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TMI BlogThe Finance Act, 1986X X X X Extracts X X X X X X X X Extracts X X X X ..... ase in the manner provided therein : Provided that where an assessee, being a company, has made, during the financial year commencing on the 1st day of April, 1985, any deposit with the Industrial Development Bank of India established under the Industrial Development Bank of India Act, 1964 (18 of 1964), under the Companies Deposits (Surcharge on Income-tax) Scheme, 1985, then, the surcharge on income-tax payable by the company,-- (a) in a case where the amount of the deposit so made is equal to, or exceeds, the amount of surcharge on income-tax payable by it, shall be nil ; and (b) in a case where the amount of the deposit so made falls short of the amount of surcharge on income-tax payable by it, shall be reduced by the amount of the deposit. (2) In the cases to which Sub-Paragraph I or Sub-Paragraph II of Paragraph A of Part I of the First Schedule applies, where the assessee has, in the previous year, any net agricultural income exceeding six hundred rupees, in addition to total income, and the total income exceeds,-- (i) in a case to which the said Sub-paragraph I applies, eighteen thousand rupees, and (ii) in a case to which the said Sub-Paragraph II applies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e at the rates specified in Part II of the First Schedule. (5) Subject to the provisions of sub-section (6), in cases in which income-tax has to be calculated under the first proviso to sub-section (5) of section 132 of the Income-tax Act or charged under sub-section (4) of section 172 or sub-section (2) of section 174 or section 175 or sub-section (2) of section 176 of the said Act or deducted under section 192 of the said Act from income chargeable under the head " Salaries " or deducted under sub-section (9) of section 80E of the said Act from any payment referred to in the said sub-section (9) or in which the " advance tax " payable under Chapter XVII-C of the said Act has to be computed, at the rate or rates in force, such income-tax or, as the case may be, " advance tax " shall be so calculated, charged, deducted or computed at the rate or rates specified in Part III of the First Schedule : Provided that in cases to which the provisions of Chapter XII or Chapter XII-A or sub-section (1A) of section 161 or section 164 or section 164A or section 167A of the Income-tax Act apply, " advance tax " shall be computed with reference to the rates imposed by this sub-section or t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income-tax or " advance tax " shall be determined in respect of the net agricultural income as so increased at the rates specified in the said Sub-Paragraph I or, as the case may be, the said Sub-Paragraph II, as if the net agricultural income as so increased were the total income ; (iii) the amount of income-tax or " advance tax " determined in accordance with sub-clause (i) shall be reduced by the amount of income-tax or, as the case may be, " advance tax " determined in accordance with sub-clause (ii) and the sum so arrived at shall be the income-tax or, as the case may be, " advance tax " in respect of the total income. (7) For the purposes of this section and the First Schedule,-- (a) " company in which the public are substantially interested " means a company which is such a company as is referred to in section 108 of the Income-tax Act ; (b) " domestic company " means an Indian company, or any other company which, in respect of its income liable to income-tax under the Income-tax Act for the assessment, year commencing on the 1st day of April, 1986, has made the prescribed arrangements for the declaration and payment within India of the dividends (including divi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on beginning with the words " a sum equal to " and ending with the words " whichever is less ", the following shall be substituted with effect from the 1st day of April, 1987, namely :-- " a sum equal to thirty per cent. of the salary or ten thousand rupees, whichever is less ". 5. Amendment of section 23.-- In section 23 of the Income-tax Act, with effect from the 1st day of April, 1987,-- (a) for sub-section (2), the following sub-section shall be substituted, namely :-- (2) Where the property consists of-- (a) a house or part of a house in the occupation of the owner for the purposes of his own residence,-- (i) which is not actually let during any part of the previous year benefit therefrom is derived by the owner, the annual value of such house or part of the house shall be taken to be nil ; (ii) which is let during any part or parts of the previous year, that part of the annual value (annual value being determined in the same manner as if the property had been let) which is proportionate to the period during which the property is in the occupation of the owner for the purposes of his own residence, or, as the case may be, where such property is let out in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in sub-clause (i) of clause (a) of sub-section (2), or sub-section (3) of section 23 : Provided that nothing in this sub-section shall apply to the allowance of a deduction under clause (vi) of sub-section (1) of an amount not exceeding five thousand rupees in respect of the property of the nature referred to in sub-clause (i) of clause (a) of sub-section (2) of section 23. (3) The total amount deductible under sub-section (1) in respect of property of the nature referred to in sub-clause (ii) of clause (a) of sub-section (2) of section 23 shall not exceed the annual value of the property as determined under that section. ". 7. Amendment of section 32A.-- In section 32A of the Income-tax Act,-- (a) in sub-section (2),-- (i) in clause (c), for the figures, letters and words " 1st day of April, 1988, " the figures, letters and words " 1st day of April, 1987, " shall be substituted with effect from the 1st day of April, 1987 ; (ii) in clause (2) of the Explanation, for sub-clauses (i) and (ii), the following sub-clauses shall be substituted and shall be deemed to have been substituted with effect from the 1st day of April, 1985, namely :-- "(i) in a case where th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section,-- (i) " eligible business or profession " shall mean business or profession, other than-- (a) the business of construction, manufacture or production of any article or thing specified in the list in the Eleventh Schedule carried on by an industrial undertaking, which is not a small-scale industrial undertaking as defined in section 80HHA ; (b) the business of leasing or hiring of machinery or plant to an industrial undertaking, other than a small-scale industrial undertaking as defined in section 80HHA, engaged in the business of construction, manufacture or production of any article or thing specified in the list in the Eleventh Schedule ; (ii) " new ship " or " new aircraft " or " new machinery or plant " shall have the same meanings as in the Explanation to clause (vi) of sub-section (1) of section 32. (3) The profits of eligible business or profession of an assessee for the purposes of sub-section (1) shall,-- (a) in a case where separate accounts in respect of such eligible business or profession are maintained, be an amount arrived at after deducting an amount equal to the depreciation computed in accordance with the provisions of sub-section (1) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing any previous year by the Development Bank for being utilised by the assessee for the purposes specified in the scheme or at the closure of the account, is not utilised in accordance with the scheme, either wholly or in part, within that previous year, the whole of such amount or, as the case may be, part thereof which is not so utilised shall be deemed to be the profits and gains of business or profession of that previous year and shall accordingly be chargeable to income-tax as the income of that previous year. (7) Where any asset acquired in accordance with the scheme is sold or otherwise transferred in any previous year by the assessee to any person at any time before the expiry of eight years from the end of the previous year in which it was acquired, such part of the cost of such asset as is relatable to the deductions allowed under sub-section (1) shall be deemed to be the profits and gains of business or profession of the previous year in which the asset is sold or otherwise transferred and shall accordingly be chargeable to income-tax as the income of that previous year : Provided that nothing in this sub-section shall apply-- (i) where the asset is sold or oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. Amendment of section 43.- -In section 43 of the Income-tax Act, in clause (1), after Explanation 7, the following Explanation shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April 1974, namely :-- " Explanation 8.-- For the removal of doubts, it is hereby declared that where any amount is paid or is payable as interest in connection with the acquisition of an asset, so much of such amount as is relatable to any period after such asset is first put to use shall not be included, and shall be deemed never to have been included, in the actual cost of such asset. ". 10. Amendment of section 50.-- In section 50 of the Income-tax Act, in clause (2), for the figures, letters and words " 1st day of January, 1964 ", the figures, letters and words " 1st day of April, 1974 " shall be substituted with effect from the 1st day of April, 1987. 11. Amendment of section 54.-- In section 54 of the Income-tax Act, with effect from the 1st day of April, 1987,-- (a) in sub-section (1), for the words " one year before or after the date on which the transfer took place purchased ", the words "one year before or two years after the date on w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in horse races, from the activity of owning and maintaining such horses. Explanation.-- For the purposes of this sub-section, " horse race means a horse race upon which wagering or betting may be lawfully made.'. 15. Amendment of section 74.-- In section 74 of the Income-tax Act, in sub-section (1), in the proviso to clause (a), for the words " five thousand rupees ", the words " ten thousand rupees " shall be substituted with effect from the 1st day of April, 1987. 16. Amendment of section 74A.- -In section 74A of the Income-tax Act, with effect from the 1st day of April, 1987,-- (a) sub-sections (1) and (2) shall be omitted ; (b) in sub-section (3),-- (i) in the opening portion,-- (A) the words " Where for any assessment year, " shall be omitted ; (B) for the portion beginning with the words " the net result of the computation " and ending with the words " owning and maintaining race horses ", the following shall be substituted, namely :-- "the amount of loss incurred by the assessee in the activity of owning and maintaining race horses in any assessment year shall not be set off against income, if any, from any source other than the activity of owni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative society (including a co-operative land mortgage bank or a co-operative land development bank), as the Central Government may, by notification in the Official Gazette, specify in this behalf. Explanation.-- For the purposes of this clause, " public sector company " means any corporation established by or under any Central, State or Provincial Act or a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956) ; (b) sub-section (2) shall be omitted. 21. Substitution of new section for section 80M.-- For section 80M of the Income-tax Act, the following section shall be substituted with effect from the 1st day of April, 1987, namely :-- " 80M. Deduction in respect of certain inter-corporate dividends.--Where the gross total income of an assessee, being a domestic company, includes any income by way of dividends from a domestic company, there shall be allowed, in computing the total income of the assessee, a deduction from such income by way of dividends of an amount equal to sixty per cent. of such income. ". 22. Omission of section 80S.-- Section 80S of the Income-tax Act shall be omitted with effect from the 1st day of April, 1987. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such lottery or crossword puzzle or race including horse race or card game and other game of any sort or from gambling or betting of any form or nature whatsoever, at the rate of forty per cent. ; and (ii) the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the amount of income referred to in clause (i). Explanation.-- For the purposes of this section, " horse race " shall have the same meaning as in section 74A.'. 27. Insertion of new section 133B.-- In the Income-tax Act, after section 133A, the following section shall be inserted, namely :-- '133B. Power to collect certain information.-- (1) Notwithstanding anything contained in any other provision of this Act, an income-tax authority may, for the purpose of collecting any information which may be useful for, or relevant to, the purposes of this Act, enter-- (a) any building or place within the limits, of the area assigned to such authority, or (b) any building or place occupied by any person in respect of whom he exercises jurisdiction, at which a business or profession is carried on, whether such place be principal place or not of such busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment company as defined in section 617 of the Companies Act, 1956 (1 of 1956) ; or'. 30. Amendment of section 194B.-- In section 194B of the Income-tax Act, for the words " one thousand rupees ", the words " five thousand rupees" shall be substituted with effect from the 1st day of June, 1986. 31. Amendment of section 194BB.-- In section 194BB of the Income-tax Act, for the words " two thousand five hundred rupees ", the words " five thousand rupees " shall be substituted with effect from the 1st day of June, 1986. 32. Amendment of section 204.-- In section 204 of the Income-tax Act, with effect from the 1st day of June, 1986,-- (a) after clause (ii), the following clause shall be inserted, namely :-- "(iia) in the case of any sum payable to a non-resident Indian, being any sum representing consideration for the transfer by him of any foreign exchange asset, which is not a short-term capital asset, the authorised dealer responsible for remitting such sum to the non-resident Indian or for crediting such sum to his Non-resident (External) Account maintained in accordance with the Foreign Exchange Regulation Act, 1973 (46 of 1973), and any rules made thereunder ; " ; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he price that such thing or things would ordinarily fetch on sale in the open market on the date on which the agreement for transfer is made, and such sum ; (iii) if the immovable property is to be transferred by way of lease,-- (A) in a case where the consideration for the transfer consists of premium only, the amount of premium as specified in the agreement for transfer ; (B) in a case where the consideration for the transfer consists of rent only, the aggregate of the moneys (if any) payable by way of rent and the amounts for the service or things forming part of or constituting the rent, as specified in the agreement for transfer ; (C) in a case where the consideration for the transfer consists of premium and rent, the aggregate of the amount of the premium, the moneys (if any) payable by way of rent and the amounts for the service or things forming part of or constituting the rent, as specified in the agreement for transfer ; and where the whole or any part of the consideration for such transfer is payable on any date or dates falling after the date of such agreement for transfer, the value of the consideration payable after such date shall be deemed to be the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, a co-operative society, company or other association of persons or by way of any agreement or any arrangement of whatever nature), not being a transaction by way of sale, exchange or lease of such land, building or part of a building ; (e) " person interested ", in relation to any immovable property, includes all persons claiming, or entitled to claim, an interest in the consideration payable on account of the vesting of that property in the Central Government under this Chapter ; (f) " transfer, "-- (i) in relation to any immovable property referred to in sub-clause (i) of clause (d), means transfer of such property by way of sale or exchange or lease for a term of not less than twelve years, and includes allowing the possession of such property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882). Explanation.-- For the purposes of this sub-clause, a lease which provides for the extension of the term thereof by a further term or terms shall be deemed to be a lease for a term of not less than twelve years, if the aggregate of the term for which such lease is to be grante ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed or is to be constructed. 269UC. Restrictions on transfer of immovable property.- -(1) Notwithstanding anything contained in the Transfer of Property Act, 1882 (4 of 1982), or in any other law for the time being in force, no transfer of any immovable property of such value exceeding five lakh rupees as may be prescribed, shall be effected except after an agreement for transfer is entered into between the person who intends transferring the immovable property (hereinafter referred to as the transferor) and the person to whom it is proposed to be transferred (hereinafter referred to as the transferee) in accordance with the provisions of sub-section (2) at least three months before the intended date of transfer. (2) The agreement referred to in sub-section (1) shall be reduced to writing in the form of a statement by each of the parties to such transfer or by any of the parties to such transfer acting on behalf of himself and on behalf of the other parties. (3) Every statement referred to in sub-section (2) shall,-- (i) be in the prescribed form ; (ii) set forth such particulars as may be prescribed ; and (iii) be verified in the prescribed manner ; and shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ances. (2) The transferor or any other person who may be in possession of the immovable property in respect of which an order under sub-section (1) of section 269UD is made, shall surrender or deliver possession thereof to the appropriate authority or any other person duly authorised by the appropriate authority in this behalf within fifteen days of the service of such order on him. (3) If any person refuses or fails to comply with the provisions of sub-section (2), the appropriate authority or other person duly authorised by it under that sub-section may take possession of the immovable property and may, for that purpose, use such force as may be necessary. (4) Notwithstanding anything contained in sub-section (2), the appropriate authority may, for the purpose of taking possession of any property referred to in sub-section (1), requisition the services of any police officer to assist him and it shall be the duty of such officer to comply with such requisition. (5) For the removal of doubts, it is hereby declared that nothing in this section shall operate to discharge the transferor or any other person (not being the Central Government) from liability in respect of any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, as the case may be, sub-section (6), of section 269UE : Provided that if any liability for any tax or any other sum remaining payable under this Act, the Wealth-tax Act, 1957 (27 of 1957), the Gift-tax Act, 1958 (18 of 1958), the Estate Duty Act, 1953 (34 of 1953), or the Companies (Profits) Surtax Act, 1964 (7 of 1964), by any person entitled to the consideration payable under section 269UF, the appropriate authority may, in lieu of the payment of the amount of consideration, set off the amount of consideration or any part thereof against such liability or sum, after giving an intimation in this behalf to the person entitled to the consideration. (2) Notwithstanding anything contained in sub-section (1), if any dispute arises as to the apportionment of the amount of consideration amongst persons claiming to be entitled thereto, the Central Government shall deposit with the appropriate authority the amount of consideration required to be tendered under sub-section (1) within the period specified therein. (3) Notwithstanding anything contained in sub-section (1), if the person entitled to the amount of consideration does not consent to receive it, or if there is any disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property re-vested in the transferor under sub-section (1), the appropriate authority shall make, as soon as may be, a declaration in writing to this effect and shall-- (a) deliver a copy of the declaration to the persons mentioned in sub-section (2) of section 269UD ; and (b) deliver or cause to be delivered possession of the immovable property back to the transferor or, as the case may be, to such other person as was in possession of the property at the time of its vesting in the Central Government under section 269UE. 269UI. Powers of the appropriate authority.-- The appropriate authority shall have, for the purposes of this Chapter, all the powers that a Commissioner of Income-tax has for the purposes of this Act under section 131. 269UJ. Rectification of mistakes.-- With a view to rectifying any mistake apparent from the record, the appropriate authority may amend any order made by it under this Chapter, either on its own motion or on the mistake being brought to its notice by any person affected by the order : Provided that if any such amendment is likely to affect any person prejudicially, it shall not be made without giving to such person a reasonable oppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of which it has received a statement under sub-section (3) of section 269UC. (3) In a case where the appropriate authority does not make an order under sub-section (1) of section 269UD for the purchase by the Central Government of an immovable property, or where the order made under sub-section (1) of section 269UD stands abrogated under sub-section (1) of section 269UH, the appropriate authority shall issue a certificate of no objection referred to in sub-section (1) or, as the case may be, sub-section (2) and deliver copies thereof to the transferor and the transferee. 269UM. Immunity to transferor against claims of transferee for transfer.-- Notwithstanding anything contained in any other law or in any instrument or any agreement for the time being in force, when an order for the purchase of any immovable property by the Central Government is made under this Chapter, no claim by the transferee shall lie against the transferor by reason of such transfer being not in accordance with the agreement for the transfer of the immovable property entered into between the transferor and the transferee : Provided that nothing contained in this section shall apply if the order f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A of the Income-tax Act shall be omitted with effect from the 1st day of October, 1986. 38. Omission of Twelfth Schedule.-- The Twelfth Schedule to the Income-tax Act shall be omitted with effect from the 1st day of April, 1987. 39. Consequential amendments.--The following amendments (being amendments of a consequential nature) shall be made in the Income-tax Act with effect from the 1st day of April, 1987, namely :-- (a) in section 80A, in sub-section (3),-- (i) the words, figures and letter " or section 80K " shall be omitted ; (ii) the words, figures and letter " or section 80S " shall be omitted ; (iii) the words, figures and letters " or section 80TT " shall be omitted ; (b) in section 80VVA, in sub-section (2),-- (i) in clause (xiiia) shall be renumbered as clause (xiiib), and before clause (xiiib) as so renumbered, the following clause shall be inserted, namely :-- " (xiiia) section 32AB ; " ; (ii) clause (xxiv) shall be omitted ; (c) in section 197,-- (i) in sub-section (1), in clause (a), the figures and letters ", 194B, 194BB " shall be omitted ; (ii) sub-section (3) shall be omitted. (d) in the Eleventh Schedule, after the words ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act), with effect from the 1st day of April, 1987, section 3 shall be renumbered as sub-section (1) thereof and-- (a) in sub-section (1) as so renumbered, after the words, figures and letters " the 1st day of April, 1958, ", the words figures and letters " but before the 1st day of April, 1987, " shall be inserted ; (b) after sub-section (1) as so renumbered, the following sub-section shall be inserted, namely :-- " (2) Subject to the other provisions contained in this Act, there shall be charged for every assessment year commencing on and from the 1st day of April, 1987, gift-tax in respect of the gifts, if any, made by a person during the previous year, at the rate of thirty per cent. on the value of all taxable gifts.". 42. Amendment of section 5.-- In section 5 of the Gift-tax Act, with effect from the 1st day of April, 1987,-- (a) in sub-section (1), clause (iiia), (vi), (viii), (ix), (xiv) and (xvi) shall be omitted ; (b) in sub-section (1A), the words, brackets and figures " or clause (vi) " shall be omitted ; (c) in sub-section (2), for the words " five thousand ", the words " twenty thousand " shall be substituted ; (d) sub-section 3 shall be omit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exceed Rs. 25,000 Rs. 18,000; (3) where the total income Rs. 1,750 plus 30 per cent. of the exceeds Rs. 25,000 but does not amount by which the total income exceed Rs. 50,000 exceeds Rs. 25,000; (4) where the total income Rs. 9,250 plus 40 per cent. of the exceeds Rs. 50,000 but does not amount by which the total income exceed Rs. 1,00,000 exceeds Rs. 50,000; (5) where the total income Rs. 29,250 plus 50 per cent. of the exceeds Rs. 1,00,000 amount by which the total income exceeds Rs. 1,00,000. Sub-Paragraph II In the case of every Hindu undivided family which at any time during the previous year has at least one member whose total income of the previous year relevant to the assessment year commencing on the 1st day of April, 1986, exceeds Rs. 18,000,--- Rates of income-tax (1) where the total income Nil does not exceed Rs. 12,000 (2) where the total income 25 per cent. of the amount by exceeds Rs. 12,000 but does not which the total income exceeds exceed Rs. 20,000 Rs. 12,000 (3) where the total income Rs. 2,000 plus 30 per cent. of the exceeds Rs. 20,000 but does not amount by which the total exceed Rs. 40,000 income exceeds Rs. 20,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. of the exceeds Rs. 1,00,000 amount by which the total income exceeds Rs. 1,00,000. (5) where the total income Rs. 16,000 plus 50 per cent. of the exceeds Rs. 60,000 but does not amount by which the total exceed Rs. 1,00,000 income exceeds Rs. 60,000; (6) where the total income Rs. 36,000 plus 55 per cent. of the exceeds Rs. 1,00,000 amount by which the total income exceeds Rs. 1,00,000. Explanation.--- For the purposes of this Paragraph, " registered firm " includes an unregistered firm assessed as a registered firm under clause (b) of section 183 of the Income-tax Act. Paragraph D In the case of every local authority,---- Rate of income-tax On the whole of the total income 50 per cent. Paragraph E In the case of a company,----- Rates of income-tax I. In the case of a domestic company,---- (1) where the company is a company 50 per cent. of the total income; in which the public are substantially interested (2) where the company is not a company in which the public are substantially interested----- (i) in the case of a trading 60 per cent. of the total income; company or an investment company (ii) in any other case 55 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er cent.; (excluding interest payable on a tax-free security) (b) where the person is not resident in India----- (i) in the case of a non-resident Indian---- (A) on investment income 20 per cent.; and long-term capital gains (B) on income by way 15 per cent.; of interest payable on a tax-free security; (C) on the whole of the other income-tax at 30 per cent. of the income amount of the income, or income-tax in respect of the income at the rates prescribed in Sub- Paragraph I of Paragraph A of Part III of this Schedule, if such income had been the total income, whichever is higher; (ii) in the case of any other person--- (A) on the whole of the income-tax at 30 per cent. of the income (excluding interest payable amount of the income, on a tax-free security) or income-tax in respect of the income at the rates prescribed in Sub- Paragraph I of Paragraph A of Part III of this Schedule, if such income had been the total income, whichever is higher; (B) on income by way 15 per cent.; of interest payable on a tax-free security 2. In the case of a company---- (a) where the company is a domestic company---- (i) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RGING INCOME-TAX IN CERTAIN CASES, DEDUCTING INCOME-TAX FROM INCOME CHARGEABLE UNDER THE HEAD " SALARIES " OR ANY PAYMENT REFERRED TO IN SUB-SECTION (9) OF SECTION 80E AND COMPUTING " ADVANCE TAX " In cases in which income-tax has to be calculated under the first proviso to sub-section (5) of section 132 of the Income-tax Act or charged under sub-section (4) of section 172 or sub-section (2) of section 174 or section 175 or sub-section (2) of section 176 of the said Act or deducted under section 192 of the said Act from income chargeable under the head " Salaries " or deducted under sub-section (9) of section 80E of the said Act from any payment referred to in the said sub-section (9) or in which the "advance tax " payable under Chapter XVII-C of the said Act has to be computed, at the rate or rates in force, such income-tax or, as the case may be, " advance tax " [not being " advance tax " in respect of any income chargeable to tax under Chapter XII or Chapter XII-A or sub-section (1A) of section 161 or section 164 or section 164A or section 167A of the Income-tax Act at the rates as specified in that Chapter or section), shall be so calculated, charged, deducted or computed at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of every co-operative society,--- Rates of income-tax (1) Where the total income 15 per cent. of the total income; does not exceed Rs. 10,000 (2) Where the total income Rs. 1,500 plus 25 per cent. of the exceeds Rs. 10,000 but amount by which the total income does not exceed Rs. 20,000 exceeds Rs. 10,000; (3) Where the total income Rs. 4,000 plus 40 per cent. of the exceeds Rs. 20,000 amount by which the total income exceeds Rs. 20,000; Paragraph C Sub-Paragraph I In the case of every registered firm, not being a case to which Sub-Paragraph II of this Paragraph applies, ---- Rates of income-tax (1) Where the total income Nil; does not exceed Rs. 10,000 (2) Where the total income per cent. of the amount by exceeds Rs. 10,000 but does not which the total income exceeds exceed Rs. 25,000 Rs. 10,000; (3) Where the total income Rs. 750 plus 7 per cent. of the exceeds Rs. 25,000 but does not amount by which the total income exceed Rs. 50,000 exceeds Rs. 25,000; (4) Where the total income Rs. 2,500 plus 15 per cent. of the exceeds Rs. 50,000 but does not amount by which the total income exceed Rs. 1,00,000 exceeds Rs. 50,000; (5) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by it with the Government or the Indian concern after the 29th day of February, 1964, but before the 1st day of April, 1976, and where such agreement has, 50 per cent.; in either case, been approved by the Central Government. (ii) on the balance, if any, of the 65 per cent. total income PART IV [See section 2(7)(e)] RULES FOR COMPUTATION OF NET AGRICULTURAL INCOME Rule 1.--- Agricultural income of the nature referred to in sub-clause (a) of clause (1) of section 2 of the Income-tax Act shall be computed as if it were income chargeable to income-tax under that Act under the head " Income from other sources " and the provisions of sections 57 to 59 of that Act shall, so far as may be, apply accordingly: Provided that sub-section (2) of section 58 shall apply subject to the modification that the reference to section 40A therein shall be construed as not including a reference to sub-sections (3) and (4) of section 40A. Rule 2.-- -Agricultural income of the nature referred to in sub-clause (b) or sub-clause (c) of clause (1) of section 2 of the Income-tax Act [other than income derived from any building required as a dwelling-house by the rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s share in the agricultural income or loss of the firm shall be computed in the manner laid down in sub-section (1), sub-section (2) and sub-section (3) of section 67 of the Income-tax Act and the share so computed shall be regarded as the agricultural income or loss of the assessee. Rule 6.--- Where the assessee is a member of an association of persons or a body of individuals (other than a Hindu undivided family, a company or a firm) which in the previous year has either no income chargeable to tax under the Income-tax Act or has total income not exceeding the maximum amount not chargeable to tax in the case of an association of persons or a body of individuals (other than a Hindu undivided family, a company or a firm) but has any agricultural income, then, the agricultural income or loss of the association or body shall be computed in accordance with these rules and the share of the assessee in the agricultural income or loss so computed shall be regarded as the agricultural income or loss of the assessee. Rule 7.--- Where the result of the computation for the previous year in respect of any source of agricultural income is a loss, such loss shall be set off against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puted for the previous year relevant to the assessment year commencing on the 1st day of April, 1980, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1981, or the 1st day of April, 1982, or the 1st day of April, 1983, or the 1st day of April, 1984, or the 1st day of April, 1985, (iv) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1981, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1982, or the 1st day of April, 1983, or the 1st day of April, 1984, or the 1st day of April, 1985, (v) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1982, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1983, or the 1st day of April, 1984, or the 1st day of April, 1985, (vi) the loss so comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1981, or the 1st day of April, 1982, or the 1st day of April, 1983, or the 1st day of April, 1984, or the 1st day of April, 1985, or the 1st day of April, 1986, (iii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1981, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1982, or the 1st day of April, 1983, or the 1st day of April, 1984, or the 1st day of April, 1985, or the 1st day of April, 1986, (iv) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1982, to the extent, if any, such loss not has been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1983, or the 1st day of April, 1984, or the 1st day of April, 1985, or the 1st day of April, 1986, (v) the loss so computed for the previous year relevant to the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 978), or of the First Schedule to the Finance Act, 1979 (21 of 1979), or of the First Schedule to the Finance (No. 2) Act, 1980 (44 of 1980), or of the First Schedule to the Finance Act, 1981 (16 of 1981), or of the First Schedule to the Finance Act, 1982 (14 of 1982), or of the First Schedule to the Finance Act, 1983 (11 of 1983), or of the First Schedule to the Finance Act, 1984 (21 of 1984), or of the First Schedule to the Finance Act, 1985 (32 of 1985), shall be set off under sub-rule (1) or, as the case may be, sub-rule (2). Rule 10.--- Where the net result of the computation made in accordance with these rules is a loss, the loss so computed shall be ignored and the net agricultural income shall be deemed to be nil. Rule 11.-- -The provisions of the Income-tax Act relating to procedure for assessment (including the provisions of section 288A relating to rounding off of income) shall, with the necessary modifications, apply in relation to the computation of the net agricultural income of the assessee as they apply in relation to the assessment of the total income. Rule 12.--- For the purposes of computing the net agricultural income of the assessee, the Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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