Section 5 - Amendment of section 13 - Taxation Laws (Amendment) Act, 1975

5. Amendment of section 13. In section 13 of the Income-tax Act, (i) in sub-section (1), (a) after clause (b), the following clause shall be inserted, namely: (bb) in the case of a charitable trust or institution for the relief of the poor, education or medical relief, which carries on any business, any income derived from such business, unless the business is carried on in the course of the actual carrying out of a primary purpose of the trust or institution; ; (b) after clause (c) and the provisos thereto, the following clause shall be inserted, namely: (d) subject to the provisions of clause (bb), in the case of a trust for charitable or religious purposes or a charitable or religious institution, any income thereof assessable for any assessment year commencing on or after the 1st day of April, 1979, if any funds of the trust or institution are invested or deposited or continue to remain invested or deposited for any period during any previous year commencing on or after the 1st day of April, 1978, otherwise than, in any of the forms or modes specified in sub-section (5). ; (ii) in sub-section (3), for clause (b), the following clause shall be substituted, namely: (b) any person who has made a substantial contribution to the trust or institution, that is to say, any person whose total contribution up to the end of the relevant previous year exceeds five thousand rupees; ; (iii) after sub-section (4) and before Explanation 1, the following sub-sections shall be inserted, namely: (5) The forms and modes of investing or depositing funds referred to in clause (d) of sub-section (1) shall be (a) subject to the provisions of clause (b), in a case where such funds represent the original corpus of the trust or institution or any contributions made to the trust or institution with a specific direction that they shall form part of the corpus of the trust or institution, (i) investment in savings certificates as defined in clause (c) of section 2 of the Government Savings Certificates Act, 1959 (46 of 1959), and any other securities or certificates issued by the- Central Government under the small savings schemes of that Government; (ii) deposit in any account with the Post Office Savings Bank; (iii) deposit in any account with any nationalised bank, that is to say, any corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970); (iv) investment in units in the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963); (v) investment in any security for money created and issued by the Central Government or a State Government: (vi) investment in debentures issued by, or on behalf of, any company or corporation both the principal whereof and the interest whereon are fully and unconditionally guaranteed by the Central Government or by a State Government; (vii) investment or deposit in any Government company as denned in section 617 of the Companies Act, 1956 (1 of 1956); (b) in a case where such funds represent (i) the corpus of the trust or institution immediately before the 1st day of June, 1973; or (ii) the original corpus (being assets other than cash) of any trust or institution created or established on or after the 1st day of June, 1973; or (iii) any contributions (otherwise than in cash) made to any trust or institution on or after the 1st day of June, 1973, with a specific direction, that they shall form part of the corpus of the trust or institution, any form or mode, other than investment in shares (not being shares entitled to a fixed rate of dividend whether with or without a further right to participate in profits) in a company (not being 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); (c) in any other case, the forms or modes referred to in sub-clause (i), sub-clause (ii), sub-clause (iii) and sub-clause (iv) of clause (a). (6) Nothing contained in clause (d) of sub-section (1) shall apply in relation to any monies accumulated or finally set apart and invested or deposited in the manner referred to in clause (b) of sub-section (2) of section 11. .