SCH-01 - First Schedule - Finance (No. 2) Act, 1962

THE FIRST SCHEDULE (See section 2) PART I INCOME TAX AND SURCHARGES ON INCOME TAX Paragraph A (i) In the case of every individual who is married and every Hindu undivided family whose total income does not exceed Rs. 20,000 in either case Rates of Income Tax Where the individual has no child wholly or mainly dependent on him or where the Hindu undivided family has no minor coparcener. Where he individual has one child wholly or mainly dependent on him or where the Hindu undivided family has one minor coparcener. Where the individual has more than child wholly or mainly dependent on him or where the Hindu undivided family has more than Rs. Rs. Rs. (1) On the first 3,000 of total income 3,300 of total income 3,600 of total income Nil (2) On the next 2,000 1,700 1,400 3% (3) On the next 2,500 2,500 2,500 7% (4) On the next 2,500 2,500 2,500 10% (5) On the next 2,500 2,500 2,500 12% (6) On the next 2,500 2,500 2,500 15% (7) On the next 2,500 2,500 2,500 20% (8) On the next 2,500 2,500 2,500 23% (ii) In the case of every individual who is not married and every individual or Hindu undivided family whose total income in either case exceeds Rs. 20,000 and in the case of every unregistered firm or other association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub clause (vii) of clause (31) of section 2 of the Income tax Act, not being a case to which any other Paragraph of this Part applies : Rs. (1) On the first. . . . . . . 1,000 of total income Nil (2) On the next. . . . . . . 4,000 3% (3) On the next. . . . . . . 2,500 7% (4) On the next. . . . . . . 2,500 10% (5) On the next. . . . . . . 2,500 12% (6) On the next. . . . . . . 2,500 15% (7) On the next. . . . . . . 2,500 20% (8) On the next. . . . . . . 2,500 23% (9) On the balance of total income. . . . . . . 25% Provided that for the purpose of this Paragraph (i) no income tax shall be payable on a total income which does not exceed the limit specified below; (ii) the income tax payable shall in no case exceed half the amount by which the total income exceeds the said limit; (iii) the income tax payable by an individual who is married or a Hindu undivided family whose total income exceeds in either case Rs. 20,000 shall not exceed the aggregate of (a) the income tax which would have been payable if the total income had been Rs. 20,000; (b) half the amount by which the total income exceeds Rs. 20,000; The limit aforesaid shall be (i) Rs. 6,000 in the case of every Hindu undivided family which as at the end of the previous year satisfies either of the following conditions, namely : (a) that it has at least two members entitled to claim partition who are not less than eighteen years of age; or (b) that it has at least two members entitled to claim partition who are not lineally descended one from the other and who are not lineally descended from any other living member of the family; (ii) Rs. 3,000 in every other case. Surcharges on income tax The amount of income tax computed at the rates hereinbefore specified shall be increased by the aggregate of the surcharges calculated as under : (a) A surcharge for purposes of the Union equal to the sum of (i) two and a half per cent. of the amount of income tax calculated at the average rate of income tax on the income under the head Salaries included in the total income; (ii) five per cent. of the amount of income tax calculated at the average rate of income tax on the total income as reduced by the income under the head Salaries included therein; and (iii) where the earned income included in the total income exceeds Rs. 1,00,000, ten per cent. of the difference between the amount of income tax which would have been payable on the whole of the earned income included in the total income if such earned income had been the total income and the amount of income tax payable on a total income of Rs. 1,00,000; (b) A special surcharge at fifteen per cent. of the difference between the amount of income tax on the total income and the amount of income tax on the whole of the earned income, if any, included in the total income if such earned income had been the total income : Provided that (i) no surcharge for purposes of the Union shall be payable where the total income does not exceed the limit specified below: (ii) no special surcharge shall be payable in the case of an assessee whose total income does not include any income from divided on ordinary shares if his total income does not exceed the limit specified below, and where the total income includes any dividends on ordinary shares, such limit shall be increased by Rs. 1,500 or the amount of the said dividends, whichever is less : Provided further that (a) where the total income includes any dividends on ordinary shares, the surcharge for purposes of the Union and the special surcharge shall not in each exceed half the amount by which the total income exceeds the respective limits applicable in either case; (b) the surcharge for purposes of the Union and the special surcharge, both together, shall not exceed half the amount by which the total income exceeds the limit specified below; The limit aforesaid shall be (i) Rs. 15,000 in the case of every Hindu undivided family which satisfies as at the end of the previous year either of the following conditions, namely : (a) that it has at least two members entitled to claim partition who are not less than eighteen years of age; or (b) that it has at least two members entitled to claim portion who are not lineally descended one from the other and who are not lineally descended from any other living member of the family; (ii) Rs. 7,500 in every other case. Explanation : For the purposes of this Paragraph, in the case of every Hindu undivided family governed by the Mitakshara law, a son shall be deemed to be entitled to claim partition of the coparcenary property against his father, or grand father notwithstanding any custom to the contrary. Paragraph B In the case of every local authority,- RATE OF INCOME TAX On the whole of the total income .. 30% Surcharge on income tax The amount of income tax computed at the rate hereinbefore specified shall be increased by a surcharge for purposes of the Union of 5 per cent. of the amount of income tax. Paragraph C In every case in which under the provisions of the Income tax Act, income tax is to be charged at the maximum rate, RATE OF INCOME TAX On the whole of the total income ..25% Surcharges on income tax The amount of income tax computed at the rate hereinbefore specified shall be increased by the aggregate of the surcharges calculated as under : (a) a surcharge for purposes of the Union of five per cent. of the amount of income tax; and (b) a special surcharge of fifteen per cent. of the amount of income tax. Paragraph D In the case of every company,- RATE OF INCOME TAX On the whole of the total income ..25% Paragraph E In the case of every registered firm,- RATES OF INCOME TAX Where the firm has four or less partners Where the firm has five or more partners (1) On the first Rs. 25,000 of total income Nil Nil (2) On the next Rs. 15,000 of total income 5% 7% (3) On the next Rs. 20,000 of total income 6% 8% (4) On the next Rs. 40,000 of total income 7% 9% (5) On the next Rs. 50,000 of total income 8% 10% (6) On the balance of total income 10% 12% PART II Super tax and surcharge on super tax Paragraph A In the case of every individual, Hindu undivided family, unregistered firm or other association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub clause (vii) of clause (31) of section 2 of the Income tax Act, not being a case to which any other Paragraph of this Part applies, RATES OF SUPER TAX (1) On the first Rs. 20,000 of total income . . . Nil (2) On the next Rs. 5,000 of total income. . . 8% (3) On the next Rs. 5,000 of total income. . . 18% (4) On the next Rs. 10,000 of total income. . . 22% (5) On the next Rs. 10,000 of total income. . . 32% (6) On the next Rs. 10,000 of total income. . . 40% (7) On the next Rs. 10,000 of total income. . . 45% (8) On the balance of total income. . . 47.5% Surcharges on super tax The amount of super tax computed at the rates hereinbefore specified shall be increased by the aggregate of the surcharges calculated as under : (a) A surcharge for purposes of the Union equal to the sum of (i) two and a half per cent. of the amount of super tax calculated at the average rate of super tax on the income under the head Salaries included in the total income; (ii) five per cent. of the amount of super tax calculated at the average rate of super tax on the total income as reduced by the income under the head Salaries included therein; and (iii) where the earned income included in the total income exceeds Rs. 1,00,000, ten per cent. of the difference between the amount of super tax which would have been payable on the whole of the earned income included in the total income, if such earned income had been the total income and the amount of super tax payable on a total income of Rs. 1,00,000; (b) A special surcharge at fifteen per cent. of the difference between the amount of super tax on the total income and the amount of super tax on the whole of the earned income, if any, included in the total income, if such earned income had been the total income. Paragraph B In the case of every local authority, RATE OF SUPER TAX On the while of the total income 16% Surcharge on super tax The amount of super tax computed at the rate hereinbefore specified shall be increased by a surcharge for purposes of the Union of 12 1/2 per cent. of the amount of super tax. Paragraph C In the case of every association of persons being a co operative society as defined in clause (19) of section 2 of the Income tax Act, RATES OF SUPER TAX (1) On the first Rs. 25,000 of total income . . . Nil (2) On the balance of total income. . . 16% Surcharge on super tax The amount of super tax computed at the rates hereinbefore specified shall be increased by a surcharge for purposes of the Union of 12 1/2 per cent. of the amount of super tax. Paragraph D In the case of every company, other than the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956), RATE OF SUPER TAX On the whole of the total income ..55% Provided that (i) a rebate at the rate of 50 per cent. on so much of the total income as consists of dividends from any Indian company; and at the rate of 35 per cent. on the balance of the total income shall be allowed in the case of any company which (a) in respect of its profits liable to tax under the Income tax Act for the assessment year commencing on the 1st day of April, 1962, has made the prescribed arrangements for the declaration and payment within India of the dividends payable out of such profits in accordance with the provisions of section 194 of that Act; and (b) is much a company as is referred to in section 108 of the Income tax Act with a total income not exceeding Rs. 25,000; (ii) a rebate at the rate of 50 per cent. on so much of the total income as consists of dividends from a subsidiary Indian company formed and registered before the 1st day of April, 1961; at the rate of 45 per cent. on so much of the total income as consists of dividends from any other Indian company; and at the rate of 30 per cent. on the balance of the total income shall be allowed in the case of any company which satisfies condition (a) but not condition (b) of the preceding clause; (iii) a rebate at the rate of 50 per cent. on so much of the total income as consists of dividends from a subsidiary Indian company formed and registered before the 1st day of April, 1961; at the rate of 30 per cent. on so much of the total income as consists of dividends from an Indian company, not being a subsidiary company, formed and registered before the 1st day of April, 1959; at the rate of 45 per cent. on so much of the total income as consists of dividends from any other Indian company formed and registered on or after the 1st day of April, 1959; at the rate 30 per cent. on so much of the total income as consists of royalties received from an Indian concern in pursuance of an agreement made by it with the Indian concern on or after the 1st day of April, 1961, and which has been approved by the Central Government; and the rate of 17 per cent. on the balance of the total income shall be allowed in the case of any company not entitled to a rebate under either of the preceding clauses : Provided further that (i) the amount of the rebate under clause (i) or clause (ii) of the preceding proviso shall be reduced by the sum, if any, equal to the amount or the aggregate of the amounts, as the case may be, computed as hereunder : (a) on the aggregate of the sums computed in the manner provided in clause (i) of the second proviso to Paragraph D of Part II of the First Schedule to the Finance Act, 1961 (14 of 1961), as reduced by the amount, if any, which is deemed to have been taken into account, in accordance with clause (ii) of the said proviso, for the purpose of reducing the rebate mentioned in clause (i) of the said proviso to nil; and at the rate of 100% (b) on the amount representing the face value of any bonus shares or the amount of any bonus issued to its shareholders during the previous year with a view to increasing the paid up capital; at the rate of 12 1/2%. (ii) where the sum arrived at in accordance with clause (i) of this proviso exceeds the amount of the rebate arrived at in accordance with clause (i) or clause (ii), as the case may be, of the preceding proviso, only so much of the amounts of reduction mentioned in sub clauses (a) and (b) of clause (i) of this proviso as is sufficient, in that order, to reduce the rebate to nil shall be deemed to have been taken into account for the purpose : Provided further that the super tax payable by a company, the total income of which exceeds rupees twenty five thousand, shall not exceed the aggregate of (a) the super tax which would have been payable by the company if its total income had been rupees twenty five thousand; and (b) half the amount by which its total income exceeds rupees twenty five thousand. Explanation I : For the purposes of this Paragraph, where any portion of the profits and gains of a company is not included in its total income by reason of such portion being agricultural income, the amount representing the face value of any bonus shares and the amount of any bonus issued to its shareholders shall each be deemed to be such proportion thereof as the average of the total income of the company in the five previous years in which the company has been in receipt of taxable income immediately preceding the relevant previous year bears to the average of its total profits and gains (excluding capital receipts) for the preceding five years aforesaid, reduced by such allowances as may be admissible under the Income tax Act which have not been taken into account by the company in its profits and loss accounts for the preceding five years aforesaid. Explanation II : For the purposes of this Paragraph and Part III of this Schedule, a company shall be deemed to be a subsidiary of another company if that other company holds more than half in nominal value of the equity share capital of the first mentioned company. Paragraph E In the case of the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956), RATE OF SUPER TAX On the whole of its profits and gains from life insurance business 22.5% PART III RATES FOR DEDUCTION OF TAX AT SOURCE IN CERTAIN CASES In every case in which under the provisions of sub section (2) of section 192 and sections 193 to 195 of the Income tax Act, tax is to be deducted at the rates in force, deduction shall be made from the income subject to deduction at the following rates : Income-tax Super-tax Rate of income-tax Rates of surcharges Rate of super-tax Rates of surcharges Surcharge for purposes of the Union Special surcharge 1. In the case of a person other than a company- (a) in every case, on the whole income (excluding interest payable on any security of the Central Government issued or declared to be income-tax free, and interest payable on any security of a State Government issued income-tax whereon is payable by the State Government), and 25% 1.25% ( b ) in addition, where the person is non-resident in India, on the whole income. Super-tax and surcharges on super-tax in accordance with the provisions of clause (b) of subsection (1) of section 113 of the. Income-tax Act. Rate of Income-Tax Rate of super-tax 2. in the case of a company- (a) in every case- (i) on the whole income (excluding interest payable on any security of the Central Government issued or declared to be income tax free and interest payable on any security of a State Government issued income tax free, the income tax whereon is payable by the State Government); and 25% (ii) on the whole income (excluding dividends payable by an Indian company referred to in clause (iv) of sub section (1) of section 99 of the Income tax Act); and 5% (b) in addition, where the company is neither an Indian company nor a company which has made the prescribed arrangements for the declaration and payment of dividends within India, (i) on the income from dividends (excluding dividends payable by an Indian company referred to in clause (iv) of sub section (1) of section 99 of the Income tax Act) (1) on dividends payable by any of its subsidiary Indian companies formed and registered before the 1st day of April, 1961 Nil (2) on dividends payable by an Indian company, not being a subsidiary company, formed and registered before the 1st day of April, 1959 20% (3) on dividends payable by any other Indian company formed and registered on or after the 1st day of April, 1959 5% (ii) on the income from royalties payable an Indian concern in pursuance of an agreement which is made by it with the Indian concern on or after the 1st day of April, 1961, and which has been approved by the Central Government . 20% (iii) on any other income, not being income from dividends 33%