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TMI BlogExplanatory Notes on the provisions of the Taxation Laws (Amendment) Act, 1991X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) The various provisions of the Finance Act, 1990, as they stood before amendments by the Taxation Laws (Amendment) Act, 1991, have been referred to as the 'old provisions'. 2. Scope of this circular .--This circular explains the provisions of the Amending Act, 1991, relating to:-- (i) increasing surcharge on income-tax payable by domestic companies ; (ii) increasing surcharge on income-tax payable by non- corporate resident assessees ; (iii) restricting in the case of all companies the depreciation on written down value of a block of assets to 75% of the amount calculated at the percentage prescribed under the Income-tax Act. 3. Surcharge on income-tax in the case of domestic companies Rate of surcharge on income-tax.--Domestic companies having taxable income exceeding Rs.75,000 were required to pay a surcharge on income-tax at the rate of 8 per cent. under the old provisions. The Amending Act, 1991, has increased the rate of surcharge from 8 per cent. to 15 per cent. [It is clarified that no surcharge on income-tax is payable by a company other than a domestic company.] Payment of surcharge in respect of instalments of "advance tax".-- As the increase in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of surcharge in case of discontinued business.-- In a case where income-tax has to be charged under sub-section (2) of section 176 of the Income-tax Act (relating to recovery of tax in cases where a business or profession is discontinued) at the rates in force for the financial year 1990-91, surcharge at the rate of 15 per cent. shall be payable where such income-tax is charged after the 15th day of October, 1990. [It is clarified that the rate of surcharge on income-tax charged on or before 15th October, 1990, under sub-section (2) of section 176 shall be 8 per cent.] 4. Surcharge on income-tax in the case of non-corporate resident assessees. Rate of surcharge on income-tax.-- A non-corporate resident assessee having a taxable income exceeding Rs.75,000 was required to pay a surcharge on income-tax at the rate of 8 per cent. under the old provisions. The Amending Act, 1991, has increased the rate of surcharge from 8 per cent. to 12 per cent. [It is clarified that no surcharge on income-tax is payable by a non-resident assessee.] Payment of surcharge in respect of instalments of "advance tax".-- As the increase in the rate of surcharge was announced after the dates f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .-- In a case where income-tax has to be charged under section 175 of the Income-tax Act (relating to assessment of persons likely to transfer property to avoid tax) at the rates in force for the financial year 1990-91, surcharge at the rate of 12 per cent. shall be payable where such income-tax is so charged after the 15th day of January, 1991. [It is clarified that the rate of surcharge on income-tax charged on or before 15th January, 1991, under section 175 shall be 8 per cent.] Payment of surcharge in case of discontinued business.-- In a case where income-tax has to be charged under sub-section (2) of section 176 of the Income-tax Act (relating to recovery of tax in cases where a business or profession is discontinued) at the rates in force for the financial year 1990-91, surcharge at the rate of 12 per cent. shall be payable where such income-tax is so charged after the 15th day of January, 1991. [It is clarified that the rate of surcharge on income-tax charged on or before 15th January, 1991, under sub-section (2) of section 176 shall be 8 per cent.] 5. Surcharge on income-tax deducted at source in certain cases. Surcharge on income-tax deducted at source in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orate resident the amount of income-tax collected was to be increased by a surcharge at the rate of 8 per cent. under the old provisions. The Amending Act, 1991, provides that income-tax collected under the aforesaid provision on or after 15th January, 1991, shall be increased by a surcharge of 12 per cent. 7. Restricting in the case of all companies the depreciation on written down value of a block of assets. Restricting in the case of all companies the depreciation on written down value of a block of assets to 75 per cent. of the amount calculated at the percentage prescribed under the Income-tax Act.--The Amending Act, 1991, provides that in the case of all companies the deduction in relation to any block of assets in respect of the previous year relevant to the assessment year commencing on 1st April, 1991, shall be restricted to seventy-five per cent. of the amount calculated at the percentage, on the written down value of such block of assets, prescribed under the Income-tax Act immediately before the commencement of the Amending Act, 1991. [It is clarified that where the actual cost of any machinery or plant does not exceed five thousand rupees, the actual cost there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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