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TMI BlogDeduction in respect of earnings in convertible foreign exchangeX X X X Extracts X X X X X X X X Extracts X X X X ..... er cent of the profits derived by him from services provided to foreign tourists; and (ii) 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); (b) for an assessment year beginning on the 1st day of April, 2002, a deduction of a sum equal to the aggregate of- (i) thirty per cent of the profits derived by him from services provided to foreign tourists; and (ii) so much of the amount not exceeding thirty per cent of the profits referred t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of the assessment year beginning on the 1st day of April, 2005 and any subsequent assessment year] : 7[Provided that a hotel or, as the case may be, a tour operator approved by the prescribed authority 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 authority 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 service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he prescribed form indicating the amount received in foreign exchange, its conversion into Indian currency and such other particulars as may be prescribed.] 15[(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) 16[[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 assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a), in the year in which the amount was so utilised; or (ii) 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. 19[(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 equ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k of India under section 3225of 28[the Foreign Exchange Management Act, 1999 (42 of 1999) ]; (b) "convertible foreign exchange" shall have the meaning assigned to it in clause (a) of the Explanation to section 80HHC; (c) "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; 26[(d) "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 29[the Foreign Exchange Management Act, 1999 (42 of 1999)]] 27[(e) "eligible issue of capit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inance Act, 2002, w.e.f. 1-4-2003. 4. Substituted for "twenty" by the Finance Act, 2002, w.e.f. 1-4-2003. 5. Substituted for "ten" by the Finance Act, 2002, w.e.f. 1-4-2003. 6. Substituted for "ten" by the Finance Act, 2002, w.e.f. 1-4-2003. 7. Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991. 8. Substituted for "by the assessee in convertible foreign exchange" by the Finance Act, 1990, w.e.f. 1-4-1991. 9. Substituted for the portion beginning with the words "where the Chief Commissioner" and ending with the words "may allow in this behalf" by the Finance Act, 1999, w.e.f. 1-6-1999. Prior to substitution, the quoted portion, as amended by the Finance Act, 1990, w.e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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