Estate Duty (Amendment) Act, 1984--Explanatory notes on the provisions of - Income Tax - 399/1984

Estate Duty (Amendment) Act, 1984--Explanatory notes on the provisions of Circular No. 399 Dated 17/10/1984 Introduction The Estate Duty (Amendment) Bill, 1984, as passed by Parliament received the assent of the President on August 23, 1984, and has been enacted as Act No 53 of 1984. This Circular explains the substance of the provisions contained in the Estate Duty (Amendment) Act, 1984. The provisions of the Estate Duty (Amendment) Act, 1984 (hereinafter referred to as "the Amendment Act"), relate to the following matters: (i) Insertion of a new section 5B in the Estate Duty Act, 1953 (hereinafter referred to as "the principal Act"), relating to exclusion of agricultural lands from the leavy of estate duty. (ii) Omission of the provisions of clause (b) of sub-section (1) and cluase (ii) of Explanation below sub-section (2) of section 34 of the principal Act relating to aggregation, for the purposes of determining the rate of estate duty, of agricultural lands, situate in any State in respect of which estate duty under the principal Act is not leviable. (iii) Amendment of section 85 of the principal Act by substitution of sub-section (3) relating to rule-laying formula. Exclusion of agricultural lands from the levy of estate duty 3. The main object of the Amendment Act is to discontinue levy of estate duty in respect of agricultural lands. Section 3 of the Amendment Act accordingly seeks to insert in the principal Act, a new section 5B which provides that the principal Act shall cease to apply to the levy of estate duty in respect of agircultural land. 4. Section 4 of the Amendment Act provides for omission of the provisions of clause (b) of sub-section (1) and clause (ii) of the Explanation below sub-setion (2) of section 34 of the principal Act. The effect of these amendments is that the provision relating to aggregation, for the purpose of determining the rate of estate duty, of agricultural lands, situate in any State in respect of which estate duty under the principal Act is not leviable will stand omitted. Rule laying formula 5. Section 5 of the Amendent Act amends the provisions of section 85 of the principal Act relating to laying of the rules before each House of parliament. The amended provision lays down that even rule made under the principal Act shall be laid, as soon as may be after it is made, 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. If before the expiry of the session immediately following the session or the sucessive session, both Houses agree to modify the rule or agree that the rule should not be made, then the rule shall have effect in such modified form or shall be of no effect, as the case may be. However, such modification or annulment will not affect the validity of anything previously done under the rule. Scope and commencement of the Amendment At 6. Section 2 of the Amendment Act inserts a new sub-section (2C) of section 5A of the principal Act, the amendments made by section 3 to 5 of the Amendment Act shall apply to estate duty in respect of agricultural lands situate in the territory comprised in the States of Assam, Bihar, Gujarat, Haryana, Himachal Pradesh, Kerala, Madhya Pradesh, Maharashtra, Mehgalaya, Orissa and Tamil Nadu and all the Union territories on the expiration of two months fro the date on which the Amendment Act received the assent of the President. Accordingly, section 3 to 5 of the Amendment Act would apply in relation to agricultural lands situated in the aforesaid States and Union territories with effect from October 24, 1984. 7. In respect of agricultural land situate in the States other than those mentioned in the preceeding paragraph, the provisions of the Amendment Act shall apply after expiration of a period of four months from the date on which Legislatures of these States adopt, under article 252(1) of the Constitution, the proposals contained in the Amendment Act. (Sd.) V.D. Wakharkar Secretary Central Board of Direct Taxes