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TMI BlogAmendments at a glance , Rate structure , Amendments to Income-tax Act , Amendments to Wealth-tax Act , Amendments to Companies (Profits) Surtax ActX X X X Extracts X X X X X X X X Extracts X X X X ..... y on the ground of payment not having been made in cash or in any other manner 34-35 80C(2)(a)/ Enlargement of the tax relief on personal savings through (b), (4)(i) life insurance policies, etc. 41-43 (prov.)/(ii) 80J(4)(iii), Extension of "tax holiday" concession to new industrial under- (5)(iii) takings commencing production, etc., after 31-3-1971 at any time during the five-year period up to 31-3-1976 39-40 80L(1)(i), (ii) Increase in the amount of dividends from Indian companies exempt from tax in the case of share-holders of all categories 44 80MM Exemption from tax of Indian companies on 40 per cent of their income by way of royalties, etc., received from any person carrying on a business in India in consideration of provision of technical know-how under an approved agreement 45-47 80P(4) Increase in the quantum of deduction in respect of business income in the case of co-operative societies 36 80RR Deduction for authors, etc., of 25 per cent of the income derived from their foreign sources in India in foreign exchange 48-49 208 Exemption limits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny refund on completion of the assessment for the assessment year 1969-70. Finance Act, 1969 Rates for deduction of tax at source from "salaries" and for computation of "advance tax", during the financial year 1969-70 3. The Finance Act, 1969 follows the principle adopted in the Finance Acts of the two earlier years that, in prescribing the rates of tax and in making new provisions in the taxation laws, measures which have the effect of bringing about a change in the tax liability or which provide a tax incentive or disincentive in any sphere should apply, prospectively, to current incomes due for assessment in the next following assessment year, and not retrospectively to incomes earned in the past, except where there are special circumstances justifying the retrospective operation of any particular provision. In conformity with this principle, changes in the rate schedule of tax which were considered necessary or desirable, have been made operative, prospectively, in relation to income falling due for assessment in the next following assessment year 1970-71. The rate schedule of tax incorporating these changes is set forth in Part III of the First Schedule to the Fina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 per cent as against 20 per cent in the slab Rs. 15,001—Rs. 20,000. The full effect of these increases will fall on taxpayers having income of Rs. 20,000 or more, and taken together with the Union surcharge of 10 per cent of the basic income-tax (which continues to be leviable at all levels of income), the additional tax will amount in each such case to Rs. 275 per year. [Paragraph A of Part III of the First Schedule to the Finance Act] Finance Act, 1969 5. Co-operative societies - Prescription of a simplified rate schedule of tax - Co-operative societies are at present entitled to several concessions under the Income-tax Act in the computation of their taxable income and they also enjoy the benefit of concessional rates of tax on their chargeable income under the annual Finance Acts. The present rate structure of tax in the case of co-operative societies is historically linked to the rate structure of tax in the case of individuals, subject to certain variations. Under the provisions of section 80P, co-operative societies are entitled to deduct from their taxable income the whole of their income from specified business activities, namely, banking, cottage industry; ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per cent in the case of an individual. The chargeable income of a co-operative society above Rs. 25,000 bears income-tax at a flat rate of 40 per cent as against rates rising progressively from 40 per cent to 75 per cent in the case of an individual. Finance Act, 1969 7. With a view to rationalising and simplifying the scheme of taxation of the income of co-operative societies, the Finance Act, 1969 has made the following changes : 1. The amount of business income exempt from tax in the generality of cases of co-operative societies has been increased by Rs. 5,000 from Rs. 15,000 to Rs. 20,000. This has been brought about by amendment of sub-section (2) of section 80P. Further, the benefit of this exemption up to Rs. 20,000 has been extended also in respect of incomes derived by co-operative societies from insurance business. This result is brought about by the omission of sub-section (4) of section 80P. The above-mentioned changes will be operative with effect from 1-4-1970, i.e., for the assessment year 1970-71 and subsequent years. 2. A new simplified rate structure of tax, different from that in the case of individuals, has been prescribed in the case of co-o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5,001—Rs. 50,000, to 20 per cent on income above Rs. 1,00,000. Registered firms are also liable to pay ordinary surcharge at 20 per cent of the basic income-tax (10 per cent in the case of a registered firm deriving income mainly from a profession) and a special surcharge of 10 per cent of the aggregate amount of the basic income-tax and the ordinary surcharge. The Finance Act, 1969 enlarges the area of taxation of the current income of registered firms by reducing the amount of the initial slab of income exempt from tax from Rs. 25,000 to Rs. 10,000. the rate of tax on income in the slab Rs. 10,001—Rs. 25,000 is prescribed at 4 per cent. The rates of basic income-tax in the income slabs above Rs. 25,000, as also the rates of ordinary surcharge and special surcharge continue unchanged. Finance Act, 1969 10. In consequence of the levy of basic income-tax on incomes of registered firms in the slab Rs. 10,001—Rs. 25,000 at 4 per cent, a firm with a total income of Rs. 25,000 and above, will be liable to pay, in each case, an additional amount of tax (including surcharges) of Rs. 792 (Rs. 726 where the firm derives income mainly from a profession). The partners of the firm will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agraphs. Provisions for rationalisation and simplification Finance Act, 1969 Treatment of public companies whose equity shares are listed in a recognised stock exchange in India as widely-held companies 15. The Income-tax Act makes a distinction in tax treatment as between a domestic company in which the public are substantially interested (widely-held domestic company) and one in which the public are not substantially interested (closely-held domestic company). Closely-held companies are required, subject to certain exceptions, to distribute dividends up to the statutory percentage of their distributable income, failing which they are liable to pay an additional income-tax with reference to their undistributed profits. Closely-held companies are (subject to certain exceptions) also liable to income-tax on their incomes at rates which are higher than in the case of widely-held domestic companies. Finance Act, 1969 16. A public company is treated for the purpose of income-tax as "a company in which the public are substantially interested" only if it satisfies the various tests laid down in the definition of that term in section 2( 18 ). One of these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 Rationalisation and simplification of the existing scheme for payment of advance tax under the Income-tax Act 19. The Finance Act, 1969 has made several changes in the provisions relating to advance tax contained in the Income-tax Act. These changes take effect, generally, from 1-4-1969; but those relating to charging of interest for non-furnishing of estimate of the advance tax payable or short payment of advance tax on the taxpayer's own estimate and levy of penalty for false estimates or failure without reasonable cause to furnish an estimate of the advance tax payable, etc., are operative from 1-4-1970, i.e., for the assessment year 1970-71 and subsequent years. The main features of the changes made by the Finance Act, 1969 in the provisions in the Income-tax Act relating to advance tax are explained in the following paragraphs. Finance Act, 1969 Exemption limits for advance tax 20. No advance tax will be payable in cases where the income subject to advance tax does not exceed the following limits : Rs. a. In the case of a company or a local authority [In these cases, the limit is the same as before] 2,500 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income 1,00,000 Gross amount of interest 50,000 Less : Interest paid on own borrowings 30,000 Net interest included in the total income . 20,000 Total income last assessed 1,20,000 Computation of advance tax under the law as amended Income on the total income of Rs. 1,20,000 @ 55% 66,000 Less : Tax deductible at source at 20 per cent from the gross interest of Rs. 50,000 (which has been taken into account in computing the total income of 1,20,000) 10,000 Net advance tax payable 56,000 [Under the law prior to its amendment, the tax deductible at source on the net amount of interest of Rs. 20,000 only, which is included in the total income could have been set off against the advance tax calculated on the last assessed income.] [Section 13 of the Finance Act, 1969] Finance Act, 1969 Instalments of advance tax 22. Under the amended law, advance tax will be payable during the financial year 1969-70 and subsequent years by all categories of persons in three equal instalments, as against four i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 69 New provision laying statutory obligation on taxpayers to pay a higher amount of advance tax than that demanded in certain cases 24. The Finance Act, 1969 has inserted a new sub-section (3A) in section 212, under which persons from whom advance tax has been demanded by an order under section 210 will be under an obligation to estimate their current income and pay advance tax thereon if such tax exceeds the advance tax demanded by more than one-third of the latter amount. The higher amount of advance tax in such cases will be payable on such of the due dates of instalments of advance tax as have not expired. It will be open to the taxpayer to revise his estimate. [Section 16 of the Finance Act, 1969] Finance Act, 1969 Charging of interest in cases of short payments of advance tax on the taxpayer's own estimate 25. Section 215 provides for the charging of interest, at the time of regular assessment, from persons who have paid advance tax on their own estimate in an amount which falls short of the assessed tax by more than 25 per cent thereof. The interest is calculated on the amount by which the advance tax paid falls short of 75 per cent of the assessed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tax demanded by more than one-third of the latter. In such a case, the interest will be calculated on the amount by which the advance tax actually paid falls short of the assessed tax. [Section 20 of the Finance Act, 1969] Finance Act, 1969 Penalty for false estimate of advance tax or default in furnishing the estimate of advance tax under the new sub-section (3A) of section 212 29. Section 273 provides for imposition of penalty on a person who furnishes a false estimate of advance tax under section 212 or who defaults without reasonable cause, in furnishing an estimate of the advance tax payable by him under section 212(3). The Finance Act, 1969 has substituted a new section for the existing section 273 with effect from 1-4-1970, i.e., for the assessment year 1970-71 and subsequent years. Under the new provisions, penalty will be imposable also in a case where a person furnishes a false estimate of the advance tax payable by him under the new sub-section (3A) of section 212, or fails, without reasonable cause, to furnish such an estimate. The scale of penalty for such defaults will be as under : 1. In a case where a false estimate has been furnished under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Rules. Under the Government's Notification No. SO 623, dated 14-2-1969, the above-mentioned provision has been given effect in relation to payments made after 31-3-1969. The cases and circumstances in which this provision will not be operative have also been specified in the Income-tax Rules under Notification No. SO 624, dated 14-2-1969. These exceptions (set forth in new rule 6DD of the Income-tax Rules, 1962) were notified after considering the views expressed by Chambers of Commerce and other public bodies on the draft Rules published earlier, and cover broadly the following categories of payments : 1. Payments made to the Reserve Bank of India, the State Bank of India, other banking institutions including co-operative banks and land mortgage banks, agricultural credit societies, the Life Insurance Corporation of India, Unit Trust of India and specified financial institutions. 2. Payments made to Government in cases where, under the rules framed by it, such payment is required to be made in legal tender. 3. Payments which, under a contract entered into by the taxpayer before 1-4-1969, have to be made in legal tender. 4. Certain categories of payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale on commission on consignment basis, because such a payment is not an expenditure deductible in computing the taxable income of the commission agent. For the same reason, the requirement does not also apply to advance payments made by the commission agent to the party concerned against supply of goods. However, where a commission agent purchases goods on his own account and not on commission basis, the requirement will apply to payments made for such purchases. Finance Act, 1969 Provision protecting payer against legal proceedings merely on the ground of payment not having been made or tendered in cash or in any other manner 34. At the time of consideration of the Finance Bill, 1968 in Parliament, apprehensions were expressed in certain quarters that difficulties might arise in the operation of the provisions in section 40A(3) unless persons who make payments by crossed cheques or bank drafts were protected from legal action on the ground that the payment was not made in legal tender. In order to secure the smooth operation of the provisions of section 40A(3), the Finance Act, 1969 has made a further provision, in new sub-section (4) of section 40A, to the effect th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will also be eligible for the deduction of Rs. 20,000 in the computation of their taxable income. The rationale and effect of these changes have been explained already in paragraphs 5 to 8. The amendments to section 80P will be effective from 1-4-1970 and will, accordingly, be operative in respect of the assessment year 1970-71 and subsequent years. [Section 10 of the Finance Act] Incentives for Industrial Development Finance Act, 1969 Treatment of the cotton textile and jute textile industries as priority industries for the purpose of grant of development rebate 37. A taxpayer who acquires a new ship or instals new machinery or plant for the purpose of his business is entitled, under the Income-tax Act, to a deduction on account of development rebate calculated at a specified percentage of the cost of such ship or machinery or plant. The rate of development rebate on new ship is 40 per cent. In respect of new machinery or plant installed up to 31-3-1970, the rate of development rebate for a "priority industry" ( i.e., an industry manufacturing or producing any of the articles or things specified in the Fifth Schedule to the Income-tax Act) is 35 per cent o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ip owned by it or the business of an approved hotel carried on by it, subject to certain conditions. The "tax holiday" consists in the exemption from tax of profits up to 6 per cent per annum of the capital employed in the undertaking, ship or hotel. In the case of an industrial undertaking owned by a co-operative society, the period of the "tax holiday" is 7 years and in other cases, 5 years, from the year in which the undertaking commences production or operation. In the case of a ship or approved hotel, the period of the "tax holiday" is five years from the year in which the ship is brought into use or the hotel starts functioning. Any deficiency from 6 per cent per annum return on the capital during the "tax holiday" period is allowed to be carried forward and set off against the profits of subsequent years up to a period of 8 years from the initial year. Shareholders of companies are exempt from tax on dividends which are attributable to the "tax holiday" profits of the company paying the dividend. Under the law, before its amendment by the Finance Act, 1969, the "tax holiday" concession was available in the case of industrial undertakings going into production or operation up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever, to the condition that the author, playwright, artist, etc., has effected an insurance policy on his life or on the life of his or her spouse before 1-3-1964 and pays premium during the relevant year to keep such policy in force. Under the Income-tax Rules, the higher limit over savings qualifying for tax relief in the case of authors, playwrights, artists, etc., is 33 1/3 per cent of the professional income plus 30 per cent of his other income, or Rs. 25,000, whichever is less. In the case of a Hindu undivided family, the limit over the amount of savings through life insurance qualifying for tax relief is 30 per cent of the gross total income or Rs. 30,000, whichever is less. The tax relief on savings up to the above-mentioned limits is granted in each case by allowing a deduction, in the computation of taxable income of 60 per cent of the first Rs. 5,000 and 50 per cent of the balance of the savings qualifying for relief. Finance Act, 1969 43. The Finance Act, 1969 has amended the provisions of section 80C with a view to enlarging the area of tax relief on savings through life insurance policies and to provide tax relief in the case of authors, playwrights, artists ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from Rs. 500 to Rs. 1,000 in the amount of dividends from Indian companies exempt from tax in the case of shareholders of all categories 44. The Finance Act, 1969 has amended section 80L with effect from 1-4-1970. Under the section as amended, taxpayers of all categories will be eligible to deduct, in the computation of their taxable incomes, dividends received by them from Indian companies during the year up to an amount of Rs. 1,000, as against Rs. 500 specified in the section before amendment. This provision is designed to encourage persons in the lower and middle income brackets to make larger investments in the shares of Indian companies and also to improve the investment climate. The higher deduction of Rs. 1,000 will be available in respect of the assessment year 1970-71 and subsequent years. [Section 8 of the Finance Act] Provisions for tax reliefs in certain directions Finance Act, 1969 Exemption from tax of Indian companies on 40 per cent of their income by way of royalties, technical service fees, etc., received from any person carrying on a business in India in consideration of provision of technical know-how or technical services under an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , under which a resident individual being an author, playwright, artist, musician or actor who derives income in the exercise of his profession from foreign sources and receives such income in India or brings it into India in foreign exchange, will be entitled to deduct 25 per cent of the income so received or brought in computing his total income. This provision is designed to encourage successful authors, playwrights, artists, musicians and actors in our country to project their activities outside India with a view to contributing to greater understanding of our country and its culture abroad and also augmenting our foreign exchange resources. Some of the professional activities coming within the scope of this section are : publication outside India of a book produced by the author, contribution of articles to foreign journals and magazines, exhibition of paintings, sculptures and other works of art in foreign countries, giving of music concerts to foreign audiences and acting in dramatic performances, cinematograph films and television programmes in foreign countries. Finance Act, 1969 49. New section 80RR comes into effect from 1-4-1970, and will be applicable for the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its residuary power of legislation under article 248 of the Constitution. The present Attorney-General has agreed with this view in his opinion given in March 1969 and also in his exposition of the matter before the Lok Sabha on 1-5-1969. Finance Act, 1969 54. It was observed by the Deputy Prime Minister and the Minister of Finance in Part B of his Budget Speech for 1969-70 as under : "This [ the circumstance that agricultural wealth has so far been exempt from wealth-tax ] has encouraged purchase of such land by the richer professional and business classes. While this has often acted as a spur to greater productivity in agriculture, there is no case in equity for taxing other productive wealth but exempting wealth in the form of agricultural land." [Paragraph 48] With a view to bringing about equality of treatment as between persons having investments in non-agricultural property, and those having investments in agricultural property, the Finance Act, 1969 has amended the Wealth-tax Act for extending the levy of wealth-tax to the value of agricultural property, with effect from 1-4-1970, i.e., from the assessment year 1970-71. For this purpose, the definitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 50,000 [Rs. 1,50,000 minus Rs. 1,00,000, being the value of the residential house eligible for exemption under clause ( iv )]. Where the value of the urban residential house is less than Rs. 1,00,000 say Rs. 70,000, the exemption under clause ( iv ) in respect of agricultural land will be available to the extent of Rs. 80,000 [Rs. 1,50,000 minus Rs. 70,000]. Where the residential house is situated in a village with a population not exceeding ten thousand persons, the whole of its value is exempt from wealth-tax under clause ( iv ) of section 5(1) and, in addition, exemption in respect of the value of agricultural land belonging to the assessee will be available to the full extent of Rs. 1,50,000. 2. Under new clause ( viiia ) inserted in section 5(1), a specific exemption is provided in respect of the value of growing crops (including fruits on trees) on agricultural land and grass on such land. It may be noted that the trees themselves, whether fruit-bearing or otherwise, are outside the purview of the exemption. Hence, in the case of land having standing fruit trees, such as coconut, arecanut, mango, jack, tamarind, cashew, etc., or timber, such as teak, rose-w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears, by virtue of section 13 of the Finance Act, 1960. Accordingly, the extension of the levy of wealth-tax to wealth in the form of agricultural property with effect from the assessment year 1970-71, will be operative only in the case of individuals and Hindu undivided families. In their cases, the value of the agricultural wealth will be aggregated with the value of their non-agricultural wealth and the aggregate value, as reduced by deduction on account of debts and liabilities and also for the specific exemptions provided for in the Act, will be charged to wealth-tax at the rates specified in Part I of the Schedule to the Wealth-tax Act. Where such agricultural land is situated in an area with a population exceeding one lakh persons, the additional wealth-tax at the rates specified in clause ( c ) of Paragraph A of Part I of the Schedule will also be chargeable. Finance Act, 1969 58. The Wealth-tax Act extends to the whole of India including the State of Jammu Kashmir. However, under the Constitution (Application to Jammu Kashmir) Order, 1954, article 248 and entry 97 of the Union List in the Seventh Schedule do not apply to that State. In view of this position, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as determined in the original assessment and Rs. 2,00,000 in the reassessment, the base for calculation of the penalty for failure to furnish the return of net wealth in the reassessment proceedings will be Rs. 1,00,000 (Rs. 2,00,000 less the amount of the initial exemption of Rs. 1,00,000). Where the net wealth determined in the original assessment was say Rs. 2,50,000 and in the reassessment Rs. 4,00,000, the base for calculation of the penalty for default in furnishing the wealth-tax return in the reassessment proceedings will be Rs. 1,50,000 (Rs. 4,00,000 minus Rs. 2,50,000). Finance Act, 1969 60. In the case of defaults, without reasonable cause, to produce accounts and documents called for by notice, the scale of penalty under the new provision will be a minimum of 1 per cent of the "assessed net wealth", and a maximum of an amount equal to the "assessed net wealth". For this purpose, "assessed net wealth" will be taken to be the net wealth determined on assessment as reduced by the net wealth declared in the return, if any, furnished by the taxpayer. Where the case is one of reassessment of wealth which had escaped assessment at the time of an earlier assessment, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o their distribution of equity dividends, the aggregate liability of a widely-held domestic company to income-tax and surtax can, in no case, go beyond 60.95 per cent for a company engaged in a priority industry and 66.25 per cent in any other case. In fact, at normal levels of profitability, the aggregate liability to income-tax and surtax in such cases is significantly lower than these percentages. Thus, in the case of a widely-held domestic company which is engaged in any of the specified priority industries [ i.e., the business of generation or distribution of electricity or any other form of power or of construction, manufacture or production of any one or more of the articles or things specified in the list in the Sixth Schedule to the Income-tax Act or the business of an approved hotel (carried on by an Indian company) vide section 80B(7) of the Income-tax Act] and has a profitability in relation to its capital base (including reserves, debentures and long-term loans) of 25 per cent, 30 per cent or 40 per cent, the aggregate liability to income-tax and surtax will be 50.95 per cent, 52.62 per cent or 54.70 per cent, as the case may be. Where such a company derives income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of income-tax 1. Exemptions from income-tax on total incomes not exceeding certain amounts : In the case of Limit of total income not chargeable to income-tax Rs. a. Resident Hindu undivided family which has at least two members, aged not less than 18 years, who are entitled to claim partition, or which 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 7,000 b. Resident taxpayers other than Hindu undivided families referred to in ( a ) above 4,000 Where the total income does not exceed Rs. 20,000, the tax chargeable after allowing the tax relief on account of personal allowances as at (2) below (where due), is limited, by way of marginal relief, to 40 per cent of the amount by which the total income exceeds the above limit of Rs. 7,000 or Rs. 4,000, as the case may be. 2. Tax relief in the case of resident individuals and Hindu undivided families on account of personal allowances : a. A resident individual whose total income does not exceed Rs. 10,000 and who has, during th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per cent of the amount by which the total income exceeds Rs. 10,000. Note : A parent or grandparent of an individual shall not be treated as being mainly dependent on such individual if the income of the parent or the grandparent from all sources in respect of the previous year exceeds Rs. 1,000. Surcharge on income-tax Surcharge is leviable at the rate of 10 per cent of the amount of income-tax. 2. Co-operative societies Rates of income-tax (exclusive of surcharge on income-tax) ( 1 ) On total income not exceeding Rs. 5,000 5 per cent of the total income; On total income— exceeding but not exceeding ( 2 ) Rs. 5,000 Rs. 10,000 Rs. 250 plus 10 per cent of the excess over Rs. 5,000; ( 3 ) Rs. 10,000 Rs. 15,000 Rs. 750 plus 15 per cent of the excess over Rs. 10,000; ( 4 ) Rs. 15,000 Rs. 20,000 Rs. 1,500 plus 20 per cent of the excess over Rs. 15,000; ( 5 ) Rs. 20,000 Rs. 25,000 Rs. 2,500 plus 25 per cent of the excess over Rs. 20,000; ( 6 ) Rs. 25,000 Rs. 3,750 plus 40 per cent of the excess over Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a company other than the Life Insurance Corporation of India, whose total income includes profits and gains from life insurance business, the rate of tax on such profits is also 52.5 per cent; the balance, if any, of the total income is chargeable to tax at the rates applicable under item ( 2 ) below to the total income of the company. 2. Companies other than the Life Insurance Corporation of India Rates of income-tax I. In the case of a domestic company— ( 1 ) where the company is a company in which the public are substantially interested,— ( i ) in a case where the total income does not exceed Rs. 50,000 45 per cent of the total income; ( ii ) in a case where the total income exceeds Rs. 50,000 55 per cent of the total income; ( 2 ) where the company is not a company in which the public are substantially interested,— ( i ) in the case of an industrial company— ( 1 ) on so much of the total income as does not exceed Rs. 10,00,000 55 per cent; ( 2 ) on the balance, if any, of the total income 60 per cent; ( ii ) in any oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lands or buildings or any rights therein 40 per cent of the amount of such capital gains; ( b ) in respect of "long-term" capital gains other than those referred to in ( a ) above. 30 per cent of the amount of such capital gains "Short-term" capital gains ( i.e. , capital gains arising from the transfer of a capital asset held by the taxpayer for not more than 24 months before the date of the transfer) are chargeable to income-tax at the rates of income-tax applicable to the total income of the company. Annexure II Rates of income-tax for deduction of tax at source from "salaries" and retirement annuities and for computing "advance tax" payable during the financial year 1969-70 A. Taxpayers other than companies 1. Individuals, Hindu undivided families, unregistered firms, associations of persons (other than co-operative societies), bodies of individuals and artificial juridical persons Rates of income-tax (exclusive of surcharge on income-tax) On total income— ( 1 ) not exceeding Rs. 5,000 5 per cent of the total income; ( 2 ) exceeding Rs. 5,000 but not exceeding Rs. 10,000 Rs. 250 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... individual whose total income does not exceed Rs. 10,000 and who has, during the previous year, incurred any expenditure on the maintenance of any one or more of his parents or grandparents mainly dependent on him, is entitled to a reduction in the amount of tax chargeable on his total income, on account of personal allowances, up to the respective amounts specified in the following table : Amount of tax relief Rs. Unmarried individual 145 Married individual who has no child mainly dependent on him 220 Married individual who has one child mainly dependent on him 240 Married individual who has more than one child mainly dependent on him 260 In the case of a married individual whose spouse has an independent taxable income exceeding Rs. 4,000, the amount of tax relief will be Rs. 145, Rs. 165 and Rs. 185, respectively, instead of Rs. 220, Rs. 240 and Rs. 260. ( b ) Resident individuals other than those referred to in ( a ) above and resident Hindu undivided families are entitled to a reduction in the amount of the tax chargeable on their total income, on account of personal allowances, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( 1 ) not exceeding Rs. 10,000 Nil ; ( 2 ) exceeding Rs. 10,000 but not exceeding Rs. 25,000 4 per cent of the excess over Rs. 10,000; ( 3 ) exceeding Rs. 25,000 but not exceeding Rs. 50,000 Rs. 600 plus 6 per cent of the excess over Rs. 25,000; ( 4 ) exceeding Rs. 50,000 but not exceeding Rs. 1,00,000 Rs. 2,100 plus 12 per cent of the excess over Rs. 50,000; ( 5 ) exceeding Rs. 1,00,000 Rs. 8,100 plus 20 per cent of the excess over Rs. 1,00,000. Surcharge on income-tax ( 1 ) Ordinary surcharge on income-tax— Rate of surcharge ( a ) a registered firm whose total income to the extent of 51 per cent thereof or more consists of income derived from a profession carried on by the firm 10 per cent of the amount of the income-tax; ( b ) any other registered firm 20 per cent of the amount of the income-tax. ( 2 ) Special surcharge. The rate of this surcharge is 10 per cent of the amount of income-tax as increased by the ordinary surcharge on income-tax referred to in ( 1 ) above. 4. Local authorities Rate of income-tax (exclusive of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny" means an Indian company or any other company which has, in respect of its income chargeable to tax for the assessment year 1969-70, made the prescribed arrangements for the declaration and payment of dividends within India. The term "industrial company" means a company which is mainly engaged in the generation or distribution of electricity or any other form of power or in the construction of ships or in the manufacture or processing of goods or in mining. A company is deemed to be mainly engaged in such a business if the income attributable to any one or more of the aforesaid activities included in its gross total income for the previous year is not less than 51 per cent of such total income.] II. In the case of a company other than a domestic company— ( i ) on so much of the total income as consists of— ( a ) royalties received from an Indian concern in pursuance of an agreement made by it with the Indian concern after 31-3-1961, or ( b ) fees for rendering technical services received from an Indian concern in pursuance of an agreement made by it with the Indian concern after 29-2-1964, and where such agreement has, in either case, been approved by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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