value of any premiums agreed to be returned, or (ii) of any benefit by way of bonus or otherwise over and above the sum actually assured, which is to be or may be received under the policy by any person.

76 [(3A) The provisions of sub-section (2) shall apply only to so much of any premium or other payment made on an insurance policy, other than a contract for a deferred annuity, issued on or after the 1st day of April, 2012 as is not in excess of 77 [fifteen per cent.] of the actual capital sum assured.

78 [Provided that where the policy, issued on or after the 1st day of April, 2013, is for insurance on life of any person, who is--

1. a person with disability or a person with severe disability as referred to in section 80U, or

2. suffering from disease or ailment as specified in the rules made under section 80DDB,]

Explanation.- For the purposes of this sub-section, "actual capital sum assured" in relation to a life insurance policy shall mean the minimum amount assured under the policy on happening of the insured event at any time during the term of the policy, not taking into account--

1. the value of any premium agreed to be returned; or

2. any benefit by way of bonus or otherwise over and above the sum actually assured, which is to be or may be received under the policy by any person.]

(4) The persons referred to in sub-section (2) shall be the following, namely:

1. for the purposes of clauses (i), (v), (x) and (xi) of that sub-section,”

   1. in the case of an individual, the individual, the wife or husband and any child of such individual, and (ii) in the case of a Hindu undivided family, any member thereof;

2. for the purposes of clause (ii) of that sub-section, in the case of an individual, the individual, the wife or husband and any child of such individual;

79 [(ba) for the purposes of clause (viii) of that sub-section, in the case of an individual, the individual or any girl child of that individual, or any girl child for whom such person is the legal guardian, if the scheme so specifies;]

3. for the purpose of clause (xvii) of that sub-section, in the case of an individual, any two children of such individual.

(5) Where, in any previous year, an assessee “

1. terminates his contract of insurance referred to in clause (i) of subsection (2), by notice to that effect or where the contract ceases to be in force by reason of failure to pay any premium, by not reviving contract of insurance,”

   1. in case of any single premium policy, within two years after the date of commencement of insurance; or

   2. in any other case, before premiums have been paid for two years; or

2. terminates his participation in any unit-linked insurance plan referred to in clause (x) or clause (xi) of sub-section (2), by notice to that effect or where he ceases to participate by reason of failure to pay any contribution, by not reviving his participation, before contributions in respect of such participation have been paid for five years; or

3. transfers the house property referred to in clause (xviii) of sub-section (2) before the expiry of five years from the end of the financial year in which possession of such property is obtained by him, or receives back, whether by way of refund or otherwise, any sum specified in that clause, then, “

   1. no deduction shall be allowed to the assessee under sub-section (1) with reference to any of the sums, referred to in clauses (i), (x), (xi) and (xviii) of sub-section (2), paid in such previous year; and

   2. the aggregate amount of the deductions of income so allowed in respect of the previous year or years preceding such previous year, shall be deemed to be the income of the assessee of such previous year and shall be liable to tax in the assessment year relevant to such previous year.

(6) If any equity shares or debentures, with reference to the cost of which a deduction is allowed under sub-section (1), are sold or otherwise transferred by the assessee to any person at any time within a period of three years from the date of their acquisition, the aggregate amount of the deductions of income so allowed in respect of such equity shares or debentures in the previous year or years preceding the previous year in which such sale or transfer has taken place shall be deemed to be the income of the assessee of such previous year and shall be liable to tax in the assessment year relevant to such previous year. Explanation : A person shall be treated as having acquired any shares or debentures on the date on which his name is entered in relation to those shares or debentures in the register of members or of debenture-holders, as the case may be, of the public company.

80 [(6A) If any amount, including interest accrued thereon, is withdrawn by the assessee from his account referred to in clause (xxiii) or clause (xxiv) of subsection (2), before the expiry of the period of five years from the date of its deposit, the amount so withdrawn shall be deemed to be the income of the assessee of the previous year in which the amount is withdrawn and shall be liable to tax in the assessment year relevant to such previous year: Provided that the amount liable to tax shall not include the following amounts, namely:

1. any amount of interest, relating to deposits referred to in clause (xxiii) or clause (xxiv) of sub-section (2), which has been included in the total income of the assessee of the previous year or years preceding such previous year; and

2. any amount received by the nominee or legal heir of the assessee, on the death of such assessee, other than interest, if any, accrued thereon, which was not included in the total income of the assessee for the previous year or years preceding such previous year.]

(7) For the purposes of this section,”

1. the insurance, deferred annuity, provident fund and superannuation fund referred to in clauses (i) to (vii);

2. unit-linked insurance plan and annuity plan referred to in clauses (xii) to (xiiia);

3. pension fund and subscription to deposit scheme referred to in clauses (xiiic) to (xiva);

4. amount borrowed for purchase or construction of a residential house referred to in clause (xv), of sub-section (2) of section 88 shall be eligible for deduction under the corresponding provisions of this section and the deduction shall be allowed in accordance with the provisions of this section.

(8) In this section,”

1. “Administrator” means the Administrator as referred to in clause (a) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002);

2. “contribution” to any fund shall not include any sums in repayment of loan;

3. “insurance” shall include -

   1. a policy of insurance on the life of an individual or the spouse or the child of such individual or a member of a Hindu undivided family securing the payment of specified sum on the stipulated date of maturity, if such person is alive on such date notwithstanding that the policy of insurance provides only for the return of premiums paid (with or without any interest thereon) in the event of such person dying before the said stipulated date;

   2. a policy of insurance effected by an individual or a member of a Hindu undivided family for the benefit of a minor with the object of enabling the minor, after he has attained majority to secure insurance on his own life by adopting the policy and on his being alive on a date (after such adoption) specified in the policy in this behalf;

4. “Life Insurance Corporation” means the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956);

5. “public company” shall have the same meaning as in section 3 of the Companies Act, 1956 (1 of 1956);

6. “security” means a Government security as defined in clause (2) of section 2 of the Public Debt Act, 1944 (18 of 1944);

7. “specified company” means a company as referred to in clause (h) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002);

8. “transfer” shall be deemed to include also the transactions referred to in clause (f) of section 269UA.]

Section 80CC Deduction in respect of investment in certain new shares

81 [***]

Section 80CCA - Deduction in respect of deposits under National Savings Scheme or payment to a deferred annuity plan

1. Where an assessee, being -

   1. an individual, or

   2. a Hindu undivided family, has in the previous year -

1. deposited any amount in accordance with such scheme as the Central Government may, by notification in the Official Gazette, specify in this behalf; or

2. 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 -

1. the assessment years commencing on the 1st day of April, 1989 and the 1st day of April, 1990, this sub-section shall have effect as if for the words “twenty thousand rupees”, the words “thirty thousand rupees” had been substituted;

2. the assessment year commencing on the 1st day of April, 1991 and subsequent assessment years, this sub-section shall have effect as if for the words ‘twenty thousand rupees”, the words “forty thousand rupees” had been substituted:

Provided further that no deduction under this sub-section shall be allowed in relation to any amount deposited or paid under clauses (i) and (ii) on or after the 1st day of April, 1992.

2. Where any amount -

   3. standing to the credit of the assessee under the scheme referred to in clause (i) of sub-section (1) 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 in part in any previous year, or

   4. 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 :

Provided that nothing contained in this sub-section shall apply to any amount received by the assessee on account of the surrender of the policy in accordance with the terms of the annuity plan of the Life Insurance Corporation where the assessee elects to surrender before the 1st day of October, 1992, the said annuity plan in respect of which he had paid any amount under clause (ii) of sub-section (1) before the 1st day of April, 1992. 

3. Notwithstanding anything contained in any other provision of this Act, where a partition has taken place among the members of a Hindu undivided family or where an association of persons has been dissolved after a deduction has been allowed under sub-section (1), the provisions of sub-section (2) shall apply as if the person in receipt of income referred to therein is the assessee. 

Explanation I : For the removal of doubts, it is hereby declared that interest on the deposits made under the scheme referred to in clause (i) of sub-section (1) 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 80C82.

Section 80CCB - Deduction in respect of investment made under Equity Linked Savings Scheme

1. Where an assessee, being “

1. an individual, or

2. a Hindu undivided family, has acquired in the previous year, out of his income chargeable to tax, units of any mutual fund specified under clause (23D) of section 10 or of the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963), under any plan formulated in accordance with such scheme as the Central Government may, by notification in the Official Gazette, specify in this behalf (hereafter in this section referred to as the Equity Linked Savings Scheme), 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 so much of the amount invested as does not exceed the amount of ten thousand rupees in the previous year :

Provided that no deduction shall be allowed in relation to any amount invested under this sub-section on or after the 1st day of April, 1992.

2. Where any amount invested by the assessee in the units issued under a plan formulated under the Equity Linked Savings Scheme in respect of which a deduction has been allowed under sub-section (1) is returned to him in whole or in part either by way of repurchase of such units or on the termination of the plan, by the fund or the trust, as the case may be, in any previous year, it shall be deemed to be the income of the assessee of that previous year and chargeable to tax accordingly.

3. Notwithstanding anything contained in any other provision of this Act, where a partition has taken place among the members of a Hindu undivided family or where an association of persons has been dissolved after a deduction has been allowed under sub-section (1), the provisions of sub-section (2) shall apply as if the person in receipt of income referred to therein is the assessee.

Section 80CCC - Deduction in respect of contribution to certain pension funds

1. Where an assessee being an individual has in the previous year paid or deposited any amount out of his income chargeable to tax to effect or keep in force a contract for any annuity plan of Life Insurance Corporation of India 83 [or any other insurer] for receiving pension from the fund referred to in clause (23AAB) of section 10, 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 paid or deposited (excluding interest or bonus accrued or credited to the assessee’s account, if any) as does not exceed the amount of 84 [one hundred and fifty thousand rupees] in the previous year.

2. Where any amount standing to the credit of the assessee in a fund, referred to in sub-section (1) in respect of which a deduction has been allowed under sub-section (1), together with the interest or bonus accrued or credited to the assessee’s account, if any, is received by the assessee or his nominee “

   1. on account of the surrender of the annuity plan whether in whole or in part, in any previous year, or

   2. as pension received from the annuity plan, 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 or his nominee, as the case may be, in that previous year in which such withdrawal is made or, as the case may be, pension is received, and shall accordingly be chargeable to tax as income of that previous year.

85 [(3) Where any amount paid or deposited by the assessee has been taken into account for the purposes of this section,”

1. a rebate with reference to such amount shall not be allowed under section 88 for any assessment year ending before the 1st day of April, 2006;

2. a deduction with reference to such amount shall not be allowed under section 80C for any assessment year beginning on or after the 1st day of April, 2006.]

Section 80CCD - Deduction in respect of contribution to pension scheme of Central Government

86 [(1) 87 [Where an assessee, being an individual employed by the Central Government on or after the 1st day of January, 2004 or, being an individual employed by any other employer], 88 [or any other assessee, being an individual] has in the previous year paid or deposited any amount in his account under a pension scheme notified or as may be notified by the Central Government, 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 so paid or deposited as does not exceed, --

1. in the case of an employee, ten per cent. of his salary in the previous year; and

2. in any other case, 89 [twenty per cent] of his gross total income in the previous year.

90 [***]

91 [(1B) An assessee referred to in sub-section (1), shall be allowed a deduction in computation of his total income, whether or not any deductions is allowed under sub-section (1), of the whole of the amount paid or deposited in the previous year in his account under a pension scheme notified or as may be notified by the Central Government, which shall not exceed fifty thousand rupees:

Provided that no deduction under this sub-section shall be allowed in respect of the amount on which a deduction has been claimed and allowed under sub-section (1).]

(2) Where, in the case of an assessee referred to in sub-section (1), the  92[Central Government or the State Government] or any other employer makes any contribution to his account referred to in that sub-section, the assessee shall be allowed a deduction in the computation of his total income, of the whole of the amount contributed by the 93[Central Government or the State Government] or any other employer as does not exceed ten per cent of his salary in the previous year.

(3) Where any amount standing to the credit of the assessee in his account referred to in 94[sub-section (1) or sub-section (1B)], in respect of which a deduction has been allowed [under those subsections] or sub-section (2), together with the amount accrued thereon, if any, is received by the assessee or his nominee, in whole or in part, in any previous year,”

1. on account of closure or his opting out of the pension scheme referred to in95 [sub-section (1) or sub-section (1B)]; or

2. as pension received from the annuity plan purchased or taken on such closure or opting out, the whole of the amount referred to in clause (a) or clause (b) shall be deemed to be the income of the assessee or his nominee, as the case may be, in the previous year in which such amount is received, and shall accordingly be charged to tax as income of that previous year.

96 [Provided that the amount received by the nominee, on the death of the assessee, under the circumstances referred to in clause (a), shall not be deemed to be the income of the nominee.]

97 [(4) Where any amount paid or deposited by the assessee has been allowed as a deduction under 98 [sub-section (1) or sub-section (1B)], “

1. no rebate with reference to such amount shall be allowed under section 88 for any assessment year ending before the 1st day of April, 2006;

2. no deduction with reference to such amount shall be allowed under section 80C for any assessment year beginning on or after the 1st day of April, 2006.]

99 [(5) For the purposes of this section, the assessee shall be deemed not to have received any amount in the previous year if such amount is used for purchasing an annuity plan in the same previous year.]

Explanation : For the purposes of this section, “salary” includes dearness allowance, if the terms of employment so provide, but excludes all other allowances and perquisites.]

Section 80CCE - Limit on deductions under sections 80C 80CCC and 80CCD

The aggregate amount of deductions under section 80C, section 80CCC and 100 [sub-section (1) of section 80CCD] shall not, in any case, exceed 101[one hundred and fifty thousand rupees].

Section 80CCF - Deduction in respect of subscription to long-term infrastructure bonds

102 [In computing the total income of an assessee, being an individual or a Hindu undivided family, there shall be deducted, the whole of the amount, to the extent such amount does not exceed twenty thousand rupees, paid or deposited, during the previous year relevant to the assessment year beginning on the 1st day of April, 2011 103 [or to the assessment year beginning on the 1st day of April, 2012], as subscription to long-term infrastructure bonds as may, for the purposes of this section, be notified by the Central Government.]

Section 80CCG - Deduction in respect of investment made under an equity savings scheme

104 [(1) Where an assessee, being a resident individual, has, in a previous year, acquired listed equity shares 105 [or listed units of an equity oriented fund] in accordance with a scheme, as may be notified by the Central Government in this behalf, he shall, subject to the provisions of sub-section (3), be allowed a deduction, in the computation of his total income of the assessment year relevant to such previous year, of fifty per cent. of the amount invested in such equity shares 106 [or units] to the extent such deduction does not exceed twenty-five thousand rupees.

107 [(2) The deduction under sub-section (1) shall be allowed in accordance with, and subject to, the provisions of this section for three consecutive assessment years, beginning with the assessment year relevant to the previous year in which the listed equity shares or listed units of equity oriented fund were first acquired.]

(3) The deduction under sub-section (1) shall be subject to the following conditions, namely:-

1. the gross total income of the assessee for the relevant assessment year shall not exceed 108 [twelve lakh rupees];

2. the assessee is a new retail investor as may be specified under the scheme referred to in sub-section (1);

3. the investment is made in such listed equity share 109 [or listed units of equity oriented fund] as may be specified under the scheme referred to in sub-section (1);

4. the investment is locked-in for a period of three years from the date of acquisition in accordance with the scheme referred to in sub-section (1); and 

5. such other condition as may be prescribed.

(4) If the assessee, in any previous year, fails to comply with any condition specified in sub-section (3), the deduction originally allowed shall be deemed to be the income of the assessee of such previous year and shall be liable to tax for the assessment year relevant to such previous year."

110[Explanation.--For the purposes of this section, "equity oriented fund" shall have the meaning assigned to it in the Explanation to clause (38) of section 10.]

111 [(5) Notwithstanding anything contained in sub-sections (1) to (4), no deduction under this section shall be allowed in respect of any assessment year commencing on or after the 1st day of April, 2018:

Provided that an assessee, who has acquired listed equity shares or listed units of an equity oriented fund in accordance with the scheme referred to in sub-section (1) and claimed deduction under this section for any assessment year commencing on or before the 1st day of April, 2017, shall be allowed deduction under this section till the assessment year commencing on the 1st day of April, 2019, if he is otherwise eligible to claim the deduction in accordance with the other provisions of this section.]

Section 80D - Deduction in respect of medical insurance premia

112 [(1) In computing the total income of an assessee, being an individual or a Hindu undivided family, there shall be deducted such sum, as specified in sub-section (2) or sub-section (3), payment of which is made by any mode, 4[as specified in sub-section (2B),] in the previous year out of his income chargeable to tax.

(2) Where the assessee is an individual, the sum referred to in sub-section (1) shall be the aggregate of the following, namely:

1. the whole of the amount paid to effect or to keep in force an insurance on the health of the assessee or his family 113 [or any contribution made to the 114 [or such other scheme as may be notified by the Central Government in this behalf]] 115 [or any payment made on account of preventive health check-up of the assessee or his family] as does not exceed in the aggregate 116 [twenty-five thousand rupees]; and

2. the whole of the amount paid to effect or to keep in force an insurance on the health of the parent or parents of the assessee 117 [or any payment made on account of preventive health check-up of the parent or parents of the assessee] as does not exceed in the aggregate 118 [twenty-five thousand rupees].

Explanation: For the purposes of clause (a), “family” means the spouse and dependant children of the assessee.

3. 119 [the whole of the amount paid on account of medical expenditure incurred on the health of the assessee or any member of his family as does not exceed in the aggregate 120 [fifty thousand rupees]; and

4. the whole of the amount paid on account of medical expenditure incurred on the health of any parent of the assessee, as does not exceed in the aggregate 121 [fifty thousand rupees]:

Provided that the amount referred to in clause (c) or clause (d) is paid in respect of a 122 [***] senior citizen and no amount has been paid to effect or to keep in force an insurance on the health of such person:

Provided further that the aggregate of the sum specified under clause (a) and clause (c) or the aggregate of the sum specified under clause (b) and clause (d) shall not exceed 123 [fifty thousand rupees].]

124 [(2A) Where the amounts referred to in clauses (a) and (b) of sub-section (2) are paid on account of preventive health check-up, the deduction for such amounts shall be allowed to the extent it does not exceed in the aggregate five thousand rupees.

(2B) For the purposes of deduction under sub-section (1), payment shall be made by--

1. any mode, including cash, in respect of any sum paid on account of preventive health check-up;

2. any mode other than cash in all other cases not falling under clause (i).]

125 [(3) Where the assessee is a Hindu undivided family, the sum referred to in sub-section (1), shall be the aggregate of the following, namely:--

1. whole of the amount paid to effect or to keep in force an insurance on the health of any member of that Hindu undivided family as does not exceed in the aggregate twenty-five thousand rupees; and

2. the whole of the amount paid on account of medical expenditure incurred on the health of any member of the Hindu undivided family as does not exceed in the aggregate 126 [fifty thousand rupees]:

Provided that the amount referred to in clause (b) is paid in respect of a 127 [***] senior citizen and no amount has been paid to effect or to keep in force an insurance on the health of such person:

Provided further that the aggregate of the sum specified under clause (a) and clause (b) shall not exceed 128 [fifty thousand rupees].]

(4) Where the sum specified in clause (a) or clause (b) of sub-section (2) 129 [or clause (a) of sub-section (3)] is paid to effect or keep in force an insurance on the health of any person specified therein, and who is a senior citizen 130 [***], the provisions of this section shall have effect as if for the words “131 [twenty-five thousand rupees]”, the words 132[fifty thousand rupees] had been substituted.

133 [***]

134 [(4A) Where the amount specified in clause (a) or clause (b) of sub-section (2) or clause (a) of sub-section (3) is paid in lump sum in the previous year to effect or to keep in force an insurance on the health of any person specified therein for more than a year, then, subject to the provisions of this section, there shall be allowed for each of the relevant previous year, a deduction equal to the appropriate fraction of the amount.

Explanation.-- For the purposes of this sub-section,--

1. "appropriate fraction" means the fraction, the numerator of which is one and the denominator of which is the total number of relevant previous years;

2. "relevant previous year" means the previous year beginning with the previous year in which such amount is paid and the subsequent previous year or years during which the insurance shall have effect or be in force.]

(5) The insurance referred to in this section shall be in accordance with a scheme made in this behalf by --

1. the General Insurance Corporation of India formed under section 9 of the General Insurance Business (Nationalisation) Act, 1972 (57 of 1972) and approved by the Central Government in this behalf; or

2. any other insurer and approved by the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999).]

135 [Explanation.--For the purposes of this section,--

1. "senior citizen" means an individual resident in India who is of the age of sixty years or more at any time during the relevant previous year;

2. 136[***]]

Section 80DD - Deduction in respect of maintenance including medical treatment of a dependent who is a person with disability

137[(1) Where an assessee, being an individual or a Hindu undivided family, who is a resident in India, has, during the previous year,--

1. incurred any expenditure for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability; or

2. paid or deposited any amount under a scheme framed in this behalf by the Life Insurance Corporation or any other insurer or the Administrator or the specified company subject to the conditions specified in sub-section (2) and approved by the Board in this behalf for the maintenance of a dependant, being a person with disability, the assessee shall, in accordance with and subject to the provisions of this section, be allowed a deduction of a sum of seventy-five thousand rupees from his gross total income in respect of the previous year:

Provided that where such dependant is a person with severe disability, the provisions of this sub-section shall have effect as if for the words "seventy-five thousand rupees", the words "one hundred and twenty-five thousand rupees" had been substituted.]

(2) The deduction under clause (b) of sub-section (1) shall be allowed only if the following conditions are fulfilled, namely -

138[(a) the scheme referred to in clause (b) of sub-section (1) provides for payment of annuity or lump sum amount for the benefit of a dependant, being a person with disability,

1. in the event of the death of the individual or the member of the Hindu undivided family in whose name subscription to the scheme has been made; or

2. on attaining the age of sixty years or more by such individual or the member of the Hindu undivided family, and the payment or deposit to such scheme has been discontinued;]

   (b)   the assessee nominates either the dependent, being a person with disability, or any other person or a trust to receive the payment on his behalf, for the benefit of the dependent, being a person with disability.

(3) If the dependent, being a person with disability, predeceases the individual or the member of the Hindu undivided family referred to in sub-section (2), an amount equal to the amount paid or deposited under clause (b) of subsection (1) shall be deemed to be the income of the assessee of the previous year in which such amount is received by the assessee and shall accordingly be chargeable to tax as the income of that previous year.

139[(3A) The provisions of sub-section (3) shall not apply to the amount received by the dependant, being a person with disability, before his death, by way of annuity or lump sum by application of the condition referred to in sub-clause (ii) of clause (a) of sub-section (2).]

(4) The assessee, claiming a deduction under this section, shall furnish a copy of the certificate issued by the medical authority in the prescribed140 form and manner, along with the return of income under section 139, in respect of the assessment year for which the deduction is claimed:

Provided that where the condition of disability requires reassessment of its extent after a period stipulated in the aforesaid certificate, no deduction under this section shall be allowed for any assessment year relating to any previous year beginning after the expiry of the previous year during which the aforesaid certificate of disability had expired, unless a new certificate is obtained from the medical authority in the form and manner, as may be prescribed141, and a copy thereof is furnished along with the return of income.

Explanation : For the purposes of this section, -

1. “Administrator” means the Administrator as referred to in clause (a) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002);

2. “dependent” means -

1. in the case of an individual, the spouse, children, parents, brothers and sisters of the individual or any of them;

2. in the case of a Hindu undivided family, a member of the Hindu undivided family, dependent wholly or mainly on such individual or Hindu undivided family for his support and maintenance, and who has not claimed any deduction under section 80U in computing his total income for the assessment year relating to the previous year;

   3. “disability” shall have the meaning assigned to it in clause (i) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996)142 [and includes ‘autism”, “cerebral palsy” and “multiple disability” referred to in clauses (a), (c) and (h) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999) ];

   4. “Life Insurance Corporation” shall have the same meaning as in clause (iii) of sub-section (8) of section 88;

   5. “medical authority” means the medical authority as referred to in clause (p) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996) [or such other medical authority as may, by notification, be specified5 by the Central Government for certifying “autism”, “cerebral palsy”, “multiple disabilities”, “person with disability” and “severe disability” referred to in clauses (a), (c), (h), (j) and (o) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999)];

   6. “person with disability” means a person as referred to in clause (t) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996) [or clause (j) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999) ];

143 [(g) “person with severe disability” means “

1. a person with eighty per cent or more of one or more disabilities, as referred to in sub-section (4) of section 56 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996); or

2. a person with severe disability referred to in clause (o) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999);]

(h) “specified company” means a company as referred to in clause (h) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002).]

Section 80DDA - Deduction in respect of deposit made for maintenance of handicapped dependent

144 [***]

Section 80DDB - Deduction in respect of medical treatment etc

145[Where an assessee who is resident in India has, during the previous year, actually paid any amount for the medical treatment of such disease or ailment as may be specified146 in the rules made in this behalf by the Board “

1. for himself or a dependent, in case the assessee is an individual; or

2. for any member of a Hindu undivided family, in case the assessee is a Hindu undivided family, the assessee shall be allowed a deduction of the amount actually paid or a sum of forty thousand rupees, whichever is less, in respect of that previous year in which such amount was actually paid :

147[Provided that no such deduction shall be allowed unless the assessee obtains the prescription for such medical treatment from a neurologist, an oncologist, a urologist, a haematologist, an immunologist or such other specialist, as may be prescribed:

Provided further that the deduction under this section shall be reduced by the amount received, if any, under an insurance from an insurer, or reimbursed by an employer, for the medical treatment of the person referred to in clause (a) or clause (b) :

Provided also that where the amount actually paid is in respect of the assessee or his dependent or any member of a Hindu undivided family of the assessee and who is a senior citizen, the provisions of this section shall have effect as if for the words “forty thousand rupees”, the words 148 [one hundred thousand rupees] had been substituted.

149[***]

Explanation : For the purposes of this section, -

1. “dependent” means -

1. in the case of an individual, the spouse, children, parents, brothers and sisters of the individual or any of them,

2. in the case of a Hindu undivided family, a member of the Hindu undivided family, dependent wholly or mainly on such individual or Hindu undivided family for his support and maintenance;

   2. 150 [***]

   3. “insurer” shall have the meaning assigned to it in clause (9) of section 2 of the Insurance Act, 1938 (4 of 1938);

   4. “senior citizen” means an individual resident in India who is of the age of 151 [sixty years] or more at any time during the relevant previous year.]

   5. 152 [***]

Section 80E - Deduction in respect of repayment of loan taken for higher education

153[(1) In computing the total income of an assessee, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section, any amount paid by him in the previous year, out of his income chargeable to tax, by way of interest on loan taken by him from any financial institution or any approved charitable institution for the purpose of pursuing his higher education 154 [or for the purpose of higher education of his relative].

(2) The deduction specified in sub-section (1) shall be allowed in computing the total income in respect of the initial assessment year and seven assessment years immediately succeeding the initial assessment year or until the interest referred to in sub-section (1) is paid by the assessee in full, whichever is earlier.

(3) For the purposes of this section, “

1. “approved charitable institution” means an institution specified in, or, as the case may be, an institution established for charitable purposes and 155 [approved by the prescribed authority] under clause (23C) of section 10 or an institution referred to in clause (a) of subsection (2) of section 80G;

2. “financial institution” means a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act); or any other financial institution which the Central Government may, by notification in the Official Gazette, specify in this behalf;

156 [(c) “higher education” means any course of study pursued after passing the Senior Secondary Examination or its equivalent from any school, board or university recognised by the Central Government or State Government or local authority or by any other authority authorised by the Central Government or State Government or local authority to do so;]

(d) “initial assessment year” means the assessment year relevant to the previous year, in which the assessee starts paying the interest on the loan;]

157[(e) “relative”, in relation to an individual, means the spouse and children of that individual]

Section 80EE - Deduction in respect of interest on loan taken for residential house property

158 [(1) In computing the total income of an assessee, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section, interest payable on loan taken by him from any financial institution for the purpose of acquisition of a residential property.

(2) The deduction under sub-section (1) shall not exceed fifty thousand rupees and shall be allowed in computing the total income of the individual for the assessment year beginning on the 1st day of April, 2017 and subsequent assessment years.

(3) The deduction under sub-section (1) shall be subject to the following conditions, namely:--

1. the loan has been sanctioned by the financial institution during the period beginning on the 1st day of April, 2016 and ending on the 31st day of March, 2017;

2. the amount of loan sanctioned for acquisition of the residential house property does not exceed thirty-five lakh rupees;

3. the value of residential house property does not exceed fifty lakh rupees;

4. the assessee does not own any residential house property on the date of sanction of loan.

(4) Where a deduction under this section is allowed for any interest referred to in sub-section (1), deduction shall not be allowed in respect of such interest under any other provision of this Act for the same or any other assessment year.

(5) For the purposes of this section,--

1. "financial institution" means a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies, or any bank or banking institution referred to in section 51 of that Act or a housing finance company;

2. "housing finance company" means a public company formed or 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.]

Section 80 EEA Deduction in respect of interest on loan taken for certain house property

1. In computing the total income of an assessee, being an individual not eligible to claim deduction under section 80EE, there shall be deducted, in accordance with and subject to the provisions of this section, interest payable on loan taken by him from any financial institution for the purpose of acquisition of a residential house property.

2. The deduction under sub-section (1) shall not exceed one lakh and fifty thousand rupees and shall be allowed in computing the total income of the individual for the assessment year beginning on the 1st day of April, 2020 and subsequent assessment years.

3. The deduction under sub-section (1) shall be subject to the following conditions, namely:-

1. the loan has been sanctioned by the financial institution during the period beginning on the 1st day of April, 2019 and ending on the 31st day of March, 159[2022];

2. the stamp duty value of residential house property does not exceed forty-five lakh rupees;

3. the assessee does not own any residential house property on the date of sanction of loan.

   4. Where a deduction under this section is allowed for any interest referred to in sub-section (1), deduction shall not be allowed in respect of such interest under any other provision of this Act for the same or any other assessment year.

   5. For the purposes of this section, -

1. the expression "financial institution" shall have the meaning assigned to it in clause (a) of sub-section (5) of section 80EE;

2. the expression "stamp duty value" means value adopted or assessed or assessable by any authority of the Central Government or a State Government for the purpose of payment of stamp duty in respect of an immovable property.

Section 80 EEB Deduction in respect of purchase of electric vehicle

1. In computing the total income of an assessee, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section, interest payable on loan taken by him from any financial institution for the purpose of purchase of an electric vehicle.

2. The deduction under sub-section (1) shall not exceed one lakh and fifty thousand rupees and shall be allowed in computing the total income of the individual for the assessment year beginning on the 1st day of April, 2020 and subsequent assessment years.

3. The deduction under sub-section (1) shall be subject to the condition that the loan has been sanctioned by the financial institution during the period beginning on the 1st day of April, 2019 and ending on the 31st day of March, 2023.

4. Where a deduction under this section is allowed for any interest referred to in sub-section (1), deduction shall not be allowed in respect of such interest under any other provision of this Act for the same or any other assessment year.

5. For the purposes of this section, -

   1. "electric vehicle" means a vehicle which is powered exclusively by an electric motor whose traction energy is supplied exclusively by traction battery installed in the vehicle and has such electric regenerative braking system, which during braking provides for the conversion of vehicle kinetic energy into electrical energy;

   2. "financial institution" means a banking company to which the Banking Regulation Act, 1949 applies, or any bank or banking institution referred to in section 51 of that Act and includes any deposit taking non-banking financial company or a systemically important non-deposit taking non-banking financial company as defined in clauses (e) and (g) of Explanation 4 to section 43B.]

Section 80F Deduction in respect of educational expenses in certain cases

160 [***]

Section 80FF Deduction in respect of expenses on higher education in certain cases

161 [***]

Section 80G - Deduction in respect of donations to certain funds charitable institutions etc

1. In computing the total income of an assessee, there shall be deducted, in accordance with and subject to the provisions of this section,-

   1. in case where the aggregate of the sums specified in sub-section (2) includes any sum or sums of the nature specified 162 [in sub-clause (i) or in sub-clause (iiia)] or in sub-clause (iiiaa) or in sub-clause (iiiab) 163 [or in sub-clause (iiib)] or in sub-clause (iiie) or in sub-clause (iiif) or in sub-clause (iiig) 164 [or in sub-clause (iiiga)] or sub-clause (iiih) or sub-clause (iiiha) or sub-clause (iiihb) or sub-clause (iiihc) or sub-clause (iiihd)] or sub-clause (iiihe) or sub-clause (iiihf) 165 [or sub-clause (iiihg) or sub-clause (iiihh)] 166 [or sub-clause (iiihi)] 167 [or sub-clause (iiihj)] or 168 [sub-clause (iiihk) or sub-clause (iiihl) or] 169 [sub-clause (iiihm) or] in sub-clause (vii) of clause (a) 170 [or in clause (c)]171 [or in clause (d)] thereof, an amount equal to the whole of the sum or, as the case may be, sums of such nature plus fifty per cent of the balance of such aggregate; and

   2. in any other case, an amount equal to fifty per cent of the aggregate of the sums specified in sub-section (2).

2. The sums referred to in sub-section (1) shall be the following, namely :-

1. any sums paid by the assessee in the previous year as donations to “

1. the National Defence Fund set-up by the Central Government; or

2. the Jawaharlal Nehru Memorial Fund referred to in the Deed of Declaration of Trust adopted by the National Committee at its meeting held on the 17th day of August, 1964; or

3. the Prime Minister’s Drought Relief Fund; or

(iiia) the Prime Minister’s National Relief Fund; or

(iiiaa) the Prime Minister’s Armenia Earthquake Relief Fund; or

(iiiab) the Africa (Public Contributions’ India) Fund; or

(iiib) the National Children’s Fund; or

(iiic) the Indira Gandhi Memorial Trust, the deed of declaration in respect whereof was registered at New Delhi on the 21st day of February, 1985; or

(iiid) the Rajiv Gandhi Foundation, the deed of declaration in respect whereof was registered at New Delhi on the 21st day of June, 1991; or

(iiie) the National Foundation for Communal Harmony; or

(iiif) a University or any educational institution of national eminence as may be approved by the prescribed authority7 in this behalf; or

(iiig) the Maharashtra Chief Minister’s Relief Fund during the period beginning on the 1st day of October, 1993 and ending on the 6th day of October, 1993 or to the Chief Minister’s Earthquake Relief Fund, Maharashtra; or

172 [(iiiga) any fund set-up by the State Government of Gujarat exclusively for providing relief to the victims of earthquake in Gujarat;]

(iiih) any Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of that district for the purposes of improvement of primary education in villages and towns in such district and for literacy and post-literacy activities.

Explanation : For the purposes of this sub-clause, “town” means a town which has a population not exceeding one lakh according to the last preceding census of which the relevant figures have been published before the first day of the previous year; or

(iiiha) the National Blood Transfusion Council or to any State Blood Transfusion Council which has its sole object the control, supervision, regulation or encouragement in India of the services related to operation and requirements of blood banks.

Explanation : For the purposes of this sub-clause, -

1. “National Blood Transfusion Council” means a society registered under the Societies Registration Act, 1860 (21 of 1860) and has an officer not below the rank of an Additional Secretary to the Government of India dealing with the AIDS Control Project as its Chairman, by whatever name called;

2. “State Blood Transfusion Council” means a society registered, in consultation with the National Blood Transfusion Council, under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India and has Secretary to the Government of that State dealing with the Department of Health, as its Chairman, by whatever name called; or

(iiihb) any fund set-up by a State Government to provide medical relief to the poor; or

(iiihc) the Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund established by the armed forces of the Union for the welfare of the past and present members of such forces or their dependents; or

(iiihd) the Andhra Pradesh Chief Minister’s Cyclone Relief Fund, 1996; or

(iiihe) the National Illness Assistance Fund; or

(iiihf) the Chief Minister’s Relief Fund or the Lieutenant Governors’ Relief Fund in respect of any State or Union territory, as the case may be :

Provided that such Fund is-

1. the only Fund of its kind established in the State or the Union territory, as the case may be;

2. under the overall control of the Chief Secretary or the Department of Finance of the State or the Union territory, as the case may be;

3. administered in such manner as may be specified by the State Government or the Lieutenant Governor, as the case may be; or

173 [(iiihg) the National Sports Fund to be set-up by the Central Government; or]

174 [(iiihh) the National Cultural Fund set-up by the Central Government; or]

175 [(iiihi) the Fund for Technology Development and Application set-up by the Central Government; or]

176 [(iiihj) the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities constituted under sub-section (1) of section 3 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999); or]

177 [(iiihk) the Swachh Bharat Kosh, set up by the Central Government, other than the sum spent by the assessee in pursuance of Corporate Social Responsibility under sub-section (5) of section 135 of the Companies Act, 2013 (18 of 2013); or

(iiihl) the Clean Ganga Fund, set up by the Central Government, where such assessee is a resident and such sum is other than the sum spent by the assessee in pursuance of Corporate Social Responsibility under sub-section (5) of section 135 of the Companies Act, 2013 (18 of 2013); or]

178 [(iiihm) the National Fund for Control of Drug Abuse constituted under section 7A of the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985); or]

4. any other fund or any institution to which this section applies; or

5. the Government or any local authority, to be utilised for any charitable purpose other than the purpose of promoting family planning; or

179 [(vi) an authority constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both; or]

(via) any corporation referred to in clause (26BB) of section 10; or

(vii) the Government or to any such local authority, institution or association as may be approved in this behalf by the Central Government, to be utilised for the purpose of promoting family planning;

2. any sums paid by the assessee in the previous year as donations for the renovation or repair of any such temple, mosque, gurdwara, church or other place as is notified by the Central Government in the Official Gazette to be of historic, archaeological or artistic importance or to be a place of public worship of renown throughout any State or States.

   180 [(c) any sums paid by the assessee, being a company, in the previous year as donations to the Indian Olympic Association or to any other association or institution 181 [established in India, as the Central Government may, having regard to the prescribed182 guidelines, by notification in the Official Gazette, specify in this behalf] for “

   1. the development of infrastructure for sports and games; or

   2. the sponsorship of sports and games, in India.]

183 [(d) any sums paid by the assessee, during the period beginning on the 26th day of January, 2001 and ending on the 30th day of September, 2001, to any trust, institution or fund to which this section applies for providing relief to the victims of earthquake in Gujarat.]

3. [***]184

4. Where the aggregate of the sums referred to in sub-clauses (iv), (v), (vi), (via) and (vii) of clause (a) and in 17[clauses (b) and (c)] of sub-section (2) exceeds ten per cent of the gross total income (as reduced by any portion thereof on which income-tax is not payable under any provision of this Act and by any amount in respect of which the assessee is entitled to a deduction under any other provision of this Chapter), then the amount in excess of ten per cent of the gross total income shall be ignored for the purpose of computing the aggregate of the sums in respect of which deduction is to be allowed under sub-section (1).

5. This section applies to donations to any institution or fund referred to in sub-clause (iv) of clause (a) of sub-section (2), only if it is established in India for a charitable purpose and if it fulfils the following conditions, namely:

   1. where the institution or fund derives any income, such income would not be liable to inclusion in its total income under the provisions of sections 11 and 12 185 [***] 186 [***] or clause (23AA) or clause (23C) of section 10:

Provided that where an institution or fund derives any income, being profits and gains of business, the condition that such income would not be liable to inclusion in its total income under the provisions of section 11 shall not apply in relation to such income, if, -

3. the institution or fund maintains separate books of account in respect of such business;

4. the donations made to the institution or fund are not used by it, directly or indirectly, for the purposes of such business; and

5. the institution or fund issues to a person making the donation a certificate to the effect that it maintains separate books of account in respect of such business and that the donations received by it will not be used, directly or indirectly, for the purposes of such business;

2. the instrument under which the institution or fund is constituted does not, or the rules governing the institution or fund do not, contain any provision for the transfer or application at any time of the whole or any part of the income or assets of the institution or fund for any purpose other than a charitable purpose;

3. the institution or fund is not expressed to be for the benefit of any particular religious community or caste;

4. the institution or fund maintains regular accounts of its receipts and expenditure;

5. the institution or fund is either constituted as a public charitable trust or is registered under the Societies Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act in force in any part of India or under section 25 of the Companies Act, 1956 (1 of 1956), or is a university established by law, or is any other educational institution recognised by the Government or by a university established by law, or affiliated to any university established by law, 187 [***] or is an institution financed wholly or in part by the Government or a local authority; 188 [***]

6. in relation to donations made after the 31st day of March, 1992, the institution or fund is for the time being 189[approved by the Principal Commissioner or Commissioner] in accordance with the rules190 191 [made in this behalf; and]

192 [***]

7. 193 [where any institution or fund had been approved under clause (vi) for the previous year beginning on the 1st day of April, 2007 and ending on the 31st day of March, 2008, such institution or fund shall, for the purposes of this section and notwithstanding anything contained in the proviso to clause (15) of section 2, be deemed to have been,--

1. established for charitable purposes for the previous year beginning on the 1st day of April, 2008 and ending on the 31st day of March, 2009; and

2. approved under the said clause (vi) for the previous year beginning on the 1st day of April, 2008 and ending on the 31st day of March, 2009.]

   194[(viii) the institution or fund prepares such statement for such period as may be prescribed and deliver or cause to be delivered to the prescribed income-tax authority or the person authorised by such authority such statement in such form and verified in such manner and setting forth such particulars and within such time as may be prescribed:

   Provided that the institution or fund may also deliver to the said prescribed authority a correction statement for rectification of any mistake or to add, delete or update the information furnished in the statement delivered under this sub-section in such form and verified in such manner as may be prescribed; and

   (ix) the institution or fund furnishes to the donor, a certificate specifying the amount of donation in such manner, containing such particulars and within such time from the date of receipt of donation, as may be prescribed:

   Provided that the institution or fund referred to in clause (vi) shall make an application in the prescribed form and manner to the Principal Commissioner or Commissioner, for grant of approval,––

1. where the institution or fund is approved under clause (vi) [as it stood immediately before its amendment by the Finance Act, 2020], within three months from the date on which this proviso has come into force;

2. where the institution or fund is approved and the period of such approval is due to expire, at least six months prior to expiry of the said period;

3. where the institution or fund has been provisionally approved, at least six months prior to expiry of the period of the provisional approval or within six months of commencement of its activities, whichever is earlier;

4. in any other case, at least one month prior to commencement of the previous year relevant to the assessment year from which the said approval is sought:

   Provided further that the Principal Commissioner or Commissioner, on receipt of an application made under the first proviso, shall,—

   1. where the application is made under clause (i) of the said proviso, pass an order in writing granting it approval for a period of five years;

   2. where the application is made under clause (ii) or clause (iii) of the said proviso,—

   1. call for such documents or information from it or make such inquiries as he thinks necessary in order to satisfy himself about—

1. the genuineness of activities of such institution or fund; and

2. the fulfilment of all the conditions laid down in clauses (i) to (v);

   2. after satisfying himself about the genuineness of activities under item (A), and the fulfilment of all the conditions under item (B), of subclause (a),––

1. pass an order in writing granting it approval for a period of five years; or

2. if he is not so satisfied, pass an order in writing rejecting such application and also cancelling its approval after affording it a reasonable opportunity of being heard;

   3. where the application is made under clause (iv) of the said proviso, pass an order in writing granting it approval provisionally for a period of three years from the assessment year from which the registration is sought, and send a copy of such order to the institution or fund:

      Provided also that the order under clause (i), sub-clause (b) of clause (ii) and clause (iii) of the first proviso shall be passed in such form and manner as may be prescribed, before expiry of the period of three months, six months and one month, respectively, calculated from the end of the month in which the application was received:

      Provided also that the approval granted under the second proviso shall apply to an institution or fund, where the application is made under––

   1. clause (i) of the first proviso, from the assessment year from which approval was earlier granted to such institution or fund;

   2. clause (iii) of the first proviso, from the first of the assessment years for which such institution or fund was provisionally approved;

   3. in any other case, from the assessment year immediately following the financial year in which such application is made.]

(5A) Where a deduction under this section is claimed and allowed for any assessment year in respect of any sum specified in sub-section (2), the sum in respect of which deduction is so allowed shall not qualify for deduction under any other provision of this Act for the same or any other assessment year.

195 [(5B) Notwithstanding anything contained in clause (ii) of sub-section (5) and Explanation 3, an institution or fund which incurs expenditure, during any previous year, which is of a religious nature for an amount not exceeding five per cent of its total income in that previous year shall be deemed to be an institution or fund to which the provisions of this section apply.]

196 [(5C) 197 [This section] applies in relation to amounts referred to in clause (d) of sub-section (2) only if the trust or institution or fund is established in India for a charitable purpose and it fulfils the following conditions, namely :

1. it is approved in terms of clause (vi) of sub-section (5);

2. it maintains separate accounts of income and expenditure for providing relief to the victims of earthquake in Gujarat;

3. the donations made to the trust or institution or fund are applied only for providing relief to the earthquake victims of Gujarat 198 [on or before the 31st day of March, 199 [2004]];

200 [(iv) the amount of donation remaining unutilised on the 31st day of March, 201 [2004] is transferred to the Prime Minister’s National Relief Fund on or before the 31st day of March, 202 [2004];]

(v) it renders accounts of income and expenditure to such authority and in such manner as may be prescribed203, 204[on or before the 30th day of June, 205 [2004].]

Explanation 1: An institution or fund established for the benefit of Scheduled Castes, backward classes, Scheduled Tribes or of women and children shall not be deemed to be an institution or fund expressed to be for the benefit of a religious community or caste within the meaning of clause (iii) of subsection (5).

Explanation 2: For the removal of doubts, it is hereby declared that a deduction to which the assessee is entitled in respect of any donation made to an institution or fund to which sub-section (5) applies shall not be denied merely on either or both of the following grounds, namely :

1. that, subsequent to the donation, any part of the income of the institution or fund has become chargeable to tax due to non-compliance with any of the provisions of section 11, section 12 or section 12A;

2. that, under clause (c) of sub-section (1) of section 13, the exemption under section 11 or section 12 is denied to the institution or fund in relation to any income arising to it from any investment referred to in clause (h) of sub-section (2) of section 13 where the aggregate of the funds invested by it in a concern referred to in the said clause (h) does not exceed five per cent of the capital of that concern.

206[Explanation 2A.— For the removal of doubts, it is hereby declared that claim of the assessee for a deduction in respect of any donation made to an institution or fund to which the provisions of sub-section (5) applies, in the return of income for any assessment year filed by him, shall be allowed on the basis of information relating to said donation furnished by the institution or fund to the prescribed income-tax authority or the person authorised by such authority, subject to verification in accordance with the risk management strategy formulated by the Board from time to time.]

Explanation 3 : In this section, “charitable purpose” does not include any purpose the whole or substantially the whole of which is of a religious nature.

207 [Explanation 4 : For the purposes of this section, an association or institution having as its object the control, supervision, regulation or encouragement in India of such games or sports as the Central Government may, by notification in the Official Gazette, specify in this behalf, shall be deemed to be an institution established in India for a charitable purpose.]

Explanation 5 : For the removal of doubts, it is hereby declared that no deduction shall be allowed under this section in respect of any donation unless such donation is of a sum of money.

208 [(5D) No deduction shall be allowed under this section in respect of donation of any sum exceeding 209 [two thousand rupees] unless such sum is paid by any mode other than cash.]

210[(5E) All applications, pending before the Commissioner on which no order has been passed under clause (vi) of sub-section (5) before the date on which this sub-section has come into force, shall be deemed to be applications made under clause (iv) of the first proviso to sub-section (5) on that date.]

Section 80GG - Deductions in respect of rents paid

211 [In computing the total income of an assessee, not being an assessee having any income falling within clause (13A) of section 10, there shall be deducted any expenditure incurred by him in excess of ten per cent of his total income towards payment of rent (by whatever name called) in respect of any furnished or unfurnished accommodation occupied by him for the purposes of his own residence, to the extent to which such excess expenditure does not exceed 212 [five thousand rupees] per month or twenty-five per cent of his total income for the year, whichever is less and subject to such other conditions or limitations as may be prescribed213, having regard to the area or place in which such accommodation is situated and other relevant considerations :

Provided that nothing in this section shall apply to an assessee in any case where any residential accommodation is, -

1. owned by the assessee or by his spouse or minor child or, where such assessee is a member of a Hindu undivided family, by such family, at the place where he ordinarily resides or performs duties of his office or employment or carries on his business or profession; or

2. owned by the assessee at any other place, being accommodation in the occupation of the assessee, the value of which is to be determined 214 [under clause (a) of sub-section (2) or, as the case may be, clause (a) of sub-section (4) of section 23].

Explanation: In this section, the expressions “ten per cent of his total income” and “twenty-five per cent of his total income” shall mean ten per cent or twenty-five per cent, as the case may be, of the assessee’s total income before allowing deduction for any expenditure under this section.] 

Section 80GGA - Deduction in respect of certain donations for scientific research or rural development

1. In computing the total income of an assessee, there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2).

2. The sums referred to in sub-section (1) shall be the following, namely :

   1. any sum paid by the assessee in the previous year to a 215 [research association] which has as its object the undertaking of scientific research or to a university, college or other institution to be used for scientific research :

Provided that such association, university, college or institution is for the time being approved for the purposes of clause (ii) of subsection (1) of section 35;

(aa) any sum paid by the assessee in the previous year 216 [to a research association which has as its object the undertaking of research in social science or statistical research or to a University], college or other institution to be used for research in social science or statistical research :

Provided that 217 [such association, University], college or institution is for the time being approved for the purposes of clause (iii) of sub-section (1) of section 35.

218[Explanation : The deduction, to which the assesse is entitled in respect of any sum paid to a 219 [research association], University, college or other institution to which clause (a) or (aa) applies, shall not be denied merely on the ground that, subsequent to the payment of such sum by the assessee, the approval to such association, University, college or other institution referred to in clause (a) or clause (aa), as the case may be, has been withdrawn;]

2. any sum paid by the assessee in the previous year “

1. to an association or institution, which has as its object the undertaking of any programme of rural development, to be used for carrying out any programme of rural development approved for the purposes of section 35CCA; or

2. to an association or institution which has as its object the training of persons for implementing programmes of rural development:

Provided that the assessee furnishes the certificate referred to in sub-section (2) or, as the case may be, sub-section (2A) of section 35CCA from such association or institution.

220[Explanation : The deduction, to which the assessee is entitled in respect of any sum paid to an association or institution for carrying out the programme of rural development to which this clause applies, shall not be denied merely on the ground that subsequent to the payment of such sum by the assessee, the approval granted to such programme, or as the case may be, to the association or institution has been withdrawn.]

(bb) any sum paid by the assessee in the previous year to a public sector company or a local authority or to an association or institution approved by the National Committee, for carrying out any eligible project or scheme:

Provided that the assessee furnishes the certificate referred to in clause (a) of sub-section (2) of section 35AC from such public sector company or local authority or, as the case may be, association or institution.

221[Explanation 1 : The deduction, to which the assessee is entitled in respect of any sum paid to a public sector company, or to a local authority or to an association or institution for carrying out eligible project or scheme referred to in section 35AC, shall not be denied merely on the ground that subsequent to the payment of such sum by the assessee,

1. the approval granted to such association or institution has been withdrawn; or

2. the notification notifying eligible project or scheme referred to in section 35AC carried out by the public sector company, or local authority or association or institution has been withdrawn.]

Explanation 222 (2): For the purposes of this clause, the expressions “National Committee” and “eligible project or scheme” shall have the meanings respectively assigned to them in the Explanation to section 35AC;

3. 223 [any sum paid by the assessee in any previous year ending on or before the 31st day of March, 2002] to an association or institution, which has as its object the undertaking of any programme of conservation of natural resources or of afforestation, to be used for carrying out any programme of conservation of natural resources or of afforestation approved for the purposes of section 35CCB :

Provided that the association or institution is for the time being approved for the purposes of sub-section (2) of section 35CCB;

(cc) 224[any sum paid by the assessee in any previous year ending on or before the 31st day of March, 2002] to such fund for afforestation as is notified by the Central Government under clause (b) of sub-section (1) of section 35CCB;

4. any sum paid by the assessee in the previous year to a rural development fund set-up and notified by the Central Government for the purposes of clause (c) of sub-section (1) of section 35CCA.

5. any sum paid by the assessee in the previous year to the National Urban Poverty Eradication Fund set-up and notified by the Central Government for the purposes of clause (d) of sub-section (1) of section 35CCA.

225 [(2A) No deduction shall be allowed under this section in respect of any sum exceeding 226[two thousand rupees] unless such sum is paid by any mode other than cash.]

3. Notwithstanding anything contained in sub-section (1), no deduction under this section shall be allowed in the case of an assessee whose gross total income includes income which is chargeable under the head “Profits and gains of business or profession”.

4. Where a deduction under this section is claimed and allowed for any assessment year in respect of any payments of the nature specified in subsection (2), deduction shall not be allowed in respect of such payments under any other provision of this Act for the same or any other assessment year. 

227[Explanation.––For the removal of doubts, it is hereby declared that the claim of the assessee for a deduction in respect of any sum referred to in sub-section (2) in the return of income for any assessment year filed by him, shall be allowed on the basis of information relating to such sum furnished by the payee to the prescribed income-tax authority or the person authorised by such authority, subject to verification in accordance with the risk management strategy formulated by the Board from time to time.]

Section 80GGB - Deduction in respect of contributions given by companies to political parties

228[In computing the total income of an assessee, being an Indian company, there shall be deducted any sum contributed by it, in the previous year to any political party 229 [or any electoral trust].

230 [Provided that no deduction shall be allowed under this section in respect of any sum contributed by way of cash.]

Explanation : For the removal of doubts, it is hereby declared that for the purposes of this section, the word “contribute”, with its grammatical variation, has the meaning assigned to it under section 293A of the Companies Act, 1956 (1 of 1956).]

Section 80GGC - Deduction in respect of contributions given by any person to political parties

231[In computing the total income of an assessee, being any person, except local authority and every artificial juridical person wholly or partly funded by the Government, there shall be deducted any amount of contribution made by him, in the previous year, 232 [to a political party or an electoral trust].

233 [Provided that no deduction shall be allowed under this section in respect of any sum contributed by way of cash.]

Explanation : For the purposes of sections 80GGB and 80GGC, “political party” means a political party registered under section 29A of the Representation of the People Act, 1951 (43 of 1951).]

Section 80H Deduction in case of new industrial undertakings employing displaced persons etc

234 [***]

Section 80HH - Deduction in respect of profits and gains from newly established industrial undertakings or hotel business in backward areas

1. Where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking, or the business of a hotel, 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 from such profits and gains of an amount equal to twenty per cent thereof.

2. This section applies to any industrial undertaking which fulfils all the following conditions, namely:

1. it has begun or begins to manufacture or produce articles after the 31st day of December, 1970 but before the 1st day of April, 1990, in any backward area;

2. it is not formed by the splitting up, or the reconstruction, of a business already in existence in any backward area:

Provided that this condition shall not apply in respect of any industrial 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;

3. it is not formed by the transfer to a new business of machinery or plant previously used for any purpose in any backward area;

4. it employs ten or more workers in a manufacturing process carried on with the aid of power, or employs twenty or more workers in a manufacturing process carried on without the aid of power.

Explanation : Where any machinery or plant or any part thereof previously used for any purpose in any backward area is transferred to a new business in that area or in any other backward area and the total value of the machinery or plant or part so transferred does not exceed twenty per cent of the total value of the machinery or plant used in the business, then, for the purposes of clause (iii) of this sub-section, the condition specified therein shall be deemed to have been fulfilled.

3. This section applies to the business of any hotel, where all the following conditions are fulfilled, namely :

1. the business of the hotel has started or starts functioning after the 31st day of December, 1970, but before the 1st day of April, 1990, in any backward area;

2. the business of the hotel is not formed by the splitting up, or the reconstruction, of a business already in existence;

3. the hotel is for the time being approved for the purposes of this subsection by the Central Government.

   4. The deduction specified in sub-section (1) shall be allowed in computing the total income in respect of each of the ten assessment years beginning with the assessment year relevant to the previous year in which the industrial undertaking begins to manufacture or produce articles or the business of the hotel starts functioning :

Provided that, “

1. in the case of an industrial undertaking which has begun to manufacture or produce articles, and

2. in the case of the business of a hotel which has started functioning, after the 31st day of December, 1970, but before the 1st day of April, 1973, this sub-section shall have effect as if the reference to ten assessment years were a reference to ten assessment years as reduced by the number of assessment years which expired before the 1st day of April, 1974.

   5. Where the assessee is a person other than a company or a co-operative society, the deduction under sub-section (1) shall not be admissible unless the accounts of the industrial undertaking or the business of the hotel for the previous year relevant to the assessment year for which the deduction is claimed have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288 and the assessee furnishes, along with his return of income, the report of such audit in the prescribed form235 duly signed and verified by such accountant.

   6. Where any goods held for the purposes of the business of the industrial undertaking or the hotel are transferred to any other business carried on by the assessee, or where any goods held for the purposes of any other business carried on by the assessee are transferred to the business of the industrial undertaking or the hotel and, in either case, the consideration, if any, for such transfer as recorded in the accounts of the business of the industrial undertaking or the hotel does not correspond to the market value of such goods as on the date of the transfer, then, for the purposes of the deduction under this section, the profits and gains of the industrial undertaking or the business of the hotel shall be computed as if the transfer, in either case, had been made at the market value of such goods as on that date :

Provided that where, in the opinion of the Assessing Officer, the computation of the profits and gains of the industrial undertaking or the business of the hotel in the manner hereinbefore specified presents exceptional difficulties, the Assessing Officer may compute such profits and gains on such reasonable basis as he may deem fit.

Explanation : In this sub-section “market value”, in relation to any goods means the price that such goods would ordinarily fetch on sale in the open market.

7. Where it appears to the Assessing Officer that, owing to the close connection between the assessee carrying on the business of the industrial undertaking or the hotel to which this section applies and any other person, or for any other reason, the course of business between them is so arranged that the business transacted between them produces to the assessee more than the ordinary profits which might be expected to arise in the business of the industrial undertaking or the hotel, the Assessing Officer shall, in computing the profits and gains of the industrial undertaking or the hotel for the purposes of the deduction under this section, take the amount of profits as may be reasonably deemed to have been derived therefrom.

8. 236 [***]

9. In a case where the assessee is entitled also to the deduction under section 80-I or section 80J in relation to the profits and gains of an industrial undertaking or the business of a hotel to which this section applies, effect shall first be given to the provisions of this section.

(9A) Where a deduction in relation to the profits and gains of a small-scale industrial undertaking to which section 80HHA applies is claimed and allowed under that section for any assessment year, deduction in relation to such profits and gains shall not be allowed under this section for the same or any other assessment year.

10. Nothing contained in this section shall apply in relation to any undertaking engaged in mining.

11. For the purposes of this section, “backward area” means such area as the Central Government may, having regard to the stage of development of that area, by notification in the Official Gazette, specify in this behalf :

    Provided that any notification under this sub-section may be issued so as to have retrospective effect to a date not earlier than the 1st day of April, 1983.

Section 80HHA - Deduction in respect of profits and gains from newly established small-scale industrial undertakings in certain areas

1. Where the gross total income of an assessee includes any profits and gains derived from a small-scale industrial undertaking 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 from such profits and gains of an amount equal to twenty per cent thereof.

2. This section applies to any small-scale industrial undertaking which fulfils all the following conditions, namely :

1. it begins to manufacture or produce articles after the 30th day of September, 1977, but before the 1st day of April, 1990, in any rural area;

2. 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 small-scale industrial 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;

1. it is not formed by the transfer to a new business of machinery or plant previously used for any purpose;

2. it employs ten or more workers in a manufacturing process carried on with the aid of power, or employs twenty or more workers in a manufacturing process carried on without the aid of power.

Explanation : Where in the case of a small-scale industrial undertaking, any machinery or plant or any part thereof previously used for any purpose is transferred to a new business and the total value of the machinery or plant or part so transferred does not exceed twenty per cent of the total value of the machinery or plant used in the business, then, for the purposes of clause (iii) of this sub-section, the condition specified therein shall be deemed to have been fulfilled.

3. The deduction specified in sub-section (1) shall be allowed in computing the total income of each of the ten previous years beginning with the previous year in which the industrial undertaking begins to manufacture or produce articles:

Provided that such deduction shall not be allowed in computing the total income of any of the ten previous years aforesaid in respect of which the industrial undertaking is not a small-scale industrial undertaking within the meaning of clause (b) of the Explanation below sub-section (8).

4. Where the assessee is a person, other than a company or a co-operative society, the deduction under sub-section (1) shall not be admissible unless the accounts of the small-scale industrial undertaking for the previous year relevant to the assessment year for which the deduction is claimed have been audited by an accountant as defined in the Explanation below sub-section (2) of ection 288 and the assessee furnishes, along with his return of income, the report of such audit in the prescribed form237 duly signed and verified by such accountant.

5. The provisions of sub-sections (6) and (7) of section 80HH shall, so far as may be, apply in relation to the computation of the profits and gains of a small-scale industrial undertaking for the purposes of the deduction under this section as they apply in relation to the computation of the profits and gains of an industrial undertaking for the purposes of the deduction under that section.

6. In a case where the assessee is entitled also to the deduction under section 80-I or section 80J in relation to the profits and gains of a small-scale industrial undertaking to which this section applies, effect shall first be given to the provisions of this section.

7. Where a deduction in relation to the profits and gains of a small-scale industrial undertaking to which section 80HH applies is claimed and allowed under that section for any assessment year, deduction in relation to such profits and gains shall not be allowed under this section for the same or any other assessment year.

8. Nothing contained in this section shall apply in relation to any small-scale industrial undertaking engaged in mining.

Explanation : For the purposes of this section, “

1. “rural area” means any area other than “

1. an area which is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee or by any other name) or a cantonment board and which has a population of not less than ten thousand according to the last preceding census of which the relevant figures have been published before the first day of the previous year; or

2. an area within such distance, not being more than fifteen kilometers from the local limits of any municipality or cantonment board referred to in sub-clause (i), as the Central Government may, having regard to the stage of development of such area (including the extent of, and scope for, urbanisation of such area) and other relevant considerations specify in this behalf by notification in the Official Gazette;

238 [(b) an industrial undertaking shall be deemed to be a small-scale industrial undertaking which is, on the last day of the previous year, regarded as a small-scale industrial undertaking under section 11B of the Industries (Development and Regulation) Act, 1951 (65 of 1951).]

Section 80HHB - Deduction in respect of profits and gains from projects outside India

1. Where the gross total income of an assessee being an Indian company or a person (other than a company) who is resident in India includes any profits and gains derived from the business of “

1. the execution of a foreign project undertaken by the assessee in pursuance of a contract entered into by him, or

2. the execution of any work undertaken by him and forming part of a foreign project undertaken by any other person in pursuance of a contract entered into by such other person, with the Government of a foreign State or any statutory or other public authority or agency in a foreign State, or a foreign enterprise, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, 239 [a deduction from such profits and gains of an amount equal to --

1. forty per cent thereof for an assessment year beginning on the 1st day of April, 2001;

2. thirty per cent thereof for an assessment year beginning on the 1st day of April, 2002;

3. twenty per cent thereof for an assessment year beginning on the 1st day of April, 2003;

4. ten per cent thereof for an assessment year beginning on the 1st day of April, 2004, and no deduction shall be allowed in respect of the assessment year beginning on the 1st day of April, 2005 and any subsequent assessment year]:

Provided that the consideration for the execution of such project or, as the case may be, of such work is payable in convertible foreign exchange.

2. For the purposes of this section, “

3. “convertible foreign exchange” means foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purposes of240 [the Foreign Exchange Management Act, 1999 (42 of 1999)], and any rules made thereunder:

4. “foreign project” means a project for “

1. the construction of any building, road, dam, bridge or other structure outside India;

2. the assembly or installation of any machinery or plant outside India;

3. the execution of such other work (of whatever nature) as may be prescribed.241

   3. The deduction under this section shall be allowed only if the following conditions are fulfilled, namely:

   1. the assessee maintains separate accounts in respect of the profits and gains derived from the business of the execution of the foreign project, or, as the case may be, of the work forming part of the foreign project undertaken by him and, where the assessee is a person other than an Indian company or a co-operative society, such accounts have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288 and the assessee furnishes, along with his return of income, the report of such audit in the prescribed form242 duly signed and verified by suchaccountant;

243 [(ia) the assessee furnishes, along with his return of income, a certificate in the prescribed form244from an accountant as defined in the

Explanation below sub-section (2) of section 288, duly signed and verified by such accountant, certifying that the deduction has been correctly claimed in accordance with the provisions of this section;]

2. an amount equal to 245 [such percentage of the profits and gains as is referred to in sub-section (1) in relation to the relevant assessment year] is debited to the profit and loss account of the previous year in respect of which the deduction under this section is to be allowed and credited to a reserve account (to be called the “Foreign Projects Reserve Account’) to be utilised by the assessee during a period of five years next following for the purposes of his business other than for distribution by way of dividends or profits;

3. an amount equal to 246 [such percentage of the profits and gains as is referred to in sub-section (1) in relation to the relevant assessment year] is brought by the assessee in convertible foreign exchange into India, in accordance with the provisions of 247 [the Foreign Exchange Management Act, 1999 (42 of 1999)], and any rules made thereunder, within a period of six months from the end of the previous year referred to in clause (ii) or, 248 [within such further period as the competent authority may allow in this behalf:]

Provided that where the amount credited by the assessee to the Foreign Projects Reserve Account in pursuance of clause (ii) or the amount brought into India by the assessee in pursuance of clause (iii) or each of the said amounts is less than 6[such percentage of the profits and gains as is referred to in sub-section (1) in relation to the relevant assessment year], the deduction under that sub-section shall be limited to the amount so credited in pursuance of clause (ii) or the amount so brought into India in pursuance of clause (iii), whichever is less.

249[Explanation : For the purposes of clause (iii), the expression “competent authority” means the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange.]

4. If at any time before the expiry of five years from the end of the previous year in which the deduction under sub-section (1) is allowed, the assessee utilises the amount credited to the Foreign Projects Reserve Account for distribution by way of dividends or profits or for any other purpose which is not a purpose of the business of the assessee, the deduction originally allowed under sub-section (1) shall be deemed to have been wrongly allowed, and the Assessing Officer may, notwithstanding anything contained in this Act, recompute the total income of the assessee for the relevant previous year and make the necessary amendment; and the provisions of section 154 shall, so far as may be, apply thereto, the period of four years specified in sub-section (7) of that section being reckoned from the end of the previous year in which the money was so utilised.

5. Notwithstanding anything contained in any other provision of this Chapter under the heading “C. - Deductions in respect of certain incomes”, no part of the consideration or of the income comprised in the consideration payable to the assessee for the execution of a foreign project referred to in clause (a) of sub-section (1) or of any work referred to in clause (b) of that sub-section shall qualify for deduction for any assessment year under any such other provision.

Section 80HHBA - Deduction in respect of profits and gains from housing projects in certain cases

250 [(1) Where the gross total income of an assessee being an Indian company or a person (other than a company) who is a resident in India includes any profits and gains derived from the execution of a housing project awarded to the assessee on the basis of global tender and such project is aided by the World Bank, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, 251 [a deduction from such profits and gains of an amount equal to “

1. forty per cent thereof for an assessment year beginning on the 1st day of April, 2001;

2. thirty per cent thereof for an assessment year beginning on the 1st day of April, 2002;

3. twenty per cent thereof for an assessment year beginning on the 1st day of April, 2003;

4. ten per cent thereof for an assessment year beginning on the 1st day of April, 2004, and no deduction shall be allowed in respect of the assessment year beginning on the 1st day of April, 2005 and any subsequent assessment year;]

(2) The deductions under this section shall be allowed only if the following conditions are fulfilled, namely:

1. the assessee maintains separate accounts in respect of the profits and gains derived from the business of the execution of the housing project undertaken by him and, where the assessee is a person other than an Indian company or a co-operative society, such accounts have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288 and the assessee furnishes along with his return of income the report of such audit in the prescribed252 form duly signed and verified by such accountant;

2. an amount equal to 253 [such percentage of the profits and gains as is referred to in sub-section (1) in relation to the relevant assessment year] is debited to the profits and loss account of the previous year in respect of which the deduction under this section is to be allowed and credited to a reserve account (to be called the Housing Projects Reserve Account) to be utilised by the assessee during a period of five years next following for the purposes of his business other than for distribution by way of dividends or profit:

Provided that where the amount credited by the assessee to the Housing Projects Reserve Account in pursuance of clause (ii) is less than 254[such percentage of the profits and gains as is referred to in sub-section (1) in relation to the relevant assessment year], the deduction under this section shall be limited to the amount so credited in pursuance of clause (ii).

(3) If at any time before the expiry of five years from the end of the previous year in which the deduction under sub-section (1) is allowed, the assessee utilises the amount credited to the Housing Projects Reserve Account for distribution by way of dividends or profit or for any other purpose which is not a purpose of the business of the assessee, the deduction originally allowed under sub-section (1) shall be deemed to have been wrongly allowed and the Assessing Officer may, notwithstanding anything contained in this Act, recompute the total income of the assessee for the relevant previous year and make necessary amendment and the provision of section 154 shall, so far as may be, apply thereto, the period of four years specified in sub-section (7) of that section being reckoned from the end of the previous year in which the money was so utilised.

(4) Notwithstanding anything contained in any other provision of this Chapter under heading “C. “Deductions in respect of certain incomes”, no part of the income payable to the assessee for the execution of a housing project under sub-section (1) shall qualify for deduction for any assessment year under any other provision.

Explanation: For the purposes of this section, “

1. “housing project” means a project for “

1. the construction of any building, road, bridge or other structure in any part of India;

2. the execution of such other work (of whatever nature) as may be prescribed;

   2. “World Bank” means the International Bank for Reconstruction and Development Bank referred to in the International Monetary Fund and Bank Act, 1945.]

Section 80HHC - Deduction in respect of profits retained for export business

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, 255 [a deduction to the extent of profit, referred to is sub-section (1B)] 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 subsection 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 derived by the assessee from the export of trading goods, the same proportion as the amount of export turnover specified in the said certificate bears to the total export turnover of the assessee in respect of such trading goods.

(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, 256 [a deduction to the extent of profits, referred to in sub-section (1B)] 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.

257 [(1B) For the purposes of sub-sections (1) and (1A), the extent of deduction of the profits shall be an amount equal to --

1. eighty per cent thereof for an assessment year beginning on the 1st day of April, 2001;

258[(ii) seventy per cent thereof for an assessment year beginning on the 1st day of April, 2002;

(iii) fifty per cent thereof for an assessment year beginning on the 1st day of April, 2003;

(iv) thirty per cent thereof for an assessment year beginning on the 1st day of April, 2004,] and no deduction shall be allowed in respect of the assessment year beginning on the 1st day of April, 2005 and any subsequent 'assessment year.]

2. (a) This section applies to all goods or merchandise, other than those specified in clause (b), if the sale proceeds of such goods or merchandise exported out of India are received in, or brought into, India by the assessee (other than the supporting manufacturer) in convertible foreign exchange, within a period of six months from the end of the previous year or, 259 [within such further period as the competent authority may allow in this behalf].

260 [Explanation : For the purposes of this clause, the expression “competent authority” means the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange.]

(b) This section does not apply to the following goods or merchandise, namely:

1. mineral oil; and

2. minerals and ores (other than processed minerals and ores specified in the Twelfth Schedule).

Explanation 1: The sale proceeds referred to in clause (a) shall be deemed to have been received in India where such sale proceeds are credited to a separate account maintained for the purpose by the assessee with any bank outside India with the approval of the Reserve Bank of India.

Explanation 2 : For the removal of doubts, it is hereby declared that where any goods or merchandise are transferred by an assessee to a branch, office, warehouse or any other establishment of the assessee situate outside India and such goods or merchandise are sold from such branch, office, warehouse or establishment, then, such transfer shall be deemed to be export out of India of such goods and merchandise and the value of such goods or merchandise declared in the shipping bill or bill of export as referred to in sub-section (1) of section 50 of the Customs Act, 1962 (52 of 1962), shall, for the purposes of this section, be deemed to be the sale proceeds thereof.

3. For the purposes of sub-section (1), “

1. where the export out of India is of goods or merchandise manufactured or processed by the assessee, the profits derived from such export shall be the amount which bears to the profits of the business, the same proportion as the export turnover in respect of such goods bears to the total turnover of the business carried on by the assessee;

2. where the export out of India is of trading goods, the profits derived from such export shall be the export turnover in respect of such trading goods as reduced by the direct costs and indirect costs attributable to such export;

3. where the export out of India is of goods or merchandise manufactured or processed by the assessee and of trading goods, the profits derived from such export shall, “

1. in respect of the goods or merchandise manufactured or processed by the assessee, be the amount which bears to the adjusted profits of the business, the same proportion as the adjusted export turnover in respect of such goods bears to the adjusted total turnover of the business carried on by the assessee; and

2. in respect of trading goods, be the export turnover in respect of such trading goods as reduced by the direct and indirect costs attributable to export of such trading goods:

Provided that the profits computed under clause (a) or clause (b) or clause (c) of this sub-section shall be further increased by the amount which bears to ninety per cent of any sum referred to in clause (iiia) (not being profits on sale of a licence acquired from any other person), and clauses (iiib) and (iiic) of section 28, the same proportion as the export turnover bears to the total turnover of the business carried on by the assessee:

261[Provided further that in the case of an assessee having export turnover exceeding rupees ten crore during the previous year, the profits computed under clause (a) or clause (b) or clause (c) of this sub-section or after giving effect to the first proviso, as the case may be, shall be further increased by the amount which bears to ninety per cent of any sum referred to in clause (iiid) or clause (iiie), as the case may be, of section 28, the same proportion as the export turnover bears to the total turnover of the business carried on by the assessee:

Provided also that in the case of an assessee having export turnover exceeding rupees ten crore during the previous year, the profits computed under clause (a) or clause (b) or clause (c) of this sub-section or after giving effect to the first proviso, as the case may be, shall be further increased by the amount which bears to ninety per cent of any sum referred to in clause (iiid) of section 28, the same proportion as the export turnover bears to the total turnover of the business carried on by the assessee, if the assessee has necessary and sufficient evidence to prove that, -

1. he had an option to choose either the duty drawback or the Duty Entitlement Pass Book Scheme, being Duty Remission Scheme; and

2. the rate of drawback credit attributable to the customs duty was higher than the rate of credit allowable under the Duty Entitlement Pass Book Scheme, being Duty Remission Scheme:

Provided also that in the case of an assessee having export turnover exceeding rupees ten crore during the previous year, the profits computed under clause (a) or clause (b) or clause (c) of this sub-section or after giving effect to the first proviso, as the case may be, shall be further increased by the amount which bears to ninety per cent of any sum referred to in clause (iiie) of section 28, the same proportion as the export turnover bears to the total turnover of the business carried on by the assessee, if the assessee has necessary and sufficient evidence to prove that, -

1. he had an option to choose either the duty drawback or the Duty- Free Replenishment Certificate, being Duty Remission Scheme; and

2. the rate of drawback credit attributable to the customs duty was higher than the rate of credit allowable under the Duty -Free Replenishment Certificate, being Duty Remission Scheme.

Explanation : For the purposes of this clause, “rate of credit allowable” means the rate of credit allowable under the Duty Free Replenishment Certificate, being Duty Remission Scheme calculated in the manner as may be notified by the Central Government.]

262 [Provided also that in case the computation under clause (a) or clause (b) or clause (c) of this sub-section is a loss, such loss shall be set-off against the amount which bears to ninety per cent of -

1. any sum referred to in clause (iiia) or clause (iiib) or clause (iiic), as the case may be, or

2. any sum referred to in clause (iiid) or clause (iiie) as the case may be, of section 28, as applicable in the case of an assessee referred to in the second or the third or the fourth proviso, as the case may be, the same proportion as the export turnover bears to the total turnover of the business carried on by the assessee.]

Explanation : For the purposes of this sub-section, “

1. “adjusted export turnover” means the export turnover as reduced by the export turnover in respect of trading goods;

2. “adjusted profits of the business” means the profits of the business as reduced by the profits derived from the business of export out of India of trading goods as computed in the manner provided in clause (b) of sub-section (3);

3. “adjusted total turnover” means the total turnover of the business as reduced by the export turnover in respect of trading goods;

4. “direct costs” means costs directly attributable to the trading goods exported out of India including the purchase price of such goods;

5. “indirect costs” means costs, not being direct costs, allocated in the ratio of the export turnover in respect of trading goods to the total turnover;

6. “trading goods” means goods which are not manufactured or processed by the assessee.

(3A) For the purposes of sub-section (1A), profits derived by a supporting manufacturer from the sale of goods or merchandise shall be, “

1. 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;

2. 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 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.

   4. The deduction under sub-section (1) shall not be admissible unless the assessee furnishes in the prescribed form263, along with the return of income, 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 in accordance with the provisions of this section:

264 [Provided that in the case of an undertaking referred to in sub-section (4C), the assessee shall also furnish along with the return of income, a certificate from the undertaking in the special economic zone containing such particulars as may be prescribed265, duly certified by the auditor auditing the accounts of the undertaking in the special economic zone under the provisions of this Act or under any other law for the time being in force.]

(4A) The deduction under sub-section (1A) shall not be admissible unless the supporting manufacturer furnishes in the prescribed form266 along with his return of income, “

1. the report267 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 profits of the supporting manufacturer in respect of his sale of goods or merchandise to the Export House or Trading House; and

2. a certificate from the Export House or Trading House containing such particulars as may be prescribed268 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.

269 [(4B) For the purposes of computing the total income under sub-section (1) or sub-section (1A), any income not charged to tax under this Act shall be excluded.]

270 [(4C) The provisions of this section shall apply to an assessee,”

1. for an assessment year beginning after the 31st day of March, 2004 and ending before the 1st day of April, 2005;

2. who owns any undertaking which manufactures or produces goods or merchandise anywhere in India (outside any special economic zone) and sells the same to any undertaking situated in a special economic zone which is eligible for deduction under section 10A and such sale shall be deemed to be export out of India for the purposes of this section.]

Explanation : For the purposes of this section, “

1. “convertible foreign exchange” means foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purposes of271 [the Foreign Exchange Management Act, 1999 (42 of 1999)], and any rules made thereunder;

(aa) “export out of India” shall not include any transaction by way of sale or otherwise, in a shop, emporium or any other establishment situate in India, not involving clearance at any custom station as defined in the Customs Act, 1962 (52 of 1962);

2. “export turnover” means the sale proceeds, received in, or brought into, India by the assessee in convertible foreign exchange in accordance with clause (a) of sub-section (2) of any goods or merchandise to which this section applies and which are exported out of India, but does not include freight or insurance attributable to the transport of the goods or merchandise beyond the customs station as defined in the Customs Act, 1962 (52 of 1962);

(ba) “total turnover” shall not include freight or insurance attributable to the transport of the goods or merchandise beyond the customs station as defined in the Customs Act, 1962 (52 of 1962):

Provided that in relation to any assessment year commencing on or after the 1st day of April, 1991, the expression “total turnover” shall have effect as if it also excluded any sum referred to in clauses (iiia), (iiib), 272 [(iiic), (iiid) and (iiie)] of section 28;

(baa) “profits of the business” means the profits of the business as computed under the head “Profits and gains of business or profession” as reduced by -

1. ninety per cent of any sum referred to in clauses (iiia), (iiib), 273 [(iiic), (iiid) and (iiie)] of section 28 or of any receipts by way of brokerage, commission, interest, rent, charges or any other receipt of a similar nature included in such profits; and (2) the profits of any branch, office, warehouse or any other establishment of the assessee situate outside India;

(bb) 274 [***];

3. “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;

4. “supporting manufacturer” means a person being an Indian company or a person (other than a company) resident in India, manufacturing (including processing) goods or merchandise and selling such goods or merchandise to an Export House or a Trading House for the purposes of export;

5. 275 [“special economic zone” shall have the meaning assigned to it in clause (viii) of the Explanation 2 to section 10A.]

Section 80HHD - Deduction in respect of earnings in convertible foreign exchange

1. Where an assessee, being an Indian company or a person (other than a company) resident in India, is engaged in the business of a hotel or of a tour operator, approved by the prescribed authority276 in this behalf or of a travel agent, there shall, in accordance with and subject to the provisions of this section, be allowed, 277 [in computing the total income of the assessee “

   1. for an assessment year beginning on the 1st day of April, 2001, a deduction of a sum equal to the aggregate of “

1. forty per cent of the profits derived by him from services provided to foreign tourists; and

2. so much of the amount not exceeding forty per cent of the profits referred to in sub-clause (i) as is debited to the profit and loss account of the previous year in respect of which the deduction is to be allowed and credited to a reserve account to be utilised for the purposes of the business of the assessee in the manner laid down in sub-section (4);

   2. for an assessment year beginning on the 1st day of April, 2002, a deduction of a sum equal to the aggregate of “

1. thirty per cent of the profits derived by him from services provided to foreign tourists; and

2. so much of the amount not exceeding thirty per cent of the profits referred to in sub-clause (i) as is debited to the profit and loss account of the previous year in respect of which the deduction is to be allowed and credited to a reserve account to be utilised for the purposes of the business of the assessee in the manner laid down in sub-section (4);

   3. for an assessment year beginning on the 1st day of April, 2003, a deduction of a sum equal to the aggregate of “

1. 278[twenty-five per cent] of the profits derived by him from services provided to foreign tourists; and

2. so much of the amount not exceeding 279 [twenty-five per cent] of the profits referred to in sub-clause (i) as is debited to the profit and loss account of the previous year in respect of which the deduction is to be allowed and credited to a reserve account to be utilised for the purposes of the business of the assessee in the manner laid down in sub-section (4);

   4. for an assessment year beginning on the 1st day of April, 2004, a deduction of a sum equal to the aggregate of “

1. 280[fifteen per cent] of the profits derived by him from services provided to foreign tourists; and

2. so much of the amount not exceeding 281 [fifteen per cent] of the profits referred to in sub-clause (i) as is debited to the profit and loss account of the previous year in respect of which the deduction is to be allowed and credited to a reserve account to be utilised for the purposes of the business of the assessee in the manner laid down in sub-section (4), and no deduction shall be allowed in respect of the assessment year beginning on the 1st day of April, 2005 and any subsequent assessment year:]

Provided that a hotel or, as the case may be, a tour operator approved by the prescribed authority282 on or after the 30th day of November, 1989 and before the 1st day of October, 1991, shall be deemed to have been approved by the prescribed authority283 for the purposes of this section in relation to the assessment year commencing on the 1st day of April, 1989 or the 1st day of April, 1990 or, as the case may be, the 1st day of April, 1991 if the assessee was engaged in the business of such hotel or as such tour operator during the previous year relevant to any of the said assessment years.

2. This section applies only to services provided to foreign tourists the receipts in relation to which are received in, or brought into, India by the assessee in convertible foreign exchange within a period of six months from the end of the previous year or 284 [within such further period as the competent authority may allow in this behalf].

Explanation 285 [1] : For the purposes of this sub-section, any payment received by an assessee, engaged in the business of a hotel or of a tour operator or of a travel agent, in Indian currency obtained by conversion of foreign exchange brought into India through an authorised dealer, from another hotelier, tour operator or travel agent, as the case may be, on behalf of a foreign tourist or group of foreign tourists, shall be deemed to have been received by the assessee in convertible foreign exchange if the person making the payment furnishes to the assessee a certificate specified in sub-section (2A).

286 [Explanation 2 : For the purposes of this sub-section, the expression “competent authority” means the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange.]

(2A) Every person making payment to an assessee referred to in the 287 [Explanation 1] to sub-section (2) out of Indian currency obtained by conversion of foreign exchange received from or on behalf of a foreign tourist or a group of foreign tourists shall furnish to that assessee a certificate in the prescribed form288 indicating the amount received in foreign exchange, its conversion into Indian currency and such other particulars as may be prescribed289.

3. For the purposes of sub-section (1), profits derived from services provided to foreign tourists shall be 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 receipts specified in sub-section (2) as reduced by any payment, referred to in sub-section (2A), made by the assessee bear to the total receipts of the business carried on by the assessee.

4. The amount credited to the reserve account under clause (b) of sub-section (1), shall be utilised by the assessee before the expiry of a period of five years next following the previous year in which the amount was credited for the following purposes, namely:

   5. construction of new hotels approved by the prescribed authority290 in this behalf or expansion of facilities in existing hotels already so approved;

   6. purchase of new cars and new coaches by tour operators already so approved or by travel agents;

   7. purchase of sports’ equipment for mountaineering, trekking, golf, river-rafting and other sports in or on water;

   8. construction of conference or convention centers;

   9. provision of such new facilities for the growth of Indian tourism as the Central Government may, by notification in the Official Gazette, specify in this behalf;

291 [(f) subscription to equity shares forming part of any eligible issue of capital made by a public company:]

Provided that where any of the activities referred to in 292 [clauses (a) to (f)] would result in creation of any asset owned by the assessee outside India, such asset should be created only after obtaining prior approval of the prescribed authority293.

5. Where any amount credited to the reserve account under clause (b) of subsection (1), “

   10. has been utilised for any purpose other than those referred to in sub-section (4), the amount so utilised; or

   11. has not been utilised in the manner specified in sub-section (4), the amount not so utilised, shall be deemed to be the profits, “

1. in a case referred to in clause (a), in the year in which the amount was so utilised; or

2. in a case referred to in clause (b), in the year immediately following the period of five years specified in sub-section (4), and shall be charged to tax accordingly.

294 [(5A) Where any amount credited to the reserve account under clause (b) of sub-section (1) has been utilised for subscription to any equity shares referred to in clause (f) of sub-section (4) and either whole or any part of such equity shares are transferred or converted into money by the assessee at any time within a period of three years from the date of their acquisition, the aggregate amount so utilised in respect of such equity shares shall be deemed to be the profits of the previous year in which the equity shares are transferred or converted into money.

Explanation: A person shall be treated as having acquired any shares on the date on which his name is entered in relation to those shares in the register of members of the public company.]

6. The deduction under sub-section (1) shall not be admissible unless the assessee furnishes in the prescribed form295, along with the return of income, 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 amount of convertible foreign exchange received by the assessee for services provided by him to foreign tourists, payments made by him to any assessee referred to in sub-section (2A) and the payments received by him in Indian currency as referred to in the 296 [Explanation 1 to sub-section (2)].

297 [(7) Where a deduction under sub-section (1) is claimed and allowed in respect of profits derived from the business of a hotel, such part of profits shall not qualify to that extent for deduction for any assessment year under any other provisions of this Chapter under the heading “C. “ Deductions in respect of certain incomes”, and shall in no case exceed the profits and gains of such hotel.]

Explanation : For the purposes of this section, “

1. “travel agent” means a travel agent or other person (not being an airline or a shipping company) who holds a valid licence granted by the Reserve Bank of India under section 32298 of 299 [the Foreign Exchange Management Act, 1999 (42 of 1999)];

2. “convertible foreign exchange” shall have the meaning assigned to it in clause (a) of the Explanation to section 80HHC;

3. “services provided to foreign tourists” shall not include services by way of sale in any shop owned or managed by the person who carries on the business of a hotel or of a tour operator or of a travel agent;

4. “authorised dealer”, “foreign exchange” and “Indian currency” shall have the meanings respectively assigned to them in clauses (b), (h) and (k) of section 2 of 300 [the Foreign Exchange Management Act, 1999 (42 of 1999)].

301 [(e) “eligible issue of capital” means an issue made by a public company formed and registered in India and the entire proceeds of the issue is utilised wholly and exclusively for the purpose of carrying on the business of “

1. setting up and running of new hotels approved by the prescribed authority; or

2. providing such new facility for the growth of tourism in India, as the Central Government may, by notification in the Official Gazette, specify.]

Section 80HHE - Deduction in respect of profits from export of computer software etc

1. Where an assessee, being an Indian company or a person (other than a company) resident in India, is engaged in the business of, “

1. export out of India of computer software or its transmission from India to a place outside India by any means;

2. providing technical services outside India in connection with the development or production of computer software, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, 302[a deduction to the extent of the profits, referred to in sub-section (1B)] derived by the assessee from such business.

[***]303

304 [Provided that if the assessee, being a company engaged in the export out of India of computer software issues a certificate referred to in clause (b) of sub-section (4A), that in respect of the amount of the export specified therein, the deduction under this sub-section is to be allowed to a supporting software developer, then the amount of deduction in the case of an assessee shall be reduced by such amount which bears to the total profits derived by the assessee from the export, the same proportion as the amount of the export turnover specified in such certificate bears to the total export turnover of the assessee.]

305 [Explanation : For the removal of doubts, it is hereby declared that the profits and gains derived from on site development of computer software (including services for development of software) outside India shall be deemed to be the profits and gains derived from the export of computer software outside India.]

306 [(1A) Where the assessee, being a supporting software developer, has during the previous year, developed and sold computer software to an exporting company in respect of which the said company 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 profits derived by the assessee from the developing and selling of computer software to the exporting company in respect of which the certificate has been issued by the said company [to such extent and for such years as specified in subsection (1B)].]

307 [(1B) For the purposes of sub-sections (1) and (1A), the extent of deduction of profits shall be an amount equal to “

1. eighty per cent of such profits for an assessment year beginning on the 1st day of April, 2001;

308 [(ii) seventy per cent thereof for an assessment year beginning on the 1st day of April, 2002;

(iii) fifty per cent thereof for an assessment year beginning on the 1st day of April, 2003;

(iv) thirty per cent thereof for an assessment year beginning on the 1st day of April, 2004,] and no deduction shall be allowed in respect of the assessment year beginning on the 1st day of April, 2005 and any subsequent assessment year.]

2. The deduction specified in sub-section (1) shall be allowed only if the consideration in respect of the computer software referred to in that sub-section is received in, or brought into, India by the assessee in convertible foreign exchange, within a period of six months from the end of the previous year or 309[within such further period as the competent authority may allow in this behalf].

Explanation 310(1): The said consideration shall be deemed to have been received in India where it is credited to a separate account maintained for the purpose by the assessee with any bank outside India with the approval of the Reserve Bank of India.

311[Explanation 2: For the purposes of this sub-section, the expression “competent authority” means the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange.]

3. For the purposes of sub-section (1), profits derived from the business referred to in that sub-section shall be the amount which bears to the profits of the business, the same proportion as the export turnover bears to the total turnover of the business carried on by the assessee.

312[(3A) For the purposes of sub-section (1A), profits derived by a supporting software developer shall be, “

1. in a case where the business carried on by the supporting software developer consists exclusively of developing and selling of computer software to one or more exporting companies solely engaged in exports, the profits of such business;

2. in a case where the business carried on by a supporting software developer does not consist exclusively of developing and selling of computer software to one or more exporting companies, the amount which bears to the profits of the business, the same proportion as the turnover in respect of sale to the respective exporting company bears to the total turnover of the business carried on by the assessee.]

4. The deduction under sub-section (1) shall not be admissible unless the assessee furnishes in the prescribed form313, along with the return of income, 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 in accordance with the provisions of this section.

314 [(4A) The deduction under sub-section (1A) shall not be admissible unless the supporting software developer furnishes in the prescribed form along with his return of income, “

1. the report of an accountant315, 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 profits of the supporting software developer in respect of sale of computer software export to the exporting company; and

2. a certificate from the exporting company containing such particulars as may be prescribed316 and verified in the manner prescribed317 that in respect of the export turnover mentioned in the certificate, the exporting company has not claimed deduction under this section:

Provided that the certificate specified in clause (ii) shall be duly certified by the auditor auditing the accounts of the exporting assessee under the provisions of this Act or under any other law.]

5. Where a deduction under this section is claimed and allowed in respect of profits of the business referred to in sub-section (1) for any assessment year, no deduction shall be allowed in relation to such profits under any other provision of this Act for the same or any other assessment year.

Explanation: For the purposes of this section, “

1. “convertible foreign exchange” shall have the meaning assigned to it in clause (a) of the Explanation to section 80HHC;

   318[(b) “computer software” means, “

1. any computer programme recorded on any disc, tape, perforated media or other information storage device, or

2. any customised electronic data or any product or service of similar nature as may be notified by the Board, which is transmitted or exported from India to a place outside India by any means;]

   (c) “export turnover” means the consideration in respect of computer software received in, or brought into, India by the assessee in convertible foreign exchange in accordance with sub-section (2), but does not include freight, telecommunication charges or insurance attributable to the delivery of the computer software outside India or expenses, if any, incurred in foreign exchange in providing the technical services outside India;

   319 [(ca) “exporting company” means a company referred to in sub-section (1) making actual export of computer software;]

   (d) “profits of the business” means the profits of the business as computed under the head “Profits and gains of business or profession” as reduced by “

   1. ninety per cent of any receipts by way of brokerage, commission, interest, rent, charges or any other receipt of a similar nature included in such profits; and

   2. the profits of any branch, office, warehouse or any other establishment of the assessee situate outside India;

      (e) “total turnover” shall not include “

1. any sum referred to in clauses (iiia), (iiib) and (iiic) of section 28;

2. any freight, telecommunication charges or insurance attributable to the delivery of the computer software outside India; and

3. expenses, if any, incurred in foreign exchange in providing the technical services outside India;

320 [(ea) “supporting software developer” means an Indian company or a person (other than a company) resident in India, developing and selling computer software to an exporting company for the purposes of export.] 

Section 80HHF - Deduction in respect of profits and gains from export or transfer of film software etc

321[(1) Where an assessee, being an Indian company, 322 [or a person (other than a company) resident in India] is engaged in the business of export or transfer by any means out of India, of any film software, television software, music software, television news software, including telecast rights (hereafter in this section referred to as the software or software rights), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, 323 [a deduction to the extent of profits referred to in sub-section (1A)] derived by the assessee from such business.

324[(1A) For the purposes of sub-section (1), the extent of deduction of profits shall be an amount equal to “

1. eighty per cent of such profits for an assessment year beginning on the 1st day of April, 2001;

325 [(ii) seventy per cent thereof for an assessment year beginning on the 1st day of April, 2002;

(iii) fifty per cent thereof for an assessment year beginning on the 1st day of April, 2003;

(iv) thirty per cent thereof for an assessment year beginning on the 1st day of April, 2004,] and no deduction shall be allowed in respect of the assessment year beginning on the 1st day of April, 2005 and any subsequent assessment year.]

(2) The deduction specified in sub-section (1) shall be allowed only if the consideration in respect of the software or software rights referred to in that sub-section is received in, or brought into, India by the assessee in convertible foreign exchange, within a period of six months from the end of the previous year or within such further period as the competent authority may allow in this behalf.

(3) For the purposes of sub-section (1), profits derived from the business referred to in that sub-section shall be the amount which bears to the profits of the business, the same proportion as the export turnover bears to the total turnover of the business carried on by the assessee.

(4) The deduction under sub-section (1) shall not be admissible unless the assessee furnishes in the prescribed form6, along with the return of income, 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 in accordance with the provisions of this section.

(5) Where a deduction under this section is claimed and allowed in respect of profits of the business referred to in sub-section (1) for any assessment year, no deduction shall be allowed in relation to such profits under any other provision of this Act for the same or any other assessment year.

(6) Notwithstanding anything contained in this section, no deduction shall be allowed in respect of the software or software rights referred to in sub-section (1), if such business is prohibited by any law for the time being in force.

Explanation : For the purposes of this section, “

1. “competent authority” means the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange;

2. “convertible foreign exchange” shall have the meaning assigned to it in clause (a) of the Explanation to section 80HHC;

3. “export turnover” means the consideration in respect of the software or software rights specified in clauses (d), (e), (g), (h) and (i), received in, or brought into, India by the assessee in convertible foreign ex-change in accordance with sub-section (2), but does not include freight, telecommunication charges or insurance attributable to the delivery of such software outside India or expenses, if any, incurred in foreign exchange in providing the technical services outside India;

4. “film software” means a copy of a cinematograph film made by any process analogous to cinematography on acetate polyester or celluloid film positive, magnetic tape, digital media or other optical or magnetic devices and certified by the Board of Film Certification constituted by the Central Government under section 3 of the Cinematograph Act, 1952 (37 of 1952);

5. “music software” includes series of sounds or music recorded on magnetic tape, cassette, compact discs and digital media which can be played or reproduced on any appropriate apparatus;

6. “profits of the business” means the profits of the business as computed under the head “Profits and gains of business or profession” as reduced by “

   1. ninety per cent of any receipts by way of brokerage, commission, interest, rent, charges or any other receipt of a similar nature included in such profits; and

   2. the profits of any branch, office, warehouse or any other establishment of the assessee situated outside India;

7. “telecast rights” means a licence or contract to exhibit motion pictures or television programmes over a television network either through terrestrial transmission or through a satellite broadcast in a specified territory;

8. “television news software” means a collection of sounds and images, reportage, data and voice of actualities broadcast either through terrestrial transmission, wire or satellite, live or pre-recorded on video cassettes or digital media;

9. “television software” means any programme or series of sounds and images recorded on film or tape or digital media or broadcast through terrestrial transmitter, satellite or any other means of diffusion;

10. “total turnover” shall not include “

    3. any sum referred to in clauses (iiia), (iiib) and (iiic) of section 28;

    4. any freight, telecommunication charges or insurance attri-butable to the delivery of the film software, music software, telecast rights, television news software, or television software as defined in clause (d), (e), (g), (h) or (i), as the case may be, outside India;

    5. expenses, if any, incurred in foreign exchange in providing the technical services outside India.]

Section 80I - Deduction in respect of profits and gains from industrial undertakings after a certain date etc

1. Where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking or a ship or the business of a hotel or the business of repairs to ocean-going vessels or other powered craft 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 from such profits and gains of an amount equal to twenty per cent thereof:

Provided that in the case of an assessee, being a company, the provisions of this sub-section shall have effect in relation to profits and gains derived from an industrial undertaking or a ship or the business of a hotel as if for the words “twenty per cent”, the words “twenty-five per cent” had been substituted.

(1A) Notwithstanding anything contained in sub-section (1), in relation to any profits and gains derived by an assessee from “

1. an industrial undertaking which begins to manufacture or produce articles or things or to operate its cold storage plant or plants; or

2. a ship which is first brought into use; or

3. the business of a hotel which starts functioning, on or after the 1st day of April, 1990, but before the 1st day of April, 1991, 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 from such profits and gains of an amount equal to twenty-five per cent thereof:

Provided that in the case of an assessee, being a company, the provisions of this sub-section shall have effect in relation to profits and gains derived from an industrial undertaking or a ship or the business of a hotel as if for the words “twenty-five per cent”, the words “thirty per cent” had been substituted.

2. This section applies to any industrial undertaking which fulfils all the following conditions, namely:

1. it is not formed by the splitting up, or the reconstruction, of a business already in existence;

2. it is not formed by the transfer to a new business of machinery or plant previously used for any purpose;

3. it manufactures or produces any article or thing, not being any article or thing specified in the list in the Eleventh Schedule, or operates one or more cold storage plant or plants, in any part of India, and begins to manufacture or produce articles or things or to operate such plant or plants, at any time within the period of ten years next following the 31st day of March, 1981, or such further period as the Central Government may, by notification in the Official Gazette, specify with reference to any particular industrial undertaking;

4. in a case where the industrial undertaking manufactures or produces articles or things, the undertaking employs ten or more workers in a manufacturing process carried on with the aid of power, or employs twenty or more workers in a manufacturing process carried on without the aid of power:

Provided that the condition in clause (i) shall not apply in respect of any industrial 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:

Provided further that the condition in clause (iii) shall, in relation to a small-scale industrial undertaking, apply as if the words “not being any article or thing specified in the list in Eleventh Schedule” had been omitted.

Explanation 1: For the purposes of clause (ii) of this sub-section, any machinery or plant which was used outside India by any person other than the assessee shall not be regarded as machinery or plant previously used for any purpose, if the following conditions are fulfilled, namely:

1. such machinery or plant was not, at any time previous to the date of the installation by the assessee, used in India;

2. such machinery or plant is imported into India from any country outside India; and

3. no deduction on account of depreciation in respect of such machinery or plant has been allowed or is allowable under the provisions of this Act in computing the total income of any person for any period prior to the date of the installation of the machinery or plant by the assessee.

Explanation 2: Where in the case of an industrial undertaking, any machinery or plant or any part thereof previously used for any purpose is transferred to a new business and the total value of the machinery or plant or part so transferred does not exceed twenty per cent of the total value of the machinery or plant used in the business, then, for the purposes of clause (ii) of this sub-section, the condition specified therein shall be deemed to have been complied with.

Explanation 3: For the purposes of this sub-section, “small-scale industrial undertaking” shall have the same meaning as in clause (b) of the Explanation below sub-section (8) of section 80HHA.

3. This section applies to any ship, where all the following conditions are fulfilled, namely:

1. it is owned by an Indian company and is wholly used for the purposes of the business carried on by it;

2. it was not, previous to the date of its acquisition by the Indian company, owned or used in Indian territorial waters by a person resident in India; and

3. it is brought into use by the Indian company at any time within the period of ten years next following the 1st day of April, 1981.

4. This section applies to the business of any hotel, where all the following conditions are fulfilled, namely:

1. the business of the hotel is not formed by the splitting up, or the reconstruction, of a business already in existence or by the transfer to a new business of a building previously used as a hotel or of any machinery or plant previously used for any purpose;

2. the business of the hotel is owned and carried on by a company registered in India with a paid-up capital of not less than five hundred thousand rupees;

3. the hotel is for the time being approved for the purposes of this subsection by the Central Government;

4. the business of the hotel starts functioning after the 31st day of March, 1981, but before the 1st day of April, 1991.

(4A) This section applies to the business of repairs to ocean-going vessels or other powered craft which fulfils all the following conditions, namely:

1. the business is not formed by the splitting up, or the reconstruction, of a business already in existence;

2. it is not formed by the transfer to a new business of machinery or plant previously used for any purpose;

3. it is carried on by an Indian company and the work by way of repairs to ocean-going vessels or other powered craft has been commenced by such company after the 31st day of March, 1983, but before the 1st day of April, 1988; and

4. it is for the time being approved for the purposes of this sub-section by the Central Government.

5. The deduction specified in sub-section (1) shall be allowed in computing the total income in respect of the assessment year relevant to the previous year in which the industrial undertaking begins to manufacture or produce articles or things, or to operate its cold storage plant or plants or the ship is first brought into use or the business of the hotel starts functioning or the company commences work by way of repairs to ocean-going vessels or other powered craft (such assessment year being hereafter in this section referred to as the initial assessment year) and each of the seven assessment years immediately succeeding the initial assessment year:

Provided that in the case of an assessee, being a co-operative society, the provisions of this sub-section shall have effect as if for the words “seven assessment years”, the words “nine assessment years” had been substituted:

Provided further that in the case of an assessee carrying on the business of repairs to ocean-going vessels or other powered craft, the provisions of this sub-section shall have effect as if for the words “seven assessment years”, the words “four assessment years” had been substituted:

Provided also that in the case of “

1. an industrial undertaking which begins to manufacture or produce articles or things or to operate its cold storage plant or plants; or

2. a ship which is first brought into use; or

3. the business of a hotel which starts functioning, on or after the 1st day of April, 1990 but before the 1st day of April, 1991, provisions of this sub-section shall have effect as if for the words “seven assessment years”, the words “nine assessment years” had been substituted:

Provided also that in the case of an assessee, being a co-operative society, deriving profits and gains from an industrial undertaking or a ship or a hotel referred to in the third proviso, the provisions of that proviso shall have effect as if for the words “nine assessment years”, the words “eleven assessment years” had been substituted.

6. Notwithstanding anything contained in any other provision of this Act, the profits and gains of an industrial undertaking or a ship or the business of a hotel or the business of repairs to ocean-going vessels or other powered craft to which the provisions of sub-section (1) apply shall, for the purposes of determining the quantum of deduction under sub-section (1) for the assessment year immediately succeeding the initial assessment year or any subsequent assessment year, be computed as if such industrial undertaking or ship or the business of the hotel or the business of repairs to ocean-going vessels or other powered craft were the only source of income of the assessee during the previous years relevant to the initial assessment year and to every subsequent assessment year up to and including the assessment year for which the determination is to be made.

7. Where the assessee is a person other than a company or a co-operative society, the deduction under sub-section (1) from profits and gains derived from an industrial undertaking shall not be admissible unless the accounts of the industrial undertaking for the previous year relevant to the assessment year for which the deduction is claimed have been audited by an accountant, as defined in the Explanation below sub-section (2) of section 288, and the assessee furnishes, along with his return of income, the report of such audit in the prescribed form1 duly signed and verified by such accountant.

8. Where any goods held for the purposes of the business of the industrial undertaking or the hotel or the operation of the ship or the business of repairs to ocean-going vessels or other powered craft are transferred to any other business carried on by the assessee, or where any goods held for the purposes of any other business carried on by the assessee are transferred to the business of the industrial undertaking or the hotel or the operation of the ship or the business of repairs to ocean-going vessels or other powered craft and, in either case, the consideration, if any, for such transfer as recorded in the accounts of the business of the industrial undertaking or the hotel or the operation of the ship or the business of repairs to ocean-going vessels or other powered craft does not correspond to the market value of such goods as on the date of the transfer, then, for the purposes of the deduction under this section, the profits and gains of the industrial undertaking or the business of the hotel or the operation of the ship or the business of repairs to ocean-going vessels or other powered craft shall be computed as if the transfer, in either case, had been made at the market value of such goods as on that date:

Provided that where, in the opinion of the Assessing Officer, the computation of the profits and gains of the industrial undertaking or the business of the hotel or the operation of the ship or the business of repairs to ocean-going vessels or other powered craft in the manner hereinbefore specified presents exceptional difficulties, the Assessing Officer may compute such profits and gains on such reasonable basis as he may deem fit.

Explanation: In this sub-section, “market value", in relation to any goods, means the price that such goods would ordinarily fetch on sale in the open market.

9. Where it appears to the Assessing Officer that, owing to the close connection between the assessee carrying on the business of the industrial undertaking or the hotel or the operation of the ship or the business of repairs to ocean-going vessels or other powered craft to which this section applies and any other person, or for any other reason, the course of business between them is so arranged that the business transacted between them produces to the assessee more than the ordinary profits which might be expected to arise in the business of the industrial undertaking or the hotel or the operation of the ship or the business of repairs to ocean-going vessels or other powered craft, the Assessing Officer shall, in computing the profits and gains of the industrial undertaking or the hotel or the ship or the business of repairs to ocean-going vessels or other powered craft for the purposes of the deduction under this section, take the amount of profits as may be reasonably deemed to have been derived therefrom.

10. The Central Government may, after making such inquiry as it may think fit, direct, by notification in the Official Gazette, that the exemption conferred by this section shall not apply to any class of industrial undertakings with effect from such date as it may specify in the notification.

Section 80IA - Deductions in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development, etc.

326 [327 [(1) Where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to in sub-section (4) (such business being hereinafter referred to as the eligible business), 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 an amount equal to hundred per cent of profits and gains derived from such business for ten consecutive assessment years.]

(2) The deduction specified in sub-section (1) may, at the option of the assessee, be claimed by him for any ten consecutive assessment years out of fifteen years beginning from the year in which the undertaking or the enterprise develops and begins to operate any infrastructure facility or starts providing telecommunication service or develops an industrial park 328 [329[or develops a special economic zone] referred to in clause (iii) of sub-section (4)] or generates power or commences transmission or distribution of power 330[or undertakes substantial renovation and modernisation of the existing transmission or distribution lines 331[***]].

332[Provided that where the assessee develops or operates and maintains or develops, operates and maintains any infrastructure facility referred to in clause (a) or clause (b) or clause (c) of the Explanation to clause (i) of sub-section (4), the provisions of this sub-section shall have effect as if for the words “fifteen years”, the words “twenty years” had been substituted.]

333[(2A) Notwithstanding anything contained in sub-section (1) or sub-section (2), the deduction in computing the total income of an undertaking providing telecommunication services, specified in clause (ii) of sub-section (4), shall be hundred per cent of the profits and gains of the eligible business for the first five assessment years commencing at any time during the periods as specified in sub-section (2) and thereafter, thirty per cent of such profits and gains for further five assessment years.]

(3) This section applies to 334[an 335[undertaking referred to in clause (ii) or 336[clause (iv) 337 [***]] of sub-section (4)] which fulfils all the following conditions, namely:

1. it is not formed by splitting up, or the reconstruction, of a business already in existence:

Provided that this condition shall not apply in respect of an undertaking which is formed as a result of the re-establishment, re-construction or revival by the assessee of the business of any such 338[undertaking] as is referred to in section 33B, in the circumstances and within the period specified in that section;

2. it is not formed by the transfer to a new business of machinery or plant previously used for any purpose.

339[Provided that nothing contained in this sub-section shall apply in the case of transfer, either in whole or in part, of machinery or plant previously used by a State Electricity Board referred to in clause (7) of section 2 of the Electricity Act, 2003 (36 of 2003), whether or not such transfer is in pursuance of the splitting up or reconstruction or reorganisation of the Board under Part XIII of that Act.]

Explanation 1 : For the purposes of clause (ii), any machinery or plant which was used outside India by any person other than the assessee shall not be regarded as machinery or plant previously used for any purpose, if the following conditions are fulfilled, namely:

1. such machinery or plant was not, at any time previous to the date of the installation by the assessee, used in India;

2. such machinery or plant is imported into India from any country outside India; and

3. no deduction on account of depreciation in respect of such machinery or plant has been allowed or is allowable under the provisions of this Act in computing the total income of any person for any period prior to the date of the installation of machinery or plant by the assessee.

Explanation 2 : Where in the case of an 340 [undertaking], any machinery or plant or any part thereof previously used for any purpose is transferred to a new business and the total value of the machinery or plant or part so transferred does not exceed twenty per cent of the total value of the machinery or plant used in the business, then, for the purposes of clause (ii) of this sub-section, the condition specified therein shall be deemed to have been complied with.

(4) This section applies to “

1. any enterprise carrying on the business 341 [of (i) developing or

2. operating and maintaining or

3. developing, operating and maintaining] any infrastructure facility which fulfils all the following conditions, namely:

   1. it is owned by a company registered in India or by a consortium of such companies 342 [or by an authority or a board or a corporation or any other body established or constituted under any Central or State Act;]

343 [(b) it has entered into an agreement with the Central Government or a State Government or a local authority or any other statutory body for (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining a new infrastructure facility;]

(c) it has started or starts operating and maintaining the infrastructure facility on or after the 1st day of April, 1995:

Provided that where an infrastructure facility is transferred on or after the 1st day of April, 1999 by an enterprise which developed such infrastructure facility (hereafter referred to in this section as the transferor enterprise) to another enterprise (hereafter in this section referred to as the transferee enterprise) for the purpose of operating and maintaining the infrastructure facility on its behalf in accordance with the agreement with the Central Government, State Government, local authority or statutory body, the provisions of this section shall apply to the transferee enterprise as if it were the enterprise to which this clause applies and the deduction from profits and gains would be available to such transferee enterprise for the unexpired period during which the transferor enterprise would have been entitled to the deduction, if the transfer had not taken place.

344 [Provided further that nothing contained in this section shall apply to any enterprise which starts the development or operation and maintenance of the infrastructure facility on or after the 1st day of April, 2017.]

345 [Explanation : For the purposes of this clause, “infrastructure facility” means”

1. a road including toll road, a bridge or a rail system;

2. a highway project including housing or other activities being an integral part of the highway project;

3. a water supply project, water treatment system, irrigation project, sanitation and sewerage system or solid waste management system;

4. a port, airport, inland waterway 346 [, inland port or navigational channel in the sea];]

347 [(ii) any undertaking which has started or starts providing telecommunication services whether basic or cellular, including radio paging, domestic satellite service, network of trunking, broadband network and internet services on or after the 1st day of April, 1995, but on or before the 348 [31st day of March, 2005];]

349 (iii) any undertaking which develops, develops and operates or maintains and operates an industrial park 350 [or special economic zone] notified by the Central Government in accordance with the scheme351 framed and notified by that Government for the period beginning on the 1st day of April, 1997 and ending on 352 [the 31st day of March, 2006]:

353 [Provided that in a case where an undertaking develops an industrial park on or after the 1st day of April, 1999 or a special economic zone on or after the 1st day of April, 2001 and transfers the operation and maintenance of such industrial park or such special economic zone, as the case may be, to another undertaking (hereafter in this section referred to as the transferee undertaking), the deduction under sub-section (1) shall be allowed to such transferee undertaking for the remaining period in the ten consecutive assessment years as if the operation and maintenance were not so transferred to the transferee undertaking:]

354 [Provided further that in the case of any undertaking which develops, develops and operates or maintains and operates an industrial park, the provisions of this clause shall have effect as if for the figures, letters and words “31st day of March, 2006”, the figures, letters and words 355 [31st day of March, 2011] had been substituted;]

(iv) an 356 [undertaking] which, -

1. is set-up in any part of India for the generation or generation and distribution of power if it begins to generate power at any time during the period beginning on the 1st day of April, 1993 and 357 [ending on 358 [359 [the 31st day of March, 2017]]];

2. starts transmission or distribution by laying a network of new transmission or distribution lines at any time during the period beginning on the 1st day of April, 1999 and 360 [ending on 361 [362[the 31st day of March, 2017]]] :

Provided that the deduction under this section to an 363 [undertaking] under sub-clause (b) shall be allowed only in relation to the profits derived from laying of such network of new lines for transmission or distribution;

364 [(c) undertakes substantial renovation and modernisation of the existing network of transmission or distribution lines at any time during the period beginning on the 1st day of April, 2004 and ending on 365 [366 [the 31st day of March, 2017]].

Explanation : For the purposes of this sub-clause, ”substantial renovation and modernisation” means an increase in the plant and machinery in the network of transmission or distribution lines by at least fifty per cent. of the book value of such plant and machinery as on the 1st day of April, 2004;]

367 [(v) an undertaking owned by an Indian company and set-up for reconstruction or revival of a power generating plant, if -

1. such Indian company is formed before the 30th day of November, 2005 with majority equity participation by public sector companies for the purposes of enforcing the security interest of the lenders to the company owning the power generating plant and such Indian company is notified before the 31st day of December, 2005 by the Central Government for the purposes of this clause;

2. such undertaking begins to generate or transmit or distribute power before the 368 [31st day of March, 2011]].

369[(vi) any undertaking carrying on the business of laying and operating a cross-country natural gas distribution network, including pipelines and storage facilities being an integral part of such network, which fulfils the following conditions, namely:

1. it is owned by a company registered in India or by a consortium of such companies or by an authority or a board or a corporation established or constituted under any Central or State Act;

2. it has been approved by the Petroleum and Natural Gas Regulatory Board established under sub-section (1) of section 3 of the Petroleum and Natural Gas Regulatory Board Act, 2006 (19 of 2006) and notified by the Central Government in the Official Gazette;

3. one-third of its total pipeline capacity is available for use on common carrier basis by any person other than the assessee or an associated person;

4. it has started or starts operating on or after the 1st day of April, 2007; and

5. any other condition which may be prescribed.

Explanation : For the purposes of this clause, an “associated person” in relation to the assessee means a person -

1. who participates directly or indirectly or through one or more intermediaries in the management or control or capital of the assessee;

2. who holds, directly or indirectly, shares carrying not less than twenty-six per cent of the voting power in the assessee;

3. who appoints more than half of the Board of directors or members of the governing board, or one or more executive directors or executive members of the governing board of the assessee; or

4. who guarantees not less than ten per cent of the total borrowings of the assessee.]

(5) Notwithstanding anything contained in any other provision of this Act, the profits and gains of an eligible business to which the provisions of sub-section (1) apply shall, for the purposes of determining the quantum of deduction under that sub-section for the assessment year immediately succeeding the initial assessment year or any subsequent assessment year, be computed as if such eligible business were the only source of income of the assessee during the previous year relevant to the initial assessment year and to every subsequent assessment year up to and including the assessment year for which the determination is to be made.

(6) Notwithstanding anything contained in sub-section (4), where housing or other activities are an integral part of the highway project and the profits of which are computed on such basis and manner as may be prescribed,370 such profit shall not be liable to tax where the profit has been transferred to a special reserve account and the same is actually utilised for the highway project excluding housing and other activities before the expiry of three years following the year in which such amount was transferred to the reserve account; and the amount remaining unutilised shall be chargeable to tax as income of the year in which such transfer to reserve account took place.

(7)  371[The deduction] under sub-section (1) from profits and gains derived from an 372[undertaking] shall not be admissible unless the accounts of the 373 [undertaking] for the previous year relevant to the assessment year for which the deduction is claimed have been audited by an accountant, as defined in the Explanation below sub-section (2) of section 288, 374[before the specified date referred to in section 44AB and the assessee furnishes by that date], the report of such audit in the prescribed form375 duly signed and verified by such accountant.

(8) Where any 376[goods or services] held for the purposes of the eligible business are transferred to any other business carried on by the assessee, or where any 377 [goods or services] held for the purposes of any other business carried on by the assessee are transferred to the eligible business and, in either case, the consideration, if any, for such transfer as recorded in the accounts of the eligible business does not correspond to the market value of such 378 [goods or services] as on the date of the transfer, then, for the purposes of the deduction under this section, the profits and gains of such eligible business shall be computed as if the transfer, in either case, had been made at the market value of such 379 [goods or services] as on that date:

Provided that where, in the opinion of the Assessing Officer, the computation of the profits and gains of the eligible business in the manner hereinbefore specified presents exceptional difficulties, the Assessing Officer may compute such profits and gains on such reasonable basis as he may deem fit.

380[Explanation.--For the purposes of this sub-section, "market value", in relation to any goods or services, means--

1. the price that such goods or services would ordinarily fetch in the open market; or

2. the arm's length price as defined in clause (ii) of section 92F, where the transfer of such goods or services is a specified domestic transaction referred to in section 92BA.]

(9) Where any amount of profits and gains of an 381 [undertaking] or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading “C.” Deductions in respect of certain incomes”, and shall in no case exceed the profits and gains of such eligible business of 6[undertaking] or enterprise, as the case may be.

(10) Where it appears to the Assessing Officer that, owing to the close connection between the assessee carrying on the eligible business to which this section applies and any other person, or for any other reason, the course of business between them is so arranged that the business transacted between them produces to the assessee more than the ordinary profits which might be expected to arise in such eligible business, the Assessing Officer shall, in computing the profits and gains of such eligible business for the purposes of the deduction under this section, take the amount of profits as may be reasonably deemed to have been derived therefrom.

382[Provided that in case the aforesaid arrangement involves a specified domestic transaction referred to in section 92BA, the amount of profits from such transaction shall be determined having regard to arm's length price as defined in clause (ii) of section 92F.]

(11) The Central Government may, after making such inquiry as it may think fit, direct, by notification in the Official Gazette, that the exemption conferred by this section shall not apply to any class of industrial undertaking or enterprise with effect from such date as it may specify in the notification.

(12) Where any undertaking of an Indian company which is entitled to the deduction under this section is transferred, before the expiry of the period specified in this section, to another Indian company in a scheme of amalgamation or demerger, -

1. no deduction shall be admissible under this section to the amalgamating or the demerged company for the previous year in which the amalgamation or the demerger takes place; and

2. the provisions of this section shall, as far as may be, apply to the amalgamated or the resulting company as they would have applied to the amalgamating or the demerged company if the amalgamation or demerger had not taken place.]

383 [(12A) Nothing contained in sub-section (12) shall apply to any enterprise or undertaking which is transferred in a scheme of amalgamation or demerger on or after the 1st day of April, 2007.]

384 [(13) Nothing contained in this section shall apply to any Special Economic Zones notified on or after the 1st day of April, 2005 in accordance with the-a) scheme referred to in sub-clause (iii) of clause (c) of sub-section (4).]

385[Explanation.--For the removal of doubts, it is hereby declared that nothing contained in this section shall apply in relation to a business referred to in sub-section (4) which is in the nature of a works contract awarded by any person (including the Central or State Government) and executed by the undertaking or enterprise referred to in sub-section (1).]

Section 80IAB - Deductions in respect of profits and gains by an undertaking or enterprise engaged in development of Special Economic Zone

386 [(1) Where the gross total income of an assessee, being a Developer, includes any profits and gains derived by an undertaking or an enterprise from any business of developing a Special Economic Zone, notified on or after the 1st day of April, 2005 under the Special Economic Zones Act, 2005, 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 an amount equal to one hundred per cent of the profits and gains derived from such business for ten consecutive assessment years.

[Provided that the provisions of this section shall not apply to an assessee, being a developer, where the development of Special Economic Zone begins on or after the 1st day of April, 2017.]

(2) The deduction specified in sub-section (1) may, at the option of the assessee, be claimed by him for any ten consecutive assessment years out of fifteen years beginning from the year in which a Special Economic Zone has been notified by the Central Government:

Provided that where in computing the total income of any undertaking, being a Developer for any assessment year, its profits and gains had not been included by application of the provisions of sub-section (13) of section 80-IA, the undertaking being the Developer shall be entitled to deduction referred to in this section only for the unexpired period of ten consecutive assessment years and thereafter it shall be eligible for deduction from income as provided in sub-section (1) or sub-section (2), as the case may be:

Provided further that in a case where an undertaking, being a Developer who develops a Special Economic Zone on or after the 1st day of April, 2005 and transfers the operation and maintenance of such Special Economic Zone to another Developer (hereafter in this section referred to as the transferee Developer), the deduction under sub-section (1) shall be allowed to such transferee Developer for the remaining period in the ten consecutive assessment years as if the operation and maintenance were not so transferred to the transferee Developer.

(3) The provisions of sub-section (5) and sub-sections (7) to (12) of section 80-IA shall apply to the Special Economic Zones for the purpose of allowing deductions under sub-section (1).

Explanation : For the purposes of this section, “Developer” and “Special Economic Zone” shall have the same meanings respectively as assigned to them in clauses (g) and (za) of section 2 of the Special Economic Zones Act, 2005.]

Section 80IAC Special provision in respect of specified business

1. Where the gross total income of an assessee, being an eligible start-up, includes any profits and gains derived from eligible business, 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 an amount equal to one hundred per cent. of the profits and gains derived from such business for three consecutive assessment years.

2. The deduction specified in sub-section (1) may, at the option of the assessee, be claimed by him for any three consecutive assessment years out of 387[ten] years beginning from the year in which the eligible start-up is incorporated.

3. This section applies to a start-up which fulfils the following conditions, namely:--

1. it is not formed by splitting up, or the reconstruction, of a business already in existence:

Provided that this condition shall not apply in respect of a start-up which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such undertaking as referred to in section 33B, in the circumstances and within the period specified in that section;

2. it is not formed by the transfer to a new business of machinery or plant previously used for any purpose.

Explanation 1.--For the purposes of this clause, any machinery or plant which was used outside India by any person other than the assessee shall not be regarded as machinery or plant previously used for any purpose, if all the following conditions are fulfilled, namely:--

1. such machinery or plant was not, at any time previous to the date of the installation by the assessee, used in India;

2. such machinery or plant is imported into India;

3. no deduction on account of depreciation in respect of such machinery or plant has been allowed or is allowable under the provisions of this Act in computing the total income of any person for any period prior to the date of the installation of the machinery or plant by the assessee.

Explanation 2.--Where in the case of a start-up, any machinery or plant or any part thereof previously used for any purpose is transferred to a new business and the total value of the machinery or plant or part so transferred does not exceed twenty per cent. of the total value of the machinery or plant used in the business, then, for the purposes of clause (ii) of this sub-section, the condition specified therein shall be deemed to have been complied with.

4. The provisions of sub-section (5) and sub-sections (7) to (11) of section 80-IA shall apply to the start-ups for the purpose of allowing deductions under sub-section (1).

Explanation.--For the purposes of this section,--

388 [(i) "eligible business" means a business carried out by an eligible start up engaged in innovation, development or improvement of products or processes or services or a scalable business model with a high potential of employment generation or wealth creation;]

(ii) "eligible start-up" means a company or a limited liability partnership engaged in eligible business which fulfils the following conditions, namely:--

1. it is incorporated on or after the 1st day of April, 2016 but before the 1st day of April, 389[2023];

2. the total turnover of its business does not exceed 390[one hundred] crore rupees 391[in the previous year relevant to the assessment year for which deduction under sub-section (1) is claimed];

3. it holds a certificate of eligible business from the Inter-Ministerial Board of Certification as notified in the Official Gazette by the Central Government; and

(iii) ''limited liability partnership'' means a partnership referred to in clause (n) of sub-section (1) of section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009).]392

Section 80IB - Deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development undertakings

1. Where the gross total income of an assessee includes any profits and gains derived from any business referred to in sub-sections 393 [(3) to 394[(11), (11A) and (11B)]] (such business being hereinafter referred to as the eligible business), 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 from such profits and gains of an amount equal to such percentage and for such number of assessment years as specified in this section.

2. This section applies to any industrial undertaking which fulfils all the following conditions, namely:

1. it is not formed by splitting up, or the reconstruction, of a business already in existence:

   Provided that this condition shall not apply in respect of an industrial 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;

2. it is not formed by the transfer to a new business of machinery or plant previously used for any purpose;

3. it manufactures or produces any article or thing, not being any article or thing specified in the list in the Eleventh Schedule, or operates one or more cold storage plant or plants, in any part of India:

Provided that the condition in this clause shall, in relation to a small-scale industrial undertaking or an industrial undertaking referred to in sub-section (4) shall apply as if the words “not being any article or thing specified in the list in the Eleventh Schedule” had been omitted.

Explanation 1: For the purposes of clause (ii), any machinery or plant which was used outside India by any person other than the assessee shall not be regarded as machinery or plant previously used for any purpose, if the following conditions are fulfilled, namely:

1. such machinery or plant was not, at any time previous to the date of the installation by the assessee, used in India;

2. such machinery or plant is imported into India from any country outside India; and

3. no deduction on account of depreciation in respect of such machinery or plant has been allowed or is allowable under the provisions of this Act in computing the total income of any person for any period prior to the date of the installation of the machinery or plant by the assessee.

Explanation 2 : Where in the case of an industrial undertaking, any machinery or plant or any part thereof previously used for any purpose is transferred to a new business and the total value of the machinery or plant or part so transferred does not exceed twenty per cent of the total value of the machinery or plant used in the business, then, for the purposes of clause (ii) of this sub-section, the condition specified therein shall be deemed to have been complied with;

4. in a case where the industrial undertaking manufactures or produces articles or things, the undertaking employs ten or more workers in a manufacturing process carried on with the aid of power, or employs twenty or more workers in a manufacturing process carried on without the aid of power.

   3. The amount of deduction in the case of an industrial undertaking shall be twenty-five per cent (or thirty per cent where the assessee is a company), of the profits and gains derived from such industrial undertaking for a period of ten consecutive assessment years (or twelve consecutive assessment years where the assessee is a co-operative society) beginning with the initial assessment year subject to the fulfillment of the following conditions, namely:

1. it begins to manufacture or produce, articles or things or to operate such plant or plants at any time during the period beginning from the 1st day of April, 1991 and ending on the 31st day of March, 1995 or such further period as the Central Government may, by notification in the Official Gazette, specify with reference to any particular undertaking;

2. where it is an industrial undertaking being a small-scale industrial undertaking, it begins to manufacture or produce articles or things or to operate its cold storage plant [not specified in sub-section (4) or sub-section (5)] at any time during the period beginning on the 1st day of April, 1995 and ending on the 395[31st day of March, 2002].

   4. The amount of deduction in the case of an industrial undertaking in an industrially backward State specified in the Eighth Schedule shall be hundred per cent of the profits and gains derived from such industrial undertaking for five assessment years beginning with the initial assessment year and thereafter twenty-five per cent (or thirty per cent where the assessee is a company) of the profits and gains derived from such industrial undertaking:

Provided that the total period of deduction does not exceed ten consecutive assessment years (or twelve consecutive assessment years where the assessee is a co-operative society) subject to fulfillment of the condition that it begins to manufacture or produce articles or things or to operate its cold storage plant or plants during the period beginning on the 1st day of April, 1993 and ending on the 396 [31st day of March, 2004]:

Provided further that in the case of such industries in the North-Eastern Region, as may be notified by the Central Government, the amount of deduction shall be hundred per cent of profits and gains for a period of ten assessment years, and the total period of deduction shall in such a case not exceed ten assessment years:

397 [Provided also that no deduction under this sub-section shall be allowed for the assessment year beginning on the 1st day of April, 2004 or any subsequent year to any undertaking or enterprise referred to in sub-section (2) of section 80-IC:]

398 [Provided also that in the case of an industrial undertaking in the State of Jammu and Kashmir, the provisions of the first proviso shall have effect as if for the figures, letters and words “31st day of March, 2004”, the figures, letters and words 399 [400 [31st day of March, 2012]] had been substituted:]

401 [Provided also that no deduction under this sub-section shall be allowed to an industrial undertaking in the State of Jammu and Kashmir which is engaged in the manufacture or production of any article or thing specified in Part C of the Thirteenth Schedule.]

5. The amount of deduction in the case of an industrial undertaking located in such industrially backward districts as the Central Government may, having regard to the prescribed guidelines402, by notification in the Official Gazette, specify in this behalf as industrially backward district of category ‘A’ or an industrially backward district of category ‘B’ shall be, “

1. hundred per cent of the profits and gains derived from an industrial undertaking located in a backward district of category ‘A’ for five assessment years beginning with the initial assessment year and thereafter, twenty-five per cent (or thirty per cent where the assessee is a company) of the profits and gains of an industrial undertaking:

Provided that the total period of deduction shall not exceed ten consecutive assessment years or where the assessee is a co-operative society, twelve consecutive assessment years:

Provided further that the industrial undertaking begins to manufacture or produce articles or things or to operate its cold storage plant or plants at any time during the period beginning on the 1st day of October, 1994 and ending on the 403 [31st day of March, 2004];

2. hundred per cent of the profits and gains derived from an industrial undertaking located in a backward district of category ‘B’ for three assessment years beginning with the initial assessment year and thereafter, twenty-five per cent (or thirty per cent where the assessee is a company) of the profits and gains of an industrial undertaking:

Provided that the total period of deduction does not exceed eight consecutive assessment years (or where the assessee is a co-operative society, twelve consecutive assessment years):

Provided further that the industrial undertaking begins to manufacture or produce articles or things or to operate its cold storage plant or plants at any time during the period beginning on the 1st day of October, 1994 and ending on the 404 [31st day of March, 2004].

6. The amount of deduction in the case of the business of a ship shall be thirty per cent of the profits and gains derived from such ship for a period of ten consecutive assessment years including the initial assessment year provided that the ship “

1. is owned by an Indian company and is wholly used for the purposes of the business carried on by it;

2. was not, previous to the date of its acquisition by the Indian company, owned or used in Indian territorial waters by a person resident in India; and

3. is brought into use by the Indian company at any time during the period beginning on the 1st day of April, 1991 and ending on the 31st day of March, 1995.

   7. The amount of deduction in the case of any hotel shall be “

   1. fifty per cent of the profits and gains derived from the business of such hotel for a period of ten consecutive years beginning from the initial assessment year as is located in a hilly area or a rural area or a place of pilgrimage or such other place as the Central Government may, having regard to the need for development of infrastructure for tourism in any place and other relevant considerations, specify by notification in the Official Gazette and such hotel starts functioning at any time during the period beginning on the 1st day of April, 1990 and ending on the 31st day of March, 1994 or beginning on the 1st day of April, 1997 and ending on the 31st day of March, 2001:

Provided that nothing contained in this clause shall apply to a hotel located at a place within the municipal jurisdiction (whether known as a municipality, municipal corporation, notified area committee or a cantonment board or by any other name) of Calcutta, Chennai, Delhi or Mumbai, which has started or starts functioning on or after the 1st day of April, 1997 and before the 31st day of March, 2001:

Provided further that the said hotel is approved by the prescribed authority for the purpose of this clause in accordance with the rules405 made under this Act and where the said hotel is approved by the prescribed authority before the 31st day of March, 1992, shall be deemed to have been approved by the prescribed authority for the purpose of this section in relation to the assessment year commencing on the 1st day of April, 1991;

2. thirty per cent of the profits and gains derived from the business of such hotel as is located in any place other than those mentioned in sub-clause (a) for a period of ten consecutive years beginning from the initial assessment year if such hotel has started or starts functioning at any time during the period beginning on the 1st day of April, 1991 and ending on the 31st day of March, 1995 or beginning on the 1st day of April, 1997 and ending on the 31st day of March, 2001:

Provided that nothing contained in this clause shall apply to a hotel located at a place within the municipal jurisdiction (whether known as a municipality, municipal corporation, notified area committee, town area committee or a cantonment board or by any other name) of Calcutta, Chennai, Delhi or Mumbai, which has started or starts functioning on or after the 1st day of April, 1997 and before the 31st day of March, 2001;

3. the deduction under clause (a) or clause (b) shall be available only “

1. the business of the hotel is not formed by the splitting up, or the reconstruction, of a business already in existence or by the transfer to a new business of a building previously used as a hotel or of any machinery or plant previously used for any purpose;

2. the business of the hotel is owned and carried on by a company registered in India with a paid-up capital of not less than five hundred thousand rupees;

3. the hotel is for the time being approved by the prescribed authority406:

Provided that any hotel approved by the prescribed authority before the 1st day of April, 1999 shall be deemed to have been approved under this sub-section.

407 [(7A) The amount of deduction in the case of any multiplex theatre shall be “

1. fifty per cent of the profits and gains derived, from the business of building, owning and operating a multiplex theatre, for a period of five consecutive years beginning from the initial assessment year in any place:

Provided that nothing contained in this clause shall apply to a multiplex theatre located at a place within the municipal jurisdiction (whether known as a municipality, municipal corporation, notified area committee or a cantonment board or by any other name) of Chennai, Delhi, Mumbai or Kolkata;

2. the deduction under clause (a) shall be allowable only if “

1. such multiplex theatre is constructed at any time during the period beginning on the 1st day of April, 2002 and ending on the 31st day of March, 2005;

2. the business of the multiplex theatre is not formed by the splitting up, or the reconstruction, of a business already in existence or by the transfer to a new business of any building or of any machinery or of plant previously used for any purpose;

408[(iii) the assessee furnishes the report of audit in such form and containing such particulars, as may be prescribed, duly signed and verified by an accountant, as defined in the Explanation below sub-section (2) of section 288, before the specified date referred to in section 44AB, certifying that the deduction has been correctly claimed.]

409 [(7B) The amount of deduction in the case of any convention center shall be “

1. fifty per cent of the profits and gains derived, by the assessee from the business of building, owning and operating a convention center, for a period of five consecutive years beginning from the initial assessment year;

2. the deduction under clause (a) shall be allowable only if “

1. such convention center is constructed at any time during the period beginning on the 1st day of April, 2002 and ending on the 31st day of March, 2005;

2. the business of the convention center is not formed by the splitting up, or the reconstruction, of a business already in existence or by the transfer to a new business of any building or of any machinery or plant previously used for any purpose;

410[(iii) the assessee furnishes the report of audit in such form and containing such particulars, as may be prescribed, duly signed and verified by an accountant, as defined in the Explanation below sub-section (2) of section 288, before the specified date referred to in section 44AB, certifying that the deduction has been correctly claimed.]

8. The amount of deduction in the case of any company carrying on scientific research and development shall be hundred per cent of the profits and gains of such business for a period of five assessment years beginning from the initial assessment year if such company “

1. is registered in India;

2. has the main object of scientific and industrial research and development;

3. is for the time being approved by the prescribed authority411 at any time before the 1st day of April, 1999.

412[(8A) The amount of deduction in the case of any company carrying on scientific research and development shall be hundred per cent of the profits and gains of such business for a period of ten consecutive assessment years, beginning from the initial assessment year, if such company “

1. is registered in India;

2. has its main object the scientific and industrial research and development;

3. is for the time being approved by the prescribed authority413 at any time after the 31st day of March, 2000 but before the 414 [415[1st day of April, 2007]];

4. fulfils such other conditions as may be prescribed416;]

417[(9) The amount of deduction to an undertaking shall be hundred percent, of the profits for a period of seven consecutive assessment years, including the initial assessment year, if such undertaking fulfils any of the following namely:--

1. is located in North-Eastern Region and has begun or begins commercial production of mineral oil before the 1st day of April, 1997;

2. is located in any part of India and has begun or begins commercial production of mineral oil on or after the 1st day of April, 1997 418 [but not later than the 31st day of March, 2017];

419 [Provided that the provisions of this clause shall not apply to blocks licensed under a contract awarded after the 31st day of March, 2011 under the New Exploration Licencing Policy announced by the Government of India vide Resolution No. O-19018/22/95-ONG.DO.VL, dated the 10th February, 1999 or in pursuance of any law for the time being in force or by the Central or a State Government in any other manner;]

3. is engaged in refining of mineral oil and begins such refining on or after the 1st day of October, 1998 420[but not later than 31st day of March, 2012].

421[(iv) is engaged in commercial production of natural gas in blocks licensed under the VIII Round of bidding for award of exploration contracts (hereafter referred to as “NELP-VIII”) under the New Exploration Licencing Policy announced by the Government of India vide Resolution No. O-19018 22/95-ONG.DO.VL, dated 10th February, 1999 and begins commercial production of natural gas on or after the 1st day of April, 2009 422 [but not later than the 31st day of March, 2017].

Explanation.-- For the purposes of claiming deduction under this sub-section, all blocks licensed under a single contract, which has been awarded under the New Exploration Licencing Policy announced by the Government of India vide Resolution No. O-19018/22/95-ONG.DO.VL, dated 10th February, 1999 or has been awarded in pursuance of any law for the time being in force or has been awarded by Central or a State Government in any other manner, shall be treated as a single “undertaking”.

(v) is engaged in commercial production of natural gas in blocks licensed under the IV Round of bidding for award of exploration contracts for Coal Bed Methane blocks and begins commercial production of natural gas on or after the 1st day of April, 2009 423 [but not later than the 31st day of March, 2017];]

424[(10) The amount of deduction in the case of an undertaking developing and building housing projects approved before the 425[31st day of March, 2008] by a local authority shall be hundred per cent of the profits derived in the previous year relevant to any assessment year from such housing project if, -

1. such undertaking has commenced or commences development and construction of the housing project on or after the 1st day of October, 1998 and completes such construction, -

1. in a case where a housing project has been approved by the local authority before the 1st day of April, 2004, on or before the 31st day of March, 2008;

2. in a case where a housing project has been, or, is approved by the local authority on or after the 1st day of April, 2004 426 [but not later than the 31st day of March, 2005], within four years from the end of the financial year in which the housing project is approved by the local authority.

427[(iii) in a case where a housing project has been approved by the local authority on or after the 1st day of April, 2005, within five years from the end of the financial year in which the housing project is approved by the local authority.]

Explanation : For the purposes of this clause, -

1. in a case where the approval in respect of the housing project is obtained more than once, such housing project shall be deemed to have been approved on the date on which the building plan of such housing project is first approved by the local authority;

2. the date of completion of construction of the housing project shall be taken to be the date on which the completion certificate in respect of such housing project is issued by the local authority;

   2. the project is on the size of a plot of land which has a minimum area of one acre:

Provided that nothing contained in clause (a) or clause (b) shall apply to a housing project carried out in accordance with a scheme framed by the Central Government or a State Government for reconstruction or redevelopment of existing buildings in areas declared to be slum areas under any law for the time being in force and such scheme is notified by the Board in this behalf;

3. the residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the cities of Delhi or Mumbai or within twenty-five kilometers from the municipal limits of these cities and one thousand and five hundred square feet at any other place; 428 [***]

4. the built-up area of the shops and other commercial establishments included in the housing project does not exceed 429 [three per cent] of the aggregate built-up area of the housing project or 430 [five thousand square feet, whichever is higher.]]

431[(e) not more than one residential unit in the housing project is allotted to any person not being an individual; and

(f) in a case where a residential unit in the housing project is allotted to a person being an individual, no other residential unit in such housing project is allotted to any of the following persons, namely:--

1. the individual or the spouse or the minor children of such individual,

2. the Hindu undivided family in which such individual is the karta,

3. any person representing such individual, the spouse or the minor children of such individual or the Hindu undivided family in which such individual is the karta;

432 [Explanation.--For the removal of doubts, it is hereby declared that nothing contained in this sub-section shall apply to any undertaking which executes the housing project as a works contract awarded by any person (including the Central or State Government).]]

(11) Notwithstanding anything contained in clause (iii) of sub-section (2) and sub-sections (3), (4) and (5), the amount of deduction in a case of industrial undertaking deriving profit from the business of setting up and operating a cold chain facility for agricultural produce, shall be hundred per cent of the profits and gains derived from such industrial undertaking for five assessment years beginning with the initial assessment year and thereafter, twenty-five per cent (or thirty per cent where the assessee is a company) of the profits and gains derived from the operation of such facility in a manner that the total period of deduction does not exceed ten consecutive assessment years (or twelve consecutive assessment years where the assessee is a co-operative society) and subject to fulfillment of the condition that it begins to operate such facility on or after the 1st day of April, 1999 but before the 433 [1st day of April, 2004].

434 [(11A) The amount of deduction in a case of 435 [an undertaking deriving profit from the business of processing, preservation and packaging of fruits or vegetables or 436 [meat and meat products or poultry or marine or dairy products or] from] the integrated business of handling, storage and transportation of food grains, shall be hundred per cent of the profits and gains derived from such undertaking for five assessment years beginning with the initial assessment year and thereafter, twenty-five per cent (or thirty per cent where the assessee is a company) of the profits and gains derived from the operation of such business in a manner that the total period of deduction does not exceed ten consecutive assessment years and subject to fulfillment of the condition that it begins to operate such business on or after the 1st day of April, 2001.]

437 [Provided that the provisions of this section shall not apply to an undertaking engaged in the business of processing, preservation and packaging of meat or meat products or poultry or marine or dairy products if it begins to operate such business before the 1st day of April, 2009.]

438 [(11B) The amount of deduction in the case of an undertaking deriving profits from the business of operating and maintaining a hospital in a rural area shall be hundred per cent of the profits and gains of such business for a period of five consecutive assessment years, beginning with the initial assessment year if “

1. such hospital is constructed at any time during the period beginning on the 1st day of October, 2004 and ending on the 31st day of March, 2008;

2. the hospital has at least one hundred beds for patients;

3. the construction of the hospital is in accordance with the regulations, for the time being in force, of the local authority; and

4. the assessee furnishes along with the return of income, the report of an audit in such form and containing such particulars as may be prescribed 439, and duly signed and verified by an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed.

Explanation : For the purposes of this sub-section, a hospital shall be deemed to have been constructed on the date on which a completion certificate in respect of such construction, is issued by the concerned local authority.]

440 [(11C) The amount of deduction in the case of an undertaking deriving profits from the business of operating and maintaining a hospital located anywhere in India, other than the excluded area, shall be hundred per cent. of the profits and gains derived from such business for a period of five consecutive assessment years, beginning with the initial assessment year, if”

1. the hospital is constructed and has started or starts functioning at any time during the period beginning on the 1st day of April, 2008 and ending on the 31st day of March, 2013;

2. the hospital has at least one hundred beds for patients;

3. the construction of the hospital is in accordance with the regulations or bye-laws of the local authority; and

441[(iv) the assessee furnishes the report of audit in such form and containing such particulars, as may be prescribed, duly signed and verified by an accountant, as defined in the Explanation below sub-section (2) of section 288, before the specified date referred to in section 44AB, certifying that the deduction has been correctly claimed.]

Explanation : For the purposes of this sub-section,”

1. a hospital shall be deemed to have been constructed on the date on which a completion certificate in respect of such construction is issued by the local authority concerned;

2. “initial assessment year” means the assessment year relevant to the previous year in which the business of the hospital starts functioning;

3. “excluded area” shall mean an area comprising “

1. Greater Mumbai urban agglomeration;

2. Delhi urban agglomeration;

3. Kolkata urban agglomeration;

4. Chennai urban agglomeration;

5. Hyderabad urban agglomeration;

6. Bangalore urban agglomeration;

7. Ahmedabad urban agglomeration;

8. District of Faridabad;

9. District of Gurgaon;

10. District of Gautam Budh Nagar;

11. District of Ghaziabad;

12. District of Gandhinagar; and

13. City of Secunderabad;

    4. the area comprising an urban agglomeration shall be the area included in such urban agglomeration on the basis of the 2001 census.]

(12) Where any undertaking of an Indian company which is entitled to the deduction under this section is transferred, before the expiry of the period specified in this section, to another Indian company in a scheme of amalgamation or demerger “

1. no deduction shall be admissible under this section to the amalgamating or the demerged company for the previous year in which the amalgamation or the demerger takes place; and

2. the provisions of this section shall, as far as may be, apply to the amalgamated or the resulting company as they would have applied to the amalgamating or the demerged company if the amalgamation or demerger had not taken place.

(13) The provisions contained in sub-section (5) and sub-sections (7) to (12) of section 80-IA shall, so far as may be, apply to the eligible business under this section.

(14) For the purposes of this section, “

442[(a) “built-up area” means the inner measurements of the residential unit at the floor level, including the projections and balconies, as increased by the thickness of the walls but does not include the common areas shared with other residential units;]

443[(aa)] “cold chain facility” means a chain of facilities for storage or transportation of agricultural produce under scientifically controlled conditions including refrigeration and other facilities necessary for the preservation of such produce;

444 [445 [(ab)] ”convention center” means a building of a prescribed446 area comprising of convention halls to be used for the purpose of holding conferences and seminars, being of such size and number and having such other facilities and amenities, as may be prescribed447;]

(b) “hilly area” means any area located at a height of one thousand metres or more above the sea level;

(c) “initial assessment year” “

1. in the case of an industrial undertaking or cold storage plant or ship or hotel, means the assessment year relevant to the previous year in which the industrial undertaking begins to manufacture or produce articles or things, or to operate its cold storage plant or plants or the cold chain facility or the ship is first brought into use or the business of the hotel starts functioning;

2. in the case of a company carrying on scientific and industrial research and development, means the assessment year relevant to the previous year in which the company is approved by the prescribed authority for the purposes of sub-section (8);

3. in the case of an undertaking engaged in the business of commercial production or refining of mineral oil referred to in sub-section (9), means the assessment year relevant to the previous year in which the undertaking commences the commercial production or refining of mineral oil;

448 [(iv) in the case of an undertaking engaged 449 [in the business of processing, preservation and packaging of fruits or vegetables or] in the intergrated business of handling, storage and transporation of food grains, means the assessment year relevant to the previous year in which the undertaking begins such business;]

450 [(v) in the case of a multiplex theatre, means the assessment year relevant to the previous year in which a cinema hall, being a part of the said multiplex theatre, starts operating on a commercial basis;]

451 [(vi) in the case of a convention center, means the assessment year relevant to the previous year in which the convention center starts operating on a commercial basis;]

452 [(vii) in the case of an undertaking engaged in operating and maintaining a hospital in a rural area, means the assessment year relevant to the previous year in which the undertaking begins to provide medical services;]

(d) “North-Eastern Region” means the region comprising the States of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura;

453[(da) “multiplex theatre” means a building of a prescribed454 area, comprising of two or more cinema theatres and commercial shops of such size and number and having such other facilities and amenities as may be prescribed455;]

(e) “place of pilgrimage” means a place where any temple, mosque, gurdwara, church or other place of public worship of renown through-out any State or States is situated;

(f) “rural area” means any area other than -

1. an area which is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee or by any other name) or a cantonment board and which has a population of not less than ten thousand according to the preceding census of which relevant figures have been published before the first day of the previous year; or

2. an area within such distance not being more than fifteen kilometers from the local limits of any municipality or cantonment board referred to in sub-clause (i), as the Central Government may, having regard to the stage of development of such area including the extent of, and scope for, urbanisation of such area and other relevant considerations specify in this behalf by notification in the Official Gazette;

(g) “small-scale industrial undertaking” means an industrial undertaking which is, as on the last day of the previous year, regarded as a small-scale industrial undertaking under section 11B of the Industries (Development and Regulation) Act, 1951 (65 of 1951).]

Section 80IBA Deductions in respect of profits and gains from housing projects

1. Where the gross total income of an assessee includes any profits and gains derived from the business of developing and building housing projects, there shall, subject to the provisions of this section, be allowed, a deduction of an amount equal to hundred per cent. of the profits and gains derived from such business.

   456[(1A) Where the gross total income of an assessee includes any profits and gains derived from the business of developing and building rental housing project, there shall be allowed a deduction of an amount equal to hundred per cent. of the profits and gains derived from such business.]

2. For the purposes of sub-section (1), a housing project shall be a project which fulfils the following conditions, namely:--

1. the project is approved by the competent authority after the 1st day of June, 2016, but on or before the 31st day of March, 457[2022];

2. the project is completed within a period of 458 [five years] from the date of approval by the competent authority:

Provided that,--

1. where the approval in respect of a housing project is obtained more than once, the project shall be deemed to have been approved on the date on which the building plan of such housing project was first approved by the competent authority; and

2. the project shall be deemed to have been completed when a certificate of completion of project as a whole is obtained in writing from the competent authority;

   3. the 459 [carpet area] of the shops and other commercial establishments included in the housing project does not exceed three per cent. of the aggregate 460 [carpet area];

   4. the project is on a plot of land measuring not less than--

1. one thousand square metres, where the project is located within the cities of Chennai, Delhi, Kolkata or Mumbai 461[***]; or

2. two thousand square metres, where the project is located in any other place;

   5. the project is the only housing project on the plot of land as specified in clause (d);

   6. the 462 [carpet area] of the residential unit comprised in the housing project does not exceed--

1. thirty square metres, where the project is located within the cities of Chennai, Delhi, Kolkata or Mumbai or within the distance, measured aerially, of twenty-five kilometres from the municipal limits of these cities; or

2. sixty square metres, where the project is located in any other place;

   7. where a residential unit in the housing project is allotted to an individual, no other residential unit in the housing project shall be allotted to the individual or the spouse or the minor children of such individual;

   8. the project utilises--

1. not less than ninety per cent. of the floor area ratio permissible in respect of the plot of land under the rules to be made by the Central Government or the State Government or the local authority, as the case may be, where the project is located within the cities of Chennai, Delhi, Kolkata or Mumbai or within the distance, measured aerially, of twenty-five kilometres from the municipal limits of these cities, or

2. not less than eighty per cent. of such floor area ratio where such project is located in any place other than the place referred to in sub-clause (i); and

   9. the assessee maintains separate books of account in respect of the housing project.

      3. Nothing contained in this section shall apply to any assessee who executes the housing project as a works-contract awarded by any person (including the Central Government or the State Government).

      4. Where the housing project is not completed within the period specified under clause (b) of sub-section (2) and in respect of which a deduction has been claimed and allowed under this section, the total amount of deduction so claimed and allowed in one or more previous years, shall be deemed to be the income of the assessee chargeable under the head "Profits and gains of business or profession" of the previous year in which the period for completion so expires.

      5. Where any amount of profits and gains derived from the business of developing and building housing projects is claimed and allowed under this section for any assessment year, deduction to the extent of such profit and gains shall not be allowed under any other provisions of this Act.

      6. For the purposes of this section,--

      1. "463[carpet area]" means the inner measurements of the residential unit at the floor level, including projections and balconies, as increased by the thickness of the walls, but does not include the common areas shared with other residential units, including any open terrace so shared;

      2. "competent authority" means the authority empowered to approve the building plan by or under any law for the time being in force;

      3. "floor area ratio" means the quotient obtained by dividing the total covered area of plinth area on all the floors by the area of the plot of land;

      4. "housing project" means a project consisting predominantly of residential units with such other facilities and amenities as the competent authority may approve subject to the provisions of this section;

         464[(da) “rental housing project” means a project which is notified by the Central Government in the Official Gazette under this clause on or before the 31st day of March, 2022 and fulfils such conditions as may be specified in the said notification;]

      5. "residential unit" means an independent housing unit with separate facilities for living, cooking and sanitary requirements, distinctly separated from other residential units within the building, which is directly accessible from an outer door or through an interior door in a shared hallway and not by walking through the living space of another household.]465

Section 80IC - Special provisions in respect of certain undertakings or enterprises in certain special category States

466 [(1) Where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to in sub-section (2), 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 from such profits and gains, as specified in sub-section (3).

(2) This section applies to any undertaking or enterprise,-

1. which has begun or begins to manufacture or produce any article or thing, not being any article or thing specified in the Thirteenth Schedule, or which manufactures or produces any article or thing, not being any article or thing specified in the Thirteenth Schedule and undertakes substantial expansion during the period beginning-

1. on the 23rd day of December, 2002 and ending before the 467 [1st day of April, 2007], in any Export Processing Zone or Integrated Infrastructure Development Center or Industrial Growth Center or Industrial Estate or Industrial Park or Software Technology Park or Industrial Area or Theme Park, as notified by the Board in accordance with the scheme framed and notified by the Central Government in this regard, in the State of Sikkim; or

2. on the 7th day of January, 2003 and ending before the 1st day of April, 2012, in any Export Processing Zone or Integrated Infrastructure Development Center or Industrial Growth Center or Industrial Estate or Industrial Park or Software Technology Park or Industrial Area or Theme Park, as notified by the Board in accordance with the scheme framed and notified by the Central Government in this regard, in the State of Himachal Pradesh or the State of Uttaranchal; or

3. on the 24th day of December, 1997 and ending before the 1st day of April, 2007, in any Export Processing Zone or Integrated Infrastructure Development Center or Industrial Growth Center or Industrial Estate or Industrial Park or Software Technology Park or Industrial Area or Theme Park, as notified by the Board in accordance with the scheme framed and notified by the Central Government in this regard, in any of the North-Eastern States;

   2. which has begun or begins to manufacture or produce any article or thing, specified in the Fourteenth Schedule or commences any operation specified in that Schedule, or which manufactures or produces any article or thing, specified in the Fourteenth Schedule or commences any operation specified in that Schedule and undertakes substantial expansion during the period beginning”

1. on the 23rd day of December, 2002 and ending before the 468[1st day of April, 2007], in the State of Sikkim; or

2. on the 7th day of January, 2003 and ending before the 1st day of April, 2012, in the State of Himachal Pradesh or the State of Uttaranchal; or

3. on the 24th day of December, 1997 and ending before the 1st day of April, 2007, in any of the North-Eastern States.

(3) The deduction referred to in sub-section (1) shall be “

1. in the case of any undertaking or enterprise referred to in sub-clauses (i) and (iii) of clause (a) or sub-clauses (i) and (iii) of clause (b), of sub-section (2), one hundred per cent of such profits and gains for ten assessment years commencing with the initial assessment year;

2. in the case of any undertaking or enterprise referred to in sub-clause (ii) of clause (a) or sub-clause (ii) of clause (b), of sub-section (2), one hundred per cent of such profits and gains for five assessment years commencing with the initial assessment year and thereafter, twenty-five per cent (or thirty per cent where the assessee is a company) of the profits and gains.

(4) This section applies to any undertaking or enterprise which fulfils all the following conditions, namely:

1. it is not formed by splitting up, or the reconstruction, of a business already in existence:

Provided that this condition shall not apply in respect of an undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section;

2. it is not formed by the transfer to a new business of machinery or plant previously used for any purpose.

Explanation : The provisions of Explanations 1 and 2 to sub-section (3) of section 80-IA shall apply for the purposes of clause (ii) of this sub-section as they apply for the purposes of clause (ii) of that sub-section.

(5) Notwithstanding anything contained in any other provision of this Act, in computing the total income of the assessee, no deduction shall be allowed under any other section contained in Chapter VIA or in section 10A or section 10B, in relation to the profits and gains of the undertaking or enterprise.

(6) Notwithstanding anything contained in this Act, no deduction shall be allowed to any undertaking or enterprise under this section, where the total period of deduction inclusive of the period of deduction under this section, or under the second proviso to sub-section (4) of section 80-IB or under section 10C, as the case may be, exceeds ten assessment years.

(7) The provisions contained in sub-section (5) and sub-sections (7) to (12) of section 80-IA shall, so far as may be, apply to the eligible undertaking or enterprise under this section.

(8) For the purposes of this section,”

1. “Industrial Area” means such areas, which the Board, may, by notification in the Official Gazette, specify in accordance with the scheme framed and notified by the Central Government;

2. “Industrial Estate” means such estates, which the Board, may, by notification in the Official Gazette, specify in accordance with the scheme framed and notified by the Central Government;

3. “Industrial Growth Center” means such centers, which the Board, may, by notification in the Official Gazette, specify in accordance with the scheme framed and notified by the Central Government;

4. “Industrial Park” means such parks, which the Board, may, by notification in the Official Gazette, specify in accordance with the scheme framed and notified by the Central Government;

5. “initial assessment year” means the assessment year relevant to the previous year in which the undertaking or the enterprise begins to manufacture or produce articles or things, or commences operation or completes substantial expansion;

6. “Integrated Infrastructure Development Center” means such centers, which the Board, may, by notification in the Official Gazette, specify in accordance with the scheme framed and notified by the Central Government;

7. “North-Eastern States” means the States of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura;

8. “Software Technology Park” means any park set up in accordance with the Software Technology Park scheme notified by the Government of India in the Ministry of Commerce and Industry;

9. “substantial expansion” means increase in the investment in the plant and machinery by at least fifty per cent of the book value of plant and machinery (before taking depreciation in any year), as on the first day of the previous year in which the substantial expansion is undertaken;

10. “Theme Park” means such parks, which the Board, may, by notification in the Official Gazette, specify in accordance with the scheme framed and notified by the Central Government.]

Section 80ID - Deduction in respect of profits and gains from business of hotels and convention centres in specified area

469 [(1) Where the gross total income of an assessee includes any profits and gains derived by an undertaking from any business referred to in sub-section (2) (such business being hereinafter referred to as the eligible business), 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 an amount equal to hundred per cent of the profits and gains derived from such business for five consecutive assessment years beginning from the initial assessment year.

(2) This section applies to any undertaking, -

1. engaged in the business of hotel located in the specified area, if such hotel is constructed and has started or starts functioning at any time during the period beginning on the 1st day of April, 2007 and ending on the 31st day of March, 2010; or

2. engaged in the business of building, owning and operating a convention center, located in the specified area, if such convention center is constructed at any time during the period beginning on the 1st day of April, 2007 and ending on the 31st day of March, 2010 [; or]470

471[(iii) engaged in the business of hotel located in the specified district having a World Heritage Site, if such hotel is constructed and has started or starts functioning at any time during the period beginning on the 1st day of April, 2008 and ending on the 31st day of March, 2013.]

(3) The deduction under sub-section (1) shall be available only if -

1. the eligible business is not formed by the splitting up, or the reconstruction, of a business already in existence;

2. the eligible business is not formed by the transfer to a new business of a building previously used as a hotel or a convention center, as the case may be;

3. the eligible business is not formed by the transfer to a new business of machinery or plant previously used for any purpose.

Explanation : The provisions of Explanations 1 and 2 to sub-section (3) of section 80-IA 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;

4. the assessee furnishes along with the return of income, the report of an audit in such form and containing such particulars as may be prescribed472 and duly signed and verified by an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed.

(4) Notwithstanding anything contained in any other provision of this Act, in computing the total income of the assessee, no deduction shall be allowed under any other section contained in Chapter VIA or section 10AA, in relation to the profits and gains of the undertaking.

(5) The provisions contained in sub-section (5) and sub-sections (8) to (11) of section 80-IA shall, so far as may be, apply to the eligible business under this section.

(6) For the purposes of this section,-

1. “convention center” means a building of a prescribed473 area comprising of convention halls to be used for the purpose of holding conferences and seminars, being of such size and number and having such other facilities and amenities, as may be prescribed474;

2. “hotel” means a hotel of two-star, three-star or four-star category as classified by the Central Government;

3. “initial assessment year” -

1. in the case of a hotel, means the assessment year relevant to the previous year in which the business of the hotel starts functioning;

2. in the case of a convention center, means the assessment year relevant to the previous year in which the convention center starts operating on a commercial basis;

   4. “specified area” means the National Capital Territory of Delhi and the districts of Faridabad, Gurgaon, Gautam Budh Nagar and Ghaziabad;]

475 [(e) “specified district having a World Heritage Site” means districts, specified in column (2) of the Table below, of the States, specified in the corresponding entry in column (3) of the said Table:

Table

S. No.	Name of district	Name of State
(1)	(2)	(3)
1.	Agra	Uttar Pradesh
2.	Jalgaon	Maharashtra
3.	Aurangabad	Maharashtra
4.	Kancheepuram	Tamil Nadu
5.	Puri	Orissa
6.	Bharatpur	Rajasthan
7.	Chhatarpur	Madhya Pradesh
8.	Thanjavur	Tamil Nadu
9.	Bellary	Karnataka
10.	South 24 Parganas (excluding areas falling within the Kolkata urban agglomeration on the basis of the 2001 census)	West Bengal
11.	Chamoli	Uttarakhand
12.	Raisen	Madhya Pradesh
13.	Gaya	Bihar
14.	Bhopal	Madhya Pradesh
15	Panchmahal	Gujarat
16.	Kamrup	Assam
17.	Goalpara	Assam
18.	Nagaon	Assam
19.	North Goa	Goa
20.	South Goa	Goa
21.	Darjeeling	West Bengal
22.	Nilgiri	Tamil Nadu.]

Section 80IE - Special provisions in respect of certain undertakings in North-Eastern States

476 [(1) Where the gross total income of an assessee includes any profits and gains derived by an undertaking, to which this section applies, from any business referred to in sub-section (2), there shall be allowed, in computing the total income of the assessee, a deduction of an amount equal to hundred per cent of the profits and gains derived from such business for ten consecutive assessment years commencing with the initial assessment year.

(2) This section applies to any undertaking which has, during the period beginning on the 1st day of April, 2007 and ending before the 1st day of April, 2017, begun or begins, in any of the North-Eastern States, -

1. to manufacture or produce any eligible article or thing;

2. to undertake substantial expansion to manufacture or produce any eligible article or thing;

3. to carry on any eligible business.

(3) This section applies to any undertaking which fulfils all the following conditions, namely:

1. it is not formed by splitting up, or the reconstruction, of a business already in existence:

Provided that this condition shall not apply in respect of an undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such undertaking as referred to in section 33B, in the circumstances and within the period specified in the said section;

2. it is not formed by the transfer to a new business of machinery or plant previously used for any purpose.

Explanation : The provisions of Explanations 1 and 2 to sub-section (3) of section 80-IA shall apply for the purposes of clause (ii) of this sub-section as they apply for the purposes of clause (ii) of that sub-section.

(4) Notwithstanding anything contained in any other provision of this Act, in computing the total income of the assessee, no deduction shall be allowed under any other section contained in Chapter VIA or in section 10A or section 10AA or section 10B or section 10BA, in relation to the profits and gains of the undertaking.

(5) Notwithstanding anything contained in this Act, no deduction shall be allowed to any undertaking under this section, where the total period of deduction inclusive of the period of deduction under this section, or under section 80-IC or under the second proviso to sub-section (4) of section 80-IB or under section 10C, as the case may be, exceeds ten assessment years.

(6) The provisions contained in sub-section (5) and sub-sections (7) to (12) of section 80-IA shall, so far as may be, apply to the eligible undertaking under this section.

(7) For the purposes of this section,-

1. “initial assessment year” means the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce articles or things, or completes substantial expansion;

2. “North-Eastern States” means the States of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura;

3. “substantial expansion” means increase in the investment in the plant and machinery by at least twenty-five per cent. of the book value of plant and machinery (before taking depreciation in any year), as on the first day of the previous year in which the substantial expansion is undertaken;

4. “eligible article or thing” means the article or thing other than the following:

   1. goods falling under Chapter 24 of the First Schedule to the Central Excise Tariff Act, 1985 which pertains to tobacco and manufactured tobacco substitutes;

   2. pan masala as covered under Chapter 21 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986);

   3. plastic carry bags of less than 20 microns as specified by the Ministry of Environment and Forests vide notification number SO. 705(E). dated the 2nd September, 1999 and S.O. 698(E), dated the 17th June, 2003; and

   4. goods falling under Chapter 27 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), produced by petroleum oil or gas refineries;

5. "eligible business" means the business of,-

   5. hotel (not below two star category);

   6. adventure and leisure sports including ropeways;

   7. providing medical and health services in the nature of nursing home with a minimum capacity of twenty-five beds;

   8. running an old-age home;

   9. operating vocational training institute for hotel management, catering and food craft, entrepreneurship development, nursing and para-medical, civil aviation related training, fashion designing and industrial training;

   10. running information technology related training center;

   11. manufacturing of information technology hardware; and

   12. bio-technology.]

Section 80J Deduction in respect of profits and gains from newly established industrial undertakings or ships or hotel business in certain cases

477 [***]

Section 80JJ Deduction in respect of profits and gains from business of poultry farming

478[***]

Section 80JJA - Deduction in respect of profits and gains from business of collecting and processing of bio-degradable waste

479 [Where the gross total income of an assessee includes any profits and gains derived from the business of collecting and processing or treating of biodegradable waste for generating power, 480 [or producing bio-fertilisers, bio-pesticides or other biological agents or for producing bio-gas or] making pellets or briquettes for fuel or organic manure, there shall be allowed, in computing the total income of the assessee, 481 [a deduction of an amount equal to the whole of such profits and gains for a period of five consecutive assessment years beginning with the assessment year relevant to the previous year in which such business commences].]

Section 80JJAA - Deduction in respect of employment of new employees

482 [(1) Where the gross total income of an assessee to whom section 44AB applies, includes any profits and gains derived from business, there shall, subject to the conditions specified in sub-section (2), be allowed a deduction of an amount equal to thirty per cent. of additional employee cost incurred in the course of such business in the previous year, for three assessment years including the assessment year relevant to the previous year in which such employment is provided.

(2) No deduction under sub-section (1) shall be allowed,--

1. if the business is formed by splitting up, or the reconstruction, of an existing business:

Provided that nothing contained in this clause shall apply in respect of a business which is formed as a result of re-establishment, reconstruction or revival by the assessee of the business in the circumstances and within the period specified in section 33B;

2. if the business is acquired by the assessee by way of transfer from any other person or as a result of any business reorganisation;

3. unless the assessee furnishes 483[the report of the accountant, as defined in the Explanation below sub-section (2) of section 288, before the specified date referred to in section 44AB] giving such particulars in the report as may be prescribed.

Explanation.--For the purposes of this section,--

1. "additional employee cost" means the total emoluments paid or payable to additional employees employed during the previous year:

Provided that in the case of an existing business, the additional employee cost shall be nil, if--

1. there is no increase in the number of employees from the total number of employees employed as on the last day of the preceding year;

2. emoluments are paid otherwise than by an account payee cheque or account payee bank draft or by use of electronic clearing system through a bank account:

Provided further that in the first year of a new business, emoluments paid or payable to employees employed during that previous year shall be deemed to be the additional employee cost;

2. "additional employee" means an employee who has been employed during the previous year and whose employment has the effect of increasing the total number of employees employed by the employer as on the last day of the preceding year, but does not include--

   3. an employee whose total emoluments are more than twenty-five thousand rupees per month; or

   4. an employee for whom the entire contribution is paid by the Government under the Employees' Pension Scheme notified in accordance with the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952); or

   5. an employee employed for a period of less than two hundred and forty days during the previous year; or

   6. an employee who does not participate in the recognised provident fund;

484 [Provided that in the case of an assessee who is engaged in the business of manufacturing of apparel 485 [or footwear or leather products], the provisions of sub-clause (c) shall have effect as if for the words "two hundred and forty days", the words "one hundred and fifty days" had been substituted.]

486 [Provided further that where an employee is employed during the previous year for a period of less than two hundred and forty days or one hundred and fifty days, as the case may be, but is employed for a period of two hundred and forty days or one hundred and fifty days, as the case may be, in the immediately succeeding year, he shall be deemed to have been employed in the succeeding year and the provisions of this section shall apply accordingly;]

3. "emoluments" means any sum paid or payable to an employee in lieu of his employment by whatever name called, but does not include--

   7. any contribution paid or payable by the employer to any pension fund or provident fund or any other fund for the benefit of the employee under any law for the time being in force; and

   8. any lump-sum payment paid or payable to an employee at the time of termination of his service or superannuation or voluntary retirement, such as gratuity, severance pay, leave encashment, voluntary retrenchment benefits, commutation of pension and the like.

(3) The provisions of this section, as they stood immediately prior to their amendment by the Finance Act, 2016, shall apply to an assessee eligible to claim any deduction for any assessment year commencing on or before the 1st day of April, 2016.]

Section 80K Deduction in respect of dividends attributable to profits and gains from new industrial undertakings or ships or hotel business

487 [***] 

Section 80L Deductions in respect of certain incomes of Offshore Banking Units and International

488 [***]

Section 80LA - Deduction in respect of certain incomes of Offshore Banking Units

489 [(1) Where the gross total income of an assessee, -

1. being a scheduled bank, or, any bank incorporated by or under the laws of a country outside India; and having an Offshore Banking Unit in a Special Economic Zone; or

2. being a Unit of an International Financial Services Center, includes any income referred to in sub-section (2), there shall be allowed, in accordance with and subject to the provisions of this section, a deduction from such income, of an amount equal to -

   1. one hundred per cent of such income for five consecutive assessment years beginning with the assessment year relevant to the previous year in which the permission, under clause (a) of sub-section (1) of section 23 of the Banking Regulation Act, 1949 (10 of 1949) or permission or registration under the Securities and Exchange Board of India Act, 1992 (15 of 1992) or any other relevant law was obtained, and thereafter;

   2. fifty per cent of such income for five consecutive assessment years.

(1A) Where the gross total income of an assessee, being a Unit of an International Financial Services Centre, includes any income referred to in sub-section (2), there shall be allowed, in accordance with and subject to the provisions of this section, a deduction from such income, of an amount equal to one hundred per cent of such income for any ten consecutive assessment years, at the option of the assessee, out of fifteen years, beginning with the assessment year relevant to the previous year in which the permission, under clause (a) of sub-section (1) of section 23 of the Banking Regulation Act, 1949 (10 of 1949) or permission or registration under the Securities and Exchange Board of India Act, 1992 (15 of 1992) or 490[permission or registration under the International Financial Services Centres Authority Act, 2019 (50 of 2019) was obtained].

(2) The income referred to in sub-section (1) shall be the income -

1. from an Offshore Banking Unit in a Special Economic Zone; or

2. from the business referred to in “sub-section (1) of section 6 of the Banking Regulation Act, 1949 (10 of 1949) with an undertaking located in a Special Economic Zone or any other undertaking which develops, develops and operates or develops, operates and maintains a Special Economic Zone; or

3. from any Unit of the International Financial Services Center from its business for which it has been approved for setting up in such a center in a Special Economic Zone.

   491[(d) arising from the transfer of an asset, being an aircraft 492[or a ship], which was leased by a unit referred to in clause (c) to a person, subject to the condition that the unit has commenced operation on or before the 31st day of March, 2024.

   Explanation.—For the purposes of 493[his clause, “aircraft” and “ship” shall] have the meaning assigned to it in the Explanation to clause (4F) of Section 10.]

(3) No deduction under this section shall be allowed unless the assessee furnishes along with the return of income, -

1. the report, in the form specified494 by the Central Board of Direct Taxes under clause (i) of sub-section (2) of section 80LA, as it stood immediately before its substitution by this section, of an accountant as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed in accordance with the provisions of this section; and

   495[(ii) a copy of the permission obtained under clause (a) of sub-section (1) of Section 23 of the Banking Regulation Act, 1949 (10 of 1949) or copy of permission or registration obtained under the International Financial Services Centres Authority Act, 2019 (50 of 2019).]

Section 80M Deduction in respect of certain inter-corporate dividends

496[(1) Where the gross total income of a domestic company in any previous year includes any income by way of dividends from any other domestic company or a foreign company or a business trust, there shall, in accordance with and subject to the provisions of this section, be allowed in computing the total income of such domestic company, a deduction of an amount equal to so much of the amount of income by way of dividends received from such other domestic company or foreign company or business trust as does not exceed the amount of dividend distributed by it on or before the due date.

(2) Where any deduction, in respect of the amount of dividend distributed by the domestic company, has been allowed under sub-section (1) in any previous year, no deduction shall be allowed in respect of such amount in any other previous year.

Explanation.––For the purposes of this section, the expression “due date” means the date one month prior to the date for furnishing the return of income under sub-section (1) of section 139.]

Section 80MM - Omitted

497 [***]

Section 80N - Omitted

498 [***]

Section 80O - Deduction in respect of royalties etc from certain foreign enterprises

Where the gross total income of an assessee, being an Indian company, or a person (other than a company) who is resident in India, includes any income received by the assessee from the Government of a foreign State or foreign enterprise in consideration for the use outside India of any patent, invention, design or registered trade mark 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, 499 [a deduction of an amount equal to “

1. forty per cent for an assessment year beginning on the 1st day of April, 2001;

2. thirty per cent for an assessment year beginning on the 1st day of April, 2002;

3. twenty per cent for an assessment year beginning on the 1st day of April, 2003;

4. ten per cent for an assessment year beginning on the 1st day of April, 2004, of the income so received in, or brought into, India, in computing the total income of the assessee and no deduction shall be allowed in respect of the assessment year beginning on the 1st day of April, 2005 and any subsequent assessment year]:

Provided that such income is received in India within a period of six months from the end of the previous year or 500[within such further period as the competent authority may allow in this behalf]:

501 [Provided further that no deduction under this section shall be allowed unless the assessee furnishes a certificate, in the prescribed form502, along with the return of income, certifying that the deduction has been correctly claimed in accordance with the provisions of this section.]

Explanation : For the purposes of this section, “

1. “convertible foreign exchange” means foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purposes of the law for the time being in force for regulating payments and dealings in foreign exchange;

2. “foreign enterprise” means a person who is a non-resident;

3. services rendered or agreed to be rendered outside India shall include services rendered from India but shall not include services rendered in India;

503 [(iv) “competent authority” means the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange.]

Section 80P - Deduction in respect of income of co-operative societies

1. Where, in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub-section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2), in computing the total income of the assessee.

2. The sums referred to in sub-section (1) shall be the following, namely:

1. in the case of a co-operative society engaged in “

1. carrying on the business of banking or providing credit facilities to its members, or

2. a cottage industry, or

504 [(iii) the marketing of agricultural produce grown by its members, or]

(iv) the purchase of the agricultural implements, seeds, livestock or other articles intended for agriculture for the purpose of supplying them to its members, or

(v) the processing, without the aid of power, of the agricultural produce of its members, or

(vi) the collective disposal of the labour of its members, or

(vii) fishing or allied activities, that is to say, the catching, curing, processing, preserving, storing or marketing of fish or the purchase of materials and equipment in connection therewith for the purpose of supplying them to its members, the whole of the amount of profits and gains of business attributable to any one or more of such activities:

Provided that in the case of a co-operative society falling under sub-clause (vi), or sub-clause (vii), the rules and bye-laws of the society restrict the voting rights to the following classes of its members, namely:

1. the individuals who contribute their labour or, as the case may be, carry on the fishing or allied activities;

2. the co-operative credit societies which provide financial assistance to the society;

3. the State Government;

2. in the case of a co-operative society, being a primary society engaged in supplying milk, oil seeds, fruits or vegetables raised or grown by its members to “

1. a federal co-operative society, being a society engaged in the business of supplying milk, oil seeds, fruits, or vegetables, as the case may be; or

2. the Government or a local authority; or

3. a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956), or a corporation established by or under a Central, State or Provincial Act (being a company or corporation engaged in supplying milk, oil seeds, fruits or vegetables, as the case may be, to the public), the whole of the amount of profits and gains of such business;

   3. in the case of a co-operative society engaged in activities other than those specified in clause (a) or clause (b) (either independently of, or in addition to, all or any of the activities so specified), so much of its profits and gains attributable to such activities as does not exceed, “

1. where such co-operative society is a consumers’ co-operative society, 505[one hundred] thousand rupees; and

2. in any other case, 506 [fifty] thousand rupees.

Explanation: In this clause, “consumers’ co-operative society” means a society for the benefit of the consumers;

4. in respect of any income by way of interest or dividends derived by the co-operative society from its investments with any other cooperative society, the whole of such income;

5. in respect of any income derived by the co-operative society from the letting of godowns or warehouses for storage, processing or facilitating the marketing of commodities, the whole of such income;

6. in the case of a co-operative society, not being a housing society or an urban consumers’ society or a society carrying on transport business or a society engaged in the performance of any manufacturing operations with the aid of power, where the gross total income does not exceed twenty thousand rupees, the amount of any income by way of interest on securities or any income from house property chargeable under section 22.

Explanation : For the purposes of this section, an “urban consumers’ cooperative society” means a society for the benefit of the consumers within the limits of a municipal corporation, municipality, municipal committee notified area committee, town area or cantonment.

(3)   In a case where the assessee is entitled also to the deduction under section 80HH or section 80HHA or section 80HHB or section 80HHC or section 80HHD or section 80-I or section 80-IA or section 80J507 or section 80JJ508the deduction under sub-section (1) of this section, in relation to the sums specified in clause (a) or clause (b) or clause (c) of sub-section (2), shall be allowed with reference to the income, if any, as referred to in those clauses included in the gross total income as reduced by the deduction under section 80HH, section 80HHA, section 80HHB, section 80HHC, section 80HHD, section 80-I, section 80-IA, section 80J509 and section 80JJ510

511 [(4) The provisions of this section shall not apply in relation to any co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank.

Explanation : For the purposes of this sub-section,--

1. “co-operative bank” and “primary agricultural credit society” shall have the meanings respectively assigned to them in Part V of the Banking Regulation Act, 1949 (10 of 1949);

2. “primary co-operative agricultural and rural development bank” means a society having its area of operation confined to a taluk and the principal object of which is to provide for long-term credit for agricultural and rural development activities.]

Section 80PA Deduction in respect of certain income of Producer Companies

1. Where the gross total income of an assessee, being a Producer Company having a total turnover of less than one hundred crore rupees in any previous year, includes any profits and gains derived from eligible business, 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 an amount equal to one hundred per cent. of the profits and gains attributable to such business for the previous year relevant to an assessment year commencing on or after the 1st day of April, 2019, but before the 1st day of April, 2025.

2. In a case where the assessee is entitled also to deduction under any other provision of this Chapter, the deduction under this section shall be allowed with reference to the income, if any, as referred to in this section included in the gross total income as reduced by the deductions under such other provision of this Chapter.

Explanation.-- For the purposes of this section,--

1. "eligible business" means--

   1. the marketing of agricultural produce grown by the members; or

   2. the purchase of agricultural implements, seeds, livestock or other articles intended for agriculture for the purpose of supplying them to the members; or

   3. the processing of the agricultural produce of the members;

2. "member" shall have the meaning assigned to it in clause (d) of section 581A of the Companies Act, 1956 (1 of 1956);

3. "Producer Company" shall have the meaning assigned to it in clause (l) of section 581A of the Companies Act, 1956 (1 of 1956).]512

Section 80Q - Deduction in respect of profits and gains from the business of publication of books

1. Where in the case of an assessee the gross total income of the previous year relevant to the assessment year commencing on the 1st day of April, 1992, or to any one of the four assessment years next following that assessment year, includes any profits and gains derived from a business carried on in India of printing and publication of books or publication of books, 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 from such profits and gains of an amount equal to twenty per cent thereof.

2. In a case where the assessee is entitled also to the deduction under section 80HH or section 80HHA or section 80HHC or section 80-I or section 80-IA or section 80J513 or section 80P, in relation to any part of the profits and gains referred to in sub-section (1), the deduction under sub-section (1) shall be allowed with reference to such profits and gains included in the gross total income as reduced by the deductions under section 80HH, section 80HHA, section 80HHC, section 80-I, section 80-IA, section 80J* and section 80P.

3. For the purposes of this section, “books” shall not include newspapers, journals, magazines, diaries, brochures, tracts, pamphlets and other publications of a similar nature by whatever name called.

Section 80QQ - Omitted

514 [***]

Section 80QQA - Deduction in respect of professional income of authors of text books in Indian languages

1. Where, in the case of an individual resident in India, being an author, the gross total income of the previous year relevant to the assessment year commencing on “

   1. the 1st day of April, 1980, or to any one of the nine assessment years next following that assessment year; or

   2. the 1st day of April, 1992, or to any one of the four assessment years next following that assessment year, includes any income derived by him in the exercise of his profession on account of any lump sum consideration for the assignment or grant of any of his interests in the copyright of any book, or of royalties or copyright fees (whether receivable in lump sum or otherwise) in respect of such book, 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 from such income of an amount equal to twenty-five per cent thereof.

2. No deduction under sub-section (1) shall be allowed unless “

   3. the book is either in the nature of a dictionary, thesaurus or encyclopaedia or is one that has been prescribed or recommended as a text book, or included in the curriculum, by any university, for a degree or post-graduate course of that university; and

   4. the book is written in any language specified in the Eighth Schedule to the Constitution or in any such other language as the Central Government may, by notification in the Official Gazette, specify in this behalf having regard to the need for promotion of publication of books of the nature referred to in clause (a) in that language and other relevant factors.

Explanation : For the purposes of this section, “

1. “author” includes a joint author;

2. “lump sum”, in regard to royalties or copyright fees, includes an advance payment on account of such royalties or copyright fees which is not returnable;

3. “university” shall have the same meaning as in the Explanation to clause (ix) of section 47.

Section 80QQB - Deduction in respect of royalty income etc of authors of certain books other than text books

515 [(1) Where, in the case of an individual resident in India, being an author, the gross total income includes any income, derived by him in the exercise of his profession, on account of any lump sum consideration for the assignment or grant of any of his interests in the copyright of any book being a work of literary, artistic or scientific nature, or of royalty or copyright fees (whether receivable in lump sum or otherwise) in respect of such book, 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 from such income, computed in the manner specified in sub-section (2).

(2) The deduction under this section shall be equal to the whole of such income referred to in sub-section (1), or an amount of three lakh rupees, whichever is less:

Provided that where the income by way of such royalty or the copyright fee, is not a lump sum consideration in lieu of all rights of the assessee in the book, so much of the income, before allowing expenses attributable to such income, as is in excess of fifteen per cent of the value of such books sold during the previous year shall be ignored:

Provided further that in respect of any income earned from any source outside India, so much of the income shall be taken into account for the purpose of this section as is brought into India by, or on behalf of, the assessee in convertible foreign exchange within a period of six months from the end of the previous year in which such income is earned or within such further period as the competent authority may allow in this behalf.

(3) No deduction under this section shall be allowed unless the assessee furnishes a certificate in the prescribed 516form and in the prescribed2 manner, duly verified by any person responsible for making such payment to the assessee as referred to in sub-section (1), along with the return of income, setting forth such particulars as may be prescribed517.

(4) No deduction under this section shall be allowed in respect of any income earned from any source outside India, unless the assessee furnishes a certificate, in the prescribed3 form from the prescribed authority518, along with the return of income in the prescribed manner519.

(5) Where a deduction for any previous year has been claimed and allowed in respect of any income referred to in this section, no deduction in respect of such income shall be allowed under any other provision of this Act in any assessment year.

Explanation : For the purposes of this section, “

1. “author” includes a joint author;

2. “books” shall not include brochures, commentaries, diaries, guides, journals, magazines, newspapers, pamphlets, text books for schools, tracts and other publications of similar nature, by whatever name called;

3. “competent authority” means the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange;

4. “lump sum”, in regard to royalties or copyright fees, includes an advance payment on account of such royalties or copyright fees which is not returnable.]

Section 80R - Deduction in respect of remuneration from certain foreign sources in the case of professors teachers etc

Where the gross total income of an individual who is a citizen of India includes any remuneration received by him outside India from any university or other educational institution established outside India or any other association or body established outside India, for any service rendered by him during his stay outside India in his capacity as a professor, teacher or research worker in such university, institution, association or body, there shall be allowed, in computing the total income of the individual, 520 [a deduction from such remuneration of an amount equal to “

1. sixty per cent of such remuneration for an assessment year beginning on the 1st day of April, 2001;

2. forty-five per cent of such remuneration for an assessment year beginning on the 1st day of April, 2002;

3. thirty per cent of such remuneration for an assessment year beginning on the 1st day of April, 2003;

4. fifteen per cent of such remuneration for an assessment year beginning on the 1st day of April, 2004, as is brought into India by, or on behalf of, the assessee in convertible foreign exchange within a period of six months from the end of the previous year or within such further period as the competent authority may allow in this behalf and no deduction shall be allowed in respect of the assessment year beginning on the 1st day of April, 2005 and any subsequent assessment year:]

Provided that no deduction under this section shall be allowed unless the assessee furnishes a certificate, in the prescribed form521, along with the return of income, certifying that the deduction has been correctly claimed in accordance with the provisions of this section.

522 [Explanation : For the purposes of this section, the expression “competent authority” means the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange.]

Section 80RR - Deduction in respect of professional income from foreign sources in certain cases

Where the gross total income of an individual resident in India, being an author, playwright, artist, musician, actor or sportsman (including an athlete), includes any income derived by him in the exercise of his profession from the Government of a foreign State or any person not resident in India, there shall be allowed, in computing the total income of the individual, 523 [a deduction from such income of an amount equal to “

1. sixty per cent of such income for an assessment year beginning on the 1st day of April, 2001;

2. forty-five per cent of such income for an assessment year beginning on the 1st day of April, 2002;

3. thirty per cent of such income for an assessment year beginning on the 1st day of April, 2003;

4. fifteen per cent of such income for an assessment year beginning on the 1st day of April, 2004, as is brought into India by, or on behalf of, the assessee in convertible foreign exchange within a period of six months from the end of the previous year or within such further period as the competent authority may allow in this behalf and no deduction shall be allowed in respect of the assessment year beginning on the 1st day of April, 2005 and any subsequent assessment year:]

Provided that no deduction under this section shall be allowed unless the assessee furnishes a certificate, in the prescribed form524, along with the return of income, certifying that the deduction has been correctly claimed in accordance with the provisions of this section.

525 [Explanation : For the purposes of this section, the expression “competent authority” means the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange.]

Section 80RRA - Deduction in respect of remuneration received for services rendered outside India

1. Where the gross total income of an individual who is a citizen of India includes any remuneration received by him in foreign currency from any employer (being a foreign employer or an Indian concern) for any service rendered by him outside India, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the individual, 526 [a deduction from such remuneration of an amount equal to “

1. sixty per cent of such remuneration for an assessment year beginning on the 1st day of April, 2001;

2. forty-five per cent of such remuneration for an assessment year beginning on the 1st day of April, 2002;

3. thirty per cent of such remuneration for an assessment year beginning on the 1st day of April, 2003;

4. fifteen per cent of such remuneration for an assessment year beginning on the 1st day of April, 2004, as is brought into India by, or on behalf of, the assessee in convertible foreign exchange within a period of six months from the end of the previous year or within such further period as the competent authority may allow in this behalf and no deduction shall be allowed in respect of the assessment year beginning on the 1st day of April, 2005 and any subsequent assessment year:]

Provided that no deduction under this section shall be allowed unless the assessee furnishes a certificate, in the prescribed form527, along with the return of income, certifying that the deduction has been correctly claimed in accordance with the provisions of this section.

2. The deduction under this section shall be allowed “

1. in the case of an individual who is or was, immediately before undertaking such service, in the employment of the Central Government or any State Government, only if such service is sponsored by the Central Government;

2. in the case of any other individual, only if he is a technician and the terms and conditions of his service outside India are approved in this behalf by the Central Government or the prescribed authority.

Explanation : For the purposes of this section, “

1. “foreign currency” shall have the meaning assigned to it in 5[the Foreign Exchange Management Act, 1999 (42 of 1999)];

2. “foreign employer” means, “

1. the Government of a foreign State; or

2. a foreign enterprise; or

3. any association or body established outside India;

3. “technician” means a person having specialised knowledge and experience in “

1. constructional or manufacturing operations or mining or the generation or distribution of electricity or any other form of power; or

2. agriculture, animal husbandry, dairy farming, deep sea fishing or ship building; or

3. public administration or industrial or business management; or

4. accountancy; or

5. any field of natural or applied science (including medical science) or social science; or

6. any other field which the Board may prescribe528 in this behalf, who is employed in a capacity in which such specialised knowledge and experience are actually utilised;

529 [(d) “competent authority” means the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange.]

Section 80RRB - Deduction in respect of royalty on patents

530 [271-I. Penalty for failure to furnish information or furnishing inaccurate information under section 195.

If a person, who is required to furnish information under sub-section (6) of section 195, fails to furnish such information, or furnishes inaccurate information, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of one lakh rupees.]

Section 80S - Omitted

531 [***]

Section 80T - Omitted

532 [***]

Section 80TT - Omitted

533 [***]

Section 80TTA - Deduction in respect of interest on deposits in savings account

534[(1) Where the gross total income of an assessee 535 [(other than the assessee referred to in section 80TTB)], being an individual or a Hindu undivided family, includes any income by way of interest on deposits (not being time deposits) in a savings account with--

1. a banking company to which the Banking Regulation Act, 1949(10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act);

2. a co-operative society engaged in carrying on the business of banking (including a co-operative land mortgage bank or a co-operative land development bank); or

3. a Post Office as defined in clause (k) of section 2 of the Indian Post Office Act, 1898(6 Of 1898), 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 as specified hereunder, namely:--

1. in a case where the amount of such income does not exceed in the aggregate ten thousand rupees, the whole of such amount; and

2. in any other case, ten thousand rupees.

(2) Where the income referred to in this section is derived from any deposit in a savings account held by, or on behalf of, a firm, an association of persons or a body of individuals, no deduction shall be allowed under this section in respect of such income in computing the total income of any partner of the firm or any member of the association or any individual of the body.

Explanation.--For the purposes of this section, "time deposits" means the deposits repayable on expiry of fixed periods.]

Section 80TTB Deduction in respect of interest on deposits in case of senior citizens

1. Where the gross total income of an assessee, being a senior citizen, includes any income by way of interest on deposits with--

1. a banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act);

2. a co-operative society engaged in carrying on the business of banking (including a co-operative land mortgage bank or a co-operative land development bank); or

3. a Post Office as defined in clause (k) of section 2 of the Indian Post Office Act, 1898 (6 of 1898),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--

1. in a case where the amount of such income does not exceed in the aggregate fifty thousand rupees, the whole of such amount; and

2. in any other case, fifty thousand rupees.

   2. Where the income referred to in sub-section (1) is derived from any deposit held by, or on behalf of, a firm, an association of persons or a body of individuals, no deduction shall be allowed under this section in respect of such income in computing the total income of any partner of the firm or any member of the association or any individual of the body.

Explanation.-- For the purposes of this section, "senior citizen" means an individual resident in India who is of the age of sixty years or more at any time during the relevant previous year.]536

Section 80U to 80VV - D Other deduction

537[D.-Other deductions

Section 80U - Deduction in case of person with disability

538 [(1) In computing the total income of an individual, being a resident, who, at any time during the previous year, is certified by the medical authority to be a person with disability, there shall be allowed a deduction of a sum of seventy-five thousand rupees:

Provided that where such individual is a person with severe disability, the provisions of this sub-section shall have effect as if for the words "seventy-five thousand rupees", the words "one hundred and twenty-five thousand rupees" had been substituted.]

(2) Every individual claiming a deduction under this section shall furnish a copy of the certificate issued by the medical authority in the form and manner, as may be prescribed539, along with the return of income under section 139, in respect of the assessment year for which the deduction is claimed:

Provided that where the condition of disability requires reassessment of its extent after a period stipulated in the aforesaid certificate, no deduction under this section shall be allowed for any assessment year relating to any previous year beginning after the expiry of the previous year during which the aforesaid certificate of disability had expired, unless a new certificate is obtained from the medical authority in the form and manner, as may be prescribed540, and a copy thereof is furnished along with the return of income under section 139.

541 [Explanation : For the purposes of this section,-

1. “disability” shall have the meaning assigned to it in clause (i) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996), and includes “autism”, “cerebral palsy” and “multiple disabilities” referred to in clauses (a), (c) and (h) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999);

2. “medical authority” means the medical authority as referred to in clause (p) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996), or such other medical authority as may, by notification542, be specified by the Central Government for certifying “autism”, “cerebral palsy”, “multiple disabilities”, “person with disability” and “severe disability” referred to in clauses (a), (c), (h), (j) and (o) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999);

3. “person with disability” means a person referred to in clause (t) of section 2 of the Persons With Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995(1 of 1996), or clause (j) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999);

4. “person with severe disability” means -

1. a person with eighty per cent or more of one or more disabilities, as referred to in sub-section (4) of section 56 of the Persons With Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996); or

2. a person with severe disability referred to in clause (o) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999).]]

Section 80V - Omitted

543 [***]

Section 80VV - Omitted

544 [***] 

Section 80VVA - Omitted

545 [***]

Section 81 - Omitted

546 [***]

Section 82 - Omitted

547 [***]

Section 83 - Omitted

548 [***]

Section 84 - Omitted

549 [***]

Section 85 - Omitted

550 [***]

Section 85A - Omitted

551 [***]

Section 85B - Omitted

552 [***]

Section 85C - Omitted

553 [***]

Section 86 - Share of member of an association of persons or body of individuals in the income of the association or body

Where the assessee is a member of an association of persons or body of individuals (other than a company or a co-operative society or a society registered under the Societies Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act in force in any part of India), income-tax shall not be payable by the assessee in respect of his share in the income of the association or body computed in the manner provided in section 67A :

Provided that -

1. where the association or body is chargeable to tax on its total income at the maximum marginal rate or any higher rate under any of the provisions of this Act, the share of a member computed as aforesaid shall not be included in his total income;

2. in any other case, the share of a member computed as aforesaid shall form part of his total income :

Provided further that where no income-tax is chargeable on the total income of the association or body, the share of a member computed as aforesaid shall be chargeable to tax as part of his total income and nothing contained in this section shall apply to the case.

Section 86A - Omitted

554[***]

CHAPTER VIII 555[REBATES AND RELIEF'S]

Section 87 to 88E - A - Rebate of income-tax

556 [A.-Rebate of income-tax

Section 87 - Rebate to be allowed in computing income-tax

1. In computing the amount of income-tax on the total income of an assessee with which he is chargeable for any assessment year, there shall be allowed from the amount of income-tax (as computed before allowing the deductions under this Chapter), in accordance with and subject to the provisions of 557 [sections 87A, 88], 88A, 88B, 88C, 88D and 88E], the deductions specified in those sections.

2. The aggregate amount of the deductions under 558[section 87A or section 88] or section 88A or section 88B 559 [or section 88C] 560 [or section 88D or section 88E] shall not, in any case, exceed the amount of income-tax (as computed before allowing the deductions under this Chapter) on the total income of the assessee with which he is chargeable for any assessment year.

Section 87A - Rebate of income-tax in case of certain individuals

561 [An assessee, being an individual resident in India, whose total income does not exceed 562[five hundred thousand rupees], shall be entitled to a deduction, from the amount of income-tax (as computed before allowing the deductions under this Chapter) on his total income with which he is chargeable for any assessment year, of an amount equal to hundred per cent. of such income-tax or an amount of 563[twelve thousand and five hundred], whichever is less.]

Section 88 - Rebate on life insurance premia contribution to provident fund etc

564 [(1) Subject to the provisions of this section, an assessee, being an individual, or a Hindu undivided family, shall be entitled to a deduction, from the amount of income-tax (as computed before allowing the deductions under this Chapter) on his total income with which he is chargeable for any assessment year, of an amount equal to “

1. in the case of an individual or a Hindu undivided family, whose gross total income before giving effect to deductions under Chapter VIA, is one lakh fifty thousand rupees or less, twenty per cent of the aggregate of the sums referred to in sub-section (2):

Provided that an individual shall be entitled to a deduction of an amount equal to thirty per cent of the aggregate of the sums referred to in sub-section (2) if his income under the head “Salaries” “

1. does not exceed one lakh rupees during the previous year before allowing the deduction under section 16; and

2. is not less than ninety per cent of his gross total income, as defined in sub-section (5) of section 80B;

2. in the case of an individual or a Hindu undivided family, whose gross total income before giving effect to deductions under Chapter VIA, is more than one lakh fifty thousand rupees but does not exceed five lakh rupees, fifteen per cent of the aggregate of the sums referred to in sub-section (2); (iii) in the case of an individual or a Hindu undivided family, whose gross total income before giving effect to deductions under Chapter VIA, exceeds five lakh rupees, nil.]

(2) The sums referred to in sub-section (1) shall be any sums paid or deposited in the previous year by the assessee 565 [***] “

1. to effect or to keep in force an insurance on the life of persons specified in sub-section (4);

2. to effect or to keep in force a contract for a deferred annuity, not being an annuity plan referred to in clause (xiiia), on the life of persons specified in sub-section (4) :

Provided that such contract does not contain a provision for the exercise by the insured of an option to receive a cash payment in lieu of the payment of the annuity;

3. by way of deduction from the salary payable by or on behalf of the Government to any individual being a sum deducted in accordance with the conditions of his service, for the purpose of securing to him a deferred annuity or making provision for his wife or children, in so far as the sum so deducted does not exceed one-fifth of the salary;

4. as a contribution by an individual to any provident fund to which the Provident Funds Act, 1925 (19 of 1925), applies;

5. as a contribution to any provident fund set-up by the Central Government and notified by it in this behalf in the Official Gazette, where such contribution is to an account standing in the name of any person specified in sub-section (4);

6. as a contribution by an employee to a recognised provident fund;

7. as a contribution by an employee to an approved superannuation fund;

8. in a ten-year account or fifteen-year account under the Post Office Savings Bank (Cumulative Time Deposits) Rules, 1959, as amended from time to time, where such sums are deposited in an account standing in the name of the persons specified in sub-section (4);

9. as subscription to any such security of the Central Government or any such deposit scheme as that Government may, by notification in the Official Gazette, specify in this behalf;

10. as subscription to the National Savings Certificates (VI Issue) and National Savings Certificates (VII Issue) issued under the Government Savings Certificates Act, 1959 (46 of 1959);

11. as subscription to any such savings certificate as defined in clause (c) of section 2 of the Government Savings Certificates Act, 1959 (46 of 1959), as the Central Government may, by notification in the Official Gazette, specify in this behalf;

12. as a contribution, in the name of any person specified in sub-section (4), for participation in the Unit-linked Insurance Plan, 1971 (hereafter in this section referred to as the Unit-linked Insurance Plan) deemed to have been made under sub-clause (a) of clause (8) of section 19 of the Unit Trust of India Act, 1963 (52 of 1963);

13. as a contribution in the name of any person specified in sub-section (4) for participation in any such Unit-linked Insurance Plan of the LIC Mutual Fund notified under clause (23D) of section 10, as the Central Government may, by notification in the Official Gazette, specify in this behalf;

(xiiia) to effect or to keep in force a contract for such annuity plan of the Life Insurance Corporation 3[or any other insurer] as the Central Government may, by notification in the Official Gazette, specify;

(xiiib) as subscription, not exceeding ten thousand rupees, to any units of any Mutual Fund notified under clause (23D) of section 10 or the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963), under any plan formulated in accordance with such scheme as the Central Government may, by notification in the Official Gazette, specify in this behalf;

(xiiic) as a contribution by an individual to any pension fund set-up by any Mutual Fund notified under clause (23D) of section 10 or by the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963), as the Central Government may, by notification in the Official Gazette, specify in this behalf;

14. as subscription to any such deposit scheme of, or as a contribution to any such pension fund set-up by the National Housing Bank established under section 3 of the National Housing Bank Act, 1987 (53 of 1987) (hereafter in this section referred to as the National Housing Bank), as the Central Government may, by notification in the Official Gazette, specify in this behalf;

(xiva) as subscription to any such deposit scheme of “

3. a public sector company which is engaged in providing long-term finance for construction or purchase of houses in India for residential purposes; or

4. any authority constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both, not being a scheme the interest on deposits whereunder qualifies for the purposes of computing the deduction under section 80L, as the Central Government may, by notification in the Official Gazette, specify in this behalf;

566 [(xivb) as tuition fees (excluding any payment towards any development fees or donation or payment of similar nature), whether at the time of admission or thereafter,”

1. to any university, college, school or other educational institution situated within India;

2. for the purpose of full-time education of any of the persons specified in sub-section (4);]

15. for the purposes of purchase or construction of a residential house property the income from which is chargeable to tax under the head “Income from house property” (or which would, if it had not been used for the assessee’s own residence, have been chargeable to tax under that head), where such payments are made towards or by way of “

    3. any installment or part payment of the amount due under any self-financing or other scheme of any development authority, housing board or other authority engaged in the construction and sale of house property on ownership basis; or

    4. any installment or part payment of the amount due to any company or co-operative society of which the assessee is a shareholder or member towards the cost of the house property allotted to him; or

    5. repayment of the amount borrowed by the assessee from “

       1. the Central Government or any State Government, or

       2. any bank, including a co-operative bank, or

       3. the Life Insurance Corporation, or

       4. the National Housing Bank, or

       5. 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 567 [which is eligible for deduction under clause (viii) of sub-section (1) of section 36], or

       6. any company in which the public are substantially interested or any co-operative society, where such company or co­operative society is engaged in the business of financing the construction of houses, or

568 [(6A) the assessee’s employer where such employer is an authority or a board or a corporation or any other body established or constituted under a Central or State Act, or]

7. the assessee’s employer where such employer is a public company or a public sector company or a university established by law or a college affiliated to such university or a local authority or a co-operative society;

6. stamp duty, registration fee and other expenses for the purpose of transfer of such house property to the assessee, but shall not include any payment towards or by way of “

   1. the admission fee, cost of share and initial deposit which a shareholder of a company or a member of a co-operative society has to pay for becoming such shareholder or member; or

   2. 569 [***];

   3. the cost of any addition or alteration to, or renovation or repair of, the house property which is carried out after the issue of the completion certificate in respect of the house property by the authority competent to issue such certificate or after the house property or any part thereof has either been occupied by the assessee or any other person on his behalf or been let out; or

   4. any expenditure in respect of which deduction is allowable under the provisions of section 24;

16. as subscription to equity shares or debentures forming part of any eligible issue of capital approved by the Board on an application made by a public company or as subscription to any eligible issue of capital by any public financial institution in the prescribed form570 :

Provided that where a deduction is claimed and allowed under this clause with reference to the cost of any equity shares or debentures, the cost of such shares or debentures shall not be taken into account for the purposes of sections 54EA and 54EB.

571 [Explanation : For the purposes of this clause,”

1. “eligible issue of capital” means an issue made by a public company formed and registered in India or a public financial institution and the entire proceeds of the issue are utilised wholly and exclusively for the purposes of any business referred to in sub-section (4) of section 80-IA;

2. “public company” shall have the meaning assigned to it in section 3 of the Companies Act, 1956 (1 of 1956);

3. “public financial institution” shall have the meaning assigned to it in section 4A of the Companies Act, 1956 (1 of 1956);

17. as subscription to any units of any mutual fund referred to in clause (23D) of section 10 and approved by the Board on an application made by such mutual fund in the prescribed form572 :

Provided that where a deduction is claimed and allowed under this clause with reference to the cost of units, the cost of such units shall not be taken into account for the purposes of sections 54EA and 54EB :

Provided further that this clause shall apply if the amount of subscription to such units is subscribed only in the eligible issue of capital of any company.

Explanation : For the purposes of this clause “eligible issue of capital” means an issue referred to in clause (i) of Explanation to clause (xvi) of sub-section (2) of section 88.

573 [(2A) The provisions of sub-section (2) shall apply only to so much of any premium or other payment made on an insurance policy other than a contract for a deferred annuity as is not in excess of twenty per cent of the actual capital sum assured.

Explanation : In calculating any such actual capital sum, no account shall be taken “

1. of the value of any premiums agreed to be returned, or

2. of any benefit by way of bonus or otherwise over and above the sum actually assured, which is to be or may be received under the policy by any person.]

574 [(3) The sums referred to in sub-section (2) shall be paid or deposited at any time during the previous year, and the assessee, being an individual or a Hindu undivided family, shall be entitled to a deduction under sub-section (1) on so much of the aggregate of such sum paid or deposited as does not exceed the total income of the assessee, chargeable to tax during the relevant previous year.]

(4) The person referred to in sub-section (2) shall be the following, namely :

1. for the purposes of clauses (i), (v), (xii) and (xiii) of that sub-section,”

1. in the case of an individual, the individual, the wife or husband and any child of such individual, and

2. in the case of a Hindu undivided family, any member thereof;

   2. for the purposes of clause (ii) of that sub-section, “

1. in the case of an individual, the individual, the wife or husband and any child of such individual, and

2. 575[***];

   3. for the purposes of clause (viii) of sub-section, “

1. in the case of an individual, such individual or a minor of whom he is the guardian;

2. in the case of a Hindu undivided family, any member of the family;

3. 576[***];

577 [(d) for the purpose of clause (xivb) of that sub-section, in the case of an individual, any two children of such individual.]

578 [(5) Where the aggregate of any sums specified in clause (i) to clause (xvii) of sub-section (2) exceeds an amount of one hundred thousand rupees, a deduction under sub-section (1) shall be allowed with reference to so much of the aggregate as does not exceed an amount of one hundred thousand rupees:

Provided that where the aggregate of any sums specified in clause (i) to clause (xv) of sub-section (2) exceeds an amount of seventy thousand rupees, a deduction under sub-section (1) in respect of such sums shall be allowed with reference to so much of the aggregate as does not exceed an amount of seventy thousand rupees :

Provided further that where the aggregate of any sums specified in clause (xv) of sub-section (2) exceeds an amount of twenty thousand rupees, a deduction under sub-section (1) in respect of such sums shall be allowed with reference to so much of the aggregate as does not exceed an amount of twenty thousand rupees :]

579 [Provided also that where the aggregate of any sum specified in clause (xivb) of sub-section (2) exceeds an amount of twelve thousand rupees in respect of a child, a deduction under sub-section (1) in respect of such sum shall be allowed with reference to so much of the aggregate as does not exceed an amount of twelve thousand rupees in respect of such child.]

(5A) 580 [***]

(6) 581 [***]

(7) Where, in any previous year, an assessee “

1. terminates his contract of insurance referred to in clause (i) of sub­section (2), by notice to that effect or where the contract ceases to be in force by reason of failure to pay any premium, by not reviving contract of insurance, “

   1. in case of any single premium policy, within two years after the date of commencement of insurance; or

   2. in any other case, before premiums have been paid for two years; or

2. terminates his participation in any Unit-linked Insurance Plan referred to in clause (xii) or clause (xiii) of sub-section (2), by notice to that effect or where he ceases to participate by reason of failure to pay any contribution, by not reviving his participation, before contributions in respect of such participation have been paid for five years; or

3. transfers the house property referred to in clause (xv) of sub-section (2) before the expiry of five years from the end of the financial year in which possession of such property is obtained by him, or receives back, whether by way of refund or otherwise, any sum specified in that clause, then, “

   3. no deduction shall be allowed to the assessee under sub-section (1) with reference to any of the sums, referred to in clauses (i), (xii), (xiii) and (xv) of sub-section (2), paid in such previous year; and

   4. the aggregate amount of the deductions of income-tax so allowed in respect of the previous year or years preceding such previous year, shall be deemed to be tax payable by the assessee in the assessment year relevant to such previous year and shall be added to the tax on the total income of the assessee with which he is chargeable for such assessment year.

(7A) If any equity shares or debentures, with reference to the cost of which a deduction is allowed under sub-section (1) are sold or otherwise transferred by the assessee to any person at any time within a period of three years from the date of their acquisition, the aggregate amount of the deductions of income-tax so allowed in respect of such equity shares or debentures in the previous year or years preceding the previous year in which such sale or transfer has taken place shall be deemed to be tax payable by the assessee for the assessment year relevant to such previous year and shall be added to the amount of income-tax on the total income of the assessee with which he is chargeable for such assessment year.

Explanation: A person shall be treated as having acquired any shares or debentures on the date on which his name is entered in relation to those shares or debentures in the register of members or of debenture-holders, as the case may be, of the public company.

(8) In this section, “

1. “contribution” to any fund shall not include any sums in repayment of loan;

2. “insurance” shall include “

   1. a policy of insurance on the life of an individual or the spouse or the child of such individual or a member of a Hindu undivided family securing the payment of specified sum on the stipulated date of maturity, if such person is alive on such date notwith­standing that the policy of insurance provides only for the return of premiums paid (with or without any interest thereon) in the event of such person dying before the said stipulated date;

   2. a policy of insurance effected by an individual or a member of a Hindu undivided family for the benefit of a minor with the object of enabling the minor, after he has attained majority to secure insurance on his own life by adopting the policy and on his being alive on a date (after such adoption) specified in the policy in this behalf;

3. “Life Insurance Corporation” means the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956);

(iv) “public company” shall have the same meaning as in section 3 of the Companies Act, 1956 (1 of 1956);

4. “security” means a Government security as defined in clause (2) of section 2 of the Public Debt Act, 1944 (18 of 1944);

5. “transfer” shall be deemed to include also the transactions referred to in clause (f) of section 269UA.

582 [(9) No deduction from the amount of income-tax shall be allowed under this section to an assessee, being an individual or a Hindu undivided family for the assessment year beginning on the 1st day of April, 2006 and subsequent years.]

Section 88A - Omitted

583 [***]

Section 88B - Rebate of income-tax in case of individuals of sixty-five years or above Omitted

584 [***]

Section 88C - Rebate of income-tax in case of women below sixty-five years Omitted

585 [***]

Section 88D - Rebate of income-tax in case of certain individuals Omitted

586 [***]

Section 88E - Rebate in respect of securities transaction tax

587 [(1) Where total income of an assessee in a previous year includes any income, chargeable under the head “Profits and gains of business or profession”, arising from taxable securities transactions, he shall be entitled to a deduction, from the amount of income-tax on such income arising from such transactions, computed in the manner provided in sub-section (2), of an amount equal to the securities transaction tax paid by him in respect of the taxable securities transactions entered into in the course of his business during that previous year:

Provided that no deduction under this sub-section shall be allowed unless the assessee furnishes alongwith the return of income, evidence of payment of securities transaction tax in the prescribed588form :

Provided further that the amount of deduction under this sub-section shall not exceed the amount of income-tax on such income computed in the manner provided in sub-section (2).

(2) For the purposes of sub-section (1), the amount of income-tax on the income arising from the taxable securities transactions, referred to in that sub-section, shall be equal to the amount calculated by applying the average rate of income-tax on such income.

Explanation : For the purposes of this section, the expressions “taxable securities transaction” and “securities transaction tax” shall have the same meanings respectively assigned to them under Chapter VII of the Finance (No. 2) Act, 2004.]

589 [(3) No deduction under this section shall be allowed in, or after, the assessment year beginning on the 1st day of April, 2009.]

Section 89 - Relief when salary etc is paid in arrears or in advance

590 [Where an assessee is in receipt of a sum in the nature of salary, being paid in arrears or in advance or is in receipt, in any one financial year, of salary for more than twelve months or a payment which under the provisions of clause (3) of section 17 is a profit in lieu of salary, or is in receipt of a sum in the nature of family pension as defined in the Explanation to clause (iia) of section 57, being paid in arrears, due to which his total income is assessed at a rate higher than that at which it would otherwise have been assessed, the Assessing Officer shall, on an application made to him in this behalf, grant such relief as may be prescribed.591]

592 [Provided that no such relief shall be granted in respect of any amount received or receivable by an assessee on his voluntary retirement or termination of his service, in accordance with any scheme or schemes of voluntary retirement or in the case of a public sector company referred to in sub-clause (i) of clause (10C) of section 10, a scheme of voluntary separation, if an exemption in respect of any amount received or receivable on such voluntary retirement or termination of his service or voluntary separation has been claimed by the assessee under clause (10C) of section 10 in respect of such, or any other, assessment year.]

Section 89A Relief from taxation in income from retirement benefit account maintained in a notified country

593 [Where a specified person has income accrued in a specified account, such income shall be taxed in such manner and in such year as may be prescribed.

Explanation.—For the purposes of this section,—

1. “notified country” means a country as may be notified by the Central Government in the Official Gazette for the purposes of this section;

2. “specified account” means an account maintained in a notified country by the specified person in respect of his retirement benefits and the income from such account is not taxable on accrual basis but is taxed by such country at the time of withdrawal or redemption;

3. “specified person” means a person resident in India who opened a specified account in a notified country while being non-resident in India and resident in that country.]

Section 90 - Agreement with foreign countries or specified territories

594 (1) The Central Government may enter into an agreement with the Government of any country outside India or specified territory outside India,--

1. for the granting of relief in respect of--

1. income on which have been paid both income-tax under this Act and income-tax in that country or specified territory, as the case may be, or

2. income-tax chargeable under this Act and under the corresponding law in force in that country or specified territory, as the case may be, to promote mutual economic relations, trade and investment, or

2. for the avoidance of double taxation of income under this Act and under the corresponding law in force in that country or specified territory, as the case may be 595[without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance (including through treaty-shopping arrangements aimed at obtaining reliefs provided in the said agreement for the indirect benefit to residents of any other country or territory)], or

3. for exchange of information for the prevention of evasion or avoidance of income-tax chargeable under this Act or under the corresponding law in force in that country or specified territory, as the case may be, or investigation of cases of such evasion or avoidance, or

4. for recovery of income-tax under this Act and under the corresponding law in force in that country or specified territory, as the case may be, and may, by notification in the Official Gazette, make such provisions as may be necessary for implementing the agreement.

(2) Where the Central Government has entered into an agreement with the Government of any country outside India or specified territory outside India, as the case may be, under sub-section (1) for granting relief of tax, or as the case may be, avoidance of double taxation, then, in relation to the assessee to whom such agreement applies, the provisions of this Act shall apply to the extent they are more beneficial to that assessee.

596[(2A) Notwithstanding anything contained in sub-section (2), the provisions of Chapter X-A of the Act shall apply to the assessee even if such provisions are not beneficial to him.]

(3) Any term used but not defined in this Act or in the agreement referred to in sub-section (1) shall, unless the context otherwise requires, and is not inconsistent with the provisions of this Act or the agreement, have the same meaning as assigned to it in the notification issued by the Central Government in the Official Gazette in this behalf.

597 [(4) An assessee, not being a resident, to whom an agreement referred to in sub-section (1) applies, shall not be entitled to claim any relief under such agreement unless 598[a certificate of his being a resident] in any country outside India or specified territory outside India, as the case may be, is obtained by him from the Government of that country or specified territory.]

Explanation 1.-- For the removal of doubts, it is hereby declared that the charge of tax in respect of a foreign company at a rate higher than the rate at which a domestic company is chargeable, shall not be regarded as less favourable charge or levy of tax in respect of such foreign company.

Explanation 2.-- For the purposes of this section, “specified territory” means any area outside India which may be notified as such by the Central Government.]

599 [Explanation 3.--For the removal of doubts, it is hereby declared that where any term is used in any agreement entered into under sub-section (1) and not defined under the said agreement or the Act, but is assigned a meaning to it in the notification issued under sub-section (3) and the notification issued thereunder being in force, then, the meaning assigned to such term shall be deemed to have effect from the date on which the said agreement came into force.]

600 [Explanation 4.--For the removal of doubts, it is hereby declared that where any term used in an agreement entered into under sub-section (1) is defined under the said agreement, the said term shall have the same meaning as assigned to it in the agreement; and where the term is not defined in the said agreement, but defined in the Act, it shall have the same meaning as assigned to it in the Act and if any, explanation given to it by the Central Government.]

601 [(5) The assessee referred to in sub-section (4) shall also provide such other documents and information, as may be prescribed.]

Section 90A - Adoption by Central Government of agreements between specified associations for double taxation relief

602 [(1) Any specified association in India may enter into an agreement with any specified association in the specified territory outside India and the Central Government may, by notification in the Official Gazette, make such provisions as may be necessary for adopting and implementing such agreement “

1. for the granting of relief in respect of “

1. income on which have been paid both income-tax under this Act and income-tax in any specified territory outside India; or

2. income-tax chargeable under this Act and under the corres­ponding law in force in that specified territory outside India to promote mutual economic relations, trade and investment, or

   2. for the avoidance of double taxation of income under this Act and under the corresponding law in force in that specified territory outside India 603[without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance (including through treaty-shopping arrangements aimed at obtaining reliefs provided in the said agreement for the indirect benefit to residents of any other country or territory)], or

   3. for exchange of information for the prevention of evasion or avoidance of income-tax chargeable under this Act or under the corresponding law in force in that specified territory outside India, or investigation of cases of such evasion or avoidance, or

   4. for recovery of income-tax under this Act and under the corresponding law in force in that specified territory outside India.

(2) Where a specified association in India has entered into an agreement with a specified association of any specified territory outside India under sub-section (1) and such agreement has been notified under that sub-section, for granting relief of tax, or as the case may be, avoidance of double taxation, then, in relation to the assessee to whom such agreement applies, the provisions of this Act shall apply to the extent they are more beneficial to that assessee.

604 [(2A) Notwithstanding anything contained in sub-section (2), the provisions of Chapter X-A of the Act shall apply to the assessee even if such provisions are not beneficial to him.]

605[***]

(3) Any term used but not defined in this Act or in the agreement referred to in sub-section (1) shall, unless the context otherwise requires, and is not inconsistent with the provisions of this Act or the agreement, have the same meaning as assigned to it in the notification issued by the Central Government in the Official Gazette in this behalf.

606 [(4) An assessee, not being a resident, to whom the agreement referred to in sub-section (1) applies, shall not be entitled to claim any relief under such agreement unless 607[a certificate of his being a resident] in any specified territory outside India, is obtained by him from the Government of that specified territory.]

608 [(5) The assessee referred to in sub-section (4) shall also provide such other documents and information, as may be prescribed.]

Explanation 1 : For the removal of doubts, it is hereby declared that the charge of tax in respect of a company incorporated in the specified territory outside India at a rate higher than the rate at which a domestic company is chargeable, shall not be regarded as less favourable charge or levy of tax in respect of such company.

Explanation 2 : For the purposes of this section, the expressions “

1. “specified association” means any institution, association or body, whether incorporated or not, functioning under any law for the time being in force in India or the laws of the specified territory outside India and which may be notified as such by the Central Government for the purposes of this section;

2. “specified territory” means any area outside India which may be notified as such by the Central Government for the purposes of this section.]

609 [Explanation 3.--For the removal of doubts, it is hereby declared that where any term is used in any agreement entered into under sub-section (1) and not defined under the said agreement or the Act, but is assigned a meaning to it in the notification issued under sub-section (3) and the notification issued thereunder being in force, then, the meaning assigned to such term shall be deemed to have effect from the date on which the said agreement came into force.]

610 [Explanation 4.--For the removal of doubts, it is hereby declared that where any term used in an agreement entered into under sub-section (1) is defined under the said agreement, the said term shall have the same meaning as assigned to it in the agreement; and where the term is not defined in the said agreement, but defined in the Act, it shall have the same meaning as assigned to it in the Act and explanation, if any, given to it by the Central Government.]

Section 91 - Countries with which no agreement exists

1. If any person who is resident in India in any previous year proves that, in respect of his income which accrued or arose during that previous year outside India (and which is not deemed to accrue or arise in India), he has paid in any country with which there is no agreement under section 90 for the relief or avoidance of double taxation, income-tax, by deduction or otherwise, under the law in force in that country, he shall be entitled to the deduction from the Indian income-tax payable by him of a sum calculated on such doubly taxed income at the Indian rate of tax or the rate of tax of the said country, whichever is the lower, or at the Indian rate of tax if both the rates are equal.

2. If any person who is resident in India in any previous year proves that in respect of his income which accrued or arose to him during that previous year in Pakistan he has paid in that country, by deduction or otherwise, tax payable to the Government under any law for the time being in force in that country relating to taxation of agricultural income, he shall be entitled to a deduction from the Indian income-tax payable by him “

   1. of the amount of the tax paid in Pakistan under any law aforesaid on such income which is liable to tax under this Act also; or

   2. of a sum calculated on that income at the Indian rate of tax, whichever is less.

3. If any non-resident person is assessed on his share in the income of a registered firm assessed as resident in India in any previous year and such share includes any income accruing or arising outside India during that previous year (and which is not deemed to accrue or arise in India) in a country with which there is no agreement under section 90 for the relief or avoidance of double taxation and he proves that he has paid income-tax by deduction or otherwise under the law in force in that country in respect of the income so included he shall be entitled to a deduction from the Indian income-tax payable by him of a sum calculated on, such doubly taxed income so included at the Indian rate of tax or the rate of tax of the said country, whichever is the lower, or at the Indian rate of tax if both the rates are equal.

Explanation : In this section, “

1. the expression “Indian income-tax” means income-tax charged in accordance with the provisions of this Act;

2. the expression “Indian rate of tax” means the rate determined by dividing the amount of Indian income-tax after deduction of any relief due under the provisions of this Act but before deduction of any relief due under this Chapter, by the total income;

3. the expression “rate of tax of the said country” means income-tax and super-tax actually paid in the said country in accordance with the corresponding laws in force in the said country after deduction of all relief due, but before deduction of any relief due in the said country in respect of double taxation, divided by the whole amount of the income as assessed in the said country;

4. the expression “income-tax” in relation to any country includes any excess profits tax or business profits tax charged on the profits by the Government of any part of that country or a local authority in that country.

Section 92 - Computation of income from international transaction having regard to arms length price

611 [(1) Any income arising from an international transaction shall be computed having regard to the arm’s length price.

Explanation : For the removal of doubts, it is hereby clarified that the allowance for any expense or interest arising from an international transaction shall also be determined having regard to the arm’s length price.

(2) Where in an 612 [international transaction or specified domestic transaction], two or more associated enterprises enter into a mutual agreement or arrangement for the allocation or apportionment of, or any contribution to, any cost or expense incurred or to be incurred in connection with a benefit, service or facility provided or to be provided to any one or more of such enterprises, the cost or expense allocated or apportioned to, or, as the case may be, contributed by, any such enterprise shall be determined having regard to the arm’s length price of such benefit, service or facility, as the case may be.

613 [(2A) Any allowance for an expenditure or interest or allocation of any cost or expense or any income in relation to the specified domestic transaction shall be computed having regard to the arm's length price.]

(3) The provisions of this section shall not apply in a case where the computation of income under 614 [sub-section (1) or sub-section (2A)] or the determination of the allowance for any expense or interest under 615[sub-section (1) or sub-section (2A)], or the determination of any cost or expense allocated or apportioned, or, as the case may be, contributed under sub-section (2), 616 [or sub-section (2A)] has the effect of reducing the income chargeable to tax or increasing the loss, as the case may be, computed on the basis of entries made in the books of account in respect of the previous year in which the617 [international transaction or specified domestic transaction] was entered into.]

Section 92A - Meaning of associated enterprise

618 [(1) For the purposes of this section and sections 92, 92B, 92C, 92D, 92E and 92F, “associated enterprise”, in relation to another enterprise, means an enterprise “

3. which participates, directly or indirectly, or through one or more intermediaries, in the management or control or capital of the other enterprise; or

4. in respect of which one or more persons who participate, directly or indirectly, or through one or more intermediaries, in its management or control or capital, are the same persons who participate, directly or indirectly, or through one or more intermediaries, in the management or control or capital of the other enterprise. 

619 [(2) For the purposes of sub-section (1), two enterprises shall be deemed to be associated enterprises if, at any time during the previous year, “]

1. one enterprise holds, directly or indirectly, shares carrying not less than twenty-six per cent of the voting power in the other enterprise; or

2. any person or enterprise holds, directly or indirectly, shares carrying not less than twenty-six per cent of the voting power in each of such enterprises; or

3. a loan advanced by one enterprise to the other enterprise constitutes not less than fifty-one per cent of the book value of the total assets of the other enterprise; or

4. one enterprise guarantees not less than ten per cent of the total borrowings of the other enterprise; or

5. more than half of the board of directors or members of the governing board, or one or more executive directors or executive members of the governing board of one enterprise, are appointed by the other enterprise; or

6. more than half of the directors or members of the governing board, or one or more of the executive directors or members of the governing board, of each of the two enterprises are appointed by the same person or persons; or

7. the manufacture or processing of goods or articles or business carried out by one enterprise is wholly dependent on the use of know-how, patents, copyrights, trade-marks, licences, franchises or any other business or commercial rights of similar nature, or any data, documentation, drawing or specification relating to any patent, invention, model, design, secret formula or process, of which the other enterprise is the owner or in respect of which the other enterprise has exclusive rights; or

8. ninety per cent or more of the raw materials and consumables required for the manufacture or processing of goods or articles carried out by one enterprise, are supplied by the other enterprise, or by persons specified by the other enterprise, and the prices and other conditions relating to the supply are influenced by such other enterprise; or

9. the goods or articles manufactured or processed by one enterprise, are sold to the other enterprise or to persons specified by the other enterprise, and the prices and other conditions relating thereto are influenced by such other enterprise; or

10. where one enterprise is controlled by an individual, the other enterprise is also controlled by such individual or his relative or jointly by such individual and relative of such individual; or

11. where one enterprise is controlled by a Hindu undivided family, the other enterprise is controlled by a member of such Hindu undivided family, or by a relative of a member of such Hindu undivided family, or jointly by such member and his relative; or

12. where one enterprise is a firm, association of persons or body of individuals, the other enterprise holds not less than ten per cent interest in such firm, association of persons or body of individuals; or

13. there exists between the two enterprises, any relationship of mutual interest, as may be prescribed.]

Section 92B - Meaning of international transaction

620 [(1) For the purposes of this section and sections 92, 92C, 92D and 92E, “international transaction” means a transaction between two or more associated enterprises, either or both of whom are non-residents, in the nature of purchase, sale or lease of tangible or intangible property, or provision of services, or lending or borrowing money, or any other transaction having a bearing on the profits, income, losses or assets of such enterprises and shall include a mutual agreement or arrangement between two or more associated enterprises for the allocation or apportionment of, or any contribution to, any cost or expense incurred or to be incurred in connection with a benefit, service or facility provided or to be provided to any one or more of such enterprises.

(2) A transaction entered into by an enterprise with a person other than an associated enterprise shall, for the purposes of sub-section (1), be 621 [deemed to be an international transaction] entered into between two associated enterprises, if there exists a prior agreement in relation to the relevant transaction between such other person and the associated enterprise; or the terms of the relevant transaction are determined in substance between such other person and the associated enterprise 622[where the enterprise or the associated enterprise or both of them are non-residents irrespective of whether such other person is a non resident or not].]

623 [Explanation.--For the removal of doubts, it is hereby clarified that--

1. the expression "international transaction" shall include--

   1. the purchase, sale, transfer, lease or use of tangible property including building, transportation vehicle, machinery, equipment, tools, plant, furniture, commodity or any other article, product or thing;

   2. the purchase, sale, transfer, lease or use of intangible property, including the transfer of ownership or the provision of use of rights regarding land use, copyrights, patents, trademarks, licences, franchises, customer list, marketing channel, brand, commercial secret, know-how, industrial property right, exterior design or practical and new design or any other business or commercial rights of similar nature;

   5. capital financing, including any type of long-term or short-term borrowing, lending or guarantee, purchase or sale of marketable securities or any type of advance, payments or deferred payment or receivable or any other debt arising during the course of business;

   6. provision of services, including provision of market research, market development, marketing management, administration, technical service, repairs, design, consultation, agency, scientific research, legal or accounting service;

   7. a transaction of business restructuring or reorganisation, entered into by an enterprise with an associated enterprise, irrespective of the fact that it has bearing on the profit, income, losses or assets of such enterprises at the time of the transaction or at any future date;

2. the expression "intangible property" shall include--

   1. marketing related intangible assets, such as, trademarks, trade names, brand names, logos;

   2. technology related intangible assets, such as, process patents, patent applications, technical documentation such as laboratory notebooks, technical know-how;

   3. artistic related intangible assets, such as, literary works and copyrights, musical compositions, copyrights, maps, engravings;

   4. data processing related intangible assets, such as, proprietary computer software, software copyrights, automated databases, and integrated circuit masks and masters;

   5. engineering related intangible assets, such as, industrial design, product patents, trade secrets, engineering drawing and schematics, blueprints, proprietary documentation;

   6. customer related intangible assets, such as, customer lists, customer contracts, customer relationship, open purchase orders;

   7. contract related intangible assets, such as, favourable supplier, contracts, licence agreements, franchise agreements, non-compete agreements;

   8. human capital related intangible assets, such as, trained and organised work force, employment agreements, union contracts;

   9. location related intangible assets, such as, leasehold interest, mineral exploitation rights, easements, air rights, water rights;

   10. goodwill related intangible assets, such as, institutional goodwill, professional practice goodwill, personal goodwill of professional, celebrity goodwill, general business going concern value;

   11. methods, programmes, systems, procedures, campaigns, surveys, studies, forecasts, estimates, customer lists, or technical data;

   12. any other similar item that derives its value from its intellectual content rather than its physical attributes.]

Section 92 A Meaning of specified domestic transaction

For the purposes of this section and sections 92, 92C, 92D and 92E, "specified domestic transaction" in case of an assessee means any of the following transactions, not being an international transaction, namely:--

624 [***]

(ii) any transaction referred to in section 80A;

(iii) any transfer of goods or services referred to in sub-section (8) of section 80-IA;

(iv) any business transacted between the assessee and other person as referred to in sub-section (10) of section 80-IA;

(v) any transaction, referred to in any other section under Chapter VI-A or section 10AA, to which provisions of sub-section (8) or sub-section (10) of section 80-IA are applicable; or

625["(va) any business transacted between the persons referred to in sub-section (6) of section 115BAB]

(vi) any other transaction as may be prescribed, and where the aggregate of such transactions entered into by the assessee in the previous year exceeds a sum of 626 [twenty crore rupees].] 627

Section 92C Computation of arms length price

1. The arm’s length price in relation to an 628 [international transaction or specified domestic transaction] shall be determined by any of the following methods, being the most appropriate method, having regard to the nature of transaction or class of transaction or class of associated persons or functions performed by such persons or such other relevant factors as the Board may prescribe629, namely :

   3. comparable uncontrolled price method;

   4. resale price method;

   5. cost plus method;

   6. profit split method;

   8. transactional net margin method;

   9. such other method as may be prescribed630 by the Board.

2. The most appropriate method referred to in sub-section (1) shall be applied, for determination of arm’s length price, in the manner as may be prescribed631:

632 [Provided that where more than one price is determined by the most appropriate method, the arm’s length price shall be taken to be the arithmetical mean of such prices:

Provided further that if the variation between the arm’s length price so determined and price at which the 633[international transaction or specified domestic transaction] has actually been undertaken 634 [does not exceed such percentage not exceeding three per cent. of the latter, as may be notified] by the Central Government in the Official Gazette in this behalf], the price at which the 635 [international transaction or specified domestic transaction] has actually been undertaken shall be deemed to be the arm’s length price.]

636 [Provided also that where more than one price is determined by the most appropriate method, the arm's length price in relation to an international transaction or specified domestic transaction undertaken on or after the 1st day of April, 2014, shall be computed in such manner as may be prescribed and accordingly the first and second proviso shall not apply.]

637 [Explanation.--For the removal of doubts, it is hereby clarified that the provisions of the second proviso shall also be applicable to all assessment or reassessment proceedings pending before an Assessing Officer as on the 1st day of October, 2009.]

638 [(2A) Where the first proviso to sub-section (2) as it stood before its amendment by the Finance (No. 2) Act, 2009 (33 of 2009), is applicable in respect of an 639 [international transaction or specified domestic transaction] for an assessment year and the variation between the arithmetical mean referred to in the said proviso and the price at which such transaction has actually been undertaken exceeds five per cent. of the arithmetical mean, then, the assessee shall not be entitled to exercise the option as referred to in the said proviso.]

640 [(2B) Nothing contained in sub-section (2A) shall empower the Assessing Officer either to assess or reassess under section 147 or pass an order enhancing the assessment or reducing a refund already made or otherwise increasing the liability of the assessee under section 154 for any assessment year the proceedings of which have been completed before the 1st day of October, 2009.]

3. Where during the course of any proceeding for the assessment of income, the Assessing Officer is, on the basis of material or information or document in his possession, of the opinion that “

   7. the price charged or paid in an 641 [international transaction or specified domestic transaction] has not been determined in accordance with sub-sections (1) and (2); or

   8. any information and document relating to an 642 [international transaction or specified domestic transaction] have not been kept and maintained by the assessee in accordance with the provisions contained in sub-section (1) of section 92D and the rules made in this behalf; or

   9. the information or data used in computation of the arm’s length price is not reliable or correct; or

   10. the assessee has failed to furnish, within the specified time, any information or document which he was required to furnish by a notice issued under sub-section (3) of section 92D, the Assessing Officer may proceed to determine the arm’s length price in relation to the said 643 [international transaction or specified domestic transaction] in accordance with subsections (1) and (2), on the basis of such material or information or document available with him :

Provided that an opportunity shall be given by the Assessing Officer by serving a notice calling upon the assessee to show cause, on a date and time to be specified in the notice, why the arm’s length price should not be so determined on the basis of material or information or document in the possession of the Assessing Officer.

4. Where an arm’s length price is determined by the Assessing Officer under sub-section (3), the Assessing Officer may compute the total income of the assessee having regard to the arm’s length price so determined :

Provided that no deduction under 644 [section 10A or section 10AA or section 10B] or under Chapter VIA shall be allowed in respect of the amount of income by which the total income of the assessee is enhanced after computation of income under this sub-section :

Provided further that where the total income of an associated enterprise is computed under this sub-section on determination of the arm’s length price paid to another associated enterprise from which tax has been deducted 645 [or was deductible] under the provisions of Chapter XVIIB, the income of the other associated enterprise shall not be recomputed by reason of such determination of arm’s length price in the case of the first mentioned enterprise.] 646

Section 92CA - Reference to Transfer Pricing Officer

647 [(1) Where any person, being the assessee, has entered into an 648 [international transaction or specified domestic transaction] in any previous year, and the Assessing Officer considers it necessary or expedient so to do, he may, with the previous approval of the 649 [Principal Commissioner or Commissioner], refer the computation of the arm's length price in relation to the said 650 [international transaction or specified domestic transaction] under section 92C to the Transfer Pricing Officer.

(2) Where a reference is made under sub-section (1), the Transfer Pricing Officer shall serve a notice on the assessee requiring him to produce or cause to be produced on a date to be specified therein, any evidence on which the assessee may rely in support of the computation made by him of the arm’s length price in relation to the 651 [international transaction or specified domestic transaction] referred to in sub-section (1).

652 [(2A) Where any other international transaction [other than an international transaction referred under sub-section (1)], comes to the notice of the Transfer Pricing Officer during the course of the proceedings before him, the provisions of this Chapter shall apply as if such other international transaction is an international transaction referred to him under sub-section (1).]

653[(2B) Where in respect of an international transaction, the assessee has not furnished the report under section 92E and such transaction comes to the notice of the Transfer Pricing Officer during the course of the proceeding before him, the provisions of this Chapter shall apply as if such transaction is an international transaction referred to him under sub-section (1).]

654 [(2C) Nothing contained in sub-section (2B) shall empower the Assessing Officer either to assess or reassess under section 147 or pass an order enhancing the assessment or reducing a refund already made or otherwise increasing the liability of the assessee under section 154, for any assessment year, proceedings for which have been completed before the 1st day of July, 2012.]

(3) On the date specified in the notice under sub-section (2), or as soon thereafter as may be, after hearing such evidence as the assessee may produce, including any information or documents referred to in sub-section (3) of section 92D and after considering such evidence as the Transfer Pricing Officer may require on any specified points and after taking into account all relevant materials which he has gathered, the Transfer Pricing Officer shall, by order in writing, determine the arm's length price in relation to the 655 [international transaction or specified domestic transaction] in accordance with sub-section (3) of section 92C and send a copy of his order to the Assessing Officer and to the assessee.

656 [(3A) Where a reference was made under sub-section (1) before the 1st day of June, 2007 but the order under sub-section (3) has not been made by the Transfer Pricing Officer before the said date, or a reference under sub-section (1) is made on or after the 1st day of June, 2007, an order under sub-section (3) may be made at any time before sixty days prior to the date on which the period of limitation referred to in section 153, or as the case may be, in section 153B for making the order of assessment or reassessment or recomputation or fresh assessment, as the case may be, expires.]

657 [Provided that in the circumstances referred to in clause (ii) or clause (x) of Explanation (1) to section 153, if the period of limitation available to the Transfer Pricing Officer for making an order is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to have been extended accordingly.]

658 [(4) On receipt of the order under sub-section (3), the Assessing Officer shall proceed to compute the total income of the assessee under sub-section (4) of section 92C in conformity with the arm’s length price as so determined by the Transfer Pricing Officer.]

(5) With a view to rectifying any mistake apparent from the record, the Transfer Pricing Officer may amend any order passed by him under sub-section (3), and the provisions of section 154 shall, so far as may be, apply accordingly.

(6) Where any amendment is made by the Transfer Pricing Officer under sub­section (5), he shall send a copy of his order to the Assessing Officer who shall thereafter proceed to amend the order of assessment in conformity with such order of the Transfer Pricing Officer.

(7) The Transfer Pricing Officer may, for the purposes of determining the arm's length price under this section, exercise all or any of the powers specified in clauses (a) to (d) of sub-section (1) of section 131 or sub-section (6) of section 133 659 [or section 133A].

660[(8) The Central Government may make a scheme, by notification in the Official Gazette, for the purposes of determination of the arm's length price under sub-section (3), so as to impart greater efficiency, transparency and accountability by—

1. eliminating the interface between the Transfer Pricing Officer and the assessee or any other person to the extent technologically feasible;

2. optimising utilisation of the resources through economies of scale and functional specialisation;

3. introducing a team-based determination of arm's length price with dynamic jurisdiction.

(9) The Central Government may, for the purpose of giving effect to the scheme made under sub-section (8), by notification in the Official Gazette, direct that any of the provisions of this Act shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification:

Provided that no direction shall be issued after the 31st day of March, 661[2024].

(10) Every notification issued under sub-section (8) and sub-section (9) shall, as soon as may be after the notification is issued, be laid before each House of Parliament.]

Explanation : For the purposes of this section, “Transfer Pricing Officer” means a Joint Commissioner or Deputy Commissioner or Assistant Commissioner, authorised by the Board to perform all or any of the functions of an Assessing Officer specified in sections 92C and 92D in respect of any person or class of persons.]

Section 92CB - Power of Board to make safe harbour rules

662[(1) The determination of––

1. income referred to in clause (i) of sub-section (1) of section 9; or

2. arm’s length price under section 92C or section 92CA, shall be subject to safe harbour rules.]

(2) The Board may, for the purposes of sub-section (1), make rules for safe harbour.

Explanation -For the purposes of this section, “safe harbour” means circumstances in which the income-tax authorities shall accept 663[the transfer price or income, deemed to accrue or arise under clause (i) of sub-section (1) of section 9, as the case may be, declared by the assessee].

Section 92CC - Advance pricing agreement

664[(1) The Board, with the approval of the Central Government, may enter into an advance pricing agreement with any person, determining the––

1. arm’s length price or specifying the manner in which the arm’s length price is to be determined, in relation to an international transaction to be entered into by that person;

2. income referred to in clause (i) of sub-section (1) of section 9, or specifying the manner in which said income is to be determined, as is reasonably attributable to the operations carried out in India by or on behalf of that person, being a non-resident.

(2) The manner of determination of the arm’s length price referred to in clause (a) or the income referred to in clause (b) of sub-section (1), may include the methods referred to in sub-section (1) of section 92C or the methods provided by rules made under this Act, respectively, with such adjustments or variations, as may be necessary or expedient so to do.

(3) Notwithstanding anything contained in section 92C or section 92CA or the methods provided by rules made under this Act, the arm’s length price of any international transaction or the income referred to in clause (b) of sub-section (1), in respect of which the advance pricing agreement has been entered into, shall be determined in accordance with the advance pricing agreement so entered.]

(4) The agreement referred to in sub-section (1) shall be valid for such period not exceeding five consecutive previous years as may be specified in the agreement.

(5) The advance pricing agreement entered into shall be binding--

1. on the person in whose case, and in respect of the transaction in relation to which, the agreement has been entered into; and

2. on the 665[Principal Commissioner or Commissioner], and the income-tax authorities subordinate to him, in respect of the said person and the said transaction.

(6) The agreement referred to in sub-section (1) shall not be binding if there is a change in law or facts having bearing on the agreement so entered.

(7) The Board may, with the approval of the Central Government, by an order, declare an agreement to be void ab initio, if it finds that the agreement has been obtained by the person by fraud or misrepresentation of facts.

(8) Upon declaring the agreement void ab initio,--

1. all the provisions of the Act shall apply to the person as if such agreement had never been entered into; and

2. notwithstanding anything contained in the Act, for the purpose of computing any period of limitation under this Act, the period beginning with the date of such agreement and ending on the date of order under sub-section (7) shall be excluded:

Provided that where immediately after the exclusion of the aforesaid period, the period of limitation, referred to in any provision of this Act, is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly.

(9) The Board may, for the purposes of this section, prescribe a scheme specifying therein the manner, form, procedure and any other matter generally in respect of the advance pricing agreement.

666[(9A) The agreement referred to in sub-section (1), may, subject to such conditions, procedure and manner as may be prescribed, provide for determining the—

1. arm’s length price or specify the manner in which the arm’s length price shall be determined in relation to the international transaction entered into by the person;

2. income referred to in clause (i) of sub-section (1) of section 9, or specifying the manner in which the said income is to be determined, as is reasonably attributable to the operations carried out in India by or on behalf of that person, being a non-resident, during any period not exceeding four previous years preceding the first of the previous years referred to in sub-section (4), and the arm’s length price of such international transaction or the income of such person shall be determined in accordance with the said agreement.]

(10) Where an application is made by a person for entering into an agreement referred to in sub-section (1), the proceeding shall be deemed to be pending in the case of the person for the purposes of the Act.]

Section 92CD - Effect to advance pricing agreement

667 [(1) Notwithstanding anything to the contrary contained in section 139, where any person has entered into an agreement and prior to the date of entering into the agreement, any return of income has been furnished under the provisions of section 139 for any assessment year relevant to a previous year to which such agreement applies, such person shall furnish, within a period of three months from the end of the month in which the said agreement was entered into, a modified return in accordance with and limited to the agreement.

(2) Save as otherwise provided in this section, all other provisions of this Act shall apply accordingly as if the modified return is a return furnished under section 139.

(3) If the assessment or reassessment proceedings for an assessment year relevant to a previous year to which the agreement applies have been completed before the expiry of period allowed for furnishing of modified return under sub-section (1), the Assessing Officer shall, in a case where modified return is filed in accordance with the provisions of sub-section (1), proceed to assess or reassess or recompute the total income of the relevant assessment year having regard to and in accordance with the agreement.

(4) Where the assessment or reassessment proceedings for an assessment year relevant to the previous year to which the agreement applies are pending on the date of filing of modified return in accordance with the provisions of sub-section (1), the Assessing Officer shall proceed to complete the assessment or reassessment proceedings in accordance with the agreement taking into consideration the modified return so furnished.

(5) Notwithstanding anything contained in section 153 or section 153B or section 144C,--

1. the order of assessment, reassessment or recomputation of total income under sub-section (3) shall be passed within a period of one year from the end of the financial year in which the modified return under sub-section (1) is furnished;

2. the period of limitation as provided in section 153 or section 153B or section 144C for completion of pending assessment or reassessment proceedings referred to in sub-section (4) shall be extended by a period of twelve months.

(6) For the purposes of this section,--

1. "agreement" means an agreement referred to in sub-section (1) of section 92CC;

2. the assessment or reassessment proceedings for an assessment year shall be deemed to have been completed where--

   1. an assessment or reassessment order has been passed; or

   2. no notice has been issued under sub-section (2) of section 143 till the expiry of the limitation period provided under the said section.]

Section 92CE Secondary adjustment in certain cases

1. Where a primary adjustment to transfer price,--

1. has been made suo motu by the assessee in his return of income;

2. made by the Assessing Officer has been accepted by the assessee;

3. is determined by an advance pricing agreement entered into by the assessee under section 92CC;

4. is made as per the safe harbour rules framed under section 92CB; or

5. is arising as a result of resolution of an assessment by way of the mutual agreement procedure under an agreement entered into under section 90 or section 90A for avoidance of double taxation, the assessee shall make a secondary adjustment:

Provided that nothing contained in this section shall apply, if,-

1. the amount of primary adjustment made in any previous year does not exceed one crore rupees; and

2. the primary adjustment is made in respect of an assessment year commencing on or before the 1st day of April, 2016.

   2. Where, as a result of primary adjustment to the transfer price, there is an increase in the total income or reduction in the loss, as the case may be, of the assessee, the excess money which is available with its associated enterprise, if not repatriated to India within the time as may be prescribed, shall be deemed to be an advance made by the assessee to such associated enterprise and the interest on such advance, shall be computed in such manner as may be prescribed.

   3. For the purposes of this section,--

1. "associated enterprise" shall have the meaning assigned to it in sub-section (1) and sub-section (2) of section 92A;

2. "arm's length price" shall have the meaning assigned to it in clause (ii) of section 92F;

3. "excess money" means the difference between the arm's length price determined in primary adjustment and the price at which the international transaction has actually been undertaken;

4. "primary adjustment" to a transfer price, means the determination of transfer price in accordance with the arm's length principle resulting in an increase in the total income or reduction in the loss, as the case may be, of the assessee;

5. "secondary adjustment" means an adjustment in the books of account of the assessee and its associated enterprise to reflect that the actual allocation of profits between the assessee and its associated enterprise are consistent with the transfer price determined as a result of primary adjustment, thereby removing the imbalance between cash account and actual profit of the assessee.]668

Section 92D - Maintenance and keeping of information and document by persons entering into an international transaction

669[(1) Every person who has entered into an 670[international transaction or specified domestic transaction] shall keep and maintain such information and document in respect thereof, as may be prescribed671.

672 [Provided that the person, being a constituent entity of an international group, shall also keep and maintain such information and document in respect of an international group as may be prescribed.

Explanation.--For the purposes of this section,--

1. "constituent entity" shall have the meaning assigned to it in clause (d) of sub-section (9) of section 286;

2. "international group" shall have the meaning assigned to it in clause (g) of sub-section (9) of section 286.]

(2) Without prejudice to the provisions contained in sub-section (1), the Board may prescribe the period for which the information and document shall be kept and maintained under that sub-section.

(3) The Assessing Officer or the [Principal Commissioner or Commissioner] (Appeals) may, in the course of any proceeding under this Act, require any person who has entered into an 673 [international transaction or specified domestic transaction] to furnish any information or document in respect thereof, as may be prescribed674 under sub-section (1), within a period of thirty days from the date of receipt of a notice issued in this regard :

Provided that the Assessing Officer or the 675 [Principal Commissioner or Commissioner] (Appeals) may, on an application made by such person, extend the period of thirty days by a further period not exceeding thirty days.]

676 [(4) Without prejudice to the provisions of sub-section (3), the person referred to in the proviso to sub-section (1) shall furnish the information and document referred to in the said proviso to the authority prescribed under sub-section (1) of section 286, in such manner, on or before the date, as may be prescribed.]

Section 92E - Report from an accountant to be furnished by persons entering into international transaction

677 [Every person who has entered into an 678 [international transaction or specified domestic transaction] during a previous year shall obtain a report from an accountant and furnish such report on or before the specified date in the prescribed form679 duly signed and verified in the prescribed manner680 by such accountant and setting forth such particulars as may be prescribed.681]

Section 92F - Definitions of certain terms relevant to computation of arms length price etc

682 [In sections 92, 92A, 92B, 92C, 92D and 92E, unless the context otherwise requires”

1. “accountant” shall have the same meaning as in the Explanation below sub-section (2) of section 288;

2. “arm’s length price” means a price which is applied or proposed to be applied in a transaction between persons other than associated enterprises, in uncontrolled conditions;

3. “enterprise” means a person (including a permanent establishment of such person) who is, or has been, or is proposed to be, engaged in any activity, relating to the production, storage, supply, distribution, acquisition or control of articles or goods, or know-how, patents, copyrights, trade-marks, licences, franchises or any other business or commercial rights of similar nature, or any data, documentation, drawing or specification relating to any patent, invention, model, design, secret formula or process, of which the other enterprise is the owner or in respect of which the other enterprise has exclusive rights, or the provision of services of any kind 683 [or in carrying out any work in pursuance of a contract], or in investment, or providing loan or in the business of acquiring, holding, underwriting or dealing with shares, debentures or other securities of any other body corporate, whether such activity or business is carried on, directly or through one or more of its units or divisions or subsidiaries, or whether such unit or division or subsidiary is located at the same place where the enterprise is located or at a different place or places;

684 [(iiia) “permanent establishment”, referred to in clause (iii), includes a fixed place of business through which the business of the enterprise is wholly or partly carried on;]

685[(iv) “specified date” means the date one month prior to the due date for furnishing the return of income under sub-section (1) of section 139 for the relevant assessment year;]

(v) “transaction” includes an arrangement, understanding or action in concert, “

1. whether or not such arrangement, understanding or action is formal or in writing; or

2. whether or not such arrangement, understanding or action is intended to be enforceable by legal proceeding.]

Section 93 - Avoidance of income-tax by transactions resulting in transfer of income to non-residents

1. Where there is a transfer of assets by virtue or in consequence whereof, either alone or in conjunction with associated operations, any income becomes payable to a non-resident, the following provisions shall apply “

   1. where any person has, by means of any such transfer, either alone or in conjunction with associated operations, acquired any rights by virtue of which he has, within the meaning of this section, power to enjoy, whether forthwith or in the future, any income of a non-resident person which, if it were income of the first-mentioned person, would be chargeable to income-tax, that income shall, whether it would or would not have been chargeable to income-tax apart from the provisions of this section, be deemed to be income of the first-mentioned person for all the purposes of this Act;

   2. where, whether before or after any such transfer, any such first-mentioned person receives or is entitled to receive any capital sum the payment whereof is in any way connected with the transfer or any associated operations, then any income which, by virtue or in consequence of the transfer, either alone or in conjunction with associated operations, has become the income of a non-resident shall, whether it would or would not have been chargeable to income-tax apart from the provisions of this section, be deemed to be the income of the first-mentioned person for all the purposes of this Act.

Explanation : The provisions of this sub-section shall apply also in relation to transfers of assets and associated operations carried out before the commencement of this Act.

2. Where any person has been charged to income-tax on any income deemed to be his under the provisions of this section and that income is subsequently received by him, whether as income or in any other form, it shall not again be deemed to form part of his income for the purposes of this Act.

3. The provisions of this section shall not apply if the first-mentioned person in sub-section (1) shows to the satisfaction of the Assessing Officer that “

   3. neither the transfer nor any associated operation had for its purpose or for one of its purposes the avoidance of liability to taxation; or

   4. the transfer and all associated operations were bona fide commercial transactions and were not designed for the purpose of avoiding liability to taxation.

Explanation : For the purposes of this section, “

1. references to assets representing any assets, income or accumulations of income include references to shares in or obligation of any company to which, or obligation of any other person to whom, those assets, that income or those accumulations are or have been transferred;

2. any body corporate incorporated outside India shall be treated as if it were a non-resident;

3. a person shall be deemed to have power to enjoy the income of a non-resident if “

1. the income is in fact so dealt with by any person as to be calculated at some point of time and, whether in the form of income or not, to enure for the benefit of the first-mentioned person in sub-section (1), or

2. the receipt or accrual of the income operates to increase the value to such first-mentioned person of any assets held by him or for his benefit, or

3. such first-mentioned person receives or is entitled to receive at any time any benefit provided or to be provided out of that income or out of moneys which are or will be available for the purpose by reason of the effect or successive effects of the associated operations on that income and assets which represent that income, or

4. such first-mentioned person has power by means of the exercise of any power of appointment or power of revocation or otherwise to obtain for himself, whether with or without the consent of any other person, the beneficial enjoyment of the income, or

5. such first-mentioned person is able, in any manner whatsoever and whether directly or indirectly, to control the application of the income;

4. in determining whether a person has power to enjoy income, regard shall be had to the substantial result and effect of the transfer and any associated operations, and all benefits which may at any time accrue to such person as a result of the transfer and any associated operations shall be taken into account irrespective of the nature or form of the benefits.

   4. (a) “Assets” includes property or rights of any kind and “transfer” in relation to rights includes the creation of those rights;

      (b) “associated operation”, in relation to any transfer, means an operation of any kind effected by any person in relation to

1. any of the assets transferred, or

2. any assets representing, whether directly or indirectly, any of the assets transferred, or

3. the income arising from any such assets, or

4. any assets representing, whether directly or indirectly, the accumu­lations of income arising from any such assets;

   (c) “benefit” includes a payment of any kind;

   (d) “capital sum” means -

1. any sum paid or payable by way of a loan or repayment of a loan; and

2. any other sum paid or payable otherwise than as income, being a sum which is not paid or payable for full consideration in money or money’s worth.

Section 94 - Avoidance of tax by certain transactions in securities

1. Where the owner of any securities [in this sub-section and in sub-section (2) referred to as “the owner”] sells or transfers those securities, and buys back or re-acquires the securities, then, if the result of the transaction is that any interest becoming payable in respect of the securities is receivable otherwise than by the owner, the interest payable as aforesaid shall, whether it would or would not have been chargeable to income-tax apart from the provisions of this sub-section, be deemed, for all the purposes of this Act, to be the income of the owner and not to be the income of any other person.

   Explanation : The references in this sub-section to buying back or re-acquiring the securities shall be deemed to include references to buying or acquiring similar securities, so, however, that where similar securities are bought or acquired, the owner shall be under no greater liability to income-tax than he would have been under if the original securities had been bought back or re-acquired.

2. Where any person has had at any time during any previous year any beneficial interest in any securities, and the result of any transaction relating to such securities or the income thereof is that, in respect of such securities within such year, either no income is received by him or the income received by him is less than the sum to which the income would have amounted if the income from such securities had accrued from day-to-day and been apportioned accordingly, then the income from such securities for such year shall be deemed to be the income of such person.

3. The provisions of sub-section (1) or sub-section (2) shall not apply if the owner, or the person who has had a beneficial interest in the securities, as the case may be, proves to the satisfaction of the Assessing Officer “

   5. that there has been no avoidance of income-tax, or

   6. that the avoidance of income-tax was exceptional and not systematic and that there was not in his case in any of the three preceding years any avoidance of income-tax by a transaction of the nature referred to in sub-section (1) or sub-section (2).

4. Where any person carrying on a business which consists wholly or partly in dealing in securities, buys or acquires any securities and sells back or retransfers the securities, then, if the result of the transaction is that interest becoming payable in respect of the securities is receivable by him but is not deemed to be his income by reason of the provisions contained in sub-section (1), no account shall be taken of the transaction in computing for any of the purposes of this Act the profits arising from or loss sustained in the business.

5. Sub-section (4) shall have effect, subject to any necessary modifications, as if references to selling back or retransferring the securities included references to selling or transferring similar securities.

6. The Assessing Officer may, by notice in writing, require any person to furnish him within such time as he may direct (not being less than twenty-eight days), in respect of all securities of which such person was the owner or in which he had a beneficial interest at any time during the period specified in the notice, such particulars as he considers necessary for the purposes of this section and for the purpose of discovering whether income-tax has been borne in respect of the interest on all those securities.

686 [(7) Where “

1. any person buys or acquires any securities or unit within a period of three months prior to the record date;

687[(b) such person sells or transfers “

1. such securities within a period of three months after such date, or

2. such unit within a period of nine months after such date;]

(c) the dividend or income on such securities or unit received or receivable by such person is exempt, then, the loss, if any, arising to him on account of such purchase and sale of securities or unit, to the extent such loss does not exceed the amount of dividend or income received or receivable on such securities or unit, shall be ignored for the purposes of computing his income chargeable to tax.]

688[(8) Where “

1. any person buys or acquires any 689[securities or units] within a period of three months prior to the record date;

2. such person is allotted additional 690[securities or units] without any payment on the basis of holding of such units on such date;

3. such person sells or transfers all or any of the 691[securities or units] referred to in clause (a) within a period of nine months after such date, while continuing to hold all or any of the additional 692[securities or units] referred to in clause (b), then, the loss, if any, arising to him on account of such purchase and sale of all or any of such 693[securities or units] shall be ignored for the purposes of computing his income chargeable to tax and notwithstanding anything contained in any other provision of this Act, the amount of loss so ignored shall be deemed to be the cost of purchase or acquisition of such additional 694[securities or units] referred to in clause (b) as are held by him on the date of such sale or transfer.]

Explanation : For the purposes of this section, -

1. “interest” includes a dividend;

695[(aa) “record date” means such date as may be fixed by.

1. a company;

2. a Mutual Fund or the Administrator of the specified undertaking or the specified company referred to in the Explanation to clause (35) of section 10; or

3. a business trust defined in clause (13A) of section 2; or

4. an Alternative Investment Fund defined in clause (b) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012, made under the Securities and Exchange Board of India Act, 1992, for the purposes of entitlement of the holder of the securities or units, as the case may be, to receive dividend, income, or additional securities or units without any consideration, as the case may be;]

   2. “securities” includes stocks and shares;

   3. securities shall be deemed to be similar if they entitle their holders to the same rights against the same persons as to the capital and interest and the same remedies for the enforcement of those rights, notwithstanding any difference in the total nominal amounts of the respective securities or in the form in which they are held or in the manner in which they can be transferred.

696[(d) “unit” shall mean,

1. a unit of a business trust defined in clause (13A) of section 2;

2. a unit defined in clause (b) of the Explanation to section 115AB; or

3. beneficial interest of an investor in an Alternative Investment Fund, defined in clause (b) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012, made under the Securities and Exchange Board of India Act, 1992, and shall include shares or partnership interests.]

Section 94A - Special measures in respect of transactions with persons located in notified jurisdictional area

697 [(1) The Central Government may, having regard to the lack of effective exchange of information with any country or territory outside India, specify by notification in the Official Gazette such country or territory as a notified jurisdictional area in relation to transactions entered into by any assessee.

(2) Notwithstanding anything to the contrary contained in this Act, if an assessee enters into a transaction where one of the parties to the transaction is a person located in a notified jurisdictional area, then--

1. all the parties to the transaction shall be deemed to be associated enterprises within the meaning of section 92A;

2. any transaction in the nature of purchase, sale or lease of tangible or intangible property or provision of service or lending or borrowing money or any other transaction having a bearing on the profits, income, losses or assets of the assessee including a mutual agreement or arrangement for allocation or apportionment of, or any contribution to, any cost or expense incurred or to be incurred in connection with a benefit, service or facility provided or to be provided by or to the assessee shall be deemed to be an international transaction within the meaning of section 92B, and the provisions of sections 92, 92A, 92B, 92C [except the second proviso to sub-section (2)], 92CA, 92CB, 92D, 92E and 92F shall apply accordingly.

(3) Notwithstanding anything to the contrary contained in this Act, no deduction,--

1. in respect of any payment made to any financial institution located in a notified jurisdictional area shall be allowed under this Act, unless the assessee furnishes an authorisation in the prescribed form authorising the Board or any other income-tax authority acting on its behalf to seek relevant information from the said financial institution on behalf of such assessee; and

2. in respect of any other expenditure or allowance (including depreciation) arising from the transaction with a person located in a notified jurisdictional area shall be allowed under any other provision of this Act, unless the assessee maintains such other documents and furnishes such information as may be prescribed, in this behalf.

(4) Notwithstanding anything to the contrary contained in this Act, where, in any previous year, the assessee has received or credited any sum from any person located in a notified jurisdictional area and the assessee does not offer any explanation about the source of the said sum in the hands of such person or in the hands of the beneficial owner (if such person is not the beneficial owner of the said sum) or the explanation offered by the assessee, in the opinion of the assessing officer, is not satisfactory, then, such sum shall be deemed to be the income of the assessee for that previous year.

(5) Notwithstanding anything contained in any other provisions of this Act, where any person located in a notified jurisdictional area is entitled to receive any sum or income or amount on which tax is deductible under Chapter XVII-B, the tax shall be deducted at the highest of the following rates, namely:--

1. at the rate or rates in force;

2. at the rate specified in the relevant provisions of this Act;

3. at the rate of thirty per cent.

(6) In this section,--

1. "person located in a notified jurisdictional area" shall include,--

   1. a person who is resident of the notified jurisdictional area;

   2. a person, not being an individual, which is established in the notified jurisdictional area; or

   3. a permanent establishment of a person not falling in sub-clause (a) or sub-clause (b), in the notified jurisdictional area;

2. "permanent establishment" shall have the same meaning as defined in clause (iiia) of section 92F;

3. "transaction" shall have the same meaning as defined in clause (v) of section 92F.]

Section 94B Limitation on interest deduction in certain cases

1. Notwithstanding anything contained in this Act, where an Indian company, or a permanent establishment of a foreign company in India, being the borrower, incurs any expenditure by way of interest or of similar nature exceeding one crore rupees which is deductible in computing income chargeable under the head "Profits and gains of business or profession" in respect of any debt issued by a nonresident, being an associated enterprise of such borrower, the interest shall not be deductible in computation of income under the said head to the extent that it arises from excess interest, as specified in sub-section (2):

Provided that where the debt is issued by a lender which is not associated but an associated enterprise either provides an implicit or explicit guarantee to such lender or deposits a corresponding and matching amount of funds with the lender, such debt shall be deemed to have been issued by an associated enterprise.

698[(1A) Nothing contained in sub-section (1) shall apply to interest paid in respect of a debt issued by a lender which is a permanent establishment in India of a non-resident, being a person engaged in the business of banking.]

2. For the purposes of sub-section (1), the excess interest shall mean an amount of total interest paid or payable in excess of thirty per cent. of earnings before interest, taxes, depreciation and amortisation of the borrower in the previous year or interest paid or payable to associated enterprises for that previous year, whichever is less.

3. Nothing contained in sub-section (1) shall apply to an Indian company or a permanent establishment of a foreign company which is engaged in the business of banking or insurance.

4. Where for any assessment year, the interest expenditure is not wholly deducted against income under the head "Profits and gains of business or profession", so much of the interest expenditure as has not been so deducted, shall be carried forward to the following assessment year or assessment years, and it shall be allowed as a deduction against the profits and gains, if any, of any business or profession carried on by it and assessable for that assessment year to the extent of maximum allowable interest expenditure in accordance with sub-section (2):

Provided that no interest expenditure shall be carried forward under this sub-section for more than eight assessment years immediately succeeding the assessment year for which the excess interest expenditure was first computed.

5. For the purposes of this section, the expressions--

1. "associated enterprise" shall have the meaning assigned to it in sub-section (1) and sub-section (2) of section 92A;

2. "debt" means any loan, financial instrument, finance lease, financial derivative, or any arrangement that gives rise to interest, discounts or other finance charges that are deductible in the computation of income chargeable under the head "Profits and gains of business or profession";

3. "permanent establishment" includes a fixed place of business through which the business of the enterprise is wholly or partly carried on.]699

Section 95 - Applicability of General Anti-Avoidance Rule

700 [701[(1)] Notwithstanding anything contained in the Act, an arrangement entered into by an assessee may be declared to be an impermissible avoidance arrangement and the consequence in relation to tax arising therefrom may be determined subject to the provisions of this Chapter.

702 [(2) This Chapter shall apply in respect of any assessment year beginning on or after the 1st day of April, 2018.]

Explanation.- For the removal of doubts, it is hereby declared that the provisions of this Chapter may be applied to any step in, or a part of, the arrangement as they are applicable to the arrangement.]

Section 96 - Impermissible avoidance arrangement

703[(1) An impermissible avoidance arrangement means an arrangement, the main purpose of which is to obtain a tax benefit, and it--

4. creates rights, or obligations, which are not ordinarily created between persons dealing at arm's length;

5. results, directly or indirectly, in the misuse, or abuse, of the provisions of this Act;

6. lacks commercial substance or is deemed to lack commercial substance under section 97, in whole or in part; or

7. is entered into, or carried out, by means, or in a manner, which are not ordinarily employed for bona fide purposes.

(2) An arrangement shall be presumed, unless it is proved to the contrary by the assessee, to have been entered into, or carried out, for the main purpose of obtaining a tax benefit, if the main purpose of a step in, or a part of, the arrangement is to obtain a tax benefit, notwithstanding the fact that the main purpose of the whole arrangement is not to obtain a tax benefit.]

Section 97 - Arrangement to lack commercial substance

704 [(1) An arrangement shall be deemed to lack commercial substance, if--

1. the substance or effect of the arrangement as a whole, is inconsistent with, or differs significantly from, the form of its individual steps or a part; or

2. it involves or includes--

1. round trip financing;

2. an accommodating party;

3. elements that have effect of offsetting or cancelling each other; or

4. a transaction which is conducted through one or more persons and disguises the value, location, source, ownership or control of funds which is the subject matter of such transaction; or

   3. it involves the location of an asset or of a transaction or of the place of residence of any party which is without any substantial commercial purpose other than obtaining a tax benefit (but for the provisions of this Chapter) for a party; or

   4. it does not have a significant effect upon the business risks or net cash flows of any party to the arrangement apart from any effect attributable to the tax benefit that would be obtained (but for the provisions of this Chapter).

(2) For the purposes of sub-section (1), round trip financing includes any arrangement in which, through a series of transactions--

1. funds are transferred among the parties to the arrangement; and

2. such transactions do not have any substantial commercial purpose other than obtaining the tax benefit (but for the provisions of this Chapter), without having any regard to--

   1. whether or not the funds involved in the round trip financing can be traced to any funds transferred to, or received by, any party in connection with the arrangement;

   2. the time, or sequence, in which the funds involved in the round trip financing are transferred or received; or

   3. the means by, or manner in, or mode through, which funds involved in the round trip financing are transferred or received.

(3) For the purposes of this Chapter, a party to an arrangement shall be an accommodating party, if the main purpose of the direct or indirect participation of that party in the arrangement, in whole or in part, is to obtain, directly or indirectly, a tax benefit (but for the provisions of this Chapter) for the assessee whether or not the party is a connected person in relation to any party to the arrangement.

(4) For the removal of doubts, it is hereby clarified that the following may be relevant but shall not be sufficient for determining whether an arrangement lacks commercial substance or not, namely:--

1. the period or time for which the arrangement (including operations therein) exists;

2. the fact of payment of taxes, directly or indirectly, under the arrangement;

3. the fact that an exit route (including transfer of any activity or business or operations) is provided by the arrangement.]

Section 98 - Consequence of impermissible avoidance arrangement

705 [(1) If an arrangement is declared to be an impermissible avoidance arrangement, then, the consequences, in relation to tax, of the arrangement, including denial of tax benefit or a benefit under a tax treaty, shall be determined, in such manner as is deemed appropriate, in the circumstances of the case, including by way of but not limited to the following, namely: -

1. disregarding, combining or re-characterising any step in, or a part or whole of, the impermissible avoidance arrangement;

2. treating the impermissible avoidance arrangement as if it had not been entered into or carried out;

3. disregarding any accommodating party or treating any accommodating party and any other party as one and the same person;

4. deeming persons who are connected persons in relation to each other to be one and the same person for the purposes of determining tax treatment of any amount;

5. reallocating amongst the parties to the arrangement--

1. any accrual, or receipt, of a capital nature or revenue nature; or

2. any expenditure, deduction, relief or rebate;

6. treating--

1. the place of residence of any party to the arrangement; or

2. the situs of an asset or of a transaction, at a place other than the place of residence, location of the asset or location of the transaction as provided under the arrangement; or

7. considering or looking through any arrangement by disregarding any corporate structure. (2) For the purposes of sub-section (1),--

1. any equity may be treated as debt or vice versa;

2. any accrual, or receipt, of a capital nature may be treated as of revenue nature or vice versa; or

3. any expenditure, deduction, relief or rebate may be recharacterised.]

Section 99 - Treatment of connected person and accommodating party

706 [For the purposes of this Chapter, in determining whether a tax benefit exists,--

1. the parties who are connected persons in relation to each other may be treated as one and the same person;

2. any accommodating party may be disregarded;

3. the accommodating party and any other party may be treated as one and the same person;

4. the arrangement may be considered or looked through by disregarding any corporate structure.]

Section 100 - Application of Chapter

707 [The provisions of this Chapter shall apply in addition to, or in lieu of, any other basis for determination of tax liability.]

Section 101 - Framing of guidelines

708 [The provisions of this Chapter shall be applied in accordance with such guidelines and subject to such conditions, as may be prescribed.] 

Section 102 - Definitions

709 [In this Chapter, unless the context otherwise requires,-

1. "arrangement" means any step in, or a part or whole of, any transaction, operation, scheme, agreement or understanding, whether enforceable or not, and includes the alienation of any property in such transaction, operation, scheme, agreement or understanding;

2. "asset" includes property, or right, of any kind;

3. "benefit" includes a payment of any kind whether in tangible or intangible form;

4. "connected person" means any person who is connected directly or indirectly to another person and includes,-

1. any relative of the person, if such person is an individual;

2. any director of the company or any relative of such director, if the person is a company;

3. any partner or member of a firm or association of persons or body of individuals or any relative of such partner or member, if the person is a firm or association of persons or body of individuals;

4. any member of the Hindu undivided family or any relative of such member, if the person is a Hindu undivided family;

5. any individual who has a substantial interest in the business of the person or any relative of such individual;

6. a company, firm or an association of persons or a body of individuals, whether incorporated or not, or a Hindu undivided family having a substantial interest in the business of the person or any director, partner, or member of the company, firm or association of persons or body of individuals or family, or any relative of such director, partner or member;

7. a company, firm or association of persons or body of individuals, whether incorporated or not, or a Hindu undivided family, whose director, partner, or member has a substantial interest in the business of the person, or family or any relative of such director, partner or member;

8. any other person who carries on a business, if-

1. the person being an individual, or any relative of such person, has a substantial interest in the business of that other person; or

2. the person being a company, firm, association of persons, body of individuals, whether incorporated or not, or a Hindu undivided family, or any director, partner or member of such company, firm or association of persons or body of individuals or family, or any relative of such director, partner or member, has a substantial interest in the business of that other person;

5. "fund" includes-

1. any cash;

2. cash equivalents; and

3. any right, or obligation, to receive or pay, the cash or cash equivalent;

6. "party" includes a person or a permanent establishment which participates or takes part in an arrangement;

7. "relative" shall have the meaning assigned to it in the Explanation to clause (vi) of sub-section (2) of section 56;

8. a person shall be deemed to have a substantial interest in the business, if,-

1. in a case where the business is carried on by a company, such person is, at any time during the financial year, the beneficial owner of equity shares carrying twenty per cent. or more, of the voting power; or

2. in any other case, such person is, at any time during the financial year, beneficially entitled to twenty per cent. or more, of the profits of such business;

9. "step" includes a measure or an action, particularly one of a series taken in order to deal with or achieve a particular thing or object in the arrangement;

10. "tax benefit" includes,-

1. a reduction or avoidance or deferral of tax or other amount payable under this Act; or

2. an increase in a refund of tax or other amount under this Act; or

3. a reduction or avoidance or deferral of tax or other amount that would be payable under this Act, as a result of a tax treaty; or

4. an increase in a refund of tax or other amount under this Act as a result of a tax treaty; or

5. a reduction in total income; or

6. an increase in loss, in the relevant previous year or any other previous year;

11. "tax treaty" means an agreement referred to in sub-section (1) of section 90 or sub-section (1) of section 90A.]

Section 103 - Omitted

710 [***]

Section 104 - Omitted

711 [***]

Section 105 - Omitted

712 [***]

Section 106 - Omitted

713 [***]

Section 107 - Omitted

714[***]

Section 107A - Omitted

715 [***]

Section 108 - Omitted

716 [***]

Section 109 - Omitted

717 [***]

Section 110 - Determination of tax where total income includes income on which no tax is payable

Where there is included in the total income of an assessee any income on which no income-tax is payable under the provisions of this Act, the assessee shall be entitled to a deduction, from the amount of income-tax with which he is chargeable on his total income, of an amount equal to the income-tax calculated at the average rate of income-tax on the amount on which no income-tax is payable.

Section 111 - Tax on accumulated balance of recognised provident fund

1. Where the accumulated balance due to an employee participating in a recognised provident fund is included in his total income, owing to the provisions of rule 8 of Part A of the Fourth Schedule not being applicable, the Assessing Officer shall calculate the total of the various sums of tax in accordance with the provisions of sub-rule (1) of rule 9 thereof.

2. Where the accumulated balance due to an employee participating in a recognised provident fund which is not included in his total income under the provisions of rule 8 of Part A of the Fourth Schedule becomes payable, super-tax shall be calculated in the manner provided in sub-rule (2) of rule 9 thereof.

Section 111A - Tax on short term capital gains in certain cases

718 [(1) Where the total income of an assessee includes any income chargeable under the head “Capital gains”, arising from the transfer of a short-term capital asset, being an equity share in a company or a unit of an equity oriented fund 719 [or a unit of a business trust] and -

1. the transaction of sale of such equity share or unit is entered into on or after the date720 on which Chapter VII of the Finance (No. 2) Act, 2004 comes into force; and

2. such transaction is chargeable to securities transaction tax under that Chapter, the tax payable by the assessee on the total income shall be the aggregate of”

1. the amount of income-tax calculated on such short-term capital gains at the rate of 721 [fifteen per cent]; and

2. the amount of income-tax payable on the balance amount of the total income as if such balance amount were the total income of the assessee:

Provided that in the case of an individual or a Hindu undivided family being a resident, where the total income as reduced by such short-term capital gains is below the maximum amount which is not chargeable to income-tax, then, such short-term capital gains shall be reduced by the amount by which the total income as so reduced falls short of the maximum amount which is not chargeable to income-tax and the tax on the balance of such short-term capital gains shall be computed at the rate of722 [fifteen per cent.]

723 [Provided further that nothing contained in clause (b) shall apply to a transaction undertaken on a recognised stock exchange located in any International Financial Services Centre and where the consideration for such transaction is paid or payable in foreign currency.]

724 [***]

(2) Where the gross total income of an assessee includes any short-term capital gains referred to in sub-section (1), the deduction under Chapter VIA shall be allowed from the gross total income as reduced by such capital gains.

(3) Where the total income of an assessee includes any short-term capital gains referred to in sub-section (1), the rebate under section 88 shall be allowed from the income-tax on the total income as reduced by such capital gains.

725 [Explanation.-For the purposes of this section,-

1. ''equity oriented fund'' shall have the meaning assigned to it in the Explanation to clause (38) of section 10;

2. ''International Financial Services Centre'' shall have the same meaning as assigned to it in clause (q) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005);

3. ''recognised stock exchange'' shall have the meaning assigned to it in clause (ii) of Explanation 1 to sub-section (5) of section 43.]

Section 112 Tax on long-term capital gains

1. Where the total income of an assessee includes any income, arising from the transfer of a long-term capital asset, which is chargeable under the head “Capital gains”, the tax payable by the assessee on the total income shall be the aggregate of,“

   1. in the case of an individual or a Hindu undivided family, being a resident,”

1. the amount of income-tax payable on the total income as reduced by the amount of such long-term capital gains, had the total income as so reduced been his total income; and

2. the amount of income-tax calculated on such long-term capital gains at the rate of twenty per cent :

Provided that where the total income as reduced by such long-term capital gains is below the maximum amount which is not chargeable to income-tax, then, such long-term capital gains shall be reduced by the amount by which the total income as so reduced falls short of the maximum amount which is not chargeable to income-tax and the tax on the balance of such long-term capital gains shall be computed at the rate of twenty per cent;

2. in the case of a domestic company,”

1. the amount of income-tax payable on the total income as reduced by the amount of such long-term capital gains, had the total income as so reduced been its total income; and

2. the amount of income-tax calculated on such long-term capital gains at the rate of twenty per cent :

726 [***];

3. in the case of a non-resident (not being a company) or a foreign company,”

9. the amount of income-tax payable on the total income as reduced by the amount of such long-term capital gains, had the total income as so reduced been its total income; and

727 [(ii) the amount of income tax calculated on long term capital gains [except where such gain arises from transfer of capital asset referred to in sub-clause (iii)] at the rate of twenty per cent.; and

(iii) the amount of income tax on long term capita) gains arising from the transfer of a capital asset, being 728 [unlisted securities or shares of a company not being a company in which the public are substantially interested], calculated at the rate often per cent. on the capital gains in respect of such asset as computed without giving effect to the first and second proviso to section 48.]

4. in any other case of a resident,”

1. the amount of income-tax payable on the total income as reduced by the amount of long-term capital gains, had the total income as so reduced been its total income; and

2. the amount of income-tax calculated on such long-term capital gains at the rate of twenty per cent :

Explanation : 729[***]

730 [Provided that where the tax payable in respect of any income arising from the transfer of a long-term capital asset, 731 [being listed securities (other than a unit)] 732 [or zero coupon bond], exceeds ten per cent of the amount of capital gains before giving effect to the provisions of the second proviso to section 48, then, such excess shall be ignored for the purpose of computing the tax payable by the assessee.]

733 [Provided further that where the tax payable in respect of any income arising from the transfer of a long-term capital asset, being a unit of a Mutual Fund specified under clause (23D) of section 10, during the period beginning on the 1st day of April, 2014 and ending on the 10th day of July, 2014, exceeds ten per cent. of the amount of capital gains, before giving effect to the provisions of the second proviso to section 48, then, such excess shall be ignored for the purpose of computing the tax payable by the assessee.]

734 [Explanation : For the purposes of this sub-section,”

735 [(a) the expression "securities" shall have the meaning assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956(32 of 1956.);

(aa) "listed securities" means the securities which are listed on any recognised stock exchange in India;

(ab) "unlisted securities" means securities other than listed securities;]

736 [***]]

2. Where the gross total income of an assessee includes any income arising from the transfer of a long-term capital asset, the gross total income shall be reduced by the amount of such income and the deduction under Chapter VIA shall be allowed as if the gross total income as so reduced were the gross total income of the assessee.

3. Where the total income of an assessee includes any income arising from the transfer of a long-term capital asset, the total income shall be reduced by the amount of such income and the rebate under section 88 shall be allowed from the income-tax on the total income as so reduced.

Section 112A Tax on long-term capital gains in certain cases

1. Notwithstanding anything contained in section 112, the tax payable by an assessee on his total income shall be determined in accordance with the provisions of sub-section (2), if-

1. the total income includes any income chargeable under the head "Capital gains";

2. the capital gains arise from the transfer of a long-term capital asset being an equity share in a company or a unit of an equity oriented fund or a unit of a business trust;

3. securities transaction tax under Chapter VII of the Finance (No. 2) Act, 2004 (23 of 2004) has,-

1. in a case where the long-term capital asset is in the nature of an equity share in a company, been paid on acquisition and transfer of such capital asset; or

2. in a case where the long-term capital asset is in the nature of a unit of an equity oriented fund or a unit of a business trust, been paid on transfer of such capital asset.

2. The tax payable by the assessee on the total income referred to in sub-section (1) shall be the aggregate of-

1. the amount of income-tax calculated on such long-term capital gains exceeding one lakh rupees at the rate of ten per cent.; and

2. the amount of income-tax payable on the total income as reduced by the amount of long-term capital gains referred to in sub-section (1) as if the total income so reduced were the total income of the assessee:

Provided that in the case of an individual or a Hindu undivided family, being a resident, where the total income as reduced by such long-term capital gains is below the maximum amount which is not chargeable to income-tax, then, the long-term capital gains, for the purposes of clause (i), shall be reduced by the amount by which the total income as so reduced falls short of the maximum amount which is not chargeable to income-tax.

3. The condition specified in clause (iii) of sub-section (1) shall not apply to a transfer undertaken on a recognised stock exchange located in any International Financial Services Centre and where the consideration for such transfer is received or receivable in foreign currency.

4. The Central Government may, by notification in the Official Gazette, specify the nature of acquisition in respect of which the provisions of sub-clause (a) of clause (iii) of sub-section (1) shall not apply.

5. Where the gross total income of an assessee includes any long-term capital gains referred to in sub-section (1), the deduction under Chapter VI-A shall be allowed from the gross total income as reduced by such capital gains.

6. Where the total income of an assessee includes any long-term capital gains referred to in sub-section (1), the rebate under section 87A shall be allowed from the income-tax on the total income as reduced by tax payable on such capital gains.

Explanation.- For the purposes of this section,-

1. "equity oriented fund" means a fund set up under a scheme of a mutual fund specified under clause (23D) of section 10 737[or under a scheme of an insurance company comprising unit linked insurance policies to which exemption under clause (10D) of the said section does not apply on account of the applicability of the fourth and fifth proviso thereof] and,-

1. in a case where the fund invests in the units of another fund which is traded on a recognised stock exchange,-

1. a minimum of ninety per cent. of the total proceeds of such fund is invested in the units of such other fund; and

2. such other fund also invests a minimum of ninety per cent. of its total proceeds in the equity shares of domestic companies listed on a recognised stock exchange; and

2. in any other case, a minimum of sixty-five per cent. of the total proceeds of such fund is invested in the equity shares of domestic companies listed on a recognised stock exchange:

Provided that the percentage of equity shareholding or unit held in respect of the fund, as the case may be, shall be computed with reference to the annual average of the monthly averages of the opening and closing figures;

738[Provided further that in case of a scheme of an insurance company comprising unit linked insurance policies to which exemption under clause (10D) of Section 10 does not apply on account of the applicability of the fourth and fifth provisos thereof, the minimum requirement of ninety per cent. or sixty-five per cent., as the case may be, is required to be satisfied throughout the term of such insurance policy.]

2. "International Financial Services Centre" shall have the meaning assigned to it in clause (q) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005);

3. "recognised stock exchange" shall have the meaning assigned to it in clause (ii) of Explanation 1 to clause (5) of section 43.] 739 

Section 113 - Tax in the case of block assessment of search cases

The total undisclosed income of the block period, determined under section 158BC, shall be chargeable to tax at the rate of sixty per cent.

740 [Provided that the tax chargeable under this section shall be increased by a surcharge, if any, levied by any Central Act and applicable in the assessment year relevant to the previous year in which the search is initiated under section 132 or the requisition is made under section 132A.]

Section 114 - Omitted

741 [***]

Section 115 - Omitted

742 [***]

Section 115A - Tax on dividends royalty and technical service fees in the case of foreign companies

1. Where the total income of”

   1. a non-resident (not being a company) or of a foreign company, includes any income by way of”

1. 743 [dividends 744[***]];
   or

2. interest received from Government or an Indian concern on monies borrowed or debt incurred by Government or the Indian concern in foreign currency 745 [not being interest of the nature referred to in 746 [sub-clause (iia) or sub-clause (iiaa)]];
   or

747 [(iia) interest received from an infrastructure debt fund referred to in clause (47) of section 10; or]

748 [(iiaa) interest of the nature and extent referred to in section 194LC; or]

749 [(iiab) interest of the nature and extent referred to in section 194LD; or]

750 [(iiac) distributed income being interest referred to in sub-section (2) of section 194LBA;]

3. income received in respect of units, purchased in foreign currency, of a Mutual Fund specified under clause (23D) of section 10 or of the Unit Trust of India, the income-tax payable shall be aggregate of”

   1. the amount of income-tax calculated on the amount of income by way of 751 [dividends, 752[***]], if any, included in the total income, at the rate of twenty per cent;

   2. the amount of income-tax calculated on the amount of income by way of interest referred to in sub-clause (ii), if any, included in the total income, at the rate of twenty per cent;

753[(BA) the amount of income-tax calculated on the amount of income by way of interest referred to in,-

1. sub-clause (iia), if any, included in the total income, at the rate of five per cent.;

2. sub-clause (iiaa) or sub-clause (iiab) or sub-clause (iiac), if any, included in the total income, at the rate provided in the respective sections referred to in the said sub-clauses;]

   3. the amount of income-tax calculated on the income in respect of units referred to in sub-clause (iii), if any, included in the total income, at the rate of twenty per cent; and

   4. the amount of income-tax with which he or it would have been chargeable had his or its total income been reduced by the amount of income referred to in sub-clause (i), sub-clause (ii) 754 [sub-clause (iia)] 755 [sub-clause (iiaa), sub-clause (iiab) 756 [sub-clause (iiac)]] and sub-clause (iii);

      2. 757 [a non-resident (not being a company) or a foreign company, includes any income by way of royalty or fees for technical services other than income referred to in sub-section (1) of section 44DA] received from Government or an Indian concern in pursuance of an agreement made by the foreign company with Government or the Indian concern after the 31st day of March, 1976, and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy, then, subject to the provisions of sub-sections (1A) and (2), the income-tax payable shall be the aggregate of,”

758 [(A) the amount of income-tax calculated on the income by way of royalty, if any, included in the total income, at the rate of 759 [ten per cent.];

(B) the amount of income-tax calculated on the income by way of fees for technical services, if any, included in the total income, at the rate of 760 [ten per cent.]; and]

(C) the amount of income-tax with which it would have been chargeable had its total income been reduced by the amount of income by way of royalty and fees for technical services.

Explanation : For the purposes of this section,”

1. “fees for technical services” shall have the same meaning as in Explanation 2 to clause (vii) of sub-section (1) of section 9;

2. “foreign currency” shall have the same meaning as in the Explanation below item (g) of sub-clause (iv) of clause (15) of section 10;

3. “royalty” shall have the same meaning as in Explanation 2 to clause (vi) of sub-section (1) of section 9;

4. “Unit Trust of India” means the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963).

(1A) Where the royalty referred to in clause (b) of sub-section (1) is in consideration for the transfer of all or any rights (including the granting of a licence) in respect of copyright in any book to an Indian concern or in respect of any computer software to a person resident in India, the provisions of sub­section (1) shall apply in relation to such royalty as if the words the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy occurring in the said clause had been omitted :

Provided that such book is on a subject, the books on which are permitted, according to the Import Trade Control Policy of the Government of India for the period commencing from the 1st day of April, 1977, and ending with the 31st day of March, 1978, to be imported into India under an Open General Licence:

Provided further that such computer software is permitted according to the Import Trade Control Policy of the Government of India for the time being in force to be imported into India under an Open General Licence.

Explanation 1: In this sub-section, “Open General Licence” means an Open General Licence issued by the Central Government in pursuance of the Imports (Control) Order, 1955.

Explanation 2: In this sub-section, the expression “Computer software” shall have the meaning assigned to it in clause (b) of the Explanation to section 80HHE.

2. Nothing contained in sub-section (1) shall apply in relation to any income by way of royalty received by a foreign company from an Indian concern in pursuance of an agreement made by it with the Indian concern after the 31st day of March, 1976, if such agreement is deemed, for the purposes of the first proviso to clause (vi) of sub-section (1) of section 9, to have been made before the 1st day of April, 1976; and the provisions of the annual Finance Act for calculating, charging, deducting or computing income-tax shall apply in relation to such income as if such income had been received in pursuance of an agreement made before the 1st day of April, 1976.

3. No deduction in respect of any expenditure or allowance shall be allowed to the assessee under sections 28 to 44C and section 57 in computing his or its income referred to in sub-section (1).

4. Where in the case of an assessee referred to in sub-section (1),”

   3. the gross total income consists only of the income referred to in clause (a) of that sub-section, no deduction shall be allowed to him or it under Chapter VIA;

   4. the gross total income includes any income referred to in clause (a) of that sub-section, the gross total income shall be reduced by the amount of such income and the deduction under Chapter VIA shall be allowed as if the gross total income as so reduced were the gross total income of the assessee.

5. It shall not be necessary for an assessee referred to in sub-section (1) to furnish under sub-section (1) of section 139 a return of his or its income if“

   5. his or its total income in respect of which he or it is assessable under this Act during the previous year consisted only of income referred to in 761[clause (a) or clause (b)] of sub-section (1); and

      762[(b) the tax deductible at source under the provisions of Part B of Chapter XVII has been deducted from such income and the rate of such deduction is not less than the rate specified under clause (a) or, as the case may be, clause (b) of sub-section (1).]

Section 115AB - Tax on income from units purchased in foreign currency or capital gains arising from their transfer

1. Where the total income of an assessee, being an overseas financial organisation (hereinafter referred to as Offshore Fund) includes”

   1. income received in respect of units purchased in foreign currency; or

   2. income by way of long-term capital gains arising from the transfer of units purchased in foreign currency, the income-tax payable shall be the aggregate of”

1. the amount of income-tax calculated on the income in respect of units referred to in clause (a), if any, included in the total income, at the rate of ten per cent;

2. the amount of income-tax calculated on the income by way of long-term capital gains referred to in clause (b), if any, included in the total income, at the rate of ten per cent; and

3. the amount of income-tax with which the Offshore Fund would have been chargeable had its total income been reduced by the amount of income referred to in clause (a) and clause (b).

   2. Where the gross total income of the Offshore Fund,”

      3. consists only of income from units or income by way of long-term capital gains arising from the transfer of units, or both, no deduction shall be allowed to the assessee under sections 28 to 44C or clause (i) or clause (iii) of section 57 or under Chapter VIA and nothing contained in the provisions of the second proviso to section 48 shall apply to income referred to in clause (b) of sub-section (1);

      4. includes any income referred to in clause (a), the gross total income shall be reduced by the amount of such income and the deduction under Chapter VIA shall be allowed as if the gross total income as so reduced were the gross total income of the assessee.

Explanation : For the purposes of this section,”

1. “overseas financial organisation” means any fund, institution, association or body, whether incorporated or not, established under the laws of a country outside India, which has entered into an arrangement for investment in India with any public sector bank or public financial institution or a mutual fund specified under clause (23D) of section 10 and such arrangement is approved by the 763 [Securities and Exchange Board of India, established under the Securities and Exchange Board of India Act, 1992 (15 of 1992)] for this purpose;

2. “unit” means unit of a mutual fund specified under clause (23D) of section 10 or of the Unit Trust of India;

3. “foreign currency” shall have the meaning as in 764 [the Foreign Exchange Management Act, 1999 (42 of 1999)];

4. “public sector bank” shall have the meaning assigned to it in clause (23D) of section 10;

5. “public financial institution” shall have the meaning assigned to it in section 4A of the Companies Act, 1956 (1 of 1956);

6. “Unit Trust of India” means the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963).

Section 115AC - Tax on income from bonds or Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer

765[(1) Where the total income of an assessee, being a non-resident, includes”

1. income by way of interest on bonds of an Indian company issued in accordance with such scheme as the Central Government may, by notification in the Official Gazette, specify in this behalf, or on bonds of a public sector company sold by the Government, and purchased by him in foreign currency; or

2. income by way of  766[dividends] on Global Depository Receipts”

1. issued in accordance with such scheme as the Central Govern­ment may, by notification in the Official Gazette, specify in this behalf, against the initial issue of shares of an Indian company and purchased by him in foreign currency through an approved intermediary; or

2. issued against the shares of a public sector company sold by the Government and purchased by him in foreign currency through an approved intermediary; or

3. 767[issued or re-issued] in accordance with such scheme as the Central Government may, by notification in the Official Gazette, specify in this behalf, against the existing shares of an Indian company purchased by him in foreign currency through an approved intermediary; or

4. 768 [***]

   3. income by way of long-term capital gains arising from the transfer of bonds referred to in clause (a) or, as the case may be, Global Depository Receipts referred to in clause (b), the income-tax payable shall be the aggregate of”

1. the amount of income-tax calculated on the income by way of interest or 769[dividends], as the case may be, in respect of bonds referred to in clause (a) or Global Depository Receipts referred to in clause (b), if any, included in the total income, at the rate of ten per cent;

2. the amount of income-tax calculated on the income by way of long-term capital gains referred to in clause (c), if any, at the rate of ten per cent; and

3. the amount of income-tax with which the non-resident would have been chargeable had his total income been reduced by the amount of income referred to in clauses (a), (b) and (c).

(2) Where the gross total income of the non-resident”

1. consists only of income by way of interest or 770[dividends] in respect of bonds referred to in clause (a) of sub-section (1) or, as the case may be, Global Depository Receipts referred to in clause (b) of that sub-section, no deduction shall be allowed to him under sections 28 to 44C or clause (i) or clause (iii) of section 57 or under Chapter VIA;

2. includes any income referred to in clause (a) or clause (b) or clause (c) of sub-section (1), the gross total income shall be reduced by the amount of such income and the deduction under Chapter VIA shall be allowed as if the gross total income as so reduced, were the gross total income of the assessee.

(3) Nothing contained in the first and second provisos to section 48 shall apply for the computation of long-term capital gains arising out of the transfer of long-term capital asset, being bonds or Global Depository Receipts referred to in clause (c) of sub-section (1).

(4) It shall not be necessary for a non-resident to furnish under sub-section (1) of section 139 a return of his income if”

1. his total income in respect of which he is assessable under this Act during the previous year consisted only of income referred to in clauses (a) and (b) of sub-section (1); and

2. the tax deductible at source under the provisions of Chapter XVIIB has been deducted from such income.

(5) Where the assessee acquired Global Depository Receipts or bonds in an amalgamated or resulting company by virtue of his holding Global Depository Receipts or bonds in the amalgamating or demerged company, as the case may be, in accordance with the provisions of sub-section (1), the provisions of that sub-section shall apply to such Global Depository Receipts or bonds.

Explanation : For the purposes of this section,”

1. “approved intermediary” means an intermediary who is approved in accordance with such scheme as may be notified by the Central Government in the Official Gazette;

2. “Global Depository Receipts” shall have the same meaning as in clause (a) of the Explanation to section 115ACA.]

Section 115ACA - Tax on income from Global depository receipts purchased in foreign currency or capital gains arising from their transfer

771 [772 [(1) Where the total income of an assessee, being an individual, who is a resident and an employee of an Indian company engaged in specified knowledge based industry or service, or an employee of its subsidiary engaged in specified knowledge based industry or service (hereafter in this section referred to as the resident employee), includes”

1. 773[income by way of 774[dividends] on Global Depository Receipts of an Indian company engaged in specified knowledge based industry or service, issued in accordance with such Employees€™ Stock Option Scheme as the Central Government may, by notification in the Official Gazette, specify in this behalf and purchased by him in foreign currency; or

2. income by way of long-term capital gains arising from the transfer of Global Depository Receipts referred to in clause (a), the income-tax payable shall be the aggregate of”

1. the amount of income-tax calculated on the 775 [income by way of 776[dividends]], in respect of Global Depository Receipts referred to in clause (a), if any, included in the total income, at the rate of ten per cent;

2. the amount of income-tax calculated on the income by way of long-term capital gains referred to in clause (b), if any, at the rate of ten per cent; and

3. the amount of income-tax with which the resident employee would have been chargeable had his total income been reduced by the amount of income referred to in clauses (a) and (b).

Explanation: For the purposes of this sub-section,”

1. “specified knowledge based industry or service” means”

1. information technology software;

2. information technology service;

3. entertainment service;

4. pharmaceutical industry;

5. bio-technology industry; and

6. any other industry or service, as may be specified by the Central Government, by notification in the Official Gazette;

“subsidiary” shall have the meaning assigned to it in section 4 of the Companies Act, 1956 (1 of 1956) and includes subsidiary incorporated outside India.]

(2) Where the gross total income of the resident employee”

1. consists only of 777 [income by way of 778[dividends]], in respect of Global Depository Receipts referred to in clause (a) of sub-section (1), no deduction shall be allowed to him under any other provision of this Act;

2. includes any income referred to in clause (a) or clause (b) of sub­section (1), the gross total income shall be reduced by the amount of such income and the deduction under any provision of this Act shall be allowed as if the gross total income as so reduced were the gross total income of the assessee.

(3) Nothing contained in the first and second provisos to section 48 shall apply for the computation of long-term capital gains arising out of the transfer of long-term capital asset, being Global Depository Receipts referred to in clause (b) of sub-section (1).

Explanation: For the purposes of this section,”

1. “Global Depository Receipts” means any instrument in the form of a depository receipt or certificate (by whatever name called) created by the Overseas Depository Bank outside India 779[or in an International Financial Services Centre] and 780 [issued to investors against the issue of,-

1. ordinary shares of issuing company, being a company listed on a recognised stock exchange in India; or

2. foreign currency convertible bonds of issuing company;]

   781[(iii) ordinary shares of issuing company, being a company incorporated outside India, if such depository receipt or certificate is listed and traded on any International Financial Services Centre;]

   2. “information technology service” means any service which results from the use of any information technology software over a system of information technology products for realising value addition;

   3. “information technology software” means any representation of instructions, data, sound or image, including source code and object code, recorded in a machine readable form and capable of being manipulated or providing inter-activity to a user, by means of an automatic data processing machine falling under heading information technology products but does not include non-information technology products;

      782[(ca) “International Financial Services Centre” shall have the meaning assigned to it in clause (q) of Section 2 of the Special Economic Zone Act, 2005 (28 of 2005).]

   4. “Overseas Depository Bank” means a bank authorised by the issuing company to issue Global Depository Receipts against issue of Foreign Currency Convertible Bonds or ordinary shares of the issuing company.]

Section 115AD - Tax on income of Foreign Institutional Investors from securities or capital gains arising from their transfer

1. Where the total income of a 783[specified fund or] foreign institutional investor includes”

784 [(a) 785 [income, 786[***] received in respect of securities (other than unit referred to in section 115AB); or]

(b) income by way of short-term or long-term capital gains arising from the transfer of such securities, the income-tax payable shall be the aggregate of”

1. the amount of income-tax calculated on the income in respect of securities referred to in clause (a), if any, included in the total income, at the rate of twenty per cent;

787 [Provided that the amount of income-tax calculated on the income by way of interest referred to in section 194LD shall be at the rate of five per cent.;]

2. the amount of income-tax calculated on the income by way of short-term capital gains referred to in clause (b), if any, included in the total income, at the rate of thirty per cent :

788 [Provided that the amount of income-tax calculated on the income by way of short-term capital gains referred to in section 111A shall be at the rate of 789[fifteen per cent];]

3. the amount of income-tax calculated on the income by way of long-term capital gains referred to in clause (b), if any, included in the total income, at the rate of ten per cent; 790[***]

791 [Provided that in case of income arising from the transfer of a long-term capital asset referred to in section 112A, income-tax at the rate of ten per cent. shall be calculated on such income exceeding one lakh rupees; and]

4. the amount of income-tax with which the foreign institutional investor would have been chargeable had its total income been reduced by the amount of income referred to in clause (a) and clause (b).

792[(1A) Notwithstanding anything contained in sub-section (1), in case of specified fund, the provision of this section shall apply only to the extent of income that is attributable to units held by non-resident (not being a permanent establishment of a non-resident in India) calculated in the prescribed manner.]

793[(1B) Notwithstanding anything contained in sub-section (1), where the specified fund is investment division of an offshore banking unit, the provisions of this section shall apply to the extent of income that is attributable to the investment division of such banking units, referred to in sub-clause (ii) of clause (c) to the Explanation to clause (4D) of Section 10, as a Category-I portfolio investor under the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019 made under the Securities and Exchange Board of India Act, 1992 (15 of 1992), calculated in such manner as may be prescribed.]

2. Where the gross total income of the foreign institutional investor”

   1. consists only of income in respect of securities referred to in clause (a) of sub-section (1), no deduction shall be allowed to it under sections 28 to 44C or clause (i) or clause (iii) of section 57 or under Chapter VIA;

   2. includes any income referred to in clause (a) or clause (b) of sub­section (1), the gross total income shall be reduced by the amount of such income and the deduction under Chapter VIA shall be allowed as if the gross total income as so reduced, were the gross total income of the foreign institutional investor.

3. Nothing contained in the first and second provisos to section 48 shall apply for the computation of capital gains arising out of the transfer of securities referred to in clause (b) of sub-section (1).

Explanation : For the purposes of this section,”

1. the expression “foreign institutional investor” means such investor as the Central Government may, by notification in the Official Gazette, specify in this behalf;

   794[(aa) the expression “investment division of offshore banking unit” shall have the meaning assigned to it in clause (aa) of the Explanation to clause (4D) of Section 10;]

2. the expression “securities” shall have the meaning assigned to it in clause (h) of section 2of the Securities Contracts (Regulation) Act, 1956 (42 of 1956).

Section 115B - Tax on profits and gains of life insurance business

1. Where the total income of an assessee includes any profits and gains from life insurance business, the income-tax payable shall be the aggregate of”

1. the amount of income-tax calculated on the amount of profits and gains of the life insurance business included in the total income, at the rate of twelve and one-half per cent; and

2. the amount of income-tax with which the assessee would have been chargeable had the total income of the assessee been reduced by the amount of profits and gains of the life insurance business.

   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 sub­section (1), deposit, during the previous years relevant to the assessment years commencing on the 1st day of April, 1989 and the 1st day of April, 1990, 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 years 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 115BA - Tax on income of certain domestic companies795

1. Notwithstanding anything contained in this Act but 796[subject to the other provisions of this Chapter, other than those mentioned under section 115BAA and section 115BAB"], the income-tax payable in respect of the total income of a person, being a domestic company, for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2017, shall, at the option of such person, be computed at the rate of twenty-five per cent., if the conditions contained in sub-section (2) are satisfied.

2. For the purposes of sub-section (1), the following conditions shall apply, namely:-

1. the company has been set-up and registered on or after the 1st day of March, 2016;

2. the company is not engaged in any business other than the business of manufacture or production of any article or thing and research in relation to, or distribution of, such article or thing manufactured or produced by it; and

3. the total income of the company has been computed,-

1. without any deduction under the provisions of section 10AA or clause (iia) of sub-section (1) of section 32 or section 32AC or section 32AD or section 33AB or section 33ABA or sub-clause (ii) or sub-clause (iia) or sub-clause (iii) of sub-section (1) or sub-section (2AA) or sub-section (2AB) of section 35 or section 35AC or section 35AD or section 35CCC or section 35CCD or under any provisions of Chapter VI-A under the heading "C.-Deductions in respect of certain incomes" other than the provisions of section 80JJAA;

2. without set off of any loss carried forward from any earlier assessment year if such loss is attributable to any of the deductions referred to in sub-clause (i); and

3. depreciation under section 32, other than clause (iia) of sub-section (1) of the said section, is determined in the manner as may be prescribed.

   3. The loss referred to in sub-clause (ii) of clause (c) of sub-section (2) shall be deemed to have been already given full effect to and no further deduction for such loss shall be allowed for any subsequent year.

   4. Nothing contained in this section shall apply unless the option is exercised by the person in the prescribed manner on or before the due date specified under sub-section (1) of section 139 for furnishing the first of the returns of income which the person is required to furnish under the provisions of this Act:

Provided that once the option has been exercised for any previous year, it cannot be subsequently withdrawn for the same or any other previous year.

797[Provided further that where the person exercises option under section 115BAA, the option under this section may be withdrawn.] 798

Section 115BAA - Tax on income of certain domestic companies

1. Notwithstanding anything contained in this Act but subject to the provisions of this Chapter, other than those mentioned under section 115BA and section 115BAB, the income-tax payable in respect of the total income of a person, being a domestic company, for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2020, shall, at the option of such person, be computed at the rate of twenty-two per cent., if the conditions contained in subsection (2) are satisfied:

Provided that where the person fails to satisfy the conditions contained in sub-section (2) in any previous year, the option shall become invalid in respect of the assessment year relevant to that previous year and subsequent assessment years and other provisions of the Act shall apply, as if the option had not been exercised for the assessment year relevant to that previous year and subsequent assessment years.

2. For the purposes of sub-section (1), the total income of the company shall be computed,-

1. without any deduction under the provisions of section 10AA or clause (iia) of sub-section (1) of section 32 or section 32AD or section 33AB or section 33ABA or sub-clause (ii) or sub-clause

(iia) or sub-clause (iii) of sub-section (1) or sub-section (2AA) or sub-section (2AB) of section 35 or section 35AD or section 35CCC or section 35CCD or under any provisions of 799[Chapter VI-A other than the provisions of section 80JJAA or section 80M] other than the provisions of section 80JJAA;

2. without set off of any loss carried forward or depreciation from any earlier assessment year, if such loss or depreciation is attributable to any of the deductions referred to in clause (i);

3. without set off of any loss or allowance for unabsorbed depreciation deemed so under section 72A, if such loss or depreciation is attributable to any of the deductions referred to in clause (i); and

4. by claiming the depreciation, if any, under any provision of section 32, except clause (iia) of sub-section (1) of the said section, determined in such manner as may be prescribed.

   3. The loss and depreciation referred to in clause (ii) and clause (iii) of sub-section (2) shall be deemed to have been given full effect to and no further deduction for such loss or depreciation shall be allowed for any subsequent year:

Provided that where there is a depreciation allowance in respect of a block of asset which has not been given full effect to prior to the assessment year beginning on the 1st day of April, 2020, corresponding adjustment shall be made to the written down value of such block of assets as on the 1st day of April, 2019 in the prescribed manner, if the option under sub-section (5) is exercised for a previous year relevant to the assessment year beginning on the 1st day of April, 2020.

4. In case of a person, having a Unit in the International Financial Services Centre, as referred to in sub-section (1A) of section 80LA, which has exercised option under sub-section (5), the conditions contained in sub-section (2) shall be modified to the extent that the deduction under section 80LA shall be available to such Unit subject to fulfillment of the conditions contained in the said section.

Explanation.-For the purposes of this sub-section, the term "Unit" shall have the same meaning as assigned to it in clause (zc) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005).

5. Nothing contained in this section shall apply unless the option is exercised by the person in the prescribed manner on or before the due date specified under sub-section (1) of section 139 for furnishing the returns of income for any previous year relevant to the assessment year commencing on or after the 1st day of April, 2020 and such option once exercised shall apply to subsequent assessment years:

Provided that in case of a person, where the option exercised by it under section 115BAB has been rendered invalid due to violation of conditions contained in sub-clause (ii) or sub-clause (iii) of clause (a), or clause (b) of sub-section (2) of said section, such person may exercise option under this section:

Provided further that once the option has been exercised for any previous year, it cannot be subsequently withdrawn for the same or any other previous year.] 800

Section 115BAB - Tax on income of new manufacturing domestic companies

1. Notwithstanding anything contained in this Act but subject to the provisions of this Chapter, other than those mentioned under section 115BA and section 115BAA, the income-tax payable in respect of the total income of a person, being a domestic company, for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2020, shall, at the option of such person, be computed at the rate of fifteen per cent., if the conditions contained in subsection (2) are satisfied:

Provided that where the total income of the person, includes any income, which has neither been derived from nor is incidental to manufacturing or production of an article or thing and in respect of which no specific rate of tax has been provided separately under this Chapter, such income shall be taxed at the rate of twenty-two per cent. and no deduction or allowance in respect of any expenditure or allowance shall be allowed in computing such income:

Provided further that the income-tax payable in respect of the income of the person deemed so under second proviso to sub-section (6) shall be computed at the rate of thirty per cent.:

Provided also that the income-tax payable in respect of income being short term capital gains derived from transfer of a capital asset on which no depreciation is allowable under the Act shall be computed at the rate of twenty-two per cent.:

Provided also that where the person fails to satisfy the conditions contained in sub-section (2) in any previous year, the option shall become invalid in respect of the assessment year relevant to that previous year and subsequent assessment years and other provisions of the Act shall apply to the person as if the option had not been exercised for the assessment year relevant to that previous year and subsequent assessment years.

2. For the purposes of sub-section (1), the following conditions shall apply, namely:-

1. the company has been set-up and registered on or after the 1st day of October, 2019, and has commenced manufacturing or production of an article or thing on or before the 31st day of March, 801[2024] and,

1. the business is not formed by splitting up, or the reconstruction, of a business already in existence:

Provided that this condition shall not apply in respect of a company, business of which is formed as a result of the reestablishment, reconstruction or revival by the person of the business of any such undertaking as is referred to in section 33B, in the circumstances and within the period specified in the said section;

2. does not use any machinery or plant previously used for any purpose.

Explanation 1.- For the purposes of sub-clause (ii), any machinery or plant which was used outside India by any other person shall not be regarded as machinery or plant previously used for any purpose, if the following conditions are fulfilled, namely:-

1. such machinery or plant was not, at any time previous to the date of the installation used in India;

2. such machinery or plant is imported into India from any country outside India; and

3. no deduction on account of depreciation in respect of such machinery or plant has been allowed or is allowable under the provisions of this Act in computing the total income of any person for any period prior to the date of the installation of machinery or plant by the person.

Explanation 2.-Where in the case of a person, any machinery or plant or any part thereof previously used for any purpose is put to use by the company and the total value of such machinery or plant or part thereof does not exceed twenty per cent. of the total value of the machinery or plant used by the company, then, for the purposes of sub-clause (ii) of this clause, the condition specified therein shall be deemed to have been complied with;

3. does not use any building previously used as a hotel or a convention centre, as the case may be, in respect of which deduction under section 80-ID has been claimed and allowed.

Explanation.-For the purposes of this sub-clause, the expressions "hotel" and "convention centre" shall have the meanings respectively assigned to them in clause (a) and clause (b) of sub-section (6) of section 80-ID;

2. the company is not engaged in any business other than the business of manufacture or production of any article or thing and research in relation to, or distribution of, such article or thing manufactured or produced by it.

Explanation.-For the removal of doubts, it is hereby clarified that the business of manufacture or production of any article or thing referred to in clause (b) shall not include business of,-

1. development of computer software in any form or in any media;

2. mining;

3. conversion of marble blocks or similar items into slabs;

4. bottling of gas into cylinder;

5. printing of books or production of cinematograph film; or

6. any other business as may be notified by the Central Government in this behalf; and

3. the total income of the company has been computed,-

1. without any deduction under the provisions of section 10AA or clause (iia) of sub-section (1) of section 32 or section 32AD or section 33AB or section 33ABA or subclause (ii) or sub-clause (iia) or sub-clause (iii) of subsection (1) or sub-section (2AA) or sub-section (2AB) of section 35 or section 35AD or section 35CCC or section 35CCD or under any provisions of 802[Chapter VI-A other than the provisions of section 80JJAA or section 80M];

2. without set off of any loss or allowance for unabsorbed depreciation deemed so under section 72A where such loss or depreciation is attributable to any of the deductions referred to in sub-clause (i).

Explanation.-For the removal of doubts, it is hereby clarified that in case of an amalgamation, the option under sub-section (7) shall remain valid in case of the amalgamated company only and if the conditions contained in sub-section (2) are continued to be satisfied by such company; and

3. by claiming the depreciation under the provision of section 32, except clause (iia) of sub-section (1) of the said section, determined in such manner as may be prescribed.

803[Explanation.–For the purposes of clause (b), the “business of manufacture or production of any article or thing” shall include the business of generation of electricity.]

3. The loss referred to in sub-clause (ii) of clause (c) of sub-section (2) shall be deemed to have been given full effect to and no further deduction for such loss shall be allowed for any subsequent year.

4. If any difficulty arises regarding fulfillment of the conditions contained in sub-clause (ii) or sub-clause (iii) of clause (a) of sub-section (2) or clause (b) of said sub-section, as the case may be, the Board may, with the approval of the Central Government, issue guidelines for the purpose of removing the difficulty and to promote manufacturing or production of article or thing using new plant and machinery.

5. Every guideline issued by the Board under sub-section (4) shall be laid before each House of Parliament, and shall be binding on the person, and the income-tax authorities subordinate to it.

6. Where it appears to the Assessing Officer that, owing to the close connection between the person to which this section applies and any other person, or for any other reason, the course of business between them is so arranged that the business transacted between them produces to the person more than the ordinary profits which might be expected to arise in such business, the Assessing Officer shall, in computing the profits and gains of such business for the purposes of this section, take the amount of profits as may be reasonably deemed to have been derived there from:

Provided that in case the aforesaid arrangement involves a specified domestic transaction referred to in section 92BA, the amount of profits from such transaction shall be determined having regard to arm's length price as defined in clause (ii) of section 92F:

Provided further that the amount, being profits in excess of the amount of the profits determined by the Assessing Officer, shall be deemed to be the income of the person.

7. Nothing contained in this section shall apply unless the option is exercised by the person in the prescribed manner on or before the due date specified under sub-section (1) of section 139 for furnishing the first of the returns of income for any previous year relevant to the assessment year commencing on or after 1st day of April, 2020 and such option once exercised shall apply to subsequent assessment years:

Provided that once the option has been exercised for any previous year, it cannot be subsequently withdrawn for the same or any other previous year.

Explanation.-For the purposes of section 115BAA and this section, the expression "unabsorbed depreciation" shall have the meaning assigned to it in clause (b) of sub-section (7) of section 72A.'.]

Section 115BAC - Tax on income of individuals and Hindu undivided family

1. Notwithstanding anything contained in this Act but subject to the provisions of this Chapter, the income-tax payable in respect of the total income of a person, being an individual or a Hindu undivided family, for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2021, shall, at the option of such person, be computed at the rate of tax given in the following Table, if the conditions contained in sub-section (2) are satisfied, namely:-

TABLE

Sl. No. (1)	Total income (2)	Rate of tax (3)
1.	Up to Rs. 2,50,000	Nil
2.	From Rs. 2,50,001 to Rs. 5,00,000	5 per cent.
3.	From Rs. 5,00,001 to Rs. 7,50,000	10 per cent.
4.	From Rs. 7,50,001 to Rs. 10,00,000	15 per cent.
5.	From Rs. 10,00,001 to Rs. 12,50,000	20 per cent.
6.	From Rs. 12,50,001 to Rs. 15,00,000	25 per cent.
7.	Above Rs. 15,00,000	30 per cent

Provided that where the person fails to satisfy the conditions contained in sub-section (2) in any previous year, the option shall become invalid in respect of the assessment year relevant to that previous year and other provisions of this Act shall apply, as if the option had not been exercised for the assessment year relevant to that previous year:

Provided further that where the option is exercised under clause (i) of sub-section (5), in the event of failure to satisfy the conditions contained in sub-section (2), it shall become invalid for subsequent assessment years also and other provisions of this Act shall apply for those years accordingly.

2. For the purposes of sub-section (1), the total income of the individual or Hindu undivided family shall be computed,-

1. without any exemption or deduction under the provisions of clause (5) or clause (13A) or prescribed under clause (14) (other than those as may be prescribed for this purpose) or clause (17) or clause (32), of section 10 or section 10AA or section 16 or clause (b) of section 24 (in respect of the property referred to in sub-section (2) of section 23) or clause (iia) of sub-section (1) of section 32 or section 32AD or section 33AB or section 33ABA or sub-clause (ii) or sub-clause (iia) or sub-clause (iii) of sub-section (1) or sub-section (2AA) of section 35 or section 35AD or section 35CCC or clause (iia) of section 57 or under any of the provisions of Chapter VI-A other than the provisions of sub-section (2) of section 80CCD or section 80JJAA;

2. without set off of any loss,-

1. carried forward or depreciation from any earlier assessment year, if such loss or depreciation is attributable to any of the deductions referred to in clause (i);

2. under the head “Income from house property” with any other head of income;

3. by claiming the depreciation, if any, under any provision of section 32, except clause (iia) of sub-section (1) of the said section, determined in such manner as may be prescribed; and

4. without any exemption or deduction for allowances or perquisite, by whatever name called, provided under any other law for the time being in force.

   3. The loss and depreciation referred to in clause (ii) of sub-section (2) shall be deemed to have been given full effect to and no further deduction for such loss or depreciation shall be allowed for any subsequent year:

Provided that where there is a depreciation allowance in respect of a block of assets which has not been given full effect to prior to the assessment year beginning on the 1st day of April, 2021, corresponding adjustment shall be made to the written down value of such block of assets as on the 1st day of April, 2020 in the prescribed manner, if the option under sub-section (5) is exercised for a previous year relevant to the assessment year beginning on

4. In case of a person, having a Unit in the International Financial Services Centre, as referred to in sub-section (1A) of section 80LA, which has exercised option under sub-section (5), the conditions contained in sub-section (2) shall be modified to the extent that the deduction under section 80LA shall be available to such Unit subject to fulfilment of the conditions contained in the said section.

Explanation.-For the purposes of this sub-section, the term “Unit” shall have the meaning assigned to it in clause (zc) of section 2 of the Special Economic Zones Act, 2005.

5. Nothing contained in this section shall apply unless option is exercised in the prescribed manner by the person,-

1. having income from business or profession, on or before the due date specified under sub-section (1) of section 139 for furnishing the returns of income for any previous year relevant to the assessment year commencing on or after the 1st day of April, 2021, and such option once exercised shall apply to subsequent assessment years;

2. having income other than the income referred to in clause (i), along with the return of income to be furnished under sub-section (1) of section 139 for a previous year relevant to the assessment year:

Provided that the option under clause (i), once exercised for any previous year can be withdrawn only once for a previous year other than the year in which it was exercised and thereafter, the person shall never be eligible to exercise option under this section, except where such person ceases to have any income from business or profession in which case, option under clause (ii) shall be available.] 804

Section 115 BAD Tax on income of certain resident co-operative societies

1. Notwithstanding anything contained in this Act but subject to the provisions of this Chapter, the income-tax payable in respect of the total income of a person, being a co-operative society resident in India, for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2021, shall, at the option of such person, be computed at the rate of twenty-two per cent., if the conditions contained in sub-section (2) are satisfied:

Provided that where the person fails to satisfy the conditions contained in sub-section (2) in computing its income in any previous year, the option shall become invalid in respect of the assessment year relevant to that previous year and subsequent assessment years and other provisions of the Act shall apply, as if the option had not been exercised for the assessment year relevant to that previous year and subsequent assessment years.

2. For the purposes of sub-section (1), the total income of the co-operative society shall be computed,-

1. without any deduction under the provisions of section 10AA or clause (iia) of sub-section (1) of section 32 or section 32AD or section 33AB or section 33ABA or sub-clause (ii) or sub-clause (iia) or sub-clause (iii) of sub-section (1) or sub-section (2AA) of section 35 or section 35AD or section 35CCC or under any of the provisions of Chapter VI-A other than the provisions of section 80JJAA;

2. without set off of any loss carried forward or depreciation from any earlier assessment year, if such loss or depreciation is attributable to any of the deductions referred to in clause (i); and

3. by claiming the depreciation, if any, under section 32, other than clause (iia) of sub-section (1) of the said section, determined in such manner as may be prescribed.

3. The loss and depreciation referred to in clause (ii) of sub-section (2) shall be deemed to have been given full effect to and no further deduction for such loss or depreciation shall be allowed for any subsequent year:

Provided that where there is a depreciation allowance in respect of a block of assets which has not been given full effect to prior to the assessment year beginning on the 1st day of April, 2021, corresponding adjustment shall be made to the written down value of such block of assets as on the 1st day of April, 2020 in such manner as may be prescribed, if the option under sub-section (5) is exercised for a previous year relevant to the assessment year beginning on the 1st day of April, 2021.

4. In case of a person, having a Unit in the International Financial Services Centre, as referred to in sub-section (1A) of section 80LA, which has exercised option under sub-section (5), the conditions contained in sub-section (2) shall be modified to the extent that the deduction under the said section shall be available to such Unit subject to fulfilment of the conditions contained in that section.

Explanation.-For the purposes of this sub-section, the term “Unit” shall have the meaning assigned to it in clause (zc) of section 2 of the Special Economic Zones Act, 2005.

5. Nothing contained in this section shall apply unless option is exercised by the person in such manner as may be prescribed on or before the due date specified under sub-section (1) of section 139 for furnishing the return of income for any previous year relevant to the assessment year commencing on or after the 1st day of April, 2021 and such option once exercised shall apply to subsequent assessment years:

Provided that once the option has been exercised for any previous year, it cannot be subsequently withdrawn for the same or any other previous year.] 805

Section 115BB - Tax on winnings from lotteries crossword puzzles races including horse races card games and other games of any sort or gambling or betting of any form or nature whatsoever

Where the total income of an assessee includes any income by way of winnings from any lottery or crossword puzzle or race including horse race (not being income from the activity of owning and maintaining race horses) or card game and other game of any sort or from gambling or betting of any form or nature whatsoever, the income-tax payable shall be the aggregate of”

1. the amount of income-tax calculated on income by way of winnings from such lottery or crossword puzzle or race including horse race or card game and other game of any sort or from gambling or betting of any form or nature whatsoever, at the rate of 806 [thirty per cent]; and

2. the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the amount of income referred to in clause (i).

Explanation : For the purposes of this section, “horse race” shall have the same meaning as in section 74A.

Section 115BBA - Tax on non-resident sportsmen or sports associations

1. Where the total income of an assessee,”

   1. being a sportsman (including an athlete), who is not a citizen of India and is a non-resident, includes any income received or receivable by way of”

   1. participation in India in any game (other than a game the win­nings wherefrom are taxable under section 115BB) or sport; or

   2. advertisement; or

   3. contribution of articles relating to any game or sport in India in newspapers, magazines or journals; or

   2. being a non-resident sports association or institution, includes any amount guaranteed to be paid or payable to such association or institution in relation to any game (other than a game the winnings wherefrom are taxable under section 115BB) or sport played in India, 807 [;or]

808 [(c) being an entertainer, who is not a citizen of India and is a non-resident, includes any income received or receivable from his performance in India,] the income-tax payable by the assessee shall be the aggregate of-

1. the amount of income-tax calculated on income referred to in 809 [clause (a) or clause (b) or clause (c)] at the rate of 810 [twenty per cent.]; and

2. the amount of income-tax with which the assessee would have been chargeable had the total income of the assessee been reduced by the amount of income referred to in 811 [clause (a) or clause (b) or clause (c)] :

Provided that no deduction in respect of any expenditure or allowance shall be allowed under any provision of this Act in computing the income referred to in 812 [clause (a) or clause (b) or clause (c)].

2. It shall not be necessary for the assessee to furnish under sub-section (1) of section 139 a return of his income if”

   3. his total income in respect of which he is assessable under this Act during the previous year consisted only of income referred to in 813 [clause (a) or clause (b) or clause (c)] of sub-section (1); and

   4. the tax deductible at source under the provisions of Chapter XVIIB has been deducted from such income.

Section 115BBB - Tax on income from units of an open-ended equity oriented fund of the Unit Trust of India or of Mutual Funds

814 [(1) Where the total income of an assessee includes any income from units of an open-ended equity oriented fund of the Unit Trust of India or of a Mutual Fund, the income-tax payable shall be the aggregate of”

1. the amount of income-tax calculated on income from units of an open-ended equity-oriented fund of the Unit Trust of India or of a Mutual Fund, at the rate of ten per cent; and

2. the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the amount of income referred to in clause (a).

(2) Nothing contained in sub-section (1) shall apply in relation to any income from units of an open-ended equity-oriented fund of the Unit Trust of India or of the Mutual Fund arising after the 31st day of March, 2003.

Explanation : For the purposes of this section, the expressions “Mutual Fund”, “open-ended equity-oriented fund” and “Unit Trust of India” shall have the meanings respectively assigned to them in the Explanation to section 115T.]

Section 115BBC - Anonymous donations to be taxed certain cases

815 [(1) Where the total income of an assessee, being a person in receipt of income on behalf of any university or other educational institution referred to in sub-clause (iiiad) or sub-clause (vi) or any hospital or other institution referred to in sub-clause (iiiae) or sub-clause (via) or any fund or institution referred to in sub-clause (iv) or any trust or institution referred to in sub-clause (v) of clause (23C) of section 10 or any trust or institution referred to in section 11, includes any income by way of any anonymous donation, the income-tax payable shall be the aggregate of€“

816 [(i) the amount of income-tax calculated at the rate of thirty per cent. on the aggregate of anonymous donations received in excess of the higher of the following, namely:-

1. five per cent. of the total donations received by the assessee; or

2. one lakh, rupees; and]

817 [(ii) the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the aggregate of anonymous donations received in excess of the amount referred to in sub-clause (A) or sub-clause (B) of clause (i), as the case may be.]

(2) The provisions of sub-section (1) shall not apply to any anonymous donation received by”

1. any trust or institution created or established wholly for religious purposes;

2. any trust or institution created or established wholly for religious and charitable purposes other than any anonymous donation made with a specific direction that such donation is for any university or other educational institution or any hospital or other medical institution run by such trust or institution.

(3) For the purposes of this section, “anonymous donation” means any voluntary contribution referred to in sub-clause (iia) of clause (24) of section 2, where a person receiving such contribution does not maintain a record of the identity indicating the name and address of the person making such contribution and such other particulars as may be prescribed.]

Section 115BBD - Tax on certain dividends received from foreign companies

818 [(1) Where the total income of an assessee, being an Indian company, 819 [***] includes any income by way of dividends declared, distributed or paid by a specified foreign company, the income-tax payable shall be the aggregate of-

1. the amount of income-tax calculated on the income by way of such dividends, at the rate of fifteen per cent.; and

2. the amount of income-tax with which the assessee would have been chargeable had its total income been reduced by the aforesaid income by way of dividends.

(2) Notwithstanding anything contained in this Act, no deduction in respect of any expenditure or allowance shall be allowed to the assessee under any provision of this Act in computing its income by way of dividends referred to in sub-section (1).

(3) In this section,-

1. "dividends" shall have the same meaning as is given to "dividend" in clause (22) of section 2 but shall not include sub-clause (e) thereof;

2. "specified foreign company" means a foreign company in which the Indian company holds twenty-six per cent, or more in nominal value of the equity share capital of the company.]

820[(4) The provisions of this section shall not apply to any assessment year beginning on or after the 1st day of April, 2023.]

Section 115BBDA - Tax on certain dividends received from domestic companies

821 [115BBDA. Tax on certain dividends received from domestic companies

1. Notwithstanding anything contained in this Act, where the total income of 822 [a specified assessee] resident in India, includes any income in aggregate exceeding ten lakh rupees, by way of dividends declared, distributed or paid by a domestic company 823[or companies on or before the 31st day of March, 2020], the income-tax payable shall be the aggregate of-

   1. the amount of income-tax calculated on the income by way of such dividends in aggregate exceeding ten lakh rupees, at the rate of ten per cent.; and

   2. the amount of income-tax with which the assessee would have been chargeable had the total income of the assessee been reduced by the amount of income by way of dividends.

2. No deduction in respect of any expenditure or allowance or set off of loss shall be allowed to the assessee under any provision of this Act in computing the income by way of dividends referred to in clause (a) of sub-section (1).

3. In this section, "dividends" shall have the same meaning as is given to "dividend" in clause (22) of section 2 but shall not include sub-clause (e) thereof.

824 [Explanation.-For the purposes of this section,-

3. "dividend" shall have the meaning assigned to it in clause (22) of section 2 but shall not include sub-clause (e) thereof;

4. "specified assessee" means a person other than,-

1. a domestic company; or

2. a fund or institution or trust or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10; or

3. a trust or institution registered 825[under section 12A or section 12AA or section 12AB]. 

Section 115BBE - Tax on income referred to in section 68 or section 69 or section 69A or section 69B or section 69C or section 69D

826 [(1) Where the total income of an assessee,-

1. includes any income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D and reflected in the return of income furnished under section 139; or

2. determined by the Assessing Officer includes any income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D, if such income is not covered under clause (a), the income-tax payable shall be the aggregate of-

   1. the amount of income-tax calculated on the income referred to in clause (a) and clause (b), at the rate of sixty per cent.; and

   2. the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the amount of income referred to in clause (i).]

(2) Notwithstanding anything contained in this Act, no deduction in respect of any expenditure or allowance 827 [or set off of any loss] shall be allowed to the assessee under any provision of this Act in computing his income referred to in clause (a) 828[and clause (b)] of sub-section (1).]

Section 115BBF - Tax on income from patent

1. Where the total income of an eligible assessee includes any income by way of royalty in respect of a patent developed and registered in India, the income-tax payable shall be the aggregate of-

1. the amount of income-tax calculated on the income by way of royalty in respect of the patent at the rate of ten per cent.; and

2. the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the income referred to in clause (a).

2. Notwithstanding anything contained in this Act, no deduction in respect of any expenditure or allowance shall be allowed to the eligible assessee under any provision of this Act in computing his income referred to in clause (a) of sub-section (1).

3. The eligible assessee may exercise the option for taxation of income by way of royalty in respect of a patent developed and registered in India in accordance with the provisions of this section, in the prescribed manner, on or before the due date specified under sub-section (1) of section 139 for furnishing the return of income for the relevant previous year.

4. Where an eligible assessee opts for taxation of income by way of royalty in respect of a patent developed and registered in India for any previous year in accordance with the provisions of this section and the assessee offers the income for taxation for any of the five assessment years relevant to the previous year succeeding the previous year not in accordance with the provisions of sub-section (1), then, the assessee shall not be eligible to claim the benefit of the provisions of this section for five assessment years subsequent to the assessment year relevant to the previous year in which such income has not been offered to tax in accordance with the provisions of sub-section (1).

Explanation.-For the purposes of this section,-

1. "developed" means at least seventy-five per cent. of the expenditure incurred in India by the eligible assessee for any invention in respect of which a patent is granted under the Patents Act, 1970 (39 of 1970) (herein referred to as the Patents Act);

2. "eligible assessee" means a person resident in India and who is a patentee;

3. "invention" shall have the meaning assigned to it in clause (j) of sub-section (1) of section 2 of the Patents Act;

4. "lump sum" includes an advance payment on account of such royalties which is not returnable;

5. "patent" shall have the meaning assigned to it in clause (m) of sub-section (1) of section 2of the Patents Act;

6. "patentee" means the person, being the true and first inventor of the invention, whose name is entered on the patent register as the patentee, in accordance with the Patents Act, and includes every such person, being the true and first inventor of the invention, where more than one person is registered as patentee under that Act in respect of that patent;

7. "patented article" and "patented process" shall have the meanings respectively assigned to them in clause (o) of sub-section (1) of section 2 of the Patents Act;

8. "royalty", in respect of a patent, means consideration (including any lump sum consideration but excluding any consideration which would be the income of the recipient chargeable under the head "Capital gains" or consideration for sale of product manufactured with the use of patented process or the patented article for commercial use) for the-

1. transfer of all or any rights (including the granting of a licence) in respect of a patent; or

2. imparting of any information concerning the working of, or the use of, a patent; or

3. use of any patent; or

4. rendering of any services in connection with the activities referred to in sub-clauses (i) to (iii);

9. "true and first inventor" shall have the meaning assigned to it in clause (y) of sub-section (1) of section 2 of the Patents Act.'] 829

Section 115BBG - Tax on income from transfer of carbon credits

1. Where the total income of an assessee includes any income by way of transfer of carbon credits, the income-tax payable shall be the aggregate of-

1. the amount of income-tax calculated on the income by way of transfer of carbon credits, at the rate of ten per cent.; and

2. the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the amount of income referred to in clause (a).

2. Notwithstanding anything contained in this Act, no deduction in respect of any expenditure or allowance shall be allowed to the assessee under any provision of this Act in computing his income referred to in clause (a) of sub-section (1).

Explanation.-For the purposes of this section, "carbon credit" in respect of one unit shall mean reduction of one tonne of carbon dioxide emissions or emissions of its equivalent gases which is validated by the United Nations Framework on Climate Change and which can be traded in market at its prevailing market price.'.] 830

Section 115BBH Tax on income from virtual digital asset

831[(1) Where the total income of an assessee includes any income from the transfer of any virtual digital asset, notwithstanding anything contained in any other provision of this Act, the income-tax payable shall be the aggregate of,

1. the amount of income-tax calculated on the income from transfer of such virtual digital asset at the rate of thirty per cent.; and

2. the amount of income-tax with which the assessee would have been chargeable, had the total income of the assessee been reduced by the income referred to in clause (a).

(2) Notwithstanding anything contained in any other provision of this Act,

1. no deduction in respect of any expenditure (other than cost of acquisition, if any) or allowance or set off of any loss shall be allowed to the assessee under any provision of this Act in computing the income referred to in clause (a) of sub-section (1); and

2. no set off of loss from transfer of the virtual digital asset computed under clause (a) of sub-section (1) shall be allowed against income computed under any provision of this Act to the assessee and such loss shall not be allowed to be carried forward to succeeding assessment years.

(3) For the purposes of this section, the word “transfer” as defined in clause (47) of section 2, shall apply to any virtual digital asset, whether capital asset or not.]

Section 115BBI Specified income of certain institutions

832[(1) Where the total income of an assessee, being a person in receipt of income on behalf of any fund or institution referred to in sub-clause (iv) or any trust or institution referred to in sub-clause (v) or any university or other educational institution referred to in sub-clause (vi) or any hospital or other medical institution referred to in sub-clause (via), of clause (23C) of section 10 or any trust or institution referred to in section 11, includes any income by way of any specified income, notwithstanding anything contained in any other provision of this Act, the income-tax payable shall be the aggregate of,

1. the amount of income-tax calculated at the rate of thirty per cent. on the aggregate of such specified income; and

2. the amount of income-tax with which the assessee would have been chargeable had the total income of the assessee been reduced by the aggregate of specified income referred to in clause (i).

(2) Notwithstanding anything contained in this Act, no deduction in respect of any expenditure or allowance or set off of any loss shall be allowed to the assessee under any provision of this Act in computing the specified income referred to in clause (i) of sub-section (1).

Explanation. For the purposes of this section, “specified income” means,

1. income accumulated or set apart in excess of fifteen per cent. of the income where such accumulation is not allowed under any specific provision of this Act; or

2. deemed income referred to in Explanation 4 to the third proviso to clause (23C) of section 10, or subsection (1B) or sub-section (3) of section 11; or

3. any income, which is not exempt under clause (23C) of section 10 on account of violation of the provisions of clause (b) of the third proviso of clause (23C) of section 10, or not to be excluded from the total income under the provisions of clause (d) of sub-section (1) of section 13; or

4. any income which is deemed to be income under the twenty-first proviso to clause (23C) of section 10 or which is not excluded from the total income under clause (c) of sub-section (1) of section 13; or

5. any income which is not excluded from the total income under clause (c) of sub-section (1) of section 11.]

833 [Chapter XII-A Special provisions relating to certain incomes of non-residents

Section 115C - Definitions

In this Chapter, unless the context otherwise requires,”

1. “convertible foreign exchange” means foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purposes of 834 [the Foreign Exchange Management Act, 1999 (42 of 1999)], and any rules made thereunder;

2. “foreign exchange asset” means any specified asset which the assessee has acquired or purchased with, or subscribed to in, convertible foreign exchange;

3. “investment income” means any 835 [income derived, 836[***]] from a foreign exchange asset;

4. “long-term capital gains” means income chargeable under the head “Capital gains” relating to a capital asset, being a foreign exchange asset which is not a short-term capital asset;

5. “non-resident Indian” means an individual, being a citizen of India or a person of Indian origin who is not a “resident”.

6. Explanation : A person shall be deemed to be of Indian origin if he, or either of his parents or any of his grand-parents, was born in undivided India;

7. “specified asset” means any of the following assets, namely :

1. shares in an Indian company;

2. debentures issued by an Indian company which is not a private company as defined in the Companies Act, 1956 (1 of 1956);

3. deposits with an Indian company which is not a private company as defined in the Companies Act, 1956 (1 of 1956);

4. any security of the Central Government as defined in clause (2) of section 2 of the Public Debt Act, 1944 (18 of 1944);

5. such other assets as the Central Government may specify in this behalf by notification in the Official Gazette.

Section 115D - Special provision for computation of total income of non-residents

1. No deduction in respect of any expenditure or allowance shall be allowed under any provision of this Act in computing the investment income of a non­resident Indian.

2. Where in the case of an assessee, being a non-resident Indian, -

   1. the gross total income consists only of investment income or income by way of long-term capital gains or both, no deduction shall be allowed to the assessee under Chapter VIA and nothing contained in the provisions of the second proviso to section 48 shall apply to income chargeable under the head “Capital gains”;

   2. the gross total income includes any income referred to in clause (a), the gross total income shall be reduced by the amount of such income and the deductions under Chapter VIA shall be allowed as if the gross total income as so reduced were the gross total income of the assessee.

Section 115F - Capital gains on transfer of foreign exchange assets not to be charged in certain cases

1. Where, in the case of an assessee being a non-resident Indian, any long-term capital gains arise from the transfer of a foreign exchange asset (the asset so transferred being hereafter in this section referred to as the original asset), and the assessee has, within a period of six months after the date of such transfer, invested the whole or any part of the net consideration in any specified asset, or in any savings certificates referred to in clause (4B) of section 10 (such specified asset, or such savings certificates being hereafter in this section referred to as the new asset), the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,“

   1. if the cost of the new asset is not less than the net consideration in respect of the original asset, the whole of such capital gains shall not be charged under section 45;

   2. if the cost of the new asset is less than the net consideration in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of acquisition of the new asset bears to the net consideration shall not be charged under section 45.

Explanation : For the purposes of this sub-section, -

1. “cost”, in relation to any new asset, being a deposit referred to in sub-clause (iii), or specified under sub-clause (v) of clause (f) of section 115C, means the amount of such deposit;

2. “net consideration”, in relation to the transfer of the original asset, means the full value of the consideration received or accruing as a result of the transfer of such asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer.

   2. Where the new asset is transferred or converted (otherwise than by transfer) into money, within a period of three years from the date of its acquisition, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such new asset as provided in clause (a) or, as the case may be, clause (b) of sub-section (1) shall be deemed to be income chargeable under the head “Capital gains” relating to capital assets other than short-term capital assets of the previous year in which the new asset is transferred or converted (otherwise than by transfer) into money.

Section 115E - Tax on investment income and long-term capital gains

Where the total income of an assessee, being a non-resident Indian, includes-

1. any income from investment or income from long-term capital gains of an asset other than a specified asset;

2. income by way of long-term capital gains, the tax payable by him shall be the aggregate of -

1. the amount of income-tax calculated on the income in respect of investment income referred to in clause (a), if any, included in the total income, at the rate of twenty per cent;

2. the amount of income-tax calculated on the income by way of long-term capital gains referred to in clause (b), if any, included in the total income, at the rate of ten per cent; and

3. the amount of income-tax with which he would have been chargeable had his total income been reduced by the amount of income referred to in clauses (a) and (b).

Section 115G - Return of income not to be filed in certain cases

It shall not be necessary for a non-resident Indian to furnish under sub-section (1) of section 139 a return of his income if”

1. his total income in respect of which he is assessable under this Act during the previous year consisted only of investment income or income by way of long-term capital gains or both; and

2. the tax deductible at source under the provisions of Chapter XVIIB has been deducted from such income.

Section 115H - Benefit under Chapter to be available in certain cases even after the assessee becomes resident

Where a person, who is a non-resident Indian in any previous year, becomes assessable as resident in India in respect of the total income of any subsequent year, he may furnish to the Assessing Officer a declaration in writing along with his return of income under section 139 for the assessment year for which he is so assessable, to the effect that the provisions of this Chapter shall continue to apply to him in relation to the investment income derived from any foreign exchange asset being an asset of the nature referred to in sub-clause (ii) or sub-clause (iii) or sub-clause (iv) or sub-clause (v) of clause (f) of section 115C; and if he does so, the provisions of this Chapter shall continue to apply to him in relation to such income for that assessment year and for every subsequent assessment year until the transfer or conversion (otherwise than by transfer) into money of such assets.

Section 115J - Special provisions relating to certain companies

1. Notwithstanding anything contained in any other provision of this Act, where in the case of an assessee being a company (other than a company engaged in the business of generation or distribution of electricity), the total income, as computed under this Act in respect of any previous year relevant to the assessment year commencing on or after the 1st day of April, 1988 but before the 1st day of April, 1991 (hereafter in this section referred to as the relevant previous year), is less than thirty per cent of its book profit, the total income of such assessee chargeable to tax for the relevant previous year shall be deemed to be an amount equal to thirty per cent of such book profit.

(1A) Every assessee, being a company, shall, for the purposes of this section, prepare its profit and loss account for the relevant previous year in accordance with the provisions of Parts II and III of Schedule VI to the Companies Act, 1956 (1 of 1956).

Explanation : For the purposes of this section, “book profit” means the net profit as shown in the profit and loss account for the relevant previous year prepared under sub-section (1A), as increased by”

1. the amount of income-tax paid or payable, and the provision therefore; or

2. the amounts carried to any reserves (other than the reserves specified in section 80HHD or sub-section (1) of section 33AC), by whatever name called; or

3. the amount or amounts set aside to provisions made for meeting liabilities, other than ascertained liabilities; or

4. the amount by way of provision for losses of subsidiary companies; or

5. the amount or amounts of dividends paid or proposed; or

6. the amount or amounts of expenditure relatable to any income to which any of the provisions of Chapter III applies; or

7. the amount withdrawn from the reserve account under section 80HHD, where it has been utilised for any purpose other than those referred to in sub-section (4) of that section; or

8. the amount credited to the reserve account under section 80HHD, to the extent that amount has not been utilised within the period specified in sub-section (4) of that section;

(ha) the amount deemed to be the profits under sub-section (3) of section 33AC, if any amount referred to in clauses (a) to (f) is debited or, as the case may be, the amount referred to in clauses (g) and (h) is not credited to the profit and loss account, and as reduced by,”

1. the amount withdrawn from reserves (other than the reserves specified in section 80HHD) or provisions, if any such amount is credited to the profit and loss account :

Provided that, where this section is applicable to an assessee in any previous year (including the relevant previous year), the amount withdrawn from reserves created or provisions made in a previous year relevant to the assessment year commencing on or after the 1st day of April, 1988 shall not be reduced from the book profit unless the book profit of such year has been increased by those reserves or provisions (out of which the said amount was withdrawn) under this Explanation; or

2. the amount of income to which any of the provisions of Chapter III applies, if any such amount is credited to the profit and loss account; or

3. the amounts [as arrived at after increasing the net profit by the amounts referred to in clauses (a) to (f) and reducing the net profit by the amounts referred to in clauses (i) and (ii)] attributable to the business, the profits from which are eligible for deduction under section 80HHC or section 80HHD; so, however, that such amounts are computed in the manner specified in sub-section (3) or sub-section (3A) of section 80HHC or sub-section (3) of section 80HHD, as the case may be; or

4. the amount of the loss or the amount of depreciation which would be required to be set-off against the profit of the relevant previous year as if the provisions of clause (b) of the first proviso to sub­section (1) of section 205 of the Companies Act, 1956 (1 of 1956), are applicable.

   2. Nothing contained in sub-section (1) shall affect the determination of the amounts in relation to the relevant previous year to be carried forward to the subsequent year or years under the provisions of sub-section (2) of section 32 or sub-section (3) of section 32A or clause (ii) of sub-section (1) of section 72 or section 73 or section 74 or sub-section (3) of section 74A or sub-section (3) of section 80J837.

Section 115-I - Chapter not to apply if the assessee so chooses

A non-resident Indian may elect not to be governed by the provisions of this Chapter for any assessment year by furnishing his return of income for that assessment year under section 139 declaring therein that the provisions of this Chapter shall not apply to him for that assessment year and if he does so, the provisions of this Chapter shall not apply to him for that assessment year and his total income for that assessment year shall be computed and tax on such total income shall be charged in accordance with the other provisions of this Act.

838[CHAPTER XII-B-SPECIAL PROVISIONS RELATING TO CERTAIN COMPANIES]

Section 115JA - Deemed income relating to certain companies

1. Notwithstanding anything contained in any other provisions of this Act, where in the case of an assessee, being a company, the total income, as computed under this Act in respect of any previous year relevant to the assessment year commencing on or after the 1st day of April, 1997 839 [but before the 1st day of April, 2001] (hereafter in this section referred to as the relevant previous year) is less than thirty per cent of its book profit, the total income of such assessee chargeable to tax for the relevant previous year shall be deemed to be an amount equal to thirty per cent of such book profit.

2. Every assessee, being a company, shall, for the purposes of this section prepare its profit and loss account for the relevant previous year in accordance with the provisions of Parts II and III of Schedule VI to the Companies Act, 1956 (1 of 1956) :

Provided that while preparing profit and loss account, the depreciation shall be calculated on the same method and rates which have been adopted for calculating the depreciation for the purpose of preparing the profit and loss account laid before the company at its annual general meeting inaccordance with the provisions of section 210 of the Companies Act, 1956 (1 of 1956) :

Provided further that where a company has adopted or adopts the financial year under the Companies Act, 1956 (1 of 1956) which is different from the previous year under the Act, the method and rates for calculation of deprecia­tion shall correspond to the method and rates which have been adopted for calculating the depreciation for such financial year or part of such financial year falling within the relevant previous year.

Explanation : For the purposes of this section, “book profit” means the net profit as shown in the profit and loss account for the relevant previous year prepared under sub-section (2), as increased by”

1. the amount of income-tax paid or payable, and the provision therefore; or

2. the amounts carried to any reserves by whatever name called; or

3. the amount or amounts set aside to provisions made for meeting liabilities, other than ascertained liabilities; or

4. the amount by way of provisions for losses of subsidiary companies; or

5. the amount or amounts of dividends paid or proposed; or

6. the amount or amounts of expenditure relatable to any income to which any of the provisions of Chapter III applies,

840 [(g) the amount or amounts set aside as provision for diminution in the value of any asset,] if any amount referred to in clauses (a) to (g) is debited to the profit and loss account, and as reduced by,-]

1. the amount withdrawn from any reserves or provisions if any such amount is credited to the profit and loss account :

Provided that, where this section is applicable to an assessee in any previous year (including the relevant previous year), the amount withdrawn from reserves created or provisions made in a previous year relevant to the assessment year commencing on or after the 1st day of April, 1997 841 [but ending before the 1st day of April 2001] shall not be reduced from the book profit unless the book profit of such year has been increased by those reserves or provisions (out of which the said amount was withdrawn) under this Explanation; or

2. the amount of income to which any of the provisions of Chapter III applies, if any such amount is credited to the profit and loss account; or

3. 842 [the amount of loss brought forward or unabsorbed depreciation, whichever is less as per books of account.

Explanation : For the purposes of this clause,”

1. the loss shall not include depreciation;

2. the provisions of this clause shall not apply if the amount of loss brought forward or unabsorbed depreciation, is nil; or]

   4. the amount of profits derived by an industrial undertaking from the business of generation or generation and distribution of power; or

   5. the amount of profits derived by an industrial undertaking located in an industrially backward State or district as referred to in 843 [sub-section (4) and sub-section (5) of section 80-IB], for the assessment years such industrial undertaking is eligible to claim a deduction of hundred per cent of the 844 [profits and gains under sub-section (4) or sub-section (5) of section 80-IB]; or

(vi) the amount of profits derived by an industrial undertaking from the business of developing, maintaining and operating any infrastructure facility as defined 845 [as defined in the Explanation to sub-section (4) of section 80-IA and subject to the fulfilling the conditions laid down in that sub-section]; or

(vii) the amount of profits of sick industrial company for the assessment year commencing from the assessment year relevant to the previous year in which the said company has become a sick industrial company under sub-section (1) of section 17 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986) and ending with the assessment year during which the entire net worth of such company becomes equal to or exceeds the accumulated losses.

Explanation : For the purposes of this clause, “net worth” shall have the meaning assigned to it in clause (ga) of sub-section (1) of section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986); or

(viii) the amount of profits eligible for deduction under section 80HHC, computed under clause (a), (b) or (c) of sub-section (3) or sub-section (3A), as the case may be, of that section, and subject to the conditions specified in sub-sections (4) and (4A) of that section; or

(ix) the amount of profits eligible for deduction under section 80HHE, computed under sub-section (3) of that section.

3. Nothing contained in sub-section (1) shall affect the determination of the amounts in relation to the relevant previous year to be carried forward to the subsequent year or years under the provisions of sub-section (2) of section 32 or sub-section (3) of section 32A or clause (ii) of sub-section (1) of section 72 or section 73 or section 74 or sub-section (3) of section 74A.

4. Save as otherwise provided in this section, all other provisions of this Act shall apply to every assessee, being a company, mentioned in this section.

Section 115JAA - Tax credit in respect of tax paid on deemed income relating to certain companies

1. Where any amount of tax is paid under sub-section (1) of section 115JA by an assessee being a company for any assessment year, then, credit in respect of tax so paid shall be allowed to him in accordance with the provisions of this section.

846 [(1A) Where any amount of tax is paid under sub-section (1) of section 115JB by an assessee, being a company for the assessment year commencing on the 1st day of April, 2006 and any subsequent assessment year, then, credit in respect of tax so paid shall be allowed to him in accordance with the provisions of this section.]

847 [(2) The tax credit to be allowed under sub-section (1) shall be the difference of the tax paid for any assessment year under sub-section (1) of section 115JA and the amount of tax payable by the assessee on his total income computed in accordance with the other provisions of this Act:

Provided that no interest shall be payable on the tax credit allowed under sub­section (1).

(2A) The tax credit to be allowed under sub-section (1A) shall be the difference of the tax paid for any assessment year under sub-section (1) of section 115JB and the amount of tax payable by the assessee on his total income computed in accordance with the other provisions of this Act:

Provided that no interest shall be payable on the tax credit allowed under sub-section (1A).]

848 [Provided further that where the amount of tax credit in respect of any income-tax paid in any country or specified territory outside India, under section 90 or section 90A or section 91, allowed against the tax payable under the provisions of sub-section (1) of section 115JB exceeds the amount of such tax credit admissible against the tax payable by the assessee on its income in accordance with the other provisions of this Act, then, while computing the amount of credit under this sub-section, such excess amount shall be ignored.]

849 [(3) The amount of tax credit determined under sub-section (2) shall be carried forward and set-off in accordance with the provisions of sub-sections (4) and (5) but such carry forward shall not be allowed beyond the fifth assessment year immediately succeeding the assessment year in which tax credit becomes allowable under sub-section (1).

(3A) The amount of tax credit determined under sub-section (2A) shall be carried forward and set-off in accordance with the provisions of sub-sections (4) and (5) but such carry forward shall not be allowed beyond the 850 [fifteenth assessment year] immediately succeeding the assessment year in which tax credit becomes allowable under sub-section (1A).]

(4) Tax credit shall be allowed set-off in a year when tax becomes payable on the total income computed in accordance with the provisions of this Act other than section 115JA 851[or section 115JB, as the case may be].

(5) Set-off in respect of brought forward tax credit shall be allowed for any assessment year to the extent of the difference between the tax on his total income and the tax which would have been payable under the provisions of sub-section (1) of section 115JA 4[or section 115JB, as the case may be] for that assessment year.

(6) Where as a result of an order under sub-section (1) or sub-section (3) of section 143, section 144, section 147, section 154, section 155, sub-section (4) of section 245D, section 250, section 254, section 260, section 262 section 263 or section 264, the amount of tax payable under this Act is reduced or increased, as the case may be, the amount of tax credit allowed under this section shall also be increased or reduced accordingly.

852 [(7) In case of conversion of a private company or unlisted public company into a limited liability partnership under the Limited Liability Partnership Act, 2008(6 of 2009), the provisions of this section shall not apply to the successor limited liability partnership.

Explanation.-For the purposes of this section, the expressions "private company" and "unlisted public company" shall have the meanings respectively assigned to them in the Limited Liability Partnership Act, 2008(6 of 2009).]

853[(8) The provisions of this section shall not apply to a person who has exercised the option under section 115BAA.]

Section 115JB Special provision for payment of tax by certain companies

1. Notwithstanding anything contained in any other provision of this Act, where in the case of an assessee, being a company, the income-tax, payable on the total income as computed under this Act in respect of any previous year relevant to the assessment year commencing on or after 854 [the 1st day of April, 2012] is less than 855 [eighteen and one-half per cent] of its book profit, 856 [such book profit shall be deemed to be the total income of the assessee and the tax payable by the assessee on such total income shall be the amount of income-tax at the rate of 857 [858 [eighteen and one-half per cent]859.

860[Provided that for the previous year relevant to the assessment year commencing on or after the 1st day of April, 2020, the provisions of this subsection shall have effect as if for the words "eighteen and one-half per cent." occurring at both the places, the words "fifteen per cent." had been substituted]

2. 861 [Every assessee,-

1. being a company, other than a company referred to in clause (b), shall, for the purposes of this section, prepare its 862 [statement of profit and loss] for the relevant previous year in accordance with the provisions of 863 [Schedule III] to 864[the Companies Act, 2013 (18 of 2013)]; or

2. being a company, to which the 865 [second proviso to sub-section (1) of section 129] of 866 [the Companies Act, 2013 (18 of 2013)] is applicable, shall, for the purposes of this section, prepare its 867 [statement of profit and loss] for the relevant previous year in accordance with the provisions of the Act governing such company:]

Provided that while preparing the annual accounts including 868 [statement of profit and loss], -

1. the accounting policies;

2. the accounting standards adopted for preparing such accounts including 869 [statement of profit and loss];

3. the method and rates adopted for calculating the depreciation, shall be the same as have been adopted for the purpose of preparing such accounts including 870 [statement of profit and loss] and laid before the company at its annual general meeting in accordance with the provisions of 871 [section 129] of 872 [the Companies Act, 2013 (18 of 2013)] :

Provided further that where the company has adopted or adopts the financial year under 873 [the Companies Act, 2013 (18 of 2013)], which is different from the previous year under this Act,”

1. the accounting policies;

2. the accounting standards adopted for preparing such accounts including 874 [statement of profit and loss];

3. the method and rates adopted for calculating the depreciation, shall correspond to the accounting policies, accounting standards and the method and rates for calculating the depreciation which have been adopted for preparing such accounts including 875 [statement of profit and loss] for such financial year or part of such financial year falling within the relevant previous year.

Explanation 876[1] : For the purposes of this section, “book profit” means the 877 [profit] as shown in the 878 [statement of profit and loss] for the relevant previous year prepared under sub-section (2), as increased by -

1. the amount of income-tax paid or payable, and the provision therefore; or

2. the amounts carried to any reserves, by whatever name called 879 [, other than a reserve specified under section 33AC]; or

3. the amount or amounts set aside to provisions made for meeting liabilities, other than ascertained liabilities; or

4. the amount by way of provision for losses of subsidiary companies; or

5. the amount or amounts of dividends paid or proposed; or

6. the amount or amounts of expenditure relatable to any income to which 880[section 10[other than the provisions contained in clause (38) thereof] or881 [***] section 11 or section 12 apply;]

882 [(fa) the amount or amounts of expenditure relatable to income, being share of the assessee in the income of an association of persons or body of individuals, on which no income-tax is payable in accordance with the provisions of section 86; or

(fb) the amount or amounts of expenditure relatable to income accruing or arising to an assessee, being a foreign company, from,-

1. the capital gains arising on transactions in securities; or

2. the 883[interest, dividend, royalty] or fees for technical services chargeable to tax at the rate or rates specified in Chapter XII, if the income-tax payable thereon in accordance with the provisions of this Act, other than the provisions of this Chapter, is at a rate less than the rate specified in sub-section (1); or

(fc) the amount representing notional loss on transfer of a capital asset, being share of a special purpose vehicle, to a business trust in exchange of units allotted by the trust referred to in clause (xvii) of section 47 or the amount representing notional loss resulting from any change in carrying amount of said units or the amount of loss on transfer of units referred to in clause (xvii) of section 47; or;]

884 [(fd) the amount or amounts of expenditure relatable to income by way of royalty in respect of patent chargeable to tax under section 115BBF; or]

7. 885 [the amount of depreciation,]

8. 886 [the amount of deferred tax and the provision therefore,]

9. 887 [the amount or amounts set aside as provision for diminution in the value of any asset

10. 888 [the amount standing in revaluation reserve relating to revalued asset on the retirement or disposal of such asset, if any amount referred to in clauses (a) to (i) is debited to the 889 [statement of profit and loss] or if any amount referred to in clause (j) is not credited to the 890 [statement of profit and loss], and as reduced by,-]]

891 [(i) the amount withdrawn from any reserve or provision (excluding a reserve created before the 1st day of April, 1997 otherwise than by way of a debit to the 892 [statement of profit and loss]), if any such amount is credited to the 893 [statement of profit and loss]:

Provided that where this section is applicable to an assessee in any previous year, the amount withdrawn from reserves created or provisions made in a previous year relevant to the assessment year commencing on or after the 1st day of April, 1997 shall not be reduced from the book profit unless the book profit of such year has been increased by those reserves or provisions (out of which the said amount was withdrawn) under this Explanation or Explanation below second proviso to section 115JA, as the case may be; or]

(ii) the amount of income to which any of the 894[provisions of 895 [section 10 [other than the provisions contained in clause (38) thereof]]] or 896 [***] section 11 or section 12 apply, if any such amount is credited to the 897 [statement of profit and loss]; or

898 [(iia) the amount of depreciation debited to the899 [statement of profit and loss] (excluding the depreciation on account of revaluation of assets); or]

900 [(iib) the amount withdrawn from revaluation reserve and credited to the 901 [statement of profit and loss], to the extent it does not exceed the amount of depreciation on account of revaluation of assets referred to in clause (iia); or]

902 [(iic) the amount of income, being the share of the assessee in the income of an association of persons or body of individuals, on which no income-tax is payable in accordance with the provisions of section 86, if any, such amount is credited to the 903 [statement of profit and loss]; or

(iid) the amount of income accruing or arising to an assessee, being a foreign company, from,-

1. the capital gains arising on transactions in securities; or

2. the 904[interest, dividend, royalty] or fees for technical services chargeable to tax at the rate or rates specified in Chapter XII, if such income is credited to the 905 [statement of profit and loss] and the income-tax payable thereon in accordance with the provisions of this Act, other than the provisions of this Chapter, is at a rate less than the rate specified in sub-section (1); or

(iie) the amount representing,-

1. notional gain on transfer of a capital asset, being share of a special purpose vehicle to a business trust in exchange of units allotted by that trust referred to in clause (xvii) of section 47; or

2. notional gain resulting from any change in carrying amount of said units; or

3. gain on transfer of units referred to in clause (xvii) of section 47, if any, credited to the 906 [statement of profit and loss]; or

(iif) the amount of loss on transfer of units referred to in clause (xvii) of section 47 computed by taking into account the cost of the shares exchanged with units referred to in the said clause or the carrying amount of the shares at the time of exchange where such shares are carried at a value other than the cost through profit or loss account, as the case 907 [may be; or]

908[(iig) the amount of income by way of royalty in respect of patent chargeable to tax under section 115BBF;]

909[(iih) the aggregate amount of unabsorbed depreciation and loss brought forward in case of a company against whom an application for corporate insolvency resolution process has been admitted by the Adjudicating Authority under section 7 or section 9or section 10 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016).

Explanation.- For the purposes of this clause, the expression "Adjudicating Authority" shall have the meaning assigned to it in clause (1) of section 5 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016) and the loss shall not include depreciation; or']

910 [(iii) the amount of loss brought forward or unabsorbed depreciation, whichever is less as per books of account 911 [in case of a company other than the company referred to in clause (iih)].

Explanation : For the purposes of this clause,”

1. the loss shall not include depreciation;

2. the provisions of this clause shall not apply if the amount of loss brought forward or unabsorbed depreciation, is nil; or]

912[***]

(vii) the amount of profits of sick industrial company for the assessment year commencing on and from the assessment year relevant to the previous year in which the said company has become a sick industrial company under sub-section (1) of section 17 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986) and ending with the assessment year during which the entire net worth of such company becomes equal to or exceeds the accumulated losses; Explanation : For the purposes of this clause, “net worth” shall have the meaning assigned to it in clause (ga) of sub-section (1) of section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986);

913[(viii) the amount of deferred tax, if any such amount is credited to the 914 [statement of profit and loss].]

915[(k) the amount of gain on transfer of units referred to in clause (xvii) of section 47 computed by taking into account the cost of the shares exchanged with units referred to in the said clause or the carrying amount of the shares at the time of exchange where such shares are carried at a value other than the cost through profit or loss account, as the case may be;]

916 [Explanation 2: For the purposes of clause (a) of Explanation 1, the amount of income-tax shall include“

1. any tax on distributed profits under section 115-O or on distributed income under section 115R;

2. any interest charged under this Act;

3. surcharge, if any, as levied by the Central Acts from time to time;

4. Education Cess on income-tax, if any, as levied by the Central Acts from time to time; and

5. Secondary and Higher Education Cess on income-tax, if any, as levied by the Central Acts from time to time.]

917 [Explanation 3.- For the removal of doubts, it is hereby clarified that for the purposes of this section, the assessee, being a company to which the 918 [second proviso to sub-section (1) of section 129 of the Companies Act, 2013 (18 of 2013)] is applicable, has, for an assessment year commencing on or before the 1st day of April, 2012, an option to prepare its 919 [statement of profit and loss] for the relevant previous year either in accordance with the provisions of 920 [Schedule III to the Companies Act, 2013 (18 of 2013)] or in accordance with the provisions of the Act governing such company.]

921 [Explanation 4.-For the removal of doubts, it is hereby clarified that the provisions of this section shall not be applicable and shall be deemed never to have been applicable to an assessee, being a foreign company, if-

1. the assessee is a resident of a country or a specified territory with which India has an agreement referred to in subsection (1) of section 90 or the Central Government has adopted any agreement under sub-section (1) of section 90A and the assessee does not have a permanent establishment in India in accordance with the provisions of such agreement; or

2. the assessee is a resident of a country with which India does not have an agreement of the nature referred to in clause (i) and the assessee is not required to seek registration under any law for the time being in force relating to companies.

922 [Explanation 4A.- For the removal of doubts, it is hereby clarified that the provisions of this section shall not be applicable and shall be deemed never to have been applicable to an assessee, being a foreign company, where its total income comprises solely of profits and gains from business referred to in section 44B or section 44BB or section 44BBA or section 44BBB and such income has been offered to tax at the rates specified in those sections.]

923 [924 [Explanation 5.-For the purposes of sub-section (2), the expression "securities" shall have the same meaning as assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956).]]

925 [(2A) For a company whose financial statements are drawn up in compliance to the Indian Accounting Standards specified in Annexure to the Companies (Indian Accounting Standards) Rules, 2015, the book profit as computed in accordance with Explanation 1 to sub-section (2) shall be further-

1. increased by all amounts credited to other comprehensive income in the statement of profit and loss under the head "Items that will not be re-classified to profit or loss";

2. decreased by all amounts debited to other comprehensive income in the statement of profit and loss under the head "Items that will not be re-classified to profit or loss";

3. increased by amounts or aggregate of the amounts debited to the statement of profit and loss on distribution of non-cash assets to shareholders in a demerger in accordance with Appendix A of the Indian Accounting Standards 10;

4. decreased by all amounts or aggregate of the amounts credited to the statement of profit and loss on distribution of non-cash assets to shareholders in a demerger in accordance with Appendix A of the Indian Accounting Standards 10:

Provided that nothing contained in clause (a) or clause (b) shall apply to the amount credited or debited to other comprehensive income under the head "Items that will not be re-classified to profit or loss" in respect of-

1. revaluation surplus for assets in accordance with the Indian Accounting Standards 16 and Indian Accounting Standards 38; or

2. gains or losses from investments in equity instruments designated at fair value through other comprehensive income in accordance with the Indian Accounting Standards 109:

Provided further that the book profit of the previous year in which the asset or investment referred to in the first proviso is retired, disposed, realised or otherwise transferred shall be increased or decreased, as the case may be, by the amount or the aggregate of the amounts referred to in the first proviso for the previous year or any of the preceding previous years and relatable to such asset or investment.

(2B) In the case of a resulting company, where the property and the liabilities of the undertaking or undertakings being received by it are recorded at values different from values appearing in the books of account of the demerged company immediately before the demerger, any change in such value shall be ignored for the purpose of computation of book profit of the resulting company under this section.

(2C) For a company referred to in sub-section (2A), the book profit of the year of convergence and each of the following four previous years, shall be further increased or decreased, as the case may be, by one-fifth of the transition amount:

Provided that the book profit of the previous year in which the asset or investment referred to in sub-clauses (B) to (E) of clause (iii) of the Explanation is retired, disposed, realised or otherwise transferred, shall be increased or decreased, as the case may be, by the amount or the aggregate of the amounts referred to in the said sub-clauses relatable to such asset or investment:

Provided further that the book profit of the previous year in which the foreign operation referred to in sub-clause (F) of clause (iii) of the Explanation is disposed or otherwise transferred, shall be increased or decreased, as the case may be, by the amount or the aggregate of the amounts referred to in the said sub-clauses relatable to such foreign operations.

Explanation.-For the purposes of this sub-section, the expression-

1. "year of convergence" means the previous year within which the convergence date falls;

2. "convergence date" means the first day of the first Indian Accounting Standards reporting period as defined in the Indian Accounting Standards 101;

3. "transition amount" means the amount or the aggregate of the amounts adjusted in the other equity (excluding capital reserve and securities premium reserve) on the convergence date but not including the following:-

   1. amount or aggregate of the amounts adjusted in the other comprehensive income on the convergence date which shall be subsequently re-classified to the profit or loss;

   2. revaluation surplus for assets in accordance with the Indian Accounting Standards 16 and Indian Accounting Standards 38 adjusted on the convergence date;

   3. gains or losses from investments in equity instruments designated at fair value through other comprehensive income in accordance with the Indian Accounting Standards 109 adjusted on the convergence date;

   4. adjustments relating to items of property, plant and equipment and intangible assets recorded at fair value as deemed cost in accordance with paragraphs D5 and D7 of the Indian Accounting Standards 101 on the convergence date;

   5. adjustments relating to investments in subsidiaries, joint ventures and associates recorded at fair value as deemed cost in accordance with paragraph D15 of the Indian Accounting Standards 101 on the convergence date; and

   6. adjustments relating to cumulative translation differences of a foreign operation in accordance with paragraph D13 of the Indian Accounting Standards 101 on the convergence date.]

926[(2D) In the case of an assessee being a company, where there is an increase in book profit of the previous year due to income of past year or years included in the book profit on account of an advance pricing agreement entered into by the assessee under Section 92-CC or on account of secondary adjustment required to be made under Section 92-CE, the Assessing Officer shall, on an application made to him in this behalf by the asssessee, recomputed the book profit of the past year or years and tax payable, if any, by the assessee during the previous year under sub-section (1), in such manner as may be prescribed and the provisions of Section 154 shall, so far as may be, apply and the period of four years specified in sub-section (7) of that section shall be reckoned from the end of the financial year in which the said application is received by the Assessing Officer:

Provided that the provisions of this sub-section shall apply only if the assessee has not utilised the credit of tax paid under this section in any subsequent assessment year under Section 115-JAA:

Provided further that the provisions of this sub-section shall also apply to an assessment year beginning on or before the 1st day of April, 2020 and notwithstanding anything contained in any other provisions of this Act, no interest shall be payable to such assessee on the refund arising on account of the provisions of this sub-section.]

3. Nothing contained in sub-section (1) shall affect the determination of the amounts in relation to the relevant previous year to be carried forward to the subsequent year or years under the provisions of sub-section (2) of section 32 or sub-section (3) of section 32A or clause (ii) of sub-section (1) of section 72 or section 73 or section 74 or sub-section (3) of section 74A.

4. Every company to which this section applies, shall furnish a report in the prescribed form927 from an accountant as defined in the Explanation below subsection (2) of section 288, certifying that the book profit has been computed in accordance with the provisions of this section 928[before the specified date referred to in section 44AB] or along with the return of income furnished in response to a notice under clause (i) of sub-section (1) of section 142.

5. Save as otherwise provided in this section, all other provisions of this Act shall apply to every assessee, being a company, mentioned in this section.]

929[(5A) The provisions of this section shall not apply to,-

1. any income accruing or arising to a company from life insurance business referred to in section 115B;

2. a person who has exercised the option referred to under section 115BAA or section 115BAB.]

930 [(6) The provisions of this section shall not apply to the income accrued or arising on or after the 1st day of April, 2005 from any business carried on, or services rendered, by an entrepreneur or a Developer, in a Unit or Special Economic Zone, as the case may be.]

931 [Provided that the provisions of this sub-section shall cease to have effect in respect of any previous year relevant to the assessment year commencing on or after the 1st day of April, 2012.]

932 [(7) Notwithstanding anything contained in sub-section (1), where the assessee referred to therein, is a unit located in an International Financial Services Centre and derives its income solely in convertible foreign exchange, the provisions of sub-section (1) shall have the effect as if for the words "eighteen and one-half per cent." wherever occurring in that sub-section, the words "nine per cent." had been substituted.

Explanation.-For the purposes of this sub-section,-

1. "International Financial Services Centre" shall have the same meaning as assigned to it in clause (q) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005);

2. "unit" means a unit established in an International Financial Services Centre;

3. "convertible foreign exchange" means a foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purposes of the Foreign Exchange Management Act, 1999 (42 of 1999) and the rules made thereunder.]

CHAPTER XIIBASPECIAL PROVISIONS RELATING TO CERTAIN 933[PERSONS OTHER THAN A COMPANY]

Section 115JC Special provisions for payment of tax by certain persons other than a company

1. Notwithstanding anything contained in this Act, where the regular income-tax payable for a previous year by a person, other than a company, is less than the alternate minimum tax payable for such previous year, the adjusted total income shall be deemed to be the total income of that person for such previous year and he shall be liable to pay income-tax on such total income at the rate of eighteen and one-half per cent.

2. Adjusted total income referred to in sub-section (1) shall be the total income before giving effect to this Chapter as increased by-

1. deductions claimed, if any, under any section (other than section 80P) included in Chapter VI-A under the heading "C.-Deductions in respect of certain incomes"; 934 [***]

2. deduction claimed, if any, 935 [under section 10AA; and].

936 [(iii) deduction claimed, if any, under section 35AD as reduced by the amount of depreciation allowable in accordance with the provisions of section 32 as if no deduction under section 35AD was allowed in respect of the assets on which the deduction under that section is claimed.]

3. Every person to whom this section applies shall obtain a report, 937[before the specified date referred to in section 44AB, in such form as may be prescribed, from an accountant referred to in the Explanation below sub-section (2) of section 288, certifying that the adjusted total income and the alternate minimum tax have been computed in accordance with the provisions of this Chapter and furnish such report by that date].

938[(4) Notwithstanding anything contained in sub-section (1), where the person referred to therein, is a

1. unit located in an International Financial Services Centre and derives its income solely in convertible foreign exchange, the provisions of sub-section (1) shall have effect as if for the words “eighteen and one-half per cent.”, the words “nine per cent.” had been substituted;

2. co-operative society, the provisions of sub-section (1) shall have effect as if for the words “eighteen and one-half per cent.”, the words “fifteen per cent.” had been substituted.]

939[(5) The provisions of this section shall not apply to a person who has exercised the option referred to in section 115BAC or section 115BAD.] 940

Section 115JD - Tax credit for alternate minimum tax

1. The credit for tax paid by 941 [a person under section 115JC shall be allowed to him] in accordance with the provisions of this section.

2. The tax credit of an assessment year to be allowed under sub-section (1) shall be the excess of alternate minimum tax paid over the regular income-tax payable of that year.

942 [Provided that where the amount of tax credit in respect of any income-tax paid in any country or specified territory outside India under section 90 or section 90A or section 91, allowed against the alternate minimum tax payable, exceeds the amount of the tax credit admissible against the regular income-tax payable by the assessee, then, while computing the amount of credit under this sub-section, such excess amount shall be ignored.]

3. No interest shall be payable on tax credit allowed under sub-section (1).

4. The amount of tax credit determined under sub-section (2) shall be carried forward and set off in accordance with the provisions of sub-sections (5) and (6) but such carry forward shall not be allowed beyond the 943[fifteenth assessment year] immediately succeeding the assessment year for which tax credit becomes allowable under sub-section (1).

5. In any assessment year in which the regular income-tax exceeds the alternate minimum tax, the tax credit shall be allowed to be set off to the extent of the excess of regular income-tax over the alternate minimum tax and the balance of the tax credit, if any, shall be carried forward.

6. If the amount of regular income-tax or the alternate minimum tax is reduced or increased as a result of any order passed under this Act, the amount of tax credit allowed under this section shall also be varied accordingly.]

   944[(7) The provisions of this section shall not apply to a person who has exercised the option referred to in section 115BAC or section 115BAD.]

Section 115JF - Interpretation in this Chapter

In this Chapter-

1. "accountant" shall have the same meaning as in the Explanation below sub-section (2) of section 288;

945 [(b) "alternate minimum tax" means the amount of tax computed on adjusted total income,-

946[(i) in case of an assessee being a unit referred to in clause (i) of sub-section (4) of section 115JC, at the rate of nine per cent.;

(ia) in case of an assessee, being a co-operative society referred to in clause (ii) of sub-section (4) of section 115JC, at the rate of fifteen per cent.;]

(ii) in any other case, at a rate of eighteen and one-half per cent.;]

947 [(ba) "convertible foreign exchange" means a foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purpose of the Foreign Exchange Management Act, 1999 (42 of 1999) and the rules made there under;

(bb) "International Financial Services Centre" shall have the meaning assigned to it in clause (q) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005);]

(c) 948 [***]

(d) "regular income-tax" means the income-tax payable for a previous year by 949 [a person on his total income] in accordance with the provisions of this Act other than the provisions of this Chapter.]

950 [(e) "unit" means a unit established in an International Financial Services Centre.]

Section 115JE - Application of other provisions of this Act

Save as otherwise provided in this Chapter, all other provisions of this Act shall apply to 951 [a person] referred to in this Chapter.

Section 155JEE - Application of this Chapter to certain persons

952 [(1) The provisions of this Chapter shall apply to a person who has claimed any deduction under-

1. any section (other than section 80P) included in Chapter VI-A under the heading "C.-Deductions in respect of certain incomes"; or

953[(b) section 10AA; or

(c) section 35AD.]

(2) The provisions of this Chapter shall not apply to an individual or a Hindu undivided family or an association of persons or a body of individuals, whether incorporated or not, or an artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2, if the adjusted total income of such person does not exceed twenty lakh rupees.]

954[(3) Notwithstanding anything contained in sub-section (1) or subsection (2), the credit for tax paid under section 115JC shall be allowed in accordance with the provisions of section 115JD.]   

Section 115JG - Conversion of an Indian branch of Foreign Company into subsidiary Indian company

955[(1) Where a foreign company is engaged in the business of banking in India through its branch situate in India and such branch is converted into a subsidiary company thereof, being an Indian company (hereafter referred to as an Indian subsidiary company) in accordance with the scheme framed by the Reserve Bank of India, then, notwithstanding anything contained in the Act and subject to the conditions as may be notified by the Central Government in this behalf,-

1. the capital gains arising from such conversion shall not be chargeable to tax in the assessment year relevant to the previous year in which such conversion takes place;

2. the provisions of this Act relating to treatment of unabsorbed depreciation, set off or carry forward and set off of losses, tax credit in respect of tax paid on deemed income relating to certain companies and the computation of income in the case of the foreign company and the Indian subsidiary company shall apply with such exceptions, modifications and adaptations as may be specified in that notification;

(2) In case of failure to comply with any of the conditions specified in the scheme or in the notification issued under sub-section (1), all the provisions of this Act shall apply to the foreign company and the said Indian subsidiary company without any benefit, exemption or relief under sub-section (1).

(3) Where, in a previous year, any benefit, exemption or relief has been claimed and granted to the foreign company or the Indian subsidiary company in accordance with the provisions of sub-section (1) and, subsequently, there is failure to comply with any of the conditions specified in the scheme or in the notification issued under sub-section (1), then,-

1. such benefit, exemption or relief shall be deemed to have been wrongly allowed;

2. the Assessing Officer may, notwithstanding anything contained in this Act, re-compute the total income of the assessee for the said previous year and make the necessary amendment; and

3. the provisions of section 154 shall, so far as may be, apply thereto and the period of four years specified in sub-section (7) of that section being reckoned from the end of the previous year in which the failure to comply with the condition referred to in sub-section (1) takes place.

(4) Every notification issued under this section shall be laid before each House of Parliament;]

956 [CHAPTER XII-BC-SPECIAL PROVISIONS RELATING TO FOREIGN COMPANY SAID TO BE RESIDENT IN INDIA

Section 115JH - Foreign company said to be resident in India

1. Where a foreign company is said to be resident in India in any previous year and such foreign company has not been resident in India in any of the previous years preceding the said previous year, then, notwithstanding anything contained in this Act and subject to the conditions as may be notified by the Central Government in this behalf, the provisions of this Act relating to the computation of total income, treatment of unabsorbed depreciation, set off or carry forward and set off of losses, collection and recovery and special provisions relating to avoidance of tax shall apply with such exceptions, modifications and adaptations as may be specified in that notification for the said previous year:

Provided that where the determination regarding foreign company to be resident in India has been made in the assessment proceedings relevant to any previous year, then, the provisions of this sub-section shall also apply in respect of any other previous year, succeeding such previous year, if the foreign company is resident in India in that previous year and the previous year ends on or before the date on which such assessment proceeding is completed.

2. Where, in a previous year, any benefit, exemption or relief has been claimed and granted to the foreign company in accordance with the provisions of sub-section (1), and, subsequently, there is failure to comply with any of the conditions specified in the notification issued under sub-section (1), then,-

1. such benefit, exemption or relief shall be deemed to have been wrongly allowed;

2. the Assessing Officer may, notwithstanding anything contained in this Act, re-compute the total income of the assessee for the said previous year and make the necessary amendment as if the exceptions, modifications and adaptations referred to in sub-section (1) did not apply; and

3. the provisions of section 154 shall, so far as may be, apply thereto and the period of four years specified in sub-section (7) of that section being reckoned from the end of the previous year in which the failure to comply with the conditions referred to in sub-section (1) takes place.

   3. Every notification issued under this section shall be laid before each House of Parliament.]

Chapter XII-C - SPECIAL PROVISIONS RELATING TO RETAIL TRADE, ETC

[Chapter XII-C, consisting of sections 115K to 115N, omitted by the Finance Act, 1997, w.e.f. 1-4-1998. Earlier Chapter XII-C was inserted by the Finance Act, 1992, w.e.f. 1-4-1993.]

Section 115K - Omitted

957 [***]

Section 115L - Omitted

958 [***]

Section 115M - Omitted

959 [***]

Section 115N - Omitted

960 [***]

961 [CHAPTER XII-D -SPECIAL PROVISIONS RELATING TO TAX ON DISTRIBUTED PROFITS OF DOMESTIC COMPANIES

Section 115O - Tax on distributed profits of domestic companies

962 [(1) Notwithstanding anything contained in any other provision of this Act and subject to the provisions of this section, in addition to the income-tax chargeable in respect of the total income of a domestic company for any assessment year, any amount declared, distributed or paid by such company by way of dividends (whether interim or otherwise) on or after the 1st day of April, 2003 963[but on or before the 31st day of March, 2020], whether out of current or accumulated profits shall be charged to additional income-tax (hereafter referred to as tax on distributed profits) 964 [at the rate of fifteen per cent].]

965 [Provided that in respect of dividend referred to in sub-clause (e) of clause (22) of section 2, this sub-section shall have effect as if for the words "fifteen per cent.", the words "thirty per cent." had been substituted;]

966 [(1A) The amount referred to in sub-section (1) shall be reduced by,-

967 [(i) the amount of dividend, if any, received by the domestic company during the financial year, if such dividend is received from its subsidiary and,-

1. where such subsidiary is a domestic company, the subsidiary has paid the tax which is payable under this section on such dividend; or

2. where such subsidiary is a foreign company, the tax is payable by the domestic company under section 115BBD on such dividend:

Provided that the same amount of dividend shall not be taken into account for reduction more than once;]

(ii) the amount of dividend, if any, paid to any person for, or on behalf of, the New Pension System Trust referred to in clause (44) of section 10.

Explanation.- For the purposes of this sub-section, a company shall be a subsidiary of another company, if such other company, holds more than half in nominal value of the equity share capital of the company.]

968 [(1B) For the purposes of determining the tax on distributed profits payable in accordance with this section, any amount by way of dividends referred to in subsection (1) as reduced by the amount referred to in sub-section (1A) [hereafter referred to as net distributed profits], shall be increased to such amount as would, after reduction of the tax on such increased amount at the rate specified in sub-section (1), be equal to the net distributed profits.]

969 [Provided that this sub-section shall not apply in respect of dividend referred to in sub-clause (e) of clause (22) of section 2.]

(2) Notwithstanding that no income-tax is payable by a domestic company on its total income computed in accordance with the provisions of this Act, the tax on distributed profits under sub-section (1) shall be payable by such company.

(3) The principal officer of the domestic company and the company shall be liable to pay the tax on distributed profits to the credit of the Central Government within fourteen days from the date of”

1. declaration of any dividend; or

2. distribution of any dividend; or

3. payment of any dividend, whichever is earliest.

(4) The tax on distributed profits so paid by the company shall be treated as the final payment of tax in respect of the amount declared, distributed or paid as dividends and no further credit therefore shall be claimed by the company or by any other person in respect of the amount of tax so paid.

(5) No deduction under any other provision of this Act shall be allowed to the company or a shareholder in respect of the amount which has been charged to tax under sub-section (1) or the tax thereon.

970 [(6) Notwithstanding anything contained in this section, no tax on distributed profits shall be chargeable in respect of the total income of an undertaking or enterprise engaged in developing or developing and operating or developing, operating and maintaining a Special Economic Zone for any assessment year on any amount declared, distributed or paid by such Developer or enterprise, by way of dividends (whether interim or otherwise) on or after the 1st day of April, 2005 out of its current income either in the hands of the Developer or enterprise or the person receiving such dividend 971 [***]

972 [Provided that the provisions of this sub-section shall cease to have effect from the 1st day of June, 2011.]

973 [(7) No tax on distributed profits shall be chargeable under this section in respect of any amount declared, distributed or paid by the specified domestic company by way of dividends (whether interim or otherwise) to a business trust out of its current income on or after the specified date:

Provided that nothing contained in this sub-section shall apply in respect of any amount declared, distributed or paid, at any time, by the specified domestic company by way of dividends (whether interim or otherwise) out of its accumulated profits and current profits up to the specified date.

Explanation.-For the purposes of this sub-section,-

1. "specified domestic company" means a domestic company in which a business trust has become the holder of whole of the nominal value of equity share capital of the company (excluding the equity share capital required to be held mandatorily by any other person in accordance with any law for the time being in force or any directions of Government or any regulatory authority, or equity share capital held by any Government or Government body);

2. "specified date" means the date of acquisition by the business trust of such holding as is referred to in clause (a).]

974 [(8) Notwithstanding anything contained in this section, no tax on distributed profits shall be chargeable in respect of the total income of a company, being a unit of an International Financial Services Centre, deriving income solely in convertible foreign exchange, for any assessment year on any amount declared, distributed or paid by such company, by way of dividends (whether interim or otherwise) on or after the 1st day of April, 2017, out of its current income, either in the hands of the company or the person receiving such dividend.

Explanation.-For the purposes of this sub-section,-

1. "International Financial Services Centre" shall have the same meaning as assigned to it in clause (q) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005);

2. "unit" means a unit established in an International Financial Services Centre, on or after the 1st day of April, 2016;

3. "convertible foreign exchange" means foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purposes of the Foreign Exchange Management Act, 1999 (42 of 1999) and the rules made thereunder.]

Section 115P - Interest payable for non-payment of tax by domestic companies

Where the principal officer of a domestic company and the company fails to pay the whole or any part of the tax on distributed profits referred to in sub­section (1) of section 115-O, within the time allowed under sub-section (3) of that section, he or it shall be liable to pay simple interest at the rate of 975 [one per cent] for every month or part thereof on the amount of such tax for the period beginning on the date immediately after the last date on which such tax was payable and ending with the date on which the tax is actually paid.

Section 115Q - When company is deemed to be in default

If any principal officer of a domestic company and the company does not pay tax on distributed profits in accordance with the provisions of section 115-O, then, he or it shall be deemed to be an assessee in default in respect of the amount of tax payable by him or it and all the provisions of this Act for the collection and recovery of income-tax shall apply.

976[Provided that the provisions of this sub-section shall not apply to such buy-back of shares (being the shares listed on a recognised stock exchange), in respect of which public announcement has been made on or before the 5th day of July, 2019 in accordance with the provisions of the Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018 made under the Securities and Exchange Board of India Act, 1992 (15 of 1992).]

977 [***]

Section 115QA - Tax on distributed income to shareholders

978 [(1) Notwithstanding anything contained in any other provision of this Act, in addition to the income-tax chargeable in respect of the total income of a domestic company for any assessment year, any amount of distributed income by the company on buy-back of shares (not being shares listed on a recognised stock exchange) from a shareholder shall be charged to tax and such company shall be liable to pay additional income-tax at the rate of twenty per cent. on the distributed income.

Explanation.-For the purposes of this section,-

1. "buy-back" means purchase by a company of its own shares in accordance with the provisions of 979[any law for the time being in force relating to companies];

2. "distributed income" means the consideration paid by the company on buy-back of shares as reduced by 980 [the amount, which was received by the company for issue of such shares, determined in the manner as may be prescribed].

   (2)   Notwithstanding that no income-tax is payable by a domestic company on its total income computed in accordance with the provisions of this Act, the tax on the distributed income under sub-section (1) shall be payable by such company.

   (3)   The principal officer of the domestic company and the company shall be liable to pay the tax to the credit of the Central Government within fourteen days from the date of payment of any consideration to the shareholder on buy-back of shares referred to in sub-section (1).

   (4)   The tax on the distributed income by the company shall be treated as the final payment of tax in respect of the said income and no further credit therefor shall be claimed by the company or by any other person in respect of the amount of tax so paid.

   (5)    No deduction under any other provision of this Act shall be allowed to the company or a shareholder in respect of the income which has been charged to tax under sub-section (1) or the tax thereon.] 

Section 115QB - Interest payable for non-payment of tax by company

981 [Where the principal officer of the domestic company and the company fails to pay the whole or any part of the tax on the distributed income referred to in sub-section (1) of section 115QA, within the time allowed under sub-section (3) of that section, he or it shall be liable to pay simple interest at the rate of one per cent. for every month or part thereof on the amount of such tax for the period beginning on the date immediately after the last date on which such tax was payable and ending with the date on which the tax is actually paid.]

Section 115QC - When company is deemed to be assessee in default

982 [If any principal officer of a domestic company and the company does not pay tax on distributed income in accordance with the provisions of section 115QA, then, he or it shall be deemed to be an assessee in default in respect of the amount of tax payable by him or it and all the provisions of this Act for the collection and recovery of income-tax shall apply.]   

983 [CHAPTER XII-E - SPECIAL PROVISIONS RELATING TO TAX ON DISTRIBUTED INCOME

Section 115R - Tax on distributed income to unit holders

1. Notwithstanding anything contained in any other provisions of this Act and section 32 of the Unit Trust of India Act, 1963 (52 of 1963), 984 [any amount of 985[income distributed to any person being an individual or a Hindu undivided family] on or before the 31st day of March, 2002 by the Unit Trust of India to its unit-holders] shall be chargeable to tax and the Unit Trust of India shall be liable to pay additional income-tax on such distributed income at the rate of 986 [ten per cent] :

Provided that nothing contained in this sub-section shall apply in respect of any income distributed to a unit-holder of open-ended equity-oriented funds in respect of any distribution made from such fund for a period of three years commencing from the 1st day of April, 1999.

987 [(2) Notwithstanding anything contained in any other provision of this Act, any amount of income distributed by the specified company or a Mutual Fund to its unit holders 988[on or before the 31st day of March, 2020] shall be chargeable to tax and such specified company or Mutual Fund shall be liable to pay additional income-tax on such distributed income 989 [at the rate of”

990[(i) twenty-five per cent on income distributed to any person being an individual or a Hindu undivided family by a money market mutual fund or a liquid fund;

(ii) thirty per cent. on income distributed to any other person by a money market mutual fund or a liquid fund;

(iii) ten per cent on income distributed to any person by an equity oriented fund;

(iv) twenty-five per cent on income distributed to any person being an individual or a Hindu undivided family by a fund other than a money market mutual fund or a liquid fund or an equity oriented fund; and

(v) thirty per cent on income distributed to any other person by a fund other than a money market mutual fund or a liquid fund or an equity oriented fund:]]

991 [Provided that where any income is distributed by a mutual fund under an infrastructure debt fund scheme to a non-resident (not being a company) or a foreign company, the mutual fund shall be liable to pay additional income-tax at the rate of five per cent. on income so distributed:]

992 [Provided further that] nothing contained in this sub-section shall apply in respect of any income distributed,“

1. by the Administrator of the specified undertaking, to the unit holders; or

[***]

993 [Explanation.-For the purposes of this sub-section,-

1. "administrator" and "specified company" shall have the meanings respectively assigned to them in the Explanation to clause (35) of section 10;

2. "infrastructure debt fund scheme" shall have the same meaning as assigned to it in clause (1) of regulation 49L of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 made under the Securities and Exchange Board of India Act, 1992(15 of 1992).]

994[(2A) For the purposes of determining the additional income-tax payable in accordance with sub-section (2), the amount of distributed income referred therein shall be increased to such amount as would, after reduction of the additional income-tax on such increased amount at the rate specified in subsection (2), be equal to the amount of income distributed by the Mutual Fund.]

(3) The person responsible for making payment of the income distributed by the Unit Trust of India or a Mutual Fund and the Unit Trust of India or the Mutual Fund, as the case may be, shall be liable to pay tax to the credit of the Central Government within fourteen days from the date of distribution or payment of such income, whichever is earlier.

995[***]

(4) No deduction under any other provision of this Act shall be allowed to the Unit Trust of India or to a Mutual Fund in respect of the income which has been charged to tax under sub-section (1) or sub-section (2).

Section 115S - Interest payable for non-payment of tax

Where the person responsible for making payment of the income distributed by the 996 [specified company as referred to in clause (h) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002) or a Mutual Fund and the specified company] or the Mutual Fund, as the case may be, fails to pay the whole or any part of the tax referred to in sub-section (1) or sub-section (2) of section 115R, within the time allowed under sub-section (3) of that section, he or it shall be liable to pay simple interest at the rate of 997 [one per cent] every month or part thereof on the amount of such tax for the period beginning on the date immediately after the last date on which such tax was payable and ending with the date on which the tax is actually paid.

Section 115T - Unit trust of India or mutual fund to be an assessee in default

If any person responsible for making payment of the income distributed by the 998 [specified company as referred to in clause (h) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002) or a Mutual Fund and the specified company] or the Mutual Fund, as the case may be, does not pay tax, as is referred to in sub-section (1) or sub-section (2) of section 115R, then, he or it shall be deemed to be an assessee in default in respect of the amount of tax payable by him or it and all the provisions of this Act for the collection and recovery of income-tax shall apply.

Explanation : For the purposes of this Chapter,”

1. “Mutual Fund” means a Mutual Fund specified under clause (23D) of section 10;

999 [(b) "equity oriented fund" means a fund referred to in clause (a) of the Explanation to section 112A and the Unit Scheme, 1964 made by the Unit Trust of India;]

(c) “Unit Trust of India” means the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963);]

1000 [(d) “money market mutual fund” means a money market mutual fund as defined in sub-clause (p) of clause 2 of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996;]

1001 [(e) “liquid fund” means a scheme or plan of a mutual fund which is classified by the Securities and Exchange Board of India as a liquid fund in accordance with the guidelines issued by it in this behalf under the Securities and Exchange Board of India Act, 1992 (15 of 1992) or regulations made thereunder.]

Section 115TA - Tax on distributed income to investors

1002 [(1) Notwithstanding anything contained in any other provisions of the Act, any amount of income distributed by the securitisation trust to its investors shall be chargeable to tax and such securitisation trust shall be liable to pay additional income-tax on such distributed income at the rate of-

1. twenty-five per cent. on income distributed to any person being an individual or a Hindu undivided family;

2. thirty per cent. on income distributed to any other person:

Provided that nothing contained in this sub-section shall apply in respect of any income distributed by the securitisation trust to any person in whose case income, irrespective of its nature and source, is not chargeable to tax under the Act.

(2) The person responsible for making payment of the income distributed by the securitisation trust shall be liable to pay tax to the credit of the Central Government within fourteen days from the date of distribution or payment of such income, whichever is earlier.

1003 (3) [***]

(4) No deduction under any other provisions of this Act shall be allowed to the securitisation trust in respect of the income which has been charged to tax under sub-section (1).]

1004 [(5) Nothing contained in this section shall apply in respect of any income distributed by a securitisation trust to its investors on or after the 1st day of June, 2016.]

Section 115TB - Interest payable for non-payment of tax

1005 [Where the person responsible for making payment of the income distributed by the securitisation trust and the securitisation trust fails to pay the whole or any part of the tax referred to in sub-section (1) of section 115TA, within the time allowed under sub-section (2) of that section, he or it shall be liable to pay simple interest at the rate of one per cent. every month or part thereof on the amount of such tax for the period beginning on the date immediately after the last date on which such tax was payable and ending with the date on which the tax is actually paid.]

Section 115TC - Securitisation trust to be assessee in default

1006 [If any person responsible for making payment of the income distributed by the securitisation trust and the securitisation trust does not pay tax, as referred to in sub-section (1) of section 115TA, then, he or it shall be deemed to be an assessee in default in respect of the amount of tax payable by him or it and all the provisions of this Act for the collection and recovery of income-tax shall apply.

Explanation.-For the purposes of this Chapter,-

1. "investor" means a person who is holder of any securitised debt instrument or securities 1007 [or security receipt] issued by the securitisation trust;

2. "securities" means debt securities issued by a Special Purpose Vehicle as referred to in the guidelines on securitisation of standard assets issued by the Reserve Bank of India;

3. "securitised debt instrument" shall have the same meaning as assigned to it in clause (s) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Public Offer and Listing of Securitised Debt Instruments) Regulations, 2008 made under the Securities and Exchange Board of India Act, 1992(15 of 1992) and the Securities Contracts (Regulation) Act, 1956(42 of 1956);

4. "securitisation trust" means a trust, being a-

1. "special purpose distinct entity" as defined in clause (u) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Public Offer and Listing of Securitised Debt Instruments) Regulations, 2008 made under the Securities and Exchange Board of India Act, 1992(15 of 1992) and the Securities Contracts (Regulation) Act, 1956(42 of 1956), and regulated under the said regulations; or

2. "Special Purpose Vehicle" as defined in, and regulated by, the guidelines on securitisation of standard assets issued by the Reserve Bank of India 1008 [; or]

1009 [(iii) trust set-up by a securitisation company or a reconstruction company formed, for the purposes of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002), or in pursuance of any guidelines or directions issued for the said purposes by the Reserve Bank of India,] which fulfils such conditions, as may be prescribed.]

1010 [(e) "security receipt" shall have the same meaning as assigned to it in clause (zg) of sub-section (1) of section 2 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002).] 

Section 115TCA - Tax on income from securitisation trusts

1. Notwithstanding anything contained in this Act, any income accruing or arising to, or received by, a person, being an investor of a securitisation trust, out of investments made in the securitisation trust, shall be chargeable to income-tax in the same manner as if it were the income accruing or arising to, or received by, such person, had the investments by the securitisation trust been made directly by him.

2. The income paid or credited by the securitisation trust shall be deemed to be of the same nature and in the same proportion in the hands of the person referred to in sub-section (1), as if it had been received by, or had accrued or arisen to, the securitisation trust during the previous year.

3. The income accruing or arising to, or received by, the securitisation trust, during a previous year, if not paid or credited to the person referred to in sub-section (1), shall be deemed to have been credited to the account of the said person on the last day of the previous year in the same proportion in which such person would have been entitled to receive the income had it been paid in the previous year.

4. The person responsible for crediting or making payment of the income on behalf of securitisation trust and the securitisation trust shall furnish, within such period, as may be prescribed, to the person who is liable to tax in respect of such income and to the prescribed income-tax authority, a statement in such form and verified in such manner, giving details of the nature of the income paid or credited during the previous year and such other relevant details, as may be prescribed.

5. Any income which has been included in the total income of the person referred to in sub-section (1), in a previous year, on account of it having accrued or arisen in the said previous year, shall not be included in the total income of such person in the previous year in which such income is actually paid to him by the securitisation trust.] 1011

1012["CHAPTER XII-EB - SPECIAL PROVISIONS RELATING TO TAX ON ACCRETED INCOME OF CERTAIN TRUSTS AND INSTITUTIONS

Section 115TD - Tax on accreted income

1013[(1) Notwithstanding anything contained in this Act, where in any previous year, a specified person has.

1. converted into any form which is not eligible for grant of registration under section 12AA or section 12AB, or approval under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10;

2. merged with any entity other than an entity which is a trust or institution having objects similar to it and registered under section 12AA or section 12AB or approved under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10; or

3. failed to transfer upon dissolution all its assets to any other specified person within a period of twelve months from the end of the month in which the dissolution takes place, then, in addition to the income-tax chargeable in respect of the total income of such specified person, the accreted income of the specified person as on the specified date shall be charged to tax and such specified person shall be liable to pay additional income-tax (herein referred to as tax on accreted income) at the maximum marginal rate on the accreted income.

(2) The accreted income for the purposes of sub-section (1) means the amount by which the aggregate fair market value of the total assets of the specified person, as on the specified date, exceeds the total liability of such specified person, computed in accordance with the method of valuation, as may be prescribed:

Provided that so much of the accreted income as is attributable to the following asset and liability, if any, related to such asset, shall be ignored for the purposes of sub-section (1), namely.

1. any asset which is established to have been directly acquired by the specified person out of its income of the nature referred to in clause (1) of section 10;

2. any asset acquired by the specified person during the period beginning from the date of its creation or establishment and ending on the date from which the registration under section 12AA or section 12AB or approval under clause (23C) of section 10 became effective, if the specified person has not been allowed any benefit of sections 11 and 12 or sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10 during the said period:

Provided further that where due to the provisions of the first proviso or the second proviso to sub-section (2) of section 12A or the eighth proviso to clause (23C) of section 10, the benefit of sections 11 and 12, or sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10 have been allowed to the specified person in respect of any previous year or years beginning prior to the date from which the registration under section 12AA or section 12AB or approval under clause (23C) of section 10 is effective, then, for the purposes of clause (ii) of the first proviso, the registration or approval shall be deemed to have become effective from the first day of the earliest previous year:

Provided also that while computing the accreted income in respect of a case referred to in clause (c) of subsection (1), assets and liabilities, if any, related to such asset, which have been transferred to any other specified person within the period specified in the said clause, shall be ignored.

(3) For the purposes of sub-section (1), a specified person shall be deemed to have been converted into any form not eligible for registration under section 12AA or section 12AB or approval under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10 in a previous year, if,

1. the registration or approval granted to it under section 12AA, or section 12AB, or sub-clause (iv) or sub-clause (v) or subclause (vi) or sub-clause (via) of clause (23C) of section 10, has been cancelled; or

2. it has adopted or undertaken modification of its objects which do not conform to the conditions of registration and it.

1. has not applied for fresh registration under section 12AA, or section 12AB, or approval under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10 in the said previous year; or

2. has filed application for fresh registration under section 12AA, or section 12AB, or approval under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10 but the said application has been rejected.]

(4)   Notwithstanding that no income-tax is payable by a 1014[specified person] on its total income computed in accordance with the provisions of this Act, the tax on the accreted income under sub-section (1) shall be payable by such trust or the institution.

(5)   The principal officer or the trustee of the 1015[specified person], as the case may be, and the 1016[specified person] shall also be liable to pay the tax on accreted income to the credit of the Central Government within fourteen days from,-

1. the date on which,-

1. the period for filing appeal under section 253 against the order cancelling the registration expires and no appeal has been filed by the trust or the institution; or

2. the order in any appeal, confirming the cancellation of the registration, is received by the trust or institution, in a case referred to in clause (i) of sub-section (3);

2. the end of the previous year in a case referred to in sub-clause (a) of clause (ii) of sub-section (3);

3. the date on which,-

1. the period for filing appeal under section 253 against the order rejecting the application expires and no appeal has been filed by the 1017[specified person]; or

2. the order in any appeal, confirming the cancellation of the application, is received by the 1018[specified person], in a case referred to in sub-clause (b) of clause (ii) of sub-section (3);

4. the date of merger in a case referred to in clause (b) of sub-section (1);

5. the date on which the period of twelve months referred to in clause (c) of sub-section (1) expires.

(6)   The tax on the accreted income by the 1019[specified person] shall be treated as the final payment of tax in respect of the said income and no further credit therefor shall be claimed by the 1020[specified person] or by any other person in respect of the amount of tax so paid.

(7)   No deduction under any other provision of this Act shall be allowed to the 1021[specified person] or any other person in respect of the income which has been charged to tax under sub-section (1) or the tax thereon.

Explanation.-For the purposes of this section,-

1. "date of conversion" means,-

1. the date of the order cancelling the registration under section 12AA or 1022[section 12AB, or approval under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10], in a case referred to in clause (i) of sub-section (3); or

2. the date of adoption or modification of any object, in a case referred to in clause (ii) of sub-section (3);

2. "specified date" means,-

1. the date of conversion in a case falling under clause (a) of sub-section (1);

2. the date of merger in a case falling under clause (b) of subsection (1); and

3. the date of dissolution in a case falling under clause (c) of sub-section (1);

   1023[(iia) “specified person” means.

1. any fund or institution or trust or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or subclause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10; or

2. a trust or institution registered under section 12AA or section 12AB;]

3. registration 1024[under section 12AA or section 12AB] shall include any registration obtained under section 12A as it stood before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996).]

Section 115TE - Interest payable for non-payment of tax by 1025specified person

1026 [Where the principal officer or the trustee of the 1027[specified person] and the 1028[specified person] fails to pay the whole or any part of the tax on the accreted income referred to in sub-section (1) of section 115TD, within the time allowed under sub-section (5) of that section, he or it shall be liable to pay simple interest at the rate of one per cent. for every month or part thereof on the amount of such tax for the period beginning on the date immediately after the last date on which such tax was payable and ending with the date on which the tax is actually paid.]

1029[Explanation. For the purposes of this section, “specified person” shall have the same meaning as assigned to in clause (iia) of the Explanation to section 115TD.]

Section 115TF - When 1030specified person is deemed to be assessee in default

1031 [(1) If any principal officer or the trustee of the 1032[specified person] and the 1033[specified person] does not pay tax on accreted income in accordance with the provisions of section 115TD, then, he or it shall be deemed to be an assessee in default in respect of the amount of tax payable by him or it and all the provisions of this Act for the collection and recovery of income-tax shall apply.

(2)   Notwithstanding anything contained in sub-section (1), in a case where the tax on accreted income is payable under the circumstances referred to in clause (c) of sub-section (1) of section 115TD, the person to whom any asset forming part of the computation of accreted income under sub-section (2) thereof has been transferred, shall be deemed to be an assessee in default in respect of such tax and interest thereon and all the provisions of this Act for the collection and recovery of income-tax shall apply:

Provided that the liability of the person referred to in this sub-section shall be limited to the extent to which the asset received by him is capable of meeting the liability.]

1034[Explanation. For the purposes of this section, “specified person” shall have the same meaning as assigned to in clause (iia) of the Explanation to section 115TD.]

1035 [CHAPTER XII-F - SPECIAL PROVISIONS RELATING TO TAX ON INCOME RECEIVED FROM VENTURE CAPITAL COMPANIES AND VENTURE CAPITAL FUNDS

Section 115U - Tax on income in certain cases

1. Notwithstanding anything contained in any other provisions of this Act, any 1036 [income accruing or arising to or received] by a person out of investments made in a venture capital company or venture capital fund shall be chargeable to income-tax in the same manner as if it were the 1037 [income accruing or arising to or received] by such person had he made investments directly in the venture capital undertaking.

2. 1038[The person responsible for crediting or making] payment of the income on behalf of a venture capital company or a venture capital fund and the venture capital company or venture capital fund shall furnish, within such time as may be prescribed, 1039 [to the person who is liable to tax in respect of such income] and to the prescribed income-tax authority1040, a statement in the prescribed form1041 and verified in the prescribed manner1042, giving details of the nature of the 1043 [income paid or credited] during the previous year and such other relevant details as may be prescribed.1044

3. The 1045 [income paid or credited] by the venture capital company and the venture capital fund shall be deemed to be of the same nature and in the same proportion in the hands of1046 [the person referred to in sub-section (1) as it had been] received by, or 1047[had accrued or arisen] to, the venture capital company or the venture capital fund, as the case may be, during the previous year.

4. The provisions of Chapter XIID or Chapter XIIE or Chapter XVIIB shall not apply to the income paid by a venture capital company or venture capital fund under this chapter.

1048 [(5) The income accruing or arising to or received by the venture capital company or venture capital fund, during a previous year, from investments made in venture capital undertaking if not paid or credited to the person referred to in sub-section (1), shall be deemed to have been credited to the account of the said person on the last day of the previous year in the same proportion in which such person would have been entitled to receive the income had it been paid in the previous year]

1049 [(6) Nothing contained in this Chapter shall apply in respect of any income, of a previous year relevant to the assessment year beginning on or after the 1st day of April, 2016, accruing or arising to, or received by, a person from investments made in a venture capital company or venture capital fund, being an investment fund specified in clause (a) of the Explanation 1 to section 115UB.]

1050 [Explanation 1]: For the purposes of this Chapter “venture capital company”, “venture capital fund” and “venture capital undertaking” shall have the meanings respectively assigned to them in clause (23FB) of section 10.]

1051 [Explanation 2.-For the removal of doubts, it is hereby declared that any income which has been included in total income of the person referred to in sub-section (1) in a previous year, on account of it having accrued or arisen in the said previous year, shall not be included in the total income of such person in the previous year in which such income is actually paid to him by the venture capital company or the venture capital fund.] 

Section 115UA - Tax on income of unit holder and business trust

1. Notwithstanding anything contained in any other provisions of this Act, any income distributed by a business trust to its unit holders shall be deemed to be of the same nature and in the same proportion in the hands of the unit holder as it had been received by, or accrued to, the business trust.

2. Subject to the provisions of section 111A and section 112, the total income of a business trust shall be charged to tax at the maximum marginal rate.

3. If in any previous year, the distributed income or any part thereof, received by a unit holder from the business trust is of the nature as referred to 1052 [in 1053[***] clause (23FC)] 1054 [or clause (23FCA)] of section 10, then, such distributed income or part thereof shall be deemed to be income of such unit holder and shall be charged to tax as income of the previous year.

4. Any person responsible for making payment of the income distributed on behalf of a business trust to a unit holder shall furnish a statement to the unit holder and the prescribed authority, within such time and in such form and manner as may be prescribed, giving the details of the nature of the income paid during the previous year and such other details as may be prescribed.

1055 [[CHAPTER XII-FB - Special provisions relating to tax on income of investment funds and income received from such funds

Section 115UB - Tax on income of investment fund and its unit holders

1. Notwithstanding anything contained in any other provisions of this Act and subject to the provisions of this Chapter, any income accruing or arising to, or received by, a person, being a unit holder of an investment fund, out of investments made in the investment fund, shall be chargeable to income-tax in the same manner as if it were the income accruing or arising to, or received by, such person had the investments made by the investment fund been made directly by him.

2. Where in any previous year, the net result of computation of total income of the investment fund [without giving effect to the provisions of clause (23FBA) of section 10] is a loss under any head of income and such loss cannot be or is not wholly set-off against income under any other head of income of the said previous year, then,-

1. such loss shall be allowed to be carried forward and it shall be set-off by the investment fund in accordance with the provisions of Chapter VI; and

2. such loss shall be ignored for the purposes of sub-section (1).

   3. The income paid or credited by the investment fund shall be deemed to be of the same nature and in the same proportion in the hands of the person referred to in sub-section (1), as if it had been received by, or had accrued or arisen to, the investment fund during the previous year subject to the provisions of sub-section (2).

   4. The total income of the investment fund shall be charged to tax-

1. at the rate or rates as specified in the Finance Act of the relevant year, where such fund is a company or a firm; or

2. at maximum marginal rate in any other case.

   5. The provisions of Chapter XII-D or Chapter XII-E shall not apply to the income paid by an investment fund under this Chapter.

   6. The income accruing or arising to, or received by, the investment fund, during a previous year, if not paid or credited to the person referred to in sub-section (1), shall subject to the provisions of sub-section (2), be deemed to have been credited to the account of the said person on the last day of the previous year in the same proportion in which such person would have been entitled to receive the income had it been paid in the previous year.

   7. The person responsible for crediting or making payment of the income on behalf of an investment fund and the investment fund shall furnish, within such time as may be prescribed, to the person who is liable to tax in respect of such income and to the prescribed income-tax authority, a statement in the prescribed form and verified in such manner, giving details of the nature of the income paid or credited during the previous year and such other relevant details, as may be prescribed.

Explanation 1.-For the purposes of this Chapter,-

1. "investment fund" means any fund established or incorporated in India in the form of a trust or a company or a limited liability partnership or a body corporate which has been granted a certificate of registration as a Category I or a Category II Alternative Investment Fund and is regulated under the Securities and Exchange Board of India (Alternative Investment Fund) Regulations, 2012, made under the Securities and Exchange Board of India Act, 1992 1056[or under the International Financial Services Centres Authority Act, 2019];

2. "trust" means a trust established under the Indian Trusts Act, 1882 (2 of 1882) or under any other law for the time being in force;

3. "unit" means beneficial interest of an investor in the investment fund or a scheme of the investment fund and shall include shares or partnership interests.

Explanation 2.-For the removal of doubts, it is hereby declared that any income which has been included in total income of the person referred to in sub-section (1) in a previous year, on account of it having accrued or arisen in the said previous year, shall not be included in the total income of such person in the previous year in which such income is actually paid to him by the investment fund.]

1057 [CHAPTER XII-G1058 - SPECIAL PROVISIONS RELATING TO INCOME OF SHIPPING COMPANIES

A.-Meaning of certain expressions

Section 115V - Definitions

In this Chapter, unless the context otherwise requires,”

1. “bareboat charter” means hiring of a ship for a stipulated period on terms which give the charterer possession and control of the ship, including the right to appoint the master and crew;

2. “bareboat charter-cum-demise” means a bareboat charter where the ownership of the ship is intended to be transferred after a specified period to the company to whom it has been chartered;

3. “Director-General of Shipping” means the Director-General of Shipping appointed by the Central Government under sub-section (1) of section 7 of the Merchant Shipping Act, 1958 (44 of 1958);

4. “factory ship” includes a vessel providing processing services in respect of processing of the fishing produce;

5. “fishing vessel” shall have the meaning assigned to it in clause (12) of section 3 of the Merchant Shipping Act, 1958 (44 of 1958);

6. “pleasure craft” means a ship of a kind whose primary use is for the purposes of sport or recreation;

7. “qualifying company” means a company referred to in section 115VC;

8. “qualifying ship” means a ship referred to in section 115VD;

9. “seagoing ship” means a ship if it is certified as such by the competent authority of any country;

10. “tonnage income” means the income of a tonnage tax company computed in accordance with the provisions of this Chapter;

11. “tonnage tax activities” means the activities referred to in sub-section (1) of section 115V-I;

12. “tonnage tax company” means a qualifying company in relation to which tonnage tax option is in force;

13. “Tonnage Tax Scheme” means a scheme for computation of profits and gains of business of operating qualifying ships under the provisions of this Chapter.

Section 115VA - Computation of profits and gains from the business of operating qualifying ships

Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of a company, the income from the business of operating qualifying ships, may, at its option, be computed in accordance with the provisions of this Chapter and such income shall be deemed to be the profits and gains of such business chargeable to tax under the head “Profits and gains of business or profession”.

Section 115VB - Operating ships

For the purposes of this Chapter, a company shall be regarded as operating a ship if it operates any ship whether owned or chartered by it and includes a case where even a part of the ship has been chartered in by it in an arrangement such as slot charter, space charter or joint charter:

Provided that a company shall not be regarded as the operator of a ship which has been chartered out by it on bareboat charter-cum-demise terms or on bareboat charter terms for a period exceeding three years.

Section 115VC - Qualifying company

For the purposes of this Chapter, a company is a qualifying company if”

1. it is an Indian company;

2. the place of effective management of the company is in India;

3. it owns at least one qualifying ship; and

4. the main object of the company is to carry on the business of operating ships.

Explanation : For the purposes of this section, “place of effective management of the company” means”

4. the place where the board of directors of the company or its executive directors, as the case may be, make their decisions; or

5. in a case where the board of directors routinely approve the commercial and strategic decisions made by the executive directors or officers of the company, the place where such executive directors or officers of the company perform their functions.

Section 115VD - Qualifying ship

For the purposes of this Chapter, a ship is a qualifying ship if -

1. it is a sea going ship or vessel of fifteen net tonnage or more;

2. it is a ship registered under the Merchant Shipping Act, 1958 (44 of 1958), or a ship registered outside India in respect of which a licence has been issued by the Director-General of Shipping under section 406 or section 407 of the Merchant Shipping Act, 1958 (44 of 1958); and

3. a valid certificate in respect of such ship indicating its net tonnage is in force,-

but does not include-

1. a seagoing ship or vessel if the main purpose for which it is used is the provision of goods or services of a kind normally provided on land;

2. fishing vessels;

3. factory ships;

4. pleasure crafts;

5. harbour and river ferries;

6. offshore installations;

7. 1059[***]

8. a qualifying ship which is used as a fishing vessel for a period of more than thirty days during a previous year.

Section 115VE - Manner of computation of income under tonnage tax scheme

1. A tonnage tax company engaged in the business of operating qualifying ships shall compute the profits from such business under the Tonnage Tax Scheme.

2. The business of operating qualifying ships giving rise to income referred to in sub-section (1) of section 115VI shall be considered as a separate business (hereafter in this Chapter referred to as the tonnage tax business) distinct from all other activities or business carried on by the company.

3. The profits referred to in sub-section (1) shall be computed separately from the profits and gains from any other business.

4. The Tonnage Tax Scheme shall apply only if an option to that effect is made in accordance with the provisions of section 115VP.

5. Where a company engaged in the business of operating qualifying ships is not covered under the Tonnage Tax Scheme or, has not made an option to that effect, as the case may be, the profits and gains of such company from such business shall be computed in accordance with the other provisions of this Act.

Section 115VF - Tonnage income

Subject to the other provisions of this Chapter, the tonnage income shall be computed in accordance with section 115VG and the income so computed shall be deemed to be the profits chargeable under the head “Profits and gains of business or profession” and the relevant shipping income referred to in sub-section (1) of section 115VI shall not be chargeable to tax.

Section 115VG - Computation of tonnage income

1. The tonnage income of a tonnage tax company for a previous year shall be the aggregate of the tonnage income of each qualifying ship computed in accordance with the provisions of sub-sections (2) and (3).

2. For the purposes of sub-section (1), the tonnage income of each qualifying ship shall be the daily tonnage income of each such ship multiplied by”

   1. the number of days in the previous year; or

   2. the number of days in part of the previous year in case the ship is operated by the company as a qualifying ship for only part of the previous year, as the case may be.

3. For the purposes of sub-section (2), the daily tonnage income of a qualifying ship having tonnage referred to in column (1) of the Table below shall be the amount specified in the corresponding entry in column (2) of the Table :

1060 [TABLE

Qualifying ship having net tonnage	Amount of daily tonnage income
(1)	(2)
up to 1,000	Rs. 70 for each 100 tons
exceeding 1,000 but not more than 10,000	Rs. 700 plus Rs. 53 for each 100 tons exceeding 1,000 tons
exceeding 10,000 but not more than 25,000	Rs. 5,470 plus Rs. 42 for each 100 tons exceeding 10,000 tons
exceeding 25,000	Rs. 11,770 plus Rs. 29 for each 100 tons exceeding 25,000 tons.]

4. For the purposes of this Chapter, the tonnage shall mean the tonnage of a ship indicated in the certificate referred to in section 115VX and includes the deemed tonnage computed in the prescribed1061 manner.

Explanation : For the purposes of this sub-section, “deemed tonnage” shall be the tonnage in respect of an arrangement of purchase of slots, slot charter and an arrangement of sharing of break-bulk vessel.

5. The tonnage shall be rounded off to the nearest multiple of hundred tons and for this purpose any tonnage consisting of kilograms shall be ignored and thereafter if such tonnage is not a multiple of hundred, then, if the last figure in that amount is fifty tons or more, the tonnage shall be increased to the next higher tonnage which is a multiple of hundred and if the last figure is less than fifty tons, the tonnage shall be reduced to the next lower tonnage which is a multiple of hundred; and the tonnage so rounded off shall be the tonnage of the ship for the purposes of this section.

6. Notwithstanding anything contained in any other provision of this Act, no deduction or set-off shall be allowed in computing the tonnage income under this Chapter.

"TABLE

Qualifying ship having net tonnage	Amount of daily tonnage income
(1)	(2)
up to 1,000	Rs. 46 for each 100 tons
exceeding 1,000 but not more than 10,000	Rs. 460 plus Rs. 35 for each 100 tons exceeding 1,000 tons
exceeding 10,000 but not more than 25,000	Rs. 3,610 plus Rs. 28 for each 100 tons exceeding 10,000 tons
exceeding 25,000	Rs. 7,810 plus Rs.19 for each 100 tons exceeding 25,000 tons."

Section 115VH - Calculation in case of joint operation etc

1. Where a qualifying ship is operated by two or more companies by way of joint interest in the ship or by way of an agreement for the use of the ship and their respective shares are definite and ascertainable, the tonnage income of each such company shall be an amount equal to a share of income propor­tionate to its share of that interest.

2. Subject to the provisions of sub-section (1), where two or more companies are operators of a qualifying ship, the tonnage income of each company shall be computed as if each had been the only operator.

Section 115VI - Relevant shipping income

1. For the purposes of this Chapter, the relevant shipping income of a tonnage tax company means”

1. its profits from core activities referred to in sub-section (2);

2. its profits from incidental activities referred to in sub-section (5) :

Provided that where the aggregate of all such incomes specified in clause (ii) exceeds one-fourth per cent of the turnover from core activities referred to in sub-section (2), such excess shall not form part of the relevant shipping income for the purposes of this Chapter and shall be taxable under the other provisions of this Act.

2. The core activities of a tonnage tax company shall be”

1. its activities from operating qualifying ships; and

2. other ship-related activities mentioned as under :

   1. shipping contracts in respect of”

1. earning from pooling arrangements;

2. contracts of affreightment.

Explanation : For the purposes of this sub-clause,-

1. “pooling arrangement” means an agreement between two or more persons for providing services through a pool or operating one or more ships and sharing earnings or operating profits on the basis of mutually agreed terms;

2. “contract of affreightment” means a service contract under which a tonnage tax company agrees to transport a specified quantity of specified products at a specified rate, between designated loading and discharging ports over a specified period;

   2. specific shipping trades, being,”

1. on-board or on-shore activities of passenger ships comprising of fares and food and beverages consumed on board;

2. slot charters, space charters, joint charters, feeder services, container box leasing of container shipping.

3. The Central Government, if it considers necessary or expedient so to do, may, by notification in the Official Gazette, exclude any activity referred to in clause (ii) of sub-section (2) or prescribe the limit up to which such activities shall be included in the core activities for the purposes of this section.

4. Every notification issued under this Chapter shall be laid, as soon as may be after it is issued, before each House of Parliament, while it is in session for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the notification, or both Houses agree that the notification should not be issued, the notification shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that notification.

5. The incidental activities shall be the activities which are incidental to the core activities and which may be prescribed1062 for the purpose.

6. Where a tonnage tax company operates any ship, which is not a qualifying ship, the income attributable to operating such non-qualifying ship shall be computed in accordance with the other provisions of this Act.

7. Where any goods or services held for the purposes of tonnage tax business are transferred to any other business carried on by a tonnage tax company, or where any goods or services held for the purposes of any other business carried on by such tonnage tax company are transferred to the tonnage tax business and, in either case, the consideration, if any, for such transfer as recorded in the accounts of the tonnage tax business does not correspond to the market value of such goods or services as on the date of the transfer, then, the relevant shipping income under this section shall be computed as if the transfer, in either case, had been made at the market value of such goods or services as on that date :

Provided that where, in the opinion of the Assessing Officer, the computation of the relevant shipping income in the manner hereinbefore specified presents exceptional difficulties, the Assessing Officer may compute such income on such reasonable basis as he may deem fit.

Explanation : For the purposes of this sub-section, “market value”, in relation to any goods or services, means the price that such goods or services would ordinarily fetch on sale in the open market.

8. Where it appears to the Assessing Officer that, owing to the close connection between the tonnage tax company and any other person, or for any other reason, the course of business between them is so arranged that the business transacted between them produces to the tonnage tax company more than the ordinary profits which might be expected to arise in the tonnage tax business, the Assessing Officer shall, in computing the relevant shipping income of the tonnage tax company for the purposes of this Chapter, take the amount of income as may be reasonably deemed to have been derived therefrom.

Explanation : For the purposes of this Chapter, in case the relevant shipping income of a tonnage tax company is a loss, then, such loss shall be ignored for the purposes of computing tonnage income.

Section 115VJ - Treatment of common costs

1. Where a tonnage tax company also carries on any business or activity other than the tonnage tax business, common costs attributable to the tonnage tax business shall be determined on a reasonable basis.

2. Where any asset, other than a qualifying ship, is not exclusively used for the tonnage tax business by the tonnage tax company, depreciation on such asset shall be allocated between its tonnage tax business and other business on a fair proportion to be determined by the Assessing Officer, having regard to the use of such asset for the purpose of the tonnage tax business and for the other business.

Section 115VK - Depreciation

1. For the purposes of computing depreciation under clause (iv) of section 115VL, the depreciation for the first previous year of the tonnage tax scheme (hereafter in this section referred to as the first previous year) shall be computed on the written down value of the qualifying ships as specified under sub-section (2).

2. The written down value of the block of assets, being ships, as on the first day of the first previous year, shall be divided in the ratio of the book written down value of the qualifying ships (hereafter in this section referred to as the qualifying assets) and the book written down value of the non-qualifying ships (hereafter in this section referred to as the other assets).

3. The block of qualifying assets as determined under sub-section (2) shall constitute a separate block of assets for the purposes of this Chapter.

4. For the purposes of sub-section (2), the book written down value of the block of qualifying assets and the block of other assets shall be computed in the following manner, namely :

   1. the book written down value of each qualifying asset and each other asset as on the first day of the previous year and which form part of the block of assets to be divided shall be determined by taking the book written down value of each asset appearing in the books of account as on the last day of the preceding previous year :

Provided that any change in the value of the assets consequent to their revaluation after the date on which the Finance (No. 2) Bill, 2004 receives the assent of the President shall be ignored;

2. the book written down value of all the qualifying assets and other assets shall be aggregated; and

3. the ratio of the aggregate book written down value of the qualifying assets to the aggregate book written down value of the other assets shall be determined.

5. Where an asset forming part of a block of qualifying assets begins to be used for purposes other than the tonnage tax business, an appropriate portion of the written down value allocable to such asset shall be reduced from the written down value of that block and shall be added to the block of other assets.

Explanation : For the purposes of this sub-section, appropriate portion of the written down value allocable to the asset, which begins to be used for purposes other than the tonnage tax business, shall be an amount which bears the same proportion to the written down value of the block of qualifying assets as on the first day of the previous year as the book written down value of the asset beginning to be used for purposes other than tonnage tax business bears to the book written down value of all the assets forming the block of qualifying asset.

6. Where an asset forming part of a block of other assets begins to be used for tonnage tax business, an appropriate portion of the written down value allocable to such asset shall be reduced from the written down value of the block of other assets and shall be added to the block of qualifying asset.

Explanation : For the purposes of this sub-section, appropriate portion of written down value allocable to the asset which begins to be used for the tonnage tax business shall be an amount which bears the same proportion to the written down value of the block of other assets as on the first day of the previous year as the book written down value of the asset beginning to be used for tonnage tax business bears to the total book written down value of all the assets forming the block of other assets.

7. For the purposes of computing depreciation under clause (iv) of section 115VL in respect of an asset mentioned in sub-sections (5) and (6), depreciation computed for the previous year shall be allocated in the ratio of the number of days for which the asset was used for the tonnage tax business and for purposes other than tonnage tax business.

Explanation 1 : For the removal of doubts, it is hereby declared that for the purposes of this Act, depreciation on the block of qualifying assets and block of other assets so created shall be allowed as if such written down value referred to in sub-section (2) had been brought forward from the preceding previous year.

Explanation 2 : For the purposes of this section, “book written down value” means the written down value as appearing in the books of account.

Section 115VL - General exclusion of deduction and set off etc

1. Notwithstanding anything contained in any other provision of this Act, in computing the tonnage income of a tonnage tax company for any previous year (hereafter in this section referred to as the “relevant previous year”) in which it is chargeable to tax in accordance with this Chapter”

1. sections 30 to 43B shall apply as if every loss, allowance or deduction referred to therein and relating to or allowable for any of the relevant previous years, had been given full effect to for that previous year itself;

2. no loss referred to in sub-sections (1) and (3) of section 70 or sub­sections (1) and (2) of section 71 or sub-section (1) of section 72 or sub-section (1) of section 72A, in so far as such loss relates to the business of operating qualifying ships of the company, shall be carried forward or set off where such loss relates to any of the previous years when the company is under the Tonnage Tax Scheme;

3. no deduction shall be allowed under Chapter VIA in relation to the profits and gains from the business of operating qualifying ships; and

4. in computing the depreciation allowance under section 32, the written down value of any asset used for the purposes of the tonnage tax business shall be computed as if the company has claimed and has been actually allowed the deduction in respect of depreciation for the relevant previous years.

Section 115VM - Exclusion of loss

1. Section 72 shall apply in respect of any losses that have accrued to a company before its option for tonnage tax scheme and which are attributable to its tonnage tax business, as if such losses had been set off against the relevant shipping income in any of the previous years when the company is under the Tonnage Tax Scheme.

2. The losses referred to in sub-section (1) shall not be available for set-off against any income other than relevant shipping income in any previous year beginning on or after the company exercises its option under section 115VP.

3. Any apportionment necessary to determine the losses referred to in sub­section (1) shall be made on a reasonable basis.

Section 115VN - Chargeable gains from transfer of tonnage tax assets

Any profits or gains arising from the transfer of a capital asset being an asset forming part of the block of qualifying assets shall be chargeable to income-tax in accordance with the provisions of section 45, read with section 50, and the capital gains so arising shall be computed in accordance with the provisions of sections 45 to 51:

Provided that for the purpose of computing such profits or gains, the provisions of section 50 shall have effect as if for the words “written down value of the block of assets”, the words “written down value of the block of qualifying assets” had been substituted.

Explanation : For the purposes of this Chapter, “written down value of the block of qualifying assets” means the written down value computed in accordance with the provisions of sub-section (2) of section 115VK.

Section 115V-O - Exclusion from provisions of section 115JB

The book profit or loss derived from the activities of a tonnage tax company, referred to in sub-section (1) of section 115VI, shall be excluded from the book profit of the company for the purposes of section 115JB.

Section 115VP - Method and time of opting for tonnage tax scheme

1. A qualifying company may opt for the Tonnage Tax Scheme by making an application to the Joint Commissioner having jurisdiction over the company in the form and manner as may be prescribe1063, for such scheme.

2. The application under sub-section (1) may be made by any existing qualifying company at any time after the 30th day of September, 2004 but before the 1st day of January, 2005 (hereafter referred to as the “initial period”):

Provided that-

1. a company incorporated after the initial period; or

2. a qualifying company incorporated before the initial period but which becomes a qualifying company for the first time after the initial period, may make an application within three months of the date of its incorporation or the date on which it became a qualifying company, as the case may be.

   3. On receipt of an application for option for Tonnage Tax Scheme under sub-section (1), the Joint Commissioner may call for such information or documents from the company as he thinks necessary in order to satisfy himself about the eligibility of the company and after satisfying himself about such eligibility of the company to make such option for Tonnage Tax Scheme, he”

1. shall pass an order in writing approving the option for Tonnage Tax Scheme; or

2. shall, if he is not so satisfied, pass an order in writing refusing to approve the option for Tonnage Tax Scheme, and a copy of such order shall be sent to the applicant:

Provided that no order under clause (ii) shall be passed unless the applicant has been given a reasonable opportunity of being heard.

4. Every order granting or refusing the approval of the option for Tonnage Tax Scheme under clause (i) or clause (ii), as the case may be, of sub-section (3) shall be passed before the expiry of one month, from the end of the month in which the application was received under sub-section (1).

5. Where an order granting approval is passed under sub-section (3), the provisions of this Chapter shall apply from the assessment year relevant to the previous year in which the option for Tonnage Tax Scheme is exercised. 

Section 115VQ - Period for which tonnage tax option to remain in force

 

1. An option for Tonnage Tax Scheme, after it has been approved under sub­section (3) of section 115VP, shall remain in force for a period of ten years from the date on which such option has been exercised and shall be taken into account from the assessment year relevant to the previous year in which such option is exercised.

2. An option for Tonnage Tax Scheme shall cease to have effect from the assessment year relevant to the previous year in which”

   1. the qualifying company ceases to be a qualifying company;

   2. a default is made in complying with the provisions contained in section 115VT or section 115VU or section 115VV;

   3. the tonnage tax company is excluded from the Tonnage Tax Scheme under section 115VZC;

   4. the qualifying company furnishes to the Assessing Officer, a declaration in writing to the effect that the provisions of this Chapter may not be made applicable to it, and the profits and gains of the company from the business of operating qualifying ships shall be computed in accordance with the other provisions of this Act.

Section 115VR - Renewal of tonnage tax scheme

1. An option for Tonnage Tax Scheme approved under sub-section (3) of section 115VP may be renewed within one year from the end of the previous year in which the option ceases to have effect.

2. The provisions of sections 115VP and 115VQ shall apply in relation to a renewal of the option for Tonnage Tax Scheme in the same manner as they apply in relation to the approval of option for Tonnage Tax Scheme.

Section 115VS - Prohibition to opt for tonnage tax scheme in certain cases

A qualifying company, which, on its own, opts out of the Tonnage Tax Scheme or makes a default in complying with the provisions of section 115VT or section 115VU or section 115VV or whose option has been excluded from Tonnage Tax Scheme in pursuance of an order made under sub-section (1) of section 115VZC, shall not be eligible to opt for Tonnage Tax Scheme for a period of ten years from the date of opting out or default or order, as the case may be.

Section 115VT - Transfer of profits to Tonnage Tax Reserve Account

1. A tonnage tax company shall, subject to and in accordance with the provisions of this section, be required to credit to a reserve account (hereafter in this section referred to as the Tonnage Tax Reserve Account) an amount not less than twenty per cent of the book profit derived from the activities referred to in clauses (i) and (ii) of sub-section (1) of section 115VI in each previous year to be utilised in the manner laid down in sub-section (3):

Provided that a tonnage tax company may transfer a sum in excess of twenty per cent of the book profit and such excess sum transferred shall also be utilised in the manner laid down in subsection (3).

Explanation : For the purposes of this section, “book profit” shall have the same meaning as in the Explanation to sub-section (2) of section 115JB so far as it relates to the income derived from the activities referred to in clauses (i) and (ii) of sub-section (1) of section 115VI.

2. Where the company has book profit from the business of operating qualifying ships and book loss from any other sources, and consequently, the company is not in a position to create the full or any part of the reserves under sub-section (1), the company shall create the reserves to the extent possible in that previous year and the shortfall, if any, shall be added to the amount of the reserves required to be created for the following previous year and such shortfall shall be deemed to be part of the reserve requirement of that following previous year :

Provided that to the extent the shortfall in creation of reserves during a particular previous year is carried forward to the following previous year under this sub-section, the company shall be considered as having created sufficient reserves for the first mentioned previous year:

Provided further that nothing contained in the first proviso shall apply in respect of the second year in case the shortfall in creation of reserves continues for two consecutive previous years.

3. The amount credited to the Tonnage Tax Reserve Account under sub-section (1) shall be utilised by the company before the expiry of a period of eight years next following the previous year in which the amount was credited€“

   1. for acquiring a new ship for the purposes of the business of the company; and

   2. until the acquisition of a new ship, for the purposes of the business of operating qualifying ships other than for distribution by way of dividends or profits or for remittance outside India as profits or for the creation of any asset outside India.

4. Where any amount credited to the Tonnage Tax Reserve Account under sub-section (1),”

   3. has been utilised for any purpose other than that referred to in clause (a) or clause (b) of sub-section (3); or

   4. has not been utilised for the purpose specified in clause (a) of sub­section (3); or

   5. has been utilised for the purpose of acquiring a new ship as specified in clause (a) of sub-section (3), but such ship is sold or otherwise transferred, other than in any scheme of demerger by the company to any person at any time before the expiry of three years from the end of the previous year in which it was acquired, an amount which bears the same proportion to the total relevant shipping income of the year in which such reserve was created, as the amount out of such reserve so utilised or not utilised bears to the total reserve created during that year under sub-section (1) shall be taxable under the other provisions of this Act”

1. in a case referred to in clause (a), in the year in which the amount was so utilised; or

2. in a case referred to in clause (b), in the year immediately following the period of eight years specified in sub-section (3); or

3. in a case referred to in clause (c), in the year in which the sale or transfer took place:

Provided that the income so taxable under the other provisions of this Act shall be reduced by the proportionate tonnage income charged to tax in the year of creation of such reserves.

5. Notwithstanding anything contained in any other provision of this Chapter, where the amount credited to the Tonnage Tax Reserve Account in accordance with sub-section (1) is less than the minimum amount required to be credited under sub-section (1), an amount which bears the same proportion to the total relevant shipping income, as the shortfall in credit to the reserves bears to the minimum reserve required to be credited under sub-section (1) shall not be taxable under the Tonnage Tax Scheme and shall be taxable under the other provisions of this Act.

6. If the reserve required to be created under sub-section (1) is not created for any two consecutive previous years, the option of the company for Tonnage Tax Scheme shall cease to have effect from the beginning of the previous year following the second consecutive previous year in which the failure to create the reserve under sub-section (1) had occurred.

Explanation : For the purposes of this section, “new ship” includes a qualifying ship which, before the date of acquisition by the qualifying company was used by any other person, if it was not at any time previous to the date of such acquisition owned by any person resident in India.

Section 115VU - Minimum training requirement for tonnage tax company

1. A tonnage tax company, after its option has been approved under sub­section (3) of section 115VP, shall comply with the minimum training requirement in respect of trainee officers in accordance with the guidelines1064 framed by the Director-General of Shipping and notified in the Official Gazette by the Central Government.

2. The tonnage tax company shall be required to furnish a copy of the certificate issued by the Director-General of Shipping along with the return of income under section 139 to the effect that such company has complied with the minimum training requirement in accordance with the guidelines1065 referred to in sub-section (1) for the previous year.

3. If the minimum training requirement is not complied with for any five consecutive previous years, the option of the company for Tonnage Tax Scheme shall cease to have effect from the beginning of the previous year following the fifth consecutive previous year in which the failure to comply with the minimum training requirement under sub-section (1) had occurred.

Section 115VV - Limit for charter in of tonnage

1. In the case of every company which has opted for Tonnage Tax Scheme, not more than forty-nine per cent. of the net tonnage of the qualifying ships operated by it during any previous year shall be chartered in.

2. The proportion of net tonnage referred to in sub-section (1) in respect of a previous year shall be calculated based on the average of net tonnage during that previous year.

3. For the purposes of sub-section (2), the average of net tonnage shall be computed in such manner as may be prescribed1066 in consultation with the Director-General of Shipping.

4. Where the net tonnage of ships chartered in exceeds the limit under sub­section (1) during any previous year, the total income of such company in relation to that previous year shall be computed as if the option for Tonnage Tax Scheme does not have effect for that previous year.

5. Where the limit under sub-section (1) had exceeded in any two consecutive previous years, the option for Tonnage Tax Scheme shall cease to have effect from the beginning of the previous year following the second consecutive previous year in which the limit had exceeded.

Explanation : For the purposes of this section, the term “chartered in” shall exclude a ship chartered in by the company on bareboat charter-cum-demise terms. 

Section 115VW - Maintenance and audit of accounts

An option for Tonnage Tax Scheme by a tonnage tax company shall not have effect in relation to a previous year unless such company”

1. maintains separate books of account in respect of the business of operating qualifying ships; and

2. furnishes, 1067[before the specified date referred to in section 44AB], the report of an accountant, in the prescribed1068 form duly signed and verified by such accountant.

Explanation : For the purposes of this section, “accountant” shall have the same meaning as in the Explanation below sub-section (2) of section 288.

Section 115VX - Determination of tonnage

1. For the purposes of this Chapter,”

   1. the tonnage of a ship shall be determined in accordance with the valid certificate indicating its tonnage;

   2. “valid certificate” means,”

1. in case of ships registered in India”

   1. having a length of less than twenty-four metres, a certificate issued under the Merchant Shipping (Tonnage Measurement of Ship) Rules, 1987 made under the Merchant Shipping Act, 1958 (44 of 1958);

   2. having a length of twenty-four metres or more, an international tonnage certificate issued under the provisions of the Convention on Tonnage Measurement of Ships, 1969 as specified in the Merchant Shipping (Tonnage Measure­ment of Ship) Rules, 1987 made under the Merchant Ship­ping Act, 1958 (44 of 1958);

2. in case of ships registered outside India, a licence issued by the Director-General of Shipping under section 406 or section 407 of the Merchant Shipping Act, 1958 specifying the net tonnage on the basis of Tonnage Certificate issued by the Flag State Administration where the ship is registered or any other evidence acceptable to the Director-General of Shipping produced by the ship owner while seeking permission for chartering in the ship.

Section 115VY - Amalgamation

Where there has been an amalgamation of a company with another company or companies, then, subject to the other provisions of this section, the provisions relating to the Tonnage Tax Scheme shall, as far as may be, apply to the amalgamated company if it is a qualifying company:

Provided that where the amalgamated company is not a tonnage tax company, it shall exercise an option for Tonnage Tax Scheme under sub-section (1) of section 115VP within three months from the date of the approval of the scheme of amalgamation:

Provided further that where the amalgamating companies are tonnage tax companies, the provisions of this Chapter shall, as far as may be, apply to the amalgamated company for such period as the option for Tonnage Tax Scheme which has the longest unexpired period continues to be in force:

Provided also that where one of the amalgamating companies is a qualifying company as on the 1st day of October, 2004 and which has not exercised the option for Tonnage Tax Scheme within the initial period, the provisions of this Chapter shall not apply to the amalgamated company and the income of the amalgamated company from the business of operating qualifying ships shall be computed in accordance with the other provisions of this Act.

Section 115VZ - Demerger

Where in a scheme of demerger, the demerged company transfers its business to the resulting company before the expiry of the option for Tonnage Tax Scheme, then, subject to the other provisions of this Chapter, the Tonnage Tax Scheme shall, as far as may be, apply to the resulting company for the unexpired period if it is a qualifying company:

Provided that the option for Tonnage Tax Scheme in respect of the demerged company shall remain in force for the unexpired period of the Tonnage Tax Scheme if it continues to be a qualifying company.

Section 115VZA - Effect of temporarily ceasing to operate qualifying ships

1. A temporary cessation (as against permanent cessation) of operating any qualifying ship by a company shall not be considered as a cessation of operating of such qualifying ship and the company shall be deemed to be operating such qualifying ship for the purposes of this Chapter.

2. Where a qualifying company continues to operate a ship, which temporarily ceases to be a qualifying ship, such ship shall not be considered as a qualifying ship for the purposes of this Chapter.

Section 115VZB - Avoidance of tax

1. Subject to the provisions of this Chapter, the Tonnage Tax Scheme shall not apply where a tonnage tax company is a party to any transaction or arrangement which amounts to an abuse of the Tonnage Tax Scheme.

2. For the purposes of sub-section (1), a transaction or arrangement shall be considered an abuse if the entering into or the application of such transaction or arrangement results, or would but for this section have resulted, in a tax advantage being obtained for”

1. a person other than a tonnage tax company; or

2. a tonnage tax company in respect of its non-tonnage tax activities.

Explanation : For the purposes of this section, “tax advantage” includes,”

1. the determination of the allowance for any expense or interest, or the determination of any cost or expense allocated or apportioned, or, as the case may be, which has the effect of reducing the income or increasing the loss, as the case may be, from activities other than tonnage tax activities chargeable to tax, computed on the basis of entries made in the books of account in respect of the previous year in which the transaction was entered into; or

2. a transaction or arrangement which produces to the tonnage tax company more than ordinary profits which might be expected to arise from tonnage tax activities.

Section 115VZC - Exclusion from tonnage tax scheme

1. Where a tonnage tax company is a party to any transaction or arrangement referred to in sub-section (1) of section 115VZB, the Assessing Officer shall, by an order in writing, exclude such company from the Tonnage Tax Scheme:

Provided that an opportunity shall be given by the Assessing Officer by serving a notice calling upon such company to show cause, on a date and time to be specified in the notice, why it should not be excluded from the Tonnage Tax Scheme :

Provided further that no order under this sub-section shall be passed without the previous approval of the Chief Commissioner.

2. The provisions of this section shall not apply where the company shows to the satisfaction of the Assessing Officer that the transaction or arrangement was a bona fide commercial transaction and had not been entered into for the purpose of obtaining tax advantage under this Chapter.

3. Where an order has been passed under sub-section (1) by the Assessing Officer excluding the Tonnage Tax Company from the Tonnage Tax Scheme, the option for Tonnage Tax Scheme shall cease to be in force from the first day of the previous year in which the transaction or arrangement was entered into.]

1069Chapter XII-H - Income-tax on Fringe Benefits

Section 115W - Definitions

In this Chapter, unless the context otherwise requires,-

1. “employer” means,-

1. a company;

2. a firm;

1070 [(iii) an association of persons or a body of individuals, whether incorporated or not;]

(iv) a local authority; and

(v) every artificial juridical person, not falling within any of the preceding sub-clauses :

1071 [Provided that any person eligible for exemption under clause (23C) of section 10 or registered under section 12AA or a political party registered under section 29A of the Representation of the People Act, 1951 (43 of 1951) shall not be deemed to be an employer for the purposes of this Chapter.]

2. “fringe benefit tax” or “tax” means the tax chargeable under section 115WA.

Section 115WA - Charge of fringe benefit tax

1. In addition to the income-tax charged under this Act, there shall be charged for every assessment year commencing on or after the 1st day of April, 2006, additional income-tax (in this Act referred to as fringe benefit tax) in respect of the fringe benefits provided or deemed to have been provided by an employer to his employees during the previous year at the rate of thirty per cent on the value of such fringe benefits.

2. Notwithstanding that no income-tax is payable by an employer on his total income computed in accordance with the provisions of this Act, the tax on fringe benefits shall be payable by such employer.

Section 115WB - Fringe benefits

1. For the purposes of this Chapter, “fringe benefits” means any consideration for employment provided by way of -

   1. any privilege, service, facility or amenity, directly or indirectly, provided by an employer, whether by way of reimbursement or otherwise, to his employees (including former employee or employees);

   2. any free or concessional ticket provided by the employer for private journeys of his employees or their family members; 1072 [***]

   3. any contribution by the employer to an approved superannuation fund for 1073 [employees; and].

1074 [(d) any specified security or sweat equity shares allotted or transferred, directly or indirectly by the employer free of cost or at concessional rate to his employees (including former employee or employees).

Explanation : For the purposes of this clause,-

1. “specified security” means the securities as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) 1075 [and, where employees” stock option has been granted under any plan or scheme therefor, includes the securities offered under such plan or scheme];

2. “sweat equity shares” means equity shares issued by a company to its employees or directors at a discount or for consideration other than cash for providing know-how or making available rights in the nature of intellectual property rights or value additions, by whatever name called.]

2. The fringe benefits shall be deemed to have been provided by the employer to his employees, if the employer has, in the course of his business or profession (including any activity whether or not such activity is carried on with the object of deriving income, profits or gains) incurred any expense on, or made any payment for, the following purposes, namely :

   1. entertainment;

   2. provision of hospitality of every kind by the employer to any person, whether by way of provision of food or beverages or in any other manner whatsoever and whether or not such provision is made by reason of any express or implied contract or custom or usage of trade but does not include -

1. any expenditure on, or payment for, food or beverages provided by the employer to his employees in office or factory;

2. any expenditure on or payment through paid vouchers which are not transferable and usable only at eating joints or outlets;

1076 [(iii) any expenditure on or payment through non-transferable pre-paid electronic meal card usable only at eating joints or outlets and which fulfils such other conditions as may be prescribed;]

3. conference (other than fee for participation by the employees in any conference).

Explanation : For the purposes of this clause, any expenditure on conveyance, tour and travel (including foreign travel), on hotel, or boarding and lodging in connection with any conference shall be deemed to be expenditure incurred for the purposes of conference;

4. sales promotion including publicity:

Provided that any expenditure on advertisement,”

1. being the expenditure (including rental) on advertisement of any form in any print (including journals, catalogues or price lists) or electronic media or transport system;

2. being the expenditure on the holding of, or the participation in, any press conference or business convention, fair or exhibition;

3. being the expenditure on sponsorship of any sports event or any other event organised by any Government agency or trade association or body;

4. being the expenditure on the publication in any print or electronic media of any notice required to be published by or under any law or by an order of a court or tribunal;

5. being the expenditure on advertisement by way of signs, art work, painting, banners, awnings, direct mail, electric spectaculars, kiosks, hoardings, 1077[bill boards; display of products] or by way of such other medium of advertisement; 1078 [and]

6. being the expenditure by way of payment to any advertising agency for the purposes of clauses (i) to (v) above,

1079[(vii) being the expenditure on distribution of samples either free of cost or at concessional rate; and]

1080[(viii) being the expenditure by way of payment to any person of repute for promoting the sale of goods or services of the business of the employer,] shall not be considered as expenditure on sales promotion including publicity;

5. employees” welfare.

1081 [Explanation: For the purposes of this clause, any expenditure incurred or payment made to -

1. fulfill any statutory obligation; or

2. mitigate occupational hazards; or

3. provide first aid facilities in the hospital or dispensary run by the employer; or

4. provide crèche facility for the children of the employee; or

5. sponsor a sportsman, being an employee; or

6. organise sports events for employees, shall not be considered as expenditure for employees” welfare;]

   6. conveyance 1082 [***];

   7. use of hotel, boarding and lodging facilities;

   8. repair, running (including fuel), maintenance of motorcars and the amount of depreciation thereon;

   9. repair, running (including fuel), maintenance of aircrafts and the amount of depreciation thereon;

   10. use of telephone (including mobile phone) other than expenditure on leased telephone lines;

   11. 1083 [***]

   12. festival celebrations;

   13. use of health club and similar facilities;

   14. use of any other club facilities;

   15. gifts; 1084 [and]

   16. scholarships; 1085 [and]

1086 [(Q) tour and travel (including foreign travel).]

3. For the purposes of sub-section (1), the privilege, service, facility or amenity does not include perquisites in respect of which tax is paid or payable by the employee 1087 [or any benefit or amenity in the nature of free or subsidised transport or any such allowance provided by the employer to his employees for journeys by the employees from their residence to the place of work or such place of work to the place of residence].

Section 115WC - Value of fringe benefits

1. For the purpose of this Chapter, the value of fringe benefits shall be the aggregate of the following, namely, -

4. cost at which the benefits referred to in clause (b) of sub-section (1) of section 115WB, is provided by the employer to the general public as reduced by the amount, if any, paid by, or recovered from, his employee or employees :

Provided that in a case where the expenses of the nature referred to in clause (b) of sub-section (1) of section 115WB are included in any other clause of sub-section (2) of the said section, the total expenses included under such other clause shall be reduced by the amount of expenditure referred to in the said clause (b) for computing the value of fringe benefits;

1088 [(b) the amount of contribution, referred to in clause (c) of sub-section (1) of section 115WB, which exceeds one lakh rupees in respect of each employee;]

1089 [(ba) the fair market value of the specified security or sweat equity shares referred to in clause (d) of sub-section (1) of section 115WB, on the date on which the option vests with the employee as reduced by the amount actually paid by, or recovered from, the employee in respect of such security or shares.

Explanation: For the purposes of this clause, -

1. “fair market value” means the value determined in accordance with the method as may be prescribed1090 by the Board;

2. “option” means a right but not an obligation granted to an employee to apply for the specified security or sweat equity shares at a predetermined price;]

(c) twenty per cent of the expenses referred to in 1091[clauses (A) to (K)] of sub-section (2) of section 115WB;

(d) fifty per cent of the expenses referred to in 1092 [clauses (L) to (P)] of sub-section (2) of section 115WB;

1093 [(e) five per cent of the expenses referred to in clause (Q) of sub-section (2) of section 115WB.]

2. Notwithstanding anything contained in sub-section (1), -

   1. in the case of an employer engaged in the business of hotel, the value of fringe benefits for the purposes referred to in clause (B) of subsection (2) of section 115WB shall be “five per cent” instead of “twenty per cent” referred to in clause (c) of sub-section (1);

1094 [(aa) in the case of an employer engaged in the business of carriage of passengers or goods by aircraft, the value of fringe benefits for the purposes referred to in clause (B) of sub-section (2) of section 115WB shall be “five per cent” instead of “twenty per cent” referred to in clause (c) of sub-section (1);]

1095 [(ab) in the case of an employer engaged in the business of carriage of passengers or goods by ship, the value of fringe benefits for the purposes referred to in clause (B) of sub-section (2) of section 115WB shall be “five per cent” instead of “twenty per cent” referred to in clause (c) of sub-section (1);]

2. in the case of an employer engaged in the business of construction, the value of fringe benefits for the purposes referred to in clause (F) of sub-section (2) of section 115WB shall be “five per cent” instead of “twenty per cent” referred to in clause (c) of sub-section (1);

3. in the case of an employer engaged in the business of manufacture or production of pharmaceuticals, the value of fringe benefits for the purposes referred to in clauses (F) and (G) of sub-section (2) of section 115WB shall be “five per cent” instead of “twenty per cent” referred to in clause (c) of sub-section (1);

4. in the case of an employer engaged in the business of manufacture or production of computer software, the value of fringe benefits for the purposes referred to in clauses (F) and (G) of sub-section (2) of section 115WB shall be “five per cent” instead of “twenty per cent” referred to in clause (c) of sub-section (1);

1096 [(da) in the case of an employer engaged in the business of carriage of passengers or goods by aircraft, the value of fringe benefits for the purposes referred to in clause (G) of sub-section (2) of section 115WB shall be “five per cent” instead of “twenty per cent” referred to in clause (c) of sub-section (1);]

1097 [(db) in the case of an employer engaged in the business of carriage of passengers or goods by ship, the value of fringe benefits for the purposes referred to in clause (G) of sub-section (2) of section 115WB shall be “five per cent” instead of “twenty per cent” referred to in clause (c) of sub-section (1);]

5. in the case of an employer engaged in the business of carriage of passengers or goods by motorcar, the value of fringe benefits for the purposes referred to in clause (h)1098 of sub-section (2) of section 115WB shall be “five per cent” instead of “twenty per cent” referred to in clause (c) of sub-section (1);

6. in the case of an employer engaged in the business of carriage of passengers or goods by aircraft, the value of fringe benefits for the purposes referred to in clause (1)1099of sub-section (2) of section 115WB shall be taken as Nil.

Section 115WD - Return of fringe benefits

1. Without prejudice to the provisions contained in section 139, every employer who during a previous year has paid or made provision for payment of fringe benefits to his employees, shall, on or before the due date, furnish or cause to be furnished a return of fringe benefits to the Assessing Officer in the prescribed1100 form and verified in the prescribed1101 manner and setting forth such other particulars as may be prescribed1102, in respect of the previous year.

Explanation: In this sub-section, “due date” means, -

1. where the employer is -

1. a company; or

2. a person (other than a company) whose accounts are required to be audited under this Act or under any other law for the time being in force, the 1103[30th day of September] of the assessment year;

   2. in the case of any other employer, the 31st day of July of the assessment year.

   2. In the case of any employer who, in the opinion of the Assessing Officer, is responsible for paying fringe benefit tax under this Act and who has not furnished a return under sub-section (1), the Assessing Officer may, after the due date, issue a notice to him and serve the same upon him, requiring him to furnish within thirty days from the date of service of the notice, the return in the prescribed1104 form and verified in the prescribed manner1105 and setting forth such other particulars as may be prescribed1106.

   3. Any employer responsible for paying fringe benefit tax who has not furnished a return within the time allowed under sub-section (1) or within the time allowed under a notice issued under sub-section (2), may furnish the return for any previous year, at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.

   4. If any employer, having furnished a return under sub-section (1), or in pursuance of a notice issued under sub-section (2), discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.

Section 115WE - Assessment

1107[1108 [(1) Where a return has been made under section 115WD, such return shall be processed in the following manner, namely:

1. the value of fringe benefits shall be computed after making the following adjustments, namely:

1. any arithmetical error in the return; or

2. an incorrect claim, if such incorrect claim is apparent from any information in the return;

   2. the tax and interest, if any, shall be computed on the basis of the value of fringe benefits computed under clause (a);

   3. the sum payable by, or the amount of refund due to, the assessee shall be determined after adjustment of the tax and interest, if any, computed under clause (b) by any advance tax paid, any tax paid on self-assessment and any amount paid otherwise by way of tax or interest;

   4. an intimation shall be prepared or generated and sent to the assessee specifying the sum determined to be payable by, or the amount of refund due to, the assessee under clause (c); and

   5. the amount of refund due to the assessee in pursuance of the determination under clause (c) shall be granted to the assessee :

Provided that no intimation under this sub-section shall be sent after the expiry of one year from the end of the financial year in which the return is made.

Explanation: For the purposes of this sub-section,“

1. “an incorrect claim apparent from any information in the return” shall mean a claim, on the basis of an entry, in the return,

1. of an item, which is inconsistent with another entry of the same or some other item in such return;

2. in respect of which the information required to be furnished to substantiate such entry has not been so furnished under this Act; or

3. in respect of a deduction or value of fringe benefits, where such deduction or value exceeds specified statutory limit which may have been expressed as monetary amount or percentage or ratio or fraction;

2. the acknowledgment of the return shall be deemed to be the intimation in a case where no sum is payable by, or refundable to, the assessee under clause (c), and where no adjustment has been made under clause (a).

(1A) For the purposes of processing of returns under sub-section (1), the Board may make a scheme for centralised processing of returns with a view to expeditiously determining the tax payable by, or the refund due to, the assessee as required under that sub-section.

(1B) Save as otherwise expressly provided, for the purpose of giving effect to the scheme made under sub-section (1A), the Central Government may, by notification in the Official Gazette, direct that any of the provisions of this Act relating to processing of returns shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in that notification; so, however, that no direction shall be issued 1109 [1110 [after the 31st day of March, 2011.]]

(1C) Every notification issued under sub-section (1B), along with the scheme made under subsection (1A), shall, as soon as may be after the notification is issued, be laid before each House of Parliament.]

(2) Where a return has been furnished under section 115WD, the Assessing Officer shall, if he considers it necessary or expedient to ensure that the assessee has not understated the value of fringe benefits or has not underpaid the tax in any manner, serve on the assessee a notice requiring him on a date to be specified therein, either to attend his office or to produce, or cause to be produced, any evidence on which the assessee may rely in support of the return:

Provided that no notice under this sub-section shall be served on the assessee after the expiry of 4[six months from the end of the financial year] in which the return is furnished.

(3) On the day specified in the notice issued under sub-section (2), or as soon afterwards as may be, after hearing such evidence as the assessee may produce and such other evidence as the Assessing Officer may require on specified points, and after taking into account all relevant material which he has gathered, the Assessing Officer shall, by an order in writing, make an assessment of the value of the fringe benefits paid or payable by the assessee, and determine the sum payable by him or refund of any amount due to him on the basis of such assessment.

(4) Where a regular assessment under sub-section (3) or section 115WF is made, -

1. any tax or interest paid by the assessee under sub-section (1) shall be deemed to have been paid towards such regular assessment;

2. if no refund is due on regular assessment or the amount refunded under sub-section (1) exceeds the amount refundable on regular assessment, the whole or the excess amount so refunded shall be deemed to be tax payable by the assessee and the provisions of this Act shall apply accordingly.]

Section 115WF - Best judgment assessment

1. If any person, being an employer”

   1. fails to make the return required under sub-section (1) of section 115WD and has not made a return under sub-section (3) or a revised return under sub-section (4) of that section, or

   2. fails to comply with all the terms of a notice issued under sub-section (2) of section 115WD or fails to comply with a direction issued under sub-section (2A) of section 142, or

   3. having made a return, fails to comply with all the terms of a notice issued under sub-section (2) of section 115WE, the Assessing Officer, after taking into account all relevant material which the Assessing Officer has gathered, shall, after giving the assessee an opportunity of being heard, make the assessment of the fringe benefits to the best of his judgement and determine the sum payable by the assessee on the basis of such assessment:

Provided that such opportunity shall be given by the Assessing Officer by serving a notice calling upon the assessee to show cause, on a date and time to be specified in the notice as to why the assessment should not be completed to the best of his judgement:

Provided further that it shall not be necessary to give such opportunity in a case where a notice under sub-section (2) of section 115WD has been issued prior to the making of an assessment under this section.

Section 115WG - Fringe benefits escaping assessment

If the Assessing Officer has reason to believe that any fringe benefits chargeable to tax have escaped assessment for any assessment year, he may, subject to the provisions of sections 115WH, 150 and 153, assess or reassess such fringe benefits and also any other fringe benefits chargeable to tax which have escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, for the assessment year concerned (hereafter referred to as the relevant assessment year).

Explanation : For the purposes of this section, the following shall also be deemed to be cases where fringe benefits chargeable to tax have escaped assessment, namely:

1. where no return of fringe benefits has been furnished by the assessee;

2. where a return of fringe benefits has been furnished by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the value of fringe benefits in the return;

3. where an assessment has been made, but the fringe benefits chargeable to tax have been under-assessed.

Section 115WH - Issue of notice where fringe benefits have escaped assessment

1. Before making the assessment or reassessment under section 115WG, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period as may be specified in the notice, a return of the fringe benefits in respect of which he is assessable under this Chapter during the previous year corresponding to the relevant assessment year, in the prescribed1111 form and verified in the prescribed1112manner and setting forth such other particulars as may be prescribed1113, and the provisions of this Chapter shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 115WD.

2. The Assessing Officer shall, before issuing any notice under this section, record his reasons for doing so.

3. No notice under sub-section (1) shall be issued for the relevant assessment year after the expiry of six years from the end of the relevant assessment year.

Explanation: In determining fringe benefits chargeable to tax which have escaped assessment for the purposes of this sub-section, the provisions of the Explanation to section 115WG shall apply as they apply for the purposes of that section.

4. In a case where an assessment under sub-section (3) of section 115WE or section 115WG has been made for the relevant assessment year, no notice shall be issued under sub-section (1) by an Assessing Officer, after the expiry of four years from the end of the relevant assessment year, unless the Chief Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for the issue of such notice.

Section 115W-I - Payment of fringe benefit tax

Notwithstanding that the regular assessment in respect of any fringe benefits is to be made in a later assessment year, the tax on such fringe benefits shall be payable in advance during any financial year, in accordance with the provisions of section 115WJ, in respect of the fringe benefits which would be chargeable to tax for the assessment year immediately following that financial year, such fringe benefits being hereafter in this Chapter referred to as the “current fringe benefits”.

Section 115WJ - Advance tax in respect of fringe benefits

1. Every assessee who is liable to pay advance tax under section 115WI, shall on his own accord, pay advance tax on his current fringe benefits calculated in the manner laid down in sub-section (2).

1114 [(2) Advance tax on the current fringe benefits shall be payable by -

1. all the companies, who are liable to pay the same in four installments during each financial year and the due date of each installment and the amount of such installment shall be as specified in Table I below:

Table I

Due date of installment	Amount payable
On or before the 15th June	Not less than fifteen per cent of such advance tax.
On or before the 15th September	Not less than forty-five per cent of such advance tax as reduced by the amount, if any, paid in the earlier installment.
On or before the 15th December	Not less than seventy-five per cent of such advance tax as reduced by the amount or amounts, if any, paid in the earlier installment or installments.
On or before the 15th March	The whole amount of such advance tax as reduced by the amount or amounts, if any, paid in the earlier installment or installments;

2. all the assessees (other than companies), who are liable to pay the same in three installments during each financial year and the due date of each installment and the amount of such installment shall be as specified in Table II below:

Table II

Due date of installment	Amount payable
On or before the 15th September	Not less than thirty per cent of such advance tax.
On or before the 15th December	Not less than sixty per cent of such advance tax as reduced by the amount, if any, paid in the earlier installment.
On or before the 15th March	The whole amount of such advance tax as reduced by the amount or amounts, if any, paid in the earlier installment or installments.]

1115 [(3) Where an assessee, being a company, has failed to pay the advance tax payable by him on or before the due date for any installment or where the advance tax paid by him is less than the amount payable by the due date, he shall be liable to pay simple interest calculated at the rate of -

1. one per cent per month, for three months on an amount by which the advance tax paid on or before the 15th June of the financial year falls short of fifteen per cent of the advance tax payable;

2. one per cent per month, for three months on an amount by which the advance tax paid on or before the 15th September of the Financial year falls short of forty-five per cent of the advance tax payable;

3. one per cent per month, for three months on an amount by which the advance tax paid on or before the 15th December of the financial year falls short of seventy-five per cent of the advance tax payable; and

4. one per cent on an amount by which the advance tax paid on or before the 15th March of the financial year falls short of the hundred per cent of the advance tax payable.

(4) Where an assessee, being a person other than a company, has failed to pay the advance tax payable by him on or before the due date for any installment or where the advance tax paid by him is less than the amount payable by the due date, he shall be liable to pay simple interest calculated at the rate of -

1. one per cent per month, for three months on an amount by which the advance tax paid on or before the 15th September of the financial year falls short of thirty per cent of the advance tax payable;

2. one per cent per month, for three months on an amount by which the advance tax paid on or before the 15th December of the financial year falls short of sixty per cent of the advance tax payable; and

3. one per cent on an amount by which the advance tax paid on or before the 15th March of the financial year falls short of hundred per cent of the advance tax payable.

(5) Where an assessee has failed to pay the advance tax payable by him during a financial year or where the advance tax paid by him is less than ninety per cent of the tax assessed under section 115WE or section 115WF or section 115WG, the assessee shall be liable to pay simple interest at the rate of one per cent per month, for every month or part of a month comprised in the period from the 1st day of April next following such financial year to the date of assessment of tax under section 115WE or section 115WF or section 115WG].

Section 115WK - Interest for default in furnishing return of fringe benefits

1. Where the return of fringe benefits for any assessment year under subsection (1) or sub-section (3) of section 115WD or in response to a notice under sub-section (2) of that section, is furnished after the due date, or is not furnished, the employer shall be liable to pay simple interest at the rate of one per cent for every month or part of a month comprised in the period commencing on the date immediately following the due date, and,-

   1. where the return is furnished after the due date, ending on the date of furnishing of the return; or

   2. where no return has been furnished, ending on the date of completion of the assessment under section 115WF, on the amount of the tax on the value of fringe benefits as determined under sub-section (1) of section 115WE or regular assessment as reduced by the advance tax paid under section 115WJ.

Explanation 1: In this section, “due date” means the date specified in the Explanation to sub-section (1) of section 115WD as applicable in the case of the employer.

Explanation 2: Where, in relation to an assessment year, an assessment is made for the first time under section 115WG, the assessment so made shall be regarded as a regular assessment for the purposes of this section.

2. The provisions contained in sub-section (2) to sub-section (4) of section 234A shall, so far as may be, apply to this section.

Section 115WKA - Recovery of fringe benefit tax by the employer from the employee

1116[Notwithstanding anything contained in any agreement or scheme under which any specified security or sweat equity shares referred to in clause (d) of subsection (1) of section 115WB has been allotted or transferred, directly or indirectly, by the employer on or after the 1st day of April, 2007, it shall be lawful for the employer to vary the agreement or scheme under which such specified security or sweat equity shares has been allotted or transferred so as to recover from the employee the fringe benefit tax to the extent to which such employer is liable to pay the fringe benefit tax in relation to the value of fringe benefits provided to the employee and determined under clause (ba) of sub-section (1) of section 115WC.]

Section 115WKB - Deemed payment of tax by employee

1117 [(1) Where an employer has paid any fringe benefit tax with respect to allotment or transfer of specified security or sweat equity shares, referred to in clause (d) of sub-section (1) of section 115WB, and has recovered such tax subsequently from an employee, it shall be deemed that the fringe benefit tax so recovered is the tax paid by such employee in relation to the value of the fringe benefit provided to him only to the extent to which the amount thereof relates to the value of the fringe benefit provided to such employee, as determined under clause (ba) of sub-section (1) of section 115WC.

(2) Notwithstanding anything contained in any other provisions of this Act, where the fringe benefit tax recovered from the employee is deemed to be the tax paid by such employee under sub-section (1), such employee shall, under this Act, not be entitled to claim”

1. any refund out of such payment of tax; or

2. any credit of such payment of tax against tax liability on other income or against any other tax liability.]

Section 115WL - Application of other provisions of this Act

Save as otherwise provided in this Chapter, all other provisions of this Act shall, as far as may be, apply in relation to fringe benefits also.]

Section 115WM - Chapter XII-H not to apply after a certain date

1118Nothing contained in this Chapter shall apply, in respect of any assessment for the assessment year commencing on the 1st day of April, 2010 or any subsequent assessment year.]

Section 116 - Income-tax authorities

There shall be the following classes of income-tax authorities for the purposes of this Act, namely:

1. The Central Board of Direct Taxes constituted under the Central Boards of Revenue Act, 1963 (54 of 1963),

1119 [(aa) Principal Directors General of Income-tax or Principal Chief Commissioners of Income-tax,]

2. Directors General of Income-tax or 1120 [Principal Chief Commissioner or Chief Commissioner] of Income-tax,

1121 [(ba) Principal Directors of Income-tax or Principal Commissioners of Income-tax,]

3. 1122 [Principal Director or Director] of Income-tax or 1123 [Principal Commissioner or Commissioner] of Income-tax or Commissioners of Income-tax (Appeals),

(cc) Additional Directors of Income-tax or Additional Commissioners of Income-tax or Additional Commissioners of Income-tax (Appeals),

1124 [(cca) Joint Directors of Income-tax or Joint Commissioners of Income tax,]

4. Deputy Directors of Income-tax or Deputy Commissioners of Income-tax or Deputy Commissioners of Income-tax (Appeals),

5. Assistant Directors of Income-tax or Assistant Commissioners of Income-tax,

6. Income-tax Officers,

7. Tax Recovery Officers,

8. Inspectors of Income-tax.

Section 117 - Appointment of income-tax authorities

1. The Central Government may appoint such persons as it thinks fit to be income-tax authorities.

2. Without prejudice to the provisions of sub-section (1), and subject to the rules and orders of the Central Government regulating the conditions of service of persons in public services and posts, the Central Government may authorise the Board, or a 1125 [Principal Director General or Director General], a 1126[Principal Chief Commissioner or Chief Commissioner] or a [Principal Director or Director] or a 1127[Principal Commissioner or Commissioner] to appoint income-tax authorities below the rank of an 1128[Assistant Commissioner or Deputy Commissioner].

3. Subject to the rules and orders of the Central Government regulating the conditions of service of persons in public services and posts, an income-tax authority authorised in this behalf by the Board may appoint such executive or ministerial staff as may be necessary to assist it in the execution of its functions.

Section 118 - Control of income-tax authorities

The Board may, by notification in the Official Gazette, direct that any income-tax authority or authorities specified in the notification shall be subordinate to such other income-tax authority or authorities as may be specified in such notification.

Section 119 - Instructions to subordinate authorities

1. The Board may, from time to time, issue such orders, instructions and directions to other income-tax authorities as it may deem fit for the proper administration of this Act, and such authorities and all other persons employed in the execution of this Act shall observe and follow such orders, instructions and directions of the Board :

Provided that no such orders, instructions or directions shall be issued”

1. so as to require any income-tax authority to make a particular assessment or to dispose of a particular case in a particular manner; or

2. so as to interfere with the discretion of the 1129 [***] 1130 [Principal Commissioner or Commissioner] (Appeals) in the exercise of his appellate functions.

   2. Without prejudice to the generality of the foregoing power,”

   1. the Board may, if it considers it necessary or expedient so to do, for the purpose of proper and efficient management of the work of assessment and collection of revenue, issue, from time to time (whether by way of relaxation of any of the provisions of sections 1131 [section 115P, 115S, 115WD, 115WE, 115WF, 115WG, 115WH, 115WJ, 115WK;] 139, 143, 144, 147, 148, 154, 155 1132[, 158BFA], sub-section (1A) of section 201, sections 210, 211, 234A, 234B, 234C, 1133 [234E], 1134[243F], 1135 [270A], 271 1136[,271C, 271CA] and 273 or otherwise), general or special orders in respect of 1137 [any class of incomes or fringe benefits] or class of cases, setting forth directions or instructions (not being prejudicial to assessees) as to the guidelines, principles or procedures to be followed by other income-tax authorities in the work relating to assessment or collection of revenue or the initiation of proceedings for the imposition of penalties and any such order may, if the Board is of opinion that it is necessary in the public interest so to do, be published and circulated in the prescribed manner1138 for general information;

   2. the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order, authorise any income-tax authority, not being a 1139 [***] 1140 [Principal Commissioner or Commissioner] (Appeals) to admit an application or claim for any exemption, deduction, refund or any other relief under this Act after the expiry of the period specified by or under this Act for making such application or claim and deal with the same on merits in accordance with law;

   3. the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order for reasons to be specified therein, relax any requirement contained in any of the provisions of Chapter IV or Chapter VIA, where the assessee has failed to comply with any requirement specified in such provision for claiming deduction thereunder, subject to the following conditions, namely :

1. the default in complying with such requirement was due to circumstances beyond the control of the assessee; and

2. the assessee had complied with such requirement before the completion of assessment in relation to the previous year in which such deduction is claimed :

Provided that the Central Government shall cause every order issued under this clause to be laid before each House of Parliament.

Section 119A Taxpayers Charter

The Board shall adopt and declare a Taxpayer’s Charter and issue such orders, instructions, directions or guidelines to other income-tax authorities as it may deem fit for the administration of such Charter.]1141

Section 120 - Jurisdiction of income-tax authorities

1. Income-tax authorities shall exercise all or any of the powers and perform all or any of the functions conferred on, or, as the case may be, assigned to such authorities by or under this Act in accordance with such directions as the Board may issue for the exercise of the powers and performance of the functions by all or any of those authorities.

1142 [Explanation : For the removal of doubts, it is hereby declared that any income-tax authority, being an authority higher in rank, may, if so directed by the Board, exercise the powers and perform the functions of the income-tax authority lower in rank and any such direction issued by the Board shall be deemed to be a direction issued under sub-section (1).]

2. The directions of the Board under sub-section (1) may authorise any other income-tax authority to issue orders in writing for the exercise of the powers and performance of the functions by all or any of the other income-tax authorities who are subordinate to it.

3. In issuing the directions or orders referred to in sub-sections (1) and (2), the Board or other income-tax authority authorised by it may have regard to any one or more of the following criteria, namely :

   1. territorial area;

   2. persons or classes of persons;

   3. incomes or classes of income; and

   4. cases or classes of cases.

4. Without prejudice to the provisions of sub-sections (1) and (2), the Board may, by general or special order, and subject to such conditions, restrictions or limitations as may be specified therein,”

1. authorise any Director General or Director to perform such functions of any other income-tax authority as may be assigned to him by the Board;

2. empower the Director General or Chief Commissioner or Commissioner to issue orders in writing that the powers and functions conferred on, or as the case may be, assigned to, the Assessing Officer by or under this Act in respect of any specified area or persons or classes of persons or incomes or classes of income or cases or classes of cases, shall be exercised or performed by 1143 [an Additional Commissioner or] 1144 [an Additional Director or] a 1145 [Joint Commissioner] or a 1146 [Joint Director,] and, where any order is made under this clause, references in any other provision of this Act, or in any rule made thereunder to the Assessing Officer shall be deemed to be references to such 1147 [Additional Commissioner or] 1148 [Additional Director or] 1149 [Joint Commissioner] or 1150 [Joint Director] by whom the powers and functions are to be exercised or performed under such order, and any provision of this Act requiring approval or sanction of the 1151 [Joint Commissioner] shall not apply.

   5. The directions and orders referred to in sub-sections (1) and (2) may, wherever considered necessary or appropriate for the proper management of the work, require two or more Assessing Officers (whether or not of the same class) to exercise and perform, concurrently, the powers and functions in respect of any area or persons or classes of persons or incomes or classes of income or cases or classes of cases; and, where such powers and functions are exercised and performed concurrently, by the Assessing Officers of different classes, any authority lower in rank amongst them shall exercise the powers and perform the functions as any higher authority amongst them may direct, and, further, references in any other provision of this Act or in any rule made thereunder to the Assessing Officer shall be deemed to be references to such higher authority and any provision of this Act requiring approval or sanction of any such authority shall not apply.

   6. Notwithstanding anything contained in any direction or order issued under this section, or in section 124, the Board may, by notification in the Official Gazette, direct that for the purpose of furnishing of the return of income or the doing of any other act or thing under this Act or any rule made thereunder by any person or class of persons, the income-tax authority exercising and performing the powers and functions in relation to the said person or class of persons shall be such authority as may be specified in the notification.

Section 121 - Omitted

1152 [***]

Section 121A - Omitted

1153 [***]

Section 122 - Omitted

1154 [***]

Section 123 - Omitted

1155 [***]

Section 124 - Jurisdiction of Assessing Officers

1. Where by virtue of any direction or order issued under sub-section (1) or subsection (2) of section 120, the Assessing Officer has been vested with jurisdiction over any area, within the limits of such area, he shall have jurisdiction”

1. in respect of any person carrying on a business or profession, if the place at which he carries on his business or profession is situate within the area, or where his business or profession is carried on in more places than one, if the principal place of his business or profession is situate within the area, and

2. in respect of any other person residing within the area.

   2. Where a question arises under this section as to whether an Assessing Officer has jurisdiction to assess any person, the question shall be determined by the 1156 [Principal Director General or Director General] or the 1157 [Principal Chief Commissioner or Chief Commissioner] or the 1158 [Principal Commissioner or Commissioner]; or where the question is one relating to areas within the jurisdiction of different 1159Principal Director General or Director General] or the 1160 [Principal Chief Commissioner or Chief Commissioner] or the 1161 [Principal Commissioner or Commissioner], by the 1162 [Principal Director General or Director General] or the 1163 [Principal Chief Commissioner or Chief Commissioner] or the 1164 [Principal Commissioner or Commissioner] concerned or, if they are not in agreement, by the Board or by such 1165 [Principal Director General or Director General] or the 1166 [Principal Chief Commissioner or Chief Commissioner] or the 1167 [Principal Commissioner or Commissioner] as the Board may, by notification in the Official Gazette, specify.

   3. No person shall be entitled to call in question the jurisdiction of an Assessing Officer”

1. where he has made a return 1168 [under sub-section (1) of section 115WD or under sub-section (1) of section 139], after the expiry of one month from the date on which he was served with a notice under sub-section (1) of section 142 or 1169 [sub-section (2) of section 115WE or sub-section (2) of section 143] or after the completion of the assessment, whichever is earlier;

2. where he has made no such return, after the expiry of the time allowed by the notice under 1170 [sub-section (2) of section 115WD or sub-section (1) of section 142 or under sub-section (1) of section 115WH or under section 148 for the making of the return or by the notice under the first proviso to section 115WF or under the first proviso to section 144] to show cause why the assessment should not be completed to the best of the judgment of the Assessing Officer, whichever is earlier.

1171 [(c) where an action has been taken under section 132 or section 132A, after the expiry of one month from the date on which he was served with a notice under sub-section (1) of section 153A or sub-section (2) of section 153C or after the completion of the assessment, whichever is earlier.]

4. Subject to the provisions of sub-section (3), where an assessee calls in question the jurisdiction of an Assessing Officer, then the Assessing Officer shall, if not satisfied with the correctness of the claim, refer the matter for determination under sub-section (2) before the assessment is made.

5. Notwithstanding anything contained in this section or in any direction or order issued under section 120, every Assessing Officer shall have all the powers conferred by or under this Act on an Assessing Officer in respect of the income accruing or arising or received within the area, if any, over which he has been vested with jurisdiction by virtue of the directions or orders issued under sub-section (1) or sub-section (2) of section 120.

Section 125 - Omitted

1172 [***]

Section 125A - Omitted

1173 [***]

Section 126 - Omitted

1174 [***]

Section 127 - Power to transfer cases

1. The 1175 [Principal Director General or Director General] or 1176 [Principal Chief Commissioner or Chief Commissioner] or 1177[Principal Commissioner or Commissioner] may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, transfer any case from one or more Assessing Officers subordinate to him (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) also subordinate to him.

2. Where the Assessing Officer or Assessing Officers from whom the case is to be transferred and the Assessing Officer or Assessing Officers to whom the case is to be transferred are not subordinate to the same 1178 [Principal Director General or Director General] or 1179 [Principal Chief Commissioner or Chief Commissioner] or 1180 [Principal Commissioner or Commissioner]”

1. where the 1181 [Principal Director General or Director General] or 1182 [Principal Chief Commissioner or Chief Commissioner] or 1183Principal Commissioner or Commissioner] to whom such Assessing Officers are subordinate are in agreement, then the 1184 [Principal Director General or Director General] or 1185 [Principal Chief Commissioner or Chief Commissioner] or 1186 [Principal Commissioner or Commissioner] from whose jurisdiction the case is to be transferred may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, pass the order;

2. where the 1187 [Principal Director General or Director General] or 1188 [Principal Chief Commissioner or Chief Commissioner] or 1189 [Principal Commissioner or Commissioner] aforesaid are not in agreement, the order transferring the case may, similarly, be passed by the Board or any such 1190 [Principal Director General or Director General] or 1191 [Principal Chief Commissioner or Chief Commissioner] or 1192 [Principal Commissioner or Commissioner] as the Board may, by notification in the Official Gazette, authorise in this behalf.

   3. Nothing in sub-section (1) or sub-section (2) shall be deemed to require any such opportunity to be given where the transfer is from any Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place.

   4. The transfer of a case under sub-section (1) or sub-section (2) may be made at any stage of the proceedings, and shall not render necessary the re-issue of any notice already issued by the Assessing Officer or Assessing Officers from whom the case is transferred.

Explanation : In section 120 and this section, the word “case”, in relation to any person whose name is specified in any order or direction issued thereunder, means all proceedings under this Act in respect of any year which may be pending on the date of such order or direction or which may have been completed on or before such date, and includes also all proceedings under this Act which may be commenced after the date of such order or direction in respect of any year.

Section 128 - Omitted

1193 [***]

Section 129 - Change of incumbent of an office

Whenever in respect of any proceeding under this Act an income-tax authority ceases to exercise jurisdiction and is succeeded by another who has and exercises jurisdiction, the income-tax authority so succeeding may continue the proceeding from the stage at which the proceeding was left by his predecessor:

Provided that the assessee concerned may demand that before the proceeding is so continued the previous proceeding or any part thereof be reopened or that before any order of assessment is passed against him, he be reheard.

Section 130 - Omitted

1194 [***]

Section 130A - Omitted

1195 [***]

Section 131 - Power regarding discovery production of evidence etc

1. The Assessing Officer, Deputy Commissioner (Appeals), 1196 [Joint Commissioner], 1197 [Principal Commissioner or Commissioner] (Appeals) 1198 [Chief Commissioner or Commissioner and the Dispute Resolution Panel referred to in clause (a) of sub-section (15) of section 144C] shall, for the purposes of this Act, 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 :

1. discovery and inspection;

2. enforcing the attendance of any person, including any officer of a banking company and examining him on oath;

3. compelling the production of books of account and other documents; and

4. issuing commissions.

(1A) If the Director General or Director or Joint Director or [Assistant Director or Deputy Director] or the authorised officer referred to in subsection (1) of section 132 before he takes action under clauses (i) to (v) of that sub-section, has reason to suspect that any income 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 enquiry or investigation relating thereto, it shall be competent for him to exercise the powers conferred under subsection (1) on the income-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 income-tax authority.

1199 [(2) For the purpose of making an inquiry or investigation in respect of any person or class of persons in relation to an agreement referred to in section 90 or section 90A, it shall be competent for any income-tax authority not below the rank of Assistant Commissioner of Income-tax, as may be notified by the Board in this behalf, to exercise the powers conferred under sub-section (1) on the income-tax authorities referred to in that sub-section, notwithstanding that no proceedings with respect to such person or class of persons are pending before it or any other income-tax authority.]

(2A) [***]1200

(3) Subject to any rules made in this behalf, any authority referred to in subsection (1) or sub-section (1A) 1201 [or sub-section (2)] may impound and retain in its custody for such period as it thinks fit any books of account or other documents produced before it in any proceeding under this Act :

Provided that an Assessing Officer or an 1202 [Assistant Director or Deputy Director] shall not”

1. impound any books of account or other documents without recording his reasons for so doing, or

2. retain in his custody any such books or documents for a period exceeding fifteen days (exclusive of holidays) without obtaining the approval of the Chief Commissioner or Director General or 1203 [Principal Commissioner or Commissioner] or Director therefore, as the case may be.

Section 132 - Search and seizure

1. 1204[Where the Director General or Director or the 1205[Principal Chief Commissioner or Chief Commissioner] or 1206[Principal Commissioner or Commissioner] or Additional Director or Additional Commissioner] 1207[or Joint Director or Joint Commissioner] as may be empowered in this behalf by the Board, in consequence of information in his possession, has reason to believe that -

1. any person to whom a summons under sub-section (1) of section 37 of the Indian Income-tax Act, 1922 (11 of 1922), or under sub-section (1) of section 131 of this Act, or a notice under sub-section (4) of section 22 of the Indian Income-tax Act, 1922 (11 of 1922), or under sub-section (1) of section 142 of this Act was issued to produce, or cause to be produced, any books of account or other documents has omitted or failed to produce, or cause to be produced, such books of account or other documents as required by such summons or notice, or

2. any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, any books of account or other documents which will be useful for, or relevant to, any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act, or

3. any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property which has not been, or would not be, disclosed for the purposes of the Indian Income-tax Act, 1922 (11 of 1922), or this Act (hereinafter in this section referred to as the undisclosed income or property), then, -

   1. the 1208[Principal Director General or Director General] or 1209[Principal Director or Director] or the 1210[Principal Chief Commissioner or Chief Commissioner] or 1211[Principal Commissioner or Commissioner], as the case may be, may authorise any 1212[Additional Director or Additional Commissioner or] 1213[Joint Director], 1214[Joint Commissioner], 1215[Assistant Director or Deputy Director], 1216[Assistant Commissioner or Deputy Commissioner] or Income-tax Officer, or

   2. such 1217[Additional Director or Additional Commissioner] 1218[Joint Director] or 1219[Joint Commissioner], as the case may be, may authorise any 1220[Assistant Director or Deputy Director], 1221[Assistant Commissioner or Deputy Commissioner] or Income-tax Officer, (the officer so authorised in all cases being hereinafter referred to as the authorised officer) to -

1. enter and search any building, place, vessel, vehicle or aircraft where he has reason to suspect that such books of account, other documents, money, bullion, jewellery or other valuable article or thing are kept;

2. break open the lock of any door, box, locker, safe, almirah or other receptacle for exercising the powers conferred by clause (i) where the keys thereof are not available;

(iia) search any person who has got out of, or is about to get into, or is in the building, place, vessel, vehicle or aircraft, if the authorised officer has reason to suspect that such person has secreted about his person any such books of account, other documents, money, bullion, jewellery or other valuable article or thing;

1222[(iib) require any person who is found to be in possession or control of any books of account or other documents maintained in the form of electronic record as defined in clause (t) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000), to afford the authorised officer the necessary facility to inspect such books of account or other documents;]

3. seize any such books of account, other documents, money, bullion, jewellery or other valuable article or thing found as a result of such search: 

   1223[Provided that bullion, jewellery or other valuable article or thing, being stock-in-trade of the business, found as a result of such search shall not be seized but the authorised officer shall make a note or inventory of such stock-in-trade of the business;]

4. place marks of identification on any books of account or other documents or make or cause to be made extracts or copies therefrom; (v) make a note or an inventory of any such money, bullion, jewellery or other valuable article or thing :

Provided that where any building, place, vessel, vehicle or aircraft referred to in clause (i) is within the area of jurisdiction of any 1224[Principal Chief Commissioner or Chief Commissioner] or 1225[Principal Commissioner or Commissioner], but such 1226[Principal Chief Commissioner or Chief Commissioner] or 1227[Principal Commissioner or Commissioner] has no jurisdiction over the person referred to in clause (a) or clause (b) or clause (c), then, notwithstanding anything contained in section 120, it shall be competent for him to exercise the powers under this sub-section in all cases where he has reason to believe that any delay in getting the authorisation from the 1228[Principal Chief Commissioner or Chief Commissioner] or 1229[Principal Commissioner or Commissioner] having jurisdiction over such person may be prejudicial to the interests of the revenue :

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):

1230[Provided also that nothing contained in the second proviso shall apply in case of any valuable article or thing, being stock-in-trade of the business.]

1231[Provided also that no authorisation shall be issued by the Additional Director or Additional Commissioner or Joint Director or Joint Commissioner on or after the 1st day of October, 2009 unless he has been empowered by the Board to do so.]

1232[Explanation.- For the removal of doubts, it is hereby declared that the reason to believe, as recorded by the income-tax authority under this sub-section, shall not be disclosed to any person or any authority or the Appellate Tribunal.]

(1A) Where any 1233[Principal Chief Commissioner or Chief Commissioner] or 1234[Principal Commissioner or Commissioner], in consequence of information in his possession, has reason to suspect that any books of account, other documents, money, bullion, jewellery or other valuable article or thing in respect of which an officer has been authorised by the Director General or Director or any other Chief Commissioner or 1235[Commissioner or Additional Director or Additional Commissioner] 1236[or Joint Director or Joint Commissioner] to take action under clauses (i) to (v) of sub-section (1) are or is kept in any building, place, vessel, vehicle or aircraft not mentioned in the authorisation under sub-section (1), such 1237[Principal Chief Commissioner or Chief Commissioner] or 1238[Principal Commissioner or Commissioner] may, notwithstanding anything contained in section 120, authorise the said officer to take action under any of the clauses aforesaid in respect of such building, place, vessel, vehicle or aircraft.

1239[Explanation.- For the removal of doubts, it is hereby declared that the reason to suspect, as recorded by the income-tax authority under this sub-section, shall not be disclosed to any person or any authority or the Appellate Tribunal.]

2. The authorised officer may requisition the services of any police officer or of any officer of the Central Government, or of both, to assist him for all or any of the purposes specified in sub-section (1) or sub-section (1A) and it shall be the duty of every such officer to comply with such requisition.

3. The authorised officer may, where it is not practicable to seize any such books of account, other documents, money, bullion, jewellery or other valuable article or thing, for reasons other than those mentioned in the second proviso to sub-section (1), 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 officer and such officer may take such steps as may be necessary for ensuring compliance with this sub-section.

Explanation : For the removal of doubts, it is hereby declared that serving of an order as aforesaid under this sub-section shall not be deemed to be seizure of such books of account, other documents, money, bullion, jewellery or other valuable article or thing under clause (iii) of sub-section (1).

4. The authorised officer may, during the course of the search or seizure, examine on oath any person who is found to be in possession or control of any books of account, documents, money, bullion, jewellery or other valuable article or thing and any statement made by such person during such examination may thereafter be used in evidence in any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act.

Explanation : For the removal of doubts, it is hereby declared that the examination of any person under this sub-section may be not merely in respect of any books of account, other documents or assets found as a result of the search, but also in respect of all matters relevant for the purposes of any investigation connected with any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act.

(4A) Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search, it may be presumed”

1. that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person;

2. that the contents of such books of account and other documents are true; and

3. that the signature and every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person’s handwriting, and in the case of a document stamped, executed, or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested.

   5. [***]1240

   6. [***]1241

   7. [***]1242

   8. The books of account or other documents seized under sub-section (1) or subsection (1A) shall not be retained by the authorised officer for a period exceeding 1243[thirty days from the date of the 1244[order of assessment or reassessment or recomputation under sub-section (3) of section 143 or section 144 or section 147 or] section 153A or clause (c) of section 158BC]] unless the reasons for retaining the same are recorded by him in writing and the approval of the 1245[Principal Chief Commissioner or Chief Commissioner], 1246[Principal Commissioner or Commissioner], Director General or Director for such retention is obtained :

Provided that the 1247[Principal Chief Commissioner or Chief Commissioner],  1248[Principal Commissioner or Commissioner], 1249[Principal Director General or 1250[Principal Director or Director]] or Director shall not authorise the retention of the books of account and other documents for a period exceeding thirty days after all the proceedings under the Indian Income-tax Act, 1922 (11 of 1922), or this Act, in respect of the years for which the books of account or other documents are relevant are completed.

1251[(8A) An order under sub-section (3) shall not be in force for a period exceeding sixty days from the date of the order.]

9. The person from whose custody any books of account or other documents are seized under sub-section (1) or sub-section (1A) may make copies thereof, or take extracts therefrom, in the presence of the authorised officer or any other person empowered by him in this behalf, at such place and time as the authorised officer may appoint in this behalf.

1252[(9A) Where the authorised officer has no jurisdiction over the person referred to in clause (a) or clause (b) or clause (c) of sub-section (1), the books of account or other documents, or any money, bullion, jewellery or other valuable article or thing (hereafter in this section and in sections 132A and 132B referred to as assets) seized under that sub-section shall be handed over by the authorised officer to the Assessing Officer having jurisdiction over such person within a period of sixty days from the date on which the last of the authorisations for search was executed and thereupon the powers exercisable by the authorised officer under sub-section (8) or sub-section (9) shall be exercisable by such Assessing Officer.]

1253[(9B) Where, during the course of the search or seizure or within a period of sixty days from the date on which the last of the authorisations for search was executed, the authorised officer, for reasons to be recorded in writing, is satisfied that for the purpose of protecting the interest of revenue, it is necessary so to do, he may with the previous approval of the Principal Director General or Director General or the Principal Director or Director, by order in writing, attach provisionally any property belonging to the assessee, and for the said purposes, the provisions of the Second Schedule shall, mutatis mutandis, apply.

(9C) Every provisional attachment made under sub-section (9B) shall cease to have effect after the expiry of a period of six months from the date of the order referred to in sub-section (9B).

(9D) The authorised officer may, during the course of the search or seizure or within a period of sixty days from the date on which the last of the authorisations for search was executed, make a reference to a Valuation Officer referred to in section 142A, who shall estimate the fair market value of the property in the manner provided under that section and submit a report of the estimate to the said officer within a period of sixty days from the date of receipt of such reference.]

10. If a person legally entitled to the books of account or other documents seized under sub-section (1) or sub-section (1A) objects for any reason to the approval given by the 1254[Principal Chief Commissioner or Chief Commissioner], 1255[Principal Commissioner or Commissioner], 1256[Principal Director General or 1257[Principal Director or Director] under sub-section (8), he may make an application to the Board stating therein the reasons for such objection and requesting for the return of the books of account or other documents 1258[and the Board may, after giving the applicant an opportunity of being heard, pass such orders as it thinks fit].

11. [***]1259

(11A) [***]1260

12. [***]1261

13. The provisions of the Code of Criminal Procedure, 1973 (2 of 1974), relating to searches and seizure shall apply, so far as may be, to searches and seizure under sub-section (1) or sub-section (1A).

14. The Board may make rules30 in relation to any search or seizure under this section; in particular, and without prejudice to the generality of the foregoing power, such rules may provide for the procedure to be followed by the authorised officer”

1. for obtaining ingress into any building, place, vessel, vehicle or aircraft to be searched where free ingress thereto is not available;

2. for ensuring safe custody of any books of account or other documents or assets seized.

1262[Explanation 1.-For the purposes of sub-sections (9A), (9B) and (9D), with respect to "execution of an authorisation for search", the provisions of sub-section (2) of section 153B shall apply.]

Explanation 2 : In this section, the word “proceeding” means any proceeding in respect of any year, whether under the Indian Income-tax Act, 1922 (11 of 1922), or this Act, which may be pending on the date on which a search is authorised under this section or which may have been completed on or before such date and includes also all proceedings under this Act which may be commenced after such date in respect of any year.

Section 132A - Powers to requisition books of account etc

1. 1263[Where the Director General or Director or the 1264[Principal Chief Commissioner or Chief Commissioner] or 1265[Principal Commissioner or Commissioner], in consequence of information in his possession, has reason to believe that -

1. any person to whom a summons under sub-section (1) of section 37 of the Indian Income-tax Act, 1922 (11 of 1922), or under sub-section (1) of section 131 of this Act, or a notice under sub-section (4) of section 22 of the Indian Income-tax Act, 1922 (11 of 1922), or under sub-section (1) of section 142 of this Act was issued to produce, or cause to be produced, any books of account or other documents has omitted or failed to produce, or cause to be produced, such books of account or other documents, as required by such summons or notice and the said books of account or other documents have been taken into custody by any officer or authority under any other law for the time being in force, or

2. any books of account or other documents will be useful for, or relevant to, any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act and any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, such books of account or other documents on the return of such books of account or other documents by any officer or authority by whom or which such books of account or other documents have been taken into custody under any other law for the time being in force, or

3. any assets represent either wholly or partly income or property which has not been, or would not have been, disclosed for the purposes of the Indian Income-tax Act, 1922 (11 of 1922), or this Act by any person from whose possession or control such assets have been taken into custody by any officer or authority under any other law for the time being in force, then, the 1266[Principal Director General or Director General] or 1267[Principal Director or Director] or the 1268[Principal Chief Commissioner or Chief Commissioner] or 1269[Principal Commissioner or Commissioner] may authorise any 1270[Additional Director, Additional Commissioner] 1271[Joint Director], 1272[Joint Commissioner], 1273[Assistant Director or Deputy Director], 1274[Assistant Commissioner or Deputy Commissioner] or Income-tax Officer, (hereafter in this section and in sub-section (2) of section 278D referred to as the requisitioning officer) to require the officer or authority referred to in clause (a) or clause (b) or clause (c), as the case may be, to deliver such books of account, other documents or assets to the requisitioning officer.

1275[Explanation.-For the removal of doubts, it is hereby declared that the reason to believe, as recorded by the income-tax authority under this sub-section, shall not be disclosed to any person or any authority or the Appellate Tribunal.]

2. On a requisition being made under sub-section (1), the officer or authority referred to in clause (a) or clause (b) or clause (c), as the case may be, of that sub-section shall deliver the books of account, other documents or assets to the requisitioning officer either forthwith or when such officer or authority is of the opinion that it is no longer necessary to retain the same in his or its custody.

3. Where any books of account, other documents or assets have been delivered to the requisitioning officer, the provisions of sub-sections (4A) to (14) (both inclusive) of section 132 and section 132B shall, so far as may be, apply as if such books of account, other documents or assets had been seized under subsection (1) of section 132 by the requisitioning officer from the custody of the person referred to in clause (a) or clause (b) or clause (c), as the case may be, of sub-section (1) of this section and as if for the words “the authorised officer” occurring in any of the aforesaid sub-sections (4A) to (14), the words “the requisitioning officer” were substituted.

Section 132B - Application of seized or requisitioned assets

1276[(1) The assets seized under section 132 or requisitioned under section 132A may be dealt with in the following manner, namely :

1. the amount of any existing liability under this Act, the Wealth-tax Act, 1957 (27 of 1957), the Expenditure-tax Act, 1987 (35 of 1987), the Gift-tax Act, 1958 (18 of 1958) and the Interest-tax Act, 1974 (45 of 1974), and the amount of the liability determined on 1277[completion of the assessment or reassessment or recomputation] and the assessment of the year relevant to the previous year in which search is initiated or requisition is made, or the amount of liability determined on completion of the assessment under Chapter XIVB for the block period, as the case may be] (including any penalty levied or interest payable in connection with such assessment) and in respect of which such person is in default or is 1278[deemed to be in default, or the amount of liability arising on an application made before the Settlement Commission under sub-section (1) of section 245C, may be recovered out of such assets]:

1279[Provided that where the person concerned makes an application to the Assessing Officer within thirty days from the end of the month in which the asset was seized, for release of asset and the nature and source of acquisition of any such asset is explained] to the satisfaction of the Assessing Officer, the amount of any existing liability referred to in this clause may be recovered out of such asset and the remaining portion, if any, of the asset may be released, with the prior approval of the Chief Commissioner or Commissioner, to the person from whose custody the assets were seized :

Provided further that such asset or any portion thereof as is referred to in the first proviso shall be released within a period of one hundred and twenty days from the date on which the last of the authorisations for search under section 132 or for requisition under section 132A, as the case may be, was executed;

2. if the assets consist solely of money, or partly of money and partly of other assets, the Assessing Officer may apply such money in the discharge of the liabilities referred to in clause (i) and the assessee shall be discharged of such liability to the extent of the money so applied;

3. the assets other than money may also be applied for the discharge of any such liability referred to in clause (i) as remains undischarged and for this purpose such assets shall be deemed to be under distraint as if such distraint was effected by the Assessing Officer or, as the case may be, the Tax Recovery Officer under authorisation from the Chief Commissioner or Commissioner under sub-section (5) of section 226 and the Assessing Officer or, as the case may be, the Tax Recovery Officer may recover the amount of such liabilities by the sale of such assets and such sale shall be effected in the manner laid down in the Third Schedule.

   (2)   Nothing contained in sub-section (1) shall preclude the recovery of the amount of liabilities aforesaid by any other mode laid down in this Act.

   (3)   Any assets or proceeds thereof which remain after the liabilities referred to in clause (i) of sub-section (1) are discharged shall be forthwith made over or paid to the persons from whose custody the assets were seized.

   (4)    (a) The Central Government shall pay simple interest at the rate of 1280[one-half per cent for every month or part of a month] on the amount by which the aggregate amount of money seized under section 132 or requisitioned under section 132A, as reduced by the amount of money, if any, released under the first proviso to clause (i) of sub-section (1), and of the proceeds, if any, of the assets sold towards the discharge of the existing liability referred to in clause (i) of sub-section (1), exceeds the aggregate of the amount required to meet the liabilities referred to in clause (i) of sub-section (1) of this section.

   (b) Such interest shall run from the date immediately following the expiry of the period of one hundred and twenty days from the date on which the last of the authorisations for search under section 132 or requisition under section 132A was executed to the date of completion of the assessment 1281[or reassessment or recomputation]

1282[(1) Explanation : In this section,”

1. “block period” shall have the meaning assigned to it in clause (a) of section 158B;

2. “execution of an authorisation for search or requisition” shall have the same meaning as assigned to it in Explanation 2 to section 158BE.]

1283[Explanation 2.-For the removal of doubts, it is hereby declared that the "existing liability" does not include advance tax payable in accordance with the provisions of Part C of Chapter XVII.] 

Section 133 - Power to call for information

The Assessing Officer, the Deputy Commissioner (Appeals), the 1284Joint Commissioner] or the 1285[Principal Commissioner or Commissioner] (Appeals) may, for the purposes of this Act,

1. require any firm to furnish him with a return of the names and addresses of the partners of the firm and their respective shares;

2. require any Hindu undivided family to furnish him with a return of the names and addresses of the manager and the members of the family;

3. require any person whom he has reason to believe to be a trustee, guardian or agent, to furnish him with a return of the names of the persons for or of whom he is trustee, guardian or agent, and of their addresses;

4. require any assessee to furnish a statement of the names and addresses of all persons to whom he has paid in any previous year rent, interest, commission, royalty or brokerage, or any annuity, not being any annuity taxable under the head “Salaries” amounting to more than one thousand rupees, or such higher amount as may be prescribed, together with particulars of all such payments made;

5. require any dealer, broker or agent or any person concerned in the management of a stock or commodity exchange to furnish a statement of the names and addresses of all persons to whom he or the exchange has paid any sum in connection with the transfer, whether by way of sale, exchange or otherwise, of assets, or on whose behalf or from whom he or the exchange has received any such sum, together with particulars of all such payments and receipts;

6. require any person, including a banking company or any officer thereof, to furnish information in relation to such points or matters, or to furnish statements of accounts and affairs verified in the manner specified by the Assessing Officer, the Deputy Commissioner (Appeals), the 1286 [Joint Commissioner] or the 1287 [Principal Commissioner or Commissioner] (Appeals), giving information in relation to such points or matters as, in the opinion of the Assessing Officer, the Deputy Commissioner (Appeals), the 1288 [Joint Commissioner] or the 1289 [Principal Commissioner or Commissioner] (Appeals), will be useful for, or relevant to, any inquiry or proceeding under this Act:

Provided that the powers referred to in clause (6), may also be exercised by the Director General, the Chief Commissioner, the Director 1290 [or the Principal Commissioner or Commissioner or the Joint Director or Deputy Director or Assistant Director].

Provided further that the power in respect of an inquiry, in a case where no proceeding is pending, shall not be exercised by any income-tax authority below the rank of Director or 1291 [Principal Commissioner or Commissioner] 1292 [, other than the Joint Director or Deputy Director or Assistant Director,] without the prior approval of the Director or, as the case may be, the 1293 [Principal Commissioner or Commissioner].

1294 [Provided also that for the purposes of an agreement referred to in section 90 or section 90A, an income-tax authority notified under sub-section (2) of section 131 may exercise all the powers conferred under this section, notwithstanding that no proceedings are pending before it or any other income-tax authority.]

Section 133A - Power of survey

1. Notwithstanding anything contained in any other provision of this Act, an income-tax authority may enter”

1. any place within the limits of the area assigned to him, or

2. any place occupied by any person in respect of whom he exercises jurisdiction, or

3. any place in respect of which he is authorised for the purposes of this section by such income-tax authority, who is assigned the area within which such place is situated or who exercises jurisdiction in respect of any person occupying such place,] 1295[at which a business or profession or an activity for charitable purpose is carried on, whether such place be the principal place or not of such business or profession or of such activity for charitable purpose, and require any proprietor, trustee, employee or any other person who may at that time and place be attending in any manner to, or helping in, the carrying on of such business or profession or such activity for charitable purpose-]

1. to afford him the necessary facility to inspect such books of account or other documents as he may require and which may be available at such place,

2. to afford him the necessary facility to check or verify the cash, stock or other valuable article or thing which may be found therein, and

3. to furnish such information as he may require as to any matter which may be useful for, or relevant to, any proceeding under this Act.

Explanation : For the purposes of this sub-section, a place where a business or profession 1296[or activity for charitable purpose] is carried on shall also include any other place, whether any business or profession 1297[or activity for charitable purpose] is carried on therein or not, in which the person carrying on the business or profession 1298[or activity for charitable purpose] states that any of his books of account or other documents or any part of his cash or stock or other valuable article or thing relating to his business or profession 1299[or activity for charitable purpose] are or is kept.

2. An income-tax authority may enter any place of business or profession referred to in sub-section (1) only during the hours at which such place is open for the conduct of business or profession and, in the case of any other place, only after sunrise and before sunset.

1300[(2A) Without prejudice to the provisions of sub-section (1), an income-tax authority acting under this sub-section may for the purpose of verifying that tax has been deducted or collected at source in accordance with the provisions under sub-heading B of Chapter XVII or under sub-heading BB of Chapter XVII, as the case may be, enter, after sunrise and before sunset, any office, or any other place where business or profession is carried on, within the limits of the area assigned to him, or any place in respect of which he is authorised for the purposes of this section by such income-tax authority who is assigned the area within which such place is situated, where books of account or documents are kept and require the deduct or the collector or any other person who may at that time and place be attending in any manner to such work,-

1. to afford him the necessary facility to inspect such books of account or other documents as he may require and which may be available at such place, and

2. to furnish such information as he may require in relation to such matter.]

   3. An income-tax authority acting under this section may,”

1. if he so deems necessary, place marks of identification on the books of account or other documents inspected by him and make or cause to be made extracts or copies therefrom,

1301[(ia) impound and retain in his custody for such period as he thinks fit any books of account or other documents inspected by him:

Provided that such income-tax authority shall not”

1. impound any books of account or other documents except after recording his reasons for so doing; or

1302[(b) retain in his custody any such books of account or other documents for a period exceeding fifteen days (exclusive of holidays) without obtaining the approval of the Principal Chief Commissioner or the Chief Commissioner or the Principal Director General or the Director General or the Principal Commissioner or the Commissioner or the Principal Director or the Director therefore, as the case may be,]]

2. make an inventory of any cash, stock or other valuable article or thing checked or verified by him,

3. record the statement of any person which may be useful for, or relevant to, any proceeding under this Act.

1303[Provided that no action under clause (ia) or clause (ii) shall be taken by an income-tax authority acting under sub-section (2A).]

4. An income-tax authority acting under this section shall, on no account, remove or cause to be removed from the place wherein he has entered, 1304[***] any cash, stock or other valuable article or thing.

5. Where, having regard to the nature and scale of expenditure incurred by an assessee, in connection with any function, ceremony or event, the income-tax authority is of the opinion that it is necessary or expedient so to do, he may, at any time after such function, ceremony or event, require the assessee by whom such expenditure has been incurred or any person who, in the opinion of the income-tax authority, is likely to possess information as respects the expenditure incurred, to furnish such information as he may require as to any matter which may be useful for, or relevant to, any proceeding under this Act and may have the statements of the assessee or any other person recorded and any statement so recorded may thereafter be used in evidence in any proceeding under this Act.

6. If a person under this section is required to afford facility to the income-tax authority to inspect books of account or other documents or to check or verify any cash, stock or other valuable article or thing or to furnish any information or to have his statement recorded either refuses or evades to do so, the income-tax authority shall have all the powers under sub-section (1) of section 131 for enforcing compliance with the requirement made :

1305[Provided that no action under this section shall be taken by an income-tax authority without the approval of the Principal Director General or the Director General or the Principal Chief Commissioner or the Chief Commissioner.]

Explanation : In this section,-

1306[(a) "income-tax authority" means-

1. a Principal Commissioner or Commissioner, a Principal Director or Director, a Joint Commissioner or Joint Director, an Assistant Director or a Deputy Director or an Assessing Officer, or a Tax Recovery Officer; and

2. includes an Inspector of Income-tax, for the purposes of clause (i) of sub-section (1), clause (i) of sub-section (3) and sub-section (5), 1307[who is subordinate to the Principal Director General or the Director General or the Principal Chief Commissioner or the Chief Commissioner, as may be specified by the Board.]

(b) “proceeding” means any proceeding under this Act in respect of any year which may be pending on the date on which the powers under this section are exercised or which may have been completed on or before such date and includes also all proceedings under this Act which may be commenced after such date in respect of any year.

Section 133B - Power to collect certain information

1. Notwithstanding anything contained in any other provision of this Act, an income-tax authority may, for the purpose of collecting any information which may be useful for, or relevant to, the purposes of this Act, enter -

   1. any building or place within the limits of the area assigned to such authority; or

   2. any building or place occupied by any person in respect of whom he exercises jurisdiction, at which a business or profession is carried on, whether such place be the principal place or not of such business or profession, and require any proprietor, employee or any other person who may at that time and place be attending in any manner to, or helping in, the carrying on of such business or profession to furnish such information as may be prescribed1308.

2. An income-tax authority may enter any place of business or profession referred to in sub-section (1) only during the hours at which such place is open for the conduct of business or profession.

3. For the removal of doubts, it is hereby declared that an income-tax authority acting under this section shall, on no account, remove or cause to be removed from the building or place wherein he has entered, any books of account or other documents or any cash, stock or other valuable article or thing.

Explanation : In this section, “income-tax authority” means a 1309 [Joint Commissioner], an 1310 [Assistant Director or Deputy Director] or an Assessing Officer, and includes an Inspector of Income-tax who has been authorised by the Assessing Officer to exercise the powers conferred under this section in relation to the area in respect of which the Assessing Officer exercises jurisdiction or part thereof.

Section 133C - Power to call for information by prescribed income-tax authority

1. 1311[The prescribed income-tax authority may, for the purposes of verification of information in its possession relating to any person, issue a notice to such person requiring him, on or before a date to be specified therein, to furnish information or documents verified in the manner specified therein, which may be useful for, or relevant to, any inquiry or proceeding under this Act.

Explanation.-In this section, the term "proceeding" shall have the meaning assigned to it in clause (b) of the Explanation to section 133A.]

1312[(2) Where any information or document has been received in response to a notice issued under sub-section (1), the prescribed income-tax authority may process such information or document and make available the outcome of such processing to the Assessing Officer.]

1313[(3) The Board may make a scheme for centralised issuance of notice and for processing of information or documents and making available the outcome of the processing to the Assessing Officer.]

Section 134 - Power to inspect registers of companies

The Assessing Officer, the Deputy Commissioner (Appeals), the 1314 [Joint Commissioner] or the 1315 [Principal Commissioner or Commissioner] (Appeals), or any person subordinate to him authorised in writing in this behalf by the Assessing Officer, the Deputy Commissioner (Appeals), the 1316[Joint Commissioner] or the 1317 [Principal Commissioner or Commissioner] (Appeals), may inspect, and if necessary, take copies, or cause copies to be taken, of any register of the members, debenture holders or mortgagees of any company or of any entry in such register.

Section 135 - Power of Director General or Director Chief Commissioner or Commissioner and Joint Commissioner

The Director General or Director, the 1318 [Principal Chief Commissioner or Chief Commissioner] or 1319 [Principal Commissioner or Commissioner] and the 1320 [Joint Commissioner] shall be competent to make any enquiry under this Act, and for this purpose shall have all the powers that an Assessing Officer has under this Act in relation to the making of enquiries.

Section 136 - Proceedings before income-tax authorities to be judicial proceedings

Any proceeding under this Act before an income-tax authority shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 and for the purposes of section 196 of the Indian Penal Code (45 of 1860), and every income-tax authority shall be deemed to be a Civil Court for the purposes of section 195, but not for the purposes of Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974).

Section 137 - Omitted

1321 [***]

Section 138 - Disclosure of information respecting assessees

1. (a) The Board or any other income-tax authority specified by it by a general or special order in this behalf may furnish or cause to be furnished to”

1. any officer, authority or body performing any functions under any law relating to the imposition of any tax, duty or cess, or to dealings in foreign exchange as defined in 1322 [clause (n) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999)]; or

2. such officer, authority or body performing functions under any other law as the Central Government may, if in its opinion it is necessary so to do in the public interest, specify by notification in the Official Gazette in this behalf, any such information received or obtained by any income-tax authority in the performance of his functions under this Act, as may, in the opinion of the Board or other income-tax authority, be necessary for the purpose of enabling the officer, authority or body to perform his or its functions under that law.

   (b) Where a person makes an application to the 1323 [Principal Chief Commissioner or Chief Commissioner] or 1324 [Principal Commissioner or Commissioner] in the prescribed form1325 for any information relating to any assessee received or obtained by any income-tax authority in the performance of his functions under this Act, the1326 [Principal Chief Commissioner or Chief Commissioner] or 1327 [Principal Commissioner or Commissioner] may, if he is satisfied that it is in the public interest so to do, furnish or cause to be furnished the information asked for and his decision in this behalf shall be final and shall not be called in question in any court of law.

   2. Notwithstanding anything contained in sub-section (1) or any other law for the time being in force, the Central Government may, having regard to the practices and usages customary or any other relevant factors, by order notified in the Official Gazette, direct that no information or document shall be furnished or produced by a public servant in respect of such matters relating to such class of assessees or except to such authorities as may be specified in the order.

Section 139 - Return of income

1328 [(1) Every person,-

1. being a 1329 [company or a firm]; or

2. being a person 1330 [other than a company or a firm], if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax, shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form1331 and verified in the prescribed manner1332 and setting forth such other particulars as may be prescribed1333 :

Provided that a person referred to in clause (b), who is not required to furnish a return under this sub-section and residing in such area as may be specified by the Board in this behalf by notification in the Official Gazette, and who 1334 [during the previous year incurs an expenditure of fifty thousand rupees or more towards consumption of electricity or at any time during the previous year] fulfils any one of the following conditions, namely :

1. is in occupation of an immovable property exceeding a specified floor area, whether by way of ownership, tenancy or otherwise, as may be specified by the Board in this behalf; or

2. is the owner or the lessee of a motor vehicle other than a two-wheeled motor vehicle, whether having any detachable side car having extra wheel attached to such two-wheeled motor vehicle or not; or

3. 1335[***]

4. has incurred expenditure for himself or any other person on travel to any foreign country; or

5. is the holder of a credit card, not being an “add-on” card, issued by any bank or institution; or

6. is a member of a club where entrance fee charged is twenty-five thousand rupees or more, shall furnish a return, of his income 1336 [during any previous year ending before the 1st day of April, 2005], on or before the due date in the prescribed form1337 and verified in the prescribed manner1338 and setting forth such other particulars as may be prescribed1339 :

Provided further that the Central Government may, by notification in the Official Gazette, specify the class or classes of persons to whom the provisions of the first proviso shall not apply :

Provided also that every 1340 [company or a firm] shall furnish on or before the due date the return in respect of its income or loss in every previous year :

1341 [Provided also that a person, being a resident other than not ordinarily resident in India within the meaning of clause (6) of section 6, who is not required to furnish a return under this sub-section and who at any time during the previous year,-

1. holds, as a beneficial owner or otherwise, any asset (including any financial interest in any entity) located outside India or has signing authority in any account located outside India; or

2. is a beneficiary of any asset (including any financial interest in any entity) located outside India, shall furnish, on or before the due date, a return in respect of his income or loss for the previous year in such form and verified in such manner and setting forth such other particulars as may be prescribed:

Provided also that nothing contained in the fourth proviso shall apply to an individual, being a beneficiary of any asset (including any financial interest in any entity) located outside India where, income, if any, arising from such asset is includible in the income of the person referred to in clause (a) of that proviso in accordance with the provisions of this Act:]

1342 [Provided also that every person, being an individual or a Hindu undivided family or an association of persons or a body of individuals, whether incorporated or not, or an artificial juridical person, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year, without giving effect to the 1343 [provisions of clause (38) of section 10 or section 10A] or section 10B or section 10BA or Chapter VIA exceeded the maximum amount which is not chargeable to income tax, shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed.]

Explanation 1: For the purposes of this sub-section, the expression “motor vehicle” shall have the meaning assigned to it in clause (28) of section 2 of the Motor Vehicles Act, 1988 (59 of 1988).

Explanation 2: In this sub-section, “due date” means, -

1. where the assessee 1344[other than an assessee referred to in clause (aa)] s”

1. a company 1345 [***]; or

2. a person (other than a company) whose accounts are required to be audited under this Act or under any other law for the time being in force; or

3. a 1346[***] partner of a firm whose accounts are required to be audited under this Act or under any other law for the time being in force 1347[or the spouse of such partner if the provisions of Section 5-A applies to such spouse], the 1348[31st day of October] of the assessment year;

1349 [(aa) in the case of an assessee 1350[, including the partners of the firm or the spouse of such partner (if the provisions of Section 5-A applies to such spouse) being such assessee,] 1351[who] is required to furnish a report referred to in section 92E, the 30th day of November of the assessment year;]

2. in the case of a person other than a company, referred to in the first proviso to this sub-section, the 31st day of October of the assessment year;

3. in the case of any other assessee, the 31st day of July of the assessment year.

Explanation 3 : For the purposes of this sub-section, the expression “travel to any foreign country” does not include travel to the neighbouring countries or to such places of pilgrimage as the Board may specify in this behalf by notification in the Official Gazette.]

1352 [Explanation 4.-For the purposes of this section "beneficial owner" in respect of an asset means an individual who has provided, directly or indirectly, consideration for the asset for the immediate or future benefit, direct or indirect, of himself or any other person.

Explanation 5.-For the purposes of this section "beneficiary" in respect of an asset means an individual who derives benefit from the asset during the pervious year and the consideration for such asset has been provided by any person other than such beneficiary.]

1353 [(1A) Without prejudice to the provisions of sub-section (1), any person, being an individual who is in receipt of income chargeable under the head “Salaries” may, at his option, furnish a return of his income for any previous year to his employer, in accordance with such scheme as may be specified1354 by the Board in this behalf, by notification in the Official Gazette, and subject to such conditions as may be specified1355therein, and such employer shall furnish all returns of income received by him on or before the due date, in such form (including on a floppy, diskette, magnetic cartridge tape, CD-ROM or any other computer readable media) and manner as may be specified1356 in that scheme, and in such case, any employee who has filed a return of his income to his employer shall be deemed to have furnished a return of income under sub-section (1), and the provisions of this Act shall apply accordingly.]

1357 [(1B) Without prejudice to the provisions of sub-section (1), any person, being a company or being a person other than a company, required to furnish a return of income under sub-section (1), may, at his option, on or before the due date, furnish a return of his income for any previous year in accordance with such scheme as may be specified1358 by the Board in this behalf by notification in the Official Gazette and subject to such conditions as may be specified1359 therein, in such form (including on a floppy, diskette, magnetic cartridge tape, CD-ROM or any other computer readable media) and in the manner as may be specified4 in that scheme, and in such case, the return of income furnished under such scheme shall be deemed to be a return furnished under sub-section (1), and the provisions of this Act shall apply accordingly.]

1360 [(1C) Notwithstanding anything contained in sub-section (1), the Central Government may, by notification in the Official Gazette, exempt any class or classes of persons from the requirement of furnishing a return of income having regard to such conditions as may be specified in that notification.]

(2)  1361[***]

(3) If any person who has sustained a loss in any previous year under the head “Profits and gains of business or profession” or under the head “Capital gains” and claims that the loss or any part thereof should be carried forward under sub-section (1) of section 72, or sub-section (2) of section 73, 1362 [or sub-section (2) of section 73A] or sub-section (1) or sub-section (3) of section 74 or sub-section (3) of section 74A, he may furnish, within the time allowed under sub-section (1), a return of loss in the prescribed form1363 and verified in the prescribed manner and containing such other particulars as may be prescribed, and all the provisions of this Act shall apply as if it were a return under sub-section (1).

1364 [(4) Any person who has not furnished a return within the time allowed to him under sub-section (1), may furnish the 1365[return for any previous year at any time before three months prior to] the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.]

(4A) Every person in receipt of income derived from property held under trust or other legal obligation wholly for charitable or religious purposes or in part only for such purposes, or of income being voluntary contributions referred to in sub-clause (iia) of clause (24) of section 2, shall, if the total income in respect of which he is assessable as a representative assessee (the total income for this purpose being computed under this Act without giving effect to the provisions of sections 11 and 12) exceeds the maximum amount which is not chargeable to income-tax, furnish a return of such income of the previous year in the prescribed form1366and verified in the prescribed manner1367 and setting forth such other particulars as may be prescribed1368 and all the provisions of this Act shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1).

(4B) The chief executive officer (whether such chief executive officer is known as Secretary or by any other designation) of every political party shall, if the total income in respect of which the political party is assessable (the total income for this purpose being computed under this Act without giving effect to the provisions of section 13A) exceeds the maximum amount which is not chargeable to income-tax, furnish a return of such income of the previous year in the prescribed form1369 and verified in the prescribed manner1370and setting forth such other particulars as may be prescribed1371 and all the provisions of this Act, shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1).

1372 [(4C) Every”

1. 1373[research association] referred to in clause (21) of section 10;

2. news agency referred to in clause (22B) of section 10;

3. association or institution referred to in clause (23A) of section 10;

1374 [(ca) person referred to in clause (23AAA) of section 10;]

4. institution referred to in clause (23B) of section 10;

5. fund or institution referred to in sub-clause (iv) or trust or institution referred to in sub-clause (v) or any university or other educational institution referred to in 1375 [sub-clause (iiiab) or] 1376 [sub-clause (iiiad) or sub-clause (vi)] or any hospital or other medical institution referred to in 1377 [sub-clause (iiiac) or] 1378 [sub-clause (iiiae) or sub-clause (via)] of clause (23C) of section 10;

1379 [(ea) Mutual Fund referred to in clause (23D) of section 10;

(eb) securitisation trust referred to in clause (23DA) of section 10;

1380 [(eba) Investor Protection Fund referred to in clause (23EC) or clause (23ED) of section 10;

(ebb) Core Settlement Guarantee Fund referred to in clause (23EE) of section 10;]

(ec) venture capital company or venture capital fund referred to in clause (23FB) of section 10;]

6. trade union referred to in sub-clause (a) or association referred to in sub-clause (b) of clause (24) of section 10,

1381 [(fa) Board or Authority referred to in clause (29A) of section 10;]

1382 [(g) body or authority or Board or Trust or Commission (by whatever name called) referred to in clause (46) of section 10;

(h) infrastructure debt fund referred to in clause (47) of section 10,] shall, if the total income in respect of which such 1383 [research association], news agency, association or institution 1384 [person or], fund or trust or university or other educational institution or any hospital or other medical institution or trade union 1385 [or body or authority or Board or Trust or Commission or infrastructure debt fund 1386 [or Mutual Fund or securitisation trust or venture capital company or venture capital fund]] is assessable, without giving effect to the provisions of section 10, exceeds the maximum amount which is not chargeable to income-tax, furnish a return of such income of the previous year in the prescribed form1387 and verified in the prescribed manner1388 and setting forth such other particulars as may be presribed1389 and all the provisions of this Act shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1).]

1390 [(4D) Every university, college or other institution referred to in clause (ii) and clause (iii) of sub-section (1) of section 35, which is not required to furnish return of income or loss under any other provision of this section, shall furnish the return in respect of its income or loss in every previous year and all the provisions of this Act shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1).]

1391 [(4E) Every business trust, which is not required to furnish return of income or loss under any other provisions of this section, shall furnish the return of its income in respect of its income or loss in every previous year and all the provisions of this Act shall, so far as may be, apply if it were a return required to be furnished under sub-section (1).]

1392 [(4F) Every investment fund referred to in section 115UB, which is not required to furnish return of income or loss under any other provisions of this section, shall furnish the return of income in respect of its income or loss in every previous year and all the provisions of this Act shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1).]

1393 [(5) If any person, having furnished a return under sub-section (1) or sub-section (4), discovers any omission or any wrong statement therein, he may furnish a revised return at any time 1394[before three months prior to the end] of the relevant assessment year or before the completion of the assessment, whichever is earlier.]

(6) The prescribed form of the returns referred to in sub-sections (1) and (3) of this section, and in clause (i) of sub-section (1) of section 142 shall, in such cases as may be prescribed, require the assessee to furnish the particulars of income exempt from tax, 1395 [assets of the prescribed nature and value, held by him as a beneficial owner or otherwise or in which he is a beneficiary], his bank account and credit card held by him] expenditure exceeding the prescribed limits incurred by him under prescribed heads and such other outgoings as may be prescribed.

(6A) Without prejudice to the provisions of sub-section (6), the prescribed form of the returns referred to in this section, and in clause (i) of sub-section (1) of section 142 shall, in the case of an assessee engaged in any business or profession, also require him to furnish the report of any audit referred to in section 44AB, or, where the report has been furnished prior to the furnishing of the return, a copy of such report together with proof of furnishing the report, the particulars of the location and style of the principal place where he carries on the business or profession and all the branches thereof, the names and addresses of his partners, if any, in such business or profession and, if he is a member of an association or body of individuals, the names of the other members of the association or the body of individuals and the extent of the share of the assessee and the shares of all such partners or the members, as the case may be, in the profits of the business or profession and any branches thereof.

(7)  1396[***]

(8)   (a) 1397 Where the return under sub-section (1) or sub-section (2) or sub-section (4) for an assessment year is furnished after the specified date, or is not furnished, then whether or not the Assessing Officer has extended the date for furnishing the return under sub-section (1) or sub-section (2), the assessee shall be liable to pay simple interest at fifteen per cent per annum, reckoned from the day immediately following the specified date to the date of the furnishing of the return or, where no return has been furnished, the date of completion of the assessment under section 144, on the amount of the tax payable on the total income as determined on regular assessment, as reduced by the advance tax, if any, paid, and any tax deducted at source :

Provided that the Assessing Officer may, in such cases and under such circumstances as may be prescribed1398, reduce or waive the interest payable by any assessee under this sub-section.

Explanation 1: For the purposes of this sub-section, “specified date”, in relation to a return for an assessment year, means,“

1. in the case of every assessee whose total income, or the total income of any person in respect of which he is assessable under this Act, includes any income from business or profession, the date of the expiry of four months from the end of the previous year or where there is more than one previous year, from the end of the previous year which expired last before the commencement of the assessment year or the 30th day of June of the assessment year, whichever is later;

2. in the case of every other assessee, the 30th day of June of the assessment year.

Explanation 2 : Where, in relation to an assessment year, an assessment is made for the first time under section 147, the assessment so made shall be regarded as a regular assessment for the purposes of this sub-section.

(b) Where as a result of an order under section 147 or section 154 or section 155 or section 250 or section 254 or section 260 or section 262 or section 263 or section 264 or an order of the Settlement Commission under sub-section (4) of section 245D, the amount of tax on which interest was payable under this sub-section has been increased or reduced as the case may be, the interest shall be increased or reduced accordingly, and”

1. in a case where the interest is increased, the Assessing Officer shall serve on the assessee, a notice of demand in the prescribed form specifying the sum payable, and such notice of demand shall be deemed to be a notice under section 156 and the provisions of this Act shall apply accordingly;

2. in a case where the interest is reduced, the excess interest paid, if any, shall be refunded.

(c) The provisions of this sub-section shall apply in respect of the assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, and references therein to the other provisions of this Act shall be construed as references to the said provisions as they were applicable to the relevant assessment year.

1399[(8A) Any person, whether or not he has furnished a return under subsection (1) or sub-section (4) or sub-section (5), for an assessment year (herein referred to as the relevant assessment year), may furnish an updated return of his income or the income of any other person in respect of which he is assessable under this Act, for the previous year relevant to such assessment year, in the prescribed form, verified in such manner and setting forth such particulars as may be prescribed, at any time within twenty-four months from the end of the relevant assessment year:

Provided that the provision of this sub-section shall not apply, if the updated return,

1. is a return of a loss; or

2. has the effect of decreasing the total tax liability determined on the basis of return furnished under sub-section (1) or subsection (4) or sub-section (5); or

3. results in refund or increases the refund due on the basis of return furnished under sub-section (1) or sub-section (4) or sub-section (5), of such person under this Act for the relevant assessment year;

Provided further that a person shall not be eligible to furnish an updated return under this sub-section, where.

1. a search has been initiated under section 132 or books of account or other documents or any assets are requisitioned under section 132A in the case of such person; or

2. a survey has been conducted under section 133A, other than sub-section (2A) of that section, in the case such person; or

3. a notice has been issued to the effect that any money, bullion, jewellery or valuable article or thing, seized or requisitioned under section 132 or section 132A in the case of any other person belongs to such person; or

4. a notice has been issued to the effect that any books of account or documents, seized or requisitioned under section 132 or section 132A in the case of any other person, pertain or pertains to, or any other information contained therein, relate to, such person, for the assessment year relevant to the previous year in which such search is initiated or survey is conducted or requisition is made and any assessment year preceding such assessment year:

Provided also that no updated return shall be furnished by any person for the relevant assessment year, where.

1. an updated return has been furnished by him under this sub-section for the relevant assessment year; or

2. any proceeding for assessment or reassessment or recomputation or revision of income under this Act is pending or has been completed for the relevant assessment year in his case; or

3. the Assessing Officer has information in respect of such person for the relevant assessment year in his possession under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 or the Prohibition of Benami Property Transactions Act, 1988 or the Prevention of Money-laundering Act, 2002 or the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 and the same has been communicated to him, prior to the date of furnishing of return under this subsection; or

4. information for the relevant assessment year has been received under an agreement referred to in section 90 or section 90A in respect of such person and the same has been communicated to him, prior to the date of furnishing of return under this sub-section; or

5. any prosecution proceedings under the Chapter XXII have been initiated for the relevant assessment year in respect of such person, prior to the date of furnishing of return under this sub-section; or

6. he is such person or belongs to such class of persons, as may be notified by the Board in this regard:

Provided also that if any person has sustained a loss in any previous year and has furnished a return of loss in the prescribed from within the time allowed under sub-section (1) and verified in the prescribed manner and containing such other particulars as may be prescribed, he shall be allowed to furnish an updated return where such updated return is a return of income:

Provided also that if the loss or any part thereof carried forward under Chapter VI or unabsorbed depreciation carried forward under sub-section (2) of section 32 or tax credit carried forward under section 115JAA or under section 115JD is to be reduced for any subsequent previous year as a result of furnishing of return of income under this sub-section for a previous year, an updated return shall be furnished for each such subsequent previous year.]

(9) Where the Assessing Officer considers that the return of income furnished by the assessee is defective, he may intimate the defect to the assessee and give him an opportunity to rectify the defect within a period of fifteen days from the date of such intimation or within such further period which, on an application made in this behalf, the Assessing Officer may, in his discretion, allow; and if the defect is not rectified within the said period of fifteen days or, as the case may be, the further period so allowed, then, notwithstanding anything contained in any other provision of this Act, the return shall be treated as an invalid return and the provisions of this Act shall apply as if the assessee had failed to furnish the return :

Provided that where the assessee rectifies the defect after the expiry of the said period of fifteen days or the further period allowed, but before the assessment is made, the Assessing Officer may condone the delay and treat the return as a valid return.

Explanation : For the purposes of this sub-section, a return of income shall be regarded as defective unless all the following conditions are fulfilled, namely :

1. the annexures, statements and columns in the return of income relating to computation of income chargeable under each head of income, computation of gross total income and total income have been duly filled in;

1400 [* * *]

2. the return is accompanied by a statement showing the computation of the tax payable on the basis of the return;

(bb) the return is accompanied by the report of the audit referred to in section 44AB, or, where the report has been furnished prior to the furnishing of the return, by a copy of such report together with proof of furnishing the report;

3. the return is accompanied by proof of”

1. the tax, if any, claimed to have been 1401 [1402 [deducted or collected at source] 1403 [***] and] the advance tax and tax on self-assessment, if any, claimed to have been paid :

1404 [Provided that where the return is not accompanied by proof of the tax, if any, 1405 [claimed to have been deducted or collected at source], the return of income shall not be regarded as defective if”

1406 [(a) a certificate for tax deducted or collected was not furnished under section 203 or section 206C to the person furnishing his return of income;]

(b) such certificate is produced within a period of two years specified under sub-section (14) of section 155;]

2. the amount of compulsory deposit, if any, claimed to have been made under the Compulsory Deposit Scheme (Income-tax Payers) Act, 1974 (38 of 1974);

1407[(ca) the return is accompanied by the proof of payment of tax as required under section 140B, if the return of income is a return furnished under sub-section (8A);]

4. where regular books of account are maintained by the assessee, the return is accompanied by copies of”

1. manufacturing account, trading account, profit and loss account or, as the case may be, income and expenditure account or any other similar account and balance sheet;

2. in the case of a proprietary business or profession, the personal account of the proprietor; in the case of a firm, association of persons or body of individuals, personal accounts of the partners or members; and in the case of a partner or member of a firm, association of persons or body of individuals, also his personal account in the firm, association of persons or body of individuals;

5. where the accounts of the assessee have been audited, the return is accompanied by copies of the audited profit and loss account and balance sheet and the auditor”s report and, where an audit of cost accounts of the assessee has been conducted under section 233B of the Companies Act, 1956 (1 of 1956), also the report under that section;

6. where regular books of account are not maintained by the assessee, the return is accompanied by a statement indicating the amounts of turnover or, as the case may be, gross receipts, gross profit, expenses and net profit of the business or profession and the basis on which such amounts have been computed, and also disclosing the amounts of total sundry debtors, sundry creditors, stock-in-trade and cash balance as at the end of the previous year.

   1408[Provided that the Board may, by notification in the Official Gazette, specify that any of the conditions specified in clauses (a) to (f) to the Explanation shall not apply to such class of assessees or shall apply with such modifications, as may be specified in such notification.]

   1409 [***]

(10) 1410 [***]

Section 139A - Permanent account number

1. Every person, -

1. if his total income or the total income of any other person in respect of which he is assessable under this Act during any previous year exceeded the maximum amount which is not chargeable to income-tax; or

2. carrying on any business or profession whose total sales, turnover or gross receipts are or is likely to exceed 1411 [five lakh rupees] in any previous year; or

3. who is required to furnish a return of income under 1412 [sub-section (4A) of section 139; or

4. being an employer, who is required to furnish a return of fringe benefits under section 115WD,] and who has not been allotted a permanent account number shall, within such time, as may be prescribed1413, apply to the Assessing Officer for the allotment of a permanent account number; 1414 [or]

1415 [(v) being a resident, other than an individual, which enters into a financial transaction of an amount aggregating to two lakh fifty thousand rupees or more in a financial year; or

(vi) who is the managing director, director, partner, trustee, author, founder, karta, chief executive officer, principal officer or office bearer of the person referred to in clause (v) or any person competent to act on behalf of the person referred to in clause (v),]

1416 [(1A) Notwithstanding anything contained in sub-section (1), the Central Government may, by notification in the Official Gazette, specify, any class or classes of persons by whom tax is payable under this Act or any tax or duty is payable under any other law for the time being in force including importers and exporters whether any tax is payable by them or not and such persons shall, within such time as mentioned in that notification, apply to the Assessing Officer for the allotment of a permanent account number.]

1417 [(1B) Notwithstanding anything contained in sub-section (1), the Central Government may, for the purpose of collecting any information which may be useful for or relevant to the purposes of this Act, by notification in the Official Gazette, specify, any class or classes of persons who shall apply to the Assessing Officer for the allotment of the permanent account number and such persons shall, within such time as mentioned in that notification, apply to the Assessing Officer for the allotment of a permanent account number.]

1418 [(2) The Assessing Officer, having regard to the nature of the transactions as may be prescribed, may also allot a permanent account number, to any other person (whether any tax is payable by him or not), in the manner and in accordance with the procedure as may be prescribed.]

(3) Any person, not falling under sub-section (1) or sub-section (2), may apply to the Assessing Officer for the allotment of a permanent account number and thereupon, the Assessing Officer shall allot a permanent account number to such person forthwith.

(4) For the purpose of allotment of permanent account numbers under the new series, the Board may, by notification in the Official Gazette, specify the date from which the persons referred to in sub-sections (1) and (2) and other persons who have been allotted permanent account numbers and residing in a place to be specified in such notification, shall, within such time as may be specified, apply to the Assessing Officer for the allotment of a permanent account number under the new series and upon allotment of such permanent account number to a person, the permanent account number, if any, allotted to him earlier shall cease to have effect :

Provided that the persons to whom permanent account number under the new series has already been allotted shall not apply for such number again.

(5) Every person shall -

1. quote such number in all his returns to, or correspondence with, any income-tax authority;

2. quote such number in all challans for the payment of any sum due under this Act;

3. quote such number in all documents pertaining to such transactions as may be prescribed1419 by the Board in the interests of the revenue, and entered into by him :

Provided that the Board may prescribe1 different dates for different transactions or class of transactions or for different class of persons :

1420 [Provided further that a person shall quote general index register number till such time permanent account number is allotted to such persons;]

4. intimate the Assessing Officer any change in his address or in the name and nature of his business on the basis of which the permanent account number was allotted to him.

1421 [(5A) Every person receiving any sum or income or amount from which tax has been deducted under the provisions of Chapter XVIIB, shall intimate his permanent account number to the person responsible for deducting such tax under that Chapter :

1422 [***] Provided further that a person referred to in this sub-section, shall intimate the General Index Register Number till such time permanent account number is allotted to such person.]

1423 [(5B) Where any sum or income or amount has been paid after deducting tax under Chapter XVIIB, every person deducting tax under that Chapter shall quote the permanent account number of the person to whom such sum or income or amount has been paid by him -

1. in the statement furnished in accordance with the provisions of subsection (2C) of section 192;

2. in all certificates furnished in accordance with the provisions of section 203;

3. in all returns prepared and delivered or caused to be delivered in accordance with the provisions of section 206 to any income-tax authority;

1424 [(iv) in all 1425 [***] statements prepared and delivered or caused to be delivered in accordance with the provisions of sub-section (3) of section 200 :]

Provided that the Central Government may, by notification in the Official Gazette, specify different dates from which the provisions of this sub-section shall apply in respect of any class or classes of persons :

Provided further that nothing contained in sub-sections (5A) and (5B) shall apply in case of a person whose total income is not chargeable to income-tax or who is not required to obtain permanent account number under any provision of this Act if such person furnishes to the person responsible for deducting tax, a declaration referred to in section 197A in the form and manner prescribed thereunder to the effect that the tax on his estimated total income of the previous year in which such income is to be included in computing his total income will be nil.]

1426 [(5C) Every 1427 [buyer or licensee or lessee] referred to in section 206C shall intimate his permanent account number to the 5[person responsible for collecting tax] referred to in that section.]

1428 [(5D) Every 1429 [person] collecting tax in accordance with the provisions of section 206C shall quote the permanent account number of every 1430 [buyer or licensee or lessee] referred to in that section -

1. in all certificates furnished in accordance with the provisions of subsection (5) of section 206C;

2. in all returns prepared and delivered or caused to be delivered in accordance with the provisions of sub-section (5A) or sub-section (5B) of section 206C to an income-tax authority;]

1431 [(iii) in all 1432 [***] statements prepared and delivered or caused to be delivered in accordance with the provisions of sub-section (3) of section 206C.]

(6) Every person receiving any document relating to a transaction prescribed under clause (c) of sub-section (5) shall ensure that the permanent account number1433[or the general index register number] has been duly quoted in the document.

(7) No person who has already been allotted a permanent account number under the new series shall apply, obtain or possess another permanent account number. 

1434 [Explanation : For the removal of doubts, it is hereby declared that any person, who has been allotted a permanent account number under any clause other than clause (iv) of sub-section (1), shall not be required to obtain another permanent account number and the permanent account number already allotted to him shall be deemed to be the permanent account number in relation to fringe benefit tax.]

(8) The Board may make rules1435 providing for -

1. the form and the manner in which an application may be made for the allotment of a permanent account number and the particulars which such application shall contain;

2. the categories of transactions in relation to which permanent account numbers 1436 [or the general index register number] shall be quoted by every person in the documents pertaining to such transactions;

3. the categories of documents pertaining to business or profession in which such numbers shall be quoted by every person; 

1437 [(d) class or classes of persons to whom the provisions of this section shall not apply;]

1438 [(e) the form and the manner in which the person who has not been allotted a permanent account number or who does not have general index register number shall make his declaration;]

1439 [(f) the manner in which the permanent account number or the general index register number shall be quoted in respect of the categories of transactions referred to in clause (b);]

1440 [(g) the time and the manner in which the transactions referred to in clause (b) shall be intimated to the prescribed authority.]

Explanation : For the purposes of this section, -

1. "Assessing Officer" includes an income-tax authority who is assigned the duty of allotting permanent account numbers;

2. "permanent account number" means a number which the Assessing Officer may allot to any person for the purpose of identification and includes a permanent account number allotted under the new series;

3. "permanent account number under the new series" means a permanent account number having ten alphanumeric characters 1441 [***];

1442 [(d) "general index register number" means a number given by an Assessing Officer to an assessee in the general index register maintained by him and containing the designation and particulars of the ward or circle or range of the Assessing Officer].

Section 139AA Quoting of Aadhaar number

1. Every person who is eligible to obtain Aadhaar number shall, on or after the 1st day of July, 2017, quote Aadhaar number-

1. in the application form for allotment of permanent account number;

2. in the return of income:

Provided that where the person does not possess the Aadhaar number, the Enrolment ID of Aadhaar application form issued to him at the time of enrolment shall be quoted in the application for permanent account number or, as the case may be, in the return of income furnished by him.

2. Every person who has been allotted permanent account number as on the 1st day of July, 2017, and who is eligible to obtain Aadhaar number, shall intimate his Aadhaar number to such authority in such form and manner as may be prescribed, on or before a date to be notified by the Central Government in the Official Gazette:

Provided that in case of failure to intimate the Aadhaar number, the permanent account number allotted to the person shall be deemed to be invalid and the other provisions of this Act shall apply, as if the person had not applied for allotment of permanent account number.

3. The provisions of this section shall not apply to such person or class or classes of persons or any State or part of any State, as may be notified by the Central Government in this behalf, in the Official Gazette.

Explanation.-For the purposes of this section, the expressions-

1. "Aadhaar number", "Enrolment" and "resident" shall have the same meanings respectively assigned to them in clauses (a), (m) and (v) of section 2 of the Aadhaar (Targeted Delivery of Financial and other Subsidies, Benefits and Services) Act, 2016 (18 of 2016.);

2. "Enrolment ID" means a 28 digit Enrolment Identification Number issued to a resident at the time of enrolment.'.] 1443

Section 139B - Scheme for submission of returns through Tax Return Preparers

1444 [(1) For the purpose of enabling any specified class or classes of persons in preparing and furnishing returns of income, the Board may, without prejudice to the provisions of section 139, frame a Scheme, by notification1445 in the Official Gazette, providing that such persons may furnish their returns of income through a Tax Return Preparer authorised to act as such under the Scheme.

(2) Every Tax Return Preparer shall assist the persons furnishing the return of income in such manner as may be specified in the Scheme framed under this section and affix his signature on such return.

(3) For the purposes of this section,-

1. “Tax Return Preparer” means any individual, [not being a person referred to in clause (ii) or clause (iii) or clause (iv) of sub-section (2) of section 288 or an employee of the “specified class or classes of persons”], who has been authorised to act as a Tax Return Preparer under the Scheme framed under this section;

2. “Specified class or classes of persons” means any person, other than a company or a person, whose accounts are required to be audited under section 44AB or under any other law for the time being in force, who is required to furnish a return of income under this Act.

(4) The Scheme framed by the Board under this section may provide for the following, namely :

1. the manner in which and the period for which the Tax Return Preparers shall be authorised under sub-section (3);

2. the educational and other qualifications to be possessed, and the training and other conditions required to be fulfilled, by a person to act as a Tax Return Preparer;

3. the code of conduct for the Tax Return Preparers;

4. the duties and obligations of the Tax Return Preparers;

5. the circumstances under which the authorisation given to a Tax Return Preparer may be withdrawn;

6. any other matter which is required to be, or may be, specified by the Scheme for the purposes of this section.

(5) Every Scheme framed by the Board under this section shall be laid, as soon as may be after it is framed, before each House of Parliament, while it is in session for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree that the Scheme should not be framed, the Scheme shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that Scheme.]

Section 139C - Power of Board to dispense with furnishing documents etc with the return

1446[(1) The Board may make rules providing for a class or classes of persons who may not be required to furnish documents, statements, receipts, certificates, reports of audit or any other documents, which are otherwise under any other provisions of this Act, except section 139D, required to be furnished, along with the return but on demand to be produced before the Assessing Officer.

(2) Any rule made under the proviso to sub-section (9) of section 139 as it stood immediately before its omission by the Finance Act, 2007 shall be deemed to have been made under the provisions of this section.]

Section 139D - Filing of return in electronic form

1447 [The Board may make rules providing for”

1. the class or classes of persons who shall be required to furnish the return in electronic form;

2. the form and the manner in which the return in electronic form may be furnished;

3. the documents, statements, receipts, certificates or audited reports which may not be furnished along with the return in electronic form but shall be produced before the Assessing Officer on demand;

4. the computer resource or the electronic record to which the return in electronic form may be transmitted.]

Section 140 - Return by whom to be verified

The return under 1448 [section 115WD or] section 139 shall be 1449 [verified]-

1450 [(a) in the case of an individual,-

1. by the individual himself;

2. where he is absent from India, by the individual himself or by some person duly authorised by him in this behalf;

3. where he is mentally incapacitated from attending to his affairs, by his guardian or any other person competent to act on his behalf; and

4. where, for any other reason, it is not possible for the individual to 1451 [verify] the return, by any person duly authorised by him in this behalf:

Provided that in a case referred to in sub-clause (ii) or sub-clause (iv), the person 1452 [verifying]the return holds a valid power of attorney from the individual to do so, which shall be attached to the return;]

(b)  in the case of a Hindu undivided family, by the karta, and, where the karta is absent from India or is mentally incapacitated from attending to his affairs, by any other adult member of such family;

1453 [(c) in the case of a company, by the managing director thereof, or where for any unavoidable reason such managing director is not able to [verify] there turn, or where there is no managing director, 1454[or any other person, as may be prescribed for this purpose]:

1455 [Provided that where the company is not resident in India, the return may be 1456 [verified] by a person who holds a valid power of attorney from such company to do so, which shall be attached to the return :

Provided further that,-

1. where the company is being wound up, whether under the orders of a court or otherwise, or where any person has been appointed as the receiver of any assets of the company, the return shall be 1457 [verified] by the liquidator referred to in sub-section (1) of section 178;

2. where the management of the company has been taken over by the Central Government or any State Government under any law, the return of the company shall be 1458 [verified] by the principal officer thereof 1459 [or];]

1460 [(c) where in respect of a company, an application for corporate insolvency resolution process has been admitted by the Adjudicating Authority under section 7 or section 9 or section 10 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), the return shall be verified by the insolvency professional appointed by such Adjudicating Authority.

Explanation.- For the purposes of this clause the expressions "insolvency professional" and "Adjudicating Authority" shall have the respective meanings assigned to them in clause (18) of section 3 and clause (1) of section 5 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016);]

(cc) in the case of a firm, by the managing partner thereof, or where for any unavoidable reason such managing partner is not able to [verify] there turn, or where there is no managing partner as such, by any partner there of, not being a minor;

1461 [(cd) in the case of a limited liability partnership, by the designated partner thereof, or where for any unavoidable reason such designated partner is not able to 7[verify] the return, or where there is no designated partner as such, 1462[or any other person, as may be prescribed for this purpose].]

(d)  in the case of a local authority, by the principal officer thereof;]

1463 [(dd) in the case of a political party referred to in sub-section (4B) of section 139, by the chief executive officer of such party (whether such chief executive officer is known as secretary or by any other designation);]

(e) in the case of any other association, by any member of the association or the principal officer thereof; and

(f)  in the case of any other person, by that person or by some person competent to act on his behalf.

Section 140A - Self-assessment

1. Where any tax is payable on the basis of any return required to be furnished under 1464 [section 115WD or section 115WH or section 139] or section 142 1465 [or section 148 or 1466 [, section 153A or, as the case may be, section 158BC]], 1467 [after taking into account, -

1. the amount of tax, if any, already paid under any provision of this Act;

2. any tax deducted or collected at source;

3. any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India;

4. any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section; 1468[***]

5. any tax credit claimed to be set-off in accordance with the provisions of section 115JAA 1469[or section 115JD; and] the assessee shall be liable to pay such tax, together with interest 1470 [and fee] payable under any provision of this Act for any delay in furnishing the return or any default or delay in payment of advance tax, before furnishing the return and the return shall be accompanied by proof of payment of such tax 1471 [, interest and fee].

   1472[(vi) any tax or interest payable according to the provisions of sub-section (2) of section 191.]

Explanation : Where the amount paid by the assessee under this sub-section falls short of the aggregate of the tax 1473 [, interest and fee as aforesaid, the amount so paid shall first be adjusted towards the fee payable and thereafter towards] the interest payable as aforesaid and the balance, if any, shall be adjusted towards the tax payable.

1474 [(1A) For the purposes of sub-section (1), interest payable,”

1475 [(i) under section 234A shall be computed on the amount of the tax on the total income as declared in the return as reduced by the amount of,”

1. advance tax, if any, paid;

2. any tax deducted or collected at source;

3. any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India;

4. any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section; and

5. any tax credit claimed to be set-off in accordance with the provisions of section 115JAA 1476 [or section 115JD];]

(ii) under section 115WK shall be computed on the amount of tax on the value of the fringe benefits as declared in the return as reduced by the advance tax, paid, if any.]

1477 [(1B) For the purposes of sub-section (1), interest payable under section 234B shall be computed on an amount equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid falls short of the assessed tax.

1478 [Explanation : For the purposes of this sub-section, “assessed tax” means the tax on the total income as declared in the return as reduced by the amount of, -

1. tax deducted or collected at source, in accordance with the provisions of Chapter XVII, on any income which is subject to such deduction or collection and which is taken into account in computing such total income;

2. any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India;

3. any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section; and

4. any tax credit claimed to be set-off in accordance with the provisions of section 115JAA 1479 [or section 115JD].]]

   2. After a regular assessment under 1480 [section 115WE or section 115WF or section 143] or section 144 1481 [or 1482 [an assessment under section 153A or section 158BC]] has been made, any amount paid under sub-section (1) shall be deemed to have been paid towards such regular assessment 1483 [or assessment, as the case may be].

   3. If any assessee fails to pay the whole or any part of such tax 1484 [interest or fee] in accordance with the provisions of sub-section (1), he shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default in respect of the tax 1485 [interest or fee] remaining unpaid, and all the provisions of this Act shall apply accordingly.

   4. The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year.

Section 140B - Tax on updated return

1486[(1) Where no return of income under sub-section (1) or sub-section (4) of section 139 has been furnished by an assessee and tax is payable, on the basis of return to be furnished by such assessee under sub-section (8A) of section 139, after taking into account,

1. the amount of tax, if any, already paid as advance tax;

2. any tax deducted or collected at source;

3. any relief of tax claimed under section 89;

4. any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India;

5. any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section; and

6. any tax credit claimed to be set off in accordance with the provisions of section 115JAA or section 115JD, the assessee shall be liable to pay such tax together with interest and fee payable under any of the provisions of this Act for any delay in furnishing the return or any default or delay in payment of advance tax, along with the payment of additional income-tax computed in accordance with sub-section (3), before furnishing the return and the return shall be accompanied by proof of payment of such tax, additional income-tax, interest and fee.

(2) Where, return of income under sub-section (1) or sub-section (4) or sub-section (5) of section 139 (referred to as earlier return) has been furnished by an assessee and tax is payable on the basis of return to be furnished by such assessee under sub-section (8A) of section 139,

5. after taking into account,

1. the amount of relief or tax referred to in sub-section (1) of section 140A, the credit for which has been taken in the earlier return;

2. tax deducted or collected at source, in accordance with the provisions of Chapter XVII-B, on any income which is subject to such deduction or collection and which is taken into account in computing total income and which has not been included in the earlier return;

3. any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India on such income which has not been included in the earlier return;

4. any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section on such income which has not been included in the earlier return;

5. any tax credit claimed, to be set off in accordance with the provisions of section 115JAA or section 115JD, which has not been claimed in the earlier return; and

   6. as increased by the amount of refund, if any, issued in respect of such earlier return, the assessee shall be liable to pay such tax together with interest payable under any provision of this Act for any default or delay in payment of advance tax along with the payment of additional income-tax, as computed in accordance with sub-section (3), as reduced by the amount of interest paid under the provisions of this Act in the earlier return, before furnishing the return and the return shall be accompanied by proof of payment of such tax, additional income-tax, interest and fee.

(3) For the purposes of sub-sections (1) and (2), the additional income-tax payable at the time of furnishing the return under sub-section (8A) of section 139 shall be equal to,

1. twenty-five per cent. of aggregate of tax and interest payable, as determined in sub-section (1) or sub-section (2), as the case may be, if such return is furnished after expiry of the time available under sub-section (4) or sub-section (5) of section 139 and before completion of the period of twelve months from the end of the relevant assessment year; or

2. fifty per cent. of aggregate of tax and interest payable, as determined in sub-section (1) or sub-section (2), as the case may be, if such return is furnished after the expiry of twelve months from the end of the relevant assessment year but before completion of the period of twenty-four months from the end of the relevant assessment year.

Explanation. For the purposes of computation of “additional income-tax”, tax shall include surcharge and cess, by whatever name called, on such tax.

(4) Notwithstanding anything contained in Explanation 1 to section 234B, for the purposes of sub-section (2), interest payable under section 234B shall be computed on an amount equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid falls short of the assessed tax, where, “assessed tax” means the tax on the total income as declared in the return to be furnished under sub-section (8A) of section 139,

1. after taking into account,

1. the amount of relief or tax referred to in sub-section (1) of section 140A, the credit for which has been claimed in the earlier return;

2. tax deducted or collected at source, in accordance with the provisions of Chapter XVII-B, on any income which is subject to such deduction or collection and which is taken into account in computing such total income, which has not been included in the earlier return;

3. any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India on such income which has not been included in the earlier return;

4. any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section on such income which has not been included in the earlier return;

5. any tax credit claimed, to be set off in accordance with the provisions of section 115JAA or section 115JD, which has not been claimed in the earlier return; and

2. as increased by the amount of refund, if any, issued in respect of such earlier return.

(5) If any difficulty arises in giving effect to the provisions of this section, the Board may, with the approval of the Central Government, by notification in the Official Gazette, issue guidelines for the purpose of removing the difficulty.

(6) Every guideline issued under sub-section (5) shall be laid before each House of Parliament.

Explanation. For the purposes of this section,

1. interest payable under section 234A, for the purposes of sub-section (1), shall be computed on the amount of tax on the total income as declared in the return, under sub-section (8A) of section 139, in accordance with the provisions of sub-section (1A) of section 140A;

2. interest payable under section 234C, for the purposes of sub-section (2), shall be computed after taking into account the total income furnished in the return under sub-section (8A) of section 139 as the returned income;

3. interest payable, for the purposes of sub-section (3), shall be the interest chargeable under any provision of this Act, on the income as per return furnished under sub-section (8A) of section 139, as reduced by interest paid, in accordance with the earlier return, if any:

Provided that for the purposes of this clause, the interest paid in the earlier return shall be nil if such return is an updated return referred to in sub-section (1).]

Section 141 Provisional Assessment

1487 [***]

Section 141A - Provisional Assessment for refund

1488[***]

Section 142 - Inquiry before assessment

1. For the purpose of making an assessment under this Act, the Assessing Officer may serve on any person who has made a return 1489 [under section 115WD or section 139 or in whose case the time allowed under sub-section (1) of section 139] for furnishing the return has expired a notice requiring him, on a date to be therein specified, -

1. where such person has not made a return 1490 [within the time allowed under sub-section (1) of section 139 or before the end of the relevant assessment year], to furnish a return of his income or the income of any other person in respect of which he is assessable under this Act, in the prescribed form1491 and verified in the prescribed manner1492 and setting forth such other particulars as may be prescribed1493, or

1494 [Provided that where any notice has been served under this sub-section for the purposes of this clause after the end of the relevant assessment year commencing on or after the 1st day of April, 1990 to a person who has not made a return within the time allowed under sub-section (1) of section 139 or before the end of the relevant assessment year, any such notice issued to him shall be deemed to have been served in accordance with the provisions of this sub-section.]

1495[Provided further that a notice under this sub-section for the purposes of this clause may also be served by the prescribed income-tax authority.]

(ii)    1496to produce, or cause to be produced, such accounts or documents as the Assessing Officer may require, or

(iii)   to furnish in writing and verified in the prescribed5 manner information in such form and on such points or matters (including a statement of all assets and liabilities of the assessee, whether included in the accounts or not) as the Assessing Officer may require:

Provided that”

1. the previous approval of the 1497 [Joint Commissioner] shall be obtained before requiring the assessee to furnish a statement of all assets and liabilities not included in the accounts;

2. the Assessing Officer shall not require the production of any accounts relating to a period more than three years prior to the previous year.

2. For the purpose of obtaining full information in respect of the income or loss of any person, the Assessing Officer may make such inquiry as he considers necessary.

(2A) If, at any stage of the proceedings before him, the Assessing Officer, having regard to 1498 [the nature and complexity of the accounts, volume of the accounts, doubts about the correctness of the accounts, multiplicity of transactions in the accounts or specialised nature of business activity of the assessee, and] the interests of the revenue, is of the opinion that it is necessary so to do, he may, with the previous approval of the 1499 [Principal Chief Commissioner or Chief Commissioner] or 1500 [Principal Commissioner or Commissioner], direct the assessee to get the accounts audited by an accountant, as defined in the Explanation below sub-section (2) of section 288, nominated by the 1501 [Principal Chief Commissioner or Chief Commissioner] or 1502[Principal Commissioner or Commissioner] in this behalf and to furnish a report of such audit in the prescribed form1503 duly signed and verified by such accountant and setting forth such particulars as may be prescribed1504 and such other particulars as the Assessing Officer may require :

1505 [Provided that the Assessing Officer shall not direct the assessee to get the accounts so audited unless the assessee has been given a reasonable opportunity of being heard.]

(2B) The provisions of sub-section (2A) shall have effect notwithstanding that the accounts of the assessee have been audited under any other law for the time being in force or otherwise.

(2C) Every report under sub-section (2A) shall be furnished by the assessee to the Assessing Officer within such period as may be specified by the Assessing Officer :

Provided that the Assessing Officer may, 1506 [suo motu, or on an application] made in this behalf by the assessee and for any good and sufficient reason, extend the said period by such further period or periods as he thinks fit; so, however, that the aggregate of the period originally fixed and the period or periods so extended shall not, in any case, exceed one hundred and eighty days from the date on which the direction under sub-section (2A) is received by the assessee.

(2D) The expenses of, and incidental to, any audit under sub-section (2A) (including the remuneration of the accountant) shall be determined by the 1507[Principal Chief Commissioner or Chief Commissioner] or 1508 [Principal Commissioner or Commissioner] (which determination shall be final) and paid by the assessee and in default of such payment, shall be recoverable from the assessee in the manner provided in Chapter XVIID for the recovery of arrears of tax :

1509 [Provided that where any direction for audit under sub-section (2A) is issued by the Assessing Officer on or after the 1st day of June, 2007, the expenses of, and incidental to, such audit (including the remuneration of the Accountant) shall be determined by the 1510 [Principal Chief Commissioner or Chief Commissioner] or 1511[Principal Commissioner or Commissioner] in accordance with such guidelines as may be prescribed1512 and the expenses so determined shall be paid by the Central Government.]

3. The assessee shall, except where the assessment is made under section 144, be given an opportunity of being heard in respect of any material gathered on the basis of any inquiry under sub-section (2) or any audit under sub-section (2A) and proposed to be utilised for the purpose of the assessment.

4. The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year.

Section 142A - Estimation of value of assets by Valuation Officer

1. The Assessing Officer may, for the purposes of assessment or reassessment, make a reference to a Valuation Officer to estimate the value, including fair market value, of any asset, property or investment and submit a copy of report to him.

2. The Assessing Officer may make a reference to the Valuation Officer under sub-section (1) whether or not he is satisfied about the correctness or completeness of the accounts of the assessee.

3. The Valuation Officer, on a reference made under sub-section (1), shall, for the purpose of estimating the value of the asset, property or investment, have all the powers that he has under section 38A of the Wealth-tax Act, 1957(27 of 1957).

4. The Valuation Officer shall, estimate the value of the asset, property or investment after taking into account such evidence as the assessee may produce and any other evidence in his possession gathered, after giving an opportunity of being heard to the assessee.

5. The Valuation Officer may estimate the value of the asset, property or investment to the best of his judgment, if the assessee does not co-operate or comply with his directions.

6. The Valuation Officer shall send a copy of the report of the estimate made under sub-section (4) or sub-section (5), as the case may be, to the Assessing Officer and the assessee, within a period of six months from the end of the month in which a reference is made under sub-section (1).

7. The Assessing Officer may, on receipt of the report from the Valuation Officer, and after giving the assessee an opportunity of being heard, take into account such report in making the assessment or reassessment.

Explanation.- In this section, "Valuation Officer" has the same meaning as in clause (r) of section 2 of the Wealth-tax Act, 1957(27 of 1957).] 1513

Section 143 - Assessment

1514 [(1) Where a return has been made under section 139, or in response to a notice under subsection (1) of section 142, such return shall be processed in the following manner, namely:-

1. the total income or loss shall be computed after making the following adjustments, namely:-

1. any arithmetical error in the return; 1515 [***]

2. an incorrect claim, if such incorrect claim is apparent from any information in the return;

1516 [(iii) disallowance of loss claimed, if return of the previous year for which set off of loss is claimed was furnished beyond the due date specified under sub-section (1) of section 139;

(iv) 1517[disallowance of expenditure or increase in income indicated] in the audit report but not taken into account in computing the total income in the return;

(v)  disallowance of deduction claimed under 1518[Section 10-AA or under any of the provisions of Chapter VI-A under the heading “C.- Deductions in respect of certain incomes] the return is furnished beyond the due date specified under sub-section (1) of section 139; or

(vi) addition of income appearing in Form 26AS or Form 16A or Form 16 which has not been included in computing the total income in the return:

Provided that no such adjustments shall be made unless an intimation is given to the assessee of such adjustments either in writing or in electronic mode:

Provided further that the response received from the assessee, if any, shall be considered before making any adjustment, and in a case where no response is received within thirty days of the issue of such intimation, such adjustments shall be made;]

1519 [Provided also that no adjustment shall be made under sub-clause (vi) in relation to a return furnished for the assessment year commencing on or after the 1st day of April, 2018;]

2. the tax 1520 [, interest and fee], if any, shall be computed on the basis of the total income computed under clause (a);

3. the sum payable by, or the amount of refund due to, the assessee shall be determined after adjustment of the tax 1521 [, interest and fee], if any, computed under clause (b) by any tax deducted at source, any tax collected at source, any advance tax paid, any relief allowable under an agreement under section 90 or section 90A, or any relief allowable under section 91, any rebate allowable under Part A of Chapter VIII, any tax paid on self-assessment and any amount paid otherwise by way of tax1522 [, interest or fee];

4. an intimation shall be prepared or generated and sent to the assessee specifying the sum determined to be payable by, or the amount of refund due to, the assessee under clause (c); and

5. the amount of refund due to the assessee in pursuance of the determination under clause (c) shall be granted to the assessee:

Provided that an intimation shall also be sent to the assessee in a case where the loss declared in the return by the assessee is adjusted but no tax 1523 [, interest or fee] is payable by, or no refund is due to, him:

Provided further that no intimation under this sub-section shall be sent after the expiry of 1524[nine months] from the end of the financial year in which the return is made.

Explanation. For the purposes of this sub-section,-

1. an incorrect claim apparent from any information in the return” shall mean a claim, on the basis of an entry, in the return,-

1. of an item, which is inconsistent with another entry of the same or some other item in such return;

2. in respect of which the information required to be furnished under this Act to substantiate such entry has not been so furnished; or

3. in respect of a deduction, where such deduction exceeds specified statutory limit which may have been expressed as monetary amount or percentage or ratio or fraction;

2. the acknowledgment of the return shall be deemed to be the intimation in a case where no sum is payable by, or refundable to, the assessee under clause (c), and where no adjustment has been made under clause (a).

(1A) For the purposes of processing of returns under sub-section (1), the Board may make a scheme for centralised processing of returns with a view to expeditiously determining the tax payable by, or the refund due to, the assessee as required under the said sub-section.

(1B) Save as otherwise expressly provided, for the purpose of giving effect to the scheme made under sub-section (1A), the Central Government may, by notification in the Official Gazette, direct that any of the provisions of this Act relating to processing of returns shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in that notification; so, however, that no direction shall be issued 1525 [1526 [after 1527 [the 31st day of March, 2012]]].

(1C) Every notification issued under sub-section (1B), along with the scheme made under sub-section (1A), shall, as soon as may be after the notification is issued, be laid before each House of Parliament.”;

1528[(1D) Notwithstanding anything contained in sub-section (1), the processing of a return shall not be necessary, where a notice has been issued to the assessee under sub-section (2):

Provided that the provisions of this sub-section shall not apply to any return furnished for the assessment year commencing on or after the 1st day of April, 2017.]

1529[(2) Where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer or the prescribed income-tax authority, as the case may be, if, considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, shall serve on the assessee a notice requiring him, on a date to be specified therein, either to attend the office of the Assessing Officer or to produce, or cause to be produced before the Assessing Officer any evidence on which the assessee may rely in support of the return:

Provided that no notice under this sub-section shall be served on the assessee after the expiry of 1530[three] months from the end of the financial year in which the return is furnished.]

1531 [(3) 1532 [On the day specified in the notice issued under] sub-section (2), or as soon afterwards as may be, after hearing such evidence as the assessee may produce and such other evidence as the Assessing Officer may require on specified points, and after taking into account all relevant material which he has gathered, the Assessing Officer shall, by an order in writing, make an assessment of the total income or loss of the assessee, and determine the sum payable by him or refund of any amount due to him on the basis of such assessment:]

1533[Provided that in the case of a.

1. research association referred to in clause (21) of section 10;

2. news agency referred to in clause (22B) of section 10;

3. association or institution referred to in clause (23A) of section 10;

4. institution referred to in clause (23B) of section 10, which is required to furnish the return of income under sub-section (4C) of section 139, no order making an assessment of the total income or loss of such research association, news agency, association or institution, shall be made by the Assessing Officer, without giving effect to the provisions of section 10, unless.

1. the Assessing Officer has intimated the Central Government or the prescribed authority the contravention of the provisions of clause (21) or clause (22B) or clause (23A) or clause (23B), as the case may be, by such research association, news agency, association or institution, where in his view such contravention has taken place; and

2. the approval granted to such research association or other association or institution has been withdrawn or notification issued in respect of such news agency or association or institution has been rescinded;]

1534[Provided further hat where the Assessing Officer is satisfied that any fund or institution referred to in sub-clause (iv) or trust or institution referred to in subclause (v) or any university or other educational institution referred to in subclause (vi) or any hospital or other medical institution referred to in sub- clause (via), of clause (23C) of section 10, or any trust or institution referred to in section 11, has committed any specified violation as defined in Explanation 2 to the fifteenth proviso to clause (23C) of section 10 or the Explanation to subsection (4) of section 12AB, as the case may be, he shall

1. send a reference to the Principal Commissioner or Commissioner to withdraw the approval or registration, as the case may be; and

2. no order making an assessment of the total income or loss of such fund or institution or trust or any university or other educational institution or any hospital or other medical institution shall be made by him without giving effect to the order passed by the Principal Commissioner or Commissioner under clause (ii) or clause (iii) of the fifteenth proviso to clause (23C) of section 10 or clause (ii) or clause (iii) of subsection (4) of section 12AB:

Provided also] that where the Assessing Officer is satisfied that the activities of the university, college or other institution referred to in clause (ii) and clause (iii) of sub-section (1) of section 35 are not being carried out in accordance with all or any of the conditions subject to which such university, college or other institution was approved, he may, after giving a reasonable opportunity of showing cause against the proposed withdrawal to the concerned university, college or other institution, recommend to the Central Government to withdraw the approval and that Government may by order, withdraw the approval and forward a copy of the order to the concerned university, college or other institution and the Assessing Officer.

1535 [Provided also that notwithstanding anything contained in the first and the second proviso, no effect shall be given by the Assessing Officer to the provisions of clause (23C) of section 10 in the case of a trust or institution for a previous year, if the provisions of the first proviso to clause (15) of section 2 become applicable in the case of such person in such previous year, whether or not the approval granted to such trust or institution or notification issued in respect of such trust or institution has been withdrawn or rescinded.]

1536 [(3A) The Central Government may make a scheme, by notification in the Official Gazette, for the purposes of making assessment of total income or loss of the assessee under sub-section (3) 1537[or section 144] so as to impart greater efficiency, transparency and accountability by-

1. eliminating the interface between the Assessing Officer and the assessee in the course of proceedings to the extent technologically feasible;

2. optimising utilisation of the resources through economies of scale and functional specialisation;

3. introducing a team-based assessment with dynamic jurisdiction.

(3B) The Central Government may, for the purpose of giving effect to the scheme made under sub-section (3A), by notification in the Official Gazette, direct that any of the provisions of this Act relating to assessment of total income or loss shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification:

Provided that no direction shall be issued after the 1538[31st day of March, 2022].

(3C) Every notification issued under sub-section (3A) and sub-section (3B) shall, as soon as may be after the notification is issued, be laid before each House of Parliament.]

1539[(4) Where a regular assessment under sub-section (3) of this section or section 144 is made,-

1. any tax or interest paid by the assessee under sub-section (1) shall be deemed to have been paid towards such regular assessment;

2. if no refund is due on regular assessment or the amount refunded under sub-section (1) exceeds the amount refundable on regular assessment, the whole or the excess amount so refunded shall be deemed to be tax payable by the assessee and the provisions of this Act shall apply accordingly.

(5) [***]1540

1541 [* * *]

Section 144 - Best judgment assessment

1. If any person -

1. fails to make the return required under sub-section (1) of section 139 and has not made a return or a revised return under sub-section (4) or sub-section (5) 1542[or an updated return under sub-section (8A)] of that section, or

2. fails to comply with all the terms of a notice issued under sub-section (1) of section 142 or fails to comply with a direction issued under sub-section (2A) of that section, or

3. having made a return, fails to comply with all the terms of a notice issued under sub-section (2) of section 143, the Assessing Officer, after taking into account all relevant material which the Assessing Officer has gathered, shall, after giving the assessee an opportunity of being heard, make the assessment of the total income or loss to the best of his judgment and determine the sum payable by the assessee on the basis of such assessment :

Provided that such opportunity shall be given by the Assessing Officer by serving a notice calling upon the assessee to show cause, on a date and time to be specified in the notice, why the assessment should not be completed to the best of his judgement :

Provided further that it shall not be necessary to give such opportunity in a case where a notice under sub-section (1) of section 142 has been issued prior to the making of an assessment under this section.

2. The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year.

Section 144A - Power of Joint Commissioner to issue directions in certain cases

1543 [***]

Section 144B Faceless Assessment

1544[(1) Notwithstanding anything to the contrary contained in any other provision of this Act, the assessment, reassessment or recomputation under sub-section (3) of section 143 or under section 144 or under section 147, as the case may be, with respect to the cases referred to in sub-section (2), shall be made in a faceless manner as per the following procedure, namely.

1. the National Faceless Assessment Centre shall assign the case selected for the purposes of faceless assessment under this section to a specific assessment unit through an automated allocation system;

2. the National Faceless Assessment Centre shall intimate the assessee that assessment in his case shall be completed in accordance with the procedure laid down under this section;

3. a notice shall be served on the assessee, through the National Faceless Assessment Centre, under sub-section (2) of section 143 or under sub-section (1) of section 142 and the assessee may file his response to such notice within the date specified therein, to the National Faceless Assessment Centre which shall forward the same to the assessment unit;

4. where a case is assigned to the assessment unit, under clause (i), it may make a request through the National Faceless Assessment Centre for.

1. obtaining such further information, documents or evidence from the assessee or any other person, as it may specify;

2. conducting of enquiry or verification by verification unit;

3. seeking technical assistance in respect of determination of arm’s length price, valuation of property, withdrawal of registration, approval, exemption or any other technical matter by referring to the technical unit;

5. where a request under sub-clause (a) of clause (iv) has been initiated by the assessment unit, the National Faceless Assessment Centre shall serve appropriate notice or requisition on the assessee or any other person for obtaining the information, documents or evidence requisitioned by the assessment unit and the assessee or any other person, as the case may be, shall file his response to such notice within the time specified therein or such time as may be extended on the basis of an application in this regard, to the National Faceless Assessment Centre which shall forward the reply to the assessment unit;

6. where a request,

1. for conducting of enquiry or verification by the verification unit has been made by the assessment unit under sub-clause (b) of clause (iv), the request shall be assigned by the National Faceless Assessment Centre to a verification unit through an automated allocation system; or

2. for reference to the technical unit has been made by the assessment unit under sub-clause (c) of clause (iv), the request shall be assigned by the National Faceless Assessment Centre to a technical unit through an automated allocation system;

7. the National Faceless Assessment Centre shall send the report received from the verification unit or the technical unit, as the case may be, based on the request referred to in clause (vi) to the concerned assessment unit;

8. where the assessee fails to comply with the notice served under clause (v) or notice issued under sub-section (1) of section 142 or the terms of notice issued under sub-section (2) of section 143, the National Faceless Assessment Centre shall intimate such failure to the assessment unit;

9. the assessment unit shall serve upon such assessee, as referred to in clause (viii), a notice, through the National Faceless Assessment Centre, under section 144, giving him an opportunity to show-cause on a date and time as specified in such notice as to why the assessment in his case should not be completed to the best of its judgment;

10. the assessee shall, within the time specified in the notice referred to in clause (ix) or such time as may be extended on the basis of an application in this regard, file his response to the National Faceless Assessment Centre which shall forward the same to the assessment unit;

11. where the assessee fails to file response to the notice served under clause (ix) within the time specified therein or within the extended time, if any, the National Faceless Assessment Centre shall intimate such failure to the assessment unit;

12. the assessment unit shall, after taking into account all the relevant material available on the record, prepare, in writing,

    1. an income or loss determination proposal, where no variation prejudicial to assessee is proposed and send a copy of such income or loss determination proposal to the National Faceless Assessment Centre; or

    2. in any other case, a show-cause notice stating the variations prejudicial to the interest of assessee proposed to be made to the income of the assessee and calling upon him to submit as to why the proposed variation should not be made and serve such show cause notice, on the assessee, through the National Faceless Assessment Centre;

13. the assessee shall file his reply to the show-cause notice served under sub-clause (b) of clause (xii) on a date and time as specified therein or such time as may be extended on the basis of an application made in this regard, to the National Faceless Assessment Centre, which shall forward the reply to the assessment unit;

14. where the assessee fails to file response to the notice served under sub-clause (b) of clause (xii) within the time specified therein or within the extended time, if any, the National Faceless Assessment Centre shall intimate such failure to the assessment unit;

15. the assessment unit shall, after considering the response received under clause (xiii) or after receipt of intimation under clause (xiv), as the case may be, and taking into account all relevant material available on record, prepare an income or loss determination proposal and send the same to the National Faceless Assessment Centre;

16. upon receipt of the income or loss determination proposal, as referred to in sub-clause (a) of clause (xii) or clause (xv), as the case may be, the National Faceless Assessment Centre may, on the basis of guidelines issued by the Board,

    3. convey to the assessment unit to prepare draft order in accordance with the income or loss determination proposal, which shall thereafter prepare a draft order; or

    4. assign the income or loss determination proposal to a review unit through an automated allocation system, for conducting review of such proposal;

17. the review unit shall conduct review of the income or loss determination proposal assigned to it by the National Faceless Assessment Centre, under sub-clause (b) of clause (xvi), whereupon it shall prepare a review report and send the same to the National Faceless Assessment Centre;

18. the National Faceless Assessment Centre shall, upon receiving the review report under clause (xvii), forward the same to the assessment unit which had proposed the income or loss determination proposal;

19. the assessment unit shall, after considering such review report, accept or reject some or all of the modifications proposed therein and after recording reasons in case of rejection of such modifications, prepare a draft order;

20. the assessment unit shall send such draft order prepared under sub-clause (a) of clause (xvi) or under clause (xix) to the National Faceless Assessment Centre;

21. in case of an eligible assessee, where there is a proposal to make any variation which is prejudicial to the interest of such assessee, as mentioned in sub-section (1) under section 144C, the National Faceless Assessment Centre shall serve the draft order referred to in clause (xx) on the assessee;

22. in any case other than that referred to in clause (xxi), the National Faceless Assessment Centre shall convey to the assessment unit to pass the final assessment order in accordance with such draft order, which shall thereafter pass the final assessment order and initiate penalty proceedings, if any, and send it to the National Faceless Assessment Centre;

23. upon receiving the final assessment order as per clause (xxii), the National Faceless Assessment Centre shall serve a copy of such order and notice for initiating penalty proceedings, if any, on the assessee, along with the demand notice, specifying the sum payable by, or refund of any amount due to, the assessee on the basis of such assessment;

24. where a draft order is served on the assessee as referred to in clause (xxi), such assessee shall,

    5. file his acceptance of the variations proposed in such draft order to the National Faceless Assessment Centre; or

    6. file his objections, if any, to such variations, with

1. the Dispute Resolution Panel, and

2. the National Faceless Assessment Centre, within the period specified in sub-section (2) of section 144C;

25. the National Faceless Assessment Centre shall,

    7. upon receipt of acceptance from the eligible assessee; or

    8. if no objections are received from the eligible assessee, within the period specified in sub-section (2) of section 144C, intimate the assessment unit to complete the assessment on the basis of the draft order;

26. the assessment unit shall, upon receipt of intimation under clause (xxv), pass the assessment order, in accordance with the relevant draft order, within the time allowed under sub-section (4) of section 144C and initiate penalty proceedings, if any, and send the order to the National Faceless Assessment Centre;

27. where the eligible assessee files objections with the Dispute Resolution Panel, under sub-clause (b) of clause (xxiv), the National Faceless Assessment Centre shall send such intimation along with a copy of objections filed to the assessment unit;

28. the National Faceless Assessment Centre shall, in a case referred to in clause (xxvii), upon receipt of the directions issued by the Dispute Resolution Panel under sub-section (5) of section 144C, forward such directions to the assessment unit;

29. the assessment unit shall, in conformity with the directions issued by the Dispute Resolution Panel under sub-section (5) of section 144C, complete the assessment within the time allowed in sub-section (13) of section 144C and initiate penalty proceedings, if any, and send a copy of the assessment order to the National Faceless Assessment Centre;

30. the National Faceless Assessment Centre shall, upon receipt of the assessment order referred to in clause (xxvi) or clause (xxix), as the case may be, serve a copy of such order and notice for initiating penalty proceedings, if any, on the assessee, along with the demand notice, specifying the sum payable by, or the amount of refund due to, the assessee on the basis of such assessment;

31. the National Faceless Assessment Centre shall, after completion of assessment, transfer all the electronic records of the case to the Assessing Officer having jurisdiction over the said case for such action as may be required under the provisions of this Act;

32. if at any stage of the proceedings before it, the assessment unit having regard to the nature and complexity of the accounts, volume of the accounts, doubts about the correctness of accounts, multiplicity of transactions in the accounts or specialised nature of business activity of the assessee, and the interests of the revenue, is of the opinion that it is necessary to do so, it may, upon recording its reasons in writing, refer the case to the National Faceless Assessment Centre stating that the provisions of sub-section (2A) of section 142 may be invoked and such case shall be dealt with in accordance with the provisions of sub-section (7).

(2) The faceless assessment under sub-section (1) shall be made in respect of such territorial area, or persons or class of persons, or incomes or class of incomes, or cases or class of cases, as may be specified by the Board.

(3) The Board may, for the purposes of faceless assessment, set up the following Centre and units and specify their functions and jurisdiction, namely.

1. a National Faceless Assessment Centre to facilitate the conduct of faceless assessment proceedings in a centralised manner;

2. such assessment units, as it may deem necessary to conduct the faceless assessment, to perform the function of making assessment, which includes identification of points or issues material for the determination of any liability (including refund) under this Act, seeking information or clarification on points or issues so identified, analysis of the material furnished by the assessee or any other person, and such other functions as may be required for the purposes of making faceless assessment, and the term “assessment unit”, wherever used in this section, shall refer to an Assessing Officer having powers so assigned by the Board;

3. such verification units, as it may deem necessary to facilitate the conduct of faceless assessment, to perform the function of verification, which includes enquiry, cross verification, examination of books of account, examination of witnesses and recording of statements, and such other functions as may be required for the purposes of verification and the term “verification unit”, wherever used in this section, shall refer to an Assessing Officer having powers so assigned by the Board:

Provided that the function of verification unit under this section may also be performed by a verification unit located in any other faceless centre set up under the provisions of this Act or under any scheme notified under the provisions of this Act; and the request for verification may also be assigned through the National Faceless Assessment Centre to such verification unit;

4. such technical units, as it may deem necessary to facilitate the conduct of faceless assessment, to perform the function of providing technical assistance which includes any assistance or advice on legal, accounting, forensic, information technology, valuation, transfer pricing, data analytics, management or any other technical matter under this Act or an agreement entered into under section 90 or 90A, which may be required in a particular case or a class of cases, under this section and the term “technical unit”, wherever used in this section, shall refer to an Assessing Officer having powers so assigned by the Board;

5. such review units, as it may deem necessary to facilitate the conduct of faceless assessment, to perform the function of review of the income determination proposal assigned under sub-clause (b) of clause (xvi) of sub-section (1), which includes checking whether the relevant and material evidence has been brought on record, relevant points of fact and law have been duly incorporated, the issues requiring addition or disallowance have been incorporated and such other functions as may be required for the purposes of review and the term “review unit”, wherever used in this section, shall refer to an Assessing Officer having powers so assigned by the Board;

(4) The assessment unit, verification unit, technical unit and the review unit shall have the following authorities, namely.

1. Additional Commissioner or Additional Director or Joint Commissioner or Joint Director, as the case may be;

2. Deputy Commissioner or Deputy Director or Assistant Commissioner or Assistant Director, or Income-tax Officer, as the case may be;

3. such other income-tax authority, ministerial staff, executive or consultant, as may be considered necessary by the Board.

(5) All communications,

1. among the assessment unit, review unit, verification unit or technical unit or with the assessee or any other person with respect to the information or documents or evidence or any other details, as may be necessary for the purposes of making a faceless assessment shall be through the National Faceless Assessment Centre;

2. between the National Faceless Assessment Centre and the assessee, or his authorised representative, or any other person shall be exchanged exclusively by electronic mode; and

3. between the National Faceless Assessment Centre and various units shall be exchanged exclusively by electronic mode:

Provided that the provisions of this sub-section shall not apply to the enquiry or verification conducted by the verification unit in the circumstances as may be specified by the Board in this behalf.

(6) For the purposes of faceless assessment.

1. an electronic record shall be authenticated by

1. the National Faceless Assessment Centre by way of an electronic communication;

2. the assessment unit or verification unit or technical unit or review unit, as the case may be, by affixing digital signature;

3. assessee or any other person, by affixing his digital signature or under electronic verification code, or by logging into his registered account in the designated portal;

2. every notice or order or any other electronic communication shall be delivered to the addressee, being the assessee, by way of.

1. placing an authenticated copy thereof in the registered account of the assessee; or

2. sending an authenticated copy thereof to the registered email address of the assessee or his authorised representative; or

3. uploading an authenticated copy on the Mobile App of the assessee, and followed by a real time alert;

3. every notice or order or any other electronic communication shall be delivered to the addressee, being any other person, by sending an authenticated copy thereof to the registered email address of such person, followed by a real time alert;

4. the assessee shall file his response to any notice or order or any other electronic communication, through his registered account, and once an acknowledgement is sent by the National Faceless Assessment Centre containing the hash result generated upon successful submission of response, the response shall be deemed to be authenticated;

5. the time and place of dispatch and receipt of electronic record shall be determined in accordance with the provisions of section 13 of the Information Technology Act, 2000;

6. a person shall not be required to appear either personally or through authorised representative in connection with any proceedings before any unit set up under this section;

7. in a case where a variation is proposed in the income or loss determination proposal or the draft order, and an opportunity is provided to the assessee by serving a notice calling upon him to show cause as to why the assessment should not be completed as per such income or loss determination proposal, the assessee or his authorised representative, as the case may be, may request for personal hearing so as to make his oral submissions or present his case before the income-tax authority of the relevant unit;

8. where the request for personal hearing has been received, the income-tax authority of relevant unit shall allow such hearing, through National Faceless Assessment Centre, which shall be conducted exclusively through video conferencing or video telephony, including use of any telecommunication application software which supports video conferencing or video telephony, to the extent technologically feasible, in accordance with the procedure laid down by the Board;

9. subject to the proviso to sub-section (5), any examination or recording of the statement of the assessee or any other person (other than the statement recorded in the course of survey under section 133A) shall be conducted by an income-tax authority in the relevant unit, exclusively through video conferencing or video telephony, including use of any telecommunication application software which supports video conferencing or video telephony, to the extent technologically feasible, in accordance with the procedure laid down by the Board;

10. the Board shall establish suitable facilities for video conferencing or video telephony including telecommunication application software which supports video conferencing or video telephony at such locations as may be necessary, so as to ensure that the assessee, or his authorised representative, or any other person is not denied the benefit of faceless assessment merely on the consideration that such assessee or his authorised representative, or any other person does not have access to video conferencing or video telephony at his end;

11. the Principal Chief Commissioner or the Principal Director General, as the case may be, in charge of the National Faceless Assessment Centre shall, with the prior approval of the Board, lay down the standards, procedures and processes for effective functioning of the National Faceless Assessment Centre and the units set up, in an automated and mechanised environment.

(7) (a) The Principal Chief Commissioner or the Principal Director General, as the case may be, in charge of the National Faceless Assessment Centre shall, in accordance with the procedure laid down by the Board in this regard, if he considers appropriate that the provisions of sub-section (2A) of section 142 may be invoked in the case,

1. forward the reference received from an assessment unit under clause (xxxii) of sub-section (1) to the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner having jurisdiction over such case, and inform the assessment unit accordingly;

2. transfer the case to the Assessing Officer having jurisdiction over such case in accordance sub-section (8);

(b) where a reference has been received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner under sub-clause (i) of clause (a), he shall direct the Assessing Officer, having jurisdiction over the case, to invoke the provisions of sub-section (2A) of section 142;

(c) where a reference has not been forwarded to the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, having jurisdiction over the case, in a case referred to in sub-clause (i) of clause (a), the assessment unit shall proceed to complete the assessment in accordance with the procedure laid down in this section.

(8) Notwithstanding anything contained in sub-section (1) or sub-section (2), the Principal Chief Commissioner or the Principal Director General, as the case may be, in charge of National Faceless Assessment Centre may, at any stage of the assessment, if considered necessary, transfer the case to the Assessing Officer having jurisdiction over such case, with the prior approval of the Board.]

1545[***]

1546[***]

Explanation.-In this section, unless the context otherwise requires-

1. "addressee" shall have the same meaning as assigned to it in clause (b) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000);

2. "authorised representative" shall have the same meaning as assigned to it in sub-section (2) of section 288;

3. "automated allocation system" means an algorithm for randomised allocation of cases, by using suitable technological tools, including artificial intelligence and machine learning, with a view to optimise the use of resources;

4. "automated examination tool" means an algorithm for standardised examination of draft orders, by using suitable technological tools, including artificial intelligence and machine learning, with a view to reduce the scope of discretion;

5. "computer resource" shall have the same meaning as assigned to it in clause (k) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000);

6. "computer system" shall have the same meaning as assigned to it in clause (l) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000);

7. "computer resource of assessee" shall include assessee's registered account in designated portal of the Income-tax Department, the Mobile App linked to the registered mobile number of the assessee, or the registered email address of the assessee with his email service provider;

8. "digital signature" shall have the same meaning as assigned to it in clause (p) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000);

9. "designated portal" means the web portal designated as such by the Principal Chief Commissioner or the Principal Director General, in charge of the National Faceless Assessment Centre;

10. "Dispute Resolution Panel" shall have the same meaning as assigned to it in clause (a) of sub-section (15) of section 144C;

11. "faceless assessment" means the assessment proceedings conducted electronically in 'e-Proceeding' facility through assessee's registered account in designated portal;

12. "electronic record" shall have the same meaning as assigned to it in clause (t) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000);

1547[(la) "electronic verification code" means a code generated for the purpose of electronic verification as per the data structure and standards specified by the Principal Director General or Director General, as the case may be, in-charge of information technology;]

13. "eligible assessee" shall have the same meaning as assigned to in clause (b) of sub-section (15) of section 144C;

14. "email" or "electronic mail" and "electronic mail message" means a message or information created or transmitted or received on a computer, computer system, computer resource or communication device including attachments in text, image, audio, video and any other electronic record, which may be transmitted with the message;

15. "hash function" and "hash result" shall have the same meaning as assigned to them in the Explanation to sub-section (2) of section 3 of the Information Technology Act, 2000 (21 of 2000);

16. "Mobile app" shall mean the application software of the Income-tax Department developed for mobile devices which is downloaded and installed on the registered mobile number of the assessee;

1548[***]

(r)  "real time alert" means any communication sent to the assessee, by way of Short Messaging Service on his registered mobile number, or by way of update on his Mobile App, or by way of an email at his registered email address, so as to alert him regarding delivery of an electronic communication;

(s)  "registered account" of the assessee means the electronic filing account registered by the assessee in designated portal;

(t)  "registered e-mail address" means the e-mail address at which an electronic communication may be delivered or transmitted to the addressee, including-

1. the e-mail address available in the electronic filing account of the addressee registered in designated portal; or

2. the e-mail address available in the last income-tax return furnished by the addressee; or

3. the e-mail address available in the Permanent Account Number database relating to the addressee; or

4. in the case of addressee being an individual who possesses the Aadhaar number, the e-mail address of addressee available in the database of Unique Identification Authority of India; or

5. in the case of addressee being a company, the e-mail address of the company as available on the official website of Ministry of Corporate Affairs; or

6. any e-mail address made available by the addressee to the income-tax authority or any person authorised by such authority;

(u)  "registered mobile number" of the assessee means the mobile number of the assessee, or his authorised representative, appearing in the user profile of the electronic filing account registered by the assessee in designated portal;

(v)  "video conferencing or video telephony" means the technological solutions for the reception and transmission of audio-video signals by users at different locations, for communication between people in real-time.

Section 144BA - Reference to Principal Commissioner or Commissioner in certain cases

1549[(1) If, the Assessing Officer, at any stage of the assessment or reassessment proceedings before him having regard to the material and evidence available, considers that it is necessary to declare an arrangement as an impermissible avoidance arrangement and to determine the consequence of such an arrangement within the meaning of Chapter X-A, then, he may make a reference to the 1550 [Principal Commissioner or Commissioner] in this regard.

(2) The 1551 [Principal Commissioner or Commissioner] shall, on receipt of a reference under sub-section (1), if he is of the opinion that the provisions of Chapter X-A are required to be invoked, issue a notice to the assessee, setting out the reasons and basis of such opinion, for submitting objections, if any, and providing an opportunity of being heard to the assessee within such period, not exceeding sixty days, as may be specified in the notice.

(3) If the assessee does not furnish any objection to the notice within the time specified in the notice issued under sub-section (2), the 1552 [Principal Commissioner or Commissioner] shall issue such directions as he deems fit in respect of declaration of the arrangement to be an impermissible avoidance arrangement.

(4) In case the assessee objects to the proposed action, and the1553 [Principal Commissioner or Commissioner] after hearing the assessee in the matter is not satisfied by the explanation of the assessee, then, he shall make a reference in the matter to the Approving Panel for the purpose of declaration of the arrangement as an impermissible avoidance arrangement.

(5) If the 1554 [Principal Commissioner or Commissioner] is satisfied, after having heard the assessee that the provisions of Chapter X-A are not to be invoked, he shall by an order in writing, communicate the same to the Assessing Officer with a copy to the assessee.

(6) The Approving Panel, on receipt of a reference from the 1555 [Principal Commissioner or Commissioner] under sub-section (4), shall issue such directions, as it deems fit, in respect of the declaration of the arrangement as an impermissible avoidance arrangement in accordance with the provisions of Chapter X-A including specifying of the previous year or years to which such declaration of an arrangement as an impermissible avoidance arrangement shall apply.

(7) No direction under sub-section (6) shall be issued unless an opportunity of being heard is given to the assessee and the Assessing Officer on such directions which are prejudicial to the interest of the assessee or the interests of the revenue, as the case may be.

(8) The Approving Panel may, before issuing any direction under sub-section (6),-

1. if it is of the opinion that any further inquiry in the matter is necessary, direct the 1556[Principal Commissioner or Commissioner] to make such inquiry or cause the inquiry to be made by any other income-tax authority and furnish a report containing the result of such inquiry to it; or

2. call for and examine such records relating to the matter as it deems fit; or

3. require the assessee to furnish such documents and evidence as it may direct.

(9) If the members of the Approving Panel differ in opinion on any point, such point shall be decided according to the opinion of the majority of the members.

(10) The Assessing Officer, on receipt of directions of the 4[Principal Commissioner or Commissioner] under sub-section (3) or of the Approving Panel under sub-section (6), shall proceed to complete the proceedings referred to in sub-section (1) in accordance with such directions and the provisions of Chapter X-A.

(11) If any direction issued under sub-section (6) specifies that declaration of the arrangement as impermissible avoidance arrangement is applicable for any previous year other than the previous year to which the proceeding referred to in sub-section (1) pertains, then, the Assessing Officer while completing any assessment or reassessment proceedings of the assessment year relevant to such other previous year shall do so in accordance with such directions and the provisions of Chapter X-A and it shall not be necessary for him to seek fresh direction on the issue for the relevant assessment year.

(12) No order of assessment or reassessment shall be passed by the Assessing Officer without the prior approval of the 4[Principal Commissioner or Commissioner], if any tax consequences have been determined in the order under the provisions of Chapter X-A.

(13) The Approving Panel shall issue directions under sub-section (6) within a period of six months from the end of the month in which the reference under sub-section (4) was received.

(14) The directions issued by the Approving Panel under sub-section (6) shall be binding on-

1. the assessee; and

2. the 1557 [Principal Commissioner or Commissioner] and the income-tax authorities subordinate to him, and notwithstanding anything contained in any other provision of the Act, no appeal under the Act shall lie against such directions.

(15) The Central Government shall, for the purposes of this section, constitute one or more Approving Panels as may be necessary and each panel shall consist of three members including a Chairperson.

(16) The Chairperson of the Approving Panel shall be a person who is or has been a judge of a High Court, and-

1. one member shall be a member of Indian Revenue Service not below the rank of Chief Commissioner of Income-tax; and

2. one member shall be an academic or scholar having special knowledge of matters, such as direct taxes, business accounts and international trade practices.

(17) The term of the Approving Panel shall ordinarily be for one year and may be extended from time to time up to a period of three years.

(18) The Chairperson and members of the Approving Panel shall meet, as and when required, to consider the references made to the panel and shall be paid such remuneration as may be prescribed.

(19) In addition to the powers conferred on the Approving Panel under this section, it shall have the powers which are vested in the Authority for Advance Rulings under section 245U.

(20) The Board shall provide to the Approving Panel such officials as may be necessary for the efficient exercise of powers and discharge of functions of the Approving Panel under the Act.

(21) The Board may make rules for the purposes of the constitution and efficient functioning of the Approving Panel and expeditious disposal of the references received under sub-section (4).

Explanation.-In computing the period referred to in sub-section (13), the following shall be excluded-

1. the period commencing from the date on which the first direction is issued by the Approving Panel to the 1558 [Principal Commissioner or Commissioner] for getting the inquiries conducted through the authority competent under an agreement referred to in section 90 or section 90A and ending with the date on which the information so requested is last received by the Approving Panel or one year, whichever is less;

2. the period during which the proceeding of the Approving Panel is stayed by an order or injunction of any court:

Provided that where immediately after the exclusion of the aforesaid time or period, the period available to the Approving Panel for issue of directions is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of six months shall be deemed to have been extended accordingly.]

Section 144C - Reference to dispute resolution panel

1559 [(1) The Assessing Officer shall, notwithstanding anything to the contrary contained in this Act, in the first instance, forward a draft of the proposed order of assessment (hereafter in this section referred to as the draft order) to the eligible assessee if he proposes to make, on or after the 1st day of October, 2009, any variation 1560[***] which is prejudicial to the interest of such assessee.

(2) On receipt of the draft order, the eligible assessee shall, within thirty days of the receipt by him of the draft order,-

1. file his acceptance of the variations to the Assessing Officer; or

2. file his objections, if any, to such variation with,-

1. the Dispute Resolution Panel; and

2. the Assessing Officer.

(3) The Assessing Officer shall complete the assessment on the basis of the draft order, if-

1. the assessee intimates to the Assessing Officer the acceptance of the variation; or

2. no objections are received within the period specified in sub-section (2).

(4) The Assessing Officer shall, notwithstanding anything contained 1561 [in section 153 or section 153B], pass the assessment order under sub-section (3) within one month from the end of the month in which,-

1. the acceptance is received; or

2. the period of filing of objections under sub-section (2) expires.

(5) The Dispute Resolution Panel shall, in a case where any objection is received under sub-section (2), issue such directions, as it thinks fit, for the guidance of the Assessing Officer to enable him to complete the assessment.

(6) The Dispute Resolution Panel shall issue the directions referred to in sub-section (5), after considering the following, namely:-

1. draft order;

2. objections filed by the assessee;

3. evidence furnished by the assessee;

4. report, if any, of the Assessing Officer, Valuation Officer or Transfer Pricing Officer or any other authority;

5. records relating to the draft order;

6. evidence collected by, or caused to be collected by, it; and

7. result of any enquiry made by, or caused to be made by, it.

(7) The Dispute Resolution Panel may, before issuing any directions referred to in sub-section (5),-

1. make such further enquiry, as it thinks fit; or

2. cause any further enquiry to be made by any income-tax authority and report the result of the same to it.

(8) The Dispute Resolution Panel may confirm, reduce or enhance the variations proposed in the draft order so, however, that it shall not set aside any proposed variation or issue any direction under sub-section (5) for further enquiry and passing of the assessment order.

1562 [Explanation.-For the removal of doubts, it is hereby declared that the power of the Dispute Resolution Panel to enhance the variation shall include and shall be deemed always to have included the power to consider any matter arising out of the assessment proceedings relating to the draft order, notwithstanding that such matter was raised or not by the eligible assessee.]

(9) If the members of the Dispute Resolution Panel differ in opinion on any point, the point shall be decided according to the opinion of the majority of the members.

(10) Every direction issued by the Dispute Resolution Panel shall be binding on the Assessing Officer.

(11) No direction under sub-section (5) shall be issued unless an opportunity of being heard is given to the assessee and the Assessing Officer on such directions which are prejudicial to the interest of the assessee or the interest of the revenue, respectively.

(12) No direction under sub-section (5) shall be issued after nine months from the end of the month in which the draft order is forwarded to the eligible assessee.

(13) Upon receipt of the directions issued under sub-section (5), the Assessing Officer shall, in conformity with the directions, complete, notwithstanding anything to the contrary contained 1563 [in section 153 or section 153B], the assessment without providing any further opportunity of being heard to the assessee, within one month from the end of the month in which such direction is received.

(14) The Board may make rules for the purposes of the efficient functioning of the Dispute Resolution Panel and expeditious disposal of the objections filed under sub-section (2) by the eligible assessee.

1564 [(14A) The provisions of this section shall not apply to any assessment or reassessment order passed by the Assessing Officer with the prior approval of the 1565 [Principal Commissioner or Commissioner] as provided in subsection (12) of section 144BA.]

1566[(14B) The Central Government may make a scheme, by notification in the Official Gazette, for the purposes of issuance of directions by the dispute resolution panel, so as to impart greater efficiency, transparency and accountability by-

1. eliminating the interface between the dispute resolution panel and the eligible assessee or any other person to the extent technologically feasible;

2. optimising utilisation of the resources through economies of scale and functional specialisation;

3. introducing a mechanism with dynamic jurisdiction for issuance of directions by dispute resolution panel.

(14C) The Central Government may, for the purpose of giving effect to the scheme made under sub-section (14B), by notification in the Official Gazette, direct that any of the provisions of this Act shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification:

Provided that no direction shall be issued after the 31st day of March, 1567[2024].

(14D) Every notification issued under sub-section (14B) and sub-section (14C) shall, as soon as may be after the notification is issued, be laid before each House of Parliament.]

(15) For the purposes of this section,-

1. "Dispute Resolution Panel" means a collegium comprising of three 1568 [Principal Commissioner or Commissioner] of Income-tax constituted by the Board for this purpose;

2. "eligible assessee" means,-

1. any person in whose case the variation referred to in sub-section (1) arises as a consequence of the order of the Transfer Pricing Officer passed under sub-section (3) of section 92CA; and

1569[(ii) any non-resident not being a company, or any foreign company.]

Section 145 - Method of accounting

1. Income chargeable under the head “Profits and gains of business or profession” or “Income from other sources” shall, subject to the provisions of sub-section (2), be computed in accordance with either cash or mercantile system of accounting regularly employed by the assessee.

2. The Central Government may notify in the Official Gazette from time to time 1570 [income computation and disclosure standards] to be followed by any class of assessees or in respect of any class of income.

3. Where the Assessing Officer is not satisfied about the correctness or completeness of the accounts of the assessee, or where the method of accounting provided in sub-section (1) 1571 [has not been regularly followed by the assessee, or income has not been computed in accordance with the standards notified under subsection (2)], the Assessing Officer may make an assessment in the manner provided in section 144.

Section 145A - Method of accounting in certain cases

For the purpose of determining the income chargeable under the head "Profits and gains of business or profession",-

1. the valuation of inventory shall be made at lower of actual cost or net realisable value computed in accordance with the income computation and disclosure standards notified under sub-section (2) of section 145;

2. the valuation of purchase and sale of goods or services and of inventory shall be adjusted to include the amount of any tax, duty, cess or fee (by whatever name called) actually paid or incurred by the assessee to bring the goods or services to the place of its location and condition as on the date of valuation;

3. the inventory being securities not listed on a recognised stock exchange, or listed but not quoted on a recognised stock exchange with regularity from time to time, shall be valued at actual cost initially recognised in accordance with the income computation and disclosure standards notified under sub-section (2) of section 145;

4. the inventory being securities other than those referred to in clause (iii), shall be valued at lower of actual cost or net realisable value in accordance with the income computation and disclosure standards notified under sub-section (2) of section 145:

Provided that the inventory being securities held by a scheduled bank or public financial institution shall be valued in accordance with the income computation and disclosure standards notified under sub-section (2) of section 145 after taking into account the extant guidelines issued by the Reserve Bank of India in this regard:

Provided further that the comparison of actual cost and net realisable value of securities shall be made category-wise.

Explanation 1.- For the purposes of this section, any tax, duty, cess or fee (by whatever name called) under any law for the time being in force, shall include all such payment notwithstanding any right arising as a consequence to such payment.

Explanation 2.- For the purposes of this section,-

1. "public financial institution" shall have the meaning assigned to it in clause (72) of section 2 of the Companies Act, 2013 (18 of 2013);

2. "recognised stock exchange" shall have the meaning assigned to it in clause (ii) of Explanation 1 to clause (5) of section 43;

3. "scheduled bank" shall have the meaning assigned to it in clause (ii) of the Explanation to clause (viia) of sub-section (1) of section 36.] 1572

Section 145B Taxability of certain income

1. Notwithstanding anything to the contrary contained in section 145, the interest received by an assessee on any compensation or on enhanced compensation, as the case may be, shall be deemed to be the income of the previous year in which it is received.

2. Any claim for escalation of price in a contract or export incentives shall be deemed to be the income of the previous year in which reasonable certainty of its realisation is achieved.

3. The income referred to in sub-clause (xviii) of clause (24) of section 2 shall be deemed to be the income of the previous year in which it is received, if not charged to income-tax in any earlier previous year.]

Section 146 Reopening of assessment at the instance of the assessee

1573[***]

Section 147 - Income escaping assessment

1574[If any income chargeable to tax, in the case of an assessee, has escaped assessment for any assessment year, the Assessing Officer may, subject to the provisions of Sections 148 to 153, assess or reassess such income or recompute the loss or the depreciation allowance or any other allowance or deduction for such assessment year (hereafter in this section and in Sections 148 to 153 referred to as the relevant assessment year).

Explanation.-For the purposes of assessment or reassessment or recomputation under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedings under this section, irrespective of the fact that the provisions of Section 148-A have not been complied with.]

Section 148 - Issue of notice where income has escaped assessment

1575[Before making the assessment, reassessment or recomputation under Section 147, and subject to the provisions of Section 148-A, the Assessing Officer shall serve on the assessee a notice, along with a copy of the order passed, if required, under clause (d) of Section 148-A, requiring him to furnish within such period, as may be specified in such notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed;

and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under Section 139:

Provided that no notice under this section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and the Assessing Officer has obtained prior approval of the specified authority to issue such notice.

1576[Provided further that no such approval shall be required where the Assessing Officer, with the prior approval of the specified authority, has passed an order under clause (d) of section 148A to the effect that it is a fit case to issue a notice under this section.]

Explanation 1.-For the purposes of this section and Section 148-A, the information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment means,-

1. any information 1577[***] in the case of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time;

   1578[(ii) any audit objection to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act; or

   (iii) any information received under an agreement referred to in section 90 or section 90A of the Act; or

   (iv) any information made available to the Assessing Officer under the scheme notified under section 135A; or

   (v) any information which requires action in consequence of the order of a Tribunal or a Court.]

   Explanation 2.-For the purposes of this section, where,-

1. a search is initiated under Section 132 or books of account, other documents or any assets are requisitioned under Section 132-A, on or after the 1st day of April, 2021, in the case of the assessee; or

2. a survey is conducted under Section 133-A, other than under subsection (2A) 1579[***] of that section, on or after the 1st day of April, 2021, in the case of the assessee; or

3. the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned under Section 132 or under Section 132-A in case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or

4. the Assessing Officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, that any books of account or documents, seized or requisitioned under Section 132 or Section 132-A in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee, the Assessing Officer shall be deemed to have information which suggests that the income chargeable to tax has escaped assessment in the case of the assessee 1580[where] the search is initiated or books of account, other documents or any assets are requisitioned or survey is conducted in the case of the assessee or money, bullion, jewellery or other valuable article or thing or books of account or documents are seized or requisitioned in case of any other person.

   Explanation 3.-For the purposes of this section, specified authority means the specified authority referred to in Section 151.]

Section 148A Conducting inquiry providing opportunity before issue of notice under section 148

1581[The Assessing Officer shall, before issuing any notice under Section 148,-

1. conduct any enquiry, if required, with the prior approval of specified authority, 1582[***] respect to the information which suggests that the income chargeable to tax has escaped assessment;

2. provide an opportunity of being heard to the assessee, 1583[***], by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under Section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a);

3. consider the reply of assessee furnished, if any, in response to the show cause notice referred to in clause (b);

4. decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under Section 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires:

Provided that the provisions of this section shall not apply in a case where,-

1. a search is initiated under Section 132 or books of account, other documents or any assets are requisitioned under Section 132-A in the case of the assessee on or after the 1st day of April, 2021; or

2. the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any money, bullion, jewellery or other valuable article or thing, seized in a search under Section 132 or requisitioned under Section 132-A, in the case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or

3. the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any books of account or documents, seized in a search under Section 132 or requisitioned under Section 132-A, in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, 1584[relate to, the assessee; or (d) the Assessing Officer has received any information under the scheme notified under section 135A pertaining to income chargeable to tax escaping assessment for any assessment year in the case of the assessee.]

Explanation.-For the purposes of this section, specified authority means he specified authority referred to in Section 151.]

Section 148B Prior approval for assessment reassessment or recomputation in certain cases

1585[No order of assessment or reassessment or recomputation under this Act shall be passed by an Assessing Officer below the rank of Joint Commissioner, in respect of an assessment year to which clause (i) or clause (ii) or clause (iii) or clause (iv) of Explanation 2 to section 148 apply except with the prior approval of the Additional Commissioner or Additional Director or Joint Commissioner or Joint Director.]

Section 149 - Time limit for notice

1586[(1) No notice under Section 148 shall be issued for the relevant assessment year,-

1. if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b);

1587[(b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of.

1. an asset;

2. expenditure in respect of a transaction or in relation to an event or occasion; or

3. an entry or entries in the books of account, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more:]

Provided that no notice under Section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if 1588[a notice under section 148 or section 153A or section 153C could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub-section (1) of this section or section 153A or section 153C, as the case may be] as they stood immediately before the commencement of the Finance Act, 2021:

Provided further that the provisions of this sub-section shall not apply in a case, where a notice under Section 153-A, or Section 153-C read with Section 153-A, is required to be issued in relation to a search initiated under Section 132 or books of account, other documents or any assets requisitioned under Section 132-A, on or before the 31st day of March, 2021:

Provided also that for the purposes of computing the period of limitation as per this section, the time or extended time allowed to the assessee, as per show-cause notice issued under clause (b) of Section 148-A or the period during which the proceeding under Section 148-A is stayed by an order or injunction of any court, shall be excluded:

Provided also that where immediately after the exclusion of the period referred to in the immediately preceding proviso, the period of limitation available to the Assessing Officer for passing an order under clause (d) of Section 148-A is less than seven days, such remaining period shall be extended to seven days and the period of limitation under this sub-section shall be deemed to be extended accordingly.

Explanation.-For the purposes of clause (b) of this sub-section, “asset” shall include immovable property, being land or building or both, shares and securities, loans and advances, deposits in bank account.

1589[(1A) Notwithstanding anything contained in sub-section (1), where the income chargeable to tax represented in the form of an asset or expenditure in relation to an event or occasion of the value referred to in clause (b) of sub-section (1), has escaped the assessment and the investment in such asset or expenditure in relation to such event or occasion has been made or incurred, in more than one previous years relevant to the assessment years within the period referred to in clause (b) of sub-section (1), a notice under section 148 shall be issued for every such assessment year for assessment, reassessment or recomputation, as the case may be.]

(2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of Section 151.]

Section 150 - Provision for cases where assessment is in pursuance of an order on appeal etc

1. Notwithstanding anything contained in section 149, the notice under section 148 may be issued at any time for the purpose of making an assessment or reassessment or recomputation in consequence of or to give effect to any finding or direction contained in an order passed by any authority in any proceeding under this Act by way of appeal, reference or revision or by a Court in any proceeding under any other law.

2. The provisions of sub-section (1) shall not apply in any case where any such assessment, reassessment or recomputation as is referred to in that sub-section relates to an assessment year in respect of which an assessment, reassessment or recomputation could not have been made at the time the order which was the subject-matter of the appeal, reference or revision, as the case may be, was made by reason of any other provision limiting the time within which any action for assessment, reassessment or recomputation may be taken.

Section 151 - Sanction for issue of notice

1590[Specified authority for the purposes of Section 148 and Section 148-A shall be,-

1. Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year;

2. Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year.]

Section 151 A Faceless assessment of income escaping assessment

1591[(1) The Central Government may make a scheme, by notification in the Official Gazette, for the purposes of assessment, reassessment or re-computation under section 147 or issuance of notice under section 148 1592[or conducting of enquiries or issuance of show-cause notice or passing of order under section 148A] or sanction for issue of such notice under section 151, so as to impart greater efficiency, transparency and accountability by-

1. eliminating the interface between the income-tax authority and the assessee or any other person to the extent technologically feasible;

2. optimising utilisation of the resources through economies of scale and functional specialisation;

3. introducing a team-based assessment, reassessment, re-computation or issuance or sanction of notice with dynamic jurisdiction.

(2) The Central Government may, for the purpose of giving effect to the scheme made under sub-section (1), by notification in the Official Gazette, direct that any of the provisions of this Act shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification:

Provided that no direction shall be issued after the 31st day of March, 2022.

(3) Every notification issued under sub-section (1) and sub-section (2) shall, as soon as may be after the notification is issued, be laid before each House of Parliament.]

Section 152 - Other provisions

1. In an assessment, reassessment or recomputation made under section 147, the tax shall be chargeable at the rate or rates at which it would have been charged had the income not escaped assessment.

2. Where an assessment is reopened under section 147, the assessee may, if he has not impugned any part of the original assessment order for that year either under sections 246 to 248 or under section 264, claim that the proceedings under section 147 shall be dropped on his showing that he had been assessed on an amount or to a sum not lower than what he would be rightly liable for even if the income alleged to have escaped assessment had been taken into account, or the assessment or computation had been properly made :

Provided that in so doing he shall not be entitled to reopen matters concluded by an order under section 154, 155, 260, 262 or 263.

Section 153 - Time limit for completion of assessment reassessment and recomputation

1593 [(1) No order of assessment shall be made under section 143 or section 144 at any time after the expiry of twenty-one months from the end of the assessment year in which the income was first assessable.

1594 [Provided that in respect of an order of assessment relating to the assessment year commencing on the 1st day of April, 2018, the provisions of this sub-section shall have effect, as if for the words "twenty-one months", the words "eighteen months" had been substituted:

1595[Provided further that in respect of an order of assessment relating to the assessment year commencing on the-

1. 1st day of April, 2019, the provisions of this sub-section shall have effect, as if for the words "twenty-one months", the words "twelve months" had been substituted;

2. 1st day of April, 2020, the provisions of this sub-section shall have effect, as if for the words "twenty-one months", the words "eighteen months" had been substituted:]

1596[Provided also that in respect of an order of assessment relating to the assessment year commencing on or after the 1st day of April, 2021, the provisions of this sub-section shall have effect, as if for the words “twenty-one months”, the words “nine months” had been substituted.]

1597[(1A) Notwithstanding anything contained in sub-section (1), where a return under sub-section (8A) of section 139 is furnished, an order of assessment under section 143 or section 144 may be made at any time before the expiry of nine months from the end of the financial year in which such return was furnished.]

(2) No order of assessment, reassessment or recomputation shall be made under section 147 after the expiry of nine months from the end of the financial year in which the notice under section 148 was served.

1598 [Provided that where the notice under section 148 is served on or after the 1st day of April, 2019, the provisions of this sub-section shall have effect, as if for the words "nine months", the words "twelve months" had been substituted.]

(3) Notwithstanding anything contained in sub-sections (1) and (2), an order of fresh assessment 1599[or fresh order under section 92CA, as the case may be,] in pursuance of an order under section 254 or section 263 or section 264, setting aside or cancelling an assessment,1600[ or an order under section 92CA, as the case may be] may be made at any time before the expiry of nine months from the end of the financial year in which the order under section 254 is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner or, as the case may be, the order under section 263 or section 264 is passed by the Principal Commissioner or Commissioner.

1601 [Provided that where the order under section 254 is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner or, as the case may be, the order under section 263 or section 264 is passed by the Principal Commissioner or Commissioner on or after the 1st day of April, 2019, the provisions of this sub-section shall have effect, as if for the words "nine months", the words "twelve months" had been substituted.]

(4) Notwithstanding anything contained in sub-sections (1), (2) and (3), where a reference under sub-section (1) of section 92CA is made during the course of the proceeding for the assessment or reassessment, the period available for completion of assessment or reassessment, as the case may be, under the said sub-sections (1), (2) and (3) shall be extended by twelve months.

(5) Where effect to an order under section 250 or section 254 or section 260 or section 262 or section 263 or section 264 is to be given by the Assessing Officer 1602[or the Transfer Pricing Officer, as the case may be,] wholly or partly, otherwise than by making a fresh assessment or reassessment 1603[or fresh order under section 92CA, as the case may be,] such effect shall be given within a period of three months from the end of the month in which order under section 250 or section 254 or section 260 or section 262 is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be, the order under section 263 or section 264 is passed by the Principal Commissioner or Commissioner:

Provided that where it is not possible for the Assessing Officer 1604[or the Transfer Pricing Officer, as the case may be,] to give effect to such order within the aforesaid period, for reasons beyond his control, the Principal Commissioner or Commissioner on receipt of such request in writing from the Assessing Officer 1605[or the Transfer Pricing Officer, as the case may be,] if satisfied, may allow an additional period of six months to give effect to the order.

1606 [Provided further that where an order under section 250 or section 254 or section 260 or section 262 or section 263 or section 264 requires verification of any issue by way of submission of any document by the assessee or any other person or where an opportunity of being heard is to be provided to the assessee, the order giving effect to the said order under section 250 or section 254 or section 260 or section 262 or section 263 or section 264 shall be made within the time specified in sub-section (3).]

1607[(5A) Where the Transfer Pricing Officer gives effect to an order or direction under section 263 by an order under section 92CA and forwards such order to the Assessing Officer, the Assessing Officer shall proceed to modify the order of assessment or reassessment or recomputation, in conformity with such order of the Transfer Pricing Officer, within two months from the end of the month in which such order of the Transfer Pricing Officer is received by him.]

(6) Nothing contained in sub-sections (1) and (2) shall apply to the following classes of assessments, reassessments and recomputation which may, subject to the provisions of 1608[sub-sections (3), (5) and (5A)], be completed-

1. where the assessment, reassessment or recomputation is made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under section 250, section 254, section 260, section 262, section 263, or section 264 or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act, on or before the expiry of twelve months from the end of the month in which such order is received or passed by the Principal Commissioner or Commissioner, as the case may be; or

2. where, in the case of a firm, an assessment is made on a partner of the firm in consequence of an assessment made on the firm under section 147, on or before the expiry of twelve months from the end of the month in which the assessment order in the case of the firm is passed.

(7) Where effect to any order, finding or direction referred to in sub-section (5) or sub-section (6) is to be given by the Assessing Officer, within the time specified in the said sub-sections, and such order has been received or passed, as the case may be, by the income-tax authority specified therein before the 1st day of June, 2016, the Assessing Officer shall give effect to such order, finding or direction, or assess, reassess or recompute the income of the assessee, on or before the 31st day of March, 2017.

(8) Notwithstanding anything contained in the foregoing provisions of this section, sub-section (2) of section 153A or sub-section (1) of section 153B, the order of assessment or reassessment, relating to any assessment year, which stands revived under sub-section (2) of section 153A, shall be made within a period of one year from the end of the month of such revival or within the period specified in this section or sub-section (1) of section 153B, whichever is later.

(9) The provisions of this section as they stood immediately before the commencement of the Finance Act, 2016, shall apply to and in relation to any order of assessment, reassessment or recomputation made before the 1st day of June, 2016.

38[Provided that where a notice under sub-section (1) of section 142 or sub-section (2) of section 143 or section 148 has been issued prior to the 1st day of June, 2016 and the assessment or reassessment has not been completed by such date due to exclusion of time referred to in Explanation 1, such assessment or reassessment shall be completed in accordance with the provisions of this section as it stood immediately before its substitution by the Finance Act, 2016 (28 of 2016.).]

Explanation 1.-For the purposes of this section, in computing the period of limitation-

1. the time taken in reopening the whole or any part of the proceeding or in giving an opportunity to the assessee to be re-heard under the proviso to section 129; or

2. the period during which the assessment proceeding is stayed by an order or injunction of any court; or

3. the period commencing from the date on which the Assessing Officer intimates the Central Government or the prescribed authority, the contravention of the provisions of clause (21) or clause (22B) or clause (23A) or clause (23B) 1609[,under clause (i) of the first proviso] to sub-section (3) of section 143 and ending with the date on which the copy of the order withdrawing the approval or rescinding the notification, as the case may be, under those clauses is received by the Assessing Officer; or

4. the period commencing from the date on which the Assessing Officer directs the assessee to get his accounts audited under sub-section (2A) of section 142 and-

   1. ending with the last date on which the assessee is required to furnish a report of such audit under that sub-section; or

   2. where such direction is challenged before a court, ending with the date on which the order setting aside such direction is received by the Principal Commissioner or Commissioner; or

5. the period commencing from the date on which the Assessing Officer makes a reference to the Valuation Officer under sub-section (1) of section 142A and ending with the date on which the report of the Valuation Officer is received by the Assessing Officer; or

6. the period (not exceeding sixty days) commencing from the date on which the Assessing Officer received the declaration under sub-section (1) of section 158A and ending with the date on which the order under sub-section (3) of that section is made by him; or

7. in a case where an application made before the Income-tax Settlement Commission is rejected by it or is not allowed to be proceeded with by it, the period commencing from the date on which an application is made before the Settlement Commission under section 245C and ending with the date on which the order under sub-section (1) of section 245D is received by the Principal Commissioner or Commissioner under sub-section (2) of that section; or

8. the period commencing from the date on which an application is made before the 1610[Authority for Advance Rulings or before the Board for Advance Rulings] under sub-section (1) of section 245Q and ending with the date on which the order rejecting the application is received by the Principal Commissioner or Commissioner under sub-section (3) of section 245R; or

9. the period commencing from the date on which an application is made before the 1611[Authority for Advance Rulings or before the Board for Advance Rulings] under sub-section (1) of section 245Q and ending with the date on which the advance ruling pronounced by it is received by the Principal Commissioner or Commissioner under sub-section (7) of section 245R; or

10. the period commencing from the date on which a reference or first of the references for exchange of information is made by an authority competent under an agreement referred to in section 90 or section 90A and ending with the date on which the information requested is last received by the Principal Commissioner or Commissioner or a period of one year, whichever is less; or

11. the period commencing from the date on which a reference for declaration of an arrangement to be an impermissible avoidance arrangement is received by the Principal Commissioner or Commissioner under sub-section (1) of section 144BA and ending on the date on which a direction under sub-section (3) or sub-section (6) or an order under sub-section (5) of the said section is received by the 1612[Assessing Officer; or

12. the period (not exceeding one hundred and eighty days) commencing from the date on which a search is initiated under section 132 or a requisition is made under section 132A and ending on the date on which the books of account or other documents, or any money, bullion, jewellery or other valuable article or thing seized under section 132 or requisitioned under section 132A, as the case may be, are handed over to the Assessing Officer having jurisdiction over the assessee,-

    3. in whose case such search is initiated under section 132 or such requisition is made under section 132A; or

    4. to whom any money, bullion, jewellery or other valuable article or thing seized or requisitioned belongs to; or

    5. to whom any books of account or documents seized or requisitioned pertains or pertain to, or any information contained therein, relates to; or], 

1613[(xiii) the period commencing from the date on which the Assessing Officer makes a reference to the Principal Commissioner or Commissioner under the second proviso to sub-section (3) of section 143 and ending with the date on which the copy of the order under clause (ii) or clause (iii) of the fifteenth proviso to clause (23C) of section 10 or clause (ii) or clause (iii) of sub-section (4) of section 12AB, as the case may be, is received by the Assessing Officer,] shall be excluded:

Provided that where immediately after the exclusion of the aforesaid period, the period of limitation referred to in sub-sections (1), (2), (3) and sub-section (8) available to the Assessing Officer for making an order of assessment, reassessment or recomputation, as the case may be, is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly:

Provided further that where the period available to the Transfer Pricing Officer is extended to sixty days in accordance with the proviso to sub-section (3A) of section 92CA and the period of limitation available to the Assessing Officer for making an order of assessment, reassessment or recomputation, as the case may be, is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly:

Provided also that where a proceeding before the Settlement Commission abates under section 245HA, the period of limitation available under this section to the Assessing Officer for making an order of assessment, reassessment or recomputation, as the case may be, shall, after the exclusion of the period under sub-section (4) of section 245HA, be not less than one year; and where such period of limitation is less than one year, it shall be deemed to have been extended to one year; and for the purposes of determining the period of limitation under sections 149, 1614 [***], 154, 155 and 158BE and for the purposes of payment of interest under section 244A, this proviso shall also apply accordingly.

1615[Provided also that where the assessee exercises the option to withdraw the application under sub-section (1) of Section 245-M, the period of limitation available under this section to the Assessing Officer for making an order of assessment, reassessment or recomputation, as the case may be, shall, after the exclusion of the period under sub-section (5) of the said section, be not less than one year; and where such period of limitation is less than one year, it shall be deemed to have been extended to one year:

Provided also that for the purposes of determining the period of limitation under Sections 149, 154 and 155, and for the purposes of payment of interest under Section 244-A, the provisions of the fourth proviso shall apply accordingly.]

Explanation 2.-For the purposes of this section, where, by an order referred to in clause (i) of sub-section (6),-

1. any income is excluded from the total income of the assessee for an assessment year, then, an assessment of such income for another assessment year shall, for the purposes of section 150 and this section, be deemed to be one made in consequence of or to give effect to any finding or direction contained in the said order; or

2. any income is excluded from the total income of one person and held to be the income of another person, then, an assessment of such income on such other person shall, for the purposes of section 150 and this section, be deemed to be one made in consequence of or to give effect to any finding or direction contained in the said order, if such other person was given an opportunity of being heard before the said order was passed.]

Section 153A - Assessment in case of search or requisition

1616 [1617 (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003 1618[but on or before the 31st day of March, 2021], the Assessing Officer shall -

1. issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years 1619 [and for the relevant assessment year or years] referred to in clause (b), in the prescribed1620 form and verified in the prescribed1621 manner and setting forth such other particulars as may be prescribed1622and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139;

2. assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made 1623 [and for the relevant assessment year or years]:

Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years :

Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years 1624 [referred to in this subsection] pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate.

1625 [Provided also that the Central Government may by rules made by it and published in the Official Gazette (except in cases where any assessment or reassessment has abated under the second proviso), specify the class or classes of cases in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made 1626[and for the relevant assessment year or years].]

1627 [Provided also that no notice for assessment or reassessment shall be issued by the Assessing Officer for the relevant assessment year or years unless-

1. the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in the relevant assessment year or in aggregate in the relevant assessment years;

2. the income referred to in clause (a) or part thereof has escaped assessment for such year or years; and

3. the search under section 132 is initiated or requisition under section 132A is made on or after the 1st day of April, 2017.

Explanation 1.-For the purposes of this sub-section, the expression "relevant assessment year" shall mean an assessment year preceding the assessment year relevant to the previous year in which search is conducted or requisition is made which falls beyond six assessment years but not later than ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted or requisition is made.

Explanation 2.-For the purposes of the fourth proviso, "asset" shall include immovable property being land or building or both, shares and securities, loans and advances, deposits in bank account.]

1628 [(2) If any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner:

Provided that such revival shall cease to have effect, if such order of annulment is set aside.]

Explanation : For the removal of doubts, it is hereby declared that,-

1. save as otherwise provided in this section, section 153B and section 153C, all other provisions of this Act shall apply to the assessment made under this section;

2. in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year.]

Section 153B - Time limit for completion of assessment under section 153A

[(1) Notwithstanding anything contained in section 153, the Assessing Officer shall make an order of assessment or reassessment,-

1. in respect of each assessment year falling within six assessment years 1629 [and for the relevant assessment year or years] referred to in clause (b) of sub-section (1) of section 153A, within a period of twenty-one months from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A was executed;

2. in respect of the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A, within a period of twenty-one months from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A was executed:

Provided that in case of other person referred to in section 153C, the period of limitation for making the assessment or reassessment shall be the period as referred to in clause (a) or clause (b) of this sub-section or nine months from the end of the financial year in which books of account or documents or assets seized or requisitioned are handed over under section 153C to the Assessing Officer having jurisdiction over such other person, whichever is later:

Provided further that in case where the last of the authorisations for search under section 132 or for requisition under section 132A was executed and during the course of the proceedings for the assessment or reassessment of total income, a reference under sub-section (1) of section 92CA is made, the provisions of clause (a) or clause (b) of this sub-section shall have effect as if for the words "twenty-one months", the words "thirty-three months" had been substituted:

1630 [Provided further that in the case where the last of the authorisations for search under section 132 or for requisition under section 132A was executed during the financial year commencing on the 1st day of April, 2018,-

1. the provisions of clause (a) or clause (b) of this sub-section shall have effect, as if for the words "twenty-one months", the words "eighteen months" had been substituted;

2. the period of limitation for making the assessment or reassessment in case of other person referred to in section 153C, shall be the period of eighteen months from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A was executed or twelve months from the end of the financial year in which books of account or documents or assets seized or requisitioned are handed over under section 153C to the Assessing Officer having jurisdiction over such other person, whichever is later:

Provided also that in the case where the last of the authorisations for search under section 132 or for requisition under section 132A was executed during the financial year commencing on or after the 1st day of April, 2019,-

1. the provisions of clause (a) or clause (b) of this sub-section shall have effect, as if for the words "twenty-one months", the words "twelve months" had been substituted;

2. the period of limitation for making the assessment or reassessment in case of other person referred to in section 153C, shall be the period of twelve months from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A was executed or twelve months from the end of the financial year in which books of account or documents or assets seized or requisitioned are handed over under section 153C to the Assessing Officer having jurisdiction over such other person, whichever is later:

Provided also that in case where the last of the authorisations for search under section 132 or for requisition under section 132A was executed and during the course of the proceedings for the assessment or reassessment of total income, a reference under sub-section (1) of section 92CA is made, the period available for making an order of assessment or reassessment shall be extended by twelve months:

Provided also that in case where during the course of the proceedings for the assessment or reassessment of total income in case of other person referred to in section 153C, a reference under sub-section (1) of section 92CA is made, the period available for making an order of assessment or reassessment in case of such other person shall be extended by twelve months.]

1631[Provided also that in a case where the last of the authorisations for search under section 132 or requisition under section 132A was executed during the financial year commencing on the 1st day of April, 2020 or in case of other person referred to in section 153C, the books of account or document or assets seized or requisitioned were handed over under section 153C to the Assessing Officer having jurisdiction over such other person during the financial year commencing on the 1st day of April, 2020, the assessment in such cases for the assessment year commencing on the 1st day of April, 2021 shall be made on or before the 30th day of September, 2022.]

(2) The authorisation referred to in clause (a) and clause (b) of sub-section (1) shall be deemed to have been executed,-

1. in the case of search, on the conclusion of search as recorded in the last panchnama drawn in relation to any person in whose case the warrant of authorisation has been issued; or

2. in the case of requisition under section 132A, on the actual receipt of the books of account or other documents or assets by the Authorised Officer.

(3) The provisions of this section, as they stood immediately before the commencement of the Finance Act, 2016, shall apply to and in relation to any order of assessment or reassessment made before the 1st day of June, 2016.

1632 [Provided that where a notice under section 153A or section 153C has been issued prior to the 1st day of June, 2016 and the assessment has not been completed by such date due to exclusion of time referred to in the Explanation, such assessment shall be completed in accordance with the provisions of this section as it stood immediately before its substitution by the Finance Act, 2016.]

1633[(4) Nothing contained in this section shall apply to any search initiated under section 132 or requisition made under section 132A on or after the 1st day of April, 2021.]

Explanation.-In computing the period of limitation under this section-

1. the period during which the assessment proceeding is stayed by an order or injunction of any court; or

2. the period commencing from the date on which the Assessing Officer directs the assessee to get his accounts audited under sub-section (2A) of section 142 and-

1. ending with the last date on which the assessee is required to furnish a report of such audit under that sub-section; or

2. where such direction is challenged before a court, ending with the date on which the order setting aside such direction is received by the Principal Commissioner or Commissioner; or

3. the period commencing from the date on which the Assessing Officer makes a reference to the Valuation Officer under sub-section (1) of section 142A and ending with the date on which the report of the Valuation Officer is received by the Assessing Officer; or

4. the time taken in re-opening the whole or any part of the proceeding or in giving an opportunity to the assessee of being re-heard under the proviso to section 129; or

5. in a case where an application made before the Income-tax Settlement Commission is rejected by it or is not allowed to be proceeded with by it, the period commencing from the date on which an application is made before the Settlement Commission under section 245C and ending with the date on which the order under sub-section (1) of section 245D is received by the Principal Commissioner or Commissioner under sub-section (2) of that section; or

6. the period commencing from the date on which an application is made before the 1634[Authority for Advance Rulings or before the Board for Advance Rulings] under sub-section (1) of section 245Q and ending with the date on which the order rejecting the application is received by the Principal Commissioner or Commissioner under sub-section (3) of section 245R; or

7. the period commencing from the date on which an application is made before the 1635[Authority for Advance Rulings or before the Board for Advance Rulings] under sub-section (1) of section 245Q and ending with the date on which the advance ruling pronounced by it is received by the Principal Commissioner or Commissioner under sub-section (7) of section 245R; or

8. the period commencing from the date of annulment of a proceeding or order of assessment or reassessment referred to in sub-section (2) of section 153A, till the date of the receipt of the order setting aside the order of such annulment, by the Principal Commissioner or Commissioner; or

9. the period commencing from the date on which a reference or first of the references for exchange of information is made by an authority competent under an agreement referred to in section 90 or section 90A and ending with the date on which the information requested is last received by the Principal Commissioner or Commissioner or a period of one year, whichever is less; or

10. the period commencing from the date on which a reference for declaration of an arrangement to be an impermissible avoidance arrangement is received by the Principal Commissioner or Commissioner under sub-section (1) of section 144BA and ending on the date on which a direction under sub-section (3) or sub-section (6) or an order under sub-section (5) of the said section is received by the 1636[Assessing Officer; or]

1637[(xi) the period (not exceeding one hundred and eighty days) commencing from the date on which a search is initiated under section 132 or a requisition is made under section 132A and ending on the date on which the books of account, or other documents or money or bullion or jewellery or other valuable article or thing seized under section 132 or requisitioned under section 132A, as the case may be, are handed over to the Assessing Officer having jurisdiction over the assessee, in whose case such search is initiated under section 132 or such requisition is made under section 132A, as the case may be]

 shall be excluded:

Provided that where immediately after the exclusion of the aforesaid period, the period of limitation referred to in clause (a) or clause (b) of this sub-section available to the Assessing Officer for making an order of assessment or reassessment, as the case may be, is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly:

Provided further that where the period available to the Transfer Pricing Officer is extended to sixty days in accordance with the proviso to sub-section (3A) of section 92CA and the period of limitation available to the Assessing Officer for making an order of assessment or reassessment, as the case may be, is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly.]

1638 [Provided also that where a proceeding before the Settlement Commission abates under section 245HA, the period of limitation available under this section to the Assessing Officer for making an order of assessment or reassessment, as the case may be, shall, after the exclusion of the period under sub-section (4) of section 245HA, be not less than one year; and where such period of limitation is less than one year, it shall be deemed to have been extended to one year.]

1639[Provided also that where the assessee exercises the option to withdraw the application under sub-section (1) of Section 245-M, the period of limitation available under this section to the Assessing Officer for making an order of assessment or reassessment, as the case may be, shall, after the exclusion of the period under sub-section (5) of the said section, be not less than one year; and where such period of limitation is less than one year, it shall be deemed to have been extended to one year.]

 

Section 153C - Assessment of income of any other person

1640 [1641 (1) 1642 [Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,-

1. any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or

2. any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person] 1643 [and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person 1644 [for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and] for the relevant assessment year or years referred to in sub-section (1) of section 153A] :]

1645 [Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to 1646 [sub-section (1) of section 153A] shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person.]

1647 [Provided further that the Central Government may by rules made by it and published in the Official Gazette, specify the class or classes of cases in respect of such other person, in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made 1648 [and for the relevant assessment year or years as referred to in sub-section (1) of section 153A] except in cases where any assessment or reassessment has abated.]

1649 [(2) Where books of account or documents or assets seized or requisitioned as referred to in sub-section (1) has or have been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A and in respect of such assessment year”

1. no return of income has been furnished by such other person and no notice under sub-section (1) of section 142 has been issued to him, or

2. a return of income has been furnished by such other person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired, or

3. assessment or reassessment, if any, has been made, before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section 153A.]

   1650[(3) Nothing contained in this section shall apply in relation to a search initiated under Section 132 or books of account, other documents or any assets requisitioned under Section 132-A on or after the 1st day of April, 2021.]

Section 153D - Prior approval necessary for assessment in cases of search or requisition

1651 [No order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner in respect of each assessment year referred to in clause (b) of1652 [sub-section (1) of section 153A] or the assessment year referred to in clause (b) of sub-section (1) of section 153B, except with the prior approval of the Joint Commissioner.]

1653 [Provided that nothing contained in this section shall apply where the assessment or reassessment order, as the case may be, is required to be passed by the Assessing Officer with the prior approval of the 1654 [Principal Commissioner or Commissioner] under sub-section (12) of section 144BA.]

---

1. Omitted by the Finance Act, 1992, with effect from 1st April, 1993↩

2. Omitted by the Finance Act, 1992, with effect from 1st April, 1993↩

3. Omitted by the Finance Act, 1992, with effect from 1st April, 1993↩

4. Omitted by the Finance Act, 1992, with effect from 1st April, 1993.↩

5. Substituted by the Finance Act, 2022, for “Provided that”.↩

6. Substituted by the Finance Act, 2022, for “Provided further that”.↩

7. Substituted by the Finance Act, 2022, for “first proviso”.↩

8. Inserted by the Finance (No. 2) Act, 1998, with effect from 1st April, 1999.↩

9. Substituted by the Finance Act, 2002, with effect from 1st April, 2003. Prior to substitution, section 70 stood as under:

   “70. Set-off of loss from one source against income from another source under the same head of income. “ Save as otherwise provided in this Act, where the net result for any assessment year in respect of any source falling under any head of income is a loss, the assessee shall be entitled to have the amount of such loss set-off against his income from any other source under the same head.”↩

10. Inserted by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005.↩

11. Inserted by the Finance Act, 2017 w.e.f. 01.04.2018.↩

12. Inserted by the Finance (No. 2) Act, 1998, with effect from 1st April, 1999.↩

13. Prior to omission, proviso to clause (i) stood as under:

    “Provided that the business or profession for which the loss was originally computed continued to be carried on by him in the previous year relevant for that assessment year;”↩

14. Substituted by the Finance Act, 1999, with effect from 1st April, 2000. Prior to substitution, section 72A, as amended by the Finance (No. 2) Act, 1998, with effect from 1st April, 1999, stood as under:

    “72A. Provisions relating to carry forward and set-off of accumulated loss and unabsorbed depreciation allowance in certain cases of amalgamation. -- (1) Where there has been an amalgamation of a company owning an industrial undertaking or a ship with another company and the Central Government, on the recommendation of the specified authority, is satisfied that the following conditions are fulfilled, namely:

    (a) the amalgamating company was not, immediately before such amalgamation, financially viable by reason of its liabilities, losses and other relevant factors;

    (b) the amalgamation was in the public interest; and

    (c) such other conditions as the Central Government may, by notification in the Official Gazette, specify, to ensure that the benefit under this section is restricted to amalgamations which would facilitate the rehabilitation or revival of the business of the amalgamating company, then, the Central Government may make a declaration to that effect, and, thereupon, notwithstanding anything contained in any other provision of this Act, the accumulated loss and the unabsorbed depreciation of the amalgamating company shall be deemed to be the loss or, as the case may be, allowance for depreciation of the amalgamated company for the previous year in which the amalgamation was effected, and the other provisions of this Act relating to set-off and carry forward of loss and allowance for depreciation shall apply accordingly.

    (2) Notwithstanding anything contained in sub-section (1), the accumulated loss shall not be set-off or carried forward and the unabsorbed depreciation shall not be allowed in the assessment of the amalgamated company unless the following conditions are fulfilled, namely:

    (i) during the previous year relevant to the assessment year for which such set-off or allowance is claimed, the business of the amalgamating company is carried on by the amalgamated company without any modification or reorganisation or with such modification or reorganisation as may be approved by the Central Government to enable the amalgamated company to carry on such business more economically or more efficiently;

    (ii) the amalgamated company furnished, along with its return of income for the said assessment year, a certificate from the specified authority to the effect that adequate steps have been taken by that company for the rehabilitation or revival of the business of the amalgamating company.

    (3) Where a company owning an industrial undertaking or a ship proposes to amalgamate with any other company and such other company submits the proposed scheme of amalgamation to the specified authority and that authority is satisfied, after examining the scheme and taking into account all relevant facts, that the conditions referred to in sub-section (1) would be fulfilled if such amalgamation is effected in accordance with such scheme or, as the case may be, in accordance with such scheme as modified in such manner as that authority may specify, it shall intimate such other company that, after the amalgamation is effected in accordance with such scheme or, as the case may be, such scheme as so modified, it would make (unless there is any material change in the relevant facts) a recommendation to the Central Government under sub-section (1).

    (4) Where there has been reorganisation of business, whereby, a firm is succeeded by a company fulfilling the conditions laid down in clause (xiii) of section 47 or a proprietary concern is succeeded by a company fulfilling the conditions laid down in clause (xiv) of section 47, then notwithstanding anything contained in any other provisions of this Act, the accumulated loss and the unabsorbed depreciation of the predecessor firm or the proprietary concern, as the case may be, shall be deemed to be the loss or allowance for depreciation of the successor company for the previous year in which business reorganisation was effected and other provisions of this Act relating to set-off and carry forward of loss and allowance for depreciation shall apply accordingly:

    Provided that if any of the conditions laid down in the proviso to clause (xiii) or the proviso to clause (xiv) to section 47 are not complied with, the set-off of loss or allowance of depreciation made in any previous year in the hands of the successor company, shall be deemed to be the income of the company chargeable to tax in the year in which such conditions are not complied with.

    (5) For the purposes of sub-section (4), “

    (a) “accumulated loss” means so much of the loss of the predecessor firm or the proprietary concern, as the case may be, under the head “Profits and gains of business or profession” (not being a loss sustained in a speculation business) which such predecessor firm or the proprietary concern would have been entitled to carry forward and set-off under the provisions of section 72 if the reorganisation of business had not taken place;

    (b) “unabsorbed depreciation” means so much of the allowance for depreciation of the predecessor firm or the proprietary concern, as the case may be, which remains to be allowed and which would have been allowed to the predecessor firm or the proprietary concern, as the case may be, under the provisions of this Act, if the reorganisation of business had not taken place.

    Explanation: In this section, “

    (a) “accumulated loss” means so much of the loss of the amalgamating company under the head “Profits and gains of business or profession” (not being a loss sustained in a speculation business) which the amalgamating company would have been entitled to carry forward and set-off under the provisions of section 72 if the amalgamation had not been effected;

    (b) “specified authority” means such authority as the Central Government may, by notification in the Official Gazette, specify for the purposes of this section;

    (c) “unabsorbed depreciation” means so much of the allowance for depreciation of the amalgamating company which remains to be allowed and which would have been allowed to the amalgamating company under the provisions of this Act if the amalgamation had not been effected.”↩

15. Substituted by the Finance Act, 2007, with effect from 1st April, 2008. Prior to substitution, sub-section (1) as substituted by the Finance Act, 2003, with effect from 1st April, 2004, stood as under:

    “(1) Where there has been an amalgamation of a company owning an industrial undertaking or a ship or a hotel with another company or an amalgamation of a banking company referred to in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949) with a specified bank, then, notwithstanding anything contained in any other provision of this Act, the accumulated loss and the unabsorbed depreciation of the amalgamating company shall be deemed to be the loss or, as the case may be, allowance for depreciation of the amalgamated company for the previous year in which the amalgamation was effected, and other provisions of this Act relating to set-off and carry forward of loss and allowance for depreciation shall apply accordingly.”↩

16. Substituted by the Finance Act, 2021, for

    “(c) one or more public sector company or companies engaged in the business of operation of aircraft with one or more public sector company or companies engaged in similar business, then, notwithstanding anything contained in any other provision of this Act, the accumulated loss and the unabsorbed depreciation of the amalgamating company shall be deemed to be the loss or, as the case may be, allowance for unabsorbed depreciation of the amalgamated company for the previous year in which the amalgamation was effected, and other provisions of this Act relating to set off and carry forward of loss and allowance for depreciation shall apply accordingly.”↩

17. Inserted by the Finance Act, 2021.↩

18. Substituted by the Finance Act, 2003, with effect from 1st April, 2004. Prior to substitution, sub-section (2) as amended by the Finance Act, 2000, with effect from 1st April 2000, stood as under:

    “(2) Notwithstanding anything contained in sub-section (1), the accumulated loss shall not be set-off or carried forward and the unabsorbed depreciation shall not be allowed in the assessment of the amalgamated company unless the amalgamated company “

    (i) holds continuously for a minimum period of five years from the date of amalgamation at least three-fourths in the book value of fixed assets of the amalgamating company acquired in a scheme of amalgamation;

    (ii) continues the business of the amalgamating company for a minimum period of five years from the date of amalgamation;

    (iii) fulfils such other conditions as may be prescribed to ensure the revival of the business of the amalgamating company or to ensure that the amalgamation is for genuine business purpose.↩

19. See rule 9C and Form No. 62. For analysis, see Mashbra's Income-tax Rules.↩

20. Inserted by the Finance Act, 2010 w.e.f. 01.04.2011.↩

21. Substituted by the Finance Act, 2010 w.e.f. 01.04.2011 for the following:"(a) “accumulated loss” means so much of the loss of the predecessor firm or the proprietary concern or the amalgamating company or the demerged company, as the case may be, under the head “Profits and gains of business or profession” (not being a loss sustained in a speculation business) which such predecessor firm or the proprietary concern or amalgamating company or demerged company, would have been entitled to carry forward and set-off under the provisions of section 72 if the reorganisation of business or amalgamation or demerger had not taken place;"↩

22. Inserted by the Finance Act, 2001, with retrospective effect from 1st April, 2000.↩

23. Inserted by the Finance Act, 2002, with effect from 1st April, 2003.↩

24. Substituted by the Finance Act, 2010 w.e.f. 01.04.2011 for the following: "(b) “unabsorbed depreciation” means so much of the allowance for depreciation of the predecessor firm or the proprietary concern or the amalgamating company or the demerged company, as the case may be, which remains to be allowed and which would have been allowed to the predecessor firm or the proprietary concern or amalgamating company or demerged company, as the case may be, under the provisions of this Act, if the reorganisation of business or amalgamation or demerger had not taken place;]"↩

25. Inserted by the Finance Act, 2003, with effect from 1st April, 2004.↩

26. Substituted by the Finance Act, 2020, for

    “Section 72AA: Provisions relating to carry forward and set-off of accumulated loss and unabsorbed depreciation allowance in scheme of amalgamation of banking company in certain cases.

    [Notwithstanding anything contained in sub-clauses (i) to (iii) of clause (1B) of section 2 or section 72A, where there has been an amalgamation of a banking company with any other banking institution under a scheme sanctioned and brought into force by the Central Government under sub-section (7) of section 45 of the Banking Regulation Act, 1949 (10 of 1949), the accumulated loss and the unabsorbed depreciation of such banking company shall be deemed to be the loss or, as the case may be, allowance for depreciation of such banking institution for the previous year in which the scheme of amalgamation was brought into force and other provisions of this Act relating to set-off and carry forward of loss and allowance for depreciation shall apply accordingly. Explanation: For the purposes of this section, --

    (i) “accumulated loss” means so much of the loss of the amalgamating banking company under the head “Profits and gains of business or profession” (not being a loss sustained in a speculation business) which such amalgamating banking company, would have been entitled to carry forward and set-off under the provisions of section 72 if the amalgamation had not taken place;

    (ii) “banking company” shall have the same meaning assigned to it in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949);

    (iii) “banking institution” shall have the same meaning assigned to it in sub-section (15) of section 45of the Banking Regulation Act, 1949 (10 of 1949);

    (iv)“unabsorbed depreciation” means so much of the allowance for depreciation of the amalgamating banking company which remains to be allowed and which would have been allowed to such banking company if amalgamation had not taken place.”↩

27. Inserted by the Finance Act, 2007, with effect from 1st April, 2008.↩

28. Substituted for “eight assessment years” by the Finance Act, 2005, with effect from 1st April, 2006.↩

29. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of April, 2015 for the following : - "the principal business of which is the business of banking"↩

30. Inserted by the Finance (No. 2) Act, 2009, with effect from 1st April, 2010.↩

31. Substituted by the Finance Act, 2002, with effect from 1st April, 2003. Prior to substitution, sub-section (1) stood as under:

    “(1) Where in respect of any assessment year, the net result of the computation under the head “Capital gains” is a loss to the assessee, the whole loss shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year, and -

    (a) it shall be set-off against income, if any, under the head “Capital gains” assessable for that assessment year; and

    (b) if the loss cannot be wholly so set-off, the amount of loss not so set-off shall be carried forward to the following assessment year, and so on.”↩

32. Prior to omission, sub-section (3) stood as under:

    “(3) Any loss computed under the head “Capital gains” in respect of the assessment year commencing on the 1st day of April, 1987, or any earlier assessment year which is carried forward in accordance with the provisions of this section as it stood before the 1st day of April, 1988, shall be dealt with in the assessment year commencing on the 1st day of April, 1988, or any subsequent assessment year as follows:

    (a) in so far as such loss relates to short-term capital assets, it shall be carried forward and set-off in accordance with the provisions of sub-sections (1) and (2);

    (b) in so far as such loss relates to long-term capital assets, it shall be reduced by the deductions specified in sub-section (2) of section 48 and the reduced amount shall be carried forward and set-off in accordance with the provisions of subsection (1) but such carry forward shall not be allowed beyond the fourth assessment year immediately succeeding the assessment year for which the loss was first computed.”↩

33. Omitted by the Finance Act, 1986, with effect from 1st April, 1987↩

34. Omitted By The Finance Act, 1992, with effect from 1st April 1993.↩

35. Omitted By The Finance Act, 1992, with effect from 1st April 1993.↩

36. Inserted by the Finance Act, 2021.↩

37. Inserted by the Finance Act, 2022.↩

38. Inserted by the Finance Act, 2022.↩

39. Inserted by the Finance Act, 2022.↩

40. Substituted by the Finance Act, 2017 w.e.f. 01.04.2018 for the following:-

    "79. Carry forward and set off of losses in case of certain companies

    "Notwithstanding anything contained in this Chapter, where a change in shareholding has taken place in a previous year in the case of a company, not being a company in which the public are substantially interested, no loss incurred in any year prior to the previous year shall be carried forward and set-off against the income of the previous year unless -

    (a) on the last day of the previous year the shares of the company carrying not less than fifty-one per cent of the voting power were beneficially held by persons who beneficially held shares of the company carrying not less than fifty-one per cent of the voting power on the last day of the year or years in which the loss was incurred:

    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 shareholder or on account of transfer of shares by way of gift to any relative of the shareholder making such gift:

    [Provided further that nothing contained in this section shall apply to any change in the shareholding of an Indian company which is a subsidiary of a foreign company as a result of amalgamation or demerger of a foreign company subject to the condition that fifty-one per cent shareholders of the amalgamating or demerged foreign company continue to be the shareholders of the amalgamated or the resulting foreign company.]

    (b) [Omitted by the Finance Act, 1988, with effect from 1st April, 1989.]"↩

41. Inserted by the Finance Act, 2022.↩

42. Inserted by the Finance Act, 2016.↩

43. Substituted for “section 80GGA” by the Election and other Related Laws (Amendment) Act, 2003, with effect from 11th September, 2003.↩

44. Inserted by the Finance Act, 1999, with effect from 1st April, 2000.↩

45. Inserted by the Finance Act, 2007, with retrospective effect from 1st April, 2004.↩

46. Inserted by the Finance Act, 2007, with effect from 1st April, 2008.↩

47. Now omitted by the Finance (No. 2) Act, 1996, with retrospective effect from 1st April, 1989.↩

48. Inserted by the Finance (No. 2) Act, 2009, with retrospective effect from 1st April, 2003.↩

49. Inserted by the Finance (No. 2) Act, 2009, with retrospective effect from 1st April, 2003.↩

50. Inserted by the Finance (No. 2) Act, 2009, with retrospective effect from 1st April, 2009.↩

51. Inserted by the Finance Act, 2012, w.e.f. 01.04.2013.↩

52. Inserted by the Finance Act, 2010 w.e.f 01.04.2011.↩

53. Omitted by the Finance Act, 1997, with effect from 1st April, 1998.↩

54. Substituted by the Finance Act, 2018, with effect from 1st April, 2018 for the following :-

    " [Where in computing the total income of an assessee of the previous year relevant to the assessment year commencing on the 1st day of April, 2006 or any subsequent assessment year, any deduction is admissible under section 80-IA or section 80-IAB or section 80-IB or section 80-IC  [or section 80-ID or section 80-IE], no such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under sub-section (1) of section 139.]"↩

55. Omitted by the Taxation Laws (Amendment) Act, 1975, with effect from 1st April, 1976.↩

56. Omitted by the Direct Tax Laws (Amendment) Act, 1987, with effect from 1st April, 1989.↩

57. Omitted by the Finance Act, 1968, with effect from 1st April, 1969.↩

58. Omitted by the Direct Tax Laws (Amendment) Act, 1987, with effect from 1st April, 1989.↩

59. Omitted by the Direct Tax Laws (Amendment) Act, 1987, with effect from 1st April, 1989.↩

60. Omitted by the Finance Act, 1972 with effect from 1st April, 1973.↩

61. Omitted by the Direct Tax Laws (Amendment) Act, 1987, with effect from 1st April, 1989.↩

62. Omitted by the Taxation Laws (Amendment) Act, 1975, with effect from 1st April, 1976.↩

63. Inserted by the Finance Act, 2005, with effect from 1st April, 2006.↩

64. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of April, 2015 for the following : - "one lakh rupees"↩

65. Substituted for “notified under clause (23D)” by the Finance Act, 2006, with effect from 1st April, 2007.↩

66. See Form No. 59 and rule 20 for guidelines for approval.↩

67. See Form No. 59 and rule 20 for guidelines for approval.↩

68. See Form No. 59A and rule 20A for guidelines for approval.↩

69. See Form No. 59A and rule 20A for guidelines for approval.↩

70. Inserted by the Finance Act, 2006, with effect from 1st April, 2007.↩

71. The Bank Term Deposit Scheme, 2006, notified vide Notification No. SO 1220(E), dated 28th July, 2006. For text of Scheme, refer Mashbra's Income-tax Rules or 15 CAPJ 580.↩

72. Inserted by the Finance Act, 2007, with effect from 1st April, 2008.↩

73. Inserted by the Finance Act, 2008, with effect from 1st April, 2008.↩

74. Inserted by the Finance Act, 2008, with effect from 1st April, 2008.↩

75. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following: - "insurance policy other than a contract for a deferred annuity"↩

76. Inserted by the Finance Act, 2012, w.e.f. 01.04.2013.↩

77. Substituted by the Finance Act, 2013 w.e.f. 01.04.2014 for the following : - "ten per cent."↩

78. Inserted by the Finance Act, 2013 w.e.f. 01.04.2014.↩

79. Inserted by the Finance Act, 2015, w.e.f. 01.04.2015.↩

80. Inserted by the Finance Act, 2008, with effect from 1st April, 2008.↩

81. Omitted by the Finance (No. 2) Act, 1996, with retrospective effect from 1st April, 1993.↩

82. Reference to section 80C needs correction.↩

83. Inserted by the Finance Act, 2001, with effect from 1st April, 2002.↩

84. Substituted by the Finance Act, 2015, w.e.f. 01.04.2016. for the following:-" [one lakh rupees]" ↩

85. Substituted by the Finance Act, 2005, with effect from 1st April, 2006. Prior to substitution, sub-section (3) stood as under :

    “(3) Where any amount paid or deposited by the assessee has been taken into account for the purposes of this section, a rebate with reference to such amount shall not be allowed under section 88.↩

86. Inserted by the Finance (No. 2) Act, 2004, with retrospective effect from 1st April, 2004.↩

87. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of April, 2015 for the following : -

    "Where an assessee, being an individual 2[employed by the Central Government or any other employer] on or after the 1st day of January, 2004"↩

88. Inserted by the Finance (No. 2) Act, 2009, with retrospective effect from 1st April, 2009.↩

89. Substituted by the Finance Act, 2017 w.e.f. 01.04.2018 w.e.f. 01.04.2018 for the following:-"ten per cent"↩

90. Omitted by the Finance Act, 2015, w.e.f. 01.04.2016, the previous text was:-"[(1A) The amount of deduction under sub-section (1) shall not exceed one hundred thousand rupees.]"↩

91. Inserted by the Finance Act, 2015, w.e.f. 01.04.2016.↩

92. Substituted by the Finance Act, 2022, for “Central Government”.↩

93. Substituted by the Finance Act, 2022, for “Central Government”.↩

94. Substituted by the Finance Act, 2015, w.e.f. 01.04.2016. for the following:-"sub-section (1)"↩

95. Substituted by the Finance Act, 2015, w.e.f. 01.04.2016. for the following:-"sub-section (1)"↩

96. Inserted by the Finance Act, 2016, w.e.f. 1st day of April, 2017.↩

97. Substituted by the Finance Act, 2005, with effect from 1st April, 2006. Prior to substitution, sub-section (4) stood as under :

    “(4) Where any amount paid or deposited by the assessee has been allowed as a deduction under sub-section (1), no rebate with reference to such amount shall be allowed under section 88.”↩

98. Substituted by the Finance Act, 2015, w.e.f. 01.04.2016. for the following:-"sub-section (1)"↩

99. Inserted by the Finance (No. 2) Act, 2009, with retrospective effect from 1st April, 2009.↩

100. Substituted by the Finance Act, 2011 w.e.f 01.04.2012 for the following section 80CCD"↩

101. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of April, 2015 for the following : - "one lakh rupees"↩

102. Inserted by the Finance Act, 2010 w.e.f. 01.04.2011.↩

103. Inserted by the Finance Act, 2011 w.e.f 01.04.2012↩

104. Inserted by the Finance Act, 2012, w.e.f. 01.04.2013.↩

105. Inserted by the Finance Act, 2013 w.e.f. 01.04.2014↩

106. Inserted by the Finance Act, 2013 w.e.f. 01.04.2014↩

107. Substituted by the Finance Act, 2013 w.e.f. 01.04.2014 for the following : -

     "(2) Where an assessee has claimed and allowed a deduction under this section for any assessment year in respect of any amount, he shall not be allowed any deduction under this section for any subsequent assessment year."↩

108. Substituted by the Finance Act, 2013 w.e.f. 01.04.2014 for the following : - "ten lakh rupees"↩

109. Inserted by the Finance Act, 2013 w.e.f. 01.04.2014↩

110. Inserted by the Finance Act, 2013 w.e.f. 01.04.2014↩

111. Inserted by the Finance Act, 2017 w.e.f. 01.04.2018.↩

112. Substituted by the Finance Act, 2008, with effect from 1st April, 2009. Prior to substitution, section 80D as amended by the Finance Act, 1999, with effect from 1st April, 2000/ 1st April, 2001; Finance Act, 2001, with effect from 1st April, 2002; Finance Act, 2005, with effect from 1st April, 2006; Finance Act, 2007, with effect from 1st April, 2008, stood as under:

     “80D. Deduction in respect of medical insurance premia.

     (1) In computing the total income of an assessee, there shall be deducted at the following rates, such sum as is specified in sub-section (2) and paid by him by any mode of payment other then cash in the previous year out of his income chargeable to tax, namely:

     (i) in a case where such sum does not exceed in the aggregate fifteen thousand rupees, the whole of such sum ; and

     (ii) in any other case, fifteen thousand rupees :

     Provided that where the sum specified in sub-section (2) is paid to effect or to keep in force an insurance on the health of the assessee, or his wife or her husband or dependent parents or any member of the family in case the assessee is a Hindu undivided family, and who is a senior citizen, the provisions of this section shall have effect as if for the words fifteen thousand rupees, the words twenty thousand rupees had been substituted.

     (2) The sum referred to in sub-section (1) shall be the following, namely :

     (a) where the assessee is an individual, any sum paid to effect or to keep in force an insurance on the health of the assessee or on the health of the wife or husband, dependent parents or dependent children of the assessee ;

     (b) where the assessee is a Hindu undivided family, any sum paid to effect or to keep in force an insurance on the health of any member of the family ;

     (c)  [***] :

     Provided that such insurance shall be in accordance with a scheme framed in this behalf by “

     (a) the General Insurance Corporation of India formed under section 9 of the General Insurance Business (Nationalisation) Act, 1972 (57 of 1972) and approved by the Central Government in this behalf ; or

     (b) any other insurer and approved by the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999).

     Explanation : For the purpose of this section, “senior citizen” shall have the meaning assigned to it in the Explanation to section 80DDB.”

      ↩

113. Inserted by the Finance Act, 2010 w.e.f. 01.04.2011.↩

114. Substituted by the Finance Act, 2013 w.e.f. 01.04.2014 for the following : - "Central Government Health Scheme"↩

115. Inserted by the Finance Act, 2012, w.e.f. 01.04.2013.↩

116. Substituted by the Finance Act, 2015, w.e.f. 01.04.2016. for the following:-"fifteen thousand rupees"↩

117. Inserted by the Finance Act, 2012, w.e.f. 01.04.2013.↩

118. Substituted by the Finance Act, 2015, w.e.f. 01.04.2016. for the following:-"fifteen thousand rupees"↩

119. Inserted by the Finance Act, 2015, w.e.f. 01.04.2016.↩

120. Substituted by the Finance Act, 2018, w.e.f. 01.04.2019. for the following: "thirty thousand rupees"↩

121. Substituted by the Finance Act, 2018, w.e.f. 01.04.2019. for the following: "thirty thousand rupees"↩

122. Omitted by the Finance Act, 2018, w.e.f. 01.04.2019, the previous text was: "very"↩

123. Substituted by the Finance Act, 2018, w.e.f. 01.04.2019. for the following: "thirty thousand rupees"↩

124. Inserted by the Finance Act, 2012, w.e.f. 01.04.2013.↩

125. Substituted by the Finance Act, 2015, w.e.f. 01.04.2016. for the following:-

     "(3) Where the assessee is a Hindu undivided family, the sum referred to in subsection (1) shall be the whole of the amount paid to effect or to keep in force an insurance on the health of any member of that Hindu undivided family as does not exceed in the aggregate  [twenty-five thousand rupees]."↩

126. Substituted by the Finance Act, 2018, w.e.f. 01.04.2019. for the following:-

     "thirty thousand rupees"↩

127. Omitted by the Finance Act, 2018, w.e.f. 01.04.2019, the previous text was:-

     "very"↩

128. Substituted by the Finance Act, 2018, w.e.f. 01.04.2019. for the following:-

     "thirty thousand rupees"↩

129. Substituted by the Finance Act, 2015, w.e.f. 01.04.2016. for the following:-"or in sub-section (3)"↩

130. Omitted by the Finance Act, 2018, w.e.f. 01.04.2019, the previous text was:-

     " [or a very senior citizen]"↩

131. Substituted by the Finance Act, 2015, w.e.f. 01.04.2016. for the following:-"fifteen thousand rupees"↩

132. Substituted by the Finance Act, 2018, w.e.f. 01.04.2019. for the following:-

     " [thirty thousand rupees]"↩

133. Omitted by the Finance Act, 2015, w.e.f. 01.04.2016, the previous text was:-

     "Explanation: For the purposes of this sub-section, “senior citizen” means an individual resident in India who is of the age of  [sixty years] or more at any time during the relevant previous year."↩

134. Inserted by the Finance Act, 2018, w.e.f. 01.04.2019.↩

135. Inserted by the Finance Act, 2015, w.e.f. 01.04.2016.↩

136. Omitted by the Finance Act, 2018, w.e.f. 01.04.2019, the previous text was:-

     "(ii) "very senior citizen" means an individual resident in India who is of the age of eighty years or more at any time during the relevant previous year."↩

137. Substituted by the Finance Act, 2015, w.e.f. 01.04.2016. for the following:

     (1) Where an assessee, being an individual or a Hindu undivided family, who is a resident in India, has, during the previous year, “

     (a) incurred any expenditure for the medical treatment (including nursing), training and rehabilitation of a dependent, being a person with disability; or

     (b) paid or deposited any amount under a scheme framed in this behalf by the Life Insurance Corporation or any other insurer or the Administrator or the specified company subject to the conditions specified in sub-section (2) and approved by the Board in this behalf for the maintenance of a dependent, being a person with disability,

     the assessee shall, in accordance with and subject to the provisions of this section, be allowed a deduction of a sum of fifty thousand rupees from his gross total income in respect of the previous year:

     Provided that where such dependant is a person with severe disability, the provisions of this sub-section shall have effect as if for the words “fifty thousand rupees”, the words [one hundred thousand rupees] had been substituted. ↩

138. Substituted by the Finance Act, 2022, for

     “(a)      the scheme referred to in clause (b) of sub-section (1) provides for payment of annuity or lump sum amount for the benefit of a dependent, being a person with disability, in the event of the death of the individual or the member of the Hindu undivided family in whose name subscription to the scheme has been made;”.↩

139. Inserted by the Finance Act, 2022.↩

140. See rule 11A(2), Form No. 10-IA and Form prescribed vide Notification No. 16-18/97-NI.1, dated 1st June, 2001 and No. 16-18/97-NI.1, dated 18th February, 2002. For Forms and analysis, see Mashbra's Income-tax Rules.↩

141. See rule 11A(2), Form No. 10-IA and Form prescribed vide Notification No. 16-18/97-NI.1, dated 1st June, 2001 and No. 16-18/97-NI.1, dated 18th February, 2002. For Forms and analysis, see Mashbra's Income-tax Rules.↩

142. Inserted by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005.↩

143. Substituted by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005. Prior to substitution, clause (g) stood as under :

     “(g) “person with severe disability” means a person with eighty per cent or more of one or more disabilities, as referred to in sub-section (4) of section 56 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996);”↩

144. Stands omitted by substitution of section 80DD for section 80DD and 80DDA by the Finance (No. 2) Act, 1998, with effect from 1st April, 1999. Prior to omission, section 80DDA, stood as under :

     “80DDA. Deduction in respect of deposit made for maintenance of handicapped dependent. “

     (1) In computing the total income of an assessee who is resident in India, being an individual or a Hindu undivided family, there shall be deducted, in accordance with and subject to the provisions of this section, an amount not exceeding twenty thousand rupees paid or deposited by him in the previous year, out of his income chargeable to tax, under any scheme framed in this behalf by the Life Insurance Corporation or the Unit Trust of India subject to the conditions specified in sub-section (2) and approved by the Board in this behalf.

     (2) The deduction under sub-section (1) shall be allowed only if the following conditions are fulfilled, namely :

     (a) the scheme referred to in sub-section (1) provides for payment of annuity or lump sum amount for the benefit of a handicapped dependent in the event of the death of the individual or the member of the Hindu undivided family in whose name subscription to the scheme has been made ;

     (b) the assessee nominates either the handicapped dependent or any other person or a trust to receive the payment on his behalf, for the benefit of the handicapped dependent.

     (3) If the handicapped dependent predeceases the individual or the member of the Hindu undivided family referred to in sub-section (2), an amount equal to the amount paid or deposited under sub-section (1) shall be deemed to be the income of the assessee of the previous year in which such amount is received by the assessee and shall accordingly be chargeable to tax as the income of that previous year.

     (4) In this section, “

     (a) “Government hospital” shall have the meaning assigned to it in the Explanation to section 80DD ;

     (b) “handicapped dependent” shall mean a person who “

     (i) is a relative of the individual or, as the case may be, is a member of the Hindu undivided family and is not dependent on any person other than such individual or Hindu undivided family for his support or maintenance ; and

     (ii) is suffering from a permanent physical disability (including blindness) or is subject to mental retardation, being a permanent physical disability or mental retardation specified in the rules made by the Board for the purposes of section 80DD, which is certified by a physician, a surgeon, an oculist or a psychiatrist, as the case may be, working in a Government hospital, and which has the effect of reducing considerably such person”s capacity for normal work or engaging in a gainful employment or occupation ;

     (c) “Life Insurance Corporation” shall have the same meaning as in clause (iii) of subsection (8) of section 88 ;

     (d) “Unit Trust of India” means the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963).”↩

145. Substituted by the Finance Act, 2003, with effect from 1st April, 2004. Prior to substitution, section 80DDB, as amended by the Finance Act, 1999, with effect from 1st April, 2000, stood as under :

     “80DDB. Deduction in respect of medical treatment, etc. “ Where an assessee who is resident in India has, during the previous year, actually incurred any expenditure for the medical treatment of such disease or ailment as may be specified in the rules made in this behalf by the Board “

     (a) for himself or a dependent relative, in case the assessee is an individual ; or

     (b) for any member of a Hindu undivided family, in case the assessee is a Hindu undivided family,

     the assessee shall be allowed a deduction of a sum of forty thousand rupees in respect of that previous year in which such expenditure was incurred :

     Provided that no such deduction shall be allowed unless the assessee furnishes a certificate in such form and from such authority as may be prescribed :

     Provided further that the deduction under this section shall be reduced by the amount received, if any, under an insurance from an insurer for the medical treatment of the person referred to in clause (a) or clause (b) :

     Provided also that where the expenditure incurred is in respect of the assessee or his dependent relative or any member of a Hindu undivided family of the assessee and who is a senior citizen, the provisions of this section shall have effect as if for the words “forty thousand rupees”, the words “sixty thousand rupees” had been substituted.

     Explanation : For the purposes of this section, “

     (i) “dependent” means a person who is not dependent for his support or maintenance on any person other than the assessee ;

     (ii) “insurer” shall have the meaning assigned to it in clause (9) of section 2 of the Insurance Act, 1938 (4 of 1938) ;

     (iii) “senior citizen” means an individual resident in India who is of the age of sixty-five years or more at any time during the relevant previous year.”

      ↩

146. See rule 11DD(1). For analysis, see Mashbra's Income-tax Rules.↩

147. Substituted by the Finance Act, 2015, w.e.f. 01.04.2016. for the following:-

     "Provided that no such deduction shall be allowed unless the assessee furnishes with the return of income, a certificate in such form, as may be prescribed, from a neurologist, an oncologist, a urologist, a haematologist, an immunologist or such other specialist, as may be prescribed, working in a Government hospital:"↩

148. Substituted by the Finance Act, 2018, w.e.f. 01.04.2019 for the following:-

     “sixty thousand rupees”↩

149. Omitted by the Finance Act, 2018, w.e.f. 01.04.2019, the previous text was:-

     " [Provided also that where the amount actually paid is in respect of the assessee or his dependant or any member of a Hindu undivided family of the assessee and who is a very senior citizen, the provisions of this section shall have effect as if for the words "forty thousand rupees", the words "eighty thousand rupees" had been substituted.]"↩

150. Omitted by the Finance Act, 2015, w.e.f. 01.04.2016, the previous text was:-

     [(ii) “Government hospital” includes a departmental dispensary whether full-time or part-time established and run by a Department of the Government for the medical attendance and treatment of a class or classes of Government servants and members of their families, a hospital maintained by a local authority and any other hospital with which arrangements have been made by the Government for the treatment of Government servants ;]↩

151. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following: - "sixty-five years"↩

152. Omitted by the Finance Act, 2018, w.e.f. 01.04.2019, the previous text was:-

     " [(v) "very senior citizen" means an individual resident in India who is of the age of eighty years or more at any time during the relevant previous year.]"↩

153. Substituted by the Finance Act, 2005, with effect from 1st April, 2006. Prior to substitution, section 80E as amended by the Finance Act, 2000, with effect from 1st April, 2001, stood as under :

     “80E. Deduction in respect of repayment of loan taken for higher education. “

     (1) In computing the total income of an assessee, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section, any amount paid by him in the previous year, out of his income chargeable to tax, by way of repayment of loan, taken by him from any financial institution or any approved charitable institution for the purpose of pursuing his higher education, or interest on such loan :

     Provided that the amount which may be so deducted shall not exceed forty thousand rupees.

     (2) The deduction specified in sub-section (1) shall be allowed in computing the total income in respect of the initial assessment year and seven assessment years immediately succeeding the initial assessment year or until the loan referred to in sub-section (1) together with interest thereon is paid by the assessee in full, whichever is earlier.

     (3) For the purposes of this section, “

     (a) “approved charitable institution” means an institution specified in, or, as the case may be, an institution established for charitable purposes and notified by the Central Government under clause (23C) of section 10 or an institution referred to in clause (a) of sub-section (2) of section 80G ;

     (b) “financial institution” means a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act) ; or any other financial institution which the Central Government may, by notification in the Official Gazette, specify in this behalf ;

     (c) “higher education” means full-time studies for any graduate or post-graduate course in engineering, medicine, management or for post-graduate course in applied sciences or pure sciences including mathematics and statistics ;

     (d) “initial assessment year” means the assessment year relevant to the previous year, in which the assessee starts repaying the loan or interest thereon.”↩

154. Inserted by the Finance Act, 2007, with effect from 1st April, 2008.↩

155. Substituted for “notified by the Central Government” by the Finance Act, 2007, with effect from 1st April, 2008.↩

156. Substituted by the Finance (No. 2) Act, 2009, with effect from 1st April, 2010:-

     "(c) “higher education” means full-time studies for any graduate or postgraduate course in engineering, medicine, management or for postgraduate course in applied sciences or pure sciences including mathematics and statistics;"↩

157. Inserted by the Finance Act, 2007, with effect from 1st April, 2008.↩

158. Substituted by the Finance Act, 2016 w.e.f. 1st day of April, 2017.

     " [(1) In computing the total income of an assessee, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section, interest payable on loan taken by him from any financial institution for the purpose of acquisition of a residential house property.

     (2) The deduction under sub-section (1) shall not exceed one lakh rupees and shall be allowed in computing the total income of the individual for the assessment year beginning on the 1st day of April, 2014 and in a case where the interest payable for the previous year relevant to the said assessment year is less than one lakh rupees, the balance amount shall be allowed in the assessment year beginning on the 1st day of April, 2015.

     (3) The deduction under sub-section (1) shall be subject to the following conditions, namely:--

     (i) the loan has been sanctioned by the financial institution during the period beginning on the 1st day of April, 2013 and ending on the 31st day of March, 2014;

     (ii) the amount of loan sanctioned for acquisition of the residential house property does not exceed twenty-five lakh rupees;

     (iii) the value of the residential house property does not exceed forty lakh rupees;

     (iv) the assessee does not own any residential house property on the date of sanction of the loan.

     (4) Where a deduction under this section is allowed for any interest referred to in sub-section (1), deduction shall not be allowed in respect of such interest under any other provisions of the Act for the same or any other assessment year.

     (5) For the purposes of this section,--

     (a) "financial institution" means a banking company to which the Banking Regulation Act, 1949(10 of 1949) applies including any bank or banking institution referred to in section 51 of that Act or a housing finance company;

     (b) "housing finance company" means a public company formed or 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.]"↩

159. Substituted by the Finance Act, 2021, for “2021”.↩

160. Omitted by the Finance Act, 1985, with effect from 1st April, 1986.↩

161. Omitted by the Finance (No. 2) Act, 1980, with effect from 1st April, 1981.↩

162. Substituted for “in sub-clause (iiia)” by the Income-tax (Amendment) Act, 1999, with effect from 1st July, 1999.↩

163. Inserted by the Finance Act, 2013, w.e.f. 01.04.2014.↩

164. Inserted by the Taxation Laws (Amendment) Act, 2001, with effect from 3rd February, 2001.↩

165. Inserted by the Finance (No. 2) Act, 1998, with effect from 1st April, 1999.↩

166. Inserted by the Finance Act, 1999, with effect from 1st April, 2000.↩

167. Inserted by the Finance Act, 2001, with effect from 1st April, 2002.↩

168. Inserted by the Finance Act, 2015, w.e.f 01.04.2015.↩

169. Inserted by the Finance Act, 2015, w.e.f. 01.04.2016.↩

170. Inserted by the Finance Act, 2000, with effect from 1st April, 2001.↩

171. Inserted by the Taxation Laws (Amendment) Act, 2001, with effect from 3rd February, 2001.↩

172. Inserted by the Taxation Laws (Amendment) Act, 2001, with effect from 3rd February, 2001.↩

173. Inserted by the Finance (No. 2) Act, 1998, with effect from 1st April, 1999.↩

174. Inserted by the Finance (No. 2) Act, 1998, with effect from 1st April, 1999.↩

175. Inserted by the Finance Act, 1999, with effect from 1st April, 2000.↩

176. Inserted by the Finance Act, 2001, with effect from 1st April, 2002.↩

177. Inserted by the Finance Act, 2015, w.e.f 01.04.2015.↩

178. Inserted by the Finance Act, 2015, w.e.f. 01.04.2016.↩

179. Substituted by the Finance Act, 2002, with effect from 1st April, 2003. Prior to substitution, sub-clause (vi) stood as under :

     “(vi) any authority referred to in clause (20A) of section 10; or”↩

180. Inserted by the Finance Act, 2000, with effect from 1st April, 2001.↩

181. Substituted for “as notified by the Central Government under clause (23) of section 10” by the Finance Act, 2002, with effect from 1st April, 2003.↩

182. See rule 18AAAAA. For analysis, see Mashbra's Income-tax Rules.↩

183. Inserted by the Taxation Laws (Amendment) Act, 2001, with effect from 3rd February, 2001.↩

184. Omitted by the Finance Act, 1994, with effect from 1st April, 1994↩

185. The expression “or clause (22) or clause (22A)” omitted by the Finance (No. 2) Act, 1998, with effect from 1st April, 1999.↩

186. Expression “or clause (23)” omitted by the Finance Act, 2002, with effect from 1st April, 2003.↩

187. The expression “or is an institution approved by the Central Government for the purposes of clause (23) of section 10 omitted by the Finance Act, 2002, with effect from 1st April, 2003.↩

188. Omitted by the Finance (No. 2) Act, 2009 for the word: "and"↩

189. Substituted by the Finance Act, 2020, for “approved by the Commissioner in accordance with the rules made in this behalf, and”.↩

190. Omitted by the Finance (No. 2) Act, 2009 for the word: "and"↩

191. Substituted by the Finance (No. 2) Act, 2009 for the words: - "made in this behalf"↩

192. Omitted by the Finance (No. 2) Act, 2009 for the following:

     “Provided that any approval shall have effect for such assessment year or years, not exceeding five assessment years, as may be specified in the approval.”↩

193. Inserted by the Finance (No. 2) Act, 2009, with retrospective effect from 1st April, 2009.↩

194. Inserted by the Finance Act, 2020.↩

195. Inserted by the Finance Act, 1999, with effect from 1st April, 2000.↩

196. Inserted by the Taxation Laws (Amendment) Act, 2001, with effect from 3rd February, 2001.↩

197. Substituted for “This sub-section” by the Finance Act, 2002, with retrospective effect from 3rd February, 2001.↩

198. Substituted for “on or before the 31st day of March, 2002” by the Finance Act, 2002, with retrospective effect from 3rd February, 2001.↩

199. Substituted for “2003” by the Finance Act, 2003, with retrospective effect from 3rd February, 2001.↩

200. Substituted by the Finance Act, 2002, with retrospective effect from 3rd February, 2001. Prior to substitution, clause (iv) stood as under :

     “(iv) the amount of donation remaining unutilised on the 31st day of March, 2002 is transferred to the Prime Minister”s National Relief Fund on or before the 31st day of March, 2002 ;”↩

201. Substituted for “2003” by the Finance Act, 2003, with retrospective effect from 3rd February, 2001.↩

202. Substituted for “2003” by the Finance Act, 2003, with retrospective effect from 3rd February, 2001.↩

203. See rule 18AAAA and Form No. 10AA. For analysis, see Mashbra's Income-tax Rules.↩

204. Substituted for “on or before the 30th day of June, 2002” by the Finance Act, 2002, with retrospective effect from 3rd February, 2001.↩

205. Substituted for “2003” by the Finance Act, 2003, with retrospective effect from 3rd February, 2001.↩

206. Inserted by the Finance Act, 2020.↩

207. Substituted by the Finance Act, 2002, with effect from 1st April, 2003. Prior to substitution, Explanation 4 stood as under :

     “Explanation 4 : For the purposes of this section, an association approved by the Central Government for the purposes of clause (23) of section 10 shall also be deemed to be an institution, and every association or institution approved by the Central Government for the purposes of the said clause shall be deemed to be an institution established in India for a charitable purpose.”↩

208. Inserted by the Finance Act, 2012, w.e.f. 01.04.2013.↩

209. Substituted by the Finance Act, 2017 w.e.f. 01.04.2018 w.e.f. 01.04.2018 for the following:-"ten thousand rupees"↩

210. Inserted by the Finance Act, 2020.↩

211. Reintroduced by the Finance (No. 2) Act, 1998, with retrospective effect from 1st April, 1998. Earlier original section 80GG was omitted by the Finance Act, 1997, with effect from 1st April, 1998.↩

212. Substituted by the Finance Act, 2016, with effect from the 1st day of April, 2017, for the previous text: "two thousand rupees"↩

213. See rule 11B and Form No. 10BA.↩

214. Substituted for “under sub-clause (i) of clause (a) or, as the case may be, clause (b) of subsection (2) of section 23” by the Finance Act, 2001, with effect from 1st April, 2002.↩

215. Substituted by the Finance Act, 2010 w.e.f. 01.04.2011 for the following :"scientific research association".↩

216. Substituted by the Finance Act, 2010 w.e.f. 01.04.2011 for the following : "to a university".↩

217. Substituted by the Finance Act, 2010 w.e.f. 01.04.2011 for the following :"such university".↩

218. Inserted by the Taxation Laws (Amendment) Act, 2006, with effect from 1st April, 2006.↩

219. Substituted by the Finance Act, 2010 w.e.f. 01.04.2011 for the following :"scientific research association".↩

220. Inserted by the Taxation Laws (Amendment) Act, 2006, with effect from 1st April, 2006.↩

221. Inserted by the Taxation Laws (Amendment) Act, 2006, with effect from 1st April, 2006.↩

222. Inserted by the Taxation Laws (Amendment) Act, 2006, with effect from 1st April, 2006.↩

223. Substituted for “any sum paid by the assessee in the previous year” by the Finance Act, 2002, with effect from 1st April, 2003.↩

224. Substituted for “any sum paid by the assessee in the previous year” by the Finance Act, 2002, with effect from 1st April, 2003.↩

225. Inserted by the Finance Act, 2012, w.e.f. 01.04.2013.↩

226. Substituted by the Finance Act, 2020, for “ten thousand rupees”.↩

227. Inserted by the Finance Act, 2020.↩

228. Inserted by the Election and Other Related Laws (Amendment) Act, 2003, with effect from 11th September, 2003.↩

229. Inserted by the Finance (No. 2) Act, 2009, with effect from 1st April, 2010.↩

230. Inserted by the Finance Act, 2013 w.e.f. 01.04.2014.↩

231. Inserted by the Election and Other Related Laws (Amendment) Act, 2003, with effect from 11th September, 2003.↩

232. Substituted by the Finance (No. 2) Act, 2009, with effect from 1st April, 2010 for the words : - "to a political party]"↩

233. Inserted by the Finance Act, 2013 w.e.f. 01.04.2014.↩

234. Omitted by the Taxation Laws (Amendment) Act, 1975, with effect from 1st April, 1976.↩

235. See rule 18B and Form No. 10C. For analysis, see Mashbra”s Income-tax Rules.↩

236. Omitted by the Taxation Laws (Amendment) Act, 1975, with effect from 1st April, 1976.↩

237. See rule 18BB and Form No. 10CC. For analysis, see Mashbra”s Income-tax Rules.↩

238. Substituted by the Finance Act, 1999, with retrospective effect from 1st April, 1978. Prior to substitution, clause (b) stood as under:

     “(b) an industrial undertaking shall be deemed to be a small-scale industrial undertaking, if the aggregate value of the machinery and plant (other than tools, jigs, dies and moulds) installed, as on the last day of the previous year, for the purposes of the business of the undertaking does not exceed, “

     (1) in a case where the previous year ends before the 1st day of August, 1980, ten lakh rupees;

     (2) in a case where the previous year ends after the 31st day of July, 1980 but before the 18th day of March, 1985, twenty lakh rupees; and

     (3) in a case where the previous year ends after the 17th day of March, 1985, thirty-five lakh rupees, and for this purpose the value of any machinery or plant shall be, “

     (i) in the case of any machinery or plant owned by the assessee, the actual cost thereof to the assessee; and

     (ii) in the case of any machinery or plant hired by the assessee, the actual cost thereof as in the case of the owner of such machinery or plant.”↩

239. Substituted for “a deduction from such profits and gains of an amount equal to fifty per cent thereof” by the Finance Act, 2000, with effect from 1st April, 2001.↩

240. Substituted by the Finance Act, 2013 for the following : - "the Foreign Exchange Regulation Act, 1973 (46 of 1973)"↩

241. See rule 17D. For analysis, see Mashbra”s Income-tax Rules.↩

242. See rule 18BBA(1) and Form No. 10CCA. For analysis, see Mashbra”s Income-tax Rules.↩

243. Inserted by the Finance Act, 1999, with effect from 1st June, 1999.↩

244. See rule 18BAA(1B) and Form No. 10CCAH. For analysis, see Mashbra”s Income-tax Rules.↩

245. Substituted for “fifty per cent of the profits and gains referred to in sub-section (1)” by the Finance Act, 2000, with effect from 1st April, 2001.↩

246. Substituted for “fifty per cent of the profits and gains referred to in sub-section (1)” by the Finance Act, 2000, with effect from 1st April, 2001.↩

247. Substituted by the Finance Act, 2013 for the following : - "the Foreign Exchange Regulation Act, 1973 (46 of 1973)"↩

248. Substituted for “where the Chief Commissioner or Commissioner is satisfied (for reasons to be recorded in writing) that the assessee is, for reasons beyond his control, unable to do so within the said period of six months, within such further period as the Chief Commissioner or Commissioner may allow in this behalf” by the Finance Act, 1999, with effect from 1st June, 1999.↩

249. Inserted by the Finance Act, 1999, with effect from 1st June, 1999.↩

250. Inserted by the Finance (No. 2) Act, 1998, with effect from 1st April, 1999.↩

251. Substituted for “a deduction from such profits and gains of an amount equal to fifty per cent thereof” by the Finance Act, 2000, with effect from 1st April, 2001.↩

252. See rule 18BBA(1A) and Form No. 10CCAA.↩

253. Substituted for “fifty per cent of the profits and gains referred to in sub-section (1)” by the Finance Act, 2000, with effect from 1st April, 2001.↩

254. Substituted for “fifty per cent of the profits and gains referred to in sub-section (1)” by the Finance Act, 2000, with effect from 1st April, 2001.↩

255. Substituted for “a deduction of the profits” by the Finance Act, 2000, with effect from 1st April, 2001.↩

256. Substituted for “a deduction of the profits” by the Finance Act, 2000, with effect from 1st April, 2001.↩

257. Inserted by the Finance Act, 2000, with effect from 1st April, 2001.↩

258. Substituted for clauses (ii), (iii) and (iv) by the Finance Act, 2001, with effect from 1st April, 2002: Prior to substitution, clauses (ii), (iii) and (iv) stood as under:

     “(ii) sixty per cent thereof for an assessment year beginning on the 1st day of April, 2002;

     (iii) forty per cent thereof for an assessment year beginning on the 1st day of April, 2003;

     (iv) twenty per cent thereof for an assessment year beginning on the 1st day of April, 2004,”↩

259. Substituted for “where the Chief Commissioner or Commissioner is satisfied (for reasons to be recorded in writing) that the assessee is, for reasons beyond his control, unable to do so within the said period of six months, within such further period as the Chief Commissioner or Commissioner may allow in this behalf” by the Finance Act, 1999, with effect from 1st June, 1999.↩

260. Inserted by the Finance Act, 1999, with effect from 1st June, 1999.↩

261. Inserted by the Taxation Laws (Amendment) Act, 2005, with retrospective effect from 1st April, 1998.↩

262. Inserted by the Taxation Laws (Amendment) Act, 2005, with retrospective effect from 1st April, 1992.↩

263. See rule 18BBA(3) and Form No. 10CCAC. For analysis, see Mashbra”s Income-tax Rules.↩

264. Inserted by the Finance Act, 2003, with effect from 1st April, 2004.↩

265. See rule 18BBA(2) and Form No. 10CCAB. For analysis, see Mashbra”s Income-tax Rules.↩

266. See rule 18BBA(3) and Form No. 10CCAC. For analysis, see Mashbra”s Income-tax Rules.↩

267. See rule 18BBA(3) and Form No. 10CCAC. For analysis, see Mashbra”s Income-tax Rules.↩

268. See rule 18BBA(2) and Form No. 10CCAB. For analysis, see Mashbra”s Income-tax Rules.↩

269. Inserted by the Finance Act, 1999, with retrospective effect from 1st April, 1992.↩

270. Inserted by the Finance Act, 2003, with effect from 1st April, 2004.↩

271. Substituted by the Finance Act, 2013 for the following :- "the Foreign Exchange Regulation Act, 1973, (46 of 1973),"↩

272. Substituted for “and (iiic)” by the Taxation Laws (Amendment) Act, 2005, with retrospective effect from 1st April, 1998.↩

273. Substituted for “and (iiic)” by the Taxation Laws (Amendment) Act, 2005, with retrospective effect from 1st April, 1998.↩

274. Omitted by the Finance Act, 1991, with effect from 1st April, 1991↩

275. Inserted by the Finance Act, 2003, with effect from 1st April, 2004.↩

276. Prescribed authority specified in rule 18BBA(5) is Director General in the Directorate General of Tourism, Government of India.↩

277. Substituted for the following portion by the Finance Act, 2000, with effect from 1st April, 2001: “in computing the total income of the assessee, a deduction of a sum equal to the aggregate of “

     (a) fifty per cent of the profits derived by him from services provided to foreign tourists; and

     (b) so much of the amount out of the remaining profits referred to in clause (a) as is debited to the profit and loss account of the previous year in respect of which the deduction is to be allowed and credited to a reserve account to be utilised for the purposes of the business of the assessee in the manner laid down in sub-section (4):”↩

278. Substituted for “twenty per cent” by the Finance Act, 2002, with effect from 1st April, 2003.↩

279. Substituted for “twenty per cent” by the Finance Act, 2002, with effect from 1st April, 2003.=↩

280. Substituted for “ten per cent” by the Finance Act, 2002, with effect from 1st April, 2003.↩

281. Substituted for “ten per cent” by the Finance Act, 2002, with effect from 1st April, 2003.↩

282. Prescribed authority specified in rule 18BBA(5) is Director General in the Directorate General of Tourism, Government of India.↩

283. Prescribed authority specified in rule 18BBA(5) is Director General in the Directorate General of Tourism, Government of India.↩

284. Substituted for “where the Chief Commissioner or Commissioner is satisfied (for reasons to be recorded in writing) that the assessee is, for reasons beyond his control, unable to do so within the said period of six months, within such further period as the Chief Commissioner or Commissioner may allow in this behalf” by the Finance Act, 1999, with effect from 1st June, 1999↩

285. Numbered by the Finance Act, 1999, with effect from 1st June, 1999.↩

286. Inserted by the Finance Act, 1999, with effect from 1st June, 1999.↩

287. Substituted for “Explanation” by the Finance Act, 1999, with effect from 1st June, 1999.↩

288. Substituted for “Explanation” by the Finance Act, 1999, with effect from 1st June, 1999.↩

289. See rule 18BBA(6) and Form No. 10CCAE. For analysis, see Mashbra”s Income-tax Rules.↩

290. Prescribed authority specified in rule 18BBA(5) is Director General in the Directorate General of Tourism, Government of India.↩

291. Inserted by the Finance Act, 1999, with effect from 1st April, 2000.↩

292. Substituted for “clauses (a) to (e)” by the Finance Act, 1999, with effect from 1st April, 2000.↩

293. Prescribed authority specified in rule 18BBA (5) is Director General in the Directorate General of Tourism, Government of India.↩

294. Inserted by the Finance Act, 1999, with effect from 1st April, 2000.↩

295. See rule 18BBA(4) and Form No. 10CCAD. For analysis, see Mashbra”s Income-tax Rules.↩

296. Substituted for “Explanation to sub-section (2)” by the Finance Act, 1999, with effect from 1st June, 1999.↩

297. Inserted by the Finance (No. 2) Act, 1998, with effect from 1st April, 1999.↩

298. Now omitted by the Foreign Exchange Regulation (Amendment) Act, 1993, with retrospective effect from 8th January, 1993.↩

299. Substituted by the Finance Act, 2013 for the following : - "the Foreign Exchange Regulation Act, 1973 (46 of 1973)"↩

300. Substituted by the Finance Act, 2013 for the following : - "the Foreign Exchange Regulation Act, 1973 (46 of 1973)"↩

301. Inserted by the Finance Act, 1999, with effect from 1st April, 2000.↩

302. Substituted for “a deduction of the profits” by the Finance Act, 2000, with effect from 1st April, 2001.↩

303. Proviso omitted by the Finance Act, 1995, with effect from 1st April, 1996↩

304. Inserted by the Finance (No. 2) Act, 1998, with effect from 1st April, 1999.↩

305. Inserted by the Finance (No. 2) Act, 1998, with effect from 1st April, 1999.↩

306. Inserted by the Finance Act, 2001, with effect from 1st April, 2001.↩

307. Inserted by the Finance Act, 2000, with effect from 1st April, 2001.↩

308. Substituted for clauses (ii), (iii) and (iv) by the Finance Act, 2001, with effect from 1st April, 2002: Prior to substitution, clauses (ii), (iii) and (iv) as inserted by the Finance Act, 2000, with effect from 1st April, 2001, stood as under:

     “(ii) sixty per cent of such profits for an assessment year beginning on the 1st day of April, 2002;

     (iii) forty per cent of such profits for an assessment year beginning on the 1st day of April, 2003;

     (iv) twenty per cent of such profits for an assessment year beginning on the 1st day of April, 2004,↩

309. Substituted for “where the Commissioner is satisfied (for reasons to be recorded in writing) that the assessee is, for reasons beyond his control, unable to do so within the said period of six months, within such further period as the Commissioner may allow in this behalf” by the Finance Act, 1999, with effect from 1st June, 1999.↩

310. Numbered by the Finance Act, 1999, with effect from 1st June, 1999.↩

311. Inserted by the Finance Act, 1999, with effect from 1st June, 1999.↩

312. Inserted by the Finance (No. 2) Act, 1998, with effect from 1st April, 1999.↩

313. See rule 18BBA(7) and Form No. 10CCAF. For analysis, see Mashbra”s Income-tax Rules.↩

314. Inserted by the Finance (No. 2) Act, 1998, with effect from 1st April, 1999.↩

315. See rule 18BBA(7) and Form No. 10CCAF. For analysis, see Mashbra”s Income-tax Rules.↩

316. See rule 18BBA(8) and Form No. 10CCAG. For analysis, see Mashbra”s Income-tax Rules.↩

317. See rule 18BBA(8) and Form No. 10CCAG. For analysis, see Mashbra”s Income-tax Rules.↩

318. Substituted by the Finance Act, 2000, with effect from 1st April, 2001. Prior to substitution, clause (b), as amended by the Finance (No. 2) Act, 1998, with effect from 1st April, 1999, stood as under:

     “(b) “computer software” means any computer programme recorded on any disc, tape, perforated media or other information storage device and includes any such programme or any customised electronic data which is transmitted from India to a place outside India by any means;”↩

319. Inserted by the Finance (No. 2) Act, 1998, with effect from 1st April, 1999.↩

320. Inserted by the Finance (No. 2) Act, 1998, with effect from 1st April, 1999.↩

321. Inserted by the Finance Act, 1999, with effect from 1st April, 2000.↩

322. Inserted by the Finance Act, 2000, with effect from 1st April, 2000.↩

323. Substituted for “a deduction of the profits” by the Finance Act, 2000, with effect from 1st April, 2001.↩

324. Inserted by the Finance Act, 2000, with effect from 1st April, 2001.↩

325. Substituted for clauses (ii), (iii) and (iv) by the Finance Act, 2001, with effect from 1st April, 2002. Prior to substitution, clauses (ii), (iii) and (iv) as inserted by the Finance Act, 2000, with effect from 1st April, 2001, stood as under:

     “(ii) sixty per cent of such profits for an assessment year beginning on the 1st day of April, 2002;

     (iii) forty per cent of such profits for an assessment year beginning on the 1st day of April, 2003;

     (iv) twenty per cent of such profits for an assessment year beginning on the 1st day of April, 2004,”↩

326. Sections 80-IA and 80-IB substituted for section 80-IA by the Finance Act, 1999, with effect from 1st April, 2000. Prior to substitution, section 80-IA as amended by the Income-tax (Amendment) Act, 1998, with retrospective effect from 1st April, 1995 and with effect from 1st April, 1998; Finance (No. 2) Act, 1998, with retrospective effect from 1st April, 1998 and with effect from 1st April, 1999, stood as under:

     “80-IA. Deduction in respect of profits and gains from industrial undertakings, etc., in certain cases. “ (1) Where the gross total income of an assessee includes any profits and gains derived from any business of an industrial undertaking or a hotel or operation of a ship or developing, maintaining and operating any infrastructure facility or scientific and industrial research and development or providing telecommunication services whether basic or cellular including radio paging, domestic satellite service or network of trunking and electronic data interchange services or construction and development of housing projects or operating an industrial park or commercial production or refining of mineral oil in the North Eastern Region or in any part of India on or after the 1st day of April, 1997 (such business being hereinafter referred to as the eligible business), 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 from such profits and gains of an amount equal to the percentage specified in sub-section (5) and for such number of assessment years as is specified in sub-section (6).

     (2) This section applies to any industrial undertaking which fulfils all the following conditions, namely:

     (i) it is not formed by splitting up, or the reconstruction, of a business already in existence:

     Provided that this condition shall not apply in respect of an industrial 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;

     (ii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose;

     (iii) it manufactures or produces any article or thing, not being any article or thing specified in the list in the Eleventh Schedule, or operates one or more cold storage plant or plants, in any part of India:

     Provided that the condition in this clause shall, in relation to a small-scale industrial undertaking or an industrial undertaking referred to in sub-clause (b) of clause (iv) which begins to manufacture or produce an article or thing during the period beginning on the 1st day of April, 1993 and ending on the 31st day of March, 2000 apply as if the words “not being any article or thing specified in the list in the Eleventh Schedule” had been omitted;

     (iv) (a) in the case of an industrial undertaking not specified in sub-clause (b) or sub-clause (c), it begins to manufacture or produce articles or things or to operate such plant or plants, at any time during the period beginning on the 1st day of April, 1991 and ending on the 31st day of March, 1995, or such further period as the Central Government may, by notification in the Official Gazette, specify with reference to any particular industrial undertaking;

     (b) in the case of an industrial undertaking located in an industrially backward State specified in the Eighth Schedule or set-up in any part of India for the generation, or generation and distribution, of power, it begins to manufacture or produce articles or things or to operate its cold storage plant or plants or to generate power at any time during the period beginning on the 1st day of April, 1993 and ending on the 31st day of March, 2000:

     Provided that in the case of an industrial undertaking set-up in any part of India for the generation, or generation and distribution of power, the period ending shall have effect as if for the figures “1998”, the figures 2003 had been substituted;

     (c) in the case of an industrial undertaking located in such industrially backward district as the Central Government may, having regard to the prescribed guidelines, by notification in the Official Gazette, specify in this behalf, as an industrially backward district of Category A or an industrially backward district of Category B and, it begins to manufacture or produce articles or things or to operate its cold storage plant or plants at any time during the period beginning on the 1st day of October, 1994 and ending on the 31st day of March, 2000;

     (d) in the case of an industrial undertaking being a small-scale industrial undertaking, not specified in sub-clause (b) or in sub-clause (c), it begins to manufacture or produce articles or things or to operate its cold storage plant at any time during the period beginning on the 1st day of April, 1995 and ending on the 31st day of March, 2000;

     (v) in a case where the industrial undertaking manufactures or produces articles or things, the undertaking employs ten or more workers in a manufacturing process carried on with the aid of power, or employs twenty or more workers in a manufacturing process carried on without the aid of power.

     Explanation 1 : For the purposes of clause (ii) of this sub-section, any machinery or plant which was used outside India by any person other than the assessee shall not be regarded as machinery or plant previously used for any purpose, if the following conditions are fulfilled, namely:

     (a) such machinery or plant was not, at any time previous to the date of the installation by the assessee, used in India;

     (b) such machinery or plant is imported into India from any country outside India; and

     (c) no deduction on account of depreciation in respect of such machinery or plant has been allowed or is allowable under the provisions of this Act in computing the total income of any person for any period prior to the date of the installation of the machinery or plant by the assessee.

     Explanation 2 : Where in the case of an industrial undertaking, any machinery or plant or any part thereof previously used for any purpose is transferred to a new business and the total value of the machinery or plant or part so transferred does not exceed twenty per cent of the total value of the machinery or plant used in the business, then, for the purposes of clause (ii) of this sub-section, the condition specified therein shall be deemed to have been complied with.

     (3) This section applies to any ship, where all the following conditions are fulfilled, namely:

     (i) it is owned by an Indian company and is wholly used for the purposes of the business carried on by it;

     (ii) it was not, previous to the date of its acquisition by the Indian company, owned or used in Indian territorial waters by a person resident in India; and

     (iii) it is brought into use by the Indian company at any time during the period beginning on the 1st day of April, 1991 and ending on the 31st day of March, 1995.

     (4) This section applies to the business of any hotel “

     (a) where conditions (i), (ii) and (v); and

     (b) either of the condition (iii) or (iv); or

     (c) either of the condition (iiia) or (iva),

     are fulfilled, namely:

     (i) the business of the hotel is not formed by the splitting up; or the reconstruction, of a business already in existence or by the transfer to a new business of a building previously used as a hotel or of any machinery or plant previously used for any purpose;

     (ii) the business of the hotel is owned and carried on by a company registered in India with a paid-up capital of not less than five hundred thousand rupees;

     (iii) the business of the hotel located in a hilly area or a rural area or a place of pilgrimage or such other place as the Central Government may having regard to the need for development of infrastructure for tourism in any place and other relevant considerations specify for the purpose of this clause, starts functioning at any time during the period beginning on the 1st day of April, 1990 and ending on the 31st day of March, 1994;

     (iiia) the business of the hotel, located in a hilly area or a rural area or a place of pilgrimage or such other place as the Central Government may, having regard to the need for development of infrastructure for tourism in any place and other relevant considerations, specify for the purpose of this clause, starts functioning at any time during the period beginning on the 1st day of April, 1997 and ending on the 31st day of March, 2001:

     Provided that nothing contained in this clause shall apply to any hotel located at a place within the municipal jurisdiction (whether known as a municipality, municipal corporation, notified area committee, town area committee or a cantonment board or by any other name) of Calcutta, Chennai, Delhi and Mumbai;

     (iv) the business of the hotel “

     (1) located in any place, or

     (2) located in a place other than a place referred to in clause (iii) of this sub-section,

     starts functioning at any time during the period beginning on the 1st day of April, 1991 and ending on the 31st day of March, 1995;

     (iva) the business of the hotel, located in a place other than a place referred to in clause (iiia) of this sub-section and not being located at a place within the municipal jurisdiction (whether known as a municipality, municipal corporation, notified area committee, town area committee or a cantonment board or by any other name) of Calcutta, Chennai, Delhi and Mumbai, starts functioning at any time during the period beginning on the 1st day of April, 1997 and ending on the 31st day of March, 2001;

     (v) the hotel is for the time being approved by the prescribed authority.

     (4A) This section applies to any enterprise carrying on the business of developing, maintaining and operating any infrastructure facility which fulfils all the following conditions, namely:

     (i) the enterprise is owned by a company registered in India or by a consortium of such companies;

     (ii) the enterprise has entered into an agreement with the Central Government or a State Government or a local authority or any other statutory body for developing, maintaining and operating a new infrastructure facility subject to the condition that such infrastructure facility shall be transferred to the Central Government, State Government, local authority or such other statutory body, as the case may be, within the period stipulated in the agreement;

     (iii) the enterprise starts operating and maintaining the infrastructure facility on or after the 1st day of April, 1995.

     (4B) This section applies to any company registered in India carrying on scientific and industrial research and development which fulfils all the following conditions, namely:

     (i) the company has the main object of scientific and industrial research and development;

     (ii) the company is for the time being approved by the prescribed authority at any time before the 1st day of April, 1999.

     (4C) This section applies to any undertaking which starts providing telecommunication services whether basic or cellular including radio paging, domestic satellite service or network of trunking and electronic data interchange services at any time on or after the 1st day of April, 1995 but before the 31st day of March, 2000.

     (4D) This section applies to any undertaking which begins to operate an industrial park notified by the Central Government in accordance with the scheme framed and notified by that Government for the period beginning on the 1st day of April, 1997 and ending on the 31st day of March, 2002.

     (4E) This section applies to any undertaking which begins commercial production or refining of mineral oil in the North Eastern Region or in any part of India on or after the 1st day of April 1997:

     Provided that the provisions of this section shall apply in case of refining of mineral oil where the undertaking begins refining on or after the 1st day of October, 1998.

     (4F) This section applies to an undertaking, engaged in developing and building housing projects approved by a local authority subject to the condition that the size of the plot of land has a minimum of one acre, and the residential unit has a built up area not exceeding one thousand square feet:

     Provided that the undertaking commences development and construction of the housing project on or after the 1st day of October, 1998 and complete the same before the 31st day of March, 2001.

     (5) The amount referred to in sub-section (1) shall be “

     (i) (a) in the case of an industrial undertaking referred to in sub-clause (a) or sub-clause (d) of clause (iv) of sub-section (2), twenty-five per cent of the profits and gains derived from such industrial undertaking;

     (b) in the case of an industrial undertaking referred to in sub-clause (b) or sub-clause (c) of clause (iv) of sub-section (2), hundred per cent of the profits and gains derived from such industrial undertaking for the initial five assessment years and thereafter twenty-five per cent of the profits and gains derived from such industrial undertaking:

     Provided that where the assessee is a company, the provisions of this clause shall have effect as if for the words “twenty-five per cent”, the words “thirty per cent” had been substituted:

     Provided further that in case of an industrial undertaking located in an industrially backward district of category B, the provisions of this clause shall have effect as if for the words “five assessment years”, the words “three assessment years” had been substituted;

     (ia) in the case of an enterprise referred to in sub-section (4A), hundred per cent of the profits and gains derived from such business for the initial five assessment years and thereafter, thirty per cent of such profits and gains;

     (ib) in the case of a company referred to in sub-section (4B), hundred per cent of the profits and gains derived from such business;

     (ic) in the case of an undertaking referred to in sub-section (4C), hundred per cent of the profits and gains derived from such business for the initial five assessment years and thereafter, twenty-five per cent of the profits and gains derived from such business:

     Provided that where the assessee is a company, the provisions of this clause shall have effect as if for the words “twenty-five per cent”, the words “thirty per cent” had been substituted;

     (id) in the case of an industrial park referred to in sub-section (4D), hundred per cent of the profits and gains derived from such business for the initial five assessment years and thereafter, twenty-five per cent of the profits and gains derived from such business:

     Provided that where the assessee is a company, the provisions of this clause shall have effect as if for the words “twenty-five per cent”, the words “thirty per cent” had been substituted;

     (ii) in the case of a hotel referred to in clause (iii) of sub-section (4), fifty per cent of the profits and gains derived from the business of such hotel:

     Provided that the said hotel is approved by the prescribed authority for the purpose of this clause in accordance with the rules made under this Act:

     Provided further that the said hotel approved by the prescribed authority before the 31st day of March, 1992, shall be deemed to have been approved by the prescribed authority for the purposes of this section in relation to the assessment year commencing on the 1st day of April, 1991;

     (iia) in the case of a hotel referred to in clause (iiia) of sub-section (4), fifty per cent of the profits and gains derived from the business of such hotel:

     Provided that the said hotel is approved by the prescribed authority for the purposes of this clause in accordance with the rules made under this Act;

     (iii) in the case of a hotel referred to in clause (iv) or clause (iva) of sub-section (4), thirty per cent of the profits and gains derived from the business of such hotel;

     (iv) in the case of a ship, thirty per cent of the profits and gains derived from such ship;

     (v) in the case of undertaking referred to in sub-section (4E) hundred per cent of profits and gains derived from such business for the initial seven assessment years;

     (vi) in the case of a housing project referred to in sub-section (4F) hundred per cent of profits and gains derived from such business. (6) The number of assessment years referred to in sub-section (1) shall, including the initial assessment year, be “

     (i) twelve in the case of an assessee, being a co-operative society, deriving profits and gains from an industrial undertaking;

     (ii) ten in the case of an assessee, not being a co-operative society, deriving profits and gains from an industrial undertaking specified in sub-clause (a) or sub-clause (b) or sub-clause (d) of clause (iv) of sub-section (2) or located in an industrially backward district of Category A specified in sub-clause (c) of clause (iv) of that sub-section;

     (iia) eight in the case of an assessee deriving profits and gains from an industrial undertaking located in an industrially backward district of Category B specified in sub-clause (c) of clause (iv) of sub-section (2) and such an undertaking is not covered under clauses (i) and (ii) of this sub-section;

     (iii) ten in the case of any other assessee deriving profits and gains, from a ship or the business of a hotel;

     (iv) any ten consecutive assessment years falling within a period of twelve assessment years beginning with the assessment year in which an assessee begins operating and maintaining infrastructure facility:

     Provided that where the assessee begins operating and maintaining any infrastructure facility referred to in sub-clause (ii) of clause (ca) of sub-section (12), the provisions of this clause shall have effect as if for the word “twelve”, the word “twenty” had been substituted;

     (v) five in the case of an assessee, being a company referred to in sub-section (4B), deriving profits and gains from scientific and industrial research and development;

     (vi) ten in the case of an assessee, being an undertaking referred to in sub-section (4C), deriving profits and gains from telecommunication services whether basic or cellular including radio paging and domestic satellite service;

     (vii) ten in the case of an assessee, being an undertaking referred to in sub-section (4D), deriving profits and gains from operating an industrial park;

     (viii) seven in the case of an assessee being an undertaking referred to in sub-section (4E) deriving profits and gains from commercial production or refining of mineral oil in the North Eastern Region and other parts of the country on or after the 1st day of April, 1997.

     (7) Notwithstanding anything contained in any other provision of this Act, the profits and gains of an eligible business to which the provisions of sub-section (1) apply shall, for the purposes of determining the quantum of deduction under sub-section (5) for the assessment year immediately succeeding the initial assessment year or any subsequent assessment year, be computed as if such eligible business were the only source of income of the assessee during the previous year relevant to the initial assessment year and to every subsequent assessment year up to and including the assessment year for which the determination is to be made.

     (7A) Notwithstanding anything contained in sub-section (4A), where housing or other activities are an integral part of the highway project and the profits of which are computed on such basis and manner as may be prescribed, such profit shall not be liable to tax where the profit has been transferred to special reserve account and the same is actually utilised for the highway project excluding housing and other activities before the expiry of three years following the year in which such amount was transferred to the reserve account; and the amount remaining unutilised shall be chargeable to tax as income of the year in which transfer to reserve account took place.

     (8) Where the assessee is a person other than a company or a co-operative society, the deduction under sub-section (1) from profits and gains derived from an industrial undertaking shall not be admissible unless the accounts of the industrial undertaking for the previous year relevant to the assessment year for which the deduction is claimed have been audited by an accountant, as defined in the Explanation below sub-section (2) of section 288, and the assessee furnishes, along with his return of income, the report of such audit in the prescribed form duly signed and verified by such accountant.

     (9) Where any goods held for the purposes of the eligible business are transferred to any other business carried on by the assessee, or where any goods held for the purposes of any other business carried on by the assessee are transferred to the eligible business and, in either case, the consideration, if any, for such transfer as recorded in the accounts of the eligible business does not correspond to the market value of such goods as on the date of the transfer, then, for the purposes of the deduction under this section, the profits and gains of such eligible business shall be computed as if the transfer, in either case, had been made at the market value of such goods as on that date:

     Provided that where, in the opinion of the Assessing Officer, the computation of the profits and gains of the eligible business in the manner hereinbefore specified presents exceptional difficulties, the Assessing Officer may compute such profits and gains on such reasonable basis as he may deem fit.

     Explanation : In this sub-section, “market value”, in relation to any goods, means the price that such goods would ordinarily fetch on sale in the open market.

     (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading “C. “ Deductions in respect of certain incomes” and shall in no case exceed the profits and gains of the undertaking or hotel, as the case may be.

     (10) Where it appears to the Assessing Officer that, owing to the close connection between the assessee carrying on the eligible business to which this section applies and any other person, or for any other reason, the course of business between them is so arranged that the business transacted between them produces to the assessee more than the ordinary profits which might be expected to arise in such eligible business, the Assessing Officer shall, in computing the profits and gains of such eligible business for the purposes of the deduction under this section, take the amount of profits as may be reasonably deemed to have been derived therefrom.

     (11) The Central Government may, after making such inquiry as it may think fit, direct, by notification in the Official Gazette, that the exemption conferred by this section shall not apply to any class of industrial undertakings with effect from such date as it may specify in the notification.

     (12) For the purposes of this section, “

     (a) “domestic satellite” means a satellite owned and operated by an Indian company for providing telecommunication service;

     (aa) “hilly area” means any area located at a height of one thousand metres or more above the sea level;

     (b) “industrial undertaking” shall have the meaning assigned to it in the Explanation to section 33B;

     (c) “initial assessment year” “

     (1) in the case of an industrial undertaking or cold storage plant or ship or hotel, means the assessment year relevant to the previous year in which the industrial undertaking begins to manufacture or produce articles or things or to operate its cold storage plant or plants or the ship is first brought into use or the business of the hotel starts functioning;

     (2) in the case of an enterprise, carrying on the business of developing, operating and maintaining any infrastructure facility, means the assessment year specified by the assessee at his option to be the initial year, not falling beyond the twelfth assessment year starting from the previous year in which the enterprise begins operating and maintaining the infrastructure facility;

     (3) in the case of a company carrying on scientific and industrial research and development, means the assessment year relevant to the previous year in which the company is approved by the prescribed authority for the purposes of sub-section (4B);

     (4) in the case of an undertaking referred to under sub-section (4C) means the assessment year relevant to the previous year in which the undertaking starts to provide the telecommunication services whether basic or cellular; including radio paging and domestic satellite services;

     (5) in the case of an undertaking operating an industrial park referred to under sub-section (4D) means the assessment year relevant to the previous year in which the undertaking starts operating such industrial park notified for the purposes of the said sub-section;

     (6) in the case of an undertaking engaged in the business of commercial production or refining of mineral oil referred to in sub-section (4E) means the assessment year relevant to the previous year in which the undertaking commences the commercial production or refining of mineral oil;

     (ca) “infrastructure facility” means “

     (i) a road, bridge, airport, port, inland waterways and inland ports, rail system or any other public facility of a similar nature as may be notified by the Board in this behalf in the Official Gazette;

     (ii) a highway project including housing or other activities being an integral part of the highway project; and

     (iii) a water supply project, irrigation project, sanitation and sewerage system;

     (d) “place of pilgrimage” means a place where any temple, mosque, gurdwara, church or other place of public worship of renown throughout any State or States is situated;

     (e) “rural area” means any area other than “

     (i) an area which is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee or by any other name) or a cantonment board and which has a population of not less than ten thousand according to the preceding census of which relevant figures have been published before the first day of the previous year; or

     (ii) an area within such distance not being more than fifteen kilometers from the local limits of any municipality or cantonment board referred to in sub-clause (i), as the Central Government may, having regard to the stage of development of such area (including the extent of, and scope for, urbanisation of such area) and other relevant considerations specify in this behalf by notification in the Official Gazette;

     (f) “small-scale industrial undertaking” means an industrial undertaking which is, as on the last day of the previous year, regarded as a small-scale industrial undertaking under section 11B of the Industries (Development and Regulation) Act, 1951 (65 of 1951);

     (g) “North Eastern Region” means the region comprising of the States of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura.”↩

327. Substituted by the Finance Act, 2001, with effect from 1st April, 2002. Prior to substitution, sub-section (1) stood as under:

     “(1) Where the gross total income of an assessee includes any profits and gains derived from any business of an industrial undertaking or an enterprise referred to in sub-section (4) (such business being hereinafter referred to as the eligible business), 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 from such profits and gains of an amount equal to hundred per cent of profits and gains derived from such business for the first five assessment years commencing at any time during the periods as specified in sub-section (2) and thereafter, twenty-five per cent of the profits and gains for further five assessment years:

     Provided that where the assessee is a company, the provisions of this sub-section shall have effect as if for the words “twenty-five per cent”, the words “thirty per cent” had been substituted.”↩

328. Inserted by the Finance Act, 2002, with effect from 1st April, 2003.↩

329. Substituted for “or develops or develops and operates or maintains and operates a special economic zone” by the Finance Act, 2003, with retrospective effect from 1st April, 2002.↩

330. Inserted by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005.↩

331. Omitted by the Finance (No. 2) Act, 2009, with effect from 1st April, 2010 for the following : -

     "or lays and begins to operate a cross-country natural gas distribution network"↩

332. Substituted by the Finance Act, 2001, with effect from 1st April, 2002. Prior to substitution, the proviso stood as under:↩

333. Inserted by the Finance Act, 2001, with effect from 1st April, 2001.

     “Provided that where the assessee begins operating and maintaining any infrastructure facility referred to in clause (b) of Explanation to clause (i) of sub-section (4), the provisions of this sub-section shall have effect as if for the words “fifteen years”, the words “twenty years” had been substituted.”↩

334. Substituted for “any industrial undertaking” by the Finance Act, 2000, with effect from 1st April, 2000.↩

335. Substituted for “undertaking referred to in clause (iv)” by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005. Earlier, the word “undertaking” in the quoted portion was substituted for “industrial undertaking” by the Finance Act, 2001, with effect from 1st April, 2002.↩

336. Substituted for “clause (iv)” by the Finance Act, 2007, with effect from 1st April, 2008.↩

337. Omitted by the Finance (No. 2) Act, 2009, with effect from 1st April, 2010.↩

338. Substituted for “industrial undertaking” by the Finance Act, 2001, with effect from 1st April, 2002.↩

339. Inserted by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005.↩

340. Substituted for “industrial undertaking” by the Finance Act, 2001, with effect from 1st April, 2002.↩

341. Substituted for “of (i) developing, (ii) maintaining and operating or (iii) developing, maintaining and operating” by the Finance Act, 2001, with effect from 1st April, 2002.↩

342. Inserted by the Finance Act, 2005, with effect from 1st April, 2006.↩

343. Substituted by the Finance Act, 2001, with effect from 1st April, 2002. Prior to substitution, clause (b) stood as under:

     “(b) it has entered into an agreement with the Central Government or a State Government or a local authority or any other statutory body for (i) developing, (ii) maintaining and operating or (iii) developing, maintaining and operating a new infrastructure facility subject to the condition that such infrastructure facility shall be transferred to the Central Government, State Government, local authority or such other statutory body, as the case may be, within the period stipulated in the agreement;”↩

344. Inserted by the Finance Act, 2016, with effect from 1st day of April, 2017.↩

345. Substituted by the Finance Act, 2001, with effect from 1st April, 2002. Prior to substitution, the Explanation as amended by the Finance Act, 2000, with effect from 1st April, 2001, stood as under:

     “Explanation : For the purposes of this clause, “infrastructure facility” means, “

     (a) a road, bridge, airport, port, inland waterways and inland ports, rail system or any other public facility of a similar nature as may be notified by the Board in this behalf in the Official Gazette;

     (b) a highway project including housing or other activities being an integral part of the highway project; and

     (c) a water supply project, water treatment system, irrigation project, sanitation and sewerage system or solid waste management system;”.↩

346. Substituted for “or inland port” by the Finance Act, 2007, with effect from 1st April, 2008.↩

347. Substituted by the Finance Act, 2001, with effect from 1st April, 2001. Prior to substitution, clause (ii) stood as under:

     “(ii) any undertaking which has started or starts providing telecommunication services whether basic or cellular, including radio paging, domestic satellite service or network of trunking and electronic data interchange services at any time on or after the 1st day of April, 1995 but before the 31st day of March, 2000.

     Explanation : For the purposes of this clause, “domestic satellite” means a satellite owned and operated by an Indian company for providing telecommunication service;”↩

348. Substituted for 31st day of March, 2004” by

     the Finance (No. 2) Act, 2004, with effect from 1st April, 2005. Earlier, “31st day of March, 2004” was substituted for “31st day of March 2003” by the Finance Act, 2003, with effect from 1st April, 2004.↩

349. See rule 18C. For analysis, see Mashbra”s Income-tax Rules.↩

350. Inserted by the Finance Act, 2001, with effect from 1st April, 2002.↩

351. See Industrial Park Scheme, 2008 and Scheme to Develop, Operate or Maintain Special Economic Zones. See Mashbra”s Income-tax Rules for Schemes.↩

352. Substituted for the expression “the 31st day of March 2002” by the Finance Act, 2001, with effect from 1st April, 2001.↩

353. Substituted by the Finance Act, 2003, with

     retrospective effect from 1st April, 2002. Prior to substitution, the proviso stood as under:

     “Provided that in a case where an undertaking develops an industrial park on or after the 1st day of April, 1999 and transfers the operation and maintenance of such industrial park to another undertaking (hereafter in this section referred to as the transferee undertaking) the deduction under sub-section (1), shall be allowed to such transferee undertaking for the remaining period in the ten consecutive assessment years in a manner as if the operation and maintenance were not so transferred to the transferee undertaking;”↩

354. Inserted by the Finance Act, 2006, with effect from 1st April, 2007.↩

355. Substituted by the Finance (No. 2) Act, 2009,

     with effect from 1st April, 2010 for the words : -”31st day of March, 2009”↩

356. Substituted for “industrial undertaking” by the Finance Act, 2001, with effect from 1st April, 2002.↩

357. Substituted for “ending on the 31st day of March, 2003” by the Finance Act, 2001, with effect from 1st April, 2002.↩

358. Substituted by the Finance Act, 2013 w.e.f. 15.03.2013 for the following : -

     " [the 31st day of March, 2013]"↩

359. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of April, 2015 for the following : - "the 31st day of March, 2014"↩

360. Substituted for “ending on the 31st day of March, 2003” by the Finance Act, 2001, with effect from 1st April, 2002.↩

361. Substituted by the Finance Act, 2013 w.e.f. 15.03.2013 for the following : -

     " [the 31st day of March, 2013]"↩

362. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of April, 2015 for the following : - "the 31st day of March, 2014"↩

363. Substituted for “industrial undertaking” by the Finance Act, 2001, with effect from 1st April, 2002.↩

364. Inserted by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005.↩

365. Substituted by the Finance Act, 2013 w.e.f. 15.03.2013 for the following : -

     " [the 31st day of March, 2013]"↩

366. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of April, 2015 for the following : - "the 31st day of March, 2014"↩

367. Inserted by the Taxation Laws (Amendment) Act, 2005, with effect from 1st April, 2006.↩

368. Substituted for “the 31st day of March 2008” by the Finance (No. 2) Act, 2009, with effect from 1st April, 2008. Earlier “the 31st day of March 2008” was substituted for “31st day of March, 2007” by the Finance Act, 2007, with effect from 1st April, 2008.↩

369. Omitted by the Finance (No. 2) Act, 2009, with effect from 1st April, 2010. Earlier clause (vi) was inserted by the Finance Act, 2007, with effect from 1st April 2008.↩

370. See rule 18BBE and Form No. 10CCC. For analysis, see Mashbra”s Income-tax Rules.↩

371. Substituted for “Where the assessee is a person other than a company or a co-operative society, the deduction” by the Finance Act, 2002, with effect from 1st April, 2003.↩

372. Substituted for “industrial undertaking” by the Finance Act, 2001, with effect from 1st April, 2002.↩

373. Substituted for “industrial undertaking” by the Finance Act, 2001, with effect from 1st April, 2002.↩

374. Substituted by the Finance Act, 2020, “and the assessee furnishes, along with his return of income”.↩

375. See rule 18BBB and Form No. 10CCB. For analysis, see Mashbra”s Income-tax Rules.↩

376. Substituted for “goods” by the Finance Act, 2001, with effect from 1st April, 2002.↩

377. Substituted for “goods” by the Finance Act, 2001, with effect from 1st April, 2002.↩

378. Substituted for “goods” by the Finance Act, 2001, with effect from 1st April, 2002.↩

379. Substituted for “goods” by the Finance Act, 2001, with effect from 1st April, 2002.↩

380. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following: -

     " [Explanation : For the purposes of this sub-section, “market value”, in relation to any goods or services, means the price that such goods or services would ordinarily fetch in the open market.]"↩

381. Substituted for “industrial undertaking” by the Finance Act, 2001, with effect from 1st April, 2002.↩

382. by the Finance Act, 2012, w.e.f. 01.04.2013.↩

383. Inserted by the Finance Act, 2007, with effect from 1st April, 2008.↩

384. Inserted by the Special Economic Zones Act, 2005, with effect from 10th February, 2006. Under section 27 of the Special Economic Zones Act, 2005, effective from 10th February, 2006, the provisions of the Income-tax Act, 1961, as in force for the time being, apply to, or in relation to, the Developer or entrepreneur for carrying on the authorised operations in a Special Economic Zone or Unit subject to the modifications specified in the Second Schedule to that Act. The above amendment is specified in the Second Schedule to that Act.↩

385. Substituted by the Finance (No. 2) Act, 2009, with retrospective effect from 1st April, 2000.

     "Prior to substitution the Explanation as inserted by the Finance Act, 2007, with retrospective effect from 1st April, 2000, stood as under:

     “Explanation. : For the removal of doubts, it is hereby declared that nothing contained in this section shall apply to a person who executes a works contract entered into with the undertaking or enterprise, as the case may be.”↩

386. Inserted by the Special Economic Zones Act, 2005, with effect from 10th February, 2006. Under section 27 of the Special Economic Zones Act, 2005, effective from 10th February, 2006, the provisions of the Income-tax Act, 1961, as in force for the time being, apply to, or in relation to, the Developer or entrepreneur for carrying on the authorised operations in a Special Economic Zone or Unit subject to the modifications specified in the Second Schedule to that Act. The above amendment is specified in the Second Schedule to that Act.↩

387. Substituted by the Finance Act, 2020, for “ten”.↩

388. Substituted by the Finance Act, 2018 w.e.f. 01.04.2018 for the following:-

     "(i) "eligible business" means a business which involves innovation, development, deployment or commercialisation of new products, processes or services driven by technology or intellectual property;"↩

389. Substituted by the Finance Act, 2022, for “2022”.↩

390. Substituted by the Finance Act, 2020, for “twenty-five”.↩

391. Substituted by the Finance Act, 2018 w.e.f. 01.04.2018 for the following:-

     "in any of the previous years beginning on or after the 1st day of April, 2016 and ending on the 31st day of March, 2021"↩

392. Inserted by the Finance Act, 2016, with effect from the 1st day of April, 2017.↩

393. Substituted for “(3) to (11)” by the Finance Act, 2001, with effect from 1st April, 2002.↩

394. Substituted for “(11) and (11A)” by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005.↩

395. Substituted for “31st day of March, 2000” by the Finance Act, 2000, with effect from 1st April, 2001.↩

396. Substituted for “31st day of March, 2002” by the Finance Act, 2002, with effect from 1st April, 2003. Earlier the expression “31st day of March, 2002” was substituted for “31st day of March, 2002” by the Finance Act, 2000, with effect from 1st April, 2001.↩

397. Inserted by the Finance Act, 2003, with effect from 1st April, 2004.↩

398. Inserted by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005.↩

399. Substituted for "31st day of March, 2007" by the Finance Act, 2007, with effect from 1st April, 2008.↩

400. Substituted for “31st day of March, 2005” by the Finance Act, 2005, with effect from 1st April, 2006.↩

401. Inserted by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005.↩

402. See rule 11EA and Appendix III of the Income-tax Rules. For analysis, see Mashbra”s Income-tax Rules.↩

403. Substituted for “31st day of March, 2002” by the Finance Act, 2002, with effect from 1st April, 2003. Earlier the expression “31st day of March, 2002” was substituted for “31st day of March, 2000” by the Finance Act, 2000, with effect from 1st April, 2001.↩

404. Substituted for “31st day of March, 2002” by the Finance Act, 2002, with effect from 1st April, 2003. Earlier the expression “31st day of March, 2002” was substituted for “31st day of March, 2000” by the Finance Act, 2000, with effect from 1st April, 2001.↩

405. See rule 18BBC. For analysis, see Mashbra”s Income-tax Rules.↩

406. See rule 18BBC. For analysis, see Mashbra”s Income-tax Rules.↩

407. Inserted by the Finance Act, 2002, with effect from 1st April, 2003.↩

408. Substituted by the Finance Act, 2020, for

     “(iii) the assessee furnishes along with the return of income, the report of an audit in such form and containing such particulars as may be prescribed, and duly signed and verified by an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed.”↩

409. Inserted by the Finance Act, 2002, with effect from 1st April, 2003.↩

410. Substituted by the Finance Act, 2020, for clause (iii).↩

411. See rule 18BBD.↩

412. Inserted by the Finance Act, 2000, with effect from 1st April, 2001.↩

413. The prescribed authority under rule 18D is the Secretary, Department of Scientific and Industrial Research, Ministry of Science and Technology, Government of India.↩

414. Substituted for “1st day of April, 2004” by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005. Earlier, “1st day of April, 2004” was substituted for “1st day of April, 2003” by the Finance Act, 2003, with effect from 1st April, 2004.↩

415. Substituted for “1st day of April, 2005” by the Finance Act, 2005, with effect from 1st April, 2006.↩

416. See rule 18DA. For analysis, see Mashbra”s Income-tax Rules.↩

417. Substituted by the Finance (No. 2) Act, 2009, with effect from 1st April, 2000 for the following : -

     “(9) The amount of deduction to an undertaking which begins commercial production or refining of mineral oil shall be hundred per cent of the profits for a period of seven consecutive assessment years including the initial assessment year:

     Provided that where the undertaking is located in North-Eastern Region, it has begun or begins commercial production of mineral oil before the 1st day of April, 1997 and where it is located in any part of India, it begins commercial production of mineral oil on or after the 1st day of April, 1997:

     Provided further that where the undertaking is engaged in refining of mineral oil, it begins refining on or after the 1st day of October, 1998:

     Provided also that where such undertaking begins refining of mineral oil on or after the 1st day of April, 2009, no deduction under this section shall be allowed in respect of such undertaking unless such undertaking fulfils all the following conditions, namely:-

     (i) it is wholly owned by a public sector company or any other company in which a public sector company or companies hold at least forty-nine per cent of the voting rights;

     (ii) it is notified by the Central Government in this behalf on or before the 31st day of May, 2008; and

     (iii) it begins refining not later than the 31st day of March, 2012.”↩

418. Inserted by the Finance Act, 2016 w.e.f 1st day of April, 2017.↩

419. Inserted by the Finance Act, 2011 w.e.f 01.04.2012.↩

420. Inserted by the Finance (No. 2) Act, 2009.↩

421. Inserted by the Finance (No. 2) Act, 2009, with effect from 1st April, 2010.↩

422. Inserted by the Finance Act, 2016 w.e.f 1st day of April, 2017.↩

423. Inserted by the Finance Act, 2016 w.e.f 1st day of April, 2017.↩

424. Substituted by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005. Prior to substitution, sub-section (10), as amended by the Finance Act, 2000, with effect from 1st April, 2001 and the Finance Act, 2003, with retrospective effect from 1st April, 2002, stood as under:

     “(10) The amount of profits in case of an undertaking developing and building housing projects approved before the 31st day of March, 2005 by a local authority, shall be hundred per cent of the profits derived in any previous year relevant to any assessment year from such housing project if, -

     (a) such undertaking has commenced or commences development and construction of the housing project on or after the 1st day of October, 1998;

     (b) the project is on the size of a plot of land which has a minimum area of one acre; and

     (c) the residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the cities of Delhi or Mumbai or within twenty-five kilometers from the municipal limits of these cities and one thousand and five hundred square feet at any other place.”↩

425. Substituted for “31st day of March 2007”, by the Finance (No. 2) Act, 2009, with effect from 1st April, 2010.↩

426. Inserted by the Finance Act, 2010.↩

427. Inserted by the Finance Act, 2010.↩

428. The word “and” omitted by the Finance (No. 2) Act, 2009, with effect from 1st April, 2010↩

429. Substituted by the Finance Act, 2010 for the following : "five per cent".↩

430. Substituted by the Finance Act, 2010 for the following : "two thousand square feet, whichever is less"↩

431. The clauses (e) and (f) shall be inserted by the Finance (No. 2) Act, 2009, with effect from 1st April, 2010:↩

432. Inserted by the Finance (No. 2) Act, 2009, with retrospective effect from 1st April, 2001.↩

433. Substituted for 31st day of March, 2003” by the Finance Act, 2003, with effect from 1st April, 2004.↩

434. Inserted by the Finance Act, 2001, with effect from 1st April, 2002.↩

435. Substituted for “an undertaking deriving profit from” by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005.↩

436. Inserted by the Finance (No. 2) Act, 2009, with effect from 1st April, 2010.↩

437. Inserted by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005.↩

438. Inserted by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005.↩

439. See rule 18DD and Form No. 10CCBC.↩

440. Inserted by the Finance Act, 2008, with effect from 1st April, 2009.↩

441. Substituted by the Finance Act, 2020 for

     “(iv) the assessee furnishes along with the return of income, a report of audit in such form and containing such particulars, as may be prescribed, and duly signed and verified by an accountant, as defined in the Explanation to sub-section (2) of section 288, certifying that the deduction has been correctly claimed.”↩

442. Inserted by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005.↩

443. Renumbered as “(aa)” by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005.↩

444. Inserted by the Finance Act, 2002, with effect from 1st April, 2003.↩

445. Renumbered as “(ab)” by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005.↩

446. Inserted by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005.↩

447. Inserted by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005.↩

448. Inserted by the Finance Act, 2001, with effect from 1st April, 2002.↩

449. Inserted by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005.↩

450. Inserted by the Finance Act, 2002, with effect from 1st April, 2003.↩

451. Inserted by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005.↩

452. Inserted by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005.↩

453. Inserted by the Finance Act, 2002, with effect from 1st April, 2003.↩

454. See rule 18DB. For analysis, see Mashbra”s Income-tax Rules.↩

455. See rule 18DB. For analysis, see Mashbra”s Income-tax Rules.↩

456. Inserted by the Finance Act, 2021.↩

457. Substituted by the Finance Act, 2021, for “2021”.↩

458. Substituted by the Finance Act, 2017 w.e.f. 01.04.2018 w.e.f. 01.04.2018 for the following:-"three years"↩

459. Substituted by the Finance Act, 2017 w.e.f. 01.04.2018 w.e.f. 01.04.2018 for the following:-"built-up area"↩

460. Substituted by the Finance Act, 2017 w.e.f. 01.04.2018 w.e.f. 01.04.2018 for the following:-"built-up area"↩

461. Omitted by the Finance Act, 2017 w.e.f. 01.04.2018 w.e.f. 01.04.2018 the previous text was-

     "or within the distance, measured aerially, of twenty-five kilometres from the municipal limits of these cities"↩

462. Substituted by the Finance Act, 2017 w.e.f. 01.04.2018 w.e.f. 01.04.2018 for the following:-"built-up area"↩

463. Substituted by the Finance Act, 2017 w.e.f. 01.04.2018 w.e.f. 01.04.2018 for the following:-"built-up area"↩

464. Inserted by the Finance Act, 2021.↩

465. Inserted by the Finance Act 2016, with effect from the 1st day of April, 2017.↩

466. Inserted by the Finance Act, 2003, with effect from 1st April, 2004.↩

467. Substituted for “1st day of April, 2012” by the Finance Act, 2007, with effect from 1st April, 2008.↩

468. Substituted for “1st day of April, 2007” by the Finance Act, 2012, with effect from 1st April, 2008.↩

469. Inserted by the Finance Act, 2007, with effect from 1st April, 2008.↩

470. Should be inserted.↩

471. Inserted by the Finance Act, 2008, with effect from 1st April, 2009.↩

472. See Rule 18DE and Form No. 10CCBBA.↩

473. See Rule 18DE.↩

474. See Rule 18DE.↩

475. Inserted by the Finance Act, 2008, with effect from 1st April, 2009.↩

476. Inserted by the Finance Act, 2007, with effect from 1st April, 2008.↩

477. Omitted by the Finance (No. 2) Act, 1996, with retrospective effect from 1st April, 1989.↩

478. Omitted by the Finance Act, 1997, with effect from 1st April, 1998.↩

479. Inserted by the Finance (No. 2) Act, 1998, with effect from 1st April, 1999.↩

480. Substituted for “producing bio-gas” by the Finance Act, 1999, with effect from 1st April, 2000.↩

481. Substituted for “a deduction from such profits and gains of an amount equal to the whole of such income, or five lakh rupees, whichever is less” by the Finance Act, 1999, with effect from 1st April, 2000.↩

482. Substituted by the Finance Act, 2016, w.e.f. 1st day of April, 2017 for the previous text:-

     " [(1) Where the gross total income of an assessee, [***], includes any profits and gains derived from the manufacture of goods in a factory, there shall, subject to the conditions specified in sub-section (2), be allowed a deduction of an amount equal to thirty per cent. of additional wages paid to the new regular workmen employed by the assessee in such factory, in the previous year, for three assessment years including the assessment year relevant to the previous year in which such employment is provided.]

     (2) No deduction under sub-section (1) shall be allowed -

     [(a) if the factory is acquired by the assessee by way of transfer from any other person or as a result of any business reorganisation;]

     (b) unless the assessee furnishes along with the return of income the report of the accountant, as defined in the Explanation below sub-section (2) of section 288 giving such particulars in the report as may be prescribed.

     Explanation : For the purposes of this section, the expressions, -

     (i) “additional wages” means the wages paid to the new regular workman in excess of [fifty workmen] employed during the previous year :

     Provided that in the case of an existing [factory], the additional wages shall be nil if the increase in the number of regular workmen employed during the year is less than ten per cent of existing number of workmen employed in such [factory] as on the last day of the preceding year;

     (ii) “regular workman”, does not include -

     (a) a casual workman; or

     (b) a workman employed through contract labour; or

     (c) any other workman employed for a period of less than three hundred days during the previous year;

     (iii) “workman” shall have the meaning assigned to it in clause (s) of section 2 of the Industrial Disputes Act, 1947 (14 of 1947).]

     [(iv) "factory" shall have the same meaning as assigned to it in clause (m) of section 2 of the Factories Act, 1948(63 of 1948).]"↩

483. Substituted by the Finance Act, 2020, for “along with the return of income the report of the accountant, as defined in the Explanation to section 288”.↩

484. Inserted by the Finance Act, 2016, w.e.f. 1st day of April, 2017.↩

485. Inserted by the Finance Act, 2018, w.e.f. 01.04.2019.↩

486. Inserted by the Finance Act, 2018, w.e.f. 01.04.2019.↩

487. Omitted by the Finance Act, 1986, with effect from 1st April, 1987.↩

488. Omitted by the Finance Act, 2005, with effect from 1st April, 2006. Prior to omission, section 80L as amended by the Finance Act, 1999, with effect from 1st April, 2000; Finance Act, 2000, with effect from 1st April, 2000 and Finance Act, 2003, with effect from 1st April, 2004; Finance Act, 2001, with effect from 1st April, 2002, stood as under: “80L. Deductions in respect of interest on certain securities, dividends, etc. -

     (1) Where the gross total income of an assessee, being -

     (a) an individual, or

     (b) a Hindu undivided family,

     (c) Omitted by the Finance Act, 1994, with retrospective effect from 1st April, 1968, includes any income by way of -

     (i) interest on any security of the Central Government or a State Government; (ia) interest on National Savings Certificates (VI Issue) or National Savings Certificates (VII Issue) or National Savings Certificates (VIII Issue) issued under the Government Savings Certificates Act, 1959 (46 of 1959);

     (ii) interest on such debentures, issued by any institution or authority or any public sector company, or any co-operative society (including a co-operative land mortgage bank or a co-operative land development bank), as the Central Government may, by notification in the Official Gazette, specify in this behalf;

     (iia) interest on deposits under such National Deposit Scheme as may be framed by the Central Government and notified by it in this behalf in the Official Gazette;

     (iii) interest on deposits under any other scheme framed by the Central Government and notified by it in this behalf in the Official Gazette;

     (iiia) interest on deposits under the Post Office (Monthly Income Account) Rules, 1987;

     (iv) [Omitted by the Finance Act, 2003, with effect from 1st April, 2004 ];

     (v) [Omitted by the Finance Act, 2003, with effect from 1st April, 2004 ];

     (va) [Omitted by the Finance Act, 2003, with effect from 1st April, 2004 ];

     (vi) interest on deposits with a banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act) or a co-operative society engaged in carrying on the business of banking (including a co-operative land mortgage bank or a co-operative land development bank);

     (via) interest on deposits with any such bank, not being a banking company or a cooperative society referred to in clause (vi) but being a bank established by or under any law made by Parliament, as may be approved by the Central Government for the purposes of this clause;

     (vii) interest on deposits with financial corporation which is engaged in providing long-term finance for industrial development in India and which is eligible for deduction under clause (viii) of sub-section (1) of section 36;

     [Proviso omitted by the Finance Act, 2000, with effect from 1st April, 2000]; (viia) interest on deposits with any authority constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both;

     (viii) interest on deposits with a co-operative society, not being a co-operative society referred to in clause (vi), made by a member of the society; or

     (ix) dividends from any co-operative society;

     (x) interest on deposits with, 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 and which is eligible for deduction under clause (viii) of sub-section (1) of section 36:

     [Proviso omitted by the Finance Act, 1999, with effect from 1st April, 2000],

     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 as specified hereunder, namely:

     (1) in a case where the amount of such income does not exceed in the aggregate twelve thousand rupees, the whole of such amount; and

     (2) in any other case, twelve thousand rupees:

     [First and second provisos omitted by the Finance Act, 1992, with effect from 1st April, 1993.] Provided that where any income referred to in clause (i), remains unallowed after the deduction under the foregoing provision 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.

     Explanation : For the purposes of this sub-section, the expression “security” means a Government security as defined in clause (2) of section 2 of the Public Debt Act, 1944 (18 of 1944).

      ↩

489. Substituted by the Special Economic Zones Act, 2005, with effect from 10th February, 2006. Under section 27 of the Special Economic Zones Act, 2005, effective from 10th February, 2006, the provisions of the Income-tax Act, 1961, as in force for the time being, apply to, or in relation to, the Developer or entrepreneur for carrying on the authorised operations in a Special Economic Zone or Unit subject to the modifications specified in the Second Schedule to that Act. The above amendment is specified in the Second Schedule to that Act. Prior to substitution, section 80LA, as inserted by the Finance Act, 2003, with effect from 1st April, 2004, stood as under:

     “80LA. Deduction in respect of certain incomes of offshore banking units. -

     (1) Where the gross total income of an assessee,-

     (i) being a scheduled bank (not being a bank incorporated by or under the laws of a country outside India);

     (ii) owning an offshore banking unit in a special economic zone, includes any income referred to in sub-section (2), there shall be allowed, in accordance with and subject to the provisions of this section, a deduction from such income, of an amount equal to -

     (a) one hundred per cent of such income for three consecutive assessment years beginning with the assessment year relevant to the previous year in which the permission, under clause (a) of sub-section (1) of section 23 of the Banking Regulation Act, 1949 (10 of 1949), was obtained, and thereafter;

     (b) fifty per cent of such income for two consecutive assessment years.

     (2) The income referred to in sub-section (1) shall be the income “

     (a) from an offshore banking unit in a special economic zone;

     (b) from the business, referred to in sub-section (1) of section 6 of the Banking Regulation Act, 1949 (10 of 1949), with an undertaking located in a special economic zone or any other undertaking which develops, develops and operates or operates and maintains a special economic zone;

     (c) received in convertible foreign exchange, in accordance with the regulations made under the Foreign Exchange Management Act, 1999 (42 of 1999).

     (3) No deduction under this section shall be allowed unless the assessee furnishes along with the return of income,-

     (i) in the prescribed form, 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 in accordance with the provisions of this section; and

     (ii) a copy of the permission obtained under clause (a) of sub-section (1) of section 23 of the Banking Regulation Act, 1949 (10 of 1949).

     Explanation : For the purposes of this section, -

     (a) “convertible foreign exchange” shall have the same meaning assigned to it in clause (a) of the Explanation below sub-section (4C) of section 80HHC;

     (b) “Offshore Banking Unit” means a branch of a bank in India located in the special economic zone and has obtained the permission under clause (a) of sub-section (1) of section 23 of the Banking Regulation Act 1949 (10 of 1949);

     (c) “scheduled bank” shall have the same meaning assigned to it in clause (e) of section 2 of the Reserve Bank of India Act, 1934 (2 of 1934);

     (d) “special economic zone” shall have the same meaning assigned to it in clause (viii) of the Explanation 2 to section 10A.” 

      ↩

490. Substituted by the Finance Act, 2021, for “any other relevant laws was obtained”.↩

491. Inserted by the Finance Act, 2021.↩

492. Inserted by the Finance Act, 2022.↩

493. Substituted by the Finance Act, 2022, for “this clause, “aircraft” shall”.↩

494. See rule 19AE and Form No. 10CCF. For analysis, see Mashbra”s Income-tax Rules.↩

495. Substituted by the Finance Act, 2021, for

     “(ii) a copy of the permission obtained under clause (a) of sub-section (1) of section 23 of the Banking Regulation Act, 1949 (10 of 1949).

     Explanation : For the purposes of this section, -

     (a)      “International Financial Services Center” shall have the same meaning as assigned to it in clause (q) of section 2 of the Special Economic Zones Act, 2005;

     (b)      “scheduled bank” shall have the same meaning as assigned to it in clause (e) of section 2 of the Reserve Bank of India Act, 1934 (2 of 1934);

     (c) “Special Economic Zone” shall have the same meaning as assigned to it in clause (za) of section 2 of the Special Economic Zones Act, 2005;

     (d) “Unit” shall have the same meaning as assigned to it in clause (zc) of section 2 of the Special Economic Zones Act, 2005.”↩

496. Inserted by the Finance Act, 2020.↩

497. Omitted by the Finance Act, 1983, with effect from 1st April, 1984.↩

498. Omitted by the Finance Act, 1985 with effect from 1st April, 1986.

      ↩

499. Substituted for “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” by the Finance Act, 2000, with effect from 1st April, 2001.↩

500. Substituted for “where the Chief Commissioner or Commissioner is satisfied (for reasons to be recorded in writing) that the assessee is, for reasons beyond his control, unable to do so within the said period of six months, within such further period as the Chief Commissioner or Commissioner may allow in this behalf” by the Finance Act, 1999, with effect from 1st June, 1999.↩

501. Inserted by the Finance Act, 1999, with effect from 1st June, 1999.↩

502. See rule 29AA and Form No. 10HA. For analysis, see Mashbra”s Income-tax Rules.↩

503. Inserted by the Finance Act, 1999, with effect from 1st June, 1999.↩

504. Substituted by the Income-tax (Second Amendment) Act, 1998, with retrospective effect from 1st April, 1968. Prior to substitution, sub-clause (iii) stood as under:

     “(iii) the marketing of the agricultural produce of its members, or”↩

505. Substituted for “forty” by the Finance (No. 2) Act, 1998, with effect from 1st April, 1999.↩

506. Substituted for “twenty” by the Finance (No. 2) Act, 1998, with effect from 1st April, 1999.↩

507. Reference to section 80J needs to be amended as the same has now been omitted by the Finance (No. 2) Act, 1996, with retrospective effect from 1st April, 1989.↩

508. Reference to section 80JJ needs to be amended as the same has now been omitted by the Finance Act, 1997, with effect from 1st April, 1998.↩

509. Reference to section 80J needs to be amended as the same has now been omitted by the Finance (No. 2) Act, 1996, with retrospective effect from 1st April, 1989.↩

510. Reference to section 80JJ needs to be amended as the same has now been omitted by the Finance Act, 1997, with effect from 1st April, 1998.↩

511. Inserted by the Finance Act, 2006, with effect from 1st April, 2007.↩

512. Inserted by the Finance Act 2018, w.e.f. 01.04.2019.↩

513. Reference to section 80J needs to be amended as the same has now been omitted by the Finance (No. 2) Act, 1996, with retrospective effect from 1st April, 1989.

      ↩

514. Omitted by the Direct Tax Laws (Amendment) Act, 1987, with effect from 1st April, 1989.

      ↩

515. Inserted by the Finance Act, 2003, with effect from 1st April, 2004.↩

516. See rule 19AC and Form No. 10CCD. For analysis, see Mashbra”s Income-tax Rules.↩

517. See rule 19AC and Form No. 10CCD. For analysis, see Mashbra”s Income-tax Rules.↩

518. Under rule 29A(2), the prescribed authority is the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange. For analysis, see Mashbra”s Income-tax Rules.↩

519. See rule 29A(1) and Form No. 10H. For analysis, see Mashbra”s Income-tax Rules.↩

520. Substituted for “a deduction from such remuneration of an amount equal to seventy-five per cent of such remuneration, as is brought into India by, or on behalf of, the assessee in convertible foreign exchange within a period of six months from the end of the previous year or within such further period as the competent authority may allow in this behalf :” by the Finance Act, 2000, with effect from 1st April, 2001. Earlier the quoted portion was amended by the Finance Act, 1999, with effect from 1st June, 1999.↩

521. See rule 29A and Form No. 10H. For analysis, see Mashbra”s Income-tax Rules, 2003 edition.↩

522. Inserted by the Finance Act, 1999, with effect from 1st June, 1999.↩

523. Substituted for “a deduction from such income of an amount equal to seventy-five per cent of such income, as is brought into India by, or on behalf of, the assessee in convertible foreign exchange within a period of six months from the end of the previous year or within such further period as the competent authority may allow in this behalf :” by the Finance Act, 2000, with effect from 1st April, 2001. Earlier the quoted portion was amended by the Finance Act, 1999, with effect from 1st June, 1999.↩

524. See rule 29A and Form No. 10H. For analysis, see Mashbra”s Income-tax Rules.↩

525. Inserted by the Finance Act, 1999, with effect from 1st June, 1999.↩

526. Substituted for “a deduction from such remuneration of an amount equal to seventy-five per cent of such remuneration, as is brought into India by, or on behalf of, the assessee in convertible foreign exchange within a period of six months from the end of the previous year or within such further period as the competent authority may allow in this behalf :” by the Finance Act, 2000, with effect from 1st April, 2001. Earlier the quoted portion was amended by the Finance Act, 1999, with effect from 1st June, 1999.↩

527. See rule 29A and Form No. 10H. For analysis, see Mashbra”s Income-tax Rules.↩

528. See rule 11C.↩

529. Inserted by the Finance Act, 1999, with effect

     from 1st June, 1999.↩

530. Inserted by the Finance Act, 2015, w.e.f. 01.06.2015.↩

531. Omitted by the Finance Act, 1986, with effect from 1st April, 1987.↩

532. Omitted by the Finance Act, 1987, with effect from 1st April, 1988.↩

533. Omitted by the Finance Act, 1986, with effect from 1st April, 1987.↩

534. Inserted by the Finance Act, 2012, w.e.f. 01.04.2013.↩

535. Inserted by the Finance Act, 2018, w.e.f. 01.04.2019.↩

536. Inserted by the Finance Act 2018, w.e.f. 01.04.2019.↩

537. Inserted by the Finance Act, 1968, w.e.f. 1-4-1969.

      ↩

538. Substituted by the Finance Act, 2015, w.e.f. 01.04.2016. for the following:-

     (1) In computing the total income of an individual, being a resident, who, at any time during the previous year, is certified by the medical authority to be a person with disability, there shall be allowed a deduction of a sum of fifty thousand rupees:

     Provided that where such individual is a person with severe disability, the provisions of this sub-section shall have effect as if for the words “fifty thousand rupees”, the words “seventy-five thousand rupees” had been substituted.

     [Provided further that for the assessment years beginning on or after the 1st day of April, 2010, the provisions of the first proviso shall have effect as if for the words “seventy-five thousand rupees”, the words “one lakh rupees” had been substituted]↩

539. See rule 11A, Form No. 10-IA and Form prescribed vide Notification No. 16-18/97-NI.1, dated 1st June, 2001 and No. 16-18/97-NI.1, dated 18th February, 2002. For Forms, see Mashbra's Income-tax Rules. For analysis, see Mashbra”s Income-tax Rules.↩

540. Inserted by the Finance (No. 2) Act, 2009, with effect from 1st April, 2010.↩

541. Substituted by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005. Prior to substitution, the Explanation stood as under:

     “Explanation : For the purposes of this section,-

     (a) “disability” shall have the meaning assigned to it in clause (i) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996);

     (b) “medical authority” means the medical authority as referred to in clause (p) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996);

     (c) “person with disability” means a person referred to in clause (t) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996);

     (d) “person with severe disability” means a person with eighty per cent or more of one or more disabilities, as referred to in sub-section (4) of section 56 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996).”↩

542. See rule 11A(1).↩

543. Omitted by the Finance Act, 1994, with effect from 1st April, 1995.↩

544. Omitted by the Finance Act, 1985, with effect from 1st April, 1986.↩

545. Omitted by the Finance Act, 1987, with effect from 1st April, 1988.↩

546. Omitted by the Finance (No. 2) Act, 1967, with effect from 1st April, 1968.↩

547. Omitted by the Finance (No. 2) Act, 1967, with effect from 1st April, 1968.↩

548. Omitted by the Finance (No. 2) Act, 1967, with effect from 1st April, 1968.↩

549. Omitted by the Finance (No. 2) Act, 1967, with effect from 1st April, 1968.↩

550. Omitted by the Finance (No. 2) Act, 1967, with effect from 1st April, 1968.↩

551. Omitted by the Finance (No. 2) Act, 1967, with effect from 1st April, 1968.↩

552. Omitted by the Finance (No. 2) Act, 1967, with effect from 1st April, 1968. ↩

553. Omitted by the Finance (No. 2) Act, 1967, with effect from 1st April, 1968.↩

554. Omitted by the Finance Act, 1988, with effect from 1st April, 1989.↩

555. Substituted for "Relief in respect of income-tax" by the Finance Act, 1990, w.e.f. 1-4-1991. Earlier existing heading was amended by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1968.↩

556. Inserted by the Finance Act, 1990, w.e.f. 1-4-1991.↩

557. Substituted by the Finance Act, 2013 w.e.f. 01.04.2014 for the following : - "1[88"↩

558. Substituted by the Finance Act, 2013 w.e.f. 01.04.2014 for the following : - "section 88"↩

559. Inserted by the Finance Act, 2000, with effect from 1st April, 2001.↩

560. Inserted by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005.↩

561. Inserted by the Finance Act, 2013 w.e.f. 01.04.2014.↩

562. Substituted by the Finance Act, 2019, for “three hundred fifty thousand”.↩

563. Substituted by the Finance Act, 2019, for "two thousand and five hundred "↩

564. Substituted by the Finance Act, 2002, with effect from 1st April, 2003. Prior to substitution, sub-section (1), as amended by the Finance Act, 2001, with effect from 1st April, 2002, stood as under :

     “(1) Subject to the provisions of this section, an assessee, being “

     (a) an individual, or

     (b) a Hindu undivided family,

     shall be entitled to a deduction, from the amount of income-tax (as computed before allowing the deductions under this Chapter) on his total income with which he is chargeable for any assessment year, of an amount equal to twenty per cent of the aggregate of the sums referred to in sub-section (2) :

     Provided that in the case of an individual, whose income, derived from the exercise of his profession as an author, playwright, artist, musician, actor or sportsman (including an athlete), is twenty-five per cent or more of his total income, the provisions of this sub¬section shall have effect as if for the words “twenty per cent”, the words “twenty-five per cent” had been substituted:

     Provided further that an individual shall be entitled to a deduction of an amount equal to thirty per cent of the aggregate of the sums referred to in sub-section (2) if his income chargeable under the head “Salaries” “

     (a) does not exceed one lakh rupees during the previous year before allowing deduction under section 16 ; and

     (b) is not less than ninety per cent of his gross total income as defined in sub-section (5) of section 80B.”↩

565. Words “out of his income chargeable to tax” omitted by the Finance Act, 2002, with effect from 1st April, 2003.↩

566. Inserted by the Finance Act, 2003, with effect from 1st April, 2004.↩

567. Substituted for “which is approved for the purposes of clause (viii) of sub-section (1) of section 36” by the Finance Act, 2000, with effect from 1st April, 2000.↩

568. Inserted by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005.↩

569. Omitted by the Finance (No. 2) Act, 1991, with effect from 1st April, 1992.↩

570. See rule 20 and Form No. 59. For analysis, see Mashbra”s Income-tax Rules.↩

571. Substituted by the Finance Act, 2003, with effect from 1st April, 2004. Prior to substitution, the Explanation, as amended by the Finance Act, 1997, with effect from 1st April, 1998 ; and Finance Act, 1999, with effect from 1st April, 2000, stood as under :

     “Explanation : For the purposes of this clause, “

     (i) “eligible issue of capital” means an issue made by a public company formed and registered in India or a public financial institution and the entire proceeds of the issue is utilised wholly and exclusively either for the purposes of developing, maintaining and operating an infrastructure facility or for generating, or for generating and distributing, power or for providing telecommunication services whether basic or cellular ;

     (ii) “infrastructure facility” shall have the meaning assigned to it in the Explanation to sub-section (4) of section 80-IA ;

     (iii) “public company” shall have the meaning assigned to it in section 3 of the Companies Act, 1956 (1 of 1956) ;

     (iv) “public financial institution” shall have the meaning assigned to it in section 4A of the Companies Act, 1956 (1 of 1956) ;”↩

572. See rule 20A and Form 59A. For analysis, see Mashbra”s Income-tax Rules.↩

573. Inserted by the Finance Act, 2003, with effect from 1st April, 2004.↩

574. Inserted by the Finance Act, 2002, with effect from 1st April, 2003. Prior to omission, sub¬section (3) stood as under :

     “(3) The provisions of sub-section (2) shall apply only to so much of any premium or other payment made on a policy other than a contract for a deferred annuity as is not in excess of ten per cent of the actual capital sum assured.

     Explanation : In calculating any such capital sum, no account shall be taken “

     (i) of the value of any premiums agreed to be returned, or

     (ii) of any benefit by way of bonus or otherwise over and above the sum actually assured, which is to be or may be received under the policy by any person.”↩

575. Omitted by the Finance Act, 1994, with retrospective effect from 1st April, 1991.↩

576. Omitted by the Finance Act, 1994, with retrospective effect from 1st April, 1991.↩

577. Inserted by the Finance Act, 2003, with effect from 1st April, 2004.↩

578. Substituted by the Finance Act, 2002, with effect from 1st April, 2003. Prior to substitution, sub-section (5) as amended by the Finance Act, 2000, with effect from 1st April, 2001, stood as under:

     “(5) Where the aggregate of any sums specified in clause (xv) of sub-section (2) exceeds an amount of twenty thousand rupees, a deduction under sub-section (1) shall be allowed with reference to so much of the aggregate as does not exceed an amount of twenty thousand rupees.”↩

579. Inserted by the Finance Act, 2003, with effect from 1st April, 2004.↩

580. Omitted by the Finance Act, 2002, with effect from 1st April, 2003. Prior to omission, sub-section (5A) as inserted by the Finance (No. 2) Act, 1996, with effect from 1st April, 1997, stood as under :

     “(5A) Where the aggregate of any sums specified in clause (i) to clause (xv) of sub-section (2) exceeds an amount of sixty thousand rupees, a deduction under sub-section (1) shall be allowed with reference to so much of the aggregate as does not exceed an amount of sixty thousand rupees :

     Provided that, in the case of an individual referred to in the proviso to sub-section (1), the provisions of this sub-section shall have effect as if for the words “sixty thousand rupees”, the words “seventy thousand rupees” had been substituted.”↩

581. Omitted by the Finance Act, 2002, with effect from 1st April, 2003. Prior to omission, sub-section (6), as amended by the Finance (No. 2) Act, 1996, with effect from 1st April, 1997, and Finance Act, 2000, with effect from 1st April, 2001; stood as under:

     “(6) The deduction from the amount of income-tax under sub-section (1) shall not exceed “

     (i) in the case of an individual, whose income, derived from the exercise of his profession as an author, playwright, artist, musician, actor or sportsman (including an athlete), is twenty-five per cent or more of his total income, seventeen thousand five hundred rupees ;

     (ii) in any other case, sixteen thousand rupees.”↩

582. Inserted by the Finance Act, 2005, with effect from 1st April, 2006.↩

583. Omitted by the Finance (No. 2) Act, 1996, with retrospective effect from 1st April, 1994.↩

584. Omitted by the Finance Act, 2005, with effect from 1st April, 2006. Prior to omission, section 88B as amended by the Finance Act, 1997, with effect from 1st April, 1998; Finance Act, 2000, with effect from 1st April, 2001 and Finance Act, 2003, with effect from 1st April, 2004, stood as under:

     “88B. Rebate of income-tax in case of individuals of sixty-five years or above “ An assessee, being an individual resident in India, who is of the age of sixty-five years or more at any time during the previous year shall be entitled to a deduction from the amount of income-tax (as computed before allowing the deduction under this Chapter) on his total income, with which he is chargeable for any assessment year, of an amount equal to hundred per cent of such income-tax or an amount of twenty thousand rupees, whichever is less.” ↩

585. Omitted by the Finance Act, 2005, with effect from 1st April, 2006. Prior to omission, section 88C, as inserted by the Finance Act, 2000, with effect from 1st April, 2001, stood as under:

     “88C. Rebate of income-tax in case of women below sixty-five years.”

     An assessee, “

     (a) being a woman resident in India ; and

     (b) below the age of sixty-five years, at any time during the previous year, shall be entitled to a deduction from the amount of income-tax (as computed before allowing the deductions under this Chapter) on her total income, with which she is chargeable for any assessment year, of an amount equal to hundred per cent of such income-tax or an amount of five thousand rupees, whichever is less.” ↩

586. Omitted by the Finance Act, 2005, with effect from 1st April, 2006. Prior to omission, section 88D, as inserted by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005, stood as under:

     “88D. Rebate of income-tax in case of certain individuals. ”

     An assessee, being an individual resident in India, “

     (a) whose total income does not exceed one hundred thousand rupees, shall be entitled to a deduction from the amount of income-tax (as computed before allowing the deductions under this Chapter) on his total income with which he is chargeable for any assessment year, of an amount equal to hundred per cent of such income-tax;

     (b) whose total income exceeds one hundred thousand rupees and the income-tax payable on such total income (as computed before allowing the deductions under this Chapter) exceeds the amount by which such total income is in excess of one hundred thousand rupees, shall be entitled to a deduction from the amount of income-tax on his total income, of an amount equal to the amount by which the income-tax payable on such total income is in excess of the amount by which the total income exceeds one hundred thousand rupees.” ↩

587. Inserted by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005.↩

588. See rule 20AB and Form Nos. 10DB and 10DC.↩

589. Inserted by the Finance Act, 2008, with effect from 1st April, 2008.↩

590. Substituted by the Finance Act, 2002, with retrospective effect from 1st April, 1996. Prior to substitution, section 89 stood as under :

     “89. Relief when salary, etc., is paid in arrears or in advance. “ (1) Where, by reason of any portion of an assessee”s salary being paid in arrears or in advance or by reason of his having received in any one financial year salary for more than twelve months or a payment which under the provisions of clause (3) of section 17 is a profit in lieu of salary, his income is assessed at a rate higher than that at which it would otherwise have been assessed, the Assessing Officer shall, on an application made to him in this behalf, grant such relief as may be prescribed. (2) Omitted by the Finance Act, 1988, with effect from 1st April, 1989.”↩

591. See Rule 21A. For analysis, see Mashbra”s Income-tax Rules.↩

592. Inserted by the Finance (No. 2) Act, 2009, with effect from 1st April, 2010.↩

593. Inserted by the Finance Act, 2021.↩

594. 1. Substituted by the Finance (No. 2) Act, 2009 with effect from 1st October, 2009. Prior to substitution, section 90 as amended by the Finance Act, 2001, with retrospective effect from 1st April, 1962; Finance Act, 2003, with effect from 1st April, 2004; Finance (No. 2) Act, 2004, with retrospective effect from 1st April, 1962, stood as under:

     “90. Agreement with foreign countries.

     (1) The Central Government may enter into an agreement with the Government of any country outside India -

     (a) for the granting of relief in respect of-

     (i) income on which have been paid both income-tax under this Act and income-tax in that country; or

     (ii) income-tax chargeable under this Act and under the corresponding law in force in that country to promote mutual economic relations, trade and investment, or

     (b) for the avoidance of double taxation of income under this Act and under the corresponding law in force in that country, or

     (c) for exchange of information for the prevention of evasion or avoidance of income-tax chargeable under this Act or under the corresponding law in force in that country, or investigation of cases of such evasion or avoidance, or

     (d) for recovery of income-tax under this Act and under the corres-ponding law in force in that country,

     and may, by notification in the Official Gazette, make such provisions as may be necessary for implementing the agreement.

     (2) Where the Central Government has entered into an agreement with the Government of any country outside India under sub-section (1) for granting relief of tax, or as the case may be, avoidance of double taxation, then, in relation to the assessee to whom such agreement applies, the provisions of this Act shall apply to the extent they are more beneficial to that assessee.

     (3) Any term used but not defined in this Act or in the agreement referred to in sub­section (1) shall, unless the context otherwise requires, and is not inconsistent with the provisions of this Act or the agreement, have the same meaning as assigned to it in the notification issued by the Central Government in the Official Gazette in this behalf. Explanation : For the removal of doubts, it is hereby declared that the charge of tax in respect of a foreign company at a rate higher than the rate at which a domestic company is chargeable, shall not be regarded as less favourable charge or levy of tax in respect of such foreign company”.↩

595. Inserted by the Finance Act, 2020.↩

596. Substituted by the Finance Act, 2013 w.e.f. 01.04.2016 for the following : -

     "[(2A) Notwithstanding anything contained in sub-section (2), the provisions of Chapter X-A of the Act shall apply to the assessee, even if such provisions are not beneficial to him.]"↩

597. Inserted by the Finance Act, 2012, w.e.f. 01.04.2013.↩

598. Substituted by the Finance Act, 2013 for the following : -

     " a certificate, containing such particulars as may be prescribed, of his being a resident"↩

599. Inserted by the Finance Act, 2012, w.e.f. 01.10.2009.↩

600. Inserted by the Finance Act, 2017 w.e.f. 01.04.2018.↩

601. Inserted by the Finance Act, 2013 w.e.f. 01.04.2016.↩

602. Inserted by the Finance Act, 2006, with effect from 1st June, 2006.↩

603. Inserted by the Finance Act, 2020.↩

604. Inserted by the Finance Act, 2013 w.e.f. 01.04.2016.↩

605. Omitted by the Finance Act, 2013 for the following :-

     " [(2A) Notwithstanding anything contained in sub-section (2), the provisions of Chapter X-A of the Act shall apply to the assessee, even if such provisions are not beneficial to him.]"↩

606. Inserted by the Finance Act, 2012, w.e.f. 01.04.2013.↩

607. Substituted by the Finance Act, 2013 for the following :-

     " a certificate, containing such particulars as may be prescribed, of his being a resident"↩

608. Inserted by the Finance Act, 2013 w.e.f. 01.04.2016.↩

609. Inserted by the Finance Act, 2012, w.e.f. 01.06.2006.↩

610. Inserted by the Finance Act, 2017 w.e.f.

     01.04.2018.↩

611. Substituted by the Finance Act, 2002, with effect from 1st April, 2002. (This section was earlier substituted by the Finance Act, 2001, with effect from the same date, i.e., 1st April, 2002). Prior to such substitution, this section stood as under :

     “92. Income from transactions with non-residents, how computed in certain cases.” Where a business is carried on between a resident and a non-resident and it appears to the Assessing Officer that, owing to the close connection between them, the course of business is so arranged that the business transacted between them produces to the resident either no profits or less than the ordinary profits which might be expected to arise in that business, the Assessing Officer shall determine the amount of profits which may reasonably be deemed to have been derived therefrom and include such amount in the total income of the resident.”↩

612. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following: - "international transaction"↩

613. Inserted by the Finance Act, 2012, w.e.f. 01.04.2013.↩

614. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following: - "sub-section (1)"↩

615. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following: - "that sub-section"↩

616. Inserted by the Finance Act, 2012, w.e.f. 01.04.2013.↩

617. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following: - "international transaction"↩

618. Inserted by the Finance Act, 2001, with effect from 1st April, 2002.↩

619. Substituted for “(2) Two enterprises shall be associated enterprises if, at any time during the previous year, ““ by the Finance Act 2002, with effect from 1st April, 2002.↩

620. Inserted by the Finance Act, 2001, with effect from 1st April, 2002.↩

621. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of April, 2015 for the following : - "deemed to be a transaction"↩

622. Inserted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of April, 2015.↩

623. Inserted by the Finance Act, 2012, w.e.f. 01.04.2002.↩

624. Omitted by Finance Act, 2017.
     “any expenditure in respect of which payment has been made or is to be made to a person referred to in clause (b) of sub-section (2) of section 40A;”↩

625. Inserted by the Taxation Law (Amendment) Act, 2019.↩

626. Substituted by the Finance Act, 2015, w.e.f. 01.04.2016. for the following:-" five crore rupees"↩

627. Inserted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following: -↩

628. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following : - "international transaction"↩

629. See rule 10B. For analysis, see Mashbra”s Income-tax Rules.↩

630. See rule 10B. For analysis, see Mashbra”s Income-tax Rules.↩

631. See rule 10C. For analysis, see Mashbra”s Income-tax Rules.↩

632. Substituted by the Finance (No. 2) Act, 2009, with effect from 1st October, 2009. Prior to substitution, the proviso as substituted by the Finance Act, 2002, with effect from 1st April, 2002 stood as under :

     “Provided that where more than one price is determined by the most appropriate method, the arm”s length price shall be taken to be the arithmetical mean of such prices, or, at the option of the assessee, a price which may vary from the arithmetical mean by an amount not exceeding five per cent of such arithmetical mean.”↩

633. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following : - "international transaction"↩

634. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following: - "does not exceed [such percentage of the latter, as may be notified"↩

635. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following : - "international transaction"↩

636. Inserted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of April, 2015.↩

637. Inserted by the Finance Act, 2012, w.e.f. 01.10.2009.↩

638. Inserted by the Finance Act, 2012, w.e.f. 01.04.2002.↩

639. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following : - "international transaction"↩

640. Inserted by the Finance Act, 2012, w.e.f. 01.07.2012.↩

641. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following : - "international transaction"↩

642. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following : - "international transaction"↩

643. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following : - "international transaction"↩

644. Substituted by “section 10A or section 10B”

     by the Finance Act, 2006, with effect from 1st April, 2007.↩

645. Inserted by the Finance Act, 2002, with effect from 1st April, 2002.↩

646. Inserted by the Finance Act, 2001, with effect from 1st April, 2002.↩

647. Inserted by the Finance Act, 2002, with effect from 1st June, 2002.↩

648. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following: - "international transaction"↩

649. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of June, 2013 for the following : - "Commissioner"↩

650. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following: - "international transaction"↩

651. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following: - "international transaction"↩

652. Inserted by the Finance Act, 2011 w.e.f 01.06.2011.↩

653. Inserted by the Finance Act, 2012, w.e.f. 01.06.2002.↩

654. Inserted by the Finance Act, 2012, w.e.f. 01.07.2012.↩

655. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following: - "international transaction"↩

656. Inserted by the Finance Act, 2007, with effect from 1st June, 2007.↩

657. Inserted by the Finance Act, 2016, w.e.f. 1st day of June, 2016.↩

658. Substituted by the Finance Act, 2007, with effect from 1st June, 2007. Prior to substitution, sub-section (4) stood as under:

     “(4) On receipt of the order under sub-section (3), the Assessing Officer shall proceed to compute the total income of the assessee under sub-section (4) of section 92C having regard to the arm”s length price determined under sub-section (3) by the Transfer Pricing Officer.”↩

659. Inserted by the Finance Act, 2011 w.e.f 01.06.2011.↩

660. Inserted by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020.↩

661. Substituted by the Finance Act, 2022, for “2022”.↩

662. Substituted by the Finance Act, 2020, for “the transfer price declared by the assessee”.

     “(1) The determination of arm”s length price under section 92C or section 92CA shall be subject to safe harbour rules.”.↩

663. Substituted by the Finance Act, 2020, for “the transfer price declared by

     the assessee”.↩

664. Substituted by the Finance Act, 2020, for

     “(1) The Board, with the approval of the Central Government, may enter into an advance pricing agreement with any person, determining the arm's length price or specifying the manner in which arm's length price is to be determined, in relation to an international transaction to be entered into by that person.

     (2) The manner of determination of arm's length price referred to in sub-section (1), may include the methods referred to in sub-section (1) of section 92C or any other method, with such adjustments or variations, as may be necessary or expedient so to do.

     (3) Notwithstanding anything contained in section 92C or section 92CA, the arm's length price of any international transaction, in respect of which the advance pricing agreement has been entered into, shall be determined in accordance with the advance pricing agreement so entered.”↩

665. Substituted by the Finance (No. 2) Act, 2014

     w.e.f. 1st day of June, 2013 for the following : - "Commissioner"↩

666. Substituted by the Finance Act, 2020, for

     “(9A) The agreement referred to in sub-section (1), may, subject to such conditions, procedure and manner as may be prescribed, provide for determining the arm's length price or specify the manner in which arm's length price shall be determined in relation to the international transaction entered into by the person during any period not exceeding four previous years preceding the first of the previous years referred to in sub-section (4), and the arm's length price of such international transaction shall be determined in accordance with the said agreement.↩

667. Inserted by the Finance Act, 2012, w.e.f. 01.07.2012.↩

668. Inserted by the Finance Act, 2017 w.e.f. 01.04.2018.↩

669. Inserted by the Finance Act, 2001, with effect from 1st April, 2002.↩

670. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following: - "international transaction"↩

671. See rule 10D. For analysis, see Mashbra”s Income-tax Rules.↩

672. Inserted by the Finance Act, 2016, with effect from 1st day of April, 2017.↩

673. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following: - "international transaction"↩

674. Inserted by the Finance Act, 2001, with effect from 1st April, 2002.↩

675. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of June, 2013 for the following : - "Commissioner"↩

676. Inserted by the Finance Act, 2016, with effect from 1st day of April, 2017.↩

677. Inserted by the Finance Act, 2001, with effect from 1st April, 2002.↩

678. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following: - "international transaction"↩

679. Inserted by the Finance Act, 2001, with effect from 1st April, 2002.↩

680. See rule 10E and Form No. 3CEB. For analysis, see Mashbra”s Income-tax Rules.↩

681. See rule 10E and Form No. 3CEB. For analysis, see Mashbra”s Income-tax Rules.↩

682. Inserted by the Finance Act, 2001, with effect from 1st April, 2002.↩

683. Inserted by the Finance Act, 2002, with effect from 1st April, 2002.↩

684. Inserted by the Finance Act, 2002, with effect from 1st April, 2002.↩

685. Substituted by the Finance Act, 2020, for

     “(iv) “specified date”, shall have the same meaning as assigned to “due date” in Explanation 2 below sub-section (1) of section 139;”↩

686. Inserted by the Finance Act 2001, with effect from 1st April, 2002.↩

687. Substituted by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005. Prior to substitution, clause (b) stood as under :

     “(b) such person sells or transfers such securities or unit within a period of three months after such date ;”↩

688. Inserted by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005.↩

689. Substituted by the Finance Act, 2022, for “units”.↩

690. Substituted by the Finance Act, 2022, for “units”.↩

691. Substituted by the Finance Act, 2022, for “units”.↩

692. Substituted by the Finance Act, 2022, for “units”.↩

693. Substituted by the Finance Act, 2022, for “units”.↩

694. Substituted by the Finance Act, 2022, for “units”.↩

695. Substituted by the Finance Act, 2022, for

     “(aa) “record date” means such date as may be fixed by-

     (i) a company for the purposes of entitlement of the holder of the securities to receive dividend; or

     (ii) a Mutual Fund or the Administrator of the specified undertaking or the specified company as referred to in the Explanation to clause (35) of section 10, for the purposes of entitlement of the holder of the units to receive income, or additional unit without any consideration, as the case may be;”↩

696. Substituted by the Finance Act, 2022, for

     “(d) “unit” shall have the meaning assigned to it in clause (b) of the Explanation to section 115AB.”↩

697. Inserted by the Finance Act, 2011 w.e.f .01.06.2011.↩

698. Inserted by the Finance Act, 2020.↩

699. Inserted by the Finance Act, 2017 w.e.f. 01.04.2018.↩

700. Inserted by the Finance Act, 2013 w.e.f. 01.04.2016 for the following : - " [***]"↩

701. Numbered by the Finance Act, 2013 w.e.f. 01.04.2016.↩

702. Inserted by the Finance Act, 2015, w.e.f. 01.04.2015.↩

703. Inserted by the Finance Act, 2013 w.e.f. 01.04.2016 for the following : - " [***]"↩

704. Inserted by the Finance Act, 2013 w.e.f. 01.04.2016 for the following : - " [***]"↩

705. Inserted by the Finance Act, 2013 w.e.f. 01.04.2016 for the following : -" [***]"↩

706. Inserted by the Finance Act, 2013 w.e.f. 01.04.2016 for the following : - " [***]"↩

707. Inserted by the Finance Act, 2013 w.e.f. 01.04.2016 for the following :- "[***]"↩

708. Inserted by the Finance Act, 2013 w.e.f. 01.04.2016  for the following : - "[***]"↩

709. Inserted by the Finance Act, 2013 w.e.f. 01.04.2016 for the following : - " [***]"↩

710. Omitted by the Finance Act, 1965, with effect from 1st April, 1965.↩

711. Omitted by the Finance Act, 1987, with effect from 1st April, 1988.↩

712. Omitted by the Finance Act, 1987, with effect from 1st April, 1988.↩

713. Omitted by the Finance Act, 1987, with effect from 1st April, 1988.↩

714. Omitted by the Finance Act, 1987, with effect from 1st April, 1988.↩

715. Omitted by the Finance Act, 1987, with effect from 1st April, 1988.↩

716. Omitted by the Finance Act, 1987, with effect from 1st April, 1988.↩

717. Omitted by the Finance Act, 1987, with effect from 1st April, 1988.↩

718. Inserted by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005.↩

719. Inserted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of April, 2015.↩

720. 1st October, 2004.↩

721. Substituted for “ten per cent” by the Finance Act, 2008, with effect from 1st April, 2009.↩

722. Substituted by the Finance Act, 2012, w.e.f. 01.04.2009 for the following : - "ten per cent."↩

723. Inserted by the Finance Act, 2016 w.e.f. 1st day of April, 2017.↩

724. Omitted by the Finance Act, 2015, w.e.f. 01.04.2016, the previous text was:-

     [Provided further that the provisions of this sub-section shall not apply in respect of any income arising from transfer of units of a business trust which were acquired by the assessee in consideration of a transfer as referred to in clause (xvii) of section 47.]↩

725. Substituted by the Finance Act, 2016 w.e.f. 1st day of April, 2017 for previous text:

     "Explanation. - For the purposes of this section, the expression “equity oriented fund” shall have the meaning assigned to it in the Explanation to clause (38) of section 10.]"↩

726. Proviso omitted by the Finance Act, 1995, with effect from 1st April, 1996.

     1a. Inserted by the Finance Act, 1999 with effect from 1st April, 2000.↩

727. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following : -

     "(ii) the amount of income-tax calculated on such long-term capital gains at the rate of twenty per cent;"↩

728. Substituted by the Finance Act, 2016 w.e.f. 1st day of April, 2017 for the previous text : - "unlisted securities"↩

729. Omitted by the Finance Act, 1995, with effect from 1st April, 1996↩

730. Inserted by the Finance Act, 1999 with effect from 1st April, 2000.↩

731. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of April, 2015 for the following : - " [being listed securities or unit]"↩

732. Inserted by the Finance Act, 2005, with effect from 1st April, 2006.↩

733. Inserted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of April, 2015.↩

734. Substituted by the Finance Act, 2000, with effect from 1st April, 2000. Prior to substitution, the Explanation as inserted by the Finance Act, 1999, with effect from 1st April, 2000, stood as under :

     “Explanation : For the purposes of this sub-section, “listed securities” means the securities “

     (a) as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (32 of 1956) ; and

     (b) listed in any recognised stock exchange in India.”↩

735. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following : -

     "(a) “listed securities” means the securities --

     (i) as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (32 of 1956) ; and

     (ii) listed in any recognised stock exchange in

     India ;"↩

736. Omitted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of April, 2015 for the following : -

     "(b) “unit” shall have the meaning assigned to it in clause (b) of Explanation to section 115AB."↩

737. Inserted by the Finance Act, 2021.↩

738. Inserted by the Finance Act, 2021.↩

739. Inserted by the Finance Act, 2018, with effect from 1st April, 2019.↩

740. Inserted by the Finance Act, 2002, with effect from 1st June, 2002.↩

741. Omitted by the Finance (No. 2) Act, 1967, with effect from 1st April, 1968.↩

742. Omitted by the Finance Act, 1987, with effect from 1st April, 1988.↩

743. Substituted for “dividends” by the Finance Act, 2003, with effect from 1st April, 2004. Earlier, the expression “other than dividends referred to in section 115-O” was omitted by the Finance Act, 2002, with effect from 1st April, 2003, which was inserted by the Finance Act, 1997, with effect from 1st April, 1998.↩

744. Omitted by the Finance Act, 2020.
     “other than dividends referred to in section 115-O”↩

745. Inserted by the Finance Act, 2011 w.e.f 01.06.2011.↩

746. Substituted by the Finance Act, 2012, w.e.f. 01.07.2012 for the following: - "clause (iia)"↩

747. Inserted by the Finance Act, 2011 w.e.f 01.06.2011.↩

748. Inserted by the Finance Act, 2012, w.e.f. 01.07.2012.↩

749. Inserted by the Finance Act, 2013 w.e.f. 01.04.2014.↩

750. Inserted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of April, 2015.↩

751. Substituted for ‘dividends’ by the Finance Act, 2003, with effect from 1st April, 2004. Earlier, the expression “other than dividends referred to in section 115-O” was omitted by the Finance Act, 2002, with effect from 1st April, 2003, which was inserted by the Finance Act, 1997, with effect from 1st April, 1998.↩

752. Omitted by the Finance Act, 2020.
     “other than dividends referred to in section 115-O ”↩

753. Substituted by the Finance Act, 2020, for

     “(BA) the amount of income-tax calculated on the amount of income by way of interest referred to in sub-clause (iia) or sub-clause (iiaa) or sub-clause (iiab) or sub-clause (iiac), if any, included in the total income, at the rate of five per cent.”↩

754. Inserted by the Finance Act, 2011 w.e.f 01.06.2011.↩

755. Substituted by the Finance Act, 2013 w.e.f. 01.04.2014 for the following : - " [sub-clause (iiaa)]"↩

756. Inserted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of April, 2015.↩

757. Substituted for “a foreign company, includes any income by way of royalty or fees for technical services” by the Finance Act, 2003, with effect from 1st April, 2004.↩

758. Substituted by the Finance Act, 2013 w.e.f. 01.04.2014 for the following : -

     "(A) the amount of income-tax calculated on the income by way of royalty, if any, included in the total income, at the rate of thirty per cent if such royalty is received in pursuance of an agreement made on or before the 31st day of May, 1997 and twenty per cent where such royalty is received in pursuance of an [agreement made after the 31st day of May, 1997 but before the 1st day of June 2005]]

     [(AA) the amount of income-tax calculated on the income by way of royalty, if any, included in the total income, at the rate of ten per cent if such royalty is received in pursuance of an agreement made on or after the 1st day of June, 2005 ;]

     (B) the amount of income-tax calculated on the income by way of fees for technical services, if any, included in the total income, at the rate of thirty per cent if such fees for technical services are received in pursuance of an agreement made on or before the 31st day of May, 1997 and twenty per cent where such fees for technical services are received in pursuance of an [agreement made after the 31st day of May, 1997 but before the 1st day of June, 2005] ; and

     [(BB) the amount of income-tax calculated on the income by way of fees for technical services, if any, included in the total income, at the rate of ten per cent if such fees for technical services are received in pursuance of an agreement made on or after the 1st day of June, 2005 ; and]"↩

759. Substituted by the Finance Act, 2015, w.e.f. 01.04.2016. for the following:-"twenty-five per cent."↩

760. Substituted by the Finance Act, 2015, w.e.f. 01.04.2016. for the following:-"twenty-five per cent."↩

761. Substituted by the Finance Act, 2020, for “clause (a)”.↩

762. Substituted by the Finance Act, 2020, for “(b) the tax deductible at source under the provisions of Chapter XVIIB has been deducted from such income.”↩

763. Substituted for “Central Government” by the Finance Act, 2001, with effect from 1st June, 2001.↩

764. Substituted by the Finance Act, 2013 for the following : - "the Foreign Exchange Regulation Act, 1973 (46 of 1973)"↩

765. 1. Substituted by the Finance Act, 2001, with effect from 1st April, 2002. Prior to substitution, section 115AC, as amended by the Finance Act, 1997, with effect from 1st April, 1998 and Finance Act, 1999, with effect from 1st April, 2000, stood as under :

     “115AC. Tax on income from bonds or shares purchased in foreign currency or capital gains arising from their transfer. “

     (1) Where the total income of an assessee, being a non­resident, includes “

     (a) income by way of interest or dividends other than dividends referred to in section 115-O, on bonds or shares of an Indian company, issued in accordance with such scheme as the Central Government may, by notification in the Official Gazette, specify in this behalf or on bonds or shares of a public sector company, sold by the Government and purchased by him in foreign currency ; or

     (b) income by way of long-term capital gains arising from the transfer of bonds or, as the case may be, shares referred to in clause (a),

     the income-tax payable shall be the aggregate of “

     (i) the amount of income-tax calculated on the income by way of interest or dividends other than dividends referred to in section 115-O], as the case may be, in respect of bonds or shares referred to in clause (a), if any, included in the total income, at the rate of ten per cent ;

     (ii) the amount of income-tax calculated on the income by way of long-term capital gains referred to in clause (b), if any, at the rate of ten per cent ; and (iii) the amount of income-tax with which the non-resident would have been chargeable had his total income been reduced by the amount of income referred to in clause (a) and clause (b).

     (2) Where the gross total income of the non-resident “

     (a) consists only of income by way of interest or dividends other than dividends referred to in section 115-O in respect of bonds or, as the case may be, shares referred to in clause (a) of sub-section (1), no deduction shall be allowed to him under sections 28 to 44C or clause (i) or clause (iii) of section 57 or under Chapter VIA ;

     (b) includes any income referred to in clause (a) or clause (b) of sub-section (1) the gross total income shall be reduced by the amount of such income and the deduction under Chapter VIA shall be allowed as if the gross total income as so reduced, were the gross total income of the assessee.

     (3) Nothing contained in the first and second provisos to section 48 shall apply for the computation of long-term capital gains arising out of the transfer of long-term capital asset, being bonds or shares referred to in clause (b) of sub-section (1).

     (4) It shall not be necessary for a non-resident to furnish under sub-section(1) of section 139 a return of his income if “

     (a) his total income in respect of which he is assessable under this Act during the previous year consisted only of income referred to in clause (a) of sub-section (1) ; and

     (b) the tax deductible at source under the provisions of Chapter XVIIB has been deducted from such income.

     (5) Where the assessee acquired shares or bonds in an amalgamated or resulting company by virtue of his holding shares or bonds in the amalgamating or demerged company, as the case may be, in accordance with the provisions of sub-section (1), the provisions of the said sub-section shall apply to such shares or bonds.”

      ↩

766. Substituted by the Finance Act, 2020, for “dividends, other than dividends referred to in section 115-O”.↩

767. Substituted for “re-issued” by the Finance Act, 2002, with effect from 1st April, 2002.↩

768. Omitted by the Finance Act, 2002, with effect from 1st April, 2002. Prior to omission, clause (iv) stood as under :

     “(iv) issued in accordance with such scheme as the Central Government may, by notification in the Official Gazette, specify in this behalf, and purchased by him in foreign currency through an approved intermediary, against the shares of an Indian company arising out of disinvestment by such company in its subsidiary company, and the shares of both such Indian companies are listed in a recognised stock exchange in India ; or”↩

769. Substituted by the Finance Act, 2020, for “dividends, other than dividends referred to in section 115-O”.↩

770. Substituted by the Finance Act, 2020, for “dividends, other than dividends referred to in section 115-O”.↩

771. Inserted by the Finance Act, 1999, with effect from 1st April, 2000.↩

772. Substituted by the Finance Act, 2001, with effect from 1st April, 2001. Prior to substitution, sub-section (1) stood as under :

     “(1) Where the total income of an assessee, being an individual, who is a resident and an employee of an Indian company engaged in information technology software and information technology services (hereafter in this section referred to as the resident employee), includes”

     (a) income by way of dividends, other than dividends referred to in section 115-O, on Global Depository Receipts of an Indian company engaged in information technology software and information technology services, issued in accordance with such employees” stock option scheme as the Central Government may, by notification in the Official Gazette, specify in this behalf and purchased by him in foreign currency ; or

     (b) income by way of long-term capital gains arising from the transfer of Global Depository Receipts referred to in clause (a),

     the income-tax payable shall be the aggregate of “

     (i) the amount of income-tax calculated on the income by way of dividends, other than dividends referred to in section 115-O, in respect of Global Depository Receipts referred to in clause (a), if any, included in the total income, at the rate of ten per cent ; (ii) the amount of income-tax calculated on the income by way of long-term capital gains referred to in clause (b), if any, at the rate of ten per cent ; and

     (iii) the amount of income-tax with which the resident employee would have been chargeable had his total income been reduced by the amount of income referred to in clauses (a) and (b).”↩

773. Substituted for “income by way of dividends” by the Finance Act, 2003, with effect from 1st April, 2004. Earlier, the expression “other than dividends referred to in section 115-O” was omitted by the Finance Act, 2002, with effect from 1st April, 2003.↩

774. Substituted by the Finance Act, 2020, for “dividends, other than dividends referred to in section 115-O”.↩

775. Substituted for “income by way of dividends” by the Finance Act, 2003, with effect from 1st April, 2004. Earlier, the expression “other than dividends referred to in section 115-O” was omitted by the Finance Act, 2002, with effect from 1st April, 2003.↩

776. Substituted by the Finance Act, 2020, for “dividends, other than dividends referred to in section 115-O”.↩

777. Substituted for “income by way of dividends” by the Finance Act, 2003, with effect from 1st April, 2004. Earlier, the expression “other than dividends referred to in section 115-O” was omitted by the Finance Act, 2002, with effect from 1st April, 2003.↩

778. Substituted by the Finance Act, 2020, for “dividends, other than dividends referred to in section 115-O”.↩

779. Inserted by the Finance Act, 2021.↩

780. Substituted by the Finance Act, 2015, w.e.f. 01.04.2016. for the following:-

     "issued to non¬resident investors against the issue of ordinary shares or foreign currency convertible bonds of issuing company"↩

781. Inserted by the Finance Act, 2021.↩

782. Inserted by the Finance Act, 2021.↩

783. Inserted by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020.↩

784. Substituted by the Finance (No. 2) Act, 1998, with effect from 1st April, 1999. Prior to substitution, clause (a) as amended by the Finance Act, 1997, with effect from 1st April, 1998, stood as under :

     “(a) income other than income by way of dividends referred to in section 115-O received in respect of securities (other than units referred to in section 115AB) listed in recognised stock exchange in India in accordance with the provisions of the Securities Contracts (Regulation) Act, 1956 (42 of 1956), and any rules made thereunder ; or”↩

785. Substituted for “income” by the Finance Act, 2003, with effect from 1st April, 2004. Earlier, the expression “other than income by way of dividends referred to in section 115-O” was omitted by the Finance Act, 2002, with effect from 1st April, 2003, which was inserted by the Finance Act, 1999, with effect from 1st April, 1999.↩

786. Omitted by the Finance Act, 2020.
     “other than income by way of dividends referred to in section 115-O”↩

787. Inserted by the Finance Act, 2013 w.e.f. 01.04.2014.↩

788. Inserted by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005.↩

789. Substituted for “ten per cent” by the Finance Act, 2008, with effect from 1st April, 2009.↩

790. Omitted by the Finance Act, 2018, with effect from 1st April, 2019 the previous text was :-

     "and"↩

791. Insered by the Finance Act, 2018, with effect from 1st April, 2019.↩

792. Inserted by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020.↩

793. Inserted by the Finance Act, 2021.↩

794. Inserted by the Finance Act, 2021.↩

795. Substituted by the Taxation Laws (Amendment) Act, 2019, for “Tax on income of certain domestic companies”.↩

796. Substituted by the Taxation Laws (Amendment) Act, 2019, for “subject to the other provisions of this Chapter”.↩

797. Inserted by the Taxation Laws (Amendment) Act, 2019.↩

798. Inserted by the Finance Act, 2016, with effect from the 1st day of April, 2017.↩

799. Substituted by the Finance Act, 2020, for “Chapter VI-A under the heading "C.--Deductions in respect of certain incomes".↩

800. Inserted by the Taxation Laws (Amendment) Act, 2019.↩

801. Substituted by the Finance Act, 2022, for “2023”.↩

802. Substituted by the Finance Act, 2020, for “Chapter VI-A under the heading "C.--Deductions in respect of certain incomes" other than the provisions of section 80JJAA”.↩

803. Inserted by the Finance Act, 2020.↩

804. Inserted by the Finance Act, 2020.↩

805. Inserted by the Finance Act, 2020.↩

806. Substituted for “forty per cent” by the Finance Act, 2001, with effect from 1st April, 2002.↩

807. Inserted by the Finance Act, 2012, w.e.f. 01.04.2013.↩

808. Inserted by the Finance Act, 2012, w.e.f. 01.04.2013.↩

809. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following : - "clause (a) or clause (b)"↩

810. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following : - "ten per cent."↩

811. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following : - "clause (a) or clause (b)"↩

812. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following : - "clause (a) or clause (b)"↩

813. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following : - "clause (a) or clause (b)"↩

814. Inserted by the Finance Act, 2002, with effect from 1st April, 2003.↩

815. Inserted by the Finance Act, 2006, with effect from 1st April, 2007.↩

816. Substituted by the Finance (No. 2) Act, 2009, with effect from 1st April, 2010 for the following : -

     "(i) the amount of income-tax calculated on the income by way of any anonymous donation, at the rate of thirty per cent; and"↩

817. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of April, 2015 for the following : -

     " [(ii) the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the aggregate of anonymous donations received.]"↩

818. Inserted by the Finance Act, 2011 w.e.f 01.04.2012.↩

819. Omitted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of April, 2015 for the following : -

     "for the previous year relevant to the assessment year beginning on the 1st day of April, 2012 [or beginning on the 1st day of April, 2013] [or beginning on the 1st day of April, 2014]"↩

820. Inserted by the Finance Act, 2022.↩

821. Inserted by the Finance Act, 2016, with effect from the 1st day of April, 2017.↩

822. Substituted by Finance Act, 2017 w.e.f. 01.04.2018 for the following:-

     "an assessee, being an individual, a Hindu undivided family or a firm,"↩

823. Substituted by the Finance Act, 2020, for “or companies”.↩

824. Substituted by Finance Act, 2017 w.e.f. 01.04.2018.↩

825. Substituted by the Finance Act, 2020, for “under section 12A or section 12AA”.↩

826. Substituted by the Taxation Laws (Second Amendment) Act, 2016, for the following:-

     " [(1) Where the total income of an assessee includes any income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D, the income-tax payable shall be the aggregate of--

     (a) the amount of income-tax calculated on income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D, at the rate of thirty per cent.; and

     (b) the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the amount of income referred to in clause (a)."↩

827. Inserted by the Finance Act, 2016, with effect from the 1st day of April, 2017.↩

828. Inserted by the Finance Act, 2018, with effect from the 1st day of April, 2017.↩

829. Inserted by the Finance Act, 2016, with effect from the 1st day of April, 2017.↩

830. Inserted by the Finance Act, 2017 w.e.f. 01.04.2018.↩

831. Inserted by the Finance Act, 2022.↩

832. Inserted by the Finance Act, 2022.↩

833. Chapter XII-A, consisting of sections 115C, 115D, 115E, 115F, 115G, 115H and 115-I, inserted by the Finance Act, 1983, w.e.f. 1-6-1983.↩

834. Substituted by the Finance Act, 2013 for the following : - "the Foreign Exchange Regulation Act, 1973 (46 of 1973)"↩

835. Substituted for “income derived” by the Finance Act, 2003, with effect from 1st April, 2004. Earlier, the expression “other than dividends referred to in section 115-O” was omitted by the Finance Act, 2002, with effect from 1st April, 2003, which was inserted by the Finance Act, 1997, with effect from 1st April, 1998.↩

836. Omitted by the Finance Act, 2020.
     “other than dividends referred to in section 115-O”↩

837. Now omitted by the Finance (No. 2) Act, 1996, with retrospective effect from 1st April, 1989.↩

838. Inserted by the Finance Act, 1987, w.e.f. 1-4-1988. ↩

839. Inserted by the Finance Act, 2000, with effect from 1st April, 2001.↩

840. Substituted by the Finance (No. 2) Act, 2009, with effect from 1st April, 1998 for the following : -

     "if any amount referred to in clauses (a) to (f) is debited to the profit and loss account, and as reduced by, -"↩

841. Inserted by the Finance Act, 2000, with effect from 1st April, 2001.↩

842. Substituted by the Finance Act, 2002, with retrospective effect from 1st April, 1997. Prior to substitution, clause (iii) stood as under :

     “(iii) the amount of loss brought forward or unabsorbed depreciation, whichever is less as per books of account.

     Explanation : For the purposes of this clause, the loss shall not include depreciation ; or”↩

843. Substituted for “sub-clause (b) or sub-clause (c) of clause (iv) of sub-section (2) of section 80-IA” by the Finance Act, 1999, with effect from 1st April, 2000.↩

844. Substituted for “profits and gains under sub-

     section (5) of section 80-IA” by the Finance Act, 1999, with effect from 1st April, 2000.↩

845. Substituted for “under sub-section (12) of section 80-IA, and subject to fulfilling the conditions laid down in sub-section (4A) of section 80-IA” by the Finance Act, 1999, with effect from 1st April, 2000↩

846. Inserted by the Finance Act, 2005, with effect from 1st April, 2006.↩

847. Sub-sections (2) and (2A) substituted for sub-section (2) by the Finance Act, 2006, with effect from 1st April, 2007. Prior to substitution, sub-section (2) as amended by the Finance Act, 2005, with effect from 1st April, 2006, stood as under:

     “(2) The tax credit to be allowed under sub-section (1) shall be the difference of the tax paid for any assessment year under sub-section (1) of section 115JA or under sub-section (1) of section 115JB and the amount of tax payable by the assessee on his total income computed in accordance with the other provisions of this Act :

     Provided that no interest shall be payable on the tax credit allowed under sub-section (1).”↩

848. Inserted by the Finance Act, 2017 w.e.f. 01.04.2018.↩

849. Sub-sections (3) and (3A) substituted for sub-section (3) by the Finance Act, 2006, with effect from 1st April, 2007. Prior to substitution, sub-section (3) stood as under:

     “(3) The amount of tax credit determined under sub-section (2) shall be carried forward and set-off in accordance with the provisions of sub-section (4) and sub-section (5) but such carry forward shall not be allowed beyond the fifth assessment year immediately succeeding the assessment year in which tax credit becomes allowable under sub¬section (1).”↩

850. Substituted by the Finance Act, 2017 w.e.f. 01.04.2018 for the following:-

     " [tenth assessment year]"↩

851. Inserted by the Finance Act, 2000, with effect from 1st April, 2001.↩

852. Inserted by the Finance Act, 2010 w.e.f. 01.04.2011.↩

853. Inserted by the Taxation Laws (Amendment) Act, 2019.↩

854. Substituted by the Finance Act, 2011 w.e.f 01.04.2012 for the following:-" [the 1st day of

     April, 2011]]"↩

855. Substituted by the Finance Act, 2011 w.e.f 01.04.2012 for the following:-" [eighteen per cent]]↩

856. Substituted for “the tax payable for the relevant previous year shall be deemed to be seven and one-half per cent of such book profit” by the Finance Act, 2002, with retrospective effect from 1st April, 2001.↩

857. Substituted by the Finance (No. 2) Act, 2009 with effect from 1st April, 2010 for the words :- " [ten per cent]"↩

858. Substituted by the Finance Act, 2011 w.e.f 01.04.2012 for the following:-" [eighteen per cent]]↩

859. Inserted by the Finance Act, 2000, with effect from 1st April, 2001.↩

860. Inserted by the Taxation Laws (Amendment) Act, 2019.↩

861. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following: -

     "Every assessee, being a company, shall, for the purposes of this section, prepare its profit and loss account for the relevant previous year in accordance with the provisions of Parts II and III of Schedule VI to the Companies Act, 1956 (1 of 1956)"↩

862. Substituted by Finance Act, 2017 for the following:-"profit and loss account".↩

863. Substituted by Finance Act, 2017 for the following:-"Part II of Schedule VI"↩

864. Substituted by Finance Act, 2017 for the following:-"the Companies Act, 1956(1 of 1956)".↩

865. Substituted by Finance Act, 2017 for the following:-"proviso to sub-section (2) of section 211"↩

866. Substituted by Finance Act, 2017 for the following:-"the Companies Act, 1956(1 of 1956)".↩

867. Substituted by Finance Act, 2017 for the following:-"profit and loss account".↩

868. Substituted by Finance Act, 2017 for the following:-"profit and loss account".↩

869. Substituted by Finance Act, 2017 for the following:-"profit and loss account".↩

870. Substituted by Finance Act, 2017 for the following:-"profit and loss account".↩

871. Substituted by Finance Act, 2017 for the following:-"section 210"↩

872. Substituted by Finance Act, 2017 for the following:-"the Companies Act, 1956(1 of 1956)".↩

873. Substituted by Finance Act, 2017 for the following:-"the Companies Act, 1956(1 of 1956)".↩

874. Substituted by Finance Act, 2017 for the following:-"profit and loss account".↩

875. Substituted by Finance Act, 2017 for the following:-"profit and loss account".↩

876. Numbered by the Finance Act, 2008, with retrospective effect from 1st April, 2001.↩

877. Substituted by Finance Act, 2017 for the following:-"net profit"↩

878. Substituted by Finance Act, 2017 for the following:-"profit and loss account".↩

879. Inserted by the Finance Act, 2002, with effect from 1st April, 2003.↩

880. Substituted for “section 10 [other than the provisions contained in clause (23G) thereof] or section 10A or section 10B or section 11 or section 12 apply” by the Finance Act, 2006, with effect from 1st April, 2007. Earlier “section 10 [other than the provisions contained in clause (23G) thereof” in the quoted portion was substituted for “section 10” by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005.↩

881. Expression “section 10A or section 10B or” omitted by the Finance Act, 2007, with effect from 1st April, 2008.↩

882. Inserted by the Finance Act, 2015, w.e.f. 01.04.2016.↩

883. Substituted by the Finance Act, 2021, for “interest, royalty”.↩

884. Inserted by the Finance Act, 2016, w.e.f. 1st day of April, 2017.↩

885. Inserted by the Finance Act, 2006, with effect from 1st April, 2007.↩

886. Inserted by the Finance Act, 2008, with retrospective effect from 1st April, 2001.↩

887. Substituted by the Finance (No. 2) Act, 2009, with effect from 1st April, 2001 for the following : -

     “if any amount referred to in clauses (a) to (h) is debited to the profit and loss account, and as reduced by -"↩

888. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following: -

     "if any amount referred to in clauses (a) to (i) is debited to the profit and loss account, and as reduced by.--"↩

889. Substituted by Finance Act, 2017 for the following:-"profit and loss account".↩

890. Substituted by Finance Act, 2017 for the following:-"profit and loss account".↩

891. Substituted by the Finance Act, 2002, with retrospective effect from 1st April, 2001. Prior to substitution, clause (i) stood as under :

     “(i) the amount withdrawn from any reserves or provisions if any such amount is credited to the profit and loss account :

     Provided that, where this section is applicable to an assessee in any previous year (including the relevant previous year), the amount withdrawn from reserves created or provisions made in a previous year relevant to the assessment year commencing on or after the 1st day of April, 2001 shall not be reduced from the book profit unless the book profit of such year has been increased by those reserves or provisions (out of which the said amount was withdrawn) under this Explanation; or”↩

892. Substituted by Finance Act, 2017 for the following:-"profit and loss account".↩

893. Substituted by Finance Act, 2017 for the following:-"profit and loss account".↩

894. Substituted for “provisions of section 10” by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005.↩

895. Substituted for “section 10 [other than the provisions contained in clause (23G) thereof]” by the Finance Act, 2006, with effect from 1st April, 2007.↩

896. Expression “section 10A or section 10B or” omitted by the Finance Act, 2007, with effect from 1st April, 2008.↩

897. Substituted by Finance Act, 2017 for the following:-"profit and loss account".↩

898. Inserted by the Finance Act, 2006, with effect from 1st April, 2007.↩

899. Substituted by Finance Act, 2017 for the following:-"profit and loss account".↩

900. Inserted by the Finance Act, 2006, with effect from 1st April, 2007.↩

901. Substituted by Finance Act, 2017 for the following:-"profit and loss account".↩

902. Inserted by the Finance Act, 2015, w.e.f. 01.04.2016.↩

903. Substituted by Finance Act, 2017 for the following:-"profit and loss account".↩

904. Substituted by the Finance Act, 2021.↩

905. Substituted by Finance Act, 2017 for the following:-"profit and loss account".↩

906. Substituted by Finance Act, 2017 for the following:-"profit and loss account".↩

907. Substituted by the Finance Act, 2016, w.e.f. 01.04.2017 for the following previous text: -"may be;"↩

908. Inserted by the Finance Act, 2016, w.e.f. 1st day of April, 2017.↩

909. Inserted by the Finance Act, 2018, w.e.f. 1st day of April, 2001.↩

910. Substituted by the Finance Act, 2002, with retrospective effect from 1st April, 2001. Prior to substitution, clause (iii) stood as under :

     “(iii) the amount of loss brought forward or unabsorbed depreciation, whichever is less as per books of account.

     Explanation : For the purposes of this clause, the loss shall not include depreciation ; or”↩

911. Inserted by the Finance Act, 2018, w.e.f. 1st day of April, 2001.↩

912. Omitted by the Finance Act, 2011 w.e.f. 01.04.2005 for the following : -

     "(iv) the amount of profits eligible for deduction under section 80HHC, computed under clause (a) or clause (b) or clause (c) of sub-section (3) or sub-section (3A), as the case may be, of that section, and subject to the conditions specified in that section ; or

     (v) the amount of profits eligible for deduction under section 80HHE computed under sub-section (3) or sub-section (3A), as the case may be, of that section, and subject to the conditions specified in that section; or

     (vi) the amount of profits eligible for deduction under section 80HHF computed under sub-section (3) of that section, and subject to the conditions specified in that section ; or"↩

913. Inserted by the Finance Act, 2008, with retrospective effect from 1st April, 2001.↩

914. Substituted by Finance Act, 2017 for the following:-"profit and loss account".↩

915. Inserted by the Finance Act, 2015, w.e.f. 01.04.2016.↩

916. Inserted by the Finance Act, 2008, with retrospective effect from 1st April, 2001.↩

917. Inserted by the Finance Act, 2012, w.e.f. 01.04.2013.↩

918. Substituted by Finance Act, 2017 for the following:-"proviso to sub-section (2) of section 211 of the Companies Act, 1956"↩

919. Substituted by Finance Act, 2017 for the following:-"profit and loss account".↩

920. Substituted by Finance Act, 2017 for the following:-"Part II and Part III of Schedule VI to the Companies Act, 1956"↩

921. Inserted by the Finance Act, 2016, w.e.f. 1st day of April, 2001.↩

922. Inserted by the Finance Act, 2018, w.e.f. 1st day of April, 2001.↩

923. Renumbered by the Finance Act, 2016, w.e.f. 1st day of April, 2001 for the Explanation 4 to Change Explanation 5.↩

924. Inserted by the Finance Act, 2015, w.e.f. 01.04.2016.↩

925. Inserted by Finance Act, 2017.↩

926. Inserted by the Finance Act, 2021.↩

927. See rule 40B and Form No. 29B. For analysis, see Mashbra's Income-tax Rules.↩

928. Substituted by the Finance Act, 2020, for “along with the return of income filed under sub-section (1) of section 139”.↩

929. Substituted by the Taxation Laws (Amendment) Act, 2019, for

     “(5A) The provisions of this section shall not apply to any income accruing or arising to a company from life insurance business referred to in section 115B.”↩

930. Inserted by the Special Economic Zones Act, 2005, with effect from 10th February, 2006. Under section 27 of the Special Economic Zones Act, 2005, effective from 10th February, 2006, the provisions of the Income-tax Act, 1961, as in force for the time being, apply to, or in relation to, the Developer or entrepreneur for carrying on the authorised operations in a Special Economic Zone or Unit subject to the modifications specified in the Second Schedule to that Act. The above amendment is specified in the Second Schedule to that Act.↩

931. Inserted by the Finance Act, 2011 w.e.f. 01.04.2012.↩

932. Inserted by the Finance Act, 2016, w.e.f. 1st day of April, 2017.↩

933. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following : - "LIMITED LIABILITY PARTNERSHIPS"↩

934. Omitted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of April, 2015 for the following : -

     "and"↩

935. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of April, 2015 for the following : - "under section 10AA"↩

936. Inserted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of April, 2015.↩

937. Substituted by the Finance Act, 2020, for “in such form as may be prescribed, from an accountant, certifying that the adjusted total income and the alternate minimum tax have been computed in accordance with the provisions of this Chapter and furnish such report on or before the due date of furnishing of return of income under sub-section (1) of section 139”.↩

938. Substituted by the Finance Act, 2022, for

     “(4) Notwithstanding anything contained in sub-section (1), where the person referred to therein, is a unit located in an International Financial Services Centre and derives its income solely in convertible foreign exchange, the provisions of sub-section (1) shall have effect as if for the words "eighteen and one-half per cent.", the words "nine per cent." had been substituted.”↩

939. Inserted by the Finance Act, 2020.↩

940. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following : -

     " [(1) Notwithstanding anything contained in this Act, where the regular income-tax payable for a previous year by a limited liability partnership is less than the alternate minimum tax payable for such previous year, the adjusted total income shall be deemed to be the total income of the limited liability partnership for such previous year and it shall be liable to pay income-tax on such total income at the rate of eighteen and one-half per cent.

     (2) Adjusted total income referred to in sub-section (1) shall be the total income before giving effect to this Chapter as increased by--

     (i) deductions claimed, if any, under any section included in Chapter VI-A under the heading "C.--Deductions in respect of certain incomes"; and

     (ii) deduction claimed, if any, under section 10AA.

     (3) Every limited liability partnership to which this section applies shall obtain a report, in such form as may be prescribed, from an accountant certifying that the adjusted total income and the alternate minimum tax have been computed in accordance with the provisions of this Chapter and furnish such report on or before the due date of filing of return under sub-section (1) of section 139."↩

941. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following: -

     "a limited liability partnership under section 115JC shall be allowed to it"↩

942. Inserted by the Finance Act, 2017 w.e.f. 01.04.2018.↩

943. Substituted by the Finance Act, 2017 w.e.f. 01.04.2018 for the following:-

     "tenth assessment year"↩

944. Inserted by the Finance Act, 2020.↩

945. Substituted by the Finance Act, 2018, w.e.f. 01.04.2019 for the following: -

     "(b) "alternate minimum tax" means the amount of tax computed on adjusted total income at a rate of eighteen and one-half per cent.;"↩

946. Substituted by the Finance Act, 2022, for

     “(i) in case of an assessee being a unit referred to in sub-section (4) of section 115JC, at a rate of nine per cent.;”↩

947. Inserted by the Finance Act, 2018, w.e.f. 01.04.2019.↩

948. Omitted by the by the Finance Act, 2012, w.e.f. 01.04.2013 for the following: -

     "(c) "limited liability partnership" shall have the same meaning as assigned to it in clause (n) of sub-section (1) of section 2 of the Limited Liability Partnership Act, 2008(6 of 2009);"↩

949. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following: -

     "a limited liability partnership on its total income"↩

950. Inserted by the Finance Act, 2018, w.e.f. 01.04.2019.↩

951. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following: - "a limited liability partnership"↩

952. Inserted by the Finance Act, 2012, w.e.f. 01.04.2013.↩

953. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of April, 2015 for the following : - "(b) section 10AA."↩

954. Inserted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of April, 2015↩

955. Inserted by the Finance Act, 2012. w.e.f. 01.04.2013.↩

956. Inserted by the Finance Act, 2016, with effect from the 1st day of April, 2017.

      ↩

957. Omitted by the Finance Act, 1997, with effect from 1st April, 1998.↩

958. Omitted by the Finance Act, 1997, with effect from 1st April, 1998.↩

959. Omitted by the Finance Act, 1997, with effect from 1st April, 1998.↩

960. Omitted by the Finance Act, 1997, with effect from 1st April, 1998.↩

961. Chapter XII-D, consisting of sections 115-O to 115Q, inserted by the Finance Act, 1997, w.e.f. 1-6-1997.↩

962. Substituted by the Finance Act, 2003, with effect from 1st April, 2003. Prior to substitution, sub-section (1) as amended by the Finance Act, 2000, with effect from 1st June, 2000 ; Finance Act, 2001, with effect from 1st June, 2001 and Finance Act, 2002, with effect from 1st April, 2003, stood as under :

     “(1) Notwithstanding anything contained in any other provision of this Act and subject to the provisions of this section, in addition to the income-tax chargeable in respect of the total income of a domestic company for any assessment year, any amount declared, distributed or paid by such company by way of dividends (whether interim or otherwise) on or after the 1st day of June, 1997 but on or before the 31st day of March, 2002, whether out of current or accumulated profits shall be charged to additional income-tax (hereafter referred to as tax on distributed profits) at the rate of ten per cent.”↩

963. Inserted by the Finance Act, 2020.↩

964. Substituted for “at the rate of twelve and one-half per cent” by the Finance Act, 2007, with effect from 1st April, 2007.↩

965. Inserted by the Finance Act, 2018 w.e.f. 1st day of April, 2019.↩

966. Substituted by the Finance (No. 2) Act, 2009 with retrospective effect from 1st April, 2009.

     "(1A) The amount referred to in sub-section (1) shall be reduced by the amount of dividend, if any, received by the domestic company during the financial year, if-

     (a) such dividend is received from its subsidiary;

     (b) the subsidiary has paid tax under this section on such dividend; and

     (c) the domestic company is not a subsidiary of any other company:

     Provided that the same amount of dividend shall not be taken into account for reduction more than once.

     Explanation: For the purposes of this sub-section, a company shall be a subsidiary of another company, if such other company holds more than half in nominal value of the equity share capital of the company."↩

967. Substituted by the Finance Act, 2013 w.e.f. 01.06.2013 for the following : -

     "(i) the amount of dividend, if any, received by the domestic company during the financial year, if--

     (a) such dividend is received from its subsidiary; [and]

     (b) the subsidiary has [paid the tax which is payable under this section on such dividend:]

     [***]"↩

968. Inserted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of October, 2014.↩

969. Inserted by the Finance Act, 2018 w.e.f. 1st day of April, 2019.↩

970. Inserted by the Special Economic Zones Act, 2005, with effect from 10th February, 2006. Under section 27 of the Special Economic Zones Act, 2005, effective from 10th February, 2006, the provisions of the Income-tax Act, 1961, as in force for the time being, apply to, or in relation to, the Developer or entrepreneur for carrying on the authorised operations in a Special Economic Zone or Unit subject to the modifications specified in the Second Schedule to that Act. The above amendment is specified in the Second Schedule to that Act.↩

971. Expression “not falling under clause (23G) of section 10” omitted by the Finance Act, 2006, with effect from 1st April, 2007.↩

972. Inserted by the Finance Act, 2011 w.e.f 01.06.2011.↩

973. Inserted by the Finance Act, 2016 w.e.f. 1st day of June, 2016.↩

974. Inserted by the Finance Act, 2016 w.e.f. 1st day of April, 2017.↩

975. Substituted for “one and one-fourth per cent” by the Taxation Laws (Amendment) Act, 2003, with effect from 8th September, 2003. Earlier, “one and one-fourth per cent” was substituted for “one and one-half per cent” by the Finance Act, 2001, with effect from 1st June, 2001 and “one and one-half per cent” was substituted for “two per cent” by the Finance Act, 2000, with effect from 1st June, 2000. ↩

976. Inserted by the Taxation Laws (Amendment) Act, 2019.↩

977. Omitted by the Finance Act 2018.
     “Explanation : For the purposes of this Chapter, the expression “dividends” shall have the same meaning as is given to “dividend” in clause (22) of section 2 but shall not include sub-clause (e) thereof”↩

978. Inserted by the Finance Act, 2013 w.e.f. 01.06.2013.↩

979. Substituted by the Finance Act, 2016 with effect from the 1st day of June, 2016 for the previous text :- "section 77A of the Companies Act, 1956(1 of 1956)"↩

980. Substituted by the Finance Act, 2016 w.e.f. 1st day of June, 2016 for the previous text:-

     "the amount which was received by the company for issue of such shares"↩

981. Inserted by the Finance Act, 2013 w.e.f. 01.06.2013.↩

982. Inserted by the Finance Act, 2013 w.e.f. 01.06.2013.↩

983. Chapter XII-E, consisting of sections 115R to 115T, inserted by the Finance Act, 1999, w.e.f. 1-6-1999.↩

984. Substituted for “any amount of income distributed by the Unit Trust of India to its unit-holders” by the Finance Act, 2002, with effect from 1st April, 2003.↩

985. Substituted by the Finance Act, 2011 w.e.f 01.06.2011. for the following:-"income distributed"↩

986. Substituted for “twenty per cent” by the Finance Act, 2001, with effect from 1st June, 2001. Earlier “twenty per cent” was substituted for “ten per cent” by the Finance Act, 2000, with effect from 1st June, 2000.↩

987. Substituted by the Finance Act, 2003, with effect from 1st April, 2003. Prior to substitution, sub-section (2) as amended by the Finance Act, 2000, with effect from 1st June, 2000 ; Finance Act, 2001 with effect from 1st June, 2001 and Finance Act, 2002, with effect from 1st April, 2003, stood as under :

     “(2) Notwithstanding anything contained in any other provisions of this Act, “any amount of income distributed on or before the 31st day of March, 2002 by the Mutual Fund to its unit-holders shall be chargeable to tax and such Mutual Fund shall be liable to pay additional income-tax at the rate of ten per cent :

     Provided that nothing contained in this sub-section shall apply in respect of any income distributed to a unit-holder of open-ended equity oriented funds in respect of any distribution made from such fund for a period of three years commencing from the 1st day of April, 1999.”↩

988. Inserted by the Finance Act, 2020.↩

989. Substituted for “at the rate of twelve and one-half per cent” by the Finance (No. 2) Act, 2004, with retrospective effect from 9th July, 2004.↩

990. Substituted by the Finance Act, 2018 w.e.f. 01.04.2019 for the following : -

     " [(3A) The person responsible for making payment of the income distributed by the Unit Trust of India or a Mutual Fund and the Unit Trust of India or the Mutual Fund, as the case may be, shall on or before the 15th day of September in each year, furnish to the prescribed income-tax authority, a statement in the prescribed form and verified in the prescribed manner, giving the details of the amount of income distributed to unit-holders during the previous year, the tax paid thereon and such other relevant details as may be prescribed.]"

     " [(i) twenty-five per cent on [income distributed to any person being an individual or a Hindu undivided family] by a money market mutual fund or a liquid fund;

     [(ia) thirty per cent. on income distributed to any other person by a money market mutual fund or a liquid fund;]

     (ii) [twenty-five per cent] on income distributed to any person being an individual or a Hindu undivided family by a fund other than a money market mutual fund or a liquid fund; and

     (iii) twelve per cent on income distributed to any other person by a fund other than a money market mutual fund or a liquid fund:]"↩

991. Inserted by the Finance Act, 2013 w.e.f. 01.06.2013.↩

992. Substituted by the Finance Act, 2013 w.e.f. 01.06.2013 for the following : - "Provided that"↩

993. Substituted by the Finance Act, 2013 w.e.f. 01.06.2013 for the following : -

     "Explanation : For the purposes of this sub-section, “Administrator” and “specified company” shall have the meanings respectively assigned to them in the Explanation to clause (35) of section 10.]"↩

994. Inserted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of October, 2014.↩

995. Omitted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of April, 2015 the previous text was : -↩

996. Substituted for “Unit Trust of India or a Mutual Fund and the Unit Trust of India” by the Finance Act, 2003, with effect from 1st April, 2003.↩

997. Substituted for “one and one-fourth per cent” by the Taxation Laws (Amendment) Act, 2003, with effect from 8th September, 2003. Earlier, “one and one-fourth per cent” was substituted for “one and one-half per cent” by the Finance Act, 2001, with effect from 1st June, 2001 and “one and one-half per cent” was substituted for “two per cent” by the Finance Act, 2000, with effect from 1st June, 2000.↩

998. Substituted for “Unit Trust of India or a Mutual Fund and the Unit Trust of India” by the Finance Act, 2003, with effect from 1st April, 2003.↩

999. Substituted by the Finance Act, 2018, with effect from 1st April, 2019.

     "(b) [***] equity-oriented fund” means “

     (i) the Unit Scheme, 1964 made by the Unit Trust of India ; and

     (ii) such fund where the investible funds are invested by way of equity shares in domestic companies to the extent of more than [sixty-five per cent] of the total proceeds of such fund :

     Provided that the percentage of equity share holding of the fund shall be computed with reference to the annual average of the monthly averages of the opening and closing figures ;"↩

1000. Inserted by the Finance Act, 2007, with effect from 1st April, 2007.↩

1001. Inserted by the Finance Act, 2007, with effect from 1st April, 2007.↩

1002. Inserted by the Finance Act, 2013 w.e.f. 01.06.2013.↩

1003. Omitted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of April, 2015 for the following : -

      "(3) The person responsible for making payment of the income distributed by the securitisation trust shall, on or before the 15th day of September in each year, furnish to the prescribed income-tax authority, a statement in the prescribed form and verified in the prescribed manner, giving the details of the amount of income distributed to investors during the previous year, the tax paid thereon and such other relevant details, as may be prescribed."↩

1004. Inserted by the Finance Act, 2016 w.e.f. 1st day of June, 2016.↩

1005. Inserted by the Finance Act, 2013 w.e.f. 01.06.2013.↩

1006. Inserted by the Finance Act, 2013 w.e.f. 01.06.2013.↩

1007. Inserted by the Finance Act, 2016 w.e.f. 1st day of June, 2016.↩

1008. Inserted by the Finance Act, 2016 w.e.f. 1st day of June, 2016.↩

1009. Inserted by the Finance Act, 2016 w.e.f. 1st day of June, 2016.↩

1010. Inserted by the Finance Act, 2016 w.e.f. 1st day of June, 2016.↩

1011. Inserted by the Finance Act, 2016, with effect from the 1st day of April, 2017.↩

1012. Inserted by the Finance Act, 2016, with effect from the 1st day of June, 2016.↩

1013. Substituted by the Finance Act, 2022, for

      “(1)     Notwithstanding anything contained in this Act, where in any previous year, a trust or institution registered [under section 12AA or section 12AB] has--

      (a)      converted into any form which is not eligible for grant of registration [under section 12AA or section 12AB];

      (b)      merged with any entity other than an entity which is a trust or institution having objects similar to it and registered [under section 12AA or section 12AB]; or

      (c)      failed to transfer upon dissolution all its assets to any other trust or institution registered [under section 12AA or section 12AB] or to any fund or institution or trust or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, within a period of twelve months from the end of the month in which the dissolution takes place, then, in addition to the income-tax chargeable in respect of the total income of such trust or institution, the accreted income of the trust or the institution as on the specified date shall be charged to tax and such trust or institution, as the case may be, shall be liable to pay additional income-tax (herein referred to as tax on accreted income) at the maximum marginal rate on the accreted income.

      (2)     The accreted income for the purposes of sub-section (1) means the amount by which the aggregate fair market value of the total assets of the trust or the institution, as on the specified date, exceeds the total liability of such trust or institution computed in accordance with the method of valuation as may be prescribed:

      Provided that so much of the accreted income as is attributable to the following asset and liability, if any, related to such asset shall be ignored for the purposes of sub-section (1), namely:--

      (i) any asset which is established to have been directly acquired by the trust or institution out of its income of the nature referred to in clause (1) of section 10;

      (ii) any asset acquired by the trust or institution during the period beginning from the date of its creation or establishment and ending on the date from which the registration [under section 12AA or section 12AB] became effective, if the trust or institution had not been allowed any benefit of sections 11 and 12 during the said period:

      Provided further that where due to the first proviso to sub-section (2) of section 12A, the benefit of sections 11 and 12 have been allowed to the trust or the institution in respect of any previous year or years beginning prior to the date from which the registration [under section 12AA or section 12AB] is effective, then, for the purposes of clause (ii) of the first proviso, the registration shall be deemed to have become effective from the first day of the earliest previous year:

      Provided also that while computing the accreted income in respect of a case referred to in clause (c) of sub-section (1), assets and liabilities, if any, related to such asset, which have been transferred to any other trust or institution registered [under section 12AA or section 12AB] or to any fund or institution or trust or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, within the period specified in the said clause, shall be ignored.

      (3)     For the purposes of sub-section (1), a trust or an institution shall be deemed to have been converted into any form not eligible for registration [under section 12AA or section 12AB] in a previous year, if,--

      (i) the registration granted to it [under section 12AA or section 12AB] has been cancelled; or

      (ii) it has adopted or undertaken modification of its objects which do not conform to the conditions of registration and it,--

      (a)      has not applied for fresh registration [under section 12AA or section 12AB] in the said previous year; or

      (b)      has filed application for fresh registration [under section 12AA or section 12AB] but the said application has been rejected.”↩

1014. Substituted by the Finance Act, 2022, for “trust or the institution”.↩

1015. Substituted by the Finance Act, 2022, for “trust or the institution”.↩

1016. Substituted by the Finance Act, 2022, for “trust or the institution”.↩

1017. Substituted by the Finance Act, 2022, for “trust or the institution”.↩

1018. Substituted by the Finance Act, 2022, for “trust or institution”.↩

1019. Substituted by the Finance Act, 2022, for “trust or the institution”.↩

1020. Substituted by the Finance Act, 2022, for “trust or the institution”.↩

1021. Substituted by the Finance Act, 2022, for “trust or the institution”.↩

1022. Substituted by the Finance Act, 2022, for “section 12AB”.↩

1023. Inserted by the Finance Act, 2022.↩

1024. Substituted by the Finance Act, 2020, for “under section 12AA”.↩

1025. Substituted by the Finance Act, 2022, for “trust or institution”.↩

1026. Inserted by the Finance Act, 2016, with effect from the 1st day of June, 2016.↩

1027. Substituted by the Finance Act, 2022, for “trust or the institution”.↩

1028. Substituted by the Finance Act, 2022, for “trust or the institution”.↩

1029. Inserted by the Finance Act, 2022.↩

1030. Substituted by the Finance Act, 2022, for “trust or the institution”.↩

1031. Inserted by the Finance Act, 2016, with effect from the 1st day of June, 2016.↩

1032. Substituted by the Finance Act, 2022, for “trust or the institution”.↩

1033. Substituted by the Finance Act, 2022, for “trust or the institution”.↩

1034. Inserted by the Finance Act, 2022.↩

1035. .Inserted by the Finance Act, 2000, w.e.f. 1-4-2001.↩

1036. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following : - "income received"↩

1037. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following : - "income received"↩

1038. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following : -"The person responsible for making"↩

1039. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following : - "to the person receiving such income"↩

1040. See rule 12C(1). For analysis, see Mashbra”s Income-tax Rules.↩

1041. See rule 12C and Form No. 64. For analysis, see Mashbra”s Income-tax Rules.↩

1042. See rule 12C and Form No. 64. For analysis, see Mashbra”s Income-tax Rules.↩

1043. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following : - "income paid"↩

1044. See rule 12C and Form No. 64. For analysis, see Mashbra”s Income-tax Rules.↩

1045. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following : - "income paid"↩

1046. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following : - "the person receiving such income as it had been"↩

1047. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following : -"had accrued"↩

1048. Inserted by the Finance Act, 2012, w.e.f. 01.04.2013.↩

1049. Inserted by the Finance Act, 2015, w.e.f. 01.04.2016.↩

1050. Re-numbered by the Finance Act, 2012, w.e.f. 01.07.2012 for the following : -"Explanation"↩

1051. Inserted by the Finance Act, 2012, w.e.f. 01.07.2012.↩

1052. Substituted by the Finance Act, 2016, w.e.f. the 1st day of April, 2017, for the previous text :"in clause (23FC)"↩

1053. Omitted by the Finance Act, 2020.
      “sub-clause (a) of”↩

1054. Inserted by the Finance Act, 2015, w.e.f. 01.04.2016.↩

1055. Inserted by the Finance Act, 2015, w.e.f. 01.04.2016.↩

1056. Inserted by the Finance Act, 2021.↩

1057. Chapter XII-G, consisting of sections 115V to 115VZC, inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-4-2005.↩

1058. To make the Indian shipping industry more competitive, a tonnage tax scheme for taxation of shipping profits has been introduced. Many maritime nations have introduced tonnage based taxation. Some of the basic features of the proposed tonnage tax scheme are as follows :

      ·         It is a scheme of presumptive taxation whereby the notional income arising from the operation of a ship is determined based on the tonnage of the ship.

      ·         The notional income is taxed at the normal corporate rate applicable for the year.

      ·         Tax is payable even if there is a loss in an year.

      ·  A company may opt for the scheme and once such option is exercised, there is a lock-in-period of ten years. If a company opts out, it is debarred from re-entry for ten years.

      · Since this is a preferential regime of taxation, certain conditions like creation of reserves, training, etc., are required to be met.

      ·         A company may be expelled in certain circumstances.

      A new Chapter XIIG has been inserted containing sections 115V to 115VZC which provides for special provisions relating to taxation of the income of shipping companies. The Chapter is divided into 7 parts. Part A contains the meaning of certain expressions typically used in shipping business, part B gives the method of computation of tonnage income, part C specifies the procedure for option of tonnage tax scheme, part D gives the conditions for the applicability of the scheme, part E contains the provisions of amalgamation and demerger, part F contains miscellaneous provisions and part G contains the provisions relating to avoidance and exclusion from the scheme.

      Consequential amendments have been made in section 246A to provide for appeal to Commissioner (Appeals) in case the option for tonnage tax scheme is rejected by the Joint Commissioner and in section 253 to provide for appeal to the Appellate Tribunal against the order of expulsion in case of abuse of the scheme. With the introduction of the tonnage tax scheme, the deduction under section 33AC has been withdrawn.

       ↩

1059. Omitted by the Finance Act, 2005, with effect from 1st April, 2006. Prior to omission, clause (vii) stood as under :

      “(vii) dredgers ;”

       ↩

1060. Inserted by the Taxation Laws (Amendment) Act, 2005, with effect from 1st April, 2006.↩

1061. See rule 11Q and Form No. 66.

      2. Substituted by the Finance Act, 2012, w.e.f. 01.04.2013 for the following:-↩

1062. See rule 11R and Form No. 66.↩

1063. See rule 11P and Form No. 65.↩

1064. S.O. 1436(E), dated 30-12-2004 [see 10 CAPJ 500].↩

1065. S.O. 1436(E), dated 30-12-2004 [see 10 CAPJ 500].↩

1066. See rule 11S and Form No. 66.↩

1067. Substituted by the Finance Act, 2020, for “along with the return of income for that previous year”.↩

1068. See rule 11T and Form No. 66.↩

1069. The Chapter XII-H, consisting of sections 115W to 115WL, inserted after Chapter XII-G by the Finance Act, 2005, w.e.f. 1-4-2006.↩

1070. Substituted by the Taxation Laws (Amendment) Act, 2005, with effect from 1st April, 2006. Prior to substitution, clause (iii), effective from the same date, stood as under:

      “(iii) an association of persons or a body of individuals, whether incorporated or not, but excluding any fund or trust or institution eligible for exemption under clause (23C) of section 10 or registered under section 12AA ;”↩

1071. Inserted by the Taxation Laws (Amendment) Act, 2005, with effect from 1st April, 2006.↩

1072. Word “and” omitted by the Finance Act, 2007, with effect from 1st April, 2008.↩

1073. Substituted for “employees” by the Finance Act, 2007, with effect from 1st April, 2008.↩

1074. Inserted by the Finance Act, 2007, with effect from 1st April, 2008.↩

1075. Substituted for “and includes employees” stock option” by Finance Act, 2008, with effect from 1st April, 2008.↩

1076. Inserted by the Finance Act, 2008, with effect from 1st April, 2009:↩

1077. Substituted for “bill boards” by the Finance Act, 2007, with effect from 1st April, 2008.↩

1078. Word “and” omitted by the Finance Act, 2006, with effect from 1st April, 2007.↩

1079. Substituted by the Finance Act, 2007, with effect from 1st April, 2008. Prior to substitution, clause (vii) as instead by the Finance Act, 2006, with effect from 1st April, 2007, stood as under:

      “(vii) being the expenditure on distribution of free samples of medicines or of medical equipment, to doctors; and”↩

1080. Inserted by the Finance Act, 2006, with effect from 1st April, 2007.↩

1081. Substituted by the Finance Act, 2008, with effect from 1st April, 2009. Prior to substitution the Explanation stood as under:

      “Explanation : For the purposes of this clause, any expenditure incurred or payment made to fulfill any statutory obligation or mitigate occupational hazards or provide first aid facilities in the hospital or dispensary run by the employer shall not be considered as expenditure for employees” welfare;”↩

1082. Expression “, tour and travel (including foreign travel”, omitted by the Finance Act, 2006, with effect from 1st April, 2007.↩

1083. Omitted by the Finance Act, 2008, with effect from 1st April, 2008. Prior to omission, clause (K) stood as under:

      “(K) maintenance of any accommodation in the nature of guest house other than accommodation used for training purposes ;”↩

1084. Should be omitted.↩

1085. Should be inserted.↩

1086. Inserted by the Finance Act, 2006, with effect from 1st April, 2007.↩

1087. Inserted by the Finance Act, 2006, with effect from 1st April, 2007.↩

1088. Substituted by the Finance Act, 2006, with effect from 1st April, 2007. Prior to substitution, clause (b) stood as under :

      “(b) actual amount of contribution referred to in clause (c) of sub-section (1) of section 115WB;”↩

1089. Inserted by the Finance Act, 2007, with effect from 1st April, 2008.↩

1090. See rules 40C and 40D.↩

1091. For the expression within bold square

      brackets, the expression “clauses (A) to (L)” shall be substituted by the Finance Act, 2008, with effect from 1st April, 2009.↩

1092. For the expression within bold square brackets, the expression “clauses (M) to (P)” shall be substituted by the Finance Act, 2008, with effect from 1st April, 2009.↩

1093. Inserted by the Finance Act, 2006, with effect from 1st April, 2007.↩

1094. Inserted by the Finance Act, 2006, with effect from 1st April, 2007.↩

1095. Inserted by the Finance Act, 2006, with effect from 1st April, 2007.↩

1096. Inserted by the Finance Act, 2006, with effect from 1st April, 2007.↩

1097. Inserted by the Finance Act, 2006, with effect from 1st April, 2007.↩

1098. Should be clause (H).↩

1099. Should be clause (I).↩

1100. See rule 12.↩

1101. See rule 12.↩

1102. See rule 12.↩

1103. Substituted for “31st day of October” by the Finance Act, 2008, with effect from 1st April 2008.↩

1104. See rule 12.↩

1105. See rule 12.↩

1106. See rule 12.↩

1107. For Legal Summary on Chapter XIIH, see after section 115WL.↩

1108. Sub-sections (1), (1A), (1B) and (1C) substituted for sub-section (1) by the Finance Act, 2008, with effect from 1st April, 2008. Prior to substitution, sub-section (1) stood as under: “(1) Where a return has been made under section 115WD, - (i) if any tax or interest is found due on the basis of such return, after adjustment of any advance tax paid, any tax paid on self-assessment and any amount paid otherwise by way of tax or interest, then without prejudice to the provisions of sub-section (2), an intimation shall be sent to the assessee specifying the sum so payable, and such intimation shall be deemed to be a notice of demand issued under section 156 and all the provisions of this Act shall apply accordingly; and (ii) if any refund is due on the basis of such return, it shall be granted to the assessee and an intimation to this effect shall be sent to the assessee: Provided that except as otherwise provided in this sub-section, the acknowledgement of the return shall be deemed to be an intimation under this sub-section where either no sum is payable by the assessee or no refund is due to him: Provided further that no intimation under this sub-section shall be sent after the expiry of one year from the end of the financial year in which the return is made.”↩

1109. Substituted by the Finance (No. 2) Act, 2009, with retrospective effect from 1st April, 2009. “after the 31st day of March, 2009”4. Substituted for “twelve months from the end of the month” by the Finance Act, 2008, with effect from 1st April, 2008.↩

1110. Substituted by the Finance Act, 2010 w.e.f. for the following :"after the 31st day of March, 2010".↩

1111. See rule 12.↩

1112. See rule 12.↩

1113. See rule 12.↩

1114. Substituted by the Finance Act, 2007, with effect from 1st June, 2007. Prior to substitution, sub-section (2) stood as under :

      “(2) The amount of advance tax payable by an assessee in the financial year shall be thirty per cent of the value of the fringe benefits referred to in section 115WC, paid or payable in each quarter and shall be payable on or before the 15th day of the month following such quarter:

      Provided that the advance tax payable for the quarter ending on the 31st day of March of the financial year shall be payable on or before the 15th day of March of the said financial year.”

       ↩

1115. Sub-sections (3), (4) and (5) substituted for sub-section (3) by the Finance Act, 2007, with effect from 1st June, 2007. Prior to substitution, sub-section (3) stood as under :

      “(3) Where an assessee, has failed to pay the advance tax for any quarter or where the advance tax paid by him is less than thirty per cent of the value of fringe benefits paid or payable in that quarter, he shall be liable to pay simple interest at the rate of one per cent on the amount by which the advance tax paid falls short of, thirty per cent of the value of fringe benefits for any quarter, for every month or part of the month for which the shortfall continues.”

       ↩

1116. Inserted by the Finance Act, 2007, with effect from 1st April, 2007.↩

1117. Inserted by the Finance Act, 2008, with effect from 1st April, 2008.↩

1118. Inserted by the Finance (No. 2) Act, 2009, with retrospective effect from 1st April, 2009.↩

1119. Inserted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of June, 2013.↩

1120. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013 for the following:-"Chief Commissioner"↩

1121. Inserted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of June, 2013.↩

1122. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Director"↩

1123. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1124. Inserted by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998.↩

1125. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Director General"↩

1126. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013 for the following:-"Chief Commissioner"↩

1127. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1128. Substituted for “Assistant Commissioner” by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998.↩

1129. The expression “Deputy Commissioner (Appeals) or the” omitted by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998.↩

1130. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of June, 2013 for the following :-"Commissioner"↩

1131. Substituted for “115P, 115S” by the Finance Act, 2005, with effect from 1st April, 2006. Earlier the quoted portion was inserted by the Finance (No. 2) Act, 2004, with effect from 1st October, 2004.↩

1132. Inserted by the Finance Act, 2002, with effect from 1st June, 2002.↩

1133. Inserted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of October, 2014.↩

1134. Inserted by the Finance Act, 2022.↩

1135. Inserted by the Finance Act, 2016, w.e.f. the 1st day of April, 2017.↩

1136. Inserted by the Finance Act, 2017.↩

1137. Substituted for “any class of incomes” by the Finance Act, 2005, with effect from 1st April, 2006.↩

1138. See rule 111B. For analysis, see Mashbra”s Income-tax Rules.↩

1139. The expression “Deputy Commissioner (Appeals) or the” omitted by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998.↩

1140. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of June, 2013 for the following :-"Commissioner"↩

1141. Inserted by the Finance Act, 2020.↩

1142. Inserted by the Finance Act, 2006, with retrospective effect from 1st April, 1988.↩

1143. Inserted by the Finance Act, 2007, with retrospective effect from 1st June, 1994.↩

1144. Inserted by the Finance Act, 2007, with retrospective effect from 1st October, 1996.↩

1145. Substituted for “Deputy Commissioner” by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998.↩

1146. Substituted for “Deputy Director” by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998.↩

1147. Inserted by the Finance Act, 2007, with retrospective effect from 1st June, 1994.↩

1148. Inserted by the Finance Act, 2007, with retrospective effect from 1st October, 1996.↩

1149. Substituted for “Deputy Commissioner” by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998.↩

1150. Substituted for “Deputy Director” by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998.↩

1151. Substituted for “Deputy Commissioner” by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998.↩

1152. Omitted by the Direct Tax Laws (Amendment) Act, 1987, with effect from 1st April, 1988.↩

1153. Omitted by the Direct Tax Laws (Amendment) Act, 1987, with effect from 1st April, 1988.↩

1154. Omitted by the Direct Tax Laws (Amendment) Act, 1987, with effect from 1st April, 1988.↩

1155. Omitted by the Direct Tax Laws (Amendment) Act, 1987, with effect from 1st April, 1988.↩

1156. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Director General"↩

1157. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013 for the following:-"Chief Commissioner"↩

1158. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1159. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Director General"↩

1160. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013 for the following:-"Chief Commissioner"↩

1161. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1162. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Director General"↩

1163. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013 for the following:-"Chief Commissioner"↩

1164. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1165. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Director General"↩

1166. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013 for the following:-"Chief Commissioner"↩

1167. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1168. Substituted for “under sub-section (1) of section 139” by the Finance Act, 2005, with effect from 1st April, 2006.↩

1169. Substituted for “sub-section (2) of section 143” by the Finance Act, 2005, with effect from 1st April, 2006.↩

1170. Substituted for “sub-section (1) of section 142 or under section 148 for the making of the return or by the notice under the first proviso to section 144” by the Finance Act, 2005, with effect from 1st April, 2006.↩

1171. Inserted by the Finance Act, 2016, w.e.f. the 1st day of June, 2016.↩

1172. Omitted by the Direct Tax Laws (Amendment) Act, 1987, with effect from 1st April, 1988.↩

1173. Omitted by the Direct Tax Laws (Amendment) Act, 1987, with effect from 1st April, 1988.↩

1174. Omitted by the Direct Tax Laws (Amendment) Act, 1987, with effect from 1st April, 1988.↩

1175. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Director General"↩

1176. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013 for the following:-"Chief Commissioner"↩

1177. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1178. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Director General"↩

1179. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013 for the following:-"Chief Commissioner"↩

1180. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1181. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Director General"↩

1182. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013 for the following:-"Chief Commissioner"↩

1183. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1184. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Director General"↩

1185. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013 for the following:-"Chief Commissioner"↩

1186. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1187. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Director General"↩

1188. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013 for the following:-"Chief Commissioner"↩

1189. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1190. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Director General"↩

1191. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013 for the following:-"Chief Commissioner"↩

1192. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1193. Omitted by the Direct Tax Laws (Amendment) Act, 1987, with effect from 1st April, 1988.↩

1194. Omitted by the Direct Tax Laws (Amendment) Act, 1987, with effect from 1st April, 1988.↩

1195. Omitted by the Direct Tax Laws (Amendment) Act, 1987, with effect from 1st April, 1988.↩

1196. Substituted for “Deputy Commissioner” by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998.↩

1197. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of June, 2013 for the following : - "Commissioner"↩

1198. Substituted by the Finance Act (No. 2) Act, 2009, with effect from 1st April, 2009. for the words :- “and Chief Commissioner or Commissioner”↩

1199. Inserted by the Finance Act, 2011 w.e.f 01.06.2011.↩

1200. Omitted by the Direct Tax Laws (Amendment) Act, 1987, with effect from 1st April, 1989↩

1201. Inserted by the Finance Act, 2011 w.e.f 01.06.2011.↩

1202. Substituted for “Assistant Director” by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998.↩

1203. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of June, 2013 for the following : - "Commissioner"↩

1204. Substituted by the Finance (No. 2) Act, 2009, with retrospective effect from 1st April, 1994 for the following : -

      “Where the Director General or Director or the Chief Commissioner or Commissioner or any such Joint Director or Joint Commissioner”↩

1205. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1206. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013 for the following:-"Chief Commissioner"↩

1207. Inserted by the Finance (No. 2) Act, 2009, with effect from 1st October, 1998.↩

1208. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Director"↩

1209. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Director"↩

1210. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1211. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013 for the following:-"Chief Commissioner"↩

1212. Inserted by the Finance (No. 2) Act, 2009, with effect from 1st June, 1994.↩

1213. Substituted for €˜Deputy Director” by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998.↩

1214. Substituted for €˜Deputy Commissioner” by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998.↩

1215. Substituted for €˜Assistant Director” by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998.↩

1216. Substituted for Assistant Commissioner” by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998.↩

1217. Inserted by the Finance (No. 2) Act, 2009, with retrospective effect from 1st June, 1994.↩

1218. Substituted for "Deputy Director” by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998.↩

1219. Substituted for "Deputy Commissioner” by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998.↩

1220. Substituted for Assistant Director” by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998.↩

1221. Substituted for Assistant Commissioner” by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998.↩

1222. Inserted by the Finance Act, 2002, with effect from 1st June, 2002.↩

1223. Inserted by the Finance Act, 2003, with effect from 1st June, 2003.↩

1224. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1225. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013 for the following:-"Chief Commissioner"↩

1226. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1227. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013 for the following:-"Chief Commissioner"↩

1228. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1229. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013 for the following:-"Chief Commissioner"↩

1230. Inserted by the Finance Act, 2003, with effect from 1st June, 2003.↩

1231. Inserted by the Finance (No. 2) Act, 2009, with retrospective effect from 1st April, 2009.↩

1232. Inserted by the Finance Act, 2017 w.e.f. 01.04.1962.↩

1233. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1234. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013 for the following:-"Chief Commissioner"↩

1235. Substituted by the Finance (No. 2) Act, 2009, with effect from 1st June, 1994 for the following :-

      “Commissioner or any such Joint Director or Joint Commissioner as may be empowered in this behalf by the Board”↩

1236. Inserted by the Finance (No. 2) Act, 2009, with retrospective effect from 1st October, 1998.↩

1237. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1238. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013 for the following:-"Chief Commissioner"↩

1239. Inserted by the Finance Act, 2017 w.e.f. 01.10.1975.↩

1240. Omitted by the Finance Act, 2002, with effect from 1st June, 2002.
      “Prior to omission, sub-section (5) as amended by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998, stood as under :

      (5) Where any money, bullion, jewellery or other valuable article or thing (hereafter in this section and in sections 132A and 132B referred to as the assets) is seized under subsection (1) or sub-section (1A), as a result of a search initiated or requisition made before the 1st day of July, 1995, the Assessing Officer, after affording a reasonable opportunity to the person concerned of being heard and making such enquiry as may be prescribed, shall, within one hundred and twenty days of the seizure, make an order, with the previous approval of the Joint Commissioner,”

      (i) estimating the undisclosed income (including the income from the undisclosed property) in a summary manner to the best of his judgment on the basis of such materials as are available with him;

      (ii) calculating the amount of tax on the income so estimated in accordance with the provisions of the Indian Income-tax Act, 1922 (11 of 1922), or this Act;

      (iia) determining the amount of interest payable and the amount of penalty imposable in accordance with the provisions of the Indian Income-tax Act, 1922 (11 of 1922), or this Act, as if the order had been the order of regular assessment;

      (iii) specifying the amount that will be required to satisfy any existing liability under this Act and any one or more of the Acts specified in clause (a) of sub-section (1) of section 230A in respect of which such person is in default or is deemed to be in default, and retain in his custody such assets or part thereof as are in his opinion sufficient to satisfy the aggregate of the amounts referred to in clauses (ii), (iia) and (iii) and forthwith release the remaining portion, if any, of the assets to the person from whose custody they were seized :

      Provided that if, after taking into account the materials available with him, the Assessing Officer is of the view that it is not possible to ascertain to which particular previous year or years such income or any part thereof relates, he may calculate the tax on such income or part, as the case may be, as if such income or part were the total income chargeable to tax at the rates in force in the financial year in which the assets were seized and may also determine the interest or penalty, if any, payable or imposable accordingly :

      Provided further that where a person has paid or made satisfactory arrangements for payment of all the amounts referred to in clauses (ii), (iia) and (iii) or any part thereof, the Assessing Officer may, with the previous approval of the Chief Commissioner or Commissioner, release the assets or such part thereof as he may deem fit in the circumstances of the case.”

      20. Prior to omission, sub-section (6) stood as under :

      €˜(6) The assets retained under sub-section (5) may be dealt with in accordance with the provisions of section 132B.””↩

1241. Omitted by the Finance Act, 2002, with effect from 1st June, 2002.
      “Prior to omission, sub-section (7) stood as under :

      "(7) If the Assessing Officer is satisfied that the seized assets or any part thereof were held by such person, for or on behalf of any other person, the Assessing Officer may proceed under sub-section (5) against such other person and all the provisions of this section shall apply accordingly.””↩

1242. Omitted by the Finance Act, 2002, with effect from 1st June, 2002.
      “Prior to omission, sub-section (7) stood as under :

      "(7) If the Assessing Officer is satisfied that the seized assets or any part thereof were held by such person, for or on behalf of any other person, the Assessing Officer may proceed under sub-section (5) against such other person and all the provisions of this section shall apply accordingly.””↩

1243. Substituted for €˜one hundred and eighty days from the date of the seizure” by the Finance Act, 2002, with effect from 1st June, 2002.↩

1244. Substituted by the Finance Act, 2022, for “order of assessment under”.↩

1245. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1246. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013 for the following:-"Chief Commissioner"↩

1247. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1248. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013 for the following:-"Chief Commissioner"↩

1249. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Director General"↩

1250. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Director"↩

1251. Substituted by the Finance Act, 2002, with effect from 1st June, 2002. Prior to substitution, sub-section (8A), stood as under :

      (8A) An order under sub-section (3) shall not be in force for a period exceeding sixty days from the date of the order, except where the authorised officer, for reasons to be recorded by him in writing, extends the period of operation of the order beyond sixty days, after obtaining the approval of the Director or, as the case may be, Commissioner for such extension :

      Provided that the Director or, as the case may be, Commissioner shall not approve the extension of the period for any period beyond the expiry of thirty days after the completion of all the proceedings under this Act in respect of the years for which the books of account, other documents, money, bullion, jewellery or other valuable articles or things are relevant.”↩

1252. Substituted by the Finance Act, 2002, with effect from 1st June, 2002. Prior to substitution, sub-section (9A) stood as under :

      "(9A) Where the authorised officer has no jurisdiction over the person referred to in clause (a) or clause (b) or clause (c) of sub-section (1), the books of account or other documents or assets seized under that sub-section shall be handed over by the authorised officer to the Assessing Officer having jurisdiction over such person within a period of fifteen days of such seizure and thereupon the powers exercisable by the authorised officer under sub-section (8) or sub-section (9) shall be exercisable by such Assessing Officer.”↩

1253. Inserted by the Finance Act, 2017.↩

1254. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1255. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013 for the following:-"Chief Commissioner"↩

1256. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Director General"↩

1257. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Director"↩

1258. Inserted by the Finance Act, 2002, with effect from 1st June, 2002.↩

1259. Omitted by the Finance Act, 2002, with effect from 1st June, 2002
      ” Prior to omission, sub-section (11) stood as under :

      (11) If any person objects for any reason to an order made under sub-section (5), he may, within thirty days of the date of such order, make an application to the Chief Commissioner or Commissioner, stating therein the reasons for such objection and requesting for appropriate relief in the matter.””↩

1260. Omitted by the Finance Act, 2002, with effect from 1st June, 2002
      ” Prior to omission, sub-section (11A) stood as under :

      "(11A) Every application referred to in sub-section (11) which is pending immediately before the 1st day of October, 1984, before an authority notified under that sub-section as it stood immediately before that day shall stand transferred on that day to the Chief Commissioner or Commissioner, and the Chief Commissioner or Commissioner may proceed with such application from the stage at which it was on that day.

      Provided that the applicant may demand that before proceeding further with the application, he be reheard.””↩

1261. Omitted by the Finance Act, 2002, with effect from 1st June, 2002
      ” Prior to omission, sub-section (12) stood as under :

      “(12) On receipt of the application under sub-section (10) the Board, or on receipt of the application under sub-section (11) the Chief Commissioner or Commissioner, may, after giving the applicant an opportunity of being heard, pass such orders as it or he thinks fit.”↩

1262. Substituted by the Finance Act, 2017 for the following:-

      "[Explanation 1 : For the purposes of sub-section (9A), “execution of an authorisation for search” shall have the same meaning as assigned to it in Explanation 2 to section 158BE.]"↩

1263. See rule 112D and Form No. 45C. For analysis, see Mashbra”s Income-tax Rules.↩

1264. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013 for the following:-"Chief Commissioner"↩

1265. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1266. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Director General"↩

1267. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Director"↩

1268. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013 for the following:-"Chief Commissioner"↩

1269. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1270. Inserted by the Finance (No. 2) Act, 2009, with retrospective effect from 1st June, 1994.↩

1271. Substituted for €˜Deputy Director” by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998.↩

1272. Substituted for "Deputy Commissioner” by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998.↩

1273. Substituted for Assistant Director” by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998↩

1274. Substituted for Assistant Commissioner” by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998.↩

1275. Inserted by the Finance Act, 2017 w.e.f. 01.10.1975.↩

1276. Substituted by the Finance Act, 2002, with effect from 1st June, 2002. Prior to substitution, section 132B stood as under :

      "132B. Application of retained assets.”

      (1) The assets retained under sub-section (5) of section 132 may be dealt with in the following manner, namely :

      (i) The amount of the existing liability referred to in clause (iii) of the said sub-section and the amount of the liability determined on completion of the regular assessment or reassessment for all the assessment years relevant to the previous years to which the income referred to in clause (i) of that sub-section relates (including any penalty levied or interest payable in connection with such assessment or reassessment) and in respect of which he is in default or is deemed to be in default may be recovered out of such assets.

      (ii) If the assets consist solely of money, or partly of money and partly of other assets, the Assessing Officer may apply such money in the discharge of the liabilities referred to in clause (i) and the assessee shall be discharged of such liability to the extent of the money so applied.

      (iii) The assets other than money may also be applied for the discharge of any such liability referred to in clause (i) as remains undischarged and for this purpose such assets shall be deemed to be under distraint as if such distraint was effected by the Assessing Officer, or as the case may be, Tax Recovery Officer under authorisation from the Chief Commissioner or Commissioner under sub-section (5) of section 226 and the Assessing Officer or, as the case may be, Tax Recovery Officer may recover the amount of such liabilities by the sale of such assets and such sale shall be effected in the manner laid down in the Third Schedule.

      (2) Nothing contained in sub-section (1) shall preclude the recovery of the amount of liabilities aforesaid by any other mode laid down in this Act.

      (3) Any assets or proceeds thereof which remain after the liabilities referred to in clause (i) of sub-section (1) are discharged shall be forthwith made over or paid to the persons from whose custody the assets were seized.

      (4) (a) The Central Government shall pay simple interest at the rate of fifteen per cent per annum on the amount by which the aggregate of money retained under section 132 and of the proceeds, if any, of the assets sold towards the discharge of the existing liability referred to in clause (iii) of sub-section (5) of that section exceeds the aggregate of the amounts required to meet the liabilities referred to in clause (i) of sub-section (1) of this section.

      (b) Such interest shall run from the date immediately following the expiry of the period of six months from the date of the order under sub-section (5) of section 132 to the date of the regular assessment or reassessment referred to in clause (i) of sub-section (1) or, as the case may be, to the date of last of such assessments or reassessments.”↩

1277. Substituted by the Finance Act, 2022, for “completion of the assessment under section 153A”.↩

1278. Substituted by the Finance Act, 2015, w.e.f. 01.06.2015. for the following:-

      "deemed to be in default, may be recovered out of such assets"↩

1279. Substituted for "Provided that where the nature and source of acquisition of any such asset is explained “ by the Finance Act, 2003, with effect from 1st June, 2003.↩

1280. Substituted for “six per cent per annum” by the Finance Act, 2007, with effect from 1st April, 2008. Earlier “six per cent” in quoted portion was substituted for “eight per cent” by the Taxation Laws (Amendment) Act, 2003, with effect from 8th September, 2003.↩

1281. Substituted by the Finance Act, 2022, for “under section 153A or under Chapter XIV-B”↩

1282. Re-numbered by the Finance Act, 2013 w.e.f. 01.06.2013.↩

1283. Inserted by the Finance Act, 2013 w.e.f. 01.06.2013.↩

1284. Substituted for “Deputy Commissioner” by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998.↩

1285. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of June, 2013 for the following:- "Commissioner"↩

1286. Substituted for “Deputy Commissioner” by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998.↩

1287. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of June, 2013 for the following:- "Commissioner"↩

1288. Substituted for “Deputy Commissioner” by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998.↩

1289. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of June, 2013 for the following:- "Commissioner"↩

1290. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of June, 2013 for the following:- "Commissioner"↩

1291. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of June, 2013 for the following:- "Commissioner"↩

1292. Inserted by the Finance Act, 2017.↩

1293. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of June, 2013 for the following:- "Commissioner"↩

1294. Inserted by the Finance Act, 2011 w.e.f 01.06.2011.↩

1295. Substituted by the Finance Act, 2017 for the following:-

      "at which a business or profession is carried on, whether such place be the principal place or not of such business or profession, and require any proprietor, employee or any other person who may at that time and place be attending in any manner to, or helping in, the carrying on of such business or profession”"↩

1296. Inserted by the Finance Act, 2017.↩

1297. Inserted by the Finance Act, 2017.↩

1298. Inserted by the Finance Act, 2017.↩

1299. Inserted by the Finance Act, 2017.↩

1300. Inserted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of October, 2014.↩

1301. Inserted by the Finance Act, 2002, with effect from 1st June, 2002.↩

1302. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of October, 2014 for the following : -

      "[(b) retain in his custody any such books of account or other documents for a period exceeding ten days (exclusive of holidays) without obtaining the approval of the Chief Commissioner or Director General therefore, as the case may be,]"↩

1303. Inserted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of October, 2014.↩

1304. Words "any books of account or other documents or” omitted by the Finance Act, 2002, with effect from 1st June, 2002.↩

1305. Substituted by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, for

      “Provided that––

      (a) in a case where the information has been received from such authority, as may be prescribed, no action under sub-section (1) shall be taken by an Assistant Director or a Deputy Director or an Assessing Officer or a Tax Recovery Officer or an Inspector of Income-tax without obtaining the approval of the Joint Director or the Joint Commissioner, as the case may be;

      (b) in any other case, no action under sub-section (1) shall be taken by a Joint Director or a Joint Commissioner or an Assistant Director or a Deputy Director or an Assessing Officer or a Tax Recovery Officer or an Inspector of Income-tax without obtaining the approval of the Director or the Commissioner, as the case may be.”↩

1306. Substituted by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, for

      “(a) “income-tax authority” means a [Principal Commissioner or Commissioner], a Joint Commissioner, a Director, a Joint Director, an Assistant Director or a Deputy Director or an Assessing Officer, or a Tax Recovery Officer, and for the purposes of clause (i) of sub-section (1), clause (i) of sub-section (3) and sub-section (5), includes an Inspector of Income-tax;”↩

1307. Substituted by the Finance Act, 2020, for

      “who is subordinate to the Principal Director General of Income-tax (Investigation) or the Director General of Income-tax (Investigation) or the Principal Chief Commissioner of Income-tax (TDS) or the Chief Commissioner of Income-tax (TDS), as the case may be;”↩

1308. See rule 112E and Form No. 45D. For analysis, see Mashbra”s Income-tax Rules.↩

1309. Substituted for “Deputy Commissioner” by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998.↩

1310. Substituted for “Assistant Director” by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998.↩

1311. Renumbered by the Finance Act, 2016, with effect from the 1st day of June, 2016.↩

1312. Inserted by the Finance Act, 2016, with effect from the 1st day of June, 2016.↩

1313. Inserted by the Finance Act, 2017↩

1314. Substituted for “Deputy Commissioner” by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998.↩

1315. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1316. Substituted for “Deputy Commissioner” by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998.↩

1317. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1318. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013 for the following:-"Chief Commissioner"↩

1319. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1320. Substituted for “Deputy Commissioner” by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998.↩

1321. Omitted by the Finance Act, 1964, with effect from 1st April, 1964.↩

1322. Substituted by the Finance Act, 2013 for the following : -

      "section 2(d) of the Foreign Exchange Regulation Act, 1947 (7 of 1947)"↩

1323. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013 for the following:-"Chief Commissioner"↩

1324. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1325. See rule 113 and Form Nos. 46 to 49. For analysis, see Mashbra”s Income-tax Rules.↩

1326. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013 for the following:-"Chief Commissioner"↩

1327. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1328. Substituted by the Finance Act, 2001, with effect from 1st April, 2001. Prior to substitution, sub-section (1) as amended by the Finance Act, 1997, with effect from 1st April, 1997 ; Finance (No. 2) Act, 1998, with effect from 1st August, 1998 and Finance Act, 1999, with effect from 1st June, 1999, stood as under :

      “(1) Every person, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax, shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed :

      Provided that a person, not furnishing return under this sub-section and residing in such area as may be specified by the Board in this behalf by a notification in the Official Gazette, and who at any time during the previous year fulfils any one of the following conditions, namely :

      (i) is in occupation of an immovable property exceeding a specified floor area, whether by way of ownership, tenancy or otherwise, as may be specified by the Board in this behalf ; or

      (ii) is the owner or the lessee of a motor vehicle other than a two-wheeled motor vehicle, whether having any detachable side car having extra wheel attached to such two-wheeled motor vehicle or not ; or

      (iii) is a subscriber to a telephone ; or

      (iv) has incurred expenditure for himself or any other person on travel to any foreign country ;

      (v) is the holder of the credit card, not being an “add-on” card, issued by any bank or institution ; or

      (vi) is a member of a club where entrance fee charged is twenty-five thousand rupees or more :

      shall furnish a return, of his income during the previous year, on or before the due date in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed :

      Provided further that the Central Government may, by notification in the Official Gazette, specify class or classes of persons to whom the provisions of the first proviso shall not apply.

      Explanation 1 : In this sub-section, “due date” means “

      (a) where the assessee is a company, the 30th day of November of the assessment year;

      (b) where the assessee is a person, other than a company, “

      (i) in a case where the accounts of the assessee are required under this Act or any other law to be audited or where the report of an accountant is required to be furnished under section 80HHC or section 80HHD or where the prescribed certificate is required to be furnished under section 80R or section 80RR or subsection (1) of section 80RRA, or in the case of a co-operative society or in the case of a working partner of a firm whose accounts are required under this Act or any other law to be audited, the 31st day of October of the assessment year ;

      (ii) in a case where the total income referred to in this sub-section includes any income from business or profession, not being a case falling under sub-clause (i), the 31st day of August of the assessment year ;

      (iii) in any other case, the 30th day of June of the assessment year.

      Explanation 2 : For the purposes of sub-clause (i) of clause (b) of Explanation 1, the expression “working partner” shall have the meaning assigned to it in Explanation 4 of clause (b) of section 40.

      Explanation 3 : For the purposes of this sub-section, the expression “motor vehicle” shall have the meaning assigned to it in clause (28) of section 2 of the Motor Vehicles Act, 1988 (59 of 1988).

      Explanation 4 : For the purposes of this sub-section, the expression “travel to any foreign country” does not include travel to the neighbouring countries or to such places of pilgrimage as the Board may specify in this behalf by notification in the Official Gazette.”↩

1329. Substituted for “company” by the Finance Act, 2005, with effect from 1st April, 2006.↩

1330. Substituted for “other than a company” by the Finance Act, 2005, with effect from 1st April, 2006.↩

1331. See rule 12.↩

1332. See rule 12.↩

1333. See rule 12.↩

1334. Substituted for “at any time during the previous year” by the Finance Act, 2005, with effect from 1st April, 2006.↩

1335. Omitted by the Finance Act, 2005, with effect from 1st April, 2006. Prior to omission, clause (iii) as amended by the Finance Act, 2002, with effect from 1st April, 2002, stood as under :

      “(iii) is a subscriber to a cellular telephone not being a wireless in local loop telephone ; or”↩

1336. Substituted for “during the previous year” by the Finance Act, 2006, with effect from 1st April, 2006.↩

1337. See rule 12 and Form No. 2C.↩

1338. See rule 12 and Form No. 2C.↩

1339. See rule 12 and Form No. 2C.↩

1340. Substituted for “company” by the Finance Act, 2005, with effect from 1st April, 2006.↩

1341. Substituted by the Finance Act, 2015, w.e.f. 01.06.2015. for the following:-

      " [Provided also that a person, being a resident, other than not ordinarily resident in India within the meaning of clause (6) of section 6 who is not required to furnish a return under this sub-section and who during the previous year has any asset (including any financial interest in any entity) located outside India or signing authority in any account located outside India, shall furnish, on or before the due date, a return in respect of his income or loss for the previous year in such form and verified in such manner and setting forth such other particulars as may be prescribed.]"↩

1342. Inserted by the Finance Act, 2005, with effect from 1st April, 2006.↩

1343. Substituted by the Finance Act, 2016, w.e.f. the 1st day of April, 2017, for the previous text:- "provisions of section 10A"↩

1344. Inserted by the Finance Act, 2012.↩

1345. Omitted by the Finance Act, 2012 for the following : - " [other than a company referred to in clause (aa)]"↩

1346. Omitted by the Finance Act, 2020.
      “working”↩

1347. Inserted by the Finance Act, 2021.↩

1348. Substituted by the Finance Act, 2020, for “30th day of September”.↩

1349. Inserted by the Finance Act, 2011 w.e.f 01.06.2011.↩

1350. Inserted by the Finance Act, 2021.↩

1351. Substituted by the Finance Act, 2012 for the following : - "being a company, which”↩

1352. Inserted by the Finance Act, 2015, w.e.f. 01.04.2016.↩

1353. Inserted by the Finance Act, 2002, with effect from 1st April, 2002.↩

1354. See Scheme for Bulk Filing of Returns by Salaried Employees, 2002 and Scheme for Filing of Returns by Salaried Employees Through Employer, 2004. See Mashbra”s Income-tax Rules.↩

1355. See Scheme for Bulk Filing of Returns by Salaried Employees, 2002 and Scheme for Filing of Returns by Salaried Employees Through Employer, 2004. See Mashbra”s Income-tax Rules.↩

1356. See Scheme for Bulk Filing of Returns by Salaried Employees, 2002 and Scheme for Filing of Returns by Salaried Employees Through Employer, 2004. See Mashbra”s Income-tax Rules.↩

1357. Inserted by the Finance Act, 2003, with effect from 1st April, 2003.↩

1358. See Electronic Furnishing of Return of Income Scheme, 2007, and, Furnishing of Return of Income on Internet Scheme, 2004. For Scheme, see Mashbra”s Income-tax Rules.↩

1359. See Electronic Furnishing of Return of Income Scheme, 2007, and, Furnishing of Return of Income on Internet Scheme, 2004. For Scheme, see Mashbra”s Income-tax Rules.↩

1360. Inserted by the Finance Act, 2011 w.e.f 01.06.2011.↩

1361. Omitted by the Direct Tax Laws (Amendment) Act, 1987, with effect from 1st April, 1989.↩

1362. Inserted by the Finance Act, 2016, w.e.f. the 1st day of April, 2017.↩

1363. See rules 12 and 12A. For analysis, see Mashbra”s Income-tax Rules.↩

1364. Substituted by the Finance Act, 2016, w.e.f. the 1st day of April, 2017, for the previous text:-

      "(4) Any person who has not furnished a return within the time allowed to him under sub-section (1), or within the time allowed under a notice issued under sub-section (1) of section 142, may furnish the return for any previous year at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier :

      Provided that where the return relates to a previous year relevant to the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, the reference to one year aforesaid shall be construed as a reference to two years from the end of the relevant assessment year."↩

1365. Substituted by the Finance Act, 2021, for “return for any previous year at any time before”.↩

1366. See rules 12 and 12A. For analysis, see Mashbra”s Income-tax Rules.↩

1367. See rules 12 and 12A. For analysis, see Mashbra”s Income-tax Rules.↩

1368. See rules 12 and 12A. For analysis, see Mashbra”s Income-tax Rules.↩

1369. See rules 12 and 12A. For analysis, see Mashbra”s Income-tax Rules.↩

1370. See rules 12 and 12A. For analysis, see Mashbra”s Income-tax Rules.↩

1371. See rules 12 and 12A. For analysis, see Mashbra”s Income-tax Rules.↩

1372. Inserted by the Finance Act, 2002, with effect from 1st April, 2003.↩

1373. Substituted by the Finance Act, 2010 w.e.f. 01.04.2011 for the following : "scientific research association".↩

1374. Inserted by the Finance Act, 2017 w.e.f. 01.04.2018.↩

1375. Inserted by the Finance Act, 2015, w.e.f. 01.04.2016.↩

1376. Substituted for “sub-clause (vi)” by the Taxation Laws (Amendment) Act, 2006, with effect from 1st April, 2006.↩

1377. Inserted by the Finance Act, 2015, w.e.f. 01.04.2016.↩

1378. Substituted for “sub-clause (via)” by the Taxation Laws (Amendment) Act, 2006, with effect from 1st April, 2006.↩

1379. Inserted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of April, 2015.↩

1380. Inserted by the Finance Act, 2017 w.e.f. 01.04.2018.↩

1381. Inserted by the Finance Act, 2017 w.e.f. 01.04.2018.↩

1382. Inserted by the Finance Act, 2011 w.e.f 01.06.2011.↩

1383. Substituted by the Finance Act, 2010 w.e.f. 01.04.2011 for the following : "scientific research association".↩

1384. Inserted by the Finance Act, 2017 w.e.f. 01.04.2018.↩

1385. Inserted by the Finance Act, 2011 w.e.f 01.06.2011.↩

1386. Inserted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of April, 2015.↩

1387. See rule 12. For analysis, see Mashbra”s Income-tax Rules.↩

1388. See rule 12. For analysis, see Mashbra”s Income-tax Rules.↩

1389. See rule 12. For analysis, see Mashbra”s Income-tax Rules.↩

1390. Inserted by the Taxation Laws (Amendment) Act, 2006, with effect from 1st April, 2006.↩

1391. Inserted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of April, 2015.↩

1392. Inserted by the Finance Act, 2015, w.e.f. 01.04.2016.↩

1393. Substituted by the Finance Act, 2016, w.e.f. the 1st day of April, 2017, for the previous text:-

      "(5) If any person, having furnished a return under sub-section (1), or in pursuance of a notice issued under sub-section (1) of section 142, discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier :

      Provided that where the return relates to the previous year relevant to the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, the reference to one year aforesaid shall be construed as a reference to two years from the end of the relevant assessment year."↩

1394. Substituted by the Finance Act, 2021, for “before the end”.↩

1395. Substituted by the Finance Act, 2015, w.e.f. 01.06.2015. for the following:-

      "assets of the prescribed nature  [, value and belonging to him"↩

1396. Omitted by the Direct Tax Laws (Amendment) Act, 1987, with effect from 1st April, 1989.↩

1397. See rule 119A. For analysis see Mashbra”s Income-tax Rules.↩

1398. See rule 117A. For analysis see Mashbra”s Income-tax Rules.↩

1399. Inserted by the Finance Act, 2022.↩

1400. Omitted by the Finance Act, 2016, w.e.f. the 1st day of April, 2017, the previous text :-

      " [(aa) the tax together with interest, if any, payable in accordance with the provisions of section 140A, has been paid on or before the date of furnishing of the return;]"↩

1401. Substituted for “deducted at source and” by the Finance (No. 2) Act, 2004, with effect from 1st April, 2005.↩

1402. Substituted for “deducted at source” by the Finance Act, 2006, with effect from 1st April, 2007.↩

1403. Expression “before the 1st day of April, 2008” omitted by the Finance Act, 2008, with effect from 1st April, 2008. Earlier the quoted portion was substituted for “before the 1st day of April, 2006” by the Finance Act, 2006, with effect from 1st April, 2006 and “before the 1st day of April, 2006” was substituted for “before the 1st day of April, 2005” by the Finance Act, 2005, with effect from 1st April, 2005.↩

1404. Inserted by the Finance Act, 2002, with effect from 1st June, 2002.↩

1405. Substituted for “claimed to have been deducted by source” by the Finance Act, 2006, with effect from 1st April, 2007.↩

1406. Substituted by the Finance Act, 2006, with effect from 1st April, 2007. Prior to substitution, clause (a) stood as under:

      “(a) a certificate for tax deducted was not furnished under section 203 to the person furnishing his return of income ;↩

1407. Inserted by the Finance Act, 2022.↩

1408. Inserted by the Finance Act, 2021.↩

1409. Proviso omitted by the Finance Act, 2007, with effect from 1st June, 2006. Prior to omission, the proviso as inserted by the Finance Act, 2006, from the same date, stood as under:

      “Provided that the Board may, by rules made by it,--

      (a) dispense, for a class or classes of persons, with any of the conditions specified in clauses (a) to (f); or

      (b) include any of the conditions specified in clauses (a) to (f) of this Explanation in the form of return prescribed under sub-section (1) or sub-section (6) of this section.”↩

1410. Omitted by the Finance (No. 2) Act, 1991, with effect from 1st April, 1991.↩

1411. Substituted for 'fifty thousand rupees' by the Finance (No. 2) Act, 1998, with effect from 1st August, 1998.↩

1412. Substituted for "sub-section (4A) of section 139" by the Finance Act, 2005, with effect from 1st April, 2006.↩

1413. See rule 114 and Form No. 49A.↩

1414. Inserted by the Finance Act, 2018, w.e.f. 01.04.2019.↩

1415. Inserted by the Finance Act, 2018, w.e.f. 01.04.2019.↩

1416. Inserted by the Finance Act, 2000 with effect from 1st June, 2000.↩

1417. Inserted by the Finance Act, 2006, with effect from 1st June, 2006.↩

1418. Substituted by the Finance Act, 2006 with effect from 1st June, 2006. Prior to substitution sub-section (2) stood as under :

      "(2) The Assessing Officer may also allot to any other person by whom tax is payable, a permanent account number."↩

1419. See rules 114B to 114D and Form Nos. 60 and 61.↩

1420. Inserted by the Finance (No. 2) Act, 1998, with effect from 1st August, 1998.↩

1421. Inserted by the Finance Act, 2001, with effect from 1st June, 2001.↩

1422. Prior to omission, the proviso stood as under : 'Provided that nothing contained in this sub-section shall apply to a non-resident referred to in sub-section (4) of section 115AC, or sub-section (2) of section 115BBA, or to a nonresident Indian referred to in section 115G'↩

1423. Inserted by the Finance Act, 2001, with effect from 1st June, 2001.↩

1424. Inserted by the Finance Act, 2006, with effect from 1st June, 2006.↩

1425. Omitted by the Finance (No. 2) Act, 2009 w.e.f. 1st October, 2009 for the following : -

      "quarterly"↩

1426. Inserted by the Finance Act, 2001, with effect from 1st June, 2001.↩

1427. Substituted for "buyer" by the Finance (No. 2) Act, 2004, with effect from 1st October, 2004.↩

1428. Inserted by the Finance Act, 2001, with effect from 1st June, 2001.↩

1429. Substituted for "seller" by the Finance Act, 2006, with effect from 1st April, 2007.↩

1430. Substituted for "buyer" by the Finance (No. 2) Act, 2004, with effect from 1st October, 2004.↩

1431. Inserted by the Finance Act, 2006, with effect from 1st June, 2006.↩

1432. Omitted by the Finance (No. 2) Act, 2009 w.e.f. 1st October, 2009 for the following : -

      "quarterly"↩

1433. Inserted by the Finance (No. 2) Act, 1998, with effect from 1st August, 1998.↩

1434. Inserted by the Finance Act, 2005, with effect from 1st April, 2006.↩

1435. See rules 114 and 114B to 114D and Form Nos. 49A, 60 and 61. For analysis see Mashbra's Income-tax Rules.↩

1436. Inserted by the Finance (No. 2) Act, 1998, with effect from 1st August, 1998.↩

1437. Inserted by the Finance (No. 2) Act, 1998, with effect from 1st August, 1998.↩

1438. Inserted by the Finance (No. 2) Act, 1998, with effect from 1st August, 1998.↩

1439. Inserted by the Finance (No. 2) Act, 1998, with effect from 1st August, 1998.↩

1440. Inserted by the Finance (No. 2) Act, 1998, with effect from 1st August, 1998.↩

1441. Omitted by the Finance Act, 2018 w.e.f. 01.04.2019 the previous text was :-

      "and issued in the form of a laminated card "↩

1442. Inserted by the Finance (No. 2) Act, 1998, w.e.f. 1st August, 1998.↩

1443. Inserted by the Finance Act, 2017.↩

1444. Inserted by the Finance Act, 2006, with effect from 1st June, 2006.↩

1445. Tax Return Preparer Scheme, 2006 [S.O. 2039(E), dated 28-11-2006, effective from 1-12-2006]. For text of Scheme, see 16 CAPJ 902 or Mashbra”s Income-tax Rules.↩

1446. Inserted by the Finance Act, 2007, with retrospective effect from 1st June, 2006.↩

1447. by the Finance Act, 2007, with retrospective effect from 1st June, 2006.↩

1448. Inserted by the Finance Act, 2005, w.e.f. 1st April, 2006.↩

1449. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of October, 2014 for the following : - "signed and verified"↩

1450. Substituted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1st April, 1989.↩

1451. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of October, 2014 for the following : - "sign"↩

1452. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of October, 2014 for the following : - "signing"↩

1453. Substituted for clauses (c) and (d) by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1st April, 1976.↩

1454. Substituted by the Finance Act, 2020, for “by any director thereof”.↩

1455. Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1st April, 1989.↩

1456. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of October, 2014 for the following : - "signed and verified"↩

1457. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of October, 2014 for the following : - "signed and verified"↩

1458. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of October, 2014 for the following : - "signed and verified"↩

1459. Inserted by the Finance Act, 2018, w.e.f. 1st April, 2019.↩

1460. Inserted by the Finance Act, 2018, w.e.f. 1st April, 2019.↩

1461. Inserted by the Finance (No. 2) Act, 2009, w.e.f. 1st April, 2010.↩

1462. Substituted by the Finance Act, 2020, for “by any partner thereof”.↩

1463. Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1st April, 1989.↩

1464. Substituted for “section 139” by the Finance Act, 2005, with effect from 1st April, 2006.↩

1465. Substituted for “or, as the case may be, section 148” by the Finance Act, 1999, with effect from 1st June, 1999.↩

1466. Substituted for “, as the case may be, section 158BC by the Finance Act, 2003, with effect from 1st June, 2003.↩

1467. Substituted for “after taking into account the amount of tax, if any, already paid under any provision of this Act” by the Finance Act, 2006, with effect from 1st April, 2007.↩

1468. Omitted by the Finance Act, 2020.
      “and”↩

1469. Substituted by the Finance Act, 2020, for “section 115JD”.↩

1470. Inserted by the Finance Act, 2017 w.e.f. 01.04.2018.↩

1471. Substituted by the Finance Act, 2017 w.e.f. 01.04.2018 for the following:-" and interest".↩

1472. Inserted by the Finance Act, 2020.↩

1473. Substituted by the Finance Act, 2017 w.e.f. 01.04.2018 for the following:-" and interest as aforesaid, the amount so paid shall first be adjusted towards"↩

1474. Substituted by the Finance Act, 2005, with effect from 1st April, 2006. Prior to substitution, sub-section (1A) as inserted by the Finance Act, 2001, with retrospective effect from 1st April, 1989, stood as under:

      “(1A) For the purposes of sub-section (1), interest payable under section 234A shall be computed on the amount of the tax on the total income as declared in the return as reduced by the advance tax, if any, paid and any tax deducted or collected at source.”↩

1475. Substituted by the Finance Act, 2006, with effect from 1st April, 2007. Prior to substitution, clause (i) stood as under:

      “(i) under section 234A shall be computed on the amount of the tax on the total income as declared in the return as reduced by the advance tax, if any, paid and any tax deducted or collected at source;”↩

1476. Inserted by the Finance Act, 2012, w.e.f. 01.04.2013.↩

1477. Inserted by the Finance Act, 2001, with retrospective effect from 1st April, 1989.↩

1478. Substituted by the Finance Act, 2006, with effect from 1st April, 2007. Prior to substitution, the Explanation stood as under:

      “Explanation : For the purposes of this sub-section, “assessed tax” means the tax on the total income as declared in the return as reduced by the amount of tax deducted or collected at source, in accordance with the provisions of Chapter XVII, on any income which is subject to such deduction or collection and which is taken into account in computing such total income.↩

1479. Inserted by the Finance Act, 2012, w.e.f. 01.04.2013.↩

1480. Substituted for “section 143” by the Finance Act, 2005, with effect from 1st April, 2006.↩

1481. Inserted by the Finance Act, 1999, with effect from 1st June, 1999.↩

1482. Substituted for “an assessment under section 158BC by the Finance Act, 2003, with effect from 1st June, 2003.↩

1483. Inserted by the Finance Act, 1999, with effect from 1st June, 1999.↩

1484. Substituted by the Finance Act, 2017 w.e.f. 01.04.2018 for the following:-" or interest or both"↩

1485. Substituted by the Finance Act, 2017 w.e.f. 01.04.2018 for the following:-" or interest or both"↩

1486. Inserted by the Finance Act, 2022.↩

1487. Omitted by the Taxation Laws (Amendment) Act, 1970, with effect from 1st April, 1971.↩

1488. Omitted by the Direct Tax Laws (Amendment) Act, 1987, with effect from 1st April, 1989.↩

1489. Substituted for “under section 139 or in whose case the time allowed under sub-section (1) of that section” by the Finance Act, 2005, with effect from 1st April, 2006.↩

1490. Substituted for “within the time allowed under sub-section (1) of section 139” by the Finance Act, 2006, with effect from 1st April, 2006.↩

1491. See rules 12 and 12A. For analysis, see Mashbra”s Income-tax Rules.↩

1492. See rules 12 and 12A. For analysis, see Mashbra”s Income-tax Rules.↩

1493. See rules 12 and 12A. For analysis, see Mashbra”s Income-tax Rules.↩

1494. Inserted by the Finance Act, 2006 with retrospective effect from 1st April, 1990.↩

1495. Inserted by the Finance Act, 2021.↩

1496. See rule 14. For analysis, see Mashbra”s Income-tax Rules.↩

1497. Substituted for “Deputy Commissioner” by the Finance (No. 2) Act, 1998, with effect from 1st October, 1998.↩

1498. Substituted by the Finance Act, 2013 w.e.f. 01.06.2013 for the following : -

      " the nature and complexity of the accounts of the assessee and"↩

1499. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013 for the following:-"Chief Commissioner"↩

1500. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1501. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013 for the following:-"Chief Commissioner"↩

1502. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1503. See rule 14A and Form No. 6B. For analysis, see Mashbra”s Income-tax Rules.↩

1504. See rule 14A and Form No. 6B. For analysis, see Mashbra”s Income-tax Rules.↩

1505. Inserted by the Finance Act, 2007, with effect from 1st June, 2007.↩

1506. Substituted for “on an application” by the Finance Act, 2008, with effect from 1st April 2008.↩

1507. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013 for the following:-"Chief Commissioner"↩

1508. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1509. Inserted by the Finance Act, 2007, with effect from 1st June, 2007.↩

1510. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013 for the following:-"Chief Commissioner"↩

1511. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1512. See rule 14B.↩

1513. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of October, 2014 for the following : -

      "142A. Estimate by Valuation Officer in certain cases.--

      [(1) For the purposes of making an assessment or re-assessment under this Act, where an estimate of the value of any investment referred to in section 69 or section 69B or the value of any bullion, jewellery or other valuable article referred to in section 69A or  [section 69B or fair market value of any property referred to in sub-section (2) of section 56 is required to be made], the Assessing Officer may require the Valuation Officer to make an estimate of such value and report the same to him.

      (2) The Valuation Officer to whom a reference is made under sub-section (1) shall, for the purposes of dealing with such reference, have all the powers that he has under section 38A of the Wealth-tax Act, 1957 (27 of 1957).

      (3) On receipt of the report from the Valuation Officer, the Assessing Officer may, after giving the assessee an opportunity of being heard, take into account such report in making such assessment or re-assessment:

      Provided that nothing contained in this section shall apply in respect of an assessment made on or before the 30th day of September, 2004, and where such assessment has become final and conclusive on or before that date, except in cases where a reassessment is required to be made in accordance with the provisions of section 153A.

      Explanation : In this section, “Valuation Officer” has the same meaning as in clause (r) of section 2 of the Wealth-tax Act, 1957 (27 of 1957).]"↩

1514. Substituted by the Finance Act, 2008 for the following :-

      " [(1) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142,-

      (i) if any tax or interest is found due on the basis of such return, after adjustment of any tax deducted at source, any advance tax paid, any tax paid on self-assessment and any amount paid otherwise by way of tax or interest, then, without prejudice to the provisions of sub-section (2) , an intimation shall be sent to the assessee specifying the sum so payable, and such intimation shall be deemed to be a notice of demand issued under section 156 and all the provisions of this Act shall apply accordingly; and , an intimation shall be sent to the assessee specifying the sum so payable, and such intimation shall be deemed to be a notice of demand issued under section 156 and all the provisions of this Act shall apply accordingly; and

      (ii) if any refund is due on the basis of such return, it shall be granted to the assessee and an intimation to this effect shall be sent to the assessee :

      Provided that except as otherwise provided in this sub-section, the acknowledgement of the return shall be deemed to be an intimation under this sub-section where either no sum is payable by the assessee or no refund is due to him :

      Provided further that no intimation under this sub-section shall be sent after the expiry of [one year from the end of the financial year in which the return is made :]

      [Provided also that where the return made is in respect of the income first assessable in the assessment year commencing on the 1st day of April, 1999, such intimation may be sent at any time up to the 31st day of March, 2002.]

      (1A)  [Omitted by the Finance Act, 1999, w.e.f. 1-6-1999.]

      (1B)  [Omitted by the Finance Act, 1999, w.e.f. 1-6-1999.]↩

1515. Omitted by the Finance Act, 2016, w.e.f. 01.04.2017, for the previous text: "or"↩

1516. Inserted by the Finance Act, 2016, w.e.f. 01.04.2017.↩

1517. Substituted by the Finance Act, 2021, for “disallowance of expenditure indicated”.↩

1518. Substituted by the Finance Act, 2021, for “sections 10AA, 80-IA, 80-IAB, 80-IB, 80-IC, 80-ID or section 80-IE, if ”.↩

1519. Inserted by the Finance Act, 2018, w.e.f. 01.04.2019.↩

1520. Substituted by the Finance Act, 2017 w.e.f. 01.04.2018 for the following:-"and interest".↩

1521. Substituted by the Finance Act, 2017 w.e.f. 01.04.2018 for the following:-"and interest".↩

1522. Substituted by the Finance Act, 2017 w.e.f. 01.04.2018 for the following:-"or interest".↩

1523. Substituted by the Finance Act, 2017 w.e.f. 01.04.2018 for the following:-"or interest".↩

1524. Substituted by the Finance Act, 2021, for “one year”.↩

1525. Substituted by the Finance (No. 2) Act, 2009 for the following : -"after the 31st day of March, 2009".↩

1526. Substituted by the Finance Act, 2010 for the following : "after the 31st day of March, 2010".↩

1527. Substituted by the Finance Act, 2011 for the following:-"the 31st day of March, 2011"↩

1528. Substituted by the Finance Act, 2017 w.e.f. 01.04.2018 for the following:-

      " [(1D) Notwithstanding anything contained in sub-section (1), the processing of a return shall not be necessary before the expiry of the period specified in the second proviso to sub-section (1), where a notice has been issued to the assessee under sub-section (2):

      Provided that such return shall be processed before the issuance of an order under sub-section (3).]"↩

1529.  Substituted by the Finance Act, 2016 w.e.f. 01.04.2017 for the previous text :

      " [(2) Where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer shall,-

      (i) where he has reason to believe that any claim of loss, exemption, deduction, allowance or relief made in the return is inadmissible, serve on the assessee a notice specifying particulars of such claim of loss, exemption, deduction, allowance or relief and require him, on a date to be specified therein to produce, or cause to be produced, any evidence or particulars specified therein or on which the assessee may rely, in support of such claim:

      [Provided that no notice under this clause shall be served on the assessee on or after the 1st day of June, 2003;]

      (ii) notwithstanding anything contained in clause (i), if he considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, serve on the assessee a notice requiring him, on a date to be specified therein, either to attend his office or to produce, or cause to be produced, any evidence on which the assessee may rely in support of the return:

      Provided that no notice under  [clause (ii)] shall be served on the assessee after the expiry of six months from the end of the month in which the return is furnished.]"↩

1530. Substituted by the Finance Act, 2021, for “six”.↩

1531. Substituted by the Finance Act, 2002, w.e.f. 1-6-2002. Prior to its substitution, sub-section (3), as inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998, read as under:

      "(3) On the day specified in the notice issued under sub-section (2), or as soon afterwards as may be, after hearing such evidence as the assessee may produce and such other evidence as the Assessing Officer may require on specified points, and after taking into account all relevant material which he has gathered, the Assessing Offi­cer shall, by an order in writing, make an assessment of the total income or loss of the assessee, and determine the sum payable by him or refund of any amount due to him on the basis of such assessment."↩

1532. Substituted by the Finance Act, 2017 w.e.f. 01.06.2016 for the following:-

      "On the day specified in the notice,-

      (i) issued under clause (i) of sub-section (2), or as soon afterwards as may be, after hearing such evidence and after taking into account such particulars as the assessee may produce, the Assessing Officer shall, by an order in writing, allow or reject the claim or claims specified in such notice and make an assessment determining the total income or loss accordingly, and determine the sum payable by the assessee on the basis of such assessment;

      (ii) issued under clause (ii) of"↩

1533. Substituted by the Finance Act, 2022, for

      “[Provided that in the case of a-

      (a)      research association referred to in clause (21) of section 10;

      (b)      news agency referred to in clause (22B) of section 10;

      (c)      association or institution referred to in clause (23A) of section 10;

      (d)      institution referred to in clause (23B) of section 10;

      (e)      fund or institution referred to in sub-clause (iv) or trust or institution referred to in sub-clause (v) or any university or other educational institution referred to in sub-clause (vi) or any hospital or other medical institution referred to in sub-clause (via) of clause (23C) of section 10, which is required to furnish the return of income under sub-section (4C) of section 139, no order making an assessment of the total income or loss of such research association, news agency, association or institution or fund or trust or university or other educational institution or any hospital or other medical institution, shall be made by the Assessing Officer, without giving effect to the provisions of section 10, unless-

      (i)       the Assessing Officer has intimated the Central Government or the prescribed authority the contravention of the provisions of clause (21) or clause (22B) or clause (23A) or clause (23B) or sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, as the case may be, by such  [research association], news agency, association or institution or fund or trust or university or other educational institution or any hospital or other medical institution, where in his view such contravention has taken place; and

      (ii)      the approval granted to such research association or other association or fund or trust or institution or university or other educational institution or hospital or other medical institution has been withdrawn or notification issued in respect of such news agency or fund or trust or institution has been rescinded.”↩

1534. Substituted by the Finance Act, 2022, for “Provided further”.↩

1535. Inserted by the Finance Act, 2012, w.e.f. 01.04.2009.↩

1536.  Inserted by the Finance Act, 2018, w.e.f. 01.04.2019.↩

1537. Inserted by the Finance Act, 2020.↩

1538. Substituted by the Finance Act, 2020, for “31st day of March, 2020”.↩

1539. Inserted by the Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-4-1989.↩

1540. Omitted by the Finance Act, 1999, w.e.f. 1-6-1999.
      “Prior to its omission, sub-section (5), as inserted by the Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-4-1989, read as under :

      "(5) The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), shall apply to and in relation to any assess­ment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year."”↩

1541. Omitted by the Finance Act, 1999, w.e.f. 1-6-1999. Prior to its omission, Explanation, as inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991 and later on amended by the Finance Act, 1994, w.e.f. 1-6-1994, read as under :

      "Explanation.-An intimation sent to the assessee under sub-section (1) or sub-section (1B) shall be deemed to be an order for the purposes of sections 246 and 264."↩

1542. Inserted by the Finance Act, 2022.↩

1543. Omitted by the Direct Tax Laws (Amendment) Act, 1987, with effect from 1st April, 1989.↩

1544. Substituted by the Finance Act, 2022.↩

1545. Omitted by the Finance Act, 2022.
      “(9)”↩

1546. Omitted by the Finance Act, 2022
      “(10)”↩

1547. Inserted by the Finance Act, 2022.↩

1548. Omitted by the Finance Act, 2022.
      “(q)”↩

1549. Inserted by the Finance Act, 2013 w.e.f. 01.04.2016 for the following : - " [***]"↩

1550. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of June, 2013 for the following : - "Commissioner"↩

1551. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of June, 2013 for the following : - "Commissioner"↩

1552. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of June, 2013 for the following : - "Commissioner"↩

1553. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of June, 2013 for the following : - "Commissioner"↩

1554. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of June, 2013 for the following : - "Commissioner"↩

1555. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of June, 2013 for the following : - "Commissioner"↩

1556. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of June, 2013 for the following : - "Commissioner"↩

1557. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of June, 2013 for the following : - "Commissioner"↩

1558. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of June, 2013 for the following : - "Commissioner"↩

1559. Inserted by the Finance (No. 2) Act, 2009.↩

1560. Omitted by the Finance Act, 2020.
      “in the income or loss returned”↩

1561. Substituted by the Finance Act, 2012, w.e.f. 01.10.2009 for the following: - "in section 153"↩

1562. Inserted by the Finance Act, 2012, w.e.f. 01.04.2009.↩

1563. Substituted by the Finance Act, 2012, w.e.f. 01.10.2009 for the following: - "in section 153"↩

1564. Inserted by the Finance Act, 2013 w.e.f. 01.04.2016 for the following : - " [***]"↩

1565. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1566. Inserted by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020.↩

1567. Substituted by the Finance Act, 2022.↩

1568. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩

1569. Substituted by the Finance Act, 2020, for “(ii) any foreign company.”.↩

1570. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of April, 2015 for the following : -

      "accounting standards"↩

1571. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of April, 2015 for the following : -

      "or accounting standards as notified under sub-section (2), have not been regularly followed by the assessee"↩

1572. Substituted by the Finance Act, 2018, w.e.f. 1st April, 2017 for the following : -

      “ [Notwithstanding anything to the contrary contained in section 145,--

      (a) the valuation of purchase and sale of goods and inventory for the purposes of determining the income chargeable under the head "Profits and gains of business or profession" shall be-

      (i) in accordance with the method of accounting regularly employed by the assessee; and

      (ii) further adjusted to include the amount of any tax, duty, cess or fee (by whatever name called) actually paid or incurred by the assessee to bring the goods to the place of its location and condition as on the date of valuation.

      Explanation.--For the purposes of this section, any tax, duty, cess or fee (by whatever name called) under any law for the time being in force, shall include all such payment notwithstanding any right arising as a consequence to such payment.

      (b) interest received by an assessee on compensation or on enhanced compensation, as the case may be, shall be deemed to be the income of the year in which it is received.]"↩

1573. Omitted by the Direct Tax Laws (Amendment) Act, 1987, with effect from 1st April, 1989.↩

1574. Substituted by the Finance Act, 2021, for

      “If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year) :

      Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year.

      [Provided further that nothing contained in the first proviso shall apply in a case where any income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment for any assessment year:]

      [[Provided also] that the Assessing Officer may assess or reassess such income, other than the income involving matters which are the subject matter of any appeal, reference or revision, which is chargeable to tax and has escaped assessment.]

      Explanation 1 : Production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso.

      Explanation 2 : For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely :

      (a)      where no return of income has been furnished by the assessee although his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax ;

      (b)      where a return of income has been furnished by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return ;

      [(ba) where the assessee has failed to furnish a report in respect of any international transaction which he was so required under section 92E;]

      (c)      where an assessment has been made, but “

      (i) income chargeable to tax has been under-assessed ; or

      (ii) such income has been assessed at too low a rate ; or

      (iii) such income has been made the subject of excessive relief under this Act ; or

      (iv) excessive loss or depreciation allowance or any other allowance under this Act has been computed.

      [(ca) where a return of income has not been furnished by the assessee or a return of income has been furnished by him and on the basis of information or document received from the prescribed income-tax authority, under sub-section (2) of section 133C, it is noticed by the Assessing Officer that the income of the assessee exceeds the maximum amount not chargeable to tax, or as the case may be, the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return;]

      [(d) where a person is found to have any asset (including financial interest in any entity) located outside India.]

      [Explanation 3.--For the purpose of assessment or reassessment under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedings under this section, notwithstanding that the reasons for such issue have not been included in the reasons recorded under sub-section (2) of section 148.]

      [Explanation 4.--For the removal of doubts, it is hereby clarified that the provisions of this section, as amended, by the Finance Act, 2012, shall also be applicable for any assessment year beginning on or before the 1st day of April, 2012.]”↩

1575. Substituted by the Finance Act, 2021, for

      “(1)     Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139.

      [Provided that in a case --

      (a)      where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005 in response to a notice served under this section, and

      (b)      subsequently a notice has been served under sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to subsection (2) of section 143, as it stood immediately before the amendment of said sub-section by the Finance Act, 2002 (20 of 2002) but before the expiry of the time limit for making the assessment, reassessment or re-computation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice:

      Provided further that in a case--

      (a)      where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005, in response to a notice served under this section, and

      (b)      subsequently a notice has been served under clause (ii) of sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to clause (ii) of sub-section (2) of section 143, but before the expiry of the time limit for making the assessment, re-assessment or re-computation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice.]

      [Explanation : For the removal of doubts, it is hereby declared that nothing contained in the first proviso or the second proviso shall apply to any return which has been furnished on or after the 1st day of October, 2005 in response to a notice served under this section.]

      (2)     The Assessing Officer shall, before issuing any notice under this section, record his reasons for doing so.”↩

1576. Inserted by the Finance Act, 2022.↩

1577. Omitted by the Finance Act, 2022.
      “flagged”↩

1578. Inserted by the Finance Act, 2022, for

      “(ii) any final objection raised by the Comptroller and Auditor-General of India to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act.”↩

1579. Omitted by the Finance Act, 2022.
      “or sub-section (5)”↩

1580. Substituted by the Finance Act, 2022, for “for the three assessment years immediately preceding the assessment year relevant to the previous year in which”↩

1581. Inserted by the Finance Act, 2021.↩

1582. Omitted by the Finance Act, 2022.
      “with”↩

1583. Omitted by the Finance Act, 2022.
      “with the prior approval of specified authority”↩

1584. Substituted by the Finance Act, 2022, for “relate to, the assessee”↩

1585. Inserted by the Finance Act, 2022.↩

1586. Substituted by the Finance Act, 2021, for

      “(1)     No notice under section 148 shall be issued for the relevant assessment year, -

      [(a) if four years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b) [or clause (c)];]

      [(b) if four years, but not more than six years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or more for that year.]

      Explanation : In determining income chargeable to tax which has escaped assessment for the purposes of this sub-section, the provisions of Explanation 2 of section 147 shall apply as they apply for the purposes of that section.

      [(c) if four years, but not more than sixteen years, have elapsed from the end of the relevant assessment year unless the income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment.]

      (2)     The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151.

      (3)     If the person on whom a notice under section 148 is to be served is a person treated as the agent of a non-resident under section 163 and the assessment, reassessment or recomputation to be made in pursuance of the notice is to be made on him as the agent of such non-resident, the notice shall not be issued after the expiry of a period of six years from the end of the relevant assessment year.

      Explanation.--For the removal of doubts, it is hereby clarified that the provisions of sub-sections (1) and (3), as amended by the Finance Act, 2012, shall also be applicable for any assessment year beginning on or before the 1st day of April, 2012.”↩

1587. Substituted by the Finance Act, 2022, for

      “(b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more for that year:”↩

1588. Substituted by the Finance Act, 2022, for

      “such notice could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub-section (1) of this section”.↩

1589. Inserted by the Finance Act, 2022.↩

1590. Substituted by the Finance Act, 2021, for

      “(1)     No notice shall be issued under section 148 by an Assessing Officer, after the expiry of a period of four years from the end of the relevant assessment year, unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for the issue of such notice.

      (2)     In a case other than a case falling under sub-section (1), no notice shall be issued under section 148 by an Assessing Officer, who is below the rank of Joint Commissioner, unless the Joint Commissioner is satisfied, on the reasons recorded by such Assessing Officer, that it is a fit case for the issue of such notice.

      (3)     For the purposes of sub-section (1) and sub-section (2), the Principal Chief Commissioner or the Chief Commissioner or the Principal Commissioner or the Commissioner or the Joint Commissioner, as the case may be, being satisfied on the reasons recorded by the Assessing Officer about fitness of a case for the issue of notice under section 148, need not issue such notice himself.”↩

1591. Inserted by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020.↩

1592. Inserted by the Finance Act, 2021.↩

1593. Substituted by the Finance Act, 2016 w.e.f. 1st day of June, 2016, for the previous text:- 

      "(1) No order of assessment shall be made under section 143 or section 144 at any time after the expiry of “

      (a) two years from the end of the assessment year in which the income was first assessable ; or

      (b) one year from the end of the financial year in which a return or a revised return relating to the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, is filed under sub-section (4) or sub-section (5) of section 139,

      whichever is later :

      [Provided that in case the assessment year in which the income was first assessable is the assessment year commencing  [on or after the 1st day of April, 2004 but before the 1st day of April, 2010], the provisions of clause (a) shall have effect as if for the words “two years”, he words “twenty-one months” had been substituted:]

      [Provided further that in case the assessment year in which the income was first assessable is the assessment year commencing  [on or after the 1st day of April, 2005 but before the 1st day of April, 2009] and during the course of the proceeding for the assessment of total income, a reference under sub-section (1) of section 92CA ”

      (i) was made before the 1st day of June, 2007 but an order under subsection (3) of that section has not been made before such date; or

      (ii) is made on or after the 1st day of June, 2007,

      the provisions of clause (a) shall, notwithstanding anything contained in the first proviso, have effect as if for the words “two years”, the words “thirty-three months” had been substituted.]

      [Provided also that in case the assessment year in which the income was first assessable is the assessment year commencing on the 1st day of April, 2009 or any subsequent assessment year and during the course of the proceeding for the assessment of total income, a reference under sub-section (1) of section 92CA is made, the provisions of clause (a) shall, notwithstanding anything contained in the first proviso, have effect as if for the words "two years", the words "three years" had been substituted.]

      [(1A) No order of assessment shall be made under section 115WE or section 115WF at any time after the expiry of  [twenty-one months] from the end of the assessment year in which the fringe benefits were first assessable.]

      [(1B) No order of assessment or reassessment shall be made under section 115WG after the expiry of  [nine months] from the end of the financial year in which the notice under section 115WH was served.]

      (2) No order of assessment, reassessment or recomputation shall be made under section 147 after the expiry of [one year] from the end of the financial year in which the notice under section 148 was served :

      [Provided that where the notice under section 148 was served on or after the 1st day of April, 1999 but before the 1st day of April, 2000, such assessment, reassessment or recomputation may be made at any time up to the 31st day of March, 2002:]

      [Provided further that where the notice under section 148 was served on or after the 1st day of April, 2005  [but before the 1st day of April, 2011], the provisions of this sub-section shall have effect as if for the words “one year”, the words “nine months” had been substituted:]

      [Provided also that where the notice under section 148 was served on or after the 1st day of April, 2006  [but before the 1st day of April, 2010] and during the course of the proceedings for the assessment or reassessment or recomputation of total income, a reference under sub-section (1) of section 92CA -

      (i) was made before the 1st day of June, 2007 but an order under subsection (3) of that section has not been made before such date; or

      (ii) is made on or after the 1st day of June, 2007,

      the provisions of this sub-section shall, notwithstanding anything contained in the second proviso, have effect as if for the words “one year”, the words “twenty-one months” had been substituted.]

      [Provided also that where the notice under section 148 was served on or after the 1st day of April, 2010 and during the course of the proceeding for the assessment or reassessment or recomputation of total income, a reference under sub-section (1) of section 92CA is made, the provisions of this sub-section shall, notwithstanding anything contained in the second proviso, have effect as if for the words "one year", the words "two years" had been substituted;]

      [(2A) Notwithstanding anything contained in [sub-sections (1), (1A), (1B) and (2)], in relation to the assessment year commencing on the 1st day of April, 1971, and any subsequent assessment year, an order of fresh assessment in pursuance of an order under section 250, section 254, section 263 or section 264, setting aside or cancelling an assessment, may be made at any time before the expiry of one year from the end of the financial year in which the order under section 250 or section 254 is received by the  [Principal Chief Commissioner or Chief Commissioner] or  [Principal Commissioner or Commissioner] or, as the case may be, the order under section 263 or section 264 is passed by the  [Principal Chief Commissioner or Chief Commissioner] or  [Principal Commissioner or Commissioner] :

      Provided that where the order under section 250 or section 254 is received by the  [Principal Chief Commissioner or Chief Commissioner] or  [Principal Commissioner or Commissioner] or, as the case may be, the order under section 263 or section 264 is passed by the  [Principal Chief Commissioner or Chief Commissioner] or  [Principal Commissioner or Commissioner], on or after the 1st day of April, 1999 but before the 1st day of April, 2000, such an order of fresh assessment may be made at any time up to the 31st day of March, 2002:]

      [Provided further that where the order under section 254 is received by the  [Principal Chief Commissioner or Chief Commissioner] or  [Principal Commissioner or Commissioner] or, as the case may be, the order under section 263 or section 264 is passed by the  [Principal Commissioner or Commissioner] on or after the 1st day of April, 2005  [but before the 1st day of April, 2011], the provisions of this sub-section shall have effect as if for the words “one year”, the words “nine months” had been substituted:]

      [Provided also that where the order under section 254 is received by the  [Principal Chief Commissioner or Chief Commissioner] or  [Principal Commissioner or Commissioner] or, as the case may be, the order under section 263 or section 264 is passed by the  [Principal Commissioner or Commissioner] on or after the 1st day of April, 2006  [but before the 1st day of April, 2010], and during the course of the proceedings for the fresh assessment of total income, a reference under sub-section (1) of section 92CA ”

      (i) was made before the 1st day of June, 2007 but an order under subsection (3) of section 92CA has not been made before such date; or

      (ii) is made on or after the 1st day of June, 2007,

      the provisions of this sub-section shall, notwithstanding anything contained in the second proviso, have effect as if for the words “one year”, the words “twenty-one months” had been substituted.]

      [Provided also that where the order under section 254 is received by the  [Principal Chief Commissioner or Chief Commissioner] or  [Principal Commissioner or Commissioner] or, as the case may be, the order under section 263 or section 264 is passed by the  [Principal Commissioner or Commissioner] on or after the 1st day of April, 2010, and during the course of the proceeding for the fresh assessment of total income, a reference under sub-section (1) of section 92CA is made, the provisions of this sub-section shall, notwithstanding anything contained in the second proviso, have effect as if for the words "one year", the words "two years" had been substituted.]

      (3) The provisions of [sub-sections (1), (1A), (1B) and (2)] shall not apply to the following classes of assessments, reassessments and recomputations which may, subject to the provisions of sub-section (2A) be completed at any time “

      (i) [***] ;

      (ii) where the assessment, reassessment or recomputation is made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under section 250, 254, 260, 262, 263 or 264 or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act ;

      (iii) where, in the case of a firm, an assessment is made on a partner of the firm in consequence of an assessment made on the firm under section 147.

      [(4) Notwithstanding anything contained in the foregoing provisions of this section, sub-section (2) of section 153A and sub-section (1) of section 153B, the order of assessment or reassessment, relating to any assessment year, which stands revived under sub-section (2) of section 153A, shall be made within one year from the end of the month of such revival or within the period specified in this section or sub-section (1) of section 153B, whichever is later.]

      Explanation 1 : In computing the period of limitation for the purposes of this section “

      (i) the time taken in reopening the whole or any part of the proceeding or in giving an opportunity to the assessee to be re-heard under the proviso to section 129, or

      (ii) the period during which the assessment proceeding is stayed by an order or injunction of any court, or

      [(iia) the period commencing from the date on which the Assessing Officer intimates the Central Government or the prescribed authority, the contravention of the provisions of clause (21) or clause (22B) or clause (23A) or clause (23B) or sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, under clause (i) of the proviso to sub-section (3) of section 143 and ending with the date on which the copy of the order withdrawing the approval or rescinding the notification, as the case may be, under those clauses is received by the Assessing Officer ;]

      [(iii) the period commencing from the date on which the Assessing Officer directs the assessee to get his accounts audited under sub-section (2A) of section 142 and--

      (a) ending with the last date on which the assessee is required to furnish a report of such audit under that sub-section; or

      (b) where such direction is challenged before a court, ending with the date on which the order setting aside such direction is received by the  [Principal Commissioner or Commissioner], or;]

      [(iv) the period commencing from the date on which the Assessing Officer makes a reference to the Valuation Officer under sub-section (1) of section 142A and ending with the date on which the report of the Valuation Officer is received by the Assessing Officer, or]

      (iva) the period (not exceeding sixty days) commencing from the date on which the Assessing Officer received the declaration under sub-section (1) of section 158A and ending with the date on which the order under sub-section (3) of that section is made by him, or

      (v) in case where an application made before the Income-tax Settlement Commission under section 245C is rejected by it or is not allowed to be proceeded with by it, the period commencing from the date on which such application is made and ending with the date on which the order under sub-section (1) of section 245D is received by the  [Principal Commissioner or Commissioner] under sub-section (2) of  [that section, or]

      [(vi) the period commencing from the date on which an application is made before the Authority for Advance Rulings under sub-section (1) of section 245Q and ending with the date on which the order rejecting the application is received by the [Principal Commissioner or Commissioner] under sub-section (3) of section 245R, or]

      [(vii) the period commencing from the date on which an application is made before the Authority for Advance Rulings under sub-section (1) of section 245Q and ending with the date on which the advance ruling pronounced by it is received by the  [Principal Commissioner or Commissioner] under sub-section (7) of  [section 245R, or],]

      [(viii) the period commencing from the date on which a reference or first of the references for exchange of information is made by an authority competent under an agreement referred to in section 90 or section 90A and ending with the date on which the information requested is last received by the  [Principal Commissioner or Commissioner] or a period of one year, whichever is less,] [or]

      [(ix) the period commencing from the date on which a reference for declaration of an arrangement to be an impermissible avoidance arrangement is received by the  [Principal Commissioner or Commissioner] under sub-section (1) of section 144BA and ending on the date on which a direction under subsection (3) or sub-section (6) or an order under sub-section (5) of the said section is received by the Assessing Officer.]

      Provided that where immediately after the exclusion of the aforesaid time or period, the period of limitation referred to  [in sub-sections (1), (1A), (1B), [(2), (2A) and (4)] available to the Assessing Officer for making an order of assessment, reassessment or recomputation, as the case may be, is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly.

      [Provided further that where a proceeding before the Settlement Commission abates under section 245HA, the period of limitation available under this section to the Assessing Officer for making an order of assessment, reassessment or re-computation, as the case may be, shall, after the exclusion of the period under sub-section (4) of section 245HA, be not less than one year; and where such period of limitation is less than one year, it shall be deemed to have been extended to one year; and for the purposes of determining the period of limitation under sections 149, 153B, 154, 155, 158BE and 231 and for the purposes of payment of interest under section 243 or section 244 or, as the case may be, section 244A, this proviso shall also apply accordingly.]

      Explanation 2 : Where, by an order referred to in clause (ii) of sub-section (3), any income is excluded from the total income of the assessee for an assessment year, then, an assessment of such income for another assessment year shall, for the purposes of section 150 and this section, be deemed to be one made in consequence of or to give effect to any finding or direction contained in the said order.

       

      Explanation 3 : Where, by an order referred to in clause (ii) of sub-section (3) any income is excluded from the total income of one person and held to be the income of another person, then, an assessment of such income on such other person shall, for the purposes of section 150 and this section, be deemed to be one made in consequence of or to give effect to any finding or direction contained in the said order, provided such other person was given an opportunity of being heard before the said order was passed." ↩

1594. Inserted by the Finance Act, 2017.↩

1595. Substituted by the Finance Act, 2022, for

      “Provided further that in respect of an order of assessment relating to the assessment year commencing on or after the 1st day of April, 2019, the provisions of this sub-section shall have effect, as if for the words "twenty-one months", the words "twelve months" had been substituted.”↩

1596. Inserted by the Finance Act, 2021.↩

1597. Inserted by the Finance Act, 2022.↩

1598. Inserted by the Finance Act, 2017.↩

1599. Inserted by the Finance Act, 2022.↩

1600. Inserted by the Finance Act, 2022.↩

1601. Inserted by the Finance Act, 2017.↩

1602. Inserted by the Finance Act, 2022.↩

1603. Inserted by the Finance Act, 2022.↩

1604. Inserted by the Finance Act, 2022.↩

1605. Inserted by the Finance Act, 2022.↩

1606. Inserted by the Finance Act, 2017.↩

1607. Inserted by the Finance Act, 2022.↩

1608. Substituted by the Finance Act, 2022, for “sub-sections (3) and (5)”.↩

1609. Substituted by the Finance Act, 2022, for

      “or sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, under clause (i) of the proviso”↩

1610. Substituted by the Finance Act, 2021, for “Authority for Advance Rulings”.↩

1611. Substituted by the Finance Act, 2021, for “Authority for Advance Rulings”.↩

1612. Substituted by the Finance Act, 2022, for “Assessing Officer”.↩

1613. Inserted by the Finance Act, 2022.↩

1614. Omitted by the Finance Act, 2017 the previous text was:-"153B"↩

1615. Inserted by the Finance Act, 2021.↩

1616. Inserted by the Finance Act, 2003, with effect from 1st June, 2003.↩

1617. Numbered by the Finance Act, 2008, with retrospective effect from 1st June, 2003.↩

1618. Inserted by the Finance Act, 2021.↩

1619. Inserted by the Finance Act, 2017.↩

1620. See rule 12.↩

1621. See rule 12.↩

1622. See rule 12.↩

1623. Inserted by the Finance Act, 2017.↩

1624. Substituted for “referred to in this section" by the Finance Act, 2008, with retrospective effect from 1st June, 2003.↩

1625. Inserted by the Finance Act, 2012, w.e.f. 01.07.2012.↩

1626. Inserted by the Finance Act, 2017.↩

1627. Inserted by the Finance Act, 2017.↩

1628. Inserted by the Finance Act, 2008, with retrospective effect from 1st June, 2003.↩

1629. Inserted by the Finance Act, 2017 w.e.f. 01.04.2018.↩

1630. Inserted by the Finance Act, 2017 w.e.f. 01.04.2018.↩

1631. Inserted by the Finance Act, 2022.↩

1632. Inserted by the Finance Act, 2017 w.e.f. 01.06.2016.↩

1633. Inserted by the Finance Act, 2022.↩

1634. Substituted by the Finance Act, 2021, for “Authority for Advance Rulings”.↩

1635. Substituted by the Finance Act, 2021, for “Authority for Advance Rulings”.↩

1636. Substituted by the Finance Act, 2022, for “Assessing Officer”.↩

1637. Inserted by the Finance Act, 2022.↩

1638. Inserted by the Finance Act, 2017.↩

1639. Inserted by the Finance Act, 2021.↩

1640. Inserted by the Finance Act, 2003, with effect from 1st June, 2003.↩

1641. Numbered by the Finance Act, 2005, with retrospective effect from 1st June, 2003.↩

1642. Substituted by the Finance Act, 2015, w.e.f. 01.06.2015. for the following:-

      "Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person"↩

1643. Substituted by the Finance (No. 2) Act, 2014 w.e.f. 1st day of October, 2014 for the following : -

      "and that Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A"↩

1644. Inserted by the Finance Act, 2017. ↩

1645. Inserted by the Finance Act, 2005, with retrospective effect from 1st June, 2003↩

1646. Substituted for “section 153A” by the Finance Act, 2008, with retrospective effect from 1st June, 2003.↩

1647. Inserted by the Finance Act, 2012, w.e.f. 01.07.2012.↩

1648. Inserted by the Finance Act, 2017. ↩

1649. Inserted by the Finance Act, 2005, with retrospective effect from 1st June, 2003.↩

1650. Inserted by the Finance Act, 2021.↩

1651. Inserted by the Finance Act, 2007, with effect from 1st June, 2007.↩

1652. Substituted for “section 153A" by the Finance Act, 2008, with retrospective effect from 1st June, 2007.↩

1653. Inserted by the Finance Act, 2013 w.e.f. 01.06.2016.↩

1654. Substituted vide the Finance (No. 2) Act, 2014 w.e.f. 01.06.2013, for the following:-"Commissioner"↩