Section 4 - Amendment of Act 43 of 1961 - Taxation Laws (Amendment) Act, 1967

4. Amendment of Act 43 of 1961. In the Income-tax Act, 1961, (i) in section 37, after sub-section (2), the following sub-section shall be inserted, namely: (2A) Notwithstanding anything contained in sub-section (1) or sub-section (2), no allowance shall be made in respect of so much of the expenditure in the nature of entertainment expenditure incurred by any assessee during any previous year which expires after the 30th day of September, 1967, as is in excess of the aggregate amount computed as hereunder: - (i) on the first Rs. 10,00,000 of the profits and gains of the business or profession (computed before making any allowance under section 33 or section 33A or in respect of entertainment expenditure) at the rate of 1/2 per cent. or Rs. 5,000, whichever is higher; (ii) on the next Rs. 40,00,000 of the profits and gains of the business or profession (computed in the manner aforesaid) at the rate of 1/4 per cent.; (iii) on the next Rs. 1,20,00,000 of the profits and gains of the business or profession (computed in the manner aforesaid) at the rate of 1/2 per cent.; (iv) on the balance of the profits and gains of the business or profession (computed in the manner aforesaid). nil; Provided that where the previous year of any assessee falls partly before and partly after the 30th day of September, 1967, the allowance in respect of such expenditure incurred during the previous year shall not exceed (a) in the case of a company (i) in respect of such expenditure incurred before the 1st day of October, 1967, the sum which bears to the aggregate amount computed at the rate or rates specified in sub-section (2), the same proportion as the number of days comprised in the period commencing on the first day of such previous year and ending with the 30th day of September, 1967, bears to the total number of days in the previous year; (ii) in respect of such expenditure incurred after the 30th day of September, 1967, the sum which bears to the aggregate amount computed at the rate or rates specified in this sub-section, the same proportion as the number of days comprised in the period commencing on the 1st day of October, 1967, and ending with the last day of the previous year bears to the total number of days in the previous year; (b) in any other case (i) In respect of such expenditure incurred before the 1st day of October, 1967, the amount admissible under sub-section (1); (ii) in respect of such expenditure incurred after the 30th day of September, 1967, the sum which bears to the aggregate amount computed at the rate or rates specified in this sub-section, the same proportion as the number of days comprised in the period commencing on the 1st day of October, 1967, and ending with the last day of the previous year bears to the total number of days in the previous year. ; (ii) in sections 132A, 139, 201, 213 to 217, 220, 243 and 244, for the words six per cent. , the words nine per cent. , shall be substituted; (iii) in section 280X, (a) in sub-section (1), clause (b) of the proviso shall be omitted; (b) for the Explanation, the following Explanation shall be substituted, namely: Explanation. (i) In this section, the expression annuity deposit required to be made shall mean the amount of annuity deposit calculated on the adjusted total income of the depositor at the rate or rates specified in the Finance Act of the relevant year, but where the amount so calculated exceeds the amount computed in the manner specified in clause (ii) of this Explanation (the amount so computed being hereinafter referred to as the specified amount), then, the annuity deposit required to be made shall mean the specified amount. (ii) The specified amount referred to in clause (i) of this Explanation shall be (a) in a case where the total income (as computed without making any allowance under section 280O) exceeds fifteen thousand rupees but does not exceed twenty thousand rupees, an amount equal to one per cent. of the adjusted total income of the depositor; (b) in a case where the total income (computed in the manner aforesaid) exceeds twenty thousand rupees but does not exceed twenty-five thousand rupees, an amount equal to (1) the aggregate of the sum calculated at one per cent, on so much of the adjusted total income as does not exceed twenty thousand rupees and the sum by which the total income (computed in the manner aforesaid) exceeds twenty thousand rupees, or (2) one and a half per cent. of the adjusted total income of the depositor, whichever is less; (c) in a case where the total income (computed in the manner aforesaid) exceeds twenty-five thousand rupees, an amount equal to the aggregate of the sum calculated at one and a half per cent. on so much of the adjusted total income as does not exceed twenty-five thousand rupees and the sum by which the total income (computed in the manner aforesaid) exceeds twenty-five thousand rupees. .