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TMI BlogThird ScheduleX X X X Extracts X X X X X X X X Extracts X X X X ..... e written down value for the purposes of clause (ii). ; (b) in sub-section (2), after clause (iv) , insert or clause (v) . 3. Section 33 (a) for sub-section (1), substitute - (1)(a) In respect of a new ship or new machinery or plant (other than office appliances or road transport vehicles) which is owned by the assessee and is wholly used for the purposes of the business carried on by him, there shall, in accordance with and subject to the provisions of this section and of section 34, be allowed a deduction, in respect of the previous year in which the ship was acquired or the machinery or plant was installed or, if the ship, machinery or plant is first put to use in the immediately succeeding previous year, then, in respect of that previous year, a sum by way of development rebate as specified in clause (b). (b) The sum referred to in clause (a) shall be - (A) in the case of a ship, forty per cent. of the actual cost thereof to the assessee; (B) in the case of machinery or plant, - (i) where the machinery or plant is installed for the purpose of business of construction, manufacture or production of any one or more of the articles or things specified in the list in the First Sched ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) or sub-section (1A) or clause (ii) of sub-section (2) of section 33 but without making any allowance under sub-section (1) of this section] , in both places, substitute - [the total income for this purpose being computed after deduction of the allowance under sub-section (1) or sub-section (1A) or clause (ii) of sub-section (2) of section 33, but without making any deduction under sub-section (1) of this section or any deduction under Chapter VIA or section 280-O] . 5. Section 35- In sub-section (2), - (i) for clause (i), substitute - (i) in a case where such capital expenditure is incurred before the 1st day of April, 1967, one-fifth of the capital expenditure incurred in any previous year shall be deducted for that previous year; and the balance of the expenditure shall be deducted in equal installments for each of the four immediately succeeding previous years; (ia) in a case where such capital expenditure is incurred after the 31st day of March, 1967, the whole of such capital expenditure incurred in any previous year shall be deducted for that previous year; ; (ii) in clause (ii), after an asset representing expenditure of a capital nature , insert incurred before the 1st da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inst the income aforesaid. 11. Section 72- In sub-section (1), after Capital gains , insert relating to capital assets other than short-term capital assets . 12. Section 74- In sub-clause (i) of clause (a) of sub-section (1), for as relates to short-term capital assets , substitute relating to short-term capital assets as cannot be or is not wholly set off against income under any head in accordance with the provisions of section 71 . 13. For Chapter VIA, Substitute Chapter VIA Deductions to be Made in Computing total Income A. - General 80A. Deductions to be made in computing total income. - (1) In computing the total income of an assessee, there shall be allowed from his gross total income, in accordance with and subject to the provisions of this Chapter, the deductions specified in sections 80C to 80T. (2) The aggregate amount of the deductions under this Chapter shall not, in any case, exceed the gross total income of the assessee. (3) Where, in computing the total income of a firm, association of persons or body of individuals, any deduction is admissible under section 80G or section 80H or section 80J or section 80K or section 80L or section 80S or section 80T, no deduction u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the individual, or (b) a son, daughter, brother, sister, nephew or niece of the individual, or (c) a grand-son or grand-daughter of the individual, or (d) the spouse of any person referred to in sub-clause (b); (9) repatriate means a person of Indian origin who was ordinarily residing in a foreign country and who, on leaving, or being forced to leave, such country, has - (a) in the case of a person leaving Mozambique, on or after the 25th day of June, 1962, or (b) in the case of a person leaving Burma, on or after the 1st day of June, 1963, or (c) in the case of a person leaving Ceylon, on or after the 1st day of November, 1964, or (d) in the case of a person leaving any other country, on or after such date or dates as may be notified in this behalf by the Central Government in the Official Gazette, returned to India with the intention of permanently residing therein. Explanation : A person shall be deemed to be of Indian origin if he, or either of his parents or any of his grand-parents, was born in undivided India. B. - Deductions in respect of certain payments 80C. Deduction in respect of life insurance premia, contributions to provident fund etc. - (1) In computing the total in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ividual being a sum deducted in accordance with the conditions of his service, for the purpose of securing to him a deferred annuity or making provision for his wife or children, in so far as the sum so deducted does not exceed one-fifth of the salary; (d) if the assessee is an employee participating in a recognised provident fund, his own contributions to his individual account in the fund in the previous year, in so far as the aggregate of such contributions does not exceed one-fifth of his salary in that previous year or eight thousand rupees, whichever is less. Explanation : In clause (d) of this sub-section, salary shall have the meaning assigned to it in clause (h) of rule 2 of Part A of the Fourth Schedule; (e) if the assessee is an employee participating in an approved superannuation fund, any sum paid in the previous year by him by way of contribution towards the superannuation fund; (f) where the assessee is an individual, any sums deposited, in the previous year by the assessee out of his income chargeable to tax, in a ten-year account or a fifteen-year account under the Post Office Savings Bank (Cumulative Time Deposits) Rules, 1959, as amended from time to time. (3) Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded family for his support or maintenance, and (b) is suffering from a physical or mental disability which is certified by a registered medical practitioner to have the effect of reducing considerably such persons capacity for normal work or engaging in a gainful employment (hereinafter in this section referred to as handicapped dependant), the assessee shall, in accordance with and subject to the provisions of this section, be allowed a deduction of the amount specified in sub-section (2) in the computation of his total income in respect of the previous year. (2) The deduction under sub-section (1) shall be - (i) in a case where the handicapped dependant has, for a period of one hundred and eighty-two days or more during the previous year, been admitted in a hospital or a nursing home or a medical institution or in such other institution as may be notified by the Central Government in the Official Gazette to be an institution for the care of handicapped persons, and fees and charges for his medical treatment (including nursing) are payable to such hospital or nursing home or medical or other institution, as the case may be, a sum of two thousand four hundred rupees, or (ii) in any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfied that it does not - (a) provide for the payment during the life of the individual of any sums except sums payable by way of annuity to the individual; or (b) provide for the annuity payable to the individual to commence before he attains the age of fifty-eight or after he attains the age of sixty-eight; or (c) provide for the payment of any other sums except sums payable by way of annuity to the individuals widow or widower and any sums which, in the event of no annuity becoming payable either to the individual or to a widow or widower of the individual, are payable to the individuals legal representative by way of return of premiums, by way of reasonable interest on premiums and by way of bonus out of profits; or (d) provide for the payment of annuity, if any, payable to a widow or widower of the individual to be of a greater annual amount than that paid or payable to the individual; or (e) provide for the payment of any annuity otherwise than for the life of the annuitant, and that it does include a provision that no annuity payable under it shall be capable in whole or in part of surrender, commutation or assignment. (3) The Commissioner may, if he thinks fit, and subject t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or (ii) who is entitled to any person or is participating in any pension or superannuation scheme. (7) The deduction under this section shall be made in computing the earned income of the assessee included in his gross total income, so, however, that the amount of deduction shall not in any case exceed the amount of the income computed under the head Profits and gains of business or profession , included in the gross total income. (8) Any annuity payable under an approved contract referred to in sub-section (1) or from any fund referred to in sub-section (4), to a person other than the individual who pays the premium or makes the contribution and any interest on premiums or bonus out of profits payable to such person, shall be deemed to be his unearned income to the extent it is attributable to the amount of deduction allowed under sub-section (1) and chargeable to tax accordingly. (9) Where any payment by way of annuity or otherwise is made by a person to whom premiums or contributions are payable under sub-section (1) or sub-section (4), such person shall, subject to any rules made by the Board in this behalf, deduct from the total amount so paid during any financial year, tax at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The amount referred to in sub-section (1) shall be - (i) in the case of an individual who has one such child, one thousand five hundred rupees; and (ii) in the case of an individual who has more than one such child, three thousand rupees. (3) If the gross total income of the assessee includes earned income chargeable under any head, the deduction under sub-section (1) shall, to the extent possible, be made in computing such earned income and, as to the balance, if any, in computing any other income; and if there is no earned income, the deduction shall be made in computing any other income under any head. 80G. Deduction in respect of donations to certain funds, charitable institutions, etc. - (1) In computing the total income of an assessee, there shall be deducted, in accordance with and subject to the provisions of this section, an amount equal to, - (a) where the assessee is a company, fifty per cent., and (b) in the case of any other assessee, fifty-five per cent. of the aggregate of the sums specified in sub-section (2). (2) The sums referred to in sub-section (1) shall be the following, namely :- (a) any sums paid by the assessee in the previous year as donations to - (i) th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of sections 11 and 12 or clause (22) of section 10; (ii) the instrument under which the institution or fund is constituted does not, or the rules governing the institution or fund do not, contain any provision for the transfer or application at any time of the whole or any part of the income or assets of the institution or fund for any purpose other than a charitable purpose; (iii) the institution or fund is not expressed to be for the benefit of any particular religious community or caste; (iv) the institution or fund maintains regular accounts of its receipts and expenditure; and (v) the institution or fund is either constituted as a public charitable trust or is registered under the Societies Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act in force in any part of India or under section 25 of the Companies Act, 1956 (1 of 1956), or is a University established by law, or is any other educational institution recognised by the Government or by a University established by law, or affiliated to any University established by law or is an institution financed wholly or in part by the Government or a local authority. Explanation 1 : An institution or f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery working day throughout the previous year, forty or more workers in a manufacturing process (where carried on with or without the aid of power); and (v) it employs displaced persons or repatriates or members of the families of displaced persons or repatriates (all such employees being, hereinafter, referred to as rehabilitated employees) and the daily average number of rehabilitated employees, as certified by the prescribed authority, is not less than sixty per cent. of the daily average number of all the persons employed in the undertaking, throughout the previous year. Explanation 1 : Member of the family , in relation to any person who is a displaced person or repatriate, means any member of the family of such person if such member was, before his employment in the undertaking, dependent on such person. Explanation 2 : Daily average number , in relation to rehabilitated employees or, as the case may be, all the persons employed in the undertaking, shall be taken to be the number arrived at by dividing the aggregate of the number of rehabilitated employees or, as the case may be, the total number of persons employed in the undertaking on each working day of a month by the tota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the relevant amount of capital employed during the previous year). (2) The deduction specified in sub-section (1) shall be allowed in computing the total income in respect of the assessment year relevant to the previous year in which the industrial undertaking begins to manufacture or produce articles or to operate its cold storage plant or plants or the ship is first brought into use or the business of the hotel starts functioning (such assessment year being hereinafter, in this section, referred to as the initial assessment year) and each of the four assessment years immediately succeeding the initial assessment year : Provided that in the case of an assessee, being a co-operative society, the provisions of this sub-section shall have effect as if for the words four assessment years , the words six assessment years had been substituted. (3) Where the amount of the profits and gains derived from the industrial undertaking or ship or business of the hotel, as the case may be, included in the total income (as computed without applying the provisions of section 64 and before making any deduction under Chapter VIA or section 280-O) in respect of the previous year relevant to an asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufactures or produces articles, or operates one or more cold storage plant or plants, in any party of India, and has begun or begins to manufacture or produce articles or to operate such plant or plants, at any time within the period of twenty-three years next following the 1st day of April, 1948, or such further period as the Central Government may, by notification in the official Gazette, specify with reference to any particular industrial undertaking; (iv) in a case where the industrial undertaking manufactures or produces articles, the undertaking employs ten or more workers in a manufacturing process carried on with the aid of power, or employs twenty or more workers in a manufacturing process carried on without the aid of power : Provided that the condition in clause (i) shall not apply in respect of any industrial undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such industrial undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section. (5) This section applies to any ship, where all the following conditions are fulfilled, namely :- (i) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial Gazette, that the exemption conferred by this section shall not apply to any class of industrial undertakings with effect from such date as it may specify in the notification. 80K. Deduction in respect of dividends attributable to profits and gains from new industrial undertakings or ships or hotel business. - Where the gross total income of an assessee, being the holder of any share or shares in a company, includes any income by way of dividends paid or deemed to have been paid to him by the company in respect of such share or shares, there shall, subject to any rules that may be made by the Board in this behalf, be allowed, in computing his total income, a deduction from such income by way of dividends of an amount equal to such part thereof as is attributable to the profits and gains derived by the company from an industrial undertaking or ship or the business of a hotel, on which no tax is payable by the company under this Act for any assessment year commencing prior to the 1st day of April, 1968, or in respect of which the company is entitled to a deduction under section 80J. 80L. Deduction in respect of dividends in certain cases. -(1) Where, in the case of any assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received from certain foreign companies. - Where shares in a foreign company have been allotted to an assessee being an Indian company in consideration of any patent, invention, model, design, secret formula or process, or similar property right, or information concerning industrial, commercial or scientific knowledge, experience or skill made available or provided or agreed to be made available or provided to the foreign company by the assessee, or in consideration of technical services rendered or agreed to be rendered to the foreign company by the assessee, under an agreement approved by the Central Government in this behalf before the 1st day of October of the relevant assessment year, and any income by way of dividend on such shares is included in the gross total income of the assessee, there shall be allowed a deduction from such income of an amount equal to sixty per cent. thereof, in computing the total income of the assessee. 80-O. Deduction in respect of royalties, etc., received from certain foreign companies. - Where the gross total income of an assessee being an Indian company includes any income by way of royalty, commission, fees or any similar payment received by i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dends derived by the co-operative society from its investments with any other co-operative society, the whole of such income; (e) in respect of any income derived by the co-operative society from the letting of godowns or warehouses for storage, processing or facilitating the marketing of commodities, the whole of such income; (f) in the case of a co-operative society, not being a housing society or an urban consumers society or a society carrying on transport business or a society engaged in the performance of any manufacturing operations with the aid of power, where the gross total income does not exceed twenty thousand rupees, the amount of any income by way of interest on securities chargeable under section 18 or any income from house property chargeable under section 22. Explanation : For the purposes of this section, an urban consumers co-operative society means a society for the benefit of the consumers within the limits of a municipal corporation, municipality, municipal committee, notified area committee, town area or cantonment. (3) In a case where the assessee is entitled also to the deduction under section 80H or section 80J, the deduction under sub-section (1) of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee, a deduction from such income of an amount equal to twenty-five per cent. thereof, so, however, that the amount of the deduction under this section shall not, in any case, exceed one hundred thousand rupees. 80T. Deduction in respect of long-term capital gains in the case of assessees other than companies. - Where the gross total income of an assessee not being a company includes any income chargeable under the head Capital gains relating to capital assets other than short-term capital assets (such income being, hereinafter, referred to as long-term capital gains), there shall be allowed, in computing the total income of the assessee, a deduction from such income of an amount equal to, - (a) in a case where the gross total income does not exceed ten thousand rupees or where the long-term capital gains do not exceed five thousand rupees, the whole of such long-term capital gains; (b) in any other case, five thousand rupees as increased by a sum equal to - (i) forty-five per cent. of the amount by which the long-term capital gains relating to capital assets, being buildings or lands, or any rights in buildings or lands, exceed five thousand rupees; (ii) sixty-five per cent. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss total income means the total income computed in accordance with the provisions of this Act before making any deduction under Chapter VIA.. 18. Chapter XII (a) Omit section 112; (b) in section 112A, - (i) in clause (b), omit plus ; (ii) omit clause (c); (iii) in Explanation 2, for sections 112, 114 and 193 , substitute section 193 ; (c) omit section 114. 19. Section 197-For sub-section (3), substitute - (3) Where the principal officer of a company considers that, by reason of the provisions of section 80K, the whole or any portion of the dividend referred to in section 194 will be deductible in computing the total income of the recipient, he may, before paying the dividend to the shareholder or issuing any cheque or warrant in respect thereof, make an application to the Income-tax Officer to determine the appropriate proportion of the dividend to be deducted under the provisions of section 80K; and on such determination by the Income-tax Officer no tax shall be deducted on such proportionate amount. . 20. Section 236-In Explanation 2, - (a) for the total income assessed for that year , substitute the total income (as computed before making any deduction under Chapter VIA) assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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