[43 OF
1961]
[AS
AMENDED BY FINANCE ACT, 1993]
BE it enacted by Parliament in the
Twelfth Year of the
Chapter I
Preliminary
Short title, extent and commencement.
[2] 1[3] (1) This Act may be called the Income-tax Act, 1961.
(2) It
extends to the whole of
(3) Save as otherwise provided in this Act, it shall come into force on the 1st day of April, 1962.
2. In this Act, unless the context
otherwise requires,—
[4] [(1) “advance tax” means the advance tax
payable in accordance with the provisions of Chapter XVII-C;]
[5] [(1A)] [6] "agricultural income”[7] means[8] -
8[9] [(a) any rent or revenue derived from land
which is situated in
(b) Any
income derived from such land by-
(i) Agricultural;
or
(ii) the performance by a cultivator or receiver
of rent-in-kind of any process ordinarily employed by a cultivator or receiver
of rent-in-kind to render the produce raised or received by him fit to be taken
to market; or
(iii) the sale by a cultivator or receiver of
rent-in-kind of the produce raised or received by him, in respect of which no
process has been performed other than a process of the nature described in
paragraph (ii) of this
sub-clause;
(c) any income derived from any
building owned and occupied by the receiver of the rent or revenue of any such
land, or occupied by the cultivator or the receiver of rent-in-kind, of any
land with respect to which, or the produce of which, any process mentioned in
paragraphs (ii) and (iii) of sub-clause (b) is carried on:
(i) the
building is on or in the immediate vicinity of the land, and is a building
which the receiver of the rent or revenue or the cultivator, or the receiver of
rent-in-kind, by reason of his connection with the land, requires as a dwelling
house, or as a store-house, or other out-building, and
(ii) the land is either assessed to land
revenue in
(A) in any area which is
comprised within the jurisdiction of a municipality (whether known as a
municipality, municipal corporation, notified area committee, town area
committee, town committee or by any other name) or a cantonment board and which
has a population of not less than ten thousand according to the last preceding
census of which the relevant figures have been
published before the first day of the previous year; or
9[11] (B) in
any area within such distance, not being more than eight kilometres,
from the local limits of any municipality or cantonment board referred to in
item (A), as the Central Government
may, having regard to the extent of, and scope for, urbanisation
of that area and other relevant considerations, specify in this behalf by
notification in the Official Gazette.]
10[12] [Explanation.—For the removal of
doubts, it is hereby declared that revenue derived from land shall not include
and shall be deemed never to have included any income arising from the transfer
of any land referred to in item (a)
or item (b) of sub-clause (iii) of clause (14) of this section;]
11[13] [12[14] [(1B)] “amalgamation”,
in relation to companies, means the merger of one or more companies with
another company or the merger of two or more companies to form one company (the
company or companies which so merge being referred to as the amalgamating
company or companies and the company with which they merge or which is formed
as a result of the merger, as the amalgamated company) in such a manner that-
(i) All the
property of the amalgamating company or companies immediately before the
amalgamation becomes the property of the amalgamated company by virtue of the
amalgamation;
(ii) All the liabilities of the amalgamating
company or companies immediately before the amalgamation become the liabilities
of the amalgamated company by virtue of the amalgamation;
(iii) Shareholders holding not less than
nine-tenths in value of the shares in the amalgamating company or companies
(other than shares already held therein immediately before the amalgamation by,
or by a nominee for, the amalgamated company or its subsidiary) become
shareholders of the amalgamated company by virtue of the amalgamation,Otherwise
than as a result of the acquisition of the property of one company by another
company pursuant to the purchase of such property by the other company or as a
result of the distribution of such property to the other company after the
winding up of the first-mentioned company;]
(2) “annual
value”, in relation to any property, means its annual value as determined under
section 23;
(4) “Appellate Tribunal” means
the Appellate Tribunal constituted under section 252;
(5) “approved
gratuity fund” means a gratuity fund which has been and continues to be
approved by the 14[16] [Chief Commissioner
or Commissioner] in accordance with the rules contained in Part C of the Forth
Schedule;
(6) “approved
superannuation fund” means a superannuation fund or any part of a
superannuation fund which has been and continues to be approved by the 14[17] [Chief
Commissioner or Commissioner] in accordance with the rules contained in Part B
of the Fourth Schedule;
(7) “assessee” means a person by whom 15[18] [any tax] or any
other sum of money is payable under this Act, and includes-
(a) every person in respect of whom any
proceeding under this Act has been taken for the assessment of his income or of
the income of any other person in respect of which he is assessable, or of the
loss sustained by him or by such other person, or of the amount of refund due
to him or to such other person;
(b) every person who is deemed to be an assessee under any provision of this Act;
(c) every person who is deemed to be an assessee in default under any provisions of this Act;
16[19] [(7A) “Assessing
Officer” means the Assistant Commissioner or the Income-tax Officer who is
vested with the relevant jurisdiction by virtue of directions or orders issued
under sub-section (1) or sub-section (2) of section 120 or any other provision
of this Act, and the Deputy Commissioner who is directed under clause (b) of sub-section (4) of that section
to exercise or perform all or any of the powers and functions conferred on, or
assigned to, an Assessing Officer under this Act;]
(8) “assessment”
includes reassessment;
(9) “assessment
year” means the period of twelve months commencing on the 1st day of April
every year;
16[20] [(9A) “Assistant
Commissioner” means a person appointed to be an Assistant Commissioner of
Income-tax under sub-section (1) of section 117;]
(10) “average
rate of income-tax” means the rate arrived at by dividing the amount of
income-tax calculated on the total income, by such total income;
17[21] [(11) “block
of assets” means a group of assets falling within a class of assets, being
buildings, machinery, plant or furniture in respect of which the same
percentage of depreciation is prescribed;]
(12) “Board” means the 18[22] [Central Board of
Direct Taxes constituted under the Central Boards of Revenue Act, 1963 (54 of
1963)];
(13) “business”
includes any trade, commerce or manufacture or any adventure or concern in the
nature of trade, commerce or manufacture;
19[23] (14) “capital
asset” means property of any kind held by an assessee,
whether or not connected with his business or profession, but does not
include-
(i) any
stock-in-trade, consumable stores or raw materials held for the purposes of his
business or profession;
20[24] [(ii) personal
effects, that is to say, movable property (including wearing apparel and
furniture, but excluding jewellery) held for
personal use by the assessee or any member of his
family dependent on him.
Explanation.—For the purposes of this
sub-clause, “jewellery” includes-
(a) ornaments made of gold, silver, platinum
or any other precious metal or any alloy containing one or more of such
precious metals, whether or not containing any precious or semi-precious stone,
and whether or not worked or sewn into any wearing apparel;
(b) precious or semi-specious stones,
whether or not set in any furniture, utensil or other article or worked or sewn
into any wearing apparel;]
21[25] [(iii) agricultural
land in
22[26] (a) in
any area which is comprised within the jurisdiction of a municipality (whether
known as a municipality, municipal corporation, notified area committee, town
area committee, town committee, or by any other name) or a cantonment board
and which has a population not less than ten thousand according to the last
preceding census of which the relevant figures have been published before the
first day of the previous year; or
22[27] (b) in
any area within such distance, not being more than eight kilometres,
from the local limits of any municipality or cantonment board referred to in
item (a), as the Central
Government may, having regard to the extent of, and scope for, urbanisation of that area and other relevant
considerations, specify in this behalf by notification in the Official
Gazette;]
23[28] [(iv) 6½
per cent Gold Bonds, 1977, 24[29] [or 7 per cent
Gold Bonds, 1980,] 25[30] [or National Defence Gold Bonds, 1980,] issued by the Central
Government;]
26[31] [(v) Special
Bearer Bonds, 1991, issued by the Central Government;]
27[32] (15) “charitable
purpose” includes relief of the poor, education, medical relief, and the
advancement of any other object of general public utility 28[33] [***];
29[34] [(15A) “Chief
Commissioner” means a person appointed to be a Chief Commissioner of Income-tax
under sub-section (1) of section 117;]
30[35] [31[36] [(15B)] “child”,
in relation to an individual, includes a step-child and an adopted child of
that individual;]
32[37] [(16) “Commissioner”
means a person appointed to be a Commissioner of Income-tax under sub-section
(1) of section 117 33[38] [***];]
34[39] [(16A) “Commissioner
(Appeals)” means a person appointed to be a Commissioner of Income-tax
(Appeals) under sub-section (1) of section 117;]
(i) any
Indian company, or
(ii) any body corporate incorporated by or
under the laws of a country outside
(iii) any institution, association or body
which is or was assessable or was assessed as a company for any assessment year
under the Indian Income-tax Act, 1922 (11 of 1922), or which is or was
assessable or was assessed under this Act as a company for any assessment year
commencing on or before the 1st day of April, 1970, or
(iv) any institution, association or body,
whether incorporated or not and whether Indian or non-Indian, which is
declared by general or special order or the Board to be a company:
Provided
that such institution, association or body shall be deemed to be a company only
for such assessment year or assessment years (whether commencing before the
1st day of April, 1971, or on or after that date) as may be specified in the
declaration;]
(18) “company
in which the public are substantially interested”- a company is said to be a
company in which the public are substantially interested-
36[41] [(a) if
it is a company owned by the Government or the Reserve Bank of India or in
which not less than forty per cent of the shares are held (whether singly or taken
together by the Government or the Reserve Bank of India or a corporation owned
by that bank; or]
37[42] [(aa) if it is a company which is registered
under section 25 of the Companies Act, 1956 (1 of 1956)38[43] ; or
(ab) if it is a
company having no share capital and if, having regard to its objects, the
nature and composition of its membership and other relevant considerations, it
is declared by order of the Board to be a company in which the public are substantially
interested:
Provided
that such company shall be deemed to be a company in which the public are
substantially interested only for such assessment year or assessment years
(whether commencing before the 1st day of April, 1971, or on or after that
date) as may be specified in the declaration; or]
39[44] [(ac) if
it is a mutual benefit finance company, that is to say, a company which carries
on, as its principal business, the business of acceptance of deposits from its
members and which is declared by the Central Government under section 620A of
the Companies Act, 1956 (1 of 1956), to be a Nidhi or Mutual Benefit
Society40[45] ; or]
41[46] [(ad) if
it is a company, wherein shares (not being shares entitled to a fixed rate of
dividend whether with or without a further right to participate in profits)
carrying not less than fifty per cent of the voting power have been allotted
unconditionally to, or acquired unconditionally by, and were throughout the
relevant previous year beneficially held by, one or more co-operative
societies;]
42[47] [(b) if
it is company which is not a 43[48] private company
as defined in the Companies Act, 1956 (1 of 1956), and the conditions
specified either in item (A) or
in item (B) are fulfilled,
namely :-
(A) shares in the company (not being shares
entitled to a fixed rate of dividend whether with or without a further right to
participate in profits) were, as on the last day of the relevant previous year,
listed in a recognised stock exchange in India in
accordance with the Securities Contracts (Regulation) Act, 1956 (42 of 1956),
and any rules made there under;
44[49] [(B) shares
in the company (not being shares entitled to a fixed rate of dividend whether
with or without a further right to participate in profits) carrying not less
than fifty per cent of the voting power have been allotted unconditionally to,
or acquired unconditionally by, and were throughout the relevant previous year
beneficially held by-
(a) the Government, or
(b) a corporation established by a Central,
State or Provincial Act, or
(c) any company to which this clause applies
or any subsidiary company of such company 45[50] [if the whole of
the share capital of such subsidiary company has been held by the parent
company or by its nominees throughout the previous year.]
Explanation.—In its application to an Indian company whose business
consists mainly in the construction of ships or in the manufacture or
processing of goods or in mining or in the generation or distribution of
electricity or any other form of power, item (B) shall have effect as if for the words “not less than forty
per cent”, the words “not less than forty per cent” had been substituted;]]
(19) “co-operative
society” means a co-operative society registered under the Co-operative
Societies Act, 1912 (2 of 1912), or under any other law for the time being in
force in any State for the registration of co-operative societies;
46[51] [(19A) “Deputy
Commissioner” means a person appointed to be a Deputy Commissioner of
Income-tax under sub-section (1) of section 117;
(19B) “Deputy Commissioner (Appeals)”
means a person appointed to be a Deputy Commissioner of Income-tax (Appeals)
under sub-section (1) of section 117;]
47[52] (20) “director”,
“manager” and “managing agent”, in relation to a company, have the meanings
respectively assigned to them in the Companies Act, 1956 (1 of 1956);
48[53] [(21) “Director
General or Director” means a person appointed to be a Director General of
Income-tax or, as the case may be, a Director of Income-tax, under sub-section
(1) of section 117, and includes a person appointed under that sub-section to
be a Deputy Director of Income-tax or an Assistant Director of Income-tax;]
49[54] (22) “dividend”
includes-
(a) any distribution by a company of
accumulated profits, whether capitalised or not, if
such distribution entails the release by the company to its shareholders of all
or any part of the assets of the company;
(b) any distribution to its shareholders by
a company of debentures, debentures-stock, or deposit certificates in any form,
whether with or without interest, and any distribution to its preference
shareholders of shares by way of bonus, to the extent to which the company
possesses accumulated profits, whether capitalised
or not;
(c) any distribution made to the
shareholders of a company on its liquidation, to the extent to which the
distribution is attributable to the accumulated profits of the company
immediately before its liquidation, whether capitalised
or not;
(d) any distribution to its shareholders by
a company on the reduction of its capital, to the extent to which the company
possesses accumulated profits which arose after the end of the previous year
ending next before the 1st day of April, 1933, whether such accumulated profits
have been capitalised or not;
(e) any payment by a company, not being a
company in which the public are substantially interested, of any sum (whether
as representing a part of the assets of the company or otherwise)50[55] [made after the 31st
day of May, 1987, by way of advance or loan to a shareholder, being a person
who is the beneficial owner of shares (not being shares entitled to a fixed
rate of dividend whether with or without a right to participate in profits)
holding not less than ten per cent of the voting power, or to any concern in
which such shareholder is a member or a partner and in which he has a
substantial interest (hereafter in this clause referred to as the said
concern)] or any payment by any such company on behalf, or for the individual
benefit, of any such shareholder, to the extent to which the company in either
case possesses accumulated profits;but “dividend”
does not include-
(i) a
distribution made in accordance with sub-clause (c) or sub-clause (d)
in respect of any share issued for full cash consideration, whether the holder
of the shares is not entitled in the event of liquidation to participate in the
surplus assets;
51[56] [(ia) a distribution made in accordance with
sub-clause (c) or sub-clause (d) in so far as such distributions
attributable to the capitalised profits of the
company representing bonus shares allotted to its equity shareholders after the
31st day of March, 1964, 52[57] [and before the
1st day of April, 1965];]
(ii) any advance or loan made to a
shareholder 53[58] [or the said
concern] by a company in the ordinary course of its business, where the
lending of money is substantial part of the business of the company;
(iii) any dividend paid by a company which is set
off by the company against the whole or any part of any sum previously paid by
it and treated as a dividend within the meaning of sub-clause (e), to the extent to which it is so
set off.
Explanation
1.- The expression “accumulated profits”,
wherever it occurs in this clause, shall not include capital gains arising
before the 1st day of April, 1946, or after the 31st day of March, 1948, and
before the 1st day of April, 1956.
Explanation
2.- The expression “accumulated profits” in
sub-clauses (a), (b), (d) and (e),
shall include all profits of the company up to the date of distribution or
payment referred to in those sub-clauses, and in sub-clause (c) shall include all profits of the
company up to the date of liquidation, 54[59] [but shall not,
where the liquidation is consequent on the compulsory acquisition of its
undertaking by the Government or a corporation owned or controlled by the
Government under any law for the time being in force, include any profits of
the company prior to three successive previous years immediately preceding the
previous year in which such acquisition took place].
55[60] [Explanation 3.—For the purpose of
this clause,—
(a) “concern” means a Hindu undivided
family, or a firm or an association of persons or a body of individuals or a
company;
(b) a person shall be deemed to have a
substantial interest in a concern, other than a company, if he is, at any time
during the previous year, beneficially entitled to not less than twenty per
cent of the income of such concern;]
56[61] [(22A) “domestic
company” means an Indian company, or any other company which, in respect of its
income liable to tax under this Act, has made the prescribed arrangements for
the declaration and payment, within India, of the dividends (including dividends
on preference shares) payable out of such income;]
57[62] [58[63] [(22B)] “fair
market value”, in relation to a capital asset, means—
(i) the price
that the capital assets would ordinarily fetch on sale in the open market on
the relevant date; and
(ii) where the price referred to in
sub-clause (i)
is not ascertainable, such price as may be determined in accordance with the
rules made under this Act;]
59[64] (23) “firm”,
“partner” and “partnership” have the meanings respectively assigned to them in
the Indian Partnership Act, 1932 (9 of 1932); but the expression “partner”
shall also include any person who, being a minor, has been admitted to the
benefits of partnership;
60[65] [(23A) “foreign
company” means a company which is not a domestic company;]
(24) “income”
includes—
(i) profits
and gains;
(ii) dividend;
61[66] [(iia) voluntary contributions received by a
trust created wholly or partly for charitable or religious purposes or by an
institution established wholly or partly for such purposes 62[67] [or by an
association or institution referred to in clause (21) or clause (23),
or by a fund or trust or institution referred to in sub-clause (iv) or sub-clause (v) of clause (23C), of section 10].
Explanation.- For the purposes of
this sub-clause, “trust” includes any other legal obligation;]
63[68] (iii) the
value of any perquisite or profit in lieu of salary taxable under clauses (2) and (3) of section 17;
64[69] [(iiia) any special allowance or benefit, other
than perquisite included under sub-clause (iii), specifically granted to the assessee
to meet expenses wholly, necessarily and exclusively for the performance of
the duties of an office or employment of profit;
(iiib) any
allowance granted to the assessee either to meet his
personal expenses at the place where the duties of his office or employment of
profit are ordinarily performed by him or at a place where he ordinarily
resides or to compensate him for the increased cost of living;]
63[70] (iv) the
value of any benefit or perquisite, whether convertible into money or not,
obtained from a company either by a director or by a person who has a
substantial interest in the company, or by a relative of the director or such
person, and any sum paid by any such company in respect of any obligation which,
but for such payment, would have been payable by the director or other person
aforesaid;
65[71] [(iva) the value of any benefit or perquisite,
whether convertible into money or not, obtained by any representative assessee mentioned in clause (iii) or clause (iv)
of sub-section (1) of section 160 or by any person on whose behalf or for whose
benefit any income is receivable by the representative assessee
(such person being hereafter in this sub-clause referred to as the
“beneficiary”) and any sum paid by the representative assessee
in respect of any obligation which, but for such payment, would have been
payable by the beneficiary;]
(v) any sum chargeable to income-tax
under clauses (ii) and (iii) of section 28 or section 41 or
section 59;
66[72] [(va) any sum chargeable to income-tax under
clause (iiia)
of section 28;]
67[73] [(vb) any sum chargeable to income-tax under
clause (iiib)
of section 28;]
68[74] [(vc) any sum chargeable to income-tax under
clause (iiic)
of section 28;]
69[75] [(vd)] the value of any benefit or perquisite
taxable under clause (iv) of
section 28;
70[76] [(ve) any
sum chargeable to income-tax under clause (v) of section 28;]
(v) any capital gains chargeable under
section 45;
(vii) the profits and gains of any
business of insurance carried on by a mutual insurance company or by a
co-operative society, computed in accordance with section 44 or any surplus
taken to be such profits and gains by virtue of provisions contained in the
First Schedule;
71[77] (viii) [Omitted by the Finance Act, 1988, w.e.f. 1-4-1988. Original sub-clause (viii) was inserted by the Finance Act, 1964, w.e.f. 1-4-1964.]
72[78] [(ix) any
winnings from lotteries, crossword puzzles, races including horse races, card
games and other games of any sort or from gambling or betting of any form or
nature whatsoever;]
73[79] [(x) any
sum received by the assessee from his employees as
contributions to any provident fund or superannuation fund or any fund set up
under the provisions of the Employees’ State Insurance Act, 1948 (34 of 1948),
or any other fund for the welfare of such employees;]
(25) “Income-tax Officer” means a
person appointed to be an Income-tax Officer under 74[80] [***] section
117;
75[81] [(25A) “
(a) as respects any period, for the purposes
of section 6; and
(b) as respects any period included in the
previous year, for the purposes of making any assessment for the assessment
year commencing on the 1st day of April, 1963, or for any subsequent year;]
(26) “Indian company” means a
company formed and registered under the Companies Act, 1956 (1 of 1956), and
includes—
(i) a company
formed and registered under any law relating to companies formerly in force in
any part of India (other than the State of Jammu and Kashmir 76[83] [and the Union
territories specified in sub-clause (iii)
of this clause]);
77[84] [(ia) a corporation established by or under a
Central, State or Provincial Act;
(ib) any
institution, association or body which is declared by the Board to be a company
under clause (17);]
(ii) in the case of the State of
76[85] [(iii) in
the case of any of the Union territories of Dadra and
Nagar Haveli, Goa†[86] , Daman and Diu, and
Provided that the 78[87] [egistered or, as the case may be, principal office of the
company, corporation, institution, association or body] in all cases is in
(28) “Inspector of Income-tax” means
a person appointed to be an Inspector of Income-tax under sub-section 80[89] [(1)] of section
117;
81[90] [82[91] (28A) “interest”
means interest payable in any manner in respect of any moneys borrowed or debt
incurred (including a deposit, claim or other similar right or obligation) and
includes any service fee or other charge in respect of the moneys borrowed or
debt incurred or in respect of any credit facility which has been utilised;]
83[92] [(28B) “interest
on securities” means,—
(i) interest on
any security of the Central Government or a State Government;
(ii) interest on debentures or other
securities for money issued by or on behalf of a local authority or a company
or a corporation established by a Central, State or Provincial Act;]
(29) 84[93] "Legal
representative” has the meaning assigned to it in clause (11) of section 2 of the Code of Civil
Procedure, 1908 (5 of 1908);
85[94] [(29A) “long-term
capital asset” means capital asset which is not a short-term capital asset;
(29B) “long-term capital gain” means
capital gain arising from the transfer of a long-term capital asset;]
86[95] [(29C) “maximum
marginal rate” means the rate of income-tax (including surcharge or income-tax,
if any) applicable in relation to the highest slab of income in the case of an
individual 87[96] [, association of
persons or, as the case may be, body of individuals] as specified in the
Finance Act of the relevant year;]
(30) “non-resident”
means a person who is not a “resident”, and for the purposes of sections 92, 93
88[97] [***] and 168,
includes a person who is not ordinarily resident within the meaning of
sub-section (6)*
[98] of section 6;
(31) “person”
includes—
(i) an
individual,
(ii) a Hindu undivided family,
(iii) a company,
(iv) a firm,
(v) an association of persons or a body of
individuals, whether incorporated or not,
(vi) a local authority, and
(vii) every artificial juridical person, not
falling within any of the preceding sub-clauses;
(32) “person who has a substantial
interest in the company”, in relation to a company, means a person who is the
beneficial owner of shares, not being shares entitled to a fixed rate of
dividend whether with or without a right to participate in profits, carrying
not less than twenty per cent of the voting power;
(33) “prescribed”
means prescribed by rules made under this Act;
(34) “previous
year” means the previous year as defined in section 3;
(35) “principal
officer”, used with reference to a local authority or a company or any other public
body or any association of persons or any body of individuals, means—
(a) the secretary, treasurer, manager or
agent of the authority, company, association or body, or
(b) any person connected with the management
or administration of the local authority, company, association or body upon
whom the 89[99] [Assessing]
Officer has served a notice of his intention of treating him as the principal
officer thereof;
(36) “profession”
includes vocation;
90[100] [(36A) “public sector company” means any corporation
established by or under any Central, State or Provincial Act or a Government
company91[101] as defined in section 617 of the Companies Act, 1956 (1 of
1956);]
(37) 92[102] "public servant” has the same meaning as in section 21
of the Indian Penal Code (45 of 1860);
93[103] [(37A) “rate or rates in force” or “rates in force”,
in relation to an assessment year or financial year, mean—
(i) for the
purposes of calculating income-tax under the first proviso to sub-section (5)
of section 132, or computing the income-tax chargeable under sub-section (4) of
section 172 or sub-section (2) of section 174 or section 175 or sub-section (2)
of section 176 or deducting income-tax under section 192 from income chargeable
under the head “Salaries” 94[104] [***] or 95[105] [computation of the “advance tax” payable under Chapter
XVII-C in a case not falling under 96[106] [section 115A or section 115B 97[107] [or section 115BB or section 115E] or] section 164 97[108] [or section 164A 98[109] [***]] 99[110] [or section 167B], the rate or rates of income-tax
specified in this behalf of the Finance Act of the relevant year, and for the
purposes of computation of the “advance tax” payable under Chapter XVII-C 1[111] [in a case falling under section 115A or section 115B 2[112] [or section 115BB or section 115E] or section 164 2[113] [or section 164A 3[114] [***]] 4[115] [or section 167B], the rate or rates specified in section
115A or 5[116] [section 115B or section 115BB or section 115E or section
164 or section 164A 3[117] [***] 4[118] [or section 167B], as the case may be,] or the rate or
rates of income-tax specified in this behalf in the Finance Act of the relevant
year, whichever is applicable;]
(ii) for the purposes of deduction of tax
under sections 193, 194, 194A 6[119] [, 194B], 7[120] [, 194BB] 8[121] [and 194D], the rate or rates of income-tax specified in
this behalf in the Finance Act of the relevant year;]
9[122] [(iii) for the purposes of deduction of tax
under section 195, the rate or rates of income-tax specified in this behalf in
the Finance Act of the relevant year or the rate or rates of income-tax
specified in an agreement entered into by the Central Government under section
90, whichever is applicable by virtue of the provisions of section 90;]
10[123] (38) “recognised
provident fund” means a provident fund which has been and continues to be recognised by the 11[124] [Chief Commissioner or Commissioner] in accordance with the
rules contained in Part A of the Fourth Schedule, and includes a provident
fund established under a scheme framed under the Employees’ Provident Funds
Act, 1952 (19 of 1952);
12[125] [(39) Omitted
by the Finance Act, 1992 w.e.f. 1-4-1993.]
(40) “regular
assessment” means the assessment made under 13[126] [sub-section (3) of] section 143 or section 144;
(41) “relative”,
in relation to an individual, means the husband, wife, brother or sister or any
lineal ascendant or descendant of that individual;
(42) “resident”
means a person who is resident in
14[127] [15[128] (42A) 16[129] [“short-term capital asset” means a capital asset held by
an assessee for not more than 17[130] [thirty-six] months immediately preceding the date of its
transfer:]
18[131] [Provided that in the case of a share held in a
company, the provisions of this clause shall have effect as if for the words
“thirty-six months”, the words “twelve months” had been substituted.]
Explanation.—(i) In
determining the period for which any capital asset is held by the assessee—
(a) in the case of a share held in a company
in liquidation, there shall be excluded the period subsequent to the date on
which the company goes into liquidation;
(b) in the case of a capital asset which
becomes the property of the assessee in the
circumstances mentioned in 19[132] [sub-section (1)] of section 49, there shall be included
the period for which the asset was held by the previous owner referred to in
the said section;
20[133] [(c) in the case of a capital asset being a
share or shares in an Indian company, which becomes the property of the assessee in consideration of a transfer referred to in
clause (vii) of section 47,
there shall be included the period for which the share or shares in the
amalgamating company were held by the assessee;]
(ii) In respect of capital assets other than
those mentioned in clause (i) the period for which any capital asset is held by assessee shall be determined subject to any rules which the
Board may make in this behalf;]
21[134] [(42B) “short-term capital gain” means capital gain
arising from the transfer of a short-term capital asset;]
23[136] [(43) “tax” in relation to the assessment year
commencing on the 1st day of April, 1965, and any subsequent assessment year
means income-tax chargeable under the provisions of this Act, and in relation
to any other assessment year income-tax and super-tax chargeable under the
provisions of this Act prior to the aforesaid date;]
24[137] [(43A) “tax credit certificate” means a tax credit certificate
granted to any person in accordance with the provisions of Chapter XXII-B24a[138] and any scheme made there under;]
26[140] [(44) “Tax Recovery Officer” means any Income-tax
Officer who may be authorised by the Chief
Commissioner or Commissioner, by general or special order in writing, to
exercise the powers of a Tax Recovery Officer;]
(45) “total
income” means the total amount of income referred to in section 5, computed in
the manner laid down in this Act;
(47) 29[142] [“transfer”, in relation to a capital asset, includes,—
(i) the sale, exchange or relinquishment of the asset; or
(ii) the extinguishment of any rights
therein; or
(iii) the compulsory acquisition thereof under
any law; or
(iv) in a case where the asset is converted by
the owner thereof into, or is treated by him as, stock-in-trade of a business
carried on by him, such conversion or treatment;] 30[143] [or]
30[144] [(v) any transaction involving the allowing of
the possession of any immovable property to be taken or retained in part
performance of a contract of the nature referred to in section 53A31[145] of the Transfer of Property Act, 1882 (4 of 1882); or
(vi) any transaction (whether by way of becoming
a member of, or acquiring shares in, a co-operative society, company or other
association of persons or by way of any agreement or any arrangement or in any
other manner whatsoever) which has the effect of transferring or enabling the
enjoyment of, any immovable property.
Explanation— For
the purposes of sub-clauses (v)
and (vi), “immovable property”
shall have the same meaning as in clause (d) of section 269UA;]
32[146] [(48) Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.]
33[147] [34[148] "Previous
year” defined.
3.
(1) Save as otherwise provided in
this section, “previous year” for the purposes of this Act, means the financial
year immediately preceding the assessment year:
Provided
that, in the case of a business or profession newly set up, or a source of
income newly coming into existence, in the said financial year, the previous
year shall be the period beginning with the date of setting up of the business
or profession or, as the case may be, the date on which the source of income
newly comes into existence and ending with the said financial year.
(2) “Previous
year”, in relation to the assessment year, commencing on the 1st day of April,
1989, means the period which begins with the date immediately following the last
day of the previous year relevant to the assessment year commencing on the 1st
day of April, 1988 and ends on the 31st day of March, 1989 :
35[149] Provided that where the assessee
has adopted more than one period as the “previous year” in relation to the
assessment year commencing on the 1st day of April, 1988 for different sources
of his income, the previous year in relation to the assessment year commencing
on the 1st day of April, 1989 shall be reckoned separately in the manner
aforesaid in respect of each such source of income, and the longer or the
longest of the periods so reckoned shall be the previous year for the said
assessment year :
36[150] [Provided further that in the case of a business or
profession newly set up, or a source of income newly coming into existence on
or after the 1st day of April, 1987 but before the 1st day of April, 1988 and
where the accounts in relation to such business or profession or source of
income have not been made up to the 31st day of March, 1988, the “previous year”
in relation to the assessment year commencing on the 1st day of April, 1989,
shall be the period beginning with the date of setting up of the business or
profession or, as the case may be, the date on which the source of income newly
comes into existence and ending on the 31st day of March 1989 :
37[151] Provided also that where the assessee
has adopted one or more periods as the “previous year” in relation to the
assessment year commending on the 1st day of April, 1988, for any source or
sources of his income, in addition to the business or profession or source of
income referred to in the second proviso, the previous year in relation to the
assessment year commencing on the 1st day of April, 1989, shall be reckoned
separately in the manner of aforesaid in respect of each such source of income,
and the longest of the periods so reckoned shall be the previous year in
relation to the said assessment year.]
(3) Where
the previous year in relation to the assessment year commencing on the 1st day
of April, 1989, referred to in sub-section (2) exceeds a period of twelve
months, the provisions of this Act shall apply subject to the modifications
specified in the rules in the Tenth Schedule.]
[1]* Amendments made by Finance Act, 1993, notwithstanding the dates from which they come into effect have been printed in italics enclosed with bold square brackets. Amendments made by the Finance Act, 1992, coming into force from April 1, 1993, have also been printed in italics but enclosed with medium square brackets.
[2]For applicability of the Act to the State of Sikkim, see
section 26 of the Finance Act, 1989. For extension of Act to continental shelf
of
[3]For effective date for applicability of the Act in the State of Sikkim, see Notification No. SO 148(E), dated 23-2-1989, refers Circulars, 1991.
[4]Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.
[6]Renumbered as clause (1A) by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.
[7]The Finance Act, 1973 introduced for the first time a scheme of partially integrated taxation of non-agricultural income with incomes derived from agriculture for the purposes of determining the rate of income-tax that will apply to certain non-corporate assessees. The scheme is since continued by the Annual Finance Acts. The provisions applicable for the assessment year 1993-94 are contained in section 2(2)/2(9)(d) and Part IV of the First Schedule to the Finance Act, 1993.
[8]See also Instruction No. 745 [F.No. 228/28/74-IT (A-II)], dated 30-8-1974 and Circular No. 310 dated 29-7-1981. See Circulars, 1991.
[9]Substituted by the Taxation Laws (Amendment) Act, 1970, with retrospective effect from 1-4-1962.
[10]Substituted by the Taxation Laws (Amendment) Act, 1970, with retrospective effect from 1-4-1962.
[11]For specified urban areas, refer Circulars, 1991.
[12]Inserted by the Finance Act, 1989 with retrospective effect from 1-4-1970.
[13]Inserted by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1967.
[14]Renumbered as clause (1B) by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.
[15]Clause (3)
omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f.
1-4-1988. Prior to its omission, clause (3)
stood as under:
‘(3) “Appellant Assistant Commissioner” means a person appointed to be an Appellate Assistant Commissioner of Income-tax under sub-section (1) of section 117.’
[16]Substituted for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[17]Substituted for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[18]Substituted for “income-tax or super-tax” by the Finance Act, 1965, w.e.f. 1-4-1965.
[19]Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[20]Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[21]Inserted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 1-4-1988. Original clause was earlier omitted by the Finance Act, 1965, w.e.f. 1-4-1965.
[22]Substituted for “Central Board of Revenue constituted under the Central Board of Revenue Act, 1924 (4 of 1924)” by the Central Board of Revenue Act, 1963, w.e.f. 1-1-1964.
[23]See also Letter F. No. 34/11/65-IT(A-I), dated 15-1-1966.
[24]Substituted by the Finance Act, 1972, w.e.f. 1-4-1973.
[25]Substituted for “(iii) agricultural land in
[26]For specified urban areas, refer Circulars.
[27]For specified urban areas, refer Circulars.
[28]Inserted by the Taxation Laws (Amendment) Act, 1962, w.e.f. 13-12-1962.
[29]Inserted by the Finance (No. 2) Act, 1965, w.e.f. 1-4-1965.
[30]Inserted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1965, w.e.f. 4-12-1965.
[31]Inserted by the Special Bearer Bonds (Immunities and Exemptions) Act, 1981, w.e.f. 12-1-1981.
[32]See also Circular No. 395, dated 24-9-1984.
[33]“not involving the carrying on of any activity for profit” omitted by the Finance Act, 1983, w.e.f. 1-4-1984.
[34]Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[35]Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976.
[36]Renumbered by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[37]Substituted by the Finance Act, 1970, w.e.f. 1-4-1970.
[38]“, and includes a person appointed to be an Additional Commissioner of Income-tax under that sub-section” omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[39]Inserted by the Finance (No. 2) Act, 1977, w.e.f. 10-7-1978.
[40]Substituted by the Finance (No. 2) Act, 1971, w.e.f. 1-4-1971.
[41]Substituted by the Finance Act, 1964, w.e.f. 1-4-1964.
[42]Inserted by the Finance (No. 2) Act, 1971, w.e.f. 1-4-1971.
[43]For text of section 25 of Companies Act, see Appendix.
[44]Inserted by the Finance Act, 1985, with retrospective effect from 1-4-1984.
[45]For notified Nidhi, etc., see Appendix.
[46]Inserted by the Finance Act, 1992, w.e.f. 1-4-1993.
[47]Substituted by the Fiance Act, 1969, w.e.f. 1-4-1970. Earlier, clause (b) was amended first by the Finance Act, 1965, w.e.f. 1-4-1965 and then by the Finance Act, 1966, w.e.f. 1-4-1966.
[48]For definition of “private company” in clause (iii) of section 3(1) of the Companies Act, 1956.
[49]Substituted by the Finance Act, 1983, w.e.f. 2-4-1983.
[50]Substituted for “where such subsidiary company fulfils the conditions laid down in clause (b) of section 108” by the Finance Act, 1987, w.e.f. 1-4-1988.
[51]Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[52]Definitions of expressions “director” and “manager” in
clauses (13) and (24) of section 2 of the Companies
Act, 1956, are as follows :
‘(13) “director” includes any person
occupying the position of director, by whatever name called;’
‘(24) “manager” means an individual (not being the managing agent) who, subject to the superintendence, control and direction of the Board of directors, has the management of the whole, or substantially the whole, of the affairs of the company, and includes a director or any other person occupying the position of a manager, by whatever name called, and whether under a contract of service or not;’
[53]Substituted for the following clause (21) by the Direct Tax Laws
(Amendment) Act, 1987, w.e.f. 1-4-1988 :
‘(21) “Director of Inspection” means a person appointed to be a Director of Inspection under sub-section (1) of section 117, and includes a person appointed to be an Additional Director of Inspection, a Deputy Director of Inspection or an Assistant Director of Inspection;’
[54]See also Circular No. 5-P (para 56), dated 9-10-1967.
[55]Substituted for “by way of advance or loan to a shareholder, being a person who has a substantial interest in the company,” by the Finance Act, 1987, w.e.f. 1-4-1988.
[56]Inserted by the Finance Act, 1965, w.e.f. 1-4-1965.
[57]Inserted by the Finance Act, 1966, w.e.f. 1-4-1966.
[58]Inserted by the Finance Act, 1987, w.e.f. 1-4-1988.
[59]Inserted by the Direct Taxes (Amendment) Act, 1964, with retrospective effect from 1-4-1962.
[60]Inserted by the Finance Act, 1987, w.e.f. 1-4-1988.
[61]Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.
[62]Inserted by the Finance Act, 1964, w.e.f. 1-4-1964.
[63]Renumbered as clause (22B) by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.
[64]Section 4 of the Indian Partnership Act, 1932 defines
expressions “firm”, “partner” and “partnership” as follows:
‘“Partnership”
is the relation between persons who have agreed to share the profits of a
business carried on by all or any of them acting for all.
Persons who have entered into partnership with one another are called individually “partners” and collectively “a firm”, and the name under which their business is carried on is called the “firm name”.’
[65]Inserted by the Direct Taxes (Amendment) Act, 1987, w.e.f. 1-4-1989.
[66]Inserted by the Finance Act, 1972, w.e.f. 1-4-1973.
[67]Substituted for “or by a trust or institution of national importance referred to in clause (d) of sub-section (1) of section 80F” by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Earlier, the said expression was substituted for “, not being contributions made with a specific direction that they shall form part of the corpus of the trust or institution” by the Direct Tax Laws (Amendment) Act, 1987, with effect from the same date.
[68]See also Board’s Letter to Indian Merchants Chamber published in Chamber’s Annual Report, 1963.
[69]Inserted by the Direct Tax Laws (Amendment) Act, 1989, with retrospective effect from 1-4-1962.
[70]See also Board’s Letter to Indian Merchants Chamber published in Chamber’s Annual Report, 1963.
[71]Inserted by the Finance (No. 2) Act, 1980, w.e.f. 1-4-1980.
[72]Inserted by the Finance Act, 1990, w.r.e.f. 1-4-1962.
[73]Inserted, ibid. w.r.e.f. 1-4-1967.
[74]Inserted by the Finance Act, 1990, w.r.e.f. 1-4-1972.
[75]Relettered by the Finance Act, 1990, w.r.e.f. 1-4-1962. Earlier existing clause (va) was inserted by the Finance Act, 1964, w.e.f. 1-4-1964.
[76]Inserted by the Finance Act, 1992, w.e.f. 1-4-1993.
[77]Prior to its omission, sub-clause (viii) read as under:
“(viii) any annuity due, or commuted value of any annuity paid, under the provisions of section 280D;”
[78]Inserted by the Finance Act, 1972, w.e.f. 1-4-1972.
[79]Inserted by the Finance Act, 1987, w.e.f. 1-4-1988.
[80]“sub-section (1) of” omitted by the Direct Tax Laws (Amendment) Act, 1989 with retrospective effect from 1-4-1988. Earlier, that expression was inserted by the Direct Tax Laws (Amendment) Act, 1987, with effect from the same date.
[81]Inserted by the Taxation Laws (Extension to
[82]†
[83]Inserted by the Taxations Laws (Extension to
[84]Inserted by the Finance (No. 2) Act, 1971, w.e.f. 1-4-1971.
[85]Inserted by the Taxations Laws (Extension to
[86]†
[87]Substituted for “registered office of the company” by the Finance (No. 2) Act, 1971, w.e.f. 1-4-1971.
[88]Omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. Omitted clause (27) stood as under :
‘(27) “Inspecting Assistant Commissioner” means a person appointed to be an Inspecting Assistant Commissioner of Income-tax under sub-section (1) of section 117;’
[89]Substituted for “(2)” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[90]Inserted by the Finance Act, 1976, w.e.f. 1-6-1976.
[91]See also Letter No. F. 164/18/77-IT(A-I), dated 13-7-1978.
[92]Inserted by the Finance Act, 1988, w.e.f. 1-4-1989.
[93]Clause (11)
of section 2 of the Code of Civil Procedure defines “legal representative” as
follows:
‘(11) “legal representative” means a person who in law represents the estate of a deceased person, and includes any person who intermeddles with the estate of the deceased and where a party sues or is used in a representative character the person on whom the estate devolves on the death of the party so suing or sued;’.
[94]Inserted by the Finance Act, 1987, w.e.f. 1-4-1988.
[95]Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.
[96]Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1991.
[97]“113” omitted by the Finance Act, 1965, w.e.f. 1-4-1965.
[98]* Should be clause (6) of Section 6
[99]Substituted for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[100]Inserted by the Finance Act, 1987, w.e.f. 1-4-1987.
[102]Definition of “public servant” in section 21 of the
Indian Penal Code is as follows:
‘The words “public servant” denote a person
falling under any of the descriptions hereinafter following, namely :—
** ** **
* Second -
Every Commissioned Officer in the Military, Naval or Air Forces of
* Third -
Every Judge including any person empowered by law to discharge, whether by
himself or as a member of any body of persons, any adjudicatory functions;
* Fourth -
Every officer of a Court of Justice (including a liquidator, receiver or
Commissioner) whose duty it is, as such officer, to investigate or report on
any matter of law or fact, or to make, authenticate, or keep any document, or
to take charge or dispose of any property, or to execute any judicial process,
or to administer any oath, or in interpret, or to preserve order in the Court,
and every person specially authorised by a Court of
Justice to perform any of such duties;
* Fifth - Every
juryman, assessor, or member of a panchayat assisting
a Court of Justice or public servant;
* Sixth -
Every arbitrator or other person to whom any cause or matter has been referred for
decision or report by any Court of Justice, or by any other competent public
authority;
* Seventh -
Every person who holds any office by virtue of which he is empowered to place
or keep any person in confinement;
* Eighth -
Every officer of the Government whose duty it is, as such officer, to prevent
offences, to give information of offences, to bring offenders to justice, or
to protect the public health, safety or convenience;
* Ninth -
Every officer whose duty it is, as such officer, to take, receive, keep or
expend any property on behalf of the Government, or to make any survey,
assessment or contract on behalf of the Government, or to execute any
revenue-process, or to investigate, or to report, on any matter affecting the
pecuniary interests of the Government, or to make, authenticate or keep any
document relating to the pecuniary interests of the Government, or to prevent
the infraction of any law for the protection of the pecuniary interests of the
Government;
* Tenth -
Every officer whose duty it is, as such officer, to take, receive, keep or
expend any property, to make any survey or assessment or to levy any rate or
tax for any secular common purpose of any village, town or district, or to
make, authenticate or keep any document for the ascertaining of the rights of
the people of any village, town or district;
* Eleventh -
Every person who holds any office by virtue of which he is empowered to
prepare, publish, maintain or revise an electoral roll or to conduct an
election or part of an election;
* Twelfth -
Every person—
(a) in the service or pay of the Government or
remunerated by fees or commission for the performance of any public duty by the
Government;
(b) in the service or pay of a local
authority, a corporation established by or under a Central, Provincial or State
Act or a Government company as defined in section 617 of the Companies Act,
1956 (1 of 1956).
Illustration
A Municipal Commission is a
public servant.
Explanation
1.— Persons falling under any of the above
descriptions are public servants, whether appointed by the Government or not.
Explanation
2.— Wherever the words “public servant”
occur, they shall be understood of every person who is in actual possession of
the situation of a public servant, whatever legal defect there may be in his
right to hold that situation.
Explanation 3.— The word “election” denotes an election for the purpose of selecting members of any legislative, municipal or other public authority, of whatever character, the method of selection to which is by, or under, any law prescribed as by election.’
[103]Inserted by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1967.
[104]“or sub-section (9) of section 80E from any payment referred to therein” omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. Originally, the said expression was inserted by the Finance Act, 1968, w.e.f. 1-4-1968.
[105]Substituted for ‘computation of the “advance tax” payable under Chapter XVII-C, the rate or rates of income-tax specified in this behalf in the Finance Act of the relevant year’ by the Finance Act, 1970, w.e.f. 1-4-1971.
[106]Inserted by the Finance Act, 1976, w.e.f. 1-6-1976.
[107]Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[108]Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[109]“Or section 167A” omitted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Earlier this expression was inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[110]Inserted by the Direct Taxes Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.
[111]Substituted for “in a case falling under section 164, the rate specified in that section” by the Finance Act, 1976, w.e.f. 1-6-1976.
[112]Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[113]Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[114]“or section 167A” omitted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Earlier this expression was inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[115]Inserted by the Direct Taxe Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.
[116]Substituted for “section 115B or, as the case may be, section 164” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[117]“or section 167A” omitted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Earlier this expression was inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[118]Inserted by the Direct Taxe Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.
[119]Inserted by the Finance Act, 1972, w.e.f. 1-4-1972.
[120]Inserted by the Finance Act, 1978, w.e.f. 1-4-1978.
[121]Substituted for “, 194D and 195” by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991.
[122]Substituted by the Finance Act, 1992, w.e.f. 1-6-1992. Prior to substitution, sub-clause (iii), as inserted by the Finance (No.
2) Act, 1991, w.e.f. 1-10-1991, read as under:
“(iii) for the purposes of deduction of tax under section 195, the rate or rates of income-tax specified in section 115A or the rate or rates of income-tax specified in this behalf in the Finance Act of the relevant year, whichever is applicable;”
[123]See also Circular No. 153, dated 30-11-1974.
[124]Substituted for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[125]Prior to omission, clause (39) was substituted by the Direct Tax laws (Second Amendment)
Act, 1989, w.e.f. 1-4-1989. Earlier clause (39) was omitted by the Direct Tax
Laws (Amendment) Act, 1987, w.e.f. 1-4-1989 and was
later reintroduced by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Prior to substitution, it read as under :
‘(39) “registered firm” means a firm registered under the provisions of clause (a) of sub-section (1) of section 185 or deemed to be registered under the provisions of sub-section (6) of that section or under those provisions read with sub-section (7) of section 184;’
[126]Inserted by the Finance Act, 1990, w.r.e.f. 1-4-1989.
[127]Inserted by the Finance (No. 2) Act, 1962, w.e.f. 1-4-1962.
[128]See also Circular No. 415, dated 14-3-1985.
[129]Substituted for the portion beginning with “short-term capital asset” and ending with “preceding the date of its transfer;” by the Finance Act, 1973, w.e.f. 1-4-1974. Earlier clause (42A) was first amended by the Finance Act, 1966, w.e.f. 1-4-1966 and later by the Finance Act, 1968, w.e.f. 1-4-1969.
[130]Substituted for “sixty” by the Finance (No. 2) Act, 1977, w.e.f. 1-4-1978.
[131]Inserted by the Finance Act, 1987, w.e.f. 1-4-1988.
[132]Substituted for “clauses (i) to (iii)” by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1967.
[133]Inserted by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1967.
[134]Inserted by the Finance Act, 1987, w.e.f. 1-4-1988.
[135]Omitted by the Finance Act, 1990, w.e.f.
1-4-1990. Prior to omission, clause (42C),
as inserted by the Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-4-1990, read as under:
‘(42C) “security” means a Government security as defined in clause (2) of section 2 of the Public Debt Act, 1944 (18 of 1944);’
[136]Substituted by the Finance Act, 1965, w.e.f. 1-4-1965.
[137]Inserted, ibid.
[138]Omitted with effect from 1-4-1990.
[139]Omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. Original clause (43B) was inserted by the Finance (No. 2) Act, 1971, w.e.f. 1-1-1972 and read as under :
‘(43B) “Tax Recovery Commissioner” means a Commissioner or an Assistant Commissioner of Income-tax who may be authorised by the Central Government, by general or special notification in the Official Gazette, to exercise the powers of a Tax Recovery Commissioner;’
[140]Substituted by the Direct Tax Laws (Amendment) Act,
1987 [as amended by the Direct Tax Laws (Amendment) Act, 1989], w.r.e.f. 1-4-1988. Prior to its substitution, clause (44), as substituted by the Finance
Act, 1963 with retrospective effect from 1-4-1962, stood as under :
‘(44) “Tax Recovery Officer” means—
(i) a
Collector or an Additional Collector;
(ii) any such officer empowered to
effect recovery of arrears of land revenue or other public demand under any
law relating to land revenue or other public demand for the time being in
force in the State as may be authorised by the State
Government, by general or special notification in the Official Gazette, to
exercise the powers of a Tax Recovery Officer;
(iii) any Gazetted Officer of the Central or a State Government who may be authorised by the Central Government, by general or special notification in the Official Gazette, to exercise the powers of a Tax Recovery Officer;’
[141]Omitted by the Finance Act, 1965, w.e.f. 1-4-1965.
[142]Substituted for the following by the Taxation Laws (Amendment)
Act, 1984, w.e.f. 1-4-1985 :
‘“transfer”, in relation to a capital asset, includes the sale, exchange or relinquishment of the asset or the extinguishment of any rights therein or the compulsory acquisition thereof under any law;’
[143]Inserted by the Finance Act, 1987, w.e.f. 1-4-1988.
[144]Inserted by the Finance Act, 1987, w.e.f. 1-4-1988.
[145]For text of section 53A of Transfer of Property Act, see Appendix.
[146]Prior to omission clause (48), as reintroduced by the Direct Tax Laws (Amendment) Act, 1989,
w.e.f. 1-4-1989 which was earlier omitted by the
Direct Tax Laws (Amendment) Act, 1987, with effect from the same date, read as
under:
‘(48) “unregistered firm” means a firm which is not a registered firm.’
[147]Substituted by the Direct Tax Laws (Amendment) Act,
1987, w.e.f. 1-4-1989. Prior to its substitution,
section 3 as amended by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988 stood as under :
‘3. “Previous year” defined.—(1) For the
purposes of this Act, “previous year” means—
(a) the financial year immediately
preceding the assessment year; or
(b) if the account of the assessee have been made up to a date within the said
financial year, then, at the option of the assessee,
the twelve months ending on such date; or
(c) in the case of any person or
business or class of persons or business not falling within clause (a) or clause (b), such period as may be determined by the Board or by any
authority authorised by the Board in this behalf; or
(d) in the case of a business or
profession newly set up in the said financial year, the period beginning with
the date of the setting up of the business or profession and—
(i) ending
with the said financial year, or
(ii) if the accounts of the assessee have been made up to a date within the said financial
year, then, at the option of the assessee, ending on
that date, or
(iii) ending with the period, if any,
determined under clause (c),
as
the case may be; or
(e) in the case of a business or
profession newly set up in the twelve months immediately preceding the said
financial year—
(i) if the
accounts of the assessee have been made up to a date
within the said financial year and the period from the date of the setting up
of the business or profession to such date does not exceed twelve months, then,
at the option of the assessee, such period, or
(ii) if any period has been determined
under clause (c), then the
period beginning with the date of the setting up of the business or profession
and ending with that period,
as
the case may be; or
(f) where the assessee
is a partner in a firm and the firm has been assessed as such, then, in respect
of the assessee’s share in the income of the firm,
the period determined as the previous year for the assessment of the income of
the firm; or
(g) in respect of profits and gains
from life insurance business, the year immediately preceding the assessment
year for which annual accounts are required to be prepared under the Insurance
Act, 1938 (4 of 1938), or under that Act read with section 43 of the Life
Insurance Corporation Act, 1956 (31 of 1956).
(2)
Where an assessee has newly set up a business or
profession in the said financial year and his accounts are made up to a date in
the assessment year in respect of a period not exceeding twelve months from the
date of such setting up, then, notwithstanding anything contained in
sub-clause (iii) of clause (d) of sub-section (1), the assessee shall, in respect of that business or profession,
at his option, be deemed to have no previous year for the said assessment year
under that clause and such option shall, in relation to the immediately
succeeding assessment year, have effect as an option exercised under sub-clause
(i)
of clause (e) of sub-section
(1).
(3)
Subject to the other provisions of this section, an assessee
may have different previous years in respect of separate sources of his income.
(4) Where in respect of a particular source of income or in respect of a business or profession newly set up, an assessee has once exercised the option under clause (b) or sub-clause (ii) of clause (d) or sub-clause (i) of clause (e) of sub-section (1) or has once been assessed, then, he shall not, in respect of that source, or, as the case may be, business or profession, be entitled to vary the meaning of the expression “previous year” as then applicable to him, except with the consent of the Assessing Officer and upon such conditions as the Assessing Officer may think fit to impose.’
[148]See also PIB Press Release, dated 10-6-1988 and Instruction F.No. 165/4/88-IT(A-I), dated 4-2-1988.
[149]See rule 125.
[150]Inserted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.
[151]See rule 125.