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TMI BlogThe Finance Act, 1988X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) in the cases to which Paragraph E of that Part applies, by a surcharge, calculated in each case in the manner provided therein. (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, twelve thousand rupees, then,-- (a) the net agricultural income shall be taken into account, in the manner provided in clause (b) [that is to say, as if the net agricultural income were comprised in the total income after,-- (i) in a case to which the said Sub-Paragraph I applies, the first eighteen thousand rupees, and (ii) in a case to which the said Sub-Paragraph II applies, the first twelve thousand rupees, of the total income but without being liable to tax], only for the purpose of charging income-tax in respect of the total income ; and (b) the income-tax chargeable shall be calculated as foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duction shall be made at the rates specified in Part II of the First Schedule and shall be increased,-- (a) in the cases to which the provisions of sub-item (a) of item 1 of that Part apply, by a surcharge for purposes of the Union ; and (b) in the cases to which the provisions of sub-item (a) of item 2 of that Part apply, by a surcharge, calculated in each case in the manner provided therein. (5) In cases in which tax has to be deducted under section 194C of the Income-tax Act, the deduction shall be made at the rates specified in that section and shall be increased by a surcharge for purposes of the Union calculated at the rate of five per cent. of such deduction. (6) In cases in which tax has to be collected under section 206C of the Income-tax Act, the collection shall be made at the rate specified in that section and shall be increased by a surcharge for purposes of the Union calculated at the rate of five per cent. of such collection. (7) Subject to the provisions of sub-section (8), 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate or rates in force,-- (a) the net agricultural income shall be taken into account, in the manner provided in clause (b) [that is to say, as if the net agricultural income were comprised in the total income after,-- (i) in a case to which the said Sub-Paragraph I applies, the first eighteen thousand rupees, and (ii) in a case to which the said Sub-Paragraph II applies, the first twelve thousand rupees, of the total income but without being liable to tax], only for the purpose of calculating, charging or computing such income-tax or, as the case may be, " advance tax " in respect of the total income ; and (b) such income-tax or, as the case may be, " advance tax " shall be so calculated, charged or computed as follows :-- (i) the total income and the net agricultural income shall be aggregated and the amount of income-tax or " advance tax " shall be determined in respect of the aggregate income at the rates specified in Sub-Paragraph I or, as the case may be, Sub-Paragraph II of the said Paragraph A, as if such aggregate income were the total income ; (ii) the net agricultural income shall be increased,-- (A) in a case to which the said Sub-Paragraph I ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whose gross total income (as defined in section 80B of the Income-tax Act) consists mainly of income which is chargeable under the heads " Interest on securities ", " Income from house property ", " Capital gains " and " Income from other sources " ; (e) " net agricultural income ", in relation to a person, means the total amount of agricultural income, from whatever source derived, of that person computed in accordance with the rules contained in Part IV of the First Schedule ; (f) " tax-free security " means any security of the Central Government issued or declared to be income-tax free, or any security of a State Government issued income-tax free, the income-tax whereon is payable by the State Government ; (g) " trading company " means a company whose business consists mainly in dealing in goods or merchandise manufactured, produced or processed by a person other than that company and whose income attributable to such business included in its gross total income (as defined in section 80B of the Income-tax Act) is not less than fifty-one per cent. of the amount of such gross total income ; (h) all other words and expressions used in this section or in the First Schedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emuneration due to or received by him " ; (3) in the proviso, for the words " Provided that ", the following shall be substituted, namely :-- '(II) where such services commence from a date after the 31st day of March, 1988, and tax on his income chargeable under the head " Salaries " is paid to the Central Government by the employer (which tax, in the case of an employer, being a company, may be paid notwithstanding anything contained in section 200 of the Companies Act, 1956 (1 of 1956)), the tax so paid by the employer for a period not exceeding forty-eight months commencing from the date of his arrival in India : Provided that nothing in this item shall relate to a period exceeding twenty-four months commencing from the date of his arrival in India if the approval of the Central Government for his employment to India for such period is not obtained before the 1st day of October of the relevant assessment year : Provided further that' : (b) in clause (6A), in the Explanation, for the words " For the purposes of this clause ", the words, brackets, figure and letter " For the purposes of this clause and clause (6B) " shall be substituted ; (c) after clause (6A), t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used for cultivation of rubber, coffee, cardamom or such other commodity as the Central Government may, by notification in the Official Gazette, specify : Provided that the assessee furnishes to the Assessing Officer, along with his return of income for the assessment year concerned or within such further time as the Assessing Officer may allow, a certificate from the concerned Board, as to the amount of such subsidy paid to the assessee during the previous year. Explanation.-- In this clause, " concerned Board " means,-- (i) in relation to rubber, the Rubber Board constituted under section 4 of the Rubber Act, 1947 (24 of 1947), (ii) in relation to coffee, the Coffee Board constituted under section 4 of the Coffee Act, 1942 (7 of 1942), (iii) in relation to cardamom, the Spices Board constituted under section 3 of the Spices Board Act, 1986 (10 of 1986), (iv) in relation to any other commodity specified under this clause, any Board or other authority established under any law for the time being in force which the Central Government may, by notification in the Official Gazette, specify in this behalf.'. 5. Amendment of section 10A.-- In section 10A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l not be included in the total income of the assessee in respect of any five consecutive assessment years, failing within a period of eight years beginning with the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce articles or things, specified by the assessee at his option : Provided that nothing in this sub-section shall be construed to extend the aforesaid five assessment years to cover any period after the expiry of the said period of eight years. (4) Notwithstanding anything contained in any other provision of this Act, in computing the total income of the assessee of the previous year relevant to the assessment year immediately succeeding the last of the relevant assessment years, or of any previous year relevant to any subsequent assessment year,-- (i) section 32, section 32A, section 33 and clause (ix) of sub-section (1) of section 36 shall apply as if every allowance or deduction referred to therein and relating to or allowable for any of the relevant assessment years, in relation to any building, machinery, plant or furniture used for the purposes of the business of the undertaking in the previous year relevan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purposes of the industrial undertaking referred to in section 80-I. (7) Notwithstanding anything contained in the foregoing provisions of this section, where the assessee, before the due date for furnishing the return of his income under sub-section (1) of section 139, furnishes to the Assessing Officer a declaration in writing that the provisions of this section may not be made applicable to him, the provisions of this section shall not apply to him for any of the relevant assessment years. Explanation.-- For the purposes of this section,-- (i) " hundred per cent. export-oriented undertaking " means an undertaking which has been approved as a hundred per cent. export-oriented undertaking by the Board appointed in this behalf by the Central Government in exercise of the powers conferred by section 14 of the Industries (Development and Regulation) Act, 1951 (65 of 1951), and the rules made under that Act ; (ii) " relevant assessment years " means the five consecutive assessment years specified by the assessee at his option under sub-section (3) or sub-section (5), as the case may be ; (iii) " manufacture " includes any-- (a) process, or (b) assembling, or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1989,-- (i) for clause (a), the following clause shall be substituted, namely :-- " (a) any sum payable by the assessee by way of tax, duty, cess or fee, by whatever name called, under any law for the time being in force, or " ; (ii) in clause (c), the word " or " shall be inserted at the end ; (iii) after clause (c), the following clause shall be inserted, namely :-- " (d) any sum payable by the assessee as interest on any loan or borrowing from any public financial institution, in accordance with the terms and conditions of the agreement governing such loan or borrowing, " ; (iv) in the first proviso, after the word, brackets and letter " clause (c) ", the words, brackets and letter " or clause (d) " shall be inserted ; (v) in Explanation 2, after the word, brackets and letter " clause (c) " the words, brackets and letter " or clause (d) " shall be inserted ; (vi) after Explanation 2, the following Explanation shall be inserted, namely :-- 'Explanation 3.-- For the purposes of this section, the expression " public financial institution " shall have the meaning assigned to it in section 4A of the Companies Act, 1956 (1 of 1956).' 13. Insertion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, namely :-- '(ii) " specified date ", in relation to the accounts of the previous year relevant to an assessment year, means,-- (a) where the assessee is a company, the 31st day of December of the assessment year ; (b) in any other case, the 31st day of October of the assessment year.'. 15. Insertion of new section 44AC.-- After section 44AB of the Income-tax Act, the following section shall be inserted with effect from the 1st day of April, 1989, namely :-- '44AC. Special provision for computing profits and gains from the business of trading in certain goods.-- (1) Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an assessee, being a person other than a public sector company (hereafter in this section referred to as the buyer), obtaining in any sale by way of auction, tender or any other mode, conducted by any other person or his agent (hereafter in this section referred to as the seller),-- (a) any goods in the nature of alcoholic liquor for human consumption (other than Indian-made foreign liquor), a sum equal to forty per cent. of the amount paid or payable by the buyer as the purchase price in respect of such goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1st day of April, 1983. 17. Amendment of section 47.-- In section 47 of the Income-tax Act, after clause (v), the following proviso shall be inserted, namely :-- " Provided that nothing contained in clause (iv) or clause (v) shall apply to the transfer of a capital asset made after the 29th day of February, 1988 as stock-in-trade.". 18. Amendment of section 56.-- In section 56 of the Income-tax Act, in sub-section (2), after clause (ic) [as inserted by section 26 of the Finance Act, 1987 (11 of 1987)], the following clause shall be inserted with effect from the 1st day of April, 1989, namely :-- '(id) income by way of interest on securities, if the income is not chargeable to income-tax under the head "Profits and gains of business or profession " ;'. 19. Amendment of section 57.-- In section 57 of the Income-tax Act, with effect from the 1st day of April, 1989,-- (a) in clause (i),-- (1) after the word " dividends ", the words " or interest on securities " shall be inserted ; (2) after the words " such dividend ", the words " or interest " shall be inserted ; (b) the Explanation shall be omitted. 20. Amendment of section 58.-- In section 58 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tification in the Official Gazette, specify, out of his income chargeable to tax, he shall, in accordance with, and subject to, the provisions of this section, be allowed a deduction in the computation of his total income of the whole of the amount deposited or paid (excluding interest or bonus accrued or credited to the assessee's account, if any) as does not exceed the amount of twenty thousand rupees in the previous year : Provided that in relation to the assessment year commencing on the 1st day of April, 1989, and subsequent assessment years, this sub-section shall have effect as if for the words " twenty thousand rupees ", the words " thirty thousand rupees " had been substituted. (2) Where any amount-- (a) standing to the credit of the assessee under the National Savings Scheme in respect of which a deduction has been allowed under sub-section (1) together with the interest accrued on such amount is withdrawn in whole or part in any previous year, or (b) is received on account of the surrender of the policy or as annuity or bonus in accordance with the annuity plan of the Life Insurance Corporation in any previous year, an amount equal to the whole of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and subject to the provisions of this section, be allowed in computing the total income of the assessee, a deduction of the whole of the income derived by the assessee from the sale of goods or merchandise to the Export House or Trading House in respect of which the certificate has been issued by the Export House or Trading House. " ; (b) after sub-section (3), the following sub-section shall be inserted, namely :-- '(3A) For the purposes of sub-section (1A), profits derived by a supporting manufacturer from the sale of goods or merchandise shall be,-- (a) in a case where the business carried on by the supporting manufacturer consists exclusively of sale of goods or merchandise to one or more Export Houses or Trading Houses, the profits of the business as computed under the head " Profits and gains of business or profession " ; (b) in a case where the business carried on by the supporting manufacturer does not consist exclusively of sale of goods or merchandise to one or more Export Houses or Trading Houses, 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 turno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India for residential purposes " shall be omitted ; (ii) in the proviso, the words " or, as the case may be, the company " shall be omitted ; (c) after clause (ix), the following clause shall be inserted, namely :-- " (x) interest on deposits with, or dividend received from, any public company formed and registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India residential purposes : Provided that the company is for the time being approved by the Central Government for the purpose of clause (viii) of sub-section (1) of section 36, " ; (d) for the first and second provisos, the following provisos shall be substituted, namely :-- " Provided that where the gross total income of the assessee includes any income by way of interest on any deposits referred to in clause (iia), or income in respect of units referred to in clause (v) or clause (va), or income by way of interest or dividend referred to in clause (x), there shall be allowed in computing the total income of the assessee, a further deduction of an amount equal to so much of such income as has not been allowed by way of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relation to which the approval is first sought : Provided further that the approval of the Chief Commissioner or, as the case may be, the Director General shall not be, necessary in the case of any such agreement which has been approved for the purposes of the deduction under this section by the Central Government before the 1st day of April, 1972, or by the Board before the 1st day of April, 1989, and every application for such approval of any such agreement pending with the Board immediately before the 1st day of April, 1989, shall stand transferred to the Chief Commissioner or the Director General for disposal. " 27. Amendment of section 80P.-- In section 80P of the Income-tax Act, in sub-section (2), in clause (f), the words and figures " chargeable under section 18 " shall be omitted with effect from the 1st day of April, 1989. 28. Omission of section 86A.-- Section 86A of the Income-tax Act shall be omitted with effect from the 1st day of April, 1989. 29. Amendment of section 89.-- In section 89 of the Income-tax Act, sub-section (2) shall be omitted with effect from the 1st day of April, 1989. 30. Omission of section 112A.-- Section 112A of the Income- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... General or Director or Deputy Director or Assistant Director, or the authorised officer referred to in sub-section (1) of section 132 before he takes action under clauses (i) to (v) of that sub-section, " shall be substituted ; (b) in sub-section (3), in the proviso, in clause (b) [as amended by section 2 of the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988)], for the words " the Chief Commissioner or Commissioner therefor ", the words " the Chief Commissioner or Director General or Commissioner or Director therefor, as the case may be ", shall be substituted. 34. Amendment of section 132.-- In section 132 of the Income-tax Act, with effect from the 1st day of April, 1989,-- (a) in sub-section (1), after the proviso, the following proviso shall be inserted, namely :-- "Provided further that where it is not possible or practicable to take physical possession of any valuable article or thing and remove it to a safe place due to its volume, weight or other physical characteristics or due to its being of a dangerous nature, the authorised officer may serve an order on the owner or the person who is in immediate possession or control thereof that he shall not remove, p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... day of March, 1988. 40. Insertion of new section 206C.-- After section 206B of the Income-tax Act, the following sub-heading and section shall be inserted with effect from the 1st day of June, 1988, namely :-- " BB.--Collection at source 206C. Profits and gains from the business of trading in alcoholic liquor, forest produce, scrap, etc.-- (1) Every person, being a seller referred to in section 44AC, shall, at the time of debiting of the amount payable by the buyer referred to in that section to the account of the buyer or at the time of receipt of such amount from the said buyer in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, collect from the buyer of any goods of the nature specified in column (2) of the Table below, a sum equal to the percentage, specified in the corresponding entry in column (3) of the said Table, of such amount as income-tax on income comprised therein. TABLE Sl. No. Nature of goods Percentage (1) (2) (3) (i) Alcoholic liquor for human consumption (other than Indian made foreign liquor) Fifteen per cent. (ii) Timber obtained under a forest lease Fifteen per cent. (iii) Timber obtained by any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was actually paid. (8) Where the tax has not been paid as aforesaid, after it is collected, the amount of the tax together with the amount of simple interest thereon referred to in sub-section (7) shall be a charge upon all the assets of the seller. ". 41. Amendment of section 230A.-- In section 230A of the Income-tax Act, in sub-section (1), for the words " fifty thousand rupees ", the words " two lakh rupees " shall be substituted. 42. Insertion of new section 245DD.-- After section 245D of the Income-tax Act, the following section shall be inserted, namely :-- " 245DD. Power of Settlement Commission to order provisional attachment to protect revenue.-- (1) Where, during the pendency of any proceeding before it, the Settlement Commission is of the opinion that for the purpose of protecting the interests of the revenue it is necessary so to do, it may, by order, attach provisionally any property belonging to the applicant in the manner provided in the Second Schedule : Provided that where a provisional attachment made under section 281B is pending immediately before an application is made under section 245C, an order under this sub-section shall continue such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders or directions issued by the Board or by the Chief Commissioner or Director General or Commissioner authorised by the Board in this behalf under section 120 ; (b) " record " includes all records relating to any proceeding under this Act available at the time of examination by the Commissioner ; (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject-matter of any appeal, the powers of the Commissioner under this sub-section shall extend to such matters as had not been considered and decided in such appeal.'. 45. Amendment of section 271B.-- In section 271B of the Income-tax Act, after the words, figures and letters " or obtain a report of such audit as required under section 44AB ", the words, brackets and figures " or furnish the said report along with the return of his income filed under sub-section (1) of section 139, or along with the return of income furnished in response to a notice under clause (i) of sub-section (1) of section 142 " shall be inserted with effect from the 1st day of April, 1989. 46. Insertion of new section 276BB.-- After section 276B of the Income-tax Act, the following section shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further that where an application for settlement under section 245C is made, the period commencing from the date on which such application is made and ending with the date on which an order under sub-section (1) of section 245D is made shall be excluded from the period specified in the preceding proviso. ". 50. Omission of section 285A.-- Section 285A of the Income-tax Act shall be omitted. 51. Amendment of section 293.-- In section 293 of the Income-tax Act, for the words " any other made ", the words " any proceeding taken or order made " shall be substituted and shall be deemed to have been substituted with effect from the 1st day of March, 1988. 52. Amendment of First Schedule.-- In the First Schedule to the Income-tax Act, in rule 5, clause (b) shall be omitted with effect from the 1st day of April, 1989. 53. Amendment of Eleventh Schedule.-- In the Eleventh Schedule to the Income-tax Act, for item 9, the following item shall be substituted with effect from the 1st day of April, 1989, namely :-- " 9. Projectors. ". 54. Consequential amendments.-- The following amendments (being amendments of a consequential nature) shall be made in the Income-tax Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the purpose of residence of persons employed by the assessee in any plantation or industrial undertaking belonging to the assessee ; " ; (b) in sub-section (1A), with effect from the 1st day of April, 1989,-- (i) in the opening paragraph, after the brackets and figures " (xvi), ", the brackets, figures and letter " (xvie), " shall be inserted ; (ii) after the first proviso, the following proviso shall be inserted, namely :-- " Provided further that nothing contained in this sub-section shall apply to any assets referred to in clause (xvie) which are sold by a public sector company before the 1st day of June, 1988. " ; (iii) in the second proviso, for the words " Provided further that ", the words " Provided also that " shall be substituted ; (c) in sub-section (3),-- (i) in the opening portion, after the brackets, figures and letter " (xvie), ", the brackets, figures and letter " (xvif), " shall be inserted ; (ii) in clause (aa),-- (1) after the words, brackets, figures and letter " clause (xvie), ", the words, brackets, figures and letter " or Relief Bonds referred to in clause (xvif), " shall be inserted ; (2) after the words " Bonds or debenture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Chief Commissioner or Director General or Commissioner authorised by the Board in this behalf under section 120 of the Income-tax Act read with section 8 of this Act ; (b) " record " includes all records relating to any proceeding under this Act available at the time of examination by the Commissioner ; (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject-matter of any appeal, the powers of the Commissioner under this sub-section shall extend to such matters as had not been considered and decided in such appeal.'. 58. Amendment of section 34AB.-- In section 34AB of the Wealth-tax Act, in sub-sections (1) and (2), for the word " Board ", the words " Chief Commissioner or Director General " shall be substituted with effect from the 1st day of June, 1988. 59. Amendment of section 34ACC.-- In section 34ACC of the Wealth-tax Act, for the words " to the Board ", occurring at the end, the words " to the Chief Commissioner or Director General " shall be substituted with effect from the 1st day of June, 1988. 60. Amendment of section 34AD.-- In section 34AD of the Wealth-tax Act, with effect from the 1st day ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 34AB within a period of three months from that date, for being registered afresh as a valuer under this Chapter and the provisions of sub-section (3) of that section and the rules made thereunder shall be applicable in respect of the verification of the application, the fees that shall accompany such application and the declaration to be made by the applicant. (2) The provisions of this Chapter regarding the registration of a person as a valuer and other matters shall, so far as may be, apply to every application made under sub-section (1). (3) Every application pending before the Board immediately before the 1st day of June, 1988, shall be deemed to be an application received by the Chief Commissioner or Director General under sub-section (1). ". 62. Amendment of section 34C.-- In section 34C of the Wealth-tax Act-- (a) in sub-section (1), the following Explanation shall be inserted at the end, namely :-- " Explanation.-- For the purposes of this sub-section, the proceedings under sub-section (5) of section 37A shall be deemed to be proceedings for the assessment of any net wealth or for the assessment or reassessment of any net wealth which has escap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. " ; (b) in sub-section (3), in the proviso, in clause (b) [as amended by section 127 of the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988)], for the words " the Chief Commissioner or Commissioner therefor ", the words " the Chief Commissioner or Director General or Commissioner or Director therefor, as the case may be " shall be substituted. 65. Amendment of section 43.-- In section 43 of the Wealth-tax Act, for the words " any order made ", the words " any proceeding taken or order made " shall be substituted and shall be deemed to have been substituted with effect from the 1st day of March, 1988. 66. Amendment of Schedule I.-- In Schedule I to the Wealth-tax Act, in Part I, the following shall be added at the end, namely :-- " Surcharge on wealth-tax The amount of wealth-tax computed in accordance with the provisions of this Part shall, in relation to the assessment year commencing on the 1st day of April, 1988, be increased by a surcharge calculated at the rate of ten per cent. of such wealth-tax. ". Gift-tax 67. Amendment of section 5.-- In section 5 of the Gift-tax Act, 1958 (18 of 1958) (hereinafter referred to as the Gift-tax Act), in sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Board in this behalf, in a case where the prosecution would lie at the instance of the Commissioner (Appeals) ; (b) the Chief Commissioner or Director General or Commissioner, in any other case. ". 70. Amendment of section 36.-- In section 36 of the Gift-tax Act, after sub-section (1), the following sub-section shall be inserted with effect from the 1st day of June, 1988, namely :-- " (1A) If the Director General or Director or Deputy Director or Assistant Director has reason to suspect that any gifts chargeable to tax under this Act have been concealed, or are likely to be concealed, by any person or class of persons within his jurisdiction, then, for the purposes of making any inquiry or investigation relating thereto, it shall be competent for him to exercise the powers conferred under sub-section (1) on the gift-tax authorities referred to in that sub-section, notwithstanding that no proceedings with respect to such person or class of persons are pending before him or any other gift-tax authority. " 71. Amendment of section 42.-- In section 42 of the Gift-tax Act, for the words " any order made ", the words " any proceeding taken or order made " shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 24.--- In section 24 of the Expenditure-tax Act,--- (a) for the figures, brackets, letters and words " 2(43B) and (44), 118, 125, 125A, 128 to 136 (both inclusive) ", the figures, brackets and words " 2(44), 118, 120, 129, 131 to 136 (both inclusive) " shall be substituted; (b) the figures " 231, " shall be omitted. THE FIRST SCHEDULE (See section 2) PART I INCOME-TAX Paragraph A Sub-Paragraph I In the case of every individual or Hindu undivided family or unregistered firm or other association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, not being a case to which Sub-Paragraph II of this Paragraph or any other Paragraph of this Part applies,--- Rates of income-tax (1) where the total income does Nil; not exceed Rs. 18,000 (2) where the total income 25 per cent. of the amount by which exceeds Rs. 18,000 but does not the total income exceeds Rs. 18,000; exceed Rs. 25,000 (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -operative society, --- Rates of income-tax (1) where the total income does 15 per cent. of the total income; not exceed Rs. 10,000 (2) where the total income Rs. 1,500 plus 25 per cent. of the exceeds Rs. 10,000 but does not amount by which the total income 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; Surcharge on income-tax The amount of income-tax computed in accordance with the preceding provisions of this Paragraph shall, in the case of every person having a total income exceeding fifty thousand rupees, be increased by a surcharge for purposes of the Union calculated at the rate of five per cent. of such income-tax : 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 does Nil; not exceed Rs. 10,000 (2) where the total income 5 per cent. of the amount by which the exceeds Rs. 10,000 but does not total income exceeds Rs. 10,000; exceed Rs. 25,000 (3) where the total incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 50 per cent. Surcharge on income-tax The amount of income-tax computed at the rate hereinbefore specified shall in the case of every person having a total income exceeding fifty thousand rupees, be increased by a surcharge for purposes of the Union calculated at the rate of five per cent. of such income-tax. 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 in which the public are substantially interested 50 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 a trading company or an investment company 60 per cent. of the total income; (ii) in any other case 55 per cent. of the 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 Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 31st day of March, 1961, but before the 1st day of April, 1976, or (b) fees for rendering technical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... word 40 per cent.; puzzles (D) on income by way of winnings 40 per cent.; from horse races (E) on the whole of other income-tax at 30 per cent. of the income amount of 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; (i) in the case of any other person--- (A) on income by way of interest 15 per cent.; payable on a tax-free security (B) on income by way of winnings 40 per cent.; from lotteries and crossword puzzles (C) on income by way of winnings 40 per cent.; from horse races (D) on the whole of the other income-tax at 30 per cent. of the income amount of 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; 2. In the case of a company--- (a) where the company is a domestic company--- (i) on income by way of interest 20 per cent.; other than " Interest on securities " (ii) on income by way of winnings 40 per cent.; from lotteries and crossword p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Surcharge on income-tax The amount of income-tax deducted in accordance with the provisions of--- (a) sub-item (a) of item 1 of this Part shall be increased by a surcharge for purposes of the Union, and (b) sub-item (a) of item 2 of this Part shall be increased by a surcharge; calculated at the rate of five per cent. of such income-tax. PART III RATES FOR CALCULATING OR CHARGING INCOME-TAX IN CERTAIN CASES, DEDUCTING INCOME-TAX FROM INCOME CHARGEABLE UNDER THE HEAD " SALARIES " OR ANY PAYMENT REFERRED TO IN SUB-SECTION (1) OF SECTION 194E 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 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch exceeds Rs. 12,000 but does not the total income exceeds Rs. 12,000; exceed Rs. 20,000 (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 income exceed Rs. 40,000 exceeds Rs. 20,000; (4) where the total income Rs. 8,000 plus 40 per cent. of the exceeds Rs. 40,000 but does not amount by which the total income exceed Rs. 60,000 exceeds Rs. 40,000; (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 income exceed Rs. 1,00,000 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. Surcharge on income-tax The amount of income-tax computed in accordance with the preceding provisions of this Sub-Paragraph shall, in the case of every person having a total income exceeding fifty thousand rupees, be increased by a surcharge for purposes of the Union calculated at the rate of five per cent. of such income-tax : Provided that no such surcharge shall be payable by a non-resident. Paragraph B In the case of every ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t does not total income exceeds Rs. 10,000; exceed Rs. 25,000 (3) where the total income Rs. 600 plus 7 per cent. of the amount exceeds Rs. 25,000 but does not by which the total income exceeds exceed Rs. 50,000 Rs. 25,000; (4) where the total income Rs. 2,350 plus 13 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. 8,850 plus 22 per cent. of the exceeds Rs. 1,00,000 amount by which the total income exceeds Rs. 1,00,000. Surcharge on income-tax The amount of income-tax computed in accordance with the preceding provisions of this Sub-Paragraph shall, in the case of every person having a total income exceeding fifty thousand rupees, be increased by a surcharge for purposes of the Union calculated at the rate of five per cent. of such income-tax. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall 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 receiver of the rent or revenue or the cultivator or the receiver of rent-in-kind referred to in the said sub-clause (c)] shall be computed as if it were income chargeable to income-tax under that Act under the head " Profits and gains of business or profession " and the provisions of sections 30, 31, 32, 36, 37, 38, 40, 40A [other than sub-sections (3) and (4) thereof], 41, 43, 43A and 43B of the Income-tax Act shall, so far as may be, apply accordingly. Rule 3.--- Agricultural income of the nature referred to in sub-clause (c) of clause (1) of section 2 of the Income-tax Act, being income derived from any building required as a dwelling house by the receiver of the rent or revenue or the cultivator or the receiver of rent-in-kind referred to in the said sub-clause (c) shall be comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of any source of agricultural income is a loss, such loss shall be set off against the income of the assessee, if any, for that previous year from any other source of agricultural income : Provided that where the assessee is a partner of an unregistered firm which has not been assessed as a registered firm under clause (b) of section 183 of the Income-tax Act or is a member of an association of persons or a body of individuals and the share of the assessee in the agricultural income of the firm, association or body, as the case may be, is a loss, such loss shall not be set off against any income of the assessee from any other source of agricultural income. Rule 8.--- Any sum payable by the assessee on account of any tax levied by the State Government on the agricultural income shall be deducted in computing the agricultural income. Rule 9.--- (1) Where the assessee has, in the previous year relevant to the assessment year commencing on the 1st day of April, 1988, any agricultural income and the net result of the computation of the agricultural income of the assessee for any one or more of the previous years relevant to the assessment years commencing on the 1st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... il, 1985, or the 1st day of April, 1986, or the 1st day of April, 1987, (vi) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1985, 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, 1986, or the 1st day of April, 1987, (vii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1986, 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, 1987, and (viii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1987, shall be set off against the agricultural income of the assessee for the previous year relevant to the assessment year commencing on the 1st day of April, 1988. (2) Where the assessee has, in the previous year relevant to the assessment year commencing on the 1st day of April, 1989, or, if by virtue of any provision of the Income-tax Act, inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... day of April, 1988, (v) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1985, 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, 1986, or the 1st day of April, 1987, or the 1st day of April, 1988, (vi) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1986, 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, 1987, or the 1st day of April, 1988, (vii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1987, 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, 1988, and (viii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1988, shall be set off against the ag ..... 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