Deductions to be made in computing total
income
A.—General
Deductions to be made in computing total income.
80A. (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 76[2] [80U].
(2) The aggregate amount of the deductions under this Chapter shall not, in any case, exceed the gross total income of the assessee.
77[3] [(3) Where, in computing the total income of an association of persons or a body of individuals, any deduction is admissible under section 80G or section 80GGA or section 80HH or section 80HHA or section 80HHB or section 80HHC or section 80HHD or section 80-I or section 80-IA or section 80J or section 80JJ, no deduction under the same section shall be made in computing the total income of a member of the association of persons or body of individuals in relation to the share of such member in the income of the association of persons or body of individuals.]
79[5] [Computation of deduction under section 80M.
80[6] 80AA. Where any deduction is required to be allowed under section 80M in respect of any income by way of dividends from a domestic company which is included in the gross total income of the assessee, then, notwithstanding anything contained in that section, the deduction under that section shall be computed with reference to the income by way of such dividends as computed in accordance with the provisions of this Act (before making any deduction under this Chapter) and not with reference to the gross amount of such dividends.]
81[7] [Deductions to be made with reference to the
income included in the gross total income.
82[8] 80AB. Where any deduction is required to be made or allowed under any section (except section 80M) included in this Chapter under the heading “C.—Deductions in respect of certain incomes” in respect of any income of the nature specified in that section which is included in the gross total income of the assessee, then, notwithstanding anything contained in that section for the purpose of computing the deduction under that section, the amount of income of that nature as computed in accordance with the provisions of this Act (before making any deduction under this Chapter) shall alone be deemed to be the amount of income of that nature which is derived or received by the assessee and which is included in his gross total income.]
80B. In this Chapter—
(5) “gross total income” means the total income computed in accordance with the provisions of this Act, before making any deduction under this Chapter 88[14] [***] 89[15] [***];
B.—Deductions in respect of certain payments
Deduction
in respect of life insurance premia, contributions to
provident fund, etc.
80C. 94[20] [ 95[21] -97[22] Omitted by the Finance Act, 1990, w.e.f. 1-4-1991.]
Deduction in respect of
investment in certain new shares.
80CC. 98-18[23] [Omitted by the Finance (No. 2) Act, 1996, w.r.e.f. 1-4-1993.]
19[24] [Deduction in respect of deposits under
National Savings Scheme or payment to a deferred annuity plan.
20[25] 80CCA. (1) Where an assessee, being—
(a) an individual, or
(b) a Hindu undivided family, 21[26] [***]
(c) 22[27] [***]has in the previous year—
(i) deposited any amount in accordance with such scheme as the Central Government may, by notification 23[28] in the Official Gazette, specify in this behalf 24[29] [***]; or
(ii) paid any amount to effect or to keep in force a contract for such annuity plan of the Life Insurance Corporation as the Central Government may, by notification 25[30] 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:
26[31] [Provided that in relation to—
(a) the assessment years commencing on the 1st day of April, 1989 and the 1st day of April, 1990, this sub-section shall have effect as if for the words “twenty thousand rupees”, the words “thirty thousand rupees” had been substituted;
(b) the assessment year commencing on the 1st day of April, 1991 and subsequent assessment years, this sub-section shall have effect as if for the words “twenty thousand rupees”, the words “forty thousand rupees” had been substituted.]
27[32] [Provided further that no deduction under this sub-section shall be allowed in relation to any amount deposited or paid under clauses (i) and (ii) on or after the 1st day of April, 1992.]
(2) Where any amount—
(a) standing to the credit of the assessee 28[33] [under the scheme referred to in clause (i) of sub-section (1)] 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 in 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 amount referred to in clause (a) or clause (b) shall be deemed to be the income of the assessee of that previous year in which such withdrawal is made or, as the case may be, amount is received, and shall, accordingly, be chargeable to tax as the income of that previous year.
29[34] [Provided that nothing contained in this sub-section shall apply to any amount received by the assessee on account of the surrender of the policy in accordance with the terms of the annuity plan of the Life Insurance Corporation where the assessee elects to surrender before the 1st day of October, 1992, the said annuity plan in respect of which he had paid any amount under clause (ii) of sub-section (1) before the 1st day of April, 1992.]
30[35] [(3) Notwithstanding anything contained in any other provision of this Act, where a partition has taken place among the members of a Hindu undivided family or where an association of persons has been dissolved after a deduction has been allowed under sub-section (1), the provisions of sub-section (2) shall apply as if the person in receipt of income referred to therein is the assessee.]
Explanation I.—For the removal of doubts, it is hereby declared that interest on the deposits made 31[36] [under the scheme referred to in clause (i) of sub-section (1)] shall not be chargeable to tax except in the manner and to the extent specified in sub-section (2).
Explanation II.—For the purposes of this section, “Life Insurance Corporation” shall have the same meaning as in clause (a) of sub-section (8) of section 80C.]
30[37] [Deduction in respect of
investment made under Equity-Linked Savings Scheme.
80CCB. (1) Where an assessee, being—
(a) an individual, or
(b) a Hindu undivided family, 32[38] [***]
(c) 33[39] [***]has acquired in the previous year, out of his income chargeable to tax, units of any Mutual Fund specified under clause (23D) of section 10 or of the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963), under any plan formulated in accordance with such scheme as the Central Government may, by notification in the Official Gazette, specify in this behalf (hereafter in this section referred to as the Equity-Linked Savings Scheme), 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 so much of the amount invested as does not exceed the amount of ten thousand rupees in the previous year:
34[40] [Provided that no deduction shall be allowed in relation to any amount invested under this sub-section on or after the 1st day of April, 1992.
(2) Where any amount invested by the assessee in the units issued under a plan formulated under the Equity-Linked Savings Scheme in respect of which a deduction has been allowed under sub-section (1) is returned to him in whole or in part either by way of repurchase of such units or on the termination of the plan, by the Fund or the Trust, as the case may be, in any previous year, it shall be deemed to be the income of the assessee of that previous year and chargeable to tax accordingly.
(3) Notwithstanding anything contained in any other provision of this Act, where a partition has taken place among the members of a Hindu undivided family or where an association of persons has been dissolved after a deduction has been allowed under sub-section (1), the provisions of sub-section (2) shall apply as if the person in receipt of income referred to therein is the assessee.]
The following section 80CCC shall be inserted by the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997 :
Deduction in respect of
contribution to certain pension funds.
80CCC. (1) Where an assessee being an individual has in the previous year paid or deposited any amount out of his income chargeable to tax to effect or keep in force a contract for any annuity plan of Life Insurance Corporation of India for receiving pension from the fund referred to in clause (23AAB) of section 10, 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 paid or deposited (excluding interest or bonus accrued or credited to the assessee’s account, if any) as does not exceed the amount of ten thousand rupees in the previous year.
(2) Where any amount standing to the credit of the assessee in a fund, referred to in sub-section (1) in respect of which a deduction has been allowed under sub-section (1), together with the interest or bonus accrued or credited to the assessee’s account, if any, is received by the assessee or his nominee—
(a) on account of the surrender of the annuity plan whether in whole or in part, in any previous year, or
(b) as pension received from the annuity plan,an amount equal to the whole of the amount referred to in clause (a) or clause (b) shall be deemed to be the income of the assessee or his nominee, as the case may be, in that previous year in which such withdrawal is made or, as the case may be, pension is received, and shall accordingly be chargeable to tax as income of that previous year.
(3) Where any amount paid or deposited by the assessee has been taken into account for the purposes of this section, a rebate with reference to such amount shall not be allowed under section 88.
35[41] [Deduction in respect of
medical insurance premia.
80D. (1) In computing the total income of an assessee, there shall be deducted at the following rates, such sum as is specified in sub-section (2) and paid by him by cheque in the previous year out of his income chargeable to tax, namely :—
(i) in a case where such sum does not exceed in the aggregate 36[42] [six] thousand rupees, the whole of such sum; and
(ii) in any other case, 36[43] [six] thousand rupees.
(2) he sum referred to in sub-section (1) shall be the following, namely:—
(a) where the assessee is an individual, any sum paid to effect or to keep in force an insurance on the health of the assessee or on the health of the wife or husband, dependant parents or dependant children of the assessee;
(b) where the assessee is a Hindu undivided family, any sum paid to effect or to keep in force an insurance on the health of any member of the family;
Provided that such insurance shall be in accordance with a scheme 38[45] framed in this behalf by the General Insurance Corporation of India formed under section 9 of the General Insurance Business (Nationalisation) Act, 1972 (57 of 1972) and approved by the Central Government in this behalf.]
39[46] [Deduction in respect of
medical treatment, etc., of handicapped dependants.
40[47] 80DD. 41[48] [***] Where an assessee who is resident in India, being an individual or a Hindu undivided family has, during the previous year, incurred any expenditure for the medical treatment (including nursing), training and rehabilitation of a person who—
(a) is a relative of the individual or, as the case may be, is a member of the Hindu undivided family and is not dependant on any person other than such individual or Hindu undivided family for his support or maintenance, and
(b) is suffering from a permanent physical disability (including blindness) or is subject to mental retardation, being a permanent physical disability or mental retardation specified in the rules 42[49] made in this behalf by the Board, which is certified by a physician, a surgeon, an oculist or a psychiatrist, as the case may be, working in a Government hospital, and which has the effect of reducing considerably such person’s capacity for normal work or engaging in a gainful employment or occupation,the assessee shall, in accordance with and subject to the provisions of this section, be allowed a deduction of a sum of 43[50] [fifteen] thousand rupees in respect of the previous year.
(2) 44[51] [Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.]
Explanation.—For the purposes of this section, the expression “Government hospital” includes a departmental dispensary whether full-time or part-time established and run by a Department of the Government for the medical attendance and treatment of a class or classes of Government servants and members of their families, a hospital maintained by a local authority and any other hospital with which arrangements have been made by the Government for the treatment of Government servants.]
45[52] [Deduction in respect of
deposit made for maintenance of handicapped dependant.
80DDA. (1) In computing the total income of an assessee who is resident in India, being an individual or a Hindu undivided family, there shall be deducted, in accordance with and subject to the provisions of this section, an amount not exceeding twenty thousand rupees paid or deposited by him in the previous year, out of his income chargeable to tax, under any scheme framed in this behalf by the Life Insurance Corporation or the Unit Trust of India subject to the conditions specified in sub-section (2) and approved by the Board in this behalf.
(2) The deduction under sub-section (1) shall be allowed only if the following conditions are fulfilled, namely :—
(a) the scheme referred to in sub-section (1) provides for payment of annuity or lumpsum amount for the benefit of a handicapped dependant in the event of the death of the individual or the member of the Hindu undivided family in whose name subscription to the scheme has been made;
(b) the assessee nominates either the handicapped dependant or any other person or a trust to receive the payment on his behalf, for the benefit of the handicapped dependant.
(3) If the handicapped dependant predeceases the individual or the member of the Hindu undivided family referred to in sub-section (2), an amount equal to the amount paid or deposited under sub-section (1) shall be deemed to be the income of the assessee of the previous year in which such amount is received by the assessee and shall accordingly be chargeable to tax as the income of that previous year.
(4) In this section,—
(a) “Government hospital” shall have the meaning assigned to it in the Explanation to section 80DD;
(b) “handicapped dependant” shall mean a person who—
(i) is a relative of the individual or, as the case may be, is a member of the Hindu undivided family and is not dependant on any person other than such individual or Hindu undivided family for his support or maintenance; and
(ii) is suffering from a permanent physical disability (including blindness) or is subject to mental retardation, being a permanent physical disability or mental retardation specified in the rules 45a[53] made by the Board for the purposes of section 80DD, which is certified by a physician, a surgeon, an oculist or a psychiatrist, as the case may be, working in a Government hospital, and which has the effect of reducing considerably such person’s capacity for normal work or engaging in a gainful employment or occupation;
(c) “Life Insurance Corporation” shall have the same meaning as in clause (iii) of sub-section (8) of section 88;
(d) “Unit Trust of India” means the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963).]
The following section 80DDB shall be inserted by the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997;
Deduction in respect of
medical treatment, etc.
80DDB. Where an assessee who is
resident in
(a) for himself or a dependant relative, in case the assessee is an individual; or
(b) for any member of a Hindu undivided family, in case the assessee is a Hindu undivided family,the assessee shall be allowed a deduction of a sum of fifteen thousand rupees in respect of that previous year in which such expenditure was incurred:
Provided that no such deduction shall be allowed unless the assessee furnishes a certificate in such form and from such authority as may be prescribed.
Explanation.—For the purposes of this section, “dependant” means a person who is not dependant for his support or maintenance on any person other than the assessee.
46[54] [Deduction in respect of
repayment of loan taken for higher education.
80E. (1) In computing the total income of an assessee, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section, any amount paid by him in the previous year, out of his income chargeable to tax, by way of repayment of loan, taken by him from any financial institution or any approved charitable institution for the purpose of pursuing his higher education, or interest on such loan :
Provided that the amount which may be so deducted shall not exceed twenty-five thousand rupees.
(2) The deduction specified in sub-section (1) shall be allowed in computing the total income in respect of the initial assessment year and seven assessment years immediately succeeding the initial assessment year or until the loan referred to in sub-section (1) together with interest thereon is paid by the assessee in full, whichever is earlier.
(3) For the purposes of this section,—
(a) “approved charitable institution” means an institution specified in, or, as the case may be, an institution established for charitable purposes and notified by the Central Government under clause (23C) of section 10 or an institution referred to in clause (a) of sub-section (2) of section 80G;
(b) “financial institution” means a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act); or any other financial institution which the Central Government may, by notification in the Official Gazette, specify in this behalf;
(c) 47[55] "higher education” means full-time studies for any graduate or post-graduate course in engineering, medicine, management or for post-graduate course in applied sciences or pure sciences including mathematics and statistics;
(d) “initial assessment year” means the assessment year relevant to the previous year, in which the assessee starts repaying the loan or interest thereon.]
Deduction in respect of
educational expenses in certain cases.
48[56] 80F. [Omitted by the Finance Act, 1985, w.e.f. 1-4-1986. Original section was inserted by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1968 in place of section 87A which was inserted by the Finance Act, 1964, w.e.f. 1-4-1964. New section 80F, dealing with deduction in respect of amounts applied for charitable or religious purposes, etc., was inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. This new section was omitted by the Direct Tax Laws (Amendment) Act, 1989, with effect from the same date.]
Deduction in respect of
expenses on higher education in certain cases.
80FF. [Omitted by the Finance (No. 2) Act, 1980, w.e.f. 1-4-1981. Original section was inserted by the Finance Act, 1975, w.e.f. 1-4-1976.]
49[57] Deduction
in respect of donations to certain funds, charitable institutions, etc.
50[58] 80G. 51[59] [(1) In computing the total income of an assessee, there shall be deducted, in accordance with and subject to the provisions of this section,—
52[60] [(i) in a case where the aggregate of the sums specified in sub-section (2) includes any sum or sums of the nature specified in 53[61] [sub-clause (iiia) 54[62] [or in sub-clause (iiiaa) 55[63] [or in sub-clause (iiiab)] 56[64] [or in sub-clause (iiie)] 57[65] [or in sub-clause (iiif)] 58[66] [or in sub-clause (iiig)] or 59[67] [sub-clause (iiih) or] 59a[68] [sub-clause (iiiha) or sub-clause (iiihb) or sub-clause (iiihc) or] in sub-clause (vii) of clause (a) thereof, an amount equal to the whole of the sum or, as the case may be, sums of such nature plus fifty per cent of the balance of such aggregate; and]
(ii) in any other case, an amount equal to fifty 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) The National Defence Fund set up by the Central Government; or
(ii) the Jawaharlal Nehru Memorial Fund referred to in the Deed of Declaration of Trust adopted by the National Committee at its meeting held on the 17th day of August, 1964; or
(iii) the Prime Minister’s Drought Relief Fund; or
60[69] [(iiia) the Prime Minister’s National Relief Fund; or]
61[70] [(iiiaa) the Prime Minister’s
62[71] [(iiiab) the Africa (Public Contributions -
63[72] [(iiib) the National Children’s Fund; or]
64[73] [(iiic) the Indira Gandhi
Memorial Trust, the deed of declaration in respect whereof was registered at
65[74] [(iiid) the Rajiv Gandhi
Foundation, the deed of declaration in respect whereof was registered at
66[75] (iiie) the National Foundation for Communal Harmony; or]
67[76] (iiif) a University or any educational institution of national eminence as may be approved by the prescribed authority 68[77] in this behalf; or]
69[78] [(iiig) the Maharashtra Chief Minister’s Relief Fund during the period beginning on the 1st day of October, 1993 and ending on the 6th day of October, 1993, or the Chief Minister’s Earthquake Relief Fund, Maharashtra; or]
70[79] [(iiih) any Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of the district for the purposes of improvement of primary education in villages and towns in such district and for literacy and post-literacy activities.
Explanation.—For the purposes of this sub-clause, “town” means a town which has a population not exceeding one lakh according to the last preceding census of which the relevant figures have been published before the first day of the previous year; or]
The following sub-clauses (iiiha), (iiihb) and (iiihc) shall be inserted in clause (a) by the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997 :
(iiiha) the National Blood Transfusion Council or to any State Blood Transfusion Council which has its sole object the control, supervision, regulation or encouragement in India of the services related to operation and requirements of blood banks.
Explanation.—For the purposes of this sub-clause,—
(a) “National Blood Transfusion Council” means a society registered under the Societies Registration Act, 1860 (21 of 1860) and has an officer not below the rank of an Additional Secretary to the Government of India dealing with the AIDS Control Project as its Chairman, by whatever name called;
(b) “State Blood Transfusion Council” means a society registered, in consultation with the National Blood Transfusion Council, under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India and has Secretary to the Government of that State dealing with the Department of Health, as its Chairman, by whatever name called; or
(iiihb) any fund set up by a State Government to provide medical relief to the poor; or
(iiihc) the Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund established by the armed forces of the Union for the welfare of the past and present members of such forces or their dependants; or
(iv) any other fund or any institution to which this section applies; or
(v) the Government or any local authority, to be utilised for any charitable purpose 71[80] [other than the purpose of promoting family planning; or]
72[81] [(vi) any authority referred to in clause (20A) of section 10; or
73[82] [(via) any corporation referred to in clause (26BB) of section 10; or
(vii) the Government or to any such local authority, institution or association as may be approved in this behalf by the Central Government, to be utilised for the purpose of promoting family planning;]
(b) any sums paid by the assessee in the previous year as donations for the renovation or repair of any such temple, mosque, gurdwara, church or other place as is notified 74[83] by the Central Government in the Official Gazette to be of historic, archaeological or artistic importance or to be a place of public worship of renown throughout any State or States.
(3) 75[84] [Omitted by the Finance Act, 1994, w.e.f. 1-4-1994.]
76[85] [(4) Where the aggregate of the sums referred to in sub-clauses (iv), (v), (vi), 77[86] [,(via)] and (vii) of clause (a) and in clause (b) of sub-section (2) exceeds ten per cent of the gross total income (as reduced by any portion thereof on which income-tax is not payable under any provision of this Act and by any amount in respect of which the assessee is entitled to a deduction under any other provision of this Chapter), then the amount in excess of ten per cent of the gross total income shall be ignored for the purpose of computing the aggregate of the sums in respect of which deduction is to be allowed under sub-section (1)].
(5) This section applies to donations to any institution or fund referred to in sub-clause (iv) of clause (a) of sub-section (2), only if it is established in India for a charitable purpose and if it fulfils the following conditions, namely :—
78[87] [(i) where the institution or fund derives any income, such income would not be liable to inclusion in its total income under the provisions of sections 11 and 12 or clause (22) 79[88] [or clause (22A)] 80[89] [or clause (23)] 81[90] [or clause (23AA)] 82[91] [or clause (23C)] of section 10:
83[92] [Provided that where an institution or fund derives any income, being profits and gains of business, the condition that such income would not be liable to inclusion in its total income under the provisions of section 11 shall not apply in relation to such income, if—
(a) the institution or fund maintains separate books of account in respect of such business;
(b) the donations made to the institution or fund are not used by it, directly, or indirectly, for the purposes of such business; and
(c) the institution or fund issues to a person making the donation a certificate to the effect that it maintains separate books of account in respect of such business and that the donations received by it will not be used, directly or indirectly, for the purposes of such business;]]
(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; 84[93] [***]
(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 85[94] 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, 86[95] [or is an institution approved by the Central Government for the purposes of clause (23) of section 10,] or is an institution financed wholly or in part by the Government or a local authority; 87[96] [and]
88[97] [(vi) in relation to donations made after the 31st day of March, 1992, the institution of fund is for the time being approved by the Commissioner in accordance with the rules 89[98] made in this behalf:
Provided that any approval shall have effect for such assessment year or years,not exceeding 90[99] [five] assessment years, as may be specified in the approval.]
91[100] [(5A) Where a deduction under this section is claimed and allowed for any assessment year in respect of any sum specified in sub-section (2), the sum in respect of which deduction is so allowed shall not qualify for deduction under any other provision of this Act for the same or any other assessment year.]
Explanation 1.—An institution or fund established for the benefit of Scheduled Castes, backward classes, Scheduled Tribes or of women and children shall not be deemed to be an institution or fund expressed to be for the benefit of a religious community or caste within the meaning of clause (iii) of sub-section (5).
92[101] [Explanation 2.—For the removal of doubts, it is hereby declared that a deduction to which the assessee is entitled in respect of any donation made to an institution or fund to which sub-section (5) applies shall not be denied merely on either or both of the following grounds, namely:—
93[102] [(i) that, subsequent to the donation, any part of the income of the institution or fund has become chargeable to tax due to non-compliance with any of the provisions of section 11, 94[103] [section 12 or section 12A];
(ii) that, under clause (c) of sub-section (1) of section 13, the exemption under section 11 95[104] [or section 12] is denied to the institution or fund in relation to any income arising to it from any investment referred to in clause (h) of sub-section (2) of section 13 where the aggregate of the funds invested by it in a concern referred to in the said clause (h) does not exceed five per cent of the capital of that concern.]
Explanation 3.—In this section, “charitable purpose” does not include any purpose the whole or substantially the whole of which is of a religious nature.
96[105] [Explanation 4.—For the purposes of this section, an association approved by the Central Government for the purposes of clause (23) of section 10 shall also be deemed to be an institution, and every association or institution approved by the Central Government for the purposes of the said clause shall be deemed to be an institution established in India for a charitable purpose.]
97[106] [Explanation 5.—For the removal of doubts, it is hereby declared that no deduction shall be allowed under this section in respect of any donation unless such donation is of a sum of money.]
99[108] [Deduction
in respect of rents paid.
1[109] 80GG. In computing the total income of an assessee, not being an assessee having any income falling within clause (13A) of section 10, there shall be deducted any expenditure incurred by him in excess of ten per cent of his total income towards payment of rent (by whatever name called) in respect of any furnished or unfurnished accommodation occupied by him for the purposes of his own residence, 2[110] [to the extent to which such excess expenditure does not exceed 2a[111] [one] thousand rupees per month or twenty-five per cent of his total income for the year, whichever is less], and subject to such other conditions or limitations as may be prescribed 3[112] , having regard to the area or place in which such accommodation is situated and other relevant considerations:
4[113] [Provided that nothing in this section shall apply to an assessee in any case where any residential accommodation is,—
(i) owned by the assessee or by his spouse or minor child or, where such assessee is a member of a Hindu undivided family, by such family, at the place where he ordinarily resides or performs duties of his office or employment or carries on his business or profession; or
(ii) owned by the assessee at any other place, being accommodation in the occupation of the assessee, the value of which is to be determined 5[114] [under sub-clause (i) of clause (a) or, as the case may be, clause (b), of sub-section (2)] of section 23.]
Explanation.—In this section, the expressions “ten per cent of his total income” and 6[115] [“twenty-five per cent] of his total income” shall mean ten per cent or 6[116] [twenty-five per cent], as the case may be, of the assessee’s total income before allowing deduction for any expenditure under this section.]
7[117] [Deduction in respect of certain donations for scientific research
or rural development.
80GGA. (1) In computing the total income of an assessee, there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2).
(2) The sums referred to in sub-section (1) shall be the following namely :—
(a) any sum paid by the assessee in the previous year to a scientific research association which has as its object the undertaking of scientific research or to a University, college or other institution to be used for scientific research :
Provided that such association, University, college or institution is for the time being approved for the purposes of clause (ii) of sub-section (1) of section 35;
8[118] [(aa) any sum paid by the assessee in the previous year to a University, college or other institution to be used for research in social science or statistical research:
Provided that such University, college or institution is for the time being approved for the purposes of clause (iii) of sub-section (1) of section 35;]
(b) any sum paid by the assessee in the previous year—
(i) to an association or institution, which has as its object the undertaking of any programme of rural development, to be used for carrying out any programme of rural development approved for the purposes of section 35CCA; or
(ii) to an association or institution which has as its object the training of persons for implementing programmes of rural development:
9[119] [Provided that the assessee furnishes the certificate referred to in sub-section (2) or, as the case may be, sub-section (2A) of section 35CCA from such association or institution;]
10[120] [(bb) any sum paid by the assessee in the previous year to a public sector company or a local authority or to an association or institution approved by the National Committee, for carrying out any eligible project or scheme:
Provided that the assessee furnishes the certificate referred to in clause (a) of sub-section (2) of section 35AC from such public sector company or local authority or, as the case may be, association or institution.
Explanation.—For the purposes of this clause, the expressions “National Committee” and “eligible project or scheme” shall have the meanings respectively assigned to them in the Explanation to section 35AC;]
11[121] [(c) any sum paid by the assessee in the previous year to an association or institution, which has as its object the undertaking of any programme of conservation of natural resources 12[122] [or of afforestation], to be used for carrying out any programme of conservation of natural resources 12[123] [or of afforestation] approved for the purposes of section 35CCB:
Provided that the association or institution is for the time being approved for the purposes of sub-section (2) of section 35CCB;]
13[124] [(cc) any sum paid by the assessee in the previous year to such fund for afforestation as is notified by the Central Government under clause (b) of sub-section (1) of section 35CCB;]
14[125] [(d) any sum paid by the assessee in the previous year to a rural development fund set up and notified by the Central Government for the purposes of clause (c) of sub-section (1) of section 35CCA.]
15[126] [(e) any sum paid by the assessee in the previous year to the National Urban Poverty Eradication Fund set up and notified by the Central Government for the purposes of clause (d) of sub-section (1) of section 35CCA.]
(3) Notwithstanding anything contained in sub-section (1), no deduction under this section shall be allowed in the case of an assessee whose gross total income includes income which is chargeable under the head “Profits and gains of business or profession”.
(4) Where a deduction under this section is claimed and allowed for any assessment year in respect of any payments of the nature specified in sub-section (2), deduction shall not be allowed in respect of such payments under any other provision of this Act for the same or any other assessment year.]]
C.—Deductions in respect of certain incomes
Deduction in case of new industrial
undertakings employing displaced persons, etc.
80H. [Omitted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976. Originally, it was inserted by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1968.]
16[127] [Deduction
in respect of profits and gains from newly established industrial undertakings
or hotel business in backward areas.
17[128] 80HH. (1) Where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking, or the business of a hotel, to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to twenty per cent thereof.
(2) This section applies to any industrial undertaking which fulfils all the following conditions, namely :—
(i) it has begun or begins to manufacture or produce articles after the 31st day of December, 1970 18[129] [but before the 1st day of April, 1990], in any backward area;
(ii) it is not formed by the splitting up, or the reconstruction, of a business already in existence in backward area :
Provided that this condition 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;
(iii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose in any backward area;
(iv) it 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.
Explanation.—Where any machinery or plant or any part thereof previously used for any purpose in any backward area is transferred to a new business in that area or in any other backward area and the total value of the machinery or plant or part so transferred does not exceed twenty per cent of the total value of the machinery or plant used in the business, then, for the purposes of clause (iii) of this sub-section, the condition specified therein shall be deemed to have been fulfilled.
(3) This section applies to the business of any hotel, where all the following conditions are fulfilled, namely :—
(i) the business or the hotel has started or starts functioning after the 31st day of December, 1970 19[130] [but before the 1st day of April, 1990], in any backward area;
(ii) the business of the hotel is not formed by the splitting up, or the reconstruction, of a business already in existence;
(iii) the hotel is for the time being approved for the purposes of this sub-section by the Central Government.
(4) The deduction specified in sub-section (1) shall be allowed in computing the total income in respect of each of the ten assessment years beginning with the assessment year relevant to the previous year in which the industrial undertaking begins to manufacture or produce articles or the business of the hotel starts functioning :
Provided that, —
(i) in the case of an industrial undertaking which has begun to manufacture or produce articles, and
(ii) in the case of the business of a hotel which has started functioning, after the 31st day of December, 1970, but before the 1st day of April, 1973, this sub-section shall have effect as if the reference to ten assessment years were a reference to ten assessment years as reduced by the number of assessment years which expired before the 1st day of April, 1974.
(5) Where the assessee is a person other than a company or a co-operative society, the deduction under sub-section (1) shall not be admissible unless the accounts of the industrial undertaking or the business of the hotel for the previous year relevant to the assessment year for which the deduction is claimed have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288 and the assessee furnishes, along with his return of income, the report of such audit in the prescribed form 20 [131] duly signed and verified by such accountant.
(6) Where any goods held for the purposes of the business of the industrial undertaking or the hotel are transferred to any other business carried on by the assessee, or where any goods held for the purposes of any other business carried on by the assessee are transferred to the business of the industrial undertaking or the hotel and, in either case, the consideration, if any, for such transfer as recorded in the accounts of the business of the industrial undertaking or the hotel does not correspond to the market value of such goods as on the date of the transfer, then, for the purposes of the deduction under this section, the profits and gains of the industrial undertaking or the business of the hotel shall be computed as if the transfer, in either case, had been made at the market value of such goods as on that date :
Provided that where, in the opinion of the 21[132] [Assessing] Officer, the computation of the profits and gains of the industrial undertaking or the business of the hotel in the manner hereinbefore specified presents exceptional difficulties, the 21[133] [Assessing] Officer may compute such profits and gains on such reasonable basis as he may deem fit.
Explanation.—In this sub-section, “market value” in relation to any goods means the price that such goods would ordinarily fetch on sale in the open market.
(7) Where it appears to the 21[134] [Assessing] Officer that, owing to the close connection between the assessee carrying on the business of the industrial undertaking or the hotel to which this section applies and any other person, or for any other reason, the course of business between them is so arranged that the business transacted between them produces to the assessee more than the ordinary profits which might be expected to arise in the business of the industrial undertaking or the hotel, the 21a[135] [Assessing] Officer shall, in computing the profits and gains of the industrial undertaking or the hotel for the purposes of the deduction this section, take the amount of profits as may be reasonably deemed to have been derived therefrom.
(9) In a case where the assessee is entitled also to the deduction under 23[137] [section 80-I or] section 80J in relation to the profits and gains of an industrial undertaking or the business of a hotel to which this section applies, effect shall first be given to the provisions of this section.
24[138] [(9A) Where a deduction in relation to the profits and gains of a small-scale industrial undertaking to which section 80HHA applies is claimed and allowed under that section for any assessment year, deduction in relation to such profits and gains shall not be allowed under this section for the same or any other assessment year.]
(10) Nothing contained in this section shall apply in relation to any undertaking engaged in mining.
25[139] [(11) For the purposes of this section, “backward area” means such area as the Central Government may, having regard to the stage of development of that area, by notification 26[140] in the Official Gazette, specify in this behalf :
Provided that any notification under this sub-section may be issued so as to have retrospective effect to a date not earlier than the 1st day of April, 1983.]
27[141] [Deduction in respect of profits and gains from newly established
small-scale industrial undertakings in certain areas.
28[142] 80HHA. (1) Where the gross total income of an assessee includes any profits and gains derived from a small-scale industrial undertaking to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to twenty per cent thereof.
(2) This section applies to any small-scale industrial undertaking which fulfils all the following conditions, namely :—
(i) it begins to manufacture or produce articles after the 30th day of September, 1977 29[143] [but before the 1st day of April, 1990], in any rural area;
(ii) it is not formed by the splitting up, or the reconstruction, of a business already in existence :
Provided that this condition shall not apply in respect of any small-scale 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;
(iii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose;
(iv) it 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.
Explanation.—Where in the case of a small-scale industrial undertaking, any machinery or plant or any part thereof previously used for any purpose is transferred to a new business and the total value of the machinery or plant or part so transferred does not exceed twenty per cent of the total value of the machinery or plant used in the business, then, for the purposes of clause (iii) of this sub-section, the condition specified therein shall be deemed to have been fulfilled.
(3) The deduction specified in sub-section (1) shall be allowed in computing the total income 30[144] [of each of the ten previous years beginning with the previous year in which the industrial undertaking] begins to manufacture or produce articles :
31[145] [Provided that such deduction shall not be allowed in computing the total income of any of the ten previous years aforesaid in respect of which the industrial undertaking is not a small-scale industrial undertaking within the meaning of clause (b) of the Explanation below sub-section (8).]
(4) Where the assessee is a person, other than a company or a co-operative society, the deduction under sub-section (1) shall not be admissible unless the accounts of the small-scale industrial undertaking for the previous year relevant to the assessment year for which the deduction is claimed have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288 and the assessee furnishes, along with his return of income, the report of such audit in the prescribed form 32[146] duly signed and verified by such accountant.
(5) The previsions of sub-sections (6) and (7) of section 80HH shall, so far as may be, apply in relation to the computation of the profits and gains of a small-scale industrial undertaking for the purposes of the deduction under this section as they apply in relation to the computation of the profits and gains of an industrial undertaking for the purposes of the deduction under that section.
(6) In a case where the assessee is entitled also to the deduction under 33[147] [section 80-I or] section 80J in relation to the profits and gains of a small-scale industrial undertaking to which this section applies, effect shall first be given to the provisions of this section.
(7) Where a deduction in relation to the profits and gains of a small-scale industrial undertaking to which section 80HH applies is claimed and allowed under that section for any assessment year, deduction in relation to such profits and gains shall not be allowed under this section for the same or any other assessment year.
(8) Nothing contained in this section shall apply in relation to any small-scale industrial undertaking engaged in mining.
Explanation.—For the purposes of this section,—
34[148] [(a) “rural area” means any area other than—
(i) an 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
(ii) an area within such distance, not being more than fifteen kilometres from the local limits of any municipality or cantonment board referred to in sub-clause (i), as the Central Government may, having regard to the stage of development of such area (including the extent of, and scope for, unbanisation of such area) and other relevant considerations specify in this behalf by notification 35[149] in the Official Gazette;]
(b) an industrial undertaking shall be deemed to be a small-scale industrial undertaking, if the aggregate value of the machinery and plant (other than tools, jigs, dies, and moulds) installed, as on the last day of the previous year, for the purposes of 36[150] [the business of the undertaking does not exceed,—
37[151] [(1) in a case where the previous year ends before the 1st day of August, 1980, ten lakh rupees;
(2) in a case where the previous year ends after the 31st day of July, 1980 but before the 18th day of March, 1985, twenty lakh rupees; and
(3) in a case where the previous year ends after the 17th day of March, 1985, thirty-five lakh rupees,]and for this purpose the value of any machinery or plant shall be,—
(i) in the case of any machinery or plant owned by the assessee, the actual cost thereof to the assessee; and
(ii) in the case of any machinery or plant hired by the assessee, the actual cost thereof as in the case of the owner of such machinery or plant.]
38[152] [Deduction in respect of profits and gains from projects outside
39[153] 80HHB.
(1) Where the gross total income of an
assessee being an Indian company or a person (other than a company) who is
resident in
(a) the execution of a foreign project undertaken by the assessee in pursuance of a contract entered into by him, or
(b) the execution of any work undertaken by him and forming part of a foreign project undertaken by any other person in pursuance of a contract entered into by such other person,with the Government of a foreign State or any statutory or other public authority or agency in a foreign State, or a foreign enterprise, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to 40[154] [fifty] per cent thereof :
Provided that the consideration for the execution of such project or, as the case may be, of such work is payable in convertible foreign exchange.
(2) For the purposes of this section,—
(a) “convertible foreign exchange” means foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purposes of the Foreign Exchange Regulation Act, 1973 (46 of 1973), and any rules made thereunder :
(b) “foreign project” means a project for—
(i) the
construction of any building, road, dam, bridge or other structure outside
(ii) the assembly or installation of any
machinery or plant outside
(iii) the execution of such other work (of whatever nature) as may be prescribed.
(3) The deduction under this section shall be allowed only if the following conditions are fulfilled, namely :—
41[155] (i) the assessee maintains separate accounts in respect of the profits and gains derived from the business of the execution of the foreign project, or, as the case may be, of the work forming part of the foreign project undertaken by him and, where the assessee is a person other than an Indian company or a co-operative society, such accounts have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288 and the assessee furnishes, along with his return of income, the report of such audit in the prescribed form duly signed and verified by such accountant;
(ii) an amount equal to 42[156] [fifty] per cent of the profits and gains referred to in sub-section (1) is debited to the profit and loss account of the previous year in respect of which the deduction under this section is to be allowed and credited to a reserve account (to be called the “Foreign Projects Reserve Account”) to be utilised by the assessee during a period of five years next following for the purposes of his business other than for distribution by way of dividends or profits;
(iii) an amount equal to 42[157] [fifty] per cent of the profits and gains referred to in sub-section (1) is brought by the assessee in convertible foreign exchange into India, in accordance with the provisions of the Foreign Exchange Regulation Act, 1973 (46 of 1973), and any rules made thereunder, within a period of six months from the end of the previous year referred to in clause (ii) or, where the 43[158] [Chief Commissioner or Commissioner] is satisfied (for reasons to be recorded in writing) that the assessee is, for reasons beyond his control, unable to do so within the said period of six months, within such further period as the 43[159] [Chief Commissioner or Commissioner] may allow in this behalf :
Provided that where the amount credited by the assessee to the Foreign Projects Reserve Account in pursuance of clause (ii) or the amount brought into India by the assessee in pursuance of clause (iii) or each of the said amounts is less than 44[160] [fifty] per cent of the profits and gains referred to in sub-section (1), the deduction under that sub-section shall be limited to the amount so credited in pursuance of clause (ii) or the amount so brought into India in pursuance of clause (iii), whichever is less.
(4) If at any time before the expiry of five years from the end of the previous year in which the deduction under sub-section (1) is allowed, the assessee utilises the amount credited to the Foreign Projects Reserve Account for distribution by way of dividends or profits or for any other purpose which is not a purpose of the business of the assessee, the deduction originally allowed under sub-section (1) shall be deemed to have been wrongly allowed, and the 45[161] [Assessing] Officer may, notwithstanding anything contained in this Act, recompute the total income of the assessee for the relevant previous year and make the necessary amendment; and the provisions of section 154 shall, so far as may be, apply thereto, the period of four years specified in sub-section (7) of that section being reckoned from the end of the previous year in which the money was so utilised.
(5) Notwithstanding anything contained in any other provision of this Chapter under the heading “C.—Deductions in respect of certain incomes”, no part of the consideration or of the income comprised in the consideration payable to the assessee for the execution of a foreign project referred to in clause (a) of sub-section (1) or of any work referred to in clause (b) of that sub-section shall qualify for deduction for any assessment year under any such other provision.]
46[[162] Deduction in respect of profits retained for
export business.
47[163] 80HHC. 48[164] [(1) Where an assessee, being an Indian company or a person (other than a company) resident in India, is engaged in the business of export out of India of any goods or merchandise to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction of the 49[165] [profits] derived by the assessee from the export of such goods or merchandise :
Provided that if the assessee, being a holder of an Export House Certificate or a Trading House Certificate (hereafter in this section referred to as an Export House or a Trading House, as the case may be,) issues a certificate referred to in clause (b) of sub-section (4A), that in respect of the amount of the export turnover specified therein, the deduction under this sub-section is to be allowed to a supporting manufacturer, then the amount of deduction in the case of the assessee shall be reduced by such amount which bears to the 50[166] [total profits derived by the assessee from the export of trading goods, the same proportion as the amount of export turnover specified in the said certificate bears to the total export turnover of the assessee in respect of such trading goods].
(1A) Where the assessee, being a supporting manufacturer, has during the previous year, sold goods or merchandise to any Export House or Trading House in respect of which the Export House or Trading House has issued a certificate under the proviso to sub-section (1), there shall, in accordance with and subject to the provisions of this section, be allowed in computing the total income of the assessee, a deduction of the 51[167] [profits] 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.
(2)(a) This section applies to all goods or merchandise, other than those specified in clause (b), if the sale proceeds of such goods or merchandise exported out of India are 52[168] [eceived in, or brought into, India] by the assessee 53[169] [(other than the supporting manufacturer)] in convertible foreign exchange 54[170] [, within a period of six months from the end of the previous year or, where the Chief Commissioner or Commissioner is satisfied (for reasons to be recorded in writing) that the assessee is, for reasons beyond his control, unable to do so within the said period of six months, within such further period as the Chief Commissioner or Commissioner may allow in this behalf.]
(b) This section does not apply to the following goods or merchandise, namely :—
(i) mineral oil; and
(ii) minerals and ores 55[171] [(other than processed minerals and ores specified in the Twelfth Schedule)].
56[172] [Explanation 1.—The sale proceeds referred to in clause (a) shall be deemed to have been received in India where such sale proceeds are credited to a separate account maintained for the purpose by the assessee with any bank outside India with the approval of the Reserve Bank of India.
Explanation 2.—For the removal of doubts, it is hereby declared that where any goods or merchandise are transferred by an assessee to a branch, office, warehouse or any other establishment of the assessee situate outside India and such goods or merchandise are sold from such branch, office, warehouse or establishment, then, such transfer shall be deemed to be export out of India of such goods and merchandise and the value of such goods or merchandise declared in the shipping bill or bill of export as referred to in sub-section (1) of section 50 57[173] of the Customs Act, 1962 (52 of 1962), shall, for the purposes of this section, be deemed to be the sale proceeds thereof.]
58[174] [(3) For the purposes of sub-section (1),—
(a) where the export out of India is of goods or merchandise manufactured 59[175] [or processed] by the assessee, the profits derived from such export shall be the amount which bears to the profits of the business, the same proportion as the export turnover in respect of such goods bears to the total turnover of the business carried on by the assessee;
(b) where the export out of
(c) where the export out of India is of goods or merchandise manufactured 60[176] [or processed] by the assessee and of trading goods, the profits derived from such export shall,—
(i) in respect of the goods or merchandise manufactured 60[177] [or processed] by the assessee, be the amount which bears to the adjusted profits of the business, the same proportion as the adjusted export turnover in respect of such goods bears to the adjusted total turnover of the business carried on by the assessee; and
(ii) in respect of trading goods, be the extort turnover in respect of such trading goods as reduced by the direct and indirect costs attributable to export of such trading goods:
Provided that the profits computed under clause (a) or clause (b) or clause (c) of this sub-section shall be further increased by the amount which bears to ninety per cent of any sum referred to in clause (iiia) (not being profits on sale of a licence acquired from any other person), and clauses (iiib) and (iiic) of section 28, the same proportion as the export turnover bears to the total turnover of the business carried on by the assessee.
Explanation.—For the purposes of this sub-section,—
(a) “adjusted export turnover” means the export turnover as reduced by the export turnover in respect of trading goods;
(b) “adjusted profits of the business” the means the profits of the business as reduced by the profits derived from the business of export out of India of trading goods as computed in the manner provided in clause (b) of sub-section (3);
(c) “adjusted total turnover” means the total turnover of the business as reduced by the export turnover in respect of trading goods;
(d) “direct costs” means costs directly
attributable to the trading goods exported out of
(e) “indirect costs” means costs, not being direct costs, allocated in the ratio of the export turnover in respect of trading goods to the total turnover;
(f) “trading goods” means goods which are not manufactured 60a[178] [or processed] by the assessee.]
61[179] [(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 62[180] [* * *];
(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 63[181] [* * *] the same proportion as the turnover in respect of sale to the respective Export House or Trading House bears to the total turnover of the business carried on by the assessee.]
64[182] [(4) The deduction under sub-section (1) shall not be admissible unless the assessee furnishes in the prescribed form 65[183] , along with the return of income, the report of an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed 66[184] [in accordance with the provisions of this section.]]
67[185] [(4A) The deduction under sub-section (1A) shall not be admissible unless the supporting manufacturer furnishes in the prescribed form along with his return of income,—
68[186] [a) the report of an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed on the basis of the 69[187] [profits] of the supporting manufacturer in respect of his sale of goods or merchandise to the Export House or Trading House; and
(b) a certificate from the Export House or Trading House containing such particulars as may be prescribed and verified in the manner prescribed 70[188] that in respect of the export turnover mentioned in the certificate, the Export House or Trading House has not claimed the deduction under this section:
Provided that the certificate specified in clause (b) shall be duly certified by the auditor auditing the accounts of the Export House or Trading House under the provisions of this Act or under any other law.]
Explanation.—For the purposes of this section,—
(a) “convertible foreign exchange” means foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purposes of the Foreign Exchange Regulation Act, 1973 (46 of 1973), and any rules made thereunder;
71[189] [(aa) “export out of India” shall not include any transaction by way of sale or otherwise, in a shop,72[190] emporium or any other establishment situate in India, not involving clearance at any customs station 73[191] as defied in the Customs Act, 1962 (52 of 1962);]
(b) “export turnover” means the sale proceeds 74[192] [, received in, or brought into, India] by the assessee in convertible foreign exchange 75[193] [in accordance with clause (a) of sub-section (2)] of any goods or merchandise to which this section applies and which are exported out of India, but does not include freight or insurance attributable to the transport of the goods or merchandise beyond the customs station 73[194] as defined in the Customs Act, 1962 (52 of 1962);]
76[195] (ba) “total turnover” shall not include freight or insurance attributable to the transport of the goods or merchandise beyond the customs station 73[196] as defined in the Customs Act, 1962 (52 of 1962) :
Provided that in relation to any assessment year commencing on or after the 1st day of April, 1991, the expression “total turnover” shall have effect as if it also excluded any sum referred to in clause (iiia), (iiib) and (iiic) of section 28;]
77[197] [(baa) “profits of the business” means the profits of the business as computed under the head “Profits and gains of business or profession” as reduced by—
(1) ninety per cent of any sum referred to in clauses (iiia), (iiib) and (iiic) of section 28 or of any receipts by way of brokerage, commission, interest, rent, charges or any other receipt of a similar nature included in such profits; and
(2) the profits of any branch, office,
warehouse or any other establishment of the assessee situate outside
80[200] [81[201] [(c) “Export House Certificate” or “Trading House Certificate” means a valid Export House Certificate or Trading House Certificate, as the case may be, issued by the Chief Controller of Imports and Exports, Government of India;
81[202] [(d) “supporting manufacturer” means a person being an Indian company or a person (other than a company) resident in India, 82[203] [manufacturing (including processing) goods] or merchandise and selling such goods or merchandise to an Export House or a Trading House for the purposes of export.]
83[204] [Deduction in respect of earnings in convertible foreign exchange.
80HHD. (1) Where an assessee, being an Indian company or a person (other than a company) resident in India, is engaged in the business of a hotel or of a tour operator, approved by the prescribed authority 84[205] in this behalf or of a travel agent, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction of a sum equal to the aggregate of—
(a) fifty per cent of the profits derived by him from services provided to foreign tourists; and
(b) so much of the amount out of the remaining profits referred to in clause (a) as is debited to the profit and loss account of the previous year in respect of which the deduction is to be allowed and credited to a reserve account to be utilised for the purposes of the business of the assessee in the manner laid down in sub-section (4):
85[[206] Provided that a hotel, as the case may be, a tour operator approved by the prescribed authority on or after the 30th day of November, 1989 and before the 1st day of October, 1991, shall be deemed to have been approved by the prescribed authority for the purposes of this section in relation to the assessment year commencing on the 1st day of April, 1989 or the 1st day of April, 1990 or, as the case may be, the 1st day of April, 1991 if the assessee was engaged in the business of such hotel or as such tour operator during the previous year relevant to any of the said assessment years.]
(2) This section applies only to services provided to foreign tourists the receipts in relation to which are received 86[207] [in, or brought into, India by the assessee in convertible foreign exchange within a period of six months from the end of the previous year or, where the Chief Commissioner or Commissioner is satisfied (for reasons to be recorded in writing) that the assessee is, for reasons beyond his control, unable to do so within the said period of six months, within such further period as the Chief Commissioner or Commissioner may allow in this behalf].
87[208] [Explanation.—For the purposes of this sub-section, any payment received by an assessee, engaged in the business of a hotel or of a tour operator or of a travel agent, in Indian currency obtained by conversion of foreign exchange brought into India through an authorised dealer, 88[209] [from another hotelier, tour operator or travel agent, as the case may be,] on behalf of a foreign tourist or group of foreign tourists, shall be deemed to have been received by the assessee in convertible foreign exchange if the person making the payment furnishes to the assessee a certificate specified in sub-section (2A).
(2A) Every person making payment to an assessee referred to in the Explanation to sub-section (2) out of Indian currency obtained by conversion of foreign exchange received from or on behalf of a foreign tourist or a group of foreign tourists shall furnish to that assessee a certificate in the prescribed form 89[210] indicating the amount received in foreign exchange, its conversion into Indian currency and such other particulars as may be prescribed.]
90[211] [(3) For the purposes of sub-section (1), profits derived from services provided to foreign tourists shall be 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 receipts specified in sub-section (2) 91[212] [[as reduced by any payment, referred to in sub-section (2A), made by the assessee]] bear to the total receipts of the business carried on by the assessee.]
(4) The amount credited to the reserve account under clause (b) of sub-section (1), shall be utilised by the assessee before the expiry of a period of five years next following the previous year in which the amount was credited for the following purposes, namely :—
(a) construction of new hotels approved by the prescribed authority in this behalf or expansion of facilities in existing hotels already so approved;
(b) purchase of new cars and new coaches by tour operators already so approved or by travel agents;
(c) purchase of sports’ equipment for mountaineering, trekking, golf, river-rafting and other sports in or on water;
(d) construction of conference or convention centres;
(e) provision of such new facilities for the growth of Indian tourism as the Central Government may, by notification in the Official Gazette, specify in this behalf:
Provided that where any of the activities
referred to in clauses (a) to (e) would result in creation of any
asset owned by the assessee outside
(5) Where any amount credited to the reserve account under clause (b) of sub-section (1),—
(a) has been utilised for any purpose other than those referred to in sub-section (4), the amount so utilised; or
(b) has not been utilised in the manner specified in sub-section (4), the amount not so utilised,shall be deemed to be the profits,—
(i) in a case referred to in clause (a), in the year in which the amount was so utilised; or
(ii) in a case referred to in clause (b), in the year immediately following the period of five years specified in sub-section (4),and shall be charged to tax accordingly.
(6) The deduction under sub-section (1), shall not be admissible unless the assessee furnishes in the prescribed form 92[213] , along with the return of income, the report of an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed on the basis of the 93[214] [94[215] [* * *] amount of convertible foreign exchange received by the assessee for services provided by him to foreign tourists 95[216] [, payments made by him to any assessee referred to in sub-section (2A)] and the payments received by him in Indian currency as referred to in the Explanation to sub-section (2).]
Explanation.—For the purposes of this section,—
(a) “travel agent” means a travel agent or other person (not being an airline or a shipping company) who holds a valid licence granted by the Reserve Bank of India under section 32 96[217] of the Foreign Exchange Regulation Act, 1973 (46 of 1973);
(b) “convertible foreign exchange” shall have the meaning assigned to it in clause (a) of the Explanation to section 80HHC;
(c) “services provided to foreign tourists” shall not include services by way of sale in any shop owned or managed by the person who carries on the business of a hotel or of a tour operator or of a travel agent;]
97[218] [(d) 98[219] "authorised dealer”, 99[220] "foreign exchange” and 1[221] “Indian currency” shall have the meanings respectively assigned to them in clauses (b), (h) and (k) of section 2 of the Foreign Exchange Regulation Act, 1973 (46 of 1973).]
2[222] [Deduction in respect of profits from export of computer software,
etc.
80HHE. (1) Where an assessee, being an Indian company
or a person (other than a company) resident in
(i) export
out of
(ii) providing technical services outside
(2) The deduction specified in sub-section (1) shall be allowed only if the consideration in respect of the computer software referred to in that sub-section is received in, or brought into, India by the assessee in convertible foreign exchange, within a period of six months from the end of the previous year or, where the Commissioner is satisfied (for reasons to be recorded in writing) that the assessee is, for reasons beyond his control, unable to do so within the said period of six months, within such further period as the Commissioner may allow in this behalf.
Explanation.—The said
consideration shall be deemed to have been received in
(3) For the purposes of sub-section (1), profits derived from the business referred to in that sub-section shall be the amount which bears to the profits of the business, the same proportion as the export turnover bears to the total turnover of the business carried on by the assessee.
(4) The deduction under sub-section (1) shall not be admissible unless the assessee furnishes in the prescribed form 4[224] , along with the return of income, the report of an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed in accordance with the provisions of this section.
(5) Where a deduction under this section is claimed and allowed in respect of profits of the business referred to in sub-section (1) for any assessment year, no deduction shall be allowed in relation to such profits under any other provision of this Act for the same or any other assessment year.
Explanation.—For the purposes of this section,—
(a) “convertible foreign exchange” shall have the meaning assigned to it in clause (a) of the Explanation to section 80HHC;
(b) “computer software” means any computer programme recorded on any disc, tape, perforated media or other information storage device and includes any such programme which is transmitted from India to a place outside India by any means;
(c) “export turnover” means the consideration in respect of computer software received in, or brought into, India by the assessee in convertible foreign exchange in accordance with sub-section (2), but does not include freight, telecommunication charges or insurance attributable to the delivery of the computer software outside India or expenses, if any, incurred in foreign exchange in providing the technical services outside India;
(d) “profits of the business” means the profits of the business as computed under the head “Profits and gains of business or profession” as reduced by—
(1) ninety per cent of any receipts by way of brokerage, commission, interest, rent, charges or any other receipt of a similar nature included in such profits; and
(2) the profits of any branch, office,
warehouse or any other establishment of the assessee situate outside
(e) “total turnover” shall not include—
(i) any sum referred to in clauses (iiia), (iiib) and (iiic) of section 28;
(ii) any freight, telecommunication
charges or insurance attributable to the delivery of the computer software
outside
(iii) expenses, if any, incurred in foreign
exchange in providing the technical services outside
5[225] [Deduction
in respect of profits and gains from industrial undertakings after a certain
date, etc.
6[226] 80-I. (1) Where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking or a ship or the business of a hotel 7[227] [or the business of repairs to ocean-going vessels or other powered craft], to which this section applies, there shall, in accordance, with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to twenty per cent thereof:
Provided that in the case of an assessee, being a company, the provisions of this sub-section shall have effect 8[228] [in relation to profits and gains derived from an industrial undertaking or a ship or the business of a hotel] as if for the words “twenty per cent”, the words “twenty-five per cent” had been substituted.
9[229] [(1A) Notwithstanding anything contained in sub-section (1), in relation to any profits and gains derived by an assessee from—
(i) an industrial undertaking which begins to manufacture or produce articles or things or to operate its cold storage plant or plants; or
(ii) a ship which is first brought into use; or
(iii) the business of a hotel which starts functioning,on or after the 1st day of April, 1990 10[230] [but before the 1st day of April, 1991], there shall, in accordance with and subject to the provisions of this section, be allowed in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to twenty-five per cent thereof:
Provided that in the case of an assessee, being a company, the provisions of this sub-section shall have effect in relation to profits and gains derived from an industrial undertaking or a ship or the business of a hotel as if for the words “twenty-five per cent”, the words “thirty per cent” had been substituted.]
(2) This section applies to any industrial undertaking which fulfils all the following conditions, namely :—
(i) it is not formed by the splitting up, or the reconstruction, of a business already in existence;
(ii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose;
(iii) it manufactures or produces any article or thing, not being any article or thing specified in the list in the Eleventh Schedule, or operates one or more cold storage plant or plants, in any part of India, and begins to manufacture or produce articles or things or to operate such plant or plants, at any time within the period of 11[231] [ten] years next following the 31st day of March, 1981, 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 or things, 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:
Provided further that the condition in clause (iii) shall, in relation to a small scale industrial undertaking, apply as if the words “not being any article or thing specified in the list in the Eleventh Schedule” had been omitted.
Explanation 1.—For the purposes of clause (ii) of this sub-section, any machinery or plant which was used outside India by any person other than the assessee shall not be regarded as machinery or plant previously used for any purpose, if the following conditions are fulfilled, namely:—
(a) such machinery or plant was not, at
any time previous to the date of the installation by the assessee, used in
(b) such machinery or plant is imported
into
(c) no deduction on account of depreciation in respect of such machinery or plant has been allowed or is allowable under the provisions of this Act in computing the total income of any person for any period prior to the date of the installation of the machinery or plant by the assessee.
Explanation 2.—Where in the case of an industrial undertaking, any machinery or plant or any part thereof previously used for any purpose is transferred to a new business and the total value of the machinery or plant or part so transferred does not exceed twenty per cent of the total value of the machinery or plant used in the business, then, for the purposes of clause (ii) of this sub-section, the condition specified therein shall be deemed to have been complied with.
Explanation 3.—For the purposes of this sub-section, “small-scale industrial undertaking” shall have the same meaning as in clause (b) of the Explanation below sub-section (8) of section 80HHA.
(3) This section applies to any ship, where all the following conditions are fulfilled, namely:—
(i) it is owned by an Indian company and is wholly used for the purposes of the business carried on by it;
(ii) it was not, previous to the date of its acquisition by the Indian company, owned or used in Indian territorial waters by a person resident in India; and
(iii) it is brought into use by the Indian company at any time within the period of 12[232] [ten] years next following the 1st day of April, 1981.
(4) This section applies to the business of any hotel, where all the following conditions are fulfilled, namely:—
(i) the business of the hotel is not formed by the splitting up, or the reconstruction, of a business already in existence or by the transfer to a new business of a building previously used as a hotel or of any machinery or plant previously used for any purpose;
(ii) the business of the hotel is owned
and carried on by a company registered in
(iii) the hotel is for the time being approved for the purposes of this sub-section by the Central Government;
(iv) the business of the hotel starts functioning after the 31st day of March, 1981, but before the 1st day of April, 13[233] [1991].
14[234] [(4A) This section applies to the business of repairs to ocean-going vessels or other powered craft which fulfils all the following conditions, namely:—
(i) the business is not formed by the splitting up, or the reconstruction, of a business already in existence;
(ii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose;
(iii) it is carried on by an Indian company and the work by way of repairs to ocean-going vessels or other powered craft has been commenced by such company after the 31st day of March, 1983, but before the 1st day of April, 1988; and
(iv) it is for the time being approved for the purposes of this sub-section by the Central Government.]
(5) 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 things, 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 15[235] [or the company commences work by way of repairs to ocean-going vessels or other powered craft] (such assessment year being hereafter in this section referred to as the initial assessment year) and each of the seven 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 “seven assessment years”, the words “nine assessment years” had been substituted:
16[236] [Provided further that in the case of an assessee carrying on the business of repairs to ocean-going vessels or other powered craft, the provisions of this sub-section shall have effect as if for the words “seven assessment years”, the words “four assessment years” had been substituted:]
17[237] [Provided also that in the case of—
(i) an industrial undertaking which begins to manufacture or produce articles or things or to operate its cold storage plant or plants; or
(ii) a ship which is first brought into use; or
(iii) the business of a hotel which starts functioning,on or after the 1st day of April, 1990 18[238] [but before the 1st day of April, 1991], provisions of this sub-section shall have effect as if for the words “seven assessment years”, the words “nine assessment years” had been substituted:
Provided also that in the case of an assessee, being a co-operative society, deriving profits and gains from an industrial undertaking or a ship or a hotel referred to in the third proviso, the provisions of that proviso shall have effect as if for the words “nine assessment years”, the words “eleven assessment years” had been substituted.]
(6) Notwithstanding anything contamed in any other provision of this Act, the profits and gains of an industrial undertaking or a ship or the business of a hotel 19[239] [or the business of repairs to ocean-going to vessels or other powered craft] to which the provisions of sub-section (1) apply shall, for the purposes of determining the quantum of deduction under sub-section (1) for the assessment year immediately succeeding the initial assessment year or any subsequent assessment year, be computed as if such industrial undertaking or ship or the business of the hotel 19[240] [or the business of repairs to ocean-going vessels or other powered craft] were the only source of income of the assessee during the previous years relevant to the initial assessment year and to every subsequent assessment year up to and including the assessment year for which the determination is to be made.
(7) Where the assessee is a person other than a company or a co-operative society, the deduction under sub-section (1) from profits and gains derived from an industrial undertaking shall not be admissible unless the accounts of the industrial undertaking for the previous year relevant to the assessment year for which the deduction is claimed have been audited by an accountant, as defined in the Explanation below sub-section (2) of section 288, and the assessee furnishes, along with his return of income, the report of such audit in the prescribed form 20[241] duly signed and verified by such accountant.
(8) Where any goods held for the purposes of the business of the industrial undertaking or the hotel or the operation of the ship 21[242] [or the business of repairs to ocean-going vessels or other powered craft] are transferred to any other business carried on by the assessee, or where any goods held for the purposes of any other business carried on by the assessee , are transferred to the business of the industrial undertaking or the hotel or the operation of the ship 21[243] [or the business of repairs to ocean-going vessels or other powered craft] and, in either case, the consideration, if any, for such transfer as recorded in the accounts of the business of the industrial undertaking or the hotel or the operation of the ship 21[244] [or the business of repairs to ocean-going vessels or other powered craft] does not correspond to the market value of such goods as on the date of the transfer,then for the purposes of the deduction under this section, the profits and gains of the industrial undertaking or the business of the hotel or the operation of the ship 21[245] [or the business of repairs to ocean-going vessels or other powered craft] shall be computed as if the transfer, in either case, had been made at the market value of such goods as on that date:
rovided that where, in the opinion of the 22[246] [Assessing] Officer, the computation of the profits and gains of the industrial undertaking or the business of the hotel or the operation of the ship 21[247] [or the business of repairs to ocean-going vessels or other powered craft] in the manner hereinbefore specified presents exceptional difficulties,the 22[248] [Assessing] Officer may compute such profits and gains on such reasonable basis as he may deem fit.
Explanation.—In this sub-section, “market value”, in relation to any goods, means the price that such goods would ordinarily fetch on sale in the open market.
(9) Where it appears to the 22[249] [Assessing] Officer that, owing to the close connection between the assessee carrying on the business of the industrial undertaking or the hotel or the operation of the ship 21[250] [or the business of repairs to ocean-going vessels or other powered craft] to which this section applies and any other person, or for any other reason, the course of business between them is so arranged that the business transacted between them produces to the assessee more than the ordinary profits which might be expected to arise in the business of the industrial undertaking or the hotel or the operation of the ship 21[251] [or the business of repairs to ocean-going vessels or other powered craft], the 22[252] [Assessing] Officer shall, in computing the profits and gains of the industrial undertaking or the hotel or the ship 21[253] [or the business of repairs to ocean-going vessels or other powered craft] for the purposes of the deduction under this section, take the amount of profits as may be reasonably deemed to have been derived therefrom.
(10) The Central Government may, after making such inquiry as it may think fit, direct, by notification in the Official 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.]
23-25[254] [Deduction
in respect of profits and gains from industrial undertakings, etc., in certain
cases.
26[255] 80-IA. (1) Where the gross total income of an assessee includes any profits and gains derived from any business of an industrial undertaking or a hotel or 27[256] [operation of a ship or developing, maintaining and operating any infrastructure facility 27a[257] [or scientific and industrial research and development] (such business being hereinafter referred to as the eligible business)], to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to the percentage specified in sub-section (5) and for such number of assessment years as is specified in sub-section (6).
(2) This section applies to any industrial undertaking which fulfils all the following conditions, namely :—
(i) it is not formed by splitting up, or the reconstruction, of a business already in existence:
Provided that this condition shall not apply in respect of an 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;
(ii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose;
(iii) it manufactures
or produces any article or thing, not being any article or thing specified in
the list in the Eleventh Schedule, or operates one or more cold storage plant
or plants, in any part of
Provided that the condition in this clause shall, in relation to a small scale industrial undertaking 28[258] [or an industrial undertaking referred to in sub-clause (b) of clause (iv) which begins to manufacture or produce an article or thing during the period beginning on the1st day of April, 1993 and ending on the 31st day of March, 1998], apply as if the words “not being any article or thing specified in the list in the Eleventh Schedule” had been omitted:
29[259] [(iv)(a) in the case of an industrial undertaking not specified in sub clause (b) 30[260] [or sub-clause (c)], it begins to manufacture or produce articles or things or to operate such plant or plants, at any time during the period beginning on the 1st day of April, 1991 and ending on the 31st day of March, 1995, or such further period as the Central Government may, by notification in the Official Gazette, specify with reference to any particular industrial undertaking;
(b) in the case of an industrial undertaking located in an industrially backward State specified in the Eighth Schedule or set up in any part of India for the generation, or generation and distribution, of power, it begins to manufacture or produce articles or things or to operate its cold storage plant or plants or to generate power at any time during the period beginning on the 1st day of April, 1993 and ending on the 31st dy of March, 1998;]
30[261] [(c) in the case of an industrial undertaking located in such industrially backward district as the Central Government may, having regard to the prescribed guidelines, by notification in the Official Gazette, specify in this behalf, it begins to manufacture or produce articles or things or to operate its cold storage plant or plants at any time during the period beginning on the1st day of October, 1994 and ending on the 31st day of March, 1999;]
31[262] [(d) in the case of an industrial undertaking being a small scale industrial undertaking, not specified in sub-clause (b) or in sub-clause (c), it begins to manufacture or produce articles or things or to operate its cold storage plant at any time during the period beginning on the 1st day of April, 1995 and ending on the 31st day of March, 2000;]
(v) in a case where the industrial under taking manufactures or produces articles or things, 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.
Explanation 1.—For the purposes of clause (ii) of this sub-section, any machinery or plant which was used outside India by any person other than the assessee shall not be regarded as machinery or plant previously used for any purpose, if the following conditions are fulfilled, namely :—
(a) such machinery or plant was not, at
any time previous to the date of the installation by the assessee, used in
(b) such machinery or plant is imported
into
(c) no deduction on account of depreciation in respect of such machinery or plant has been allowed or is allowable under the provisions of this Act in computing the total income of any person for any period prior to the date of the installation of the machinery or plant by the assessee.
Explanation 2.—Where in the case of an industrial undertaking, any machinery or plant or any part thereof previously used for any purpose is transferred to a new business and the total value of the machinery or plant or part so transferred does not exceed twenty per cent of the total value of the machinery or plant used in the business, then, for the purposes of clause (ii) of this sub-section, the condition specified therein shall be deemed to have been complied with.
(3) This section applies to any ship, where all the following conditions are fulfilled, namely:—
(i) it is owned by an Indian company and is wholly used for the purposes of the business carried on by it;
(ii) it was not, previous to the date of its acquisition by the Indian company, owned or used in Indian territorial waters by a person resident in India; and
(iii) it is brought into use by the Indian company at any time during the period beginning on the 1st day of April, 1991 and ending on the 31st day of March, 1995.
32-33[263] (4) This section applies to the business of any hotel, where conditions (i), (ii), (v), and either of the conditions (iii) or (iv), are fulfilled, namely:—
(i) the business of the hotel is not formed by the splitting up, or the reconstruction, of a business already in existence or by the transfer to a new business of a building previously used as a hotel or of any machinery or plant previously used for any purpose;
(ii) the business of the hotel is owned
and carried on by a company registered in
(iii) the business of the hotel, located in a hilly area or a rural area or a place of pilgrimage or such other place as the Central Government may having regard to the need for development of infrastructure for tourism in any place and other relevant considerations specify for the purposes of this clause, starts functioning at any time during the period beginning on the 1st day of April, 1990 and ending on the 31st day of March, 1994;
(iv) the business of the hotel—
(1) located in any place, or
(2) located in a place other than a place referred to in clause (iii) of this sub-section,starts functioning at any time during the period beginning on the1st day of April, 1991 and ending on the 31st day of March, 1995;
(v) the hotel is for the time being approved by the prescribed authority.
34[264] [(4A) This section applies to any enterprise carrying on the business of developing, maintaining and operating any infrastructure facility which fulfills all the following conditions, namely:—
(i) the
enterprise is owned by a company registered in
(ii) the enterprise has entered into an agreement with the Central Government or a State Government or a local authority or any other statutory body for developing, maintaining and operating a new infrastructure facility subject to the conditions that such infrastructure facility shall be transferred to the Central Government, State Government, local authority or such other statutory body, as the case may be, within the period stipulated in the agreement;
(iii) the enterprise starts operating and maintaining the infrastructure facility on or after the 1st day of April, 1995.]
The following sub-section (4B) shall be inserted by the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997:
(4B) This section applies to any
company registered in
(i) the company has the main object of scientific and industrial research and development;
(ii) the company is for the time being approved by the prescribed authority at any time before the 1st day of April, 1998.
(5) The amount referred to in sub-section (1) shall be—
35[265] [(i) (a) in the case of an industrial undertaking referred to in sub-clause (a) 36[266] [or sub-clause (d)] of clause (iv) of sub-section (2), twenty five per cent of the profits and gains derived from such industrial undertakings;
(b) in the case of an industrial undertaking referred to in sub-clause (b) 37[267] [or sub-clause (c)] of clause (iv) of sub-section (2), hundred per cent of the profits and gains derived from such industrial undertaking for the initial five assessment years and thereafter twenty-five per cent of the profits and gains derived from such industrial undertaking:
Provided that where the assessee is a company, the provisions of this clause shall have effect, as if for the words “twenty-five per cent”, the words “thirty per cent” had been substituted’]
38[268] [(ia) in the case of an enterprise referred to in sub-section (4A), hundred per cent of the profits and gains derived from such business for the initial five assessment years and thereafter, thirty per cent of such profits and gains;]
The following clause (ib) shall be inserted in sub-section (5) by the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997:
(ib) in the case of a company referred to in sub-section (4B), hundred per cent of the profits and gains derived from such business;
(ii) in the case of a hotel referred to in clause (iii) of sub-section (4), fifty per cent of the profits and gains derived from the business of such hotel:
Provided that the said hotel is approved by the prescribed authority for the purpose of this clause in accordance with the rules 39 [269] made under this Act:
Provided further that the said hotel approved by the prescribed authority before the 31st day of March, 1992, shall be deemed to have been approved by the prescribed authority for the purposes of this section in relation to the assessment year commencing on the 1st day of April, 1991;
(iii) in the case of a hotel referred to in clause (iv) of sub-section (4), thirty per cent of the profits and gains derived from the business of such hotel;
(iv) in the case of a ship, thirty per cent of the profits and gains derived from such ship.
(6) The number of assessment years referred to in sub-section (1) shall, including the initial assessment year, be—
(i) twelve in the case of an assessee, being a co-operative society, deriving profits and gains from an industrial undertaking;
(ii) ten in the case of any other assessee deriving profits and gains from an industrial undertaking;
(iii) ten in the case of any other assessee deriving profits and gains, from a ship or the business of a hotel;
40[270] [(iv) any ten consecutive assessment years falling within a period of twelve assessment years beginning with the assessment year in which an assessee begins operating and maintaining infrastructure facility.]
The following clause (v) shall be inserted in sub-section (6) by the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997:
(v) five in the case of an assessee, being a company referred to in sub-section (4B), deriving profits and gains from scientific and industrial research and development.
(7) Notwithstanding anything contained in any other provision of this Act, the profits and gains of an eligible business to which the provisions of sub-section (1) apply shall, for the purposes of determining the quantum of deduction under sub-section (5) for the assessment year immediately succeeding the initial assessment year or any subsequent assessment year, be computed as if such eligible business were the only source of income of the assessee during the previous year relevant to the initial assessment year and to every subsequent assessment year up to and including the assessment year for which the determination is to be made.
(8) Where the assessee is a person other than a company or a co-operative society, the deduction under sub-section (1) from profits and gains derived from an industrial undertaking shall not be admissible unless the accounts of the industrial undertaking from the previous year relevant to the assessment year for which the deduction is claimed have been audited by an accountant, as defined in the Explanation below sub-section (2) of section 288, and the assessee furnishes, along with his return of income, the report of such audit in the prescribed form 41[271] duly signed and verified by such accountant.
(9) Where any goods held for the purposes of the eligible business are transferred to any other business carried on by the assessee, or where any goods held for the purposes of any other business carried on by the assessee are transferred to the eligible business and, in either case, the consideration, if any, for such transfer as recorded in the accounts of the eligible business does not correspond to the market value of such goods as on the date of the transfer, then, for the purposes of the deduction under this section, the profits and gains of such eligible business shall be computed as if the transfer, in either case, had been made at the market value of such goods as on that date:
Provided that where, in the opinion of the Assessing Officer, the computation of the profits and gains of the eligible business in the manner hereinbefore specified presents exceptional difficulties, the Assessing Officer may compute such profits and gains on such reasonable basis as he may deem fit.
Explanation.—In this sub-section, “market value”, in relation to any goods, means the price that such goods would ordinarily fetch on sale in the open market.
(10) Where it appears to the Assessing Officer that, owing to the close connection between the assessee carrying on the eligible business to which this section applies and any other person, or for any other reason, the course of business between them is so arranged that the business transacted between them produces to the assessee more than the ordinary profits which might be expected to arise in such eligible business, the Assessing Officer shall, in computing the profits and gains of such eligible business, for the purposes of the deduction under this section, take the amount of profits as may be reasonably deemed to have been derived therefrom.
(11) The Central Government may, after making such inquiry as it may think fit, direct, by notification in the Official 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.
(12) For the purposes of this section,—
(a) “hilly area” means any area located at a height of one thousand metres or more above the sea level;
(b) “industrial undertaking” shall have the meaning assigned to it in the Explanation to section 33B;
42[272] [(c) “initial assessment year”—
(1) in the case of an industrial undertaking or cold storage plant or ship or hotel, means the assessment year relevant to the previous year in which the industrial undertaking begins to manufacture or produce articles or things, 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;
(2) in the case of an enterprise, carrying on the business of developing, operating and maintaining any infrastructure facility, means the assessment year specified by the assessee at his option to be the initial year, not falling beyond the twelfth assessment year starting from the previous year in which the enterprise begins operating and maintaining the infrastructure facility;
The following sub-clause (3) shall be inserted in clause (c) by the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997:
(3) in the case of a company carrying on scientific and industrial research and development, means the assessment year relevant to the previous year in which the company is approved by the prescribed authority for the purposes of sub-section (4B);
(ca) “infrastructure facility” means a road, highway,bridge, airport, port or rail system or any other public facility of a similar nature as may be notified by the Board in this behalf in the Official Gazette;]
The following clause (ca) shall be substituted for the existing clause (ca) by the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997:
(ca) “infrastructure facility” means—
(i) a road, highway, bridge, airport, port or rail system or any other public facility of a similar nature as may be notified by the Board in this behalf in the Official Gazette;]
(ii) a water supply project, irrigation project, sanitation and sewerage system;
(d) “place of pilgrimage” means a place where any temple, mosque, gurdwara, church or other place of public worship of renown throughout any State or States is situated;
(e) “rural area” means any area other than—
(i) an area which is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee or by any other name) or a cantonment board and which has a population of not less than ten thousand according to the preceding census of which relevant figures have been published before the first day of the previous year; or
(ii) an area within such distance not being more than fifteen kilometres from the local limits of any municipality or cantonment board referred to in sub-clause (i), as the Central Government may, having regard to the stage of development of such area (including the extent of, and scope for, urbanisation of such area) and other relevant considerations specify in this behalf by notification in the Official Gazette;
43[273] [(f) “small-scale industrial undertaking” means an industrial undertaking which is, as on the last day of the previous year, regarded as a small-scale industrial undertaking under section 11B 44[274] of the Industries (Development and Regulation) Act, 1951 (65 of 1951).]
Deduction in respect of profits and gains
from newly established industrial undertakings or ships or hotel business in
certain cases.
80J. 45-70 [275] [Omitted by the Finance (No. 2) Act, 1996, w.r.e.f. 1-4-1989.]
71[276] [Deduction in respect of profits and gains from business of poultry
farming.
72[277] 80JJ. Where the gross total income of an assessee includes any profits and gains derived from business of poultry farming, there shall be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to thirty-three and one-third per cent thereof.]
Deduction in respect of profits and gains
from business of growing mushrooms.
73[278] 80JJA. [Omitted by the Finance Act, 1983, w.e.f. 1-4-1984. Original section was inserted by the Finance Act, 1979, w.e.f. 1-4-1980.]
Deduction in respect of
dividends attributable to profits and gains from new industrial undertakings or
ships or hotel business.
74[279] 80K. [Omitted by the Finance Act, 1986, w.e.f. 1-4-1987. Original section was inserted in place of section 85 which was deleted, by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1968.]
75[280] [Deductions in respect of interest on certain securities, dividends,
etc.
76[281] 80L. (1) 77[282] [Where the gross total income of an assessee, being—
(a) an individual, or
(b) a Hindu undivided family, 78[283] [***]
(c) 79[284] [***]includes any income by way of—]
(i) interest on any security of the Central Government or a State Government 80[285] [***];
81[286] [ia) interest on National Savings Certificates (VI Issue) or National Savings Certificates (VII Issue) or National Savings Certificates (VIII Issue) issued under the Government Savings Certificates Act, 1959 (46 of 1959);]
82[287] [(ii) interest on such debentures, issued by any institution or authority or any public sector company, or any co-operative society (including a co-operative land mortgage bank or a co-operative land development bank), as the Central Government may, by notification 83[288] in the Official Gazette, specify in this behalf;
85[290] [iia) interest on deposits under such National Deposit Scheme as may be framed by the Central Government and notified by it in this behalf in the Official Gazette;]
(iii) interest on deposits under any 86[291] [other] scheme framed by the Central Government and notified 87[292] by it in this behalf in the Official Gazette;
88[293] (iiia) interest on deposits under the Post Office (Monthly Income Account) Rules, 1987;]
(iv) dividends from any Indian company;
(v) income received in respect of units from the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963);
89[294] [(va) income received in respect of units of a Mutual Fund specified under clause (23D) of section 10;]
(vi) interest on deposits with a banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act) or a co-operative society engaged in carrying on the business of banking (including a co-operative land mortgage bank or a co-operative land development bank); 90[295] [***]
90a[296] [(via) interest on deposits with any such bank, not being a banking company or a co-operative society referred to in clause (vi) but being a bank established by or under any law made by Parliament, as may be approved by the Central Government for the purposes of this clause;]
91[297] [(vii) interest on deposits with a financial
corporation which is engaged in providing long-term finance for industrial
development in
Provided that the corporation 93[299] [***] is for the time being approved by the Central Government for the purposes of clause (viii) of sub-section (1) of section 36;]
94[300] (viia) interest on deposits with any authority constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both;]
95[301] [viii) interest on deposits with a co-operative society, not being a co-operative society referred to in clause (vi), made by a member of the society;] 96[302] [or]
97[303] [(ix) dividends from any co-operative society;]
98[304] [(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 for 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,]there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction as specified hereunder, namely:—
99[305] [(1)] in a case where the amount of such income does not exceed in the aggregate 1[306] [thirteen] thousand rupees, the whole of such amount; and
99[307] [(2)] in any other case, 1[308] [thirteen] thousand rupees.
The following proviso shall be inserted in sub-section (1) by the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997:
Provided that where any income referred in clause (iv), clause (v) or clause (va) remains unallowed after the deduction under the foregoing provision of this section, there shall be allowed in computing the total income of the assessee, an additional deduction of an amount equal to so much of such income as has remained unallowed; so, however, that the amount of such additional deduction shall not exceed three thousand rupees.
4[311] [Explanation.—For the purposes of this sub-section, the expression “security” means a Government security 5[312] as defined in clause (2) of section 2 of the Public Debt Act, 1944 (18 of 1944).]
7[314] [(3) For the removal of doubts, it is hereby declared that where the income referred to in sub-section (1) is derived from any asset held by, or on behalf of, a firm, an association of persons or a body of individuals, no deduction shall be allowed under the said sub-section in respect of such income in computing the total income of any partner of the firm or any member of the association or body.]
8.
[Deduction in respect of certain inter-corporate dividends.
9[315] 80M. (1) Where the gross total income of a domestic company, in any previous year, includes any income by way of dividends from another domestic company, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of such domestic company, a deduction of an amount equal to,—
(i) in the case of a scheduled bank or a public financial institution or a State financial corporation or a State industrial investment corporation or a company registered under section 25 10[316] of the Companies Act, 1956 (1 of 1956), sixty per cent of the income by way of dividends from another domestic company;
(ii) in the case of any other domestic company, so much of the amount of income by way of dividends from another domestic company as does not exceed the amount of dividend distributed by the first-mentioned domestic company on or before the due date:
11[317] [Provided that where any domestic company receives any income by way of dividend from the units of the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963), such domestic company shall, subject to the aforesaid provisions, be eligible for deduction to the extent of—
(a) four-fifth of such income in respect of the previous year relevant to the assessment year commencing on the 1st day of April, 1994;
(b) two-fifth of such income in respect of the previous year relevant to the assessment year commencing on the 1st day of April, 1995,and no deduction shall be allowed on such income in respect of the previous year relevant to the assessment year commencing on the 1st day of April, 1996 and any subsequent previous year.]
(2) Where any deduction, in respect of the amount of dividend distributed by the domestic company, has been allowed under clause (ii) of sub-section (1) in any previous year, no deduction shall be allowed in respect of such amount in any other previous year.
(3) Where the dividend distributed is in respect of any period comprised in the previous year ending on 31st day of March, 1990, no deduction shall be allowed in respect of such dividend.
Explanation.— For the purposes of this section, the expressions—
(i) “scheduled bank” means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980), or any other bank included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934), and which is a domestic company;
(ii) “public financial institution” shall have the meaning assigned to it in section 4A 12 [318] of the Companies Act, 1956 (1 of 1956);
(iii) “State financial corporation” and “State industrial investment corporation” shall have the same meanings as in section 43B;
(iv) “due date” means the date for furnishing the return of income under sub-section (1) of section 139.]
Deduction in the case of an Indian company
in respect of royalties, etc., received from any concern in
13[319] 80MM. [Omitted by the Finance Act, 1983, w.e.f. 1-4-1984. Original section was inserted by the Finance Act, 1969, w.e.f. 1-4-1970.]
Deduction in respect of dividends received from
certain foreign companies.
14[320] 80N. [Omitted by the Finance Act, 1985, w.e.f. 1-4-1986. This topic was originally dealt with by section 85B which was inserted by the Finance Act, 1966, w.e.f. 1-4-1966. Present section 80N was inserted, in place of section 85B which was deleted by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1968.]
15[321] [16[322] Deduction in respect of royalties, etc.,
from certain foreign enterprises.
17[323] 80-O. 18[324] [Where the gross total income of an assessee, being an Indian company 19[325] [or a person (other than a company) who is resident in India]], includes any income by way of royalty, commission, fees or any similar payment received by the assessee from the Government of a foreign State or a foreign enterprise in consideration for the use outside India 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 such Government or enterprise by the assessee, or in consideration of 20[326] [technical or professional services] rendered or agreed to be rendered outside India to such Government or enterprise by the assessee, 21[327] [* * *] 22[328] [and such income is received in convertible foreign exchange in India, or having been received in convertible foreign exchange outside India, or having been converted into convertible foreign exchange outside India, is brought into India, by or on behalf of the assessee in accordance with any law for the time being in force for regulating payments and dealings in foreign exchange, there shall be allowed, in accordance with and subject to the provisions of this section, a deduction of an amount equal to fifty per cent of the income so received in, or brought into, India, in computing the total income of the assessee]:
24[330] [Provided 25[331] [* * *] that such income is received in India within a period of six months from the end of the previous year, or where the 26[332] [Chief Commissioner or Commissioner] is satisfied (for reasons to be recorded in writing) that the assessee is, for reasons beyond his control, unable to do so within the said period of six months, within such further period as the 26a[[333] Chief Commissioner or Commissioner] may allow in this behalf.]
27[334] [Explanation.—For the purposes of this section,—
(i) “convertible foreign exchange” means foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purposes of the law for the time being in force for regulating payments and dealings in foreign exchange;
28[335] [(ii) “foreign enterprise” means a person who is a non-resident.]]
29[336] [(iii) services rendered or agreed to be
rendered outside
31[338] [Deduction
in respect of income of co-operative societies.
32[339] 80P.(1) Where, in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub-section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2), in computing the total income of the assessee.
(2) The sums referred to in sub-section (1) shall be the following, namely :—
(a) in the case of a co-operative society engaged in—
(i) carrying on the business of banking or providing credit facilities to its members, or
(ii) a cottage industry, or
(iii) the marketing of the agricultural produce of its members, or
(iv) the purchase of agricultural implements, seeds, livestock or other articles intended for agriculture for the purpose of supplying them to its members, or
(v) the processing, without the aid of power, of the agricultural produce of its members, 33[[340] or]
33[341] [(vi) the collective disposal of the labour of its members, or
(vii) fishing or allied activities, that is to say, the catching, curing, processing, preserving, storing or marketing of fish or the purchase of materials and equipment in connection therewith for the purpose of supplying them to its members,]the whole of the amount of profits and gains of business attributable to any one or more of such activities:
34[342] [Provided that in the case of a co-operative society falling under sub-clause (vi), or sub-clause (vii), the rules and bye-laws of the society restrict the voting rights to the following classes of its members, namely :—
(1) the individuals who contribute their labour or, as the case may be, carry on the fishing or allied activities;
(2) the co-operative credit societies which provide financial assistance to the society;
(3) the State Government;]
35[[343] (b) in the case of a co-operative society, being a primary society engaged in supplying milk, oil seeds, fruits or vegetables raised or grown by its members to—
(i) a federal co-operative society, being a society engaged in the business of supplying milk, oil seeds, fruits, or vegetables, as the case may be; or
(ii) the Government or a local authority; or
(iii) a Government company 36[344] as defined in section 617 of the Companies Act, 1956 (1 of 1956), or a corporation established by or under a Central, State or Provincial Act (being a company or corporation engaged in supplying milk, oil seeds, fruits or vegetables, as the case may be, to the public),the whole of the amount of profits and gains of such business;]
(c) in the case of a co-operative society engaged in activities other than those specified in clause (a) or clause (b) (either independently of, or in addition to, all or any of the activities so specified), so much of its profits and gains attributable to such activities as 37[345] [does not exceed,—
(i) where such co-operative society is a consumers’ co-operative society, forty thousand rupees; and
(ii) in any other case, twenty thousand rupees.
Explanation.— In this clause, “consumers’ co-operative society” means a society for the benefit of the consumers;]
(d) in respect of any income by way of interest or dividends 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 or 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 38[346] [* * *] 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 39[347] [* * *] 40[348] [section 80HH] 41[349] [or section 80HHA] 42[350] [or section 80HHB] 43[351] [or section 80HHC] 44[352] [or section 80HHD] 45[353] [or section 80-I] 46[354] [or section 80-IA] or section 80J46a[355] 47[356] [or section 80JJ] 48[357] [* * *], the deduction under sub-section (1) of this section, in relation to the sums specified in clause (a) or clause (b) or clause (c) of sub-section (2), shall be allowed with reference to the income, if any, as referred to in those clauses included in the gross total income as reduced by the deductions under 49[358] [* * *] 50[359] [section 80HH,] 51[360] [section 80HHA,] 52[361] [section 80HHB,] 53[362] [section 80HHC,] 54[363] [section 80HHD,] 55[364] [section 80-I,] 56[365] [section 80-IA,] 57[366] [58[367] [section 80J and section 80JJ]].]
60[369] [Deduction
in respect of profits and gains from the business of publication of books.
61[370] 80Q. (1) Where in the case of an assessee the gross total income of the previous year relevant to the assessment year commencing on the 1st day of April, 1992, or to any one of the four assessment years next following that assessment year, includes any profits and gains derived from a business carried on in India of printing and publication of books or publication of books, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to twenty per cent thereof.
(2) In a case where the assessee is entitled also to the deduction under section 80HH or section 80HHA or section 80HHC or section 80-I or section 80-IA or section 80J or section 80P, in relation to any part of the profits and gains referred to in sub-section (1), the deduction under sub-section (1) shall be allowed with reference to such profits and gains included in the gross total income as reduced by the deductions under section 80HH, section 80HHA, section 80HHC, section 80-I, section 80-IA, section 80J and section 80P.
(3) For the purposes of this section, “books” shall not include newspapers, journals, magazines, diaries, brochures, tracts, pamphlets and other publications of a similar nature by whatever name called.]
Deduction in respect of profits and gains
from the business of publication of books.
62[371] 80QQ. [Omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. Original section was inserted by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971.]
63[372] [Deduction in respect of professional income of authors of text books
in Indian languages.
80QQA. (1) Where, in the case of an individual resident in India, being an author, the gross total income of the previous year relevant to the assessment year 64[373] [commencing on—
(a) the 1st day of April, 1980, or to any one of the nine assessment years next following that assessment year; or
(b) the 1st day of April, 1992, or to any one of the four assessment years next following that assessment year,includes] any income derived by him in the exercise of his profession on account of any lump sum consideration for the assignment or grant of any of his interests in the copyright of any book, or of royalties or copyright fees (whether receivable in lump sum or otherwise) in respect of such book, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such income of an amount equal to twenty-five per cent thereof.
(2) No deduction under sub-section (1) shall be allowed unless—
(a) the book is either in the nature of a dictionary, thesaurus or encyclopaedia or is one that has been prescribed or recommended as a text book, or included in the curriculum, by any University, for a degree or post-graduate course of that University; and
(b) the book is written in any language specified in the Eighth Schedule to the Constitution 65[374] or in any such other language as the Central Government may, by notification in the Official Gazette, specify in this behalf having regard to the need for promotion of publication of books of the nature referred to in clause (a) in that language and other relevant factors.
Explanation.—For the purposes of this section,—
(i) “author” includes a joint author;
(ii) “lump sum”, in regard to royalties or copyright fees, includes an advance payment on account of such royalties or copyright fees which is not returnable;
(iii) `“University” shall have the same meaning as in the Explanation to clause (ix) of section 47.]
66[375] [Deduction
in respect of remuneration from certain foreign sources in the case of
professors, teachers, etc.67[376]
80R. Where the gross total income of an individual who is a citizen of India includes any remuneration received by him outside India from any University or other educational institution established outside India or 68[377] [any other association or body established outside India], for any service rendered by him during his stay outside India in his capacity as a professor, teacher or research worker in such University, institution, association or body, there shall be 69[378] [allowed, in computing the total income of the individual, a deduction from such remuneration of an amount 69a[379] [equal to,—
(i) fifty per cent of the remuneration; or
(ii) seventy-five per cent of such remuneration as is brought into India by, or on behalf of, the assessee in accordance with the Foreign Exchange Regulation Act, 1973 (46 of 1973), and any rules made thereunder,whichever is higher.]]
71[381] [Deduction
in respect of professional income from foreign sources in certain cases.
72 [382] 80RR. Where the gross total income of an individual resident in India, being an author, playwright, artist, 73[383] [musician, actor or sportsman (including an athlete)], includes any income derived by him in the exercise of his profession from the Government of a foreign State or any person not resident in India, 74[384] [there shall be allowed, in computing the total income of the individual, a deduction from such income of an amount 74a[385] [equal to,—
(i) fifty per cent of the income; or
(ii) seventy-five per cent of such income as is brought into India by, or on behalf of, the assessee in accordance with the Foreign Exchange Regulation Act, 1973 (46 of 1973), and any rules made thereunder, whichever is higher.]]
75[386] [Deduction in respect of remuneration received for services rendered
outside
76[387] 80RRA. (1) Where the gross total income of an individual who is a citizen of India includes any remuneration received by him in foreign currency from any employer (being a foreign employer or an Indian concern) for any service rendered by him outside India, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the individual, a deduction from such remuneration 77[388] [of an amount 77a[389] [equal to,—
(i) fifty per cent of the remuneration; or
(ii) seventy-five per cent of such remuneration as is brought into India by, or on behalf of, the assessee in accordance with the Foreign Exchange Regulation Act, 1973 (46 of 1973), and any rules made there under,whichever is higher.]]
(2) The deduction under this section shall be allowed—
(i) in the case of an individual who is or was, immediately before undertaking such service, in the employment of the Central Government or any State Government, only if such service is sponsored by the Central Government;
(ii) in the case of any other individual,
only if he is a technician and the terms and conditions of his service outside
Explanation.—For the purposes of this section,—
(a) “foreign currency”79[391] shall have the meaning assigned to it in the Foreign Exchange Regulation Act, 1973 (46 of 1973);
(b) “foreign employer” means,—
(i) the Government of a foreign State; or
(ii) a foreign enterprise; or
(iii) any association
or body established outside
(c) “technician” means a person having specialised knowledge and experience in—
(i) constructional or manufacturing operations or mining or the generation or distribution of electricity or any other form of power; or
(ii) agriculture, animal husbandry, dairy farming, deep sea fishing or ship building; or
(iii) public administration or industrial or business management; or
(iv) accountancy; or
(v) any field of natural or applied science (including medical science) or social science; or
(vi) any other field which the Board may prescribe 80[392] in this behalf,who is employed in a capacity in which such specialized knowledge and experience are actually utilised.]
Deduction in respect of
compensation for termination of managing agency, etc., the case of assessees
other than companies.
81[393] 80S. [Omitted by the Finance Act, 1986, w.e.f. 1-4-1987, Original section was introduced in place of old section 112 by the Finance (No.2) Act, 1967, w.e.f. 1-4-1968.]
Deduction in respect of
long-term capital gains in the case of assessees other than companies.
82[394] 80T. [Omitted by the Finance Act, 1987, w.e.f. 1-4-1988. Original section was inserted by the Finance (No.2) Act, 1967, w.e.f. 1-4-1968 in replacement of section 114.]
Deduction
in respect of winnings from lottery.
83[395] 80TT. [Omitted by the Finance Act, 1986, w.e.f.
1-4-1987, Original section was inserted by the Finance Act, 1972, w.e.f.
1-4-1972.]
84[396] . [D.—Other deductions
85[397] Deduction
in the case of permanent physical disability (including blindness).
86[398] 80U. 87[399] In computing the total income of an individual, being a resident, who, at the end of the previous year, is suffering from a permanent physical disability (including blindness) or is subject to mental retardation, being a permanent physical disability or mental retardation specified in the rules 88[400] made in this behalf by the Board, which is certified by a physician, a surgeon, an oculist or a psychiatrist, as the case may be, working in a Government hospital, and which has the effect of reducing considerably such individual’s capacity for normal work or engaging in a gainful employment or occupation, there shall be allowed a deduction of a sum of 89[401] [forty] thousand rupees:
Provided that such individual produces the aforesaid certificate before the Assessing Officer in respect of the first assessment year for which he claims deduction under this section:
Provided further that the requirement of producing the aforesaid certificate from a physician, a surgeon, an oculist or a psychiatrist, as the case may be, working in a Government hospital shall not apply to an individual who has already produced a certificate before the Assessing Officer under the provisions of this section as they stood immediately before the 1st day of April, 1992.
Explanation.—For the purposes of this section, the expression “Government hospital” shall have the meaning assigned to it in the Explanation to section 80DD.]
Deduction from gross total income of the
parent in certain cases.
80V. 90[402] [Omitted by the Finance Act, 1994, w.e.f. 1-4-1995.]
Deduction in respect of expenses incurred in
connection with certain proceedings under the Act.
91-92[403] 80VV. [Omitted by the Finance Act, 1985, w.e.f. 1-4-1986, Original section was inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976.]
[1]Chapter VI-A, consisting of sections 80A, 80B, 80C, 80D, 80E, 80F, 80G, 80H, 80-I, 80J, 80K, 80L, 80M, 80N, 80-O, 80P, 80Q, 80R, 80S and 80T, was substituted by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1968. The original Chapter, consisting of only sections 80A to 80D, was inserted by the Finance Act, 1965, w.e.f. 1-4-1965. In the original Chapter, section 80A was amended by the Finance Act, 1966, w.e.f. 1-4-1966 and new section 80E was inserted by the Finance (No. 2) Act, 1966, w.e.f. 1-4-1966.
[2]Substituted for “80VV” by the Finance Act, 1985, w.e.f. 1-4-1986. Earlier, “80VV” was substituted for “80U” by the taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976 and “80U” was substituted for “80T” by the Finance Act, 1968, w.e.f. 1-4-1969.
[3]Substituted for existing sub-section (3) by the Finance Act, 1992, w.e.f. 1-4-1993. Prior to substitution, sub-section (3), as amended by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971, the Finance (No. 2) Act, 1971, w.e.f. 1-4-1972, the Finance Act, 1972, w.e.f. 1-4-1972, the Direct Taxes (Amendment) Act, 1974, w.e.f. 1-4-1974, the Finance Act, 1974, w.e.f. 1-4-1975, the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976, the Finance Act, 1975, w.e.f. 1-4-1976, the Finance (No. 2) Act, 1977, w.e.f. 1-4-1978, the Finance Act, 1979, w.e.f. 1-4-1980, the Finance (No. 2) Act, 1980, w.e.f. 1981, the Finance Act, 1982, w.e.f. 1-4-1983, the Finance Act, 1983, w.e.f. 1-4-1983/1-4-1984, the Finance Act, 1985, w.e.f. 1-4-1986, the Finance Act, 1986, w.e.f. 1-4-1987, the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989, the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989 and the Finance Act, 1989, w.e.f. 1-4-1989, read as under :
“(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 80GGA or section 80HH or section 80HHA or section 80HHB or section 80HHC or section 80HHD or section 80-I or section 80J or section 80JJ, no deduction under the same section shall be made in computing the total income of a partner of the firm or, as the case may be, of a member of the association of persons or body of individuals in relation to the share of such partner in the income of the firm or the share of such member in the income of the association of persons or body of individuals.”
[4]Omitted by the Finance Act, 1978, w.e.f. 1-4-1979.
Originally, sub-section (4) was inserted by the Finance Act, 1976, w.e.f.
1-4-1977.
[5]Inserted by the Finance (No. 2) Act, 1980, with retrospective
effect from 1-4-1968, subject to the savings prescribed in section 44 of the
said Act, which read as under :
“44. Saving in certain cases.—Where before the 18th day of June, 1980 [being the date on which the Finance (No. 2) Bill, 1980, was introduced], the Supreme Court has, on an appeal or a reference in respect of the assessment of an assessee for any particular assessment year, held that the deduction under section80M is to be allowed in a manner different from that provided in section 80AA of the Income-tax Act, as inserted by section 12 of this Act, then, nothing contained in the said section 80AA shall apply to the assessment of such assessee for that particular assessment year.”
[6]For relevant case laws, see Income-tax Act.
[7]Inserted by the Finance (No. 2) Act, 1980, w.e.f.
1-4-1981.
[8]For relevant case laws, see Income-tax Act.
[9]Inserted by the Finance (No. 2) Act, 1967, w.e.f.
1-4-1968 in place of original section 80D.
[10]Omitted by the Taxation Laws (Amendment) Act, 1975,
w.e.f. 1-4-1976.
[11]Omitted by the Direct Tax Laws (Amendment) Act, 1987,
w.e.f. 1-4-1989. Prior to its omission, clause (2) stood as under:
‘(2) “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;’
[12]Omitted by the Finance Act, 1968, w.e.f. 1-4-1969.
[13]Omitted by the Direct Tax Laws (Amendment) Act, 1987,
w.e.f. 1-4-1989. Prior to its omission, clause (4) stood as under :
[14]“or under section 280-O” omitted by the Finance Act, 1988, w.e.f. 1-4-1988.
[15]“and without applying the provisions of section 64” omitted by the Taxation Laws (Amendment) Act, 1970, with retrospective effect from 1-4-1968.
[16]Omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. Prior to its omission, clause (6) stood as under :
‘(6) “income”, in relation to a handicapped dependant, means the aggregate income of such person from all sources :’
[17]Omitted by the Finance Act, 1972, w.e.f. 1-4-1973.
[18]Omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. Prior to its omission, clause (8) stood as under:
‘(8) “relative”, in relation to an individual, means—
(a) the mother, father, husband or wife of 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);’
[19]Omitted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976.
[20]Subject-matter of this section has been dealt with by different sections at different times, viz., (i) section 87 as originally enacted; (ii) original section 80A as introduced by the Finance Act, 1965, w.e.f. 1-4-1965; and (iii) then section 80C was introduced by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1968 and the same was replaced by section 88 with effect from 1-4-1991.
[21]Section 80C on earlier occasions was amended by the Finance
Act, 1968, w.e.f. 1-4-1969, Finance Act, 1969, w.e.f. 1-4-1970, Finance Act,
1970, w.e.f. 1-4-1971, Finance (No. 2) Act, 1971, w.e.f. 1-4-1972, Finance Act,
1972, w.e.f. 1-4-1973, Finance Act, 1973, w.e.f. 1-4-1974, Finance Act, 1975,
w.e.f. 1-4-1976, Finance Act, 1976, w.e.f. 1-4-1977, Finance Act, 1978, w.e.f.
1-4-1979, Finance Act, 1979, w.e.f. 1-4-1980, Finance (No. 2) Act, 1980, w.e.f.
1-4-1981, Finance Act, 1982, w.e.f. 1-4-1983, Finance Act, 1983, w.e.f.
1-4-1984, Taxation Laws (Amendment) Act, 1984, w.r.e.f.
1-4-1971, Taxation Laws (Amendment) Act, 1984, w.r.e.f.
1-4-1983, Finance Act, 1987, w.e.f. 1-4-1988, Direct Tax Laws (Amendment) Act,
1989, w.e.f. 1-4-1989, Direct Tax Laws (Second Amdt.)
Act, 1989, w.r.e.f. 1-4-1984, Direct Tax Laws (Second
Amdt.) Act, 1989, w.e.f. 1-4-1990 and Finance Act,
1989, w.e.f. 1-4-1990. Prior to omission section 80C read as under
:
‘(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 calculated, with reference to the aggregate of the sums
specified in sub-section (2), at the following rates, namely:—
|
(a) where such aggregate
does not exceed Rs. 6,000 |
the whole of such aggregate; |
|
(b) where such aggregate
exceeds Rs. 6,000 but does not exceed Rs. 12,000 |
Rs. 6,000 plus 50 per cent of the amount by which
such aggregate exceeds Rs. 6,000; |
|
(c) where such aggregate
exceeds Rs. 12,000 |
Rs. 9,000 plus 40 per cent of the amount by which
such aggregate exceeds Rs. 12,000. |
(2) The sums referred to in sub-section (1) shall be the
following, namely:—
(a) where the assessee is
an individual, any sums paid in the previous year by the assessee out of his
income chargeable to tax—
(i) to
effect or to keep in force an insurance on the life of the assessee or on the
life of the wife or husband or any child of the assessee; or
(ii) to effect or to keep
in force a contract for a deferred annuity not being an annuity plan referred
to in clause (ii) of sub-section (1) of section 80CCA, on the life of
the assessee or on the life of the wife or husband or any child of the
assessee:
Provided that such
contract does not contain a provision for the exercise by the insured of an
option to receive a cash payment in lieu of the payment of the annuity; or
(iii) as a contribution to
any provident fund to which the Provident Funds Act, 1925 (19 of 1925),
applies; or
(iv) as a contribution to any provident fund set up
by the Central Government and notified by it in this behalf in the Official
Gazette; or
(v) as a contribution for
participation of the Unit-linked Insurance Plan, 1971 made under section 19(1)(cc)
of the Unit Trust of India Act, 1963 (52 of 1963); or
(vi) as a contribution for participation in any such
unit-linked insurance plan of the LIC Mutual Fund notified under clause (23D)
of section 10, as the Central Government may, by notification in the Official
Gazette, specify in this behalf;
(b) where the assessee is a
Hindu undivided family,—
(i) any
sums paid in the previous year by the assessee out of its income chargeable to
tax—
(1) to effect or to keep in
force an insurance on the life of any member of the family; or
(2) as a contribution to any provident fund referred
to in sub-clause (iv) of clause (a), where such contribution is
to an account standing in the name of any member of the family; or
(ii) any sums deposited in the previous year by the
assessee out of its 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, where such sums are
deposited in an account standing in the name of any member of the family.
Explanation.—For the
purposes of sub-clause (i) of clause (a)
and sub-clause (i) of clause (b) of
this sub-section, an insurance on the life of any person referred to therein
shall include—
(i) a policy of insurance
on the life of such person securing the payment of a specified sum on the
stipulated date of maturity of the policy, if such person is alive on such
date, notwithstanding that the policy of insurance provides only for the return
of premiums paid (with or without any interest thereon) in the event of such
person dying before the said stipulated date;
(ii) a policy of insurance effected by a person for
the benefit of a minor with the object of enabling the minor, after he has
attained majority, to secure an insurance on his own life by adopting the
policy and on his being alive on a date (after such adoption) specified in the
policy in this behalf;
(c) any sum deducted in the previous year from the
salary payable by or on behalf of the Government to any individual 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 contribution to
his individual account in the fund in the previous year, in so far as the aggregate
of such contribution does not exceed one-fifth of his salary in that previous
year.
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;
(g) where the assessee is
an association of persons or a body of individuals consisting, in either case,
only of husband and wife governed by the system of community of property in
force in the State of
(i) any
sums paid in the previous year by the assessee out of its income chargeable to
tax—
(1) to effect or to keep in
force an insurance on the life of any member of such association or body or on
the life of any child of any of the members of such association or body;
(2) to effect or to keep in
force a contract for a deferred annuity on the life of any member of such
association or body or any child of any of members of such association or body:
Provided that such
contract does not contain a provision for the exercise by the insured of an
option to receive a cash payment in lieu of the payment of the annuity; or
(3) as a contribution to any
provident fund referred to in sub-clause (iv) of clause (a); or
(4) as a contribution for
participation by any one member of such association or body in the Unit-linked
Insurance Plan;
(ii) any sums deposited in the previous year by such
association or body out of its income chargeable to tax in 10-year account or
a 15-year account under the Post Office Savings Bank (Cumulative Time Deposits)
Rules, 1959, as amended from time to time;
(h) where the assessee is an individual or a Hindu
undivided family or where the assessee is an association of persons or a body
of individuals consisting, in either case, only of husband and wife governed by
the system of community of property in force in the State of Goa and the Union territories of Dadra
and Nagar Haveli and Daman
and Diu, any sums paid in the previous year by such
assessee out of his or its income chargeable to tax,—
(i) as subscription to any
such security of the Central Government as that Government may, by notification
in the Official Gazette, specify in this behalf; or
(ia) as subscription to
any such deposit scheme of the National Housing Bank established under section
3 of the National Housing Bank Act, 1987 (53 of 1987), as the Central
Government may, by notification in the Official Gazette, specify in this
behalf;
(ib) as subscription to
any such savings certificate as defined in clause (c) of section 2 of
the Government Savings Certificates Act, 1959 (46 of 1959), as the Central
Government may, by notification in the Official Gazette, specify in this
behalf;
(ii) for the purposes of purchase or construction of
a residential house property the construction of which is completed after the
31st day of March, 1987, and the income from which is chargeable to tax under
the head “Income from house property” (or which would, if it had not been used
for the assessee’s own residence, have been
chargeable to tax under that head), where such payments are made towards or by
way of—
(a) any instalment or
part-payment of the amount due under any self-financing or other scheme of any
development authority, housing board or other authority, engaged in the
construction and sale of house property on ownership basis; or
(b) any instalment or
part-payment of the amount due to any company or co-operative society of which
the assessee is a shareholder or member towards the cost of the house property
allotted to him; or
(c) re-payment of the
amount borrowed by the assessee from—
(1) the Central Government
or any State Government, or
(2) any bank, including a
co-operative bank, or
(3) the Life Insurance
Corporation, or
(3A) the National Housing Bank, or
(4) 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 for residential
purposes which is approved for the purposes of clause (viii) of
sub-section (1) of section 36, or
(5) any company in which
the public are substantially interested or any co-operative society, where such
company or co-operative society is engaged in the business of financing the
construction of houses, or
(6) the assessee’s
employer where such employer is a public company or a public sector company or
a University established by law or a college affiliated to such University or a
local authority;
(d) stamp duty,
registration fee and other expenses for the purpose of transfer of such house
property to the assessee,
but
shall not include any payment towards or by way of—
(A) the admission fee, cost
of share and initial deposit which a shareholder of a company or a member of a
co-operative society has to pay for becoming such shareholder or member; or
(B) the cost of the land,
except where the consideration for the purchase of the house property is a
composite amount and the cost of the land alone cannot be separately
ascertained; or
(C) the cost of any addition or alteration to, or
renovation or repair of, the house property which is carried out after the
issue of the completion certificate in respect of the house property by the
authority competent to issue such certificate or after the house property or
any part thereof has either been occupied by the assessee or any other person
on his behalf or been let out; or
(D) any expenditure in
respect of which deduction is allowable under the provisions of section 24.
(i) where the assessee is
an individual or a Hindu undivided family or where the assessee is an
association of persons or a body of individuals consisting, in either case,
only of husband and wife governed by the system of community of property in
force in the State of Goa and the Union territories
of Dadra and Nagar Haveli and Daman and Diu, any
sums paid in the previous year by such assessee out of his or its income
chargeable to tax as subscription to the National Savings Certificates (VI
Issue) and National Savings Certificates (VII Issue) issued under the Government
Savings Certificates Act, 1959 of (46 of 1959);
(3) The provisions of clauses (a), (b) and (g)
of sub-section (2) shall apply only to so much of any premium or other payment
made on a policy other than a contract for a deferred annuity as is not in
excess of ten per cent of the actual capital sum assured.
Explanation.—In
calculating any such capital sum, no account shall be taken—
(i) of
the value of any premiums agreed to be returned, or
(ii) of any benefit by way
of bonus or otherwise over and above the sum actually assured, which is to be
or may be received under the policy by any person.
(4) The aggregate of the sums referred to in sub-section
(2), which qualifies for the purposes of computing the deduction under
sub-section (1), shall not exceed—
(i) in
the case of an individual, being an author, playwright, artist, musician,
actor or sportsman (including an athlete), sixty thousand rupees;
(ii) in the case of any other individual or a Hindu
undivided family or any such association of persons or a body of individuals
as is referred to in clause (g) or clause (h) of sub-section (2),
forty thousand rupees.
(5) If the assessee participating in any unit-linked insurance
plan referred to in sub-clause (v) or sub-clause (vi) of clause (a)
of sub-section (2), or in the case of an assessee being an association of
persons or a body of individuals referred to in clause (g) of
sub-section (2), the member thereof participating in any such plan, terminates
his participation in that plan (by notice to that effect or where he ceases to
participate by reason of failure to pay any contribution, by not reviving his
participation) before contributions in respect of such participation have been
paid for five years, then—
(a) no deduction shall be allowed to the assessee
under this section in respect of the contribution, if any, paid in the previous
year in which the participation is so terminated; and
(b) the deductions allowed in respect of the
contributions paid in the previous years preceding the previous year referred
to in clause (a) shall be deemed to be the income of the assessee of
that previous year and shall be chargeable to tax accordingly.
Explanation 1.—For the
purposes of this sub-section, the deduction allowed under this section in
respect of the contribution paid in any previous year shall be the amount by
which the deduction allowed under this section for that year exceeds the
deduction which would have been allowed for that year if no such contribution
had been paid during that year.
(6) If the assessee, being—
(a) an individual, has effected or kept in force an
insurance on the life of the assessee or on the life of the wife or husband or
any child of the assessee; or
(b) a Hindu undivided
family, has effected or kept in force an insurance on the life of any member of
the family; or
(c) an association of persons or a body of
individuals referred to in clause (g) of sub-section (2), has effected
or kept in force an insurance on the life of any member of such association or
body or on the life of any child of any of the members of such association or
body,
terminates the contract of insurance (by notice to that
effect or where the contract ceases to be in force by reason of failure to pay
any premiums, by not reviving the contract of insurance) before premiums have
been paid for two years, then—
(i) no deduction shall be
allowed to the assessee under this section in respect of the premiums, if any,
paid in the previous year in which the policy is so terminated; and
(ii) the deduction allowed
in respect of the premiums paid in the previous year or years preceding the
previous year referred to in clause (i) shall
be deemed to be the income of the assessee of such previous year or years and
shall be chargeable to tax accordingly.
Explanation 1.—For the
purposes of this sub-section, the deduction allowed under this section in
respect of the premiums paid in any previous year shall be the amount by which
the deduction allowed under this section for that year exceeds the deduction
which would have been allowed for that year if no such premiums had been paid
during that year.
Explanation 2.—In a
case where an assessee terminates his participation in any unit-linked
insurance plan referred to in sub-clause (v) or sub-clause (vi)
of clause (a) of sub-section (2) in any previous year and also
terminates a contract of insurance in that year, the deduction allowed under
this section in respect of the contribution or premiums paid in any previous
year shall, for the purposes of the Explanation to sub-section (5) and Explanation
1, be the amount by which the deduction allowed under this section for that
year exceeds the deduction which would have been allowed for that year if no such
contribution or premiums had been paid during that year.
(7) In the case of an assessee referred to in clause (h)
of sub-section (2),—
(a) where any sums specified in sub-clause (ii)
of that clause, with reference to which the deduction under sub-section (1) has
been allowed are refunded to or received back by the assessee in any previous
year (hereinafter referred to as the relevant previous year), then,—
(i) no deduction shall be
allowed to the assessee under sub-section (1) with reference to any of the
sums, specified in that sub-clause, paid in the relevant previous year; and
(ii) the aggregate amount of the deductions so
allowed in respect of the previous year or previous years preceding the
relevant previous year shall be deemed to be the income of the assessee of the
relevant previous year and shall be chargeable to tax under the head “Income
from other sources”;
(b) where the house
property referred to in sub-clause (ii) of that clause is transferred by
the assessee before the expiry of five years from the end of the financial year
in which possession of such property is obtained by him, then—
(i) no deduction shall be
allowed to the assessee under sub-section (1) with reference to any of the
sums, specified in that sub-clause, paid in the previous year in which the
transfer is so made; and
(ii) the aggregate amount of the deductions allowed
under sub-section (1) with reference to the sums specified in that sub-clause
in respect of the previous year or previous years preceding the previous year
referred to in sub-clause (i) of this clause
shall be deemed to be the income of the assessee of the previous year in which
the transfer is made and shall be chargeable to tax under the head “Income
from other sources”;
(c) where the aggregate of
any sums specified in sub-clause (ii) of that clause exceeds an amount
of ten thousand rupees, a deduction under sub-section (1) shall be allowed with
reference to so much of the aggregate as does not exceed an amount of ten
thousand rupees.
(8) In this section,—
(a) “Life Insurance Corporation” means the Life
Insurance Corporation of India established under the Life Insurance Corporation
Act, 1956 (31 of 1956);
(b) “public company” shall
have the same meaning as in section 3 of the Companies Act, 1956 (1 of 1956);
(c) “transfer” shall be
deemed to include also the transactions referred to in clause (f) of
section 269UA;
(d) “contribution” to any fund shall not include any sums in repayment of loan.’
[22]Notified Schemes were :
(a) Public provident fund vide
Notification No. SO 2431, dated 2-7-1968.
(b) Dhanraksha
1989 Plan of LIC Mutual Fund - See Notification No. GSR 55(E), dated
9-2-1990.
(c) NSC (VIII Issue) - See Notification No.
270(E), dated 29-3-1990.
For details, see n’s Master Guide to Income-tax Act.
[23]Prior to its omission, section 80CC, as inserted by the Finance Act, 1978, w.e.f. 1-4-1978 and later on amended by the Finance Act, 1982, w.e.f. 1-4-1983; Finance Act, 1984, w.e.f. 1-4-1984/1-4-1985; Taxation Laws (Amendment) Act, 1984, w.r.e.f. 1-4-1978; Finance Act, 1985, w.e.f. 1-4-1985; Finance Act, 1987, w.e.f. 1-4-1987; Finance Act, 1988, w.e.f. 1-4-1989/1-4-1990; Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989; Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-4-1990; Finance Act, 1989, w.e.f. 1-4-1990 and Finance Act, 1984, w.r.e.f. 1-4-1978, read as under :
’80CC. Deduction in respect of investment in certain new shares.—(1) Where an assessee, being—
(a) an individual, or
(b) a Hindu undivided family,
(c) [***]
has acquired in the previous year (being a previous year relevant to the assessment year, commencing on the 1st day of April, 1979, or any subsequent assessment year) out of his income chargeable to tax, equity shares forming part of any eligible issue of capital, or units of any Mutual Fund specified under clause (23D) of section 10 or units issued under any scheme of the Unit Trust of India established under section 3 of the unit Trust of India Act, 1963 (52 of 1963), if the amount of subscription to any units, issued by the Mutual Fund or, as the case may be, the Unit Trust of India under such scheme, is subscribed only to eligible issue of capital, 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 an amount equal to fifty per cent of the cost of such shares to him.
Explanation.—Where in any previous year the assessee has acquired any shares referred to in this sub-section and has, within a period of six months from the end of that previous year paid the whole or a part of the amount, if any, remaining unpaid on such shares, the amount so paid shall be deemed to have been paid by the assessee towards the cost of such shares in that previous year.
(2) Where the aggregate cost to the assessee of the shares referred to in sub-section (1) which are acquired by him in the previous year exceeds twenty thousand rupees, the deduction under that sub-section shall be allowed only with reference to such of those shares (being shares the aggregate cost whereof to the assessee does not exceed twenty thousand rupees) as are specified by him in this behalf.
(3) For the purposes of this section, “eligible issue of capital” means an issue of equity shares which satisfies the following conditions, namely :—
(a) the issue is made by a public company
formed and registered in
(i) construction, manufacture or production of any article or thing, not being an article or thing specified in the list in the Eleventh Schedule; or
(ii) providing long-term finance for
construction or purchase of houses in
Provided that in the case of a public company carrying on the business referred to in sub-clause (ii), such company* is approved by the Central Government for the purposes of this section or;
(iia) a hospital; or
(iii) a hotel approved by the prescribed† authority; or
(iv) operation of ships;
(b) the issue is an issue of capital made by the company for the first time :
Provided that this clause shall not apply in the case of an issue of
equity shares made by a public company formed and registered in
(c) the shares forming part of the issue are offered for subscription to the public and such offer for subscription is made by the company before the 1st day of April, 1990;
(d) such other conditions as may be prescribed :
Provided that in the case of a company which had originally been incorporated as a private company but has become a public company under the provisions of the Companies Act, 1956 (1 of 1956), an issue of equity shares made by it for the first time after it has become a public company shall not be regarded as an eligible issue of capital, if—
(i) such company had declared, distributed or paid any dividend when it was a private company; or
(ii) any of the shares forming part of such issue is offered for subscription at a premium.
Explanation 1.—If any question arises as to whether any issue of equity shares would constitute an eligible issue of capital for the purposes of this section, the question shall be referred to the Central Government whose decision thereon shall be final.
Explanation 2.—In this sub-section and sub-section (4), “public company” shall have the meaning assigned to it in section 3 of the Companies Act, 1956 (1 of 1956).
(4) The deduction under sub-section (1) shall not be allowed unless the assessee has —
(i) subscribed to the shares in pursuance of an offer for subscription to the public made by the public company or in pursuance of a reservation or an option in his favour by reason of his being a promoter of the company; or
(ii) purchased the shares from a person who is specified as an underwriter in respect of the issue of such shares in pursuance of clause 11 of Part I of Schedule II to the Companies Act, 1956 (1 of 1956), and who has acquired such shares by virtue of his obligation as such underwriter.
(5) If any equity shares, with reference to the cost of which a deduction is allowed under sub-section (1), are sold or otherwise transferred by the assessee to any person at any time within a period of three years from the date of their acquisition, an amount equal to fifty per cent of the cost to the assessee of the shares so sold or otherwise transferred shall be deemed to be the income of the assessee of the previous year in which the shares are so sold or transferred and shall be chargeable to tax accordingly.
Explanation.—A person shall be treated as having acquired any shares on the date on which his name is entered in relation to those shares in the register of members of the company.
(6) Where a deduction is claimed and allowed under sub-section(1) with reference to the cost of any equity shares, the cost of such shares shall not be taken into account for the purposes of section54E.
*Can Fin Homes Ltd.,
†The prescribed authority under rule 18AA is Director-General, Directorate of Tourism, Government of India.
[24]Substituted by the Finance Act, 1988, w.e.f. 1-4-1988. Original section 80CCA was inserted by the Finance Act, 1987, w.e.f. 1-4-1988.
[25]See also Circular No. 527, dated 9-12-1988, Notification No. GSR 903(E), dated 6-9-1988, Circular No. 531, dated 17-3-1989, Circular No. 532, dated 17-3-1989 and Circular No. 534, dated 7-4-1989. For details, see n’s Master Guide to Income-tax Act.
[27]Omitted, ibid. Prior to its omission, clause (c), as substituted by the Finance Act, 1988, w.e.f. 1-4-1988, read as under :
“(c) an association of persons or a body of individuals consisting in either case, only of husband and wife governed by the system of community of property in force in the State of Goa and the Union territories of Dadra and Nagar Haveli and Daman and Diu.”
[29]“(hereafter in this section referred to as the National Savings Scheme)” omitted by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991.
[31]Substituted by the Finance Act, 1990, w.e.f. 1-4-1991.
Prior to substitution proviso read as under :
‘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.’
[32]Inserted by the Finance Act, 1992, w.e.f. 1-4-1993.
[33]Substituted for “under the National Savings Scheme” by
the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991.
[34]Inserted by the Finance Act, 1992, w.e.f. 1-4-1993.
[35]Inserted by the Finance Act, 1990, w.e.f. 1-4-1991.
[36]Substituted for “under the National Savings Scheme” by
the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991.
[37]Inserted by the Finance Act, 1990, w.e.f. 1-4-1991.
[38]Word “or” omitted by the Finance Act, 1994, w.r.e.f. 1-4-1991.
[39]Omitted, ibid. Prior to its omission, clause (c),
as substituted by the Finance Act, 1990, w.e.f. 1-4-1991, read as under :
“(c) an association of persons or a body of individuals consisting, in either case, only of husband and wife governed by the system of community of property in force in the State of Goa and the Union territories of Dadra and Nagar Haveli and Daman and Diu.”
[40]Inserted by the Finance Act, 1992, w.e.f. 1-4-1993.
[41]Inserted by the Income-tax (Amendment) Act, 1986,
w.e.f. 1-4-1987. Original section 80D dealing with deduction in respect of
medical treatment, etc., of handicapped dependants was introduced by the
Finance (No. 2) Act, 1967, w.e.f. 1-4-1968 replacing old section 80B which was
inserted by the Finance Act, 1965, w.e.f. 1-4-1965. Original section 80D, as
amended by the Finance Act, 1981, w.e.f. 1-4-1982 and the Finance Act, 1968,
w.e.f. 1-4-1969, stood as under before its omission by the Finance Act, 1984,
w.e.f. 1-4-1985 :
“80D. Deduction in respect of medical
treatment, etc., of handicapped dependants,— (1) Where an assessee who is
resident in India, being an individual or Hindu undivided family, who has,
during the previous year, incurred out of his or its income chargeable to
income-tax, any expenditure for the medical treatment (including nursing) of a
person who—
(a) is a relative of the individual
or, as the case may be, is a member of the Hindu undivided family and is not
dependant on any person other than such individual or Hindu undivided 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 person’s capacity for normal work or engaging in a gainful employment (hereafter 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 four thousand eight hundred rupees, or
(ii) in any other case, a sum of one thousand two hundred rupees.”
[42]Substituted for “three” by the Finance Act, 1992,
w.e.f. 1-4-1993. However, “ten” shall be substituted for “six” by the Finance
(No. 2) Act, 1996, w.e.f. 1-4-1997.
[43]Substituted for “three” by the Finance Act, 1992,
w.e.f. 1-4-1993. However, “ten” shall be substituted for “six” by the Finance
(No. 2) Act, 1996, w.e.f. 1-4-1997.
[44]Omitted by the Finance Act, 1994, w.r.e.f.
1-4-1987. Prior to its omission, clause (c) as inserted by the
Income-tax (Amendment) Act, 1986, w.e.f. 1-4-1987, read as under
:
“(c) where the assessee is an association of persons or a body of individuals consisting, in either case, only of husband and wife governed by the system of community of property in force in the Union territories of Dadra and Nagar Haveli and Goa, Daman and Diu, any sum paid to effect or to keep in force an insurance on the health of any member of such association or body or on the health of the dependant children of the members of such an association or body:”
[45]For a scheme providing for hospitalisation and domiciliary hospitalisation benefit, refer n’s Direct Taxes Circulars, 1994 edn., Vol. 1, pp. 1.915-1.923.
[46]Inserted by the Finance Act, 1990, w.e.f. 1-4-1991.
[47]See also
Circular No. 653, dated 15-6-1993 and Circular No. 702, dated 3-4-1995. For
details, see Income-tax Act.
[48]“(1)” Omitted by the Finance Act, 1992, w.e.f.
1-4-1993.
[49]See rule 11A
for specified categories of ‘permanent physical disability’.
[50]Substituted for “twelve” by the Finance Act, 1993,
w.e.f. 1-4-1994. Earlier word “twelve” was substituted for “six” by the Finance
Act, 1992, w.e.f. 1993.
[51]Prior to omission, sub-section (2), read as under :
“(2) Nothing contained in this section shall apply in a case, where the assessee’s total income in respect of the previous year as computed before making any deduction under this section exceeds one lakh rupees.”
[52]Inserted by the Finance Act, 1995, w.e.f. 1-4-1996.
[53]See rule
11A.
[54]. Inserted
by the Finance Act, 1994, w.e.f. 1-4-1995.Earlier section 80E with heading
“Deduction in respect of payment for securing retirement annuities” was
inserted by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1968. Section 80E,
thereafter, was amended by the Finance Act, 1968, w.e.f. 1-4-1969 and the
Finance Act, 1984, w.e.f. 1-4-1984, and later on by the Direct Tax Laws
(Amendment) Act, 1987, w.e.f. 1-4-1989. This topic was dealt with by original
section 80C which was inserted by the Finance Act, 1965, w.e.f. 1-4-1965.
[55]See also Circular No. 688, dated 23-8-1994. For details, see Income-tax Act.
[56]Omitted section 80F, as amended by the Finance Act,
1968, w.e.f. 1-4-1969, stood as under:
“Deduction
in respect of educational expenses in certain cases.—(1) Where an
individual, being a resident, who is not a citizen of India, has expended any
sum in the previous year out of his income chargeable to tax for the full time
education of his child wholly or mainly dependant on him and who is not more
than twenty-one years of age, at any University, college, school or other
educational institution situate in a country outside India, he 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.
(2) 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.”
[57]This section was inserted in place of section 88 which
was deleted by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1968. Now section 88
has taken the place of section 80C.
[58]See also Letter F. No. 45/313/66-ITJ (61), dated 2-12-1966, Circular No. 123, dated 31-10-1973, Letter [F. No. 16/38/64-IT (B)], dated 24-10-1964, Circular No. 416, dated 11-4-1985, Letter [F. No. 81/60/62-IT], dated 11-12-1962, Letter [F. No. 69/94/62-IT], dated 14-1-1963, Letter [F. No. 16/5/67-IT (A-I)], dated 5-4-1967, Circular No. 178, dated 23-9-1975, Letter [F. No. 69/22/63-IT], dated 28-9-1963, Letter [F. No. 69/13/62-IT], dated 20-7-1962 and Letter [F. No. 69/34/62-IT], dated 11-7-1962, Letter No. W 110421/1/77-C & G (FP), dated 11-1-1977 and Circular No. 678, dated 10-2-1994. For details, see n’s Master Guide to Income-tax Act.
For relevant case laws, see n’s Master Guide to Income-tax Act.
[59]Substituted by the Finance Act, 1976, w.e.f. 1-4-1977. Earlier, it was substituted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976.
[60]Substituted for the following clause (i) by the Finance Act, 1985, w.e.f. 1-4-1986:
“(i) in a case where the aggregate of the sums specified in sub-section (2) includes any sum specified in sub-clause (vii) of clause (a) thereof, an amount equal to the whole of such sum plus fifty per cent of the balance of such aggregate; and”
[61]Restored to its original expression by the Direct Tax Laws (Amendment) Act, 1989,w.e.f. 1-4-1989. Earlier, this was substituted by the Direct Tax laws (Amendment) Act, 1987, with effect from the same date.
[69]Inserted by the Income-tax (Amendment) Act, 1976 with
retrospective effect from 9-9-1975.
[70]Inserted by the Income-tax (Amendment) Act, 1989,
w.e.f. 24-1-1989.
[71]Inserted by the Finance (No. 2) Act, 1991, w.e.f.
1-4-1991.
[72]Inserted by the Finance Act, 1982, w.e.f. 1-4-1983.
[73]Inserted by the Finance Act, 1985, w.e.f. 1-4-1985.
[74]Inserted by the Finance (No. 2), Act, 1991, w.e.f.
1-4-1992.
[75]Inserted by the Finance Act, 1993, w.e.f. 1-4-1993.
Earlier sub-clause (iiie) was omitted by the
Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989 and earlier inserted by
the Direct Tax Laws (Amendment) Act, 1987, with effect from the same date.
[76]Inserted by the Finance Act, 1993, w.e.f. 1-4-1994.
[77]The prescribed authority under rule 18AAA is as follows: in relation to a university or any non-technical institution of national eminence: Director-General (Income-tax Exemption) in concurrence with the Secretary, University Grants Commission; in relation to any technical institution of national eminence: Director-General (Income-tax Exemption) in concurrence with the Secretary, All India Council of Technical Education.
[78]Inserted by the Finance Act, 1994, w.e.f. 1-4-1994.
[79]Inserted by the Finance Act, 1995, w.e.f. 1-4-1996.
[80]Inserted by the Finance Act, 1976, w.e.f. 1-4-1977.
[81]Inserted, ibid.
[82]Inserted by the Finance Act, 1995, w.e.f. 1-4-1995.
[83]For complete list of places of public worship, etc.
[84]Prior to its omission, sub-section (3) read as under :
“(3) No deduction shall be allowed under sub-section (1) if the aggregate of the sums referred to in sub-section (2) is less than two hundred and fifty rupees.”
[85]Substituted by the Direct Tax Laws (Amendment) Act,
1987, w.e.f. 1-4-1989. Prior to its substitution, sub-section (4), as amended
by the Taxation Laws (Amendment) Act, 1970, with retrospective effect from
1-4-1968 and Finance (No. 2) Act, 1977, w.e.f. 1-4-1978 and substituted by the
Finance (No. 2) Act, 1980, w.e.f. 1-4-1981, stood as under:
“(4) Where the aggregate of the sums referred
to in sub-clauses (iv), (v), (vi) and (vii) of
clause (a) and in clause (b) of sub-section (2) exceeds the smaller
of the following amounts, that is to say,—
(i) ten per
cent of the gross total income (as reduced by any portion thereof on which
income-tax is not payable under any provision of this Act and by any amount in
respect of which the assessee is entitled to a deduction under any other
provision of this Chapter), and
(ii) five
hundred thousand rupees,
then, the amount by which such aggregate exceeds such smaller amount shall be ignored for the purpose of computing the aggregate of the sums in respect of which deduction is to be allowed under sub-section (1).”
[86]Inserted by the Finance Act, 1995, w.e.f. 1-4-1995.
[87]Restored to its original provision by the Direct Tax
Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Earlier, it was substituted by the
Direct Tax Laws (Amendment) Act, 1987, with effect from the same date.
[88]Inserted by the Finance Act, 1970, w.e.f. 1-4-1970.
[89]Inserted by the Finance Act, 1973, w.e.f. 1-4-1974.
[90]Inserted by the Finance Act, 1987, w.e.f. 1-4-1988.
[91]Inserted by the Taxation Laws (Amendment) Act, 1975,
w.e.f. 1-4-1976.
[92]Inserted by the Finance Act, 1983, w.e.f. 1-4-1984.
[93]Word “and” omitted by the Finance Act, 1994, w.e.f. 1-4-1994.
[94]For text of section 25 of the Companies Act, 1956, see
Appendix One.
[95]Inserted by the Finance Act, 1973, w.e.f. 1-4-1974.
Restored to its original expression by the Direct Tax Laws (Amendment) Act,
1989, w.e.f. 1-4-1989. Earlier, it was omitted by the Direct Tax Laws
(Amendment) Act, 1987, with effect from the same date.
[96]Inserted by the Finance Act, 1994, w.e.f. 1-4-1994.
[97]Inserted by the Finance (No. 2) Act, 1991, w.e.f.
1-10-1991.
[98]See rule
11AA and Form No. 10G.
[99]Substituted for “three” by the Finance Act, 1993,
w.e.f. 1-4-1993.
[100]Inserted by the Finance (No. 2) Act, 1980, with retrospective
effect from 1-4-1962.
[101]Substituted by the Finance Act, 1970, w.e.f. 1-4-1971.
[102]Restored to its original provision by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Earlier, clauses (i) and (ii) were substituted by the Direct Tax Laws (Amendment) Act, 1987, with effect from the same date.
[103] Inserted by the Finance Act, 1972, w.e.f. 1-4-1973.
[104]Inserted, ibid.
[105]Inserted by the Finance Act, 1973, w.e.f. 1-4-1974.
Restored to its original provision by the Direct Tax Laws (Amendment) Act,
1989, w.e.f. 1-4-1989. Earlier it was omitted by the Direct Tax Laws
(Amendment) Act, 1987, with effect from the same date.
[106]Inserted by the Finance Act, 1976, w.e.f. 1-4-1976.
[107]Omitted by the Finance Act, 1968, w.e.f. 1-4-1969.
[108]Inserted by the Taxation Laws (Amendment) Act, 1975,
w.e.f. 1-4-1976.
[109]See also
Circular No. 327, dated 8-2-1982. For details, see n’s Master Guide to
Income-tax Act.
[110]Substituted for “to the extent to which such excess
expenditure does not exceed *four hundred rupees per month or fifteen per cent
of his total income for the year, whichever is less” by the Finance Act, 1986,
w.e.f. 1-4-1987.
*”Four” was substituted for “three” by the Finance Act, 1982, w.e.f. 1-4-1983.
[112]To claim deduction under section 80GG, rule 11B provides
that the residential accommodation in question should be situated in one of the
following areas:
(A) Municipal areas (excluding
urban agglomeration) -
(B) Municipal areas (including urban agglomeration) - Agra, Ahmedabad, Allahabad, Amritsar, Bangalore, Bhopal, Calcutta, Coimbatore, Delhi, Faridabad, Gwalior (Laskar), Hyderabad, Indore, Jabalpur, Jaipur, Kanpur, Lucknow, Ludhiana City, Madurai, Nagpur, Patna, Poona, Srinagar, Surat, Vadodara and Varanasi.
[113]Substituted for the following by the Finance Act,
1983, w.e.f. 1-4-1984:
“Provided that nothing in this section shall apply to an assessee in any case where any residential accommodation is owned by him or by his spouse or minor child, or, where such assessee is a member of a Hindu undivided family, by such family.”
[114]Substituted for “under clause (i)
or, as the case may be, clause (ii) of sub-section
(2)” by the Finance Act, 1986, w.e.f. 1-4-1987.
[115]Substituted for “fifteen per cent” ibid.
[116]Substituted for “fifteen per cent” ibid.
[117]Inserted by the Finance Act, 1979, w.e.f. 1-4-1980.
Restored to its original position by the Direct Tax Laws (Amendment) Act,
1989, w.e.f. 1-4-1989. Earlier section 80GGA was omitted by the Direct Tax Laws
(Amendment) Act, 1987, with effect from the same date.
[118]Inserted by the Finance (No. 2) Act, 1991, w.e.f.
1-4-1992.
[119]Substituted for the following by the Finance Act, 1983,
w.e.f. 1-4-1983 :
“Provided that the association or institution is for the time being approved for the purposes of sub-section (2) of section 35CCA.”
[120]Inserted by the Finance (No. 2) Act, 1991, w.e.f
1-4-1992.
[121]Inserted by the Finance Act, 1982, w.e.f. 1-6-1982.
[122]Inserted by the Finance Act, 1990, w.e.f. 1-4-1991.
[123]Inserted by the Finance Act, 1990, w.e.f. 1-4-1991.
[124]Inserted, ibid.
[125]Inserted by the Finance Act, 1983, w.e.f. 1-4-1983.
[126]Inserted by the Finance Act, 1995, w.e.f. 1-4-1996.
[127]Inserted by the Direct Taxes (Amendment) Act, 1974,
w.e.f. 1-4-1974.
[128]See also Circular No. 484, dated 1-5-1987.
[129]Inserted by the Finance Act, 1990, w.e.f. 1-4-1990.
[130]Inserted, ibid.
[131]See rule 18B and Form No. 10C for form of audit report.
[132]Substituted for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[133]Substituted for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[134]Substituted for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[135].Substituted for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[136]Omitted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976.
[137]Inserted by the Finance (No. 2) Act, 1980, w.e.f. 1-4-1981.
[138]Inserted by the Finance (No. 2) Act, 1977, w.e.f. 1-4-1978.
[139]Substituted for the following Explanation by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986 :
‘Explanation.—In this section, “backward area” means an area specified in the list in the Eighth Schedule.’
[140]For notified backward areas, see n’s Direct Taxes Circulars, 1994, edn., Vol. 1, pp. 1.958-1.962.
[141]Inserted by the Finance (No. 2) Act, 1977, w.e.f. 1-4-1978.
[142]For relevant case laws, see Income-tax Act.
[143]Inserted by the Finance Act, 1990, w.e.f. 1-4-1990.
[144]Substituted for “in respect of each of the ten assessment years beginning with the assessment year relevant to the previous year in which the small-scale industrial undertaking” by the Finance Act, 1981, w.e.f. 1-4-1981.
[145]Inserted, ibid.
[146]See rule 18BB and Form No. 10CC for form of audit report.
[147]Inserted by the Finance (No. 2) Act, 1980, w.e.f. 1-4-1981.
[148]Substituted for the following clause by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989 :
‘(a) “rural area” shall have the same meaning as in clause (b) of the Explanation to sub-section (1) of section 35CC;’
[149]For specified areas, see n’s Direct taxes Circulars, 1994 edn., Vol. 1, pp. 1.962-1.963.
[150]Substituted for “the business of the undertaking does not exceed ten lakh rupees; and, for this purpose the value of any machinery or plant shall be,—” by the Finance Act, 1981, w.e.f. 1-4-1981.
[151]Substituted for the following by the Finance Act, 1986, with retrospective effect from 1-4-1985 :
“(1) in a case where the previous year ends before the 1st day of August, 1980, ten lakh rupees; and
(2) in a case where the previous year ends after the 31st day of July, 1980 twenty lakh rupees.”
[152]Inserted by the Finance Act, 1982, w.e.f. 1-4-1983.
[153]See also Circular No. 563, dated 23-5-1990, Circular No. 575, dated 31-8-1990 and Circular No. 711, dated 24-7-1995. For details, see n’s Master Guide to Income-tax Act.
For relevant case laws, see Income-tax Act.
[154]Substituted for “twenty-five” by the Income-tax (Amendment) Act, 1986, w.e.f. 1-4-1987.
[155]See rule 18BBA(1) and Form No. 10CCA for form of audit report.
[156]Substituted for “twenty-five” by the Income-tax (Amendment) Act, 1986, w.e.f. 1-4-1987.
[157]Substituted for “twenty-five” by the Income-tax (Amendment) Act, 1986, w.e.f. 1-4-1987.
[158]Substituted for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[159]Substituted for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[160]Substituted for “twenty-five” by the Income-tax (Amendment) Act, 1986, w.e.f. 1-4-1987.
[161]Substituted for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[162]Substituted by the Finance Act, 1985, w.e.f. 1-4-1986.
Original section, as inserted by the Finance Act, 1983, w.e.f. 1-4-1983, stood
as under :
’80HHC. Deduction in respect of export
turnover.—(1) Where the assessee, being an Indian company or a person
(other than a company) who is resident in India, exports out of India during
the previous year relevant to an assessment year any goods or merchandise to
which this section applies, there shall, in accordance with and subject to the
provisions of this section, be allowed, in computing the total income of the
assessee, the following deductions, namely :—
(a) a
deduction of an amount equal to one per cent of the export turnover of such
goods or merchandise during the previous year; and
(b)
a deduction of an amount equal to five per cent of the amount by which the
export turnover of such goods or merchandise during the previous year exceeds
the export turnover of such goods or merchandise during the immediately
preceding year.
(2)(a) This section applies to all
goods or merchandise [other than those specified in clause (b)] if the
sale proceeds of such goods or merchandise exported out of
(b) The goods or merchandise referred
to in clause (a) are the following, namely:—
(i) agricultural primary commodities, not being produce of
plantations;
(ii) mineral
oil;
(iii) minerals
and ores; and
(iv) such
other goods or merchandise as the Central Government may, by notification in
the Official Gazette, specify in this behalf.
(3) No deduction under clause (b) of
sub-section (1) shall be allowed unless the assessee had, during the
immediately preceding previous year, exported out of
Explanation.—For the purposes of this section,—
(a) “convertible foreign exchange” means foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purposes of the Foreign Exchange Regulation Act, 1973 (46 of 1973), and any rules made thereunder;
(b) “export turnover” means the sale proceeds of any goods or merchandise exported out of India, but does not include freight or insurance attributable to the transport of the goods or merchandise beyond the customs station as defined in the Customs Act, 1962 (52 of 1962).’
[163]See also Letter [F.No. 178/206/83-IT (A-I)], dated 22-5-1984, Circular No. 466, dated 14-8-1986, Circular No. 562, dated 23-5-1990, Circular No. 564, dated 5-7-1990, Circular No. 571, dated 1-8-1990, Circular No. 575, dated 31-8-1990, Circular No. 600, dated 23-4-1991, Circular No. 624, dated 23-1-1992, Circular No. 693, dated 17-11-1994 and Circular No. 729, dated 1-11-1995. For details, see n’s Master Guide to Income-tax Act.
[164]Substituted by the Finance Act, 1988, w.e.f. 1-4-1989. Prior to its substitution, sub-section (1), as amended by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 1-4-1987, stood as under :
“(1) Where an assessee, being an Indian company or a person (other than a company) resident in India, is engaged in the business of export out of India of any goods or merchandise to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction equal to the aggregate of—
(a) four per cent of the net foreign exchange realisation; and
(b) fifty per cent of so much of the profits derived by the assessee from the export of such goods or merchandise as exceeds the amount referred to in clause (a) :
Provided that the deduction under this sub-section shall not exceed the profits derived by the assessee from the export of such goods or merchandise :
Provided further that an amount equal to the amount of the deduction claimed under this sub-section is debited to the profit and loss account of the previous year in respect of which the deduction is to be allowed and credited to a reserve account to be utilised for the purposes of the business of the assessee.”
[165]Substituted for “whole of the income” by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.
[166]Substituted for the words “total profits of the export business of the assessee the same proportion as the amount of export turnover specified in the said certificate bears to the total export turnover of the assessee” by the Finance Act, 1992, w.e.f. 1-4-1992.
[167]Substituted for “whole of the income” by the Direct
Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.
[168]Substituted for “receivable” by the Finance Act, 1990,
w.e.f. 1-4-1991.
[169]Inserted, ibid., w.r.e.f. 1-4-1989.
[170]Inserted, ibid.,
w.e.f. 1-4-1991.
[171]Inserted by the Finance (No. 2) Act, 1991, w.e.f.
1-4-1991.
[172]Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1992.
[173]For text of section 50 of the Customs Act, 1962, see
Appendix One.
[174].
Substituted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1992. Prior to
substitution, sub-section (3) as substituted by the Finance Act, 1990, w.e.f.
1-4-1991, stood as under:
‘(3) For the purposes of sub-section (1), profits derived from the export of goods or merchandise out of India shall be 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 export turnover bears to the total turnover of the business carried on by the assessee.’
[175]Inserted by the Finance Act, 1992, w.e.f. 1-4-1992.
[176]Inserted, ibid.
[177]Inserted, ibid.
[178]Inserted by the Finance Act, 1992, w.e.f. 1-4-1992.
[179]Inserted by the Finance Act, 1988, w.e.f. 1-4-1989.
[180]Words ‘as computed under the head “Profits and gains
of business or profession”’ omitted by the Finance (No. 2) Act, 1991, w.e.f.
1-4-1992.
[181]Words ‘(as computed under the head “Profits and gains
of business or profession”)’ omitted, ibid.
[182]Inserted by the Taxation Laws (Amendment &
Miscellaneous Provisions) Act, 1986, w.e.f. 1-4-1987.
[183]See rule 18BBA(3) and Form No. 10CCAC for Form of report of accountant.
[184]Substituted for “on the basis of the amount of export
turnover” by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1992. Earlier, words
“export turnover” were substituted for “net foreign exchange realisation as determined in accordance with the Import and
Export Policy of the Government of India for the relevant period” by the Direct
Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.
[185]Inserted by the Finance Act, 1988, w.e.f. 1-4-1989.
[186]See rule 18BBA(3) and Form No. 10CCAC for Form of report of accountant.
[187]Substituted for “income” by the Direct Tax Laws (Amendment)
Act, 1989, w.e.f. 1-4-1989.
[188]See rule 18BBA(2) and Form No. 10CCAB for form of certificate from
export/trading house to supporting manufacturer.
[189]Inserted by the Finance (No. 2) Act, 1991, w.r.e.f. 1-4-1986.
[190]See Circular
No. 624, dated 23-1-1992. For details see Income-tax Act.
[191]Section 2(13) of the Customs Act, 1962, defines
“customs station” as follows:
‘(13) “customs station” means any customs port, customs airport or land customs station;’
[192]Substituted for “receivable” by the Finance Act, 1990,
w.e.f. 1-4-1991.
[193]Inserted, ibid.
[194]Section 2(13) of the Customs Act, 1962, defines
“customs station” as follows:
‘(13) “customs station” means any customs port, customs airport or land customs station;’
[195]Inserted by the Finance (No. 2) Act, 1991, w.r.e.f. 1-4-1987.
[196]Section 2(13) of the Customs Act, 1962, defines
“customs station” as follows:
‘(13) “customs station” means any customs port, customs airport or land customs station;’
[197]Inserted by the Finance (No. 2) Act, 1991, w.e.f.
1-4-1992.
[198]Omitted by the Finance (No. 2) Act, 1991, w.e.f.
1-4-1991. Prior to its omission, clause (bb) as inserted by the Finance
Act, 1990, w.e.f. 1-4-1991, read as under :
‘“total turnover” shall not include any sum referred to in clauses (iiia), (iiib) and (iiic) of section 28;’
[199]Clause (c) omitted by the Direct Tax Laws
(Amendment) Act, 1989, w.e.f. 1-4-1989. Original clause (c) was inserted
by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f.
1-4-1987. Prior to its omission, clause (c) stood as under:
‘(c) “net foreign exchange realisation” means the total free on board value of exports out of India of goods and merchandise to which this section applies as reduced by the aggregate of the cost, insurance and freight value of all categories of import licences, to be issued by the Chief Controller of Imports and Exports, Government of India, to which the assessee is entitled during the previous year, either against export obligation or against exports as replenishment;’
[200]Inserted by the Finance Act, 1988, w.e.f. 1-4-1989.
[205]The prescribed authority under rule 18BBA(5) is Director General, Directorate of Tourism, Government of India.
[206]Inserted by the Finance (No. 2) Act, 1991, w.e.f.
1-10-1991.
[207]Substituted for “by the assessee in convertible foreign exchange” by the Finance Act, 1990, w.e.f. 1-4-1991.
[208]Inserted by the Finance (No. 2) Act, 1991, w.e.f.
1-4-1992.
[209]Substituted for “form a tour operator or, as the case
may be, a travel agent” by the Finance Act, 1994, w.e.f. 1-4-1995.
[210]See rule 18BBA(6) and Form No. 10CCAE for certificate from person making payment to an assessee engaged in business of tour operator/hotel/travel agent.
[211]Substituted by the Finance Act, 1990, w.e.f. 1-4-1991.
Prior to substitution sub-section (3) read as under:
‘(3) For the purposes of sub-section (1),
profits derived from services provided to foreign tourists shall be,—
(a) in a case where the business
carried on by the assessee consists exclusively of services provided to foreign
tourists resulting in receipts in convertible foreign exchange, 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 assessee does not consists exclusively of services provided to foreign tourists resulting in receipts in convertible foreign exchange, 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 receipts in convertible foreign exchange bear to the total receipts of the business carried on by the assessee.’
[212]Inserted by the Finance Act, 1994, w.e.f. 1-4-1995.
[213]See rule 18BBA(4) and Form No. 10CCAD for form of report of
accountant.
[214]Substituted for “amount of convertible foreign
exchange received by the assessee for services provided by him to the foreign
tourists” by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1992.
[215]Words “aggregate of the” omitted by the Finance Act,
1994, w.e.f. 1-4-1995.
[216]Inserted, ibid.
[217]Section 32 has been omitted by the Foreign Exchange Regulation (Amendment) Act, 1993, w.r.e.f. 8-1-1993.
[218]Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1992.
[219]For definition of “authorised dealer”
[220]Clause (h) of section 2 of the Foreign Exchange Regulation Act, 1973, defines “foreign exchange” as follows:
‘(h) “foreign exchange” means foreign currency and includes—
(i) all deposits, credits and balances payable in any foreign currency, and any drafts, traveller’s cheques, letters of credit and bills of exchange, expressed or drawn in Indian currency but payable in any foreign currency;
(ii) any instrument payable, at the option of the drawee or holder thereof or any other party thereto, either in Indian currency or in foreign currency or partly in one and partly in the other;’
[221]For definition of “Indian currency”
[222]Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1991.
[223]. Proviso
omitted by the Finance Act, 1995, w.e.f. 1-4-1996. Prior to its
omission, the proviso as amended by the Finance Act, 1993, w.e.f. 13-5-1993
and the Finance Act, 1994, w.e.f. 13-5-1994, read as under:
“Provided that no such deduction shall be allowed in relation to the assessment year commencing on the 1st day of April, 1996 or any subsequent assessment year.”
[224]See rule 18BBA(7) and Form No. 10CCAF for form of report of
accountant.
[225]Inserted by the Finance (No. 2) Act, 1980, w.e.f.
1-4-1981. Originally, provision relating to priority industries was dealt with
by section 80E which was inserted by the Finance Act, 1966, w.e.f. 1-4-1966.
That section was omitted and in its place section 80-I was introduced by the
Finance (No. 2) Act, 1967, w.e.f. 1-4-1968. Section 80-I was also omitted by
the Finance Act, 1972, w.e.f. 1-4-1973.
[226]For relevant case laws, see Income-tax Act.
[227]Inserted by the Finance Act, 1983, w.e.f. 1-4-1984.
[228]Inserted, ibid.
[229]Inserted by the Finance Act, 1990, w.e.f. 1-4-1990.
[230]Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1991.
[231]Substituted for “fourteen” by the Finance (No. 2) Act,
1991, w.e.f. 1-4-1991. Earlier “fourteen” was substituted for “nine” by the
Finance Act, 1990, w.e.f. 1-4-1990, which was earlier substituted for “four” by
the Finance Act, 1985, w.e.f. 1-4-1985.
[232]Substituted for “fourteen” by the Finance (No. 2) Act,
1991, w.e.f. 1-4-1991. Earlier “fourteen” was substituted for “nine” by the
Finance Act, 1990, w.e.f. 1-4-1990, which was earlier substituted for “four” by
the Finance Act, 1985, w.e.f. 1-4-1985.
[233]Substituted for ‘1995’ by the Finance (No. 2) Act,
1991, w.e.f. 1-4-1991. Earlier ‘1995’ was substituted for ‘1990’ by the Finance
Act, 1990, w.e.f. 1-4-1990 which was earlier substituted for ‘1985’ by the
Finance Act, 1985, w.e.f. 1-4-1985.
[234]Inserted by the Finance Act, 1983, w.e.f. 1-4-1984.
[235]Inserted, ibid.
[236]Inserted by the Finance Act, 1983, w.e.f. 1-4-1984.
[237]Inserted by the Finance Act, 1990, w.e.f. 1-4-1990.
[238]Inserted by the Finance (No. 2) Act, 1991, w.e.f.
1-4-1991.
[239]Inserted by the Finance Act, 1983, w.e.f. 1-4-1984.
[240]Inserted by the Finance Act, 1983, w.e.f. 1-4-1984.
[241]See rule
18BBB and Form No. 10CCB for form of audit report.
[242]Inserted by the Finance Act, 1983, w.e.f. 1-4-1984.
[243]Inserted by the Finance Act, 1983, w.e.f. 1-4-1984.
[244]Inserted by the Finance Act, 1983, w.e.f. 1-4-1984.
[245]Inserted by the Finance Act, 1983, w.e.f. 1-4-1984.
[246]Substituted for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[247]Inserted by the Finance Act, 1983, w.e.f. 1-4-1984.
[248]Substituted for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[249]Substituted for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[250]Inserted by the Finance Act, 1983, w.e.f. 1-4-1984.
[251]Inserted by the Finance Act, 1983, w.e.f. 1-4-1984.
[252]Substituted for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[253]Inserted by the Finance Act, 1983, w.e.f. 1-4-1984.
[254]Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1991.
[255]For relevant case laws, se Income-tax Act.
See also Circular No. 733, dated 3-1-1996. For details, see n’s Master Guide to Income-tax Act.
[256]Substituted for “operation of a ship (such business being hereinafter referred to as the eligible business)” by the Finance Act, 1995, w.e.f. 1-4-1996.
[257]The italicised words shall be inserted by the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997.
[258]Inserted by the Finance Act, 1994, w.e.f. 1-4-1994.
[259]Substituted by the Finance Act, 1993, w.e.f. 1-4-1994. Prior to its substitution, clause (iv) read as under:
“(iv) it begins to manufacture or produce articles or things or to operate such plant or plants, at any time during the period beginning on the1st day of April, 1991 and ending on the 31st day of March 1995, or such further period as the Central Government may, by notification in the Official Gazette, specify with reference to any particular industrial undertaking;”
[260]Inserted by the Finance Act, 1994, w.e.f. 1-4-1995.
[261]Inserted by the Finance Act, 1994, w.e.f. 1-4-1995.
[262]Inserted by the Finance Act, 1995, w.e.f. 1-4-1996.
[263]See rule 18BBC(2) for conditions to be fulfilled for obtaining approval of prescribed authority.
Rule 18BBC(2) lays down following conditions to be fulfilled for obtaining approval of prescribed authority :
n Hotel is situated in an area or place specified under clause (iii) of section 80-IA(4).
n There are not more than 300 hotel rooms of 3 star category and above in the aggregate in areas or places specified under clause (iii) of section 80-IA(4) within the jurisdiction of the revenue sub-division in which hotel is located.
n Where the hotel is located in a place where there is need for development of infrastructure for tourism, such place has been specified by Central Government under clause (iii) of section 80-IA(4) on the recommendation of the Department of Tourisim.
The prescribed authority under rule 18BBC(1) is:
(a) in relation to hotels located in an area or place referred to in clause (iii) of section 80-IA(4): Director General (income-tax Exemption) who shall grant approval on the concurrence of the Director General in the Directorate General of Tourism, Government of India;
(b) in relation to hotels located in any place referred to in clause (iv) of section 80-IA(4): Director General in the Directorate General of Tourism, Government of India.
[264]Inserted by the Finance Act, 1995, w.e.f. 1-4-1996.
[265]Substituted by the Finance Act, 1993, w.e.f. 1-4-1994.
Prior to its substitution, clause (i) read as
under:
‘(i) in the
case of an industrial undertaking, twenty-five per cent of the profits and
gains derived from such industrial undertaking:
Provided that where the assessee is a company, the provisions of this clause shall have effect as if for the words “twenty-five per cent”, the words “thirty per cent” had been substituted;’
[266]Inserted by the Finance Act, 1995, w.e.f. 1-4-1996.
[267]Inserted by the Finance Act, 1994, w.e.f. 1-4-1995.
[268]Inserted by the Finance Act, 1995, w.e.f. 1-4-1996.
[269]Rule 18BBC(2) lays down
conditions to be fulfilled for obtaining approval of prescribed authority.
[270]Inserted by the Finance Act, 1995, w.e.f. 1-4-1996.
[271]See rule
18BBB and Form No. 10CCB for form of audit report.
[272]Clauses (c) and (ca) substituted for
clause (c) by the Finance Act, 1995, w.e.f. 1-4-1996.
Prior to its substitution, clause (c)
read as under:
‘(c) “initial assessment year” means the assessment year relevant to the previous year in which the industrial undertaking begins to manufacture or produce articles or things, or to operate its cold storage plant or plants or the ship is first brought into use of the business of the hotel starts functioning;’
[273]Substituted by the Finance Act, 1992, w.e.f. 1-4-1993.
[274]For the text of section 11B of the Industries (Development & Regulation) Act, 1951, see Appendix One.
[275]Prior to its omission, section 80J, as inserted in place of section 84 [which was omitted by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1968], and later amended by the Finance Act, 1969, w.e.f. 1-4-1969, Finance Act, 1972, w.e.f. 1-4-1973, Finance Act, 1973, w.e.f. 1-4-1974, Direct Taxes (Amendment) Act, 1974, w.e.f. 1-4-1974, Finance Act, 1975, w.e.f. 1-4-1975/1-4-1976, Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976, Finance (No. 2) Act, 1977, w.e.f. 1-4-1978, Finance Act 1979, w.e.f. 1-4-1979, Finance (No. 2) Act, 1980, w.r.e.f. 1-4-1972, Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988 and Finance Act, 1988, w.e.f. 1-4-1988, read as under : “80J. *Deduction in respect of profits and gains from newly established industrial undertakings or ships or hotel business in certain cases.—(1) Where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking or a ship or the business of a hotel, to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains (reduced by the deduction, if any, admissible to the assessee under section 80HH or section 80HHA) of so much of the amount thereof as does not exceed the amount calculated at the rate of six per cent per annum on the capital employed in the industrial undertaking or ship or business of the hotel, as the case may be, computed in the manner specified in sub-section (1A) in respect of the previous year relevant to the assessment year (the amount calculated as aforesaid being hereafter, in this section, referred to as the relevant amount of capital employed during the previous year):
Provided that in relation to the profits and gains derived by an assessee, being a company, from an industrial undertaking which begins to manufacture or produce articles or to operate its cold storage plant or plants after the 31st day of March, 1976, or from a ship which is first brought into use after that date, or from the business of a hotel which starts functioning after that date, the provisions of this sub-section shall have effect as if for the words “six per cent”, the words “seven and a half per cent” had been substituted.
(1A) (I) For the purposes of this section, the capital employed in an industrial undertaking or the business of a hotel shall, except as otherwise expressly provided in this section, be computed in accordance with clauses (II) to (IV) and the capital employed in a ship shall be computed in accordance with clause (V).
(II) The aggregate of the amounts representing the values of the assets as on the first day of the computation period of the undertaking or of the business of the hotel to which this section applies shall first be ascertained in the following manner:—
(i) in the case of assets entitled to depreciation, their written down value;
(ii) in the case of assets acquired by purchase and not entitled to depreciation, their actual cost to the assessee;
(iii) in the case of assets acquired otherwise than by purchase and not entitled to depreciation, the value of the assets when they became assets of the business;
(iv) in the case of assets, being debts due to the person carrying on the business, the nominal amount of those debts;
(v) in the case of assets, being cash in hand or bank, the amount thereof.
Explanation 1.—In this clause, “actual cost” has the same meaning as in clause (1) of section 43.
Explanation 2.—In this clause and in clause (III), “computation period” means the period for which profits and gains of the industrial undertaking or business of the hotel are computed under sections 28 to 43A.
Explanation 3.—In this clause and in clause (V), “written down value” has the same meaning as in clause (6) of section 43.
Explanation 4.—Where the cost of any asset has been satisfied otherwise than in cash, the then value of the consideration actually given for the asset shall be treated as the actual cost of the asset.
(III) From the aggregate of the amounts as ascertained under clause (II) shall be deducted the aggregate of the amounts, as on the first day of the computation period, of borrowed moneys and debts owed by the assessee (including amounts due towards any liability in respect of tax.)
Explanation.—For the purposes of this clause,—
(i) “tax” means—
(a) income-tax or super-tax (including advance tax) due under any provision of this Act;
(b) wealth-tax due under any provision of the Wealth-tax Act, 1957 (27 of 1957);
(c) gift-tax due under any provision of the Gift-tax Act, 1958 (18 of 1958);
(d) super profits tax due under any provision of the Super Profits Tax Act, 1963 (14 of 1963);
(e) surtax due under any provision of the Companies (Profits) Surtax Act, 1964 (7 of 1964);
(ii) any liability in respect of tax shall be deemed to have become due—
(a) in the case of advance tax due under any provision of this Act, on the date on which such advance tax is payable; and
(b) in the case of any other tax, on the first day of the period within which it is required to be paid.
(IV) The resultant sum as determined under clause (III) shall be diminished by the value, as ascertained under clause (II), of any investments the income from which is not taken into account in computing the profits of the business and any moneys not required for the purpose of the business, in so far as a the aggregate of such investments or moneys exceed the amount of the borrowed moneys which under clause (III) are required to be deducted in computing the capital.
(V) The capital employed in a ship shall be taken to be the written down value of the ship as reduced by the aggregate of the amounts owed by the assessee as on the computation date on account of moneys borrowed or debts incurred in acquiring that ship.
Explanation.—In this clause, “computation date” in relation to a ship, means—
(a) in respect of the previous year in which the ship is first brought into use, the date on which it is so brought into use;
(b) in respect of any subsequent previous year, the first day of such 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 hereafter, 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 VI-A) in respect of the previous year relevant to an assessment year commencing on or after the 1st day of April, 1967 (not being an assessment year prior to the initial assessment year or subsequent to the fourth assessment year as reckoned from the end of the initial assessment year) falls short of the relevant amount of capital employed during the previous year, the amount of such shortfall, or, where there are no such profits and gains, an amount equal to the relevant amount of capital employed during the previous year (such amount, in either case, being hereafter, in this section, referred to as deficiency) shall be carried forward and set off against the profits and gains referred to in sub-section (1) [as computed after allowing the deductions, if any, admissible under section 80HH or section 80HHA and the said sub-section (1)] in respect of the previous year relevant to the next following assessment year and, if there are no such profits and gains for that assessment year, or where the deficiency exceeds such profits and gains, the whole or balance of the deficiency, as the case may be, shall be set off against such profits and gains for the next following assessment year and if and so far as such deficiency cannot be wholly so set off, it shall be set off against such profits and gains assessable for the next following assessment year and so on :
Provided that -
(i) in no case shall the deficiency or any part thereof be carried forward beyond the seventh assessment year as reckoned from the end of the initial assessment year;
(ii) where there is more than one deficiency and each such deficiency relates to a different assessment year, the deficiency which relates to an earlier assessment year shall be set off under this sub-section before setting off the deficiency in relation to a later assessment year:
Provided further 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 “fourth assessment year”, the words “sixth assessment year” had been substituted.
(4) This section applies to any industrial undertaking which fulfils all the following conditions, namely:—
(i) it is not formed by the splitting up, or the reconstruction, of a business already in existence;
(ii) it is not formed by the transfer of a new business of machinery or plant previously used for any purpose;
(iii) it manufactures or produces articles, or operates one or more cold storage plant or plants, in any part 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 thirty-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:
Provided further that, where any building or any part thereof previously used for any purpose is transferred to the business of the industrial undertaking, the value of the building or part so transferred shall not be taken into account in computing the capital employed in the industrial undertaking:
Provided also that in the case of an industrial undertaking which manufactures or produces any article specified in the list in the Eleventh Schedule, the provisions of clause (iii) shall have effect as if for the words “thirty-three years”, the words “thirty-one years” had been substituted.
Explanation 1.—For the purposes of clause (ii) of this sub-section, any machinery or plant which was used outside India by any person other than the assessee shall not be regarded as machinery or plant previously used for any purpose, if the following conditions are fulfilled, namely:—
(a) such machinery or plant was not, at any
time, previous to the date of the installation by the assessee, used in
(b) such machinery or plant is imported into
(c) no deduction on account of depreciation in respect of such machinery or plant has been allowed or is allowable under the provisions of the Indian Income-tax Act, 1922 (11 of 1922), or this Act in computing the total income of any person for any period prior to the date of the installation of the machinery or plant by the assessee.
Explanation 2.—Where in the case of an industrial undertaking, any machinery or plant or any part thereof previously used for any purpose is transferred to a new business and the total value of the machinery or plant or part so transferred does not exceed twenty per cent of the total value of the machinery or plant used in the business, then, for the purposes of clause (ii) of this sub-section, the condition specified therein shall be deemed to have been complied with and the total value of machinery or plant or part so transferred shall not be taken into account in computing the capital employed in the industrial undertaking.]
(5) The section applies to any ship, where all the Following conditons are fulfilled, namely:—
(i) it is owned by an Indian company and is wholly used for the purposes of the business carried on by it;
(ii) it was not, previous to the date of its acquisition by the Indian company, owned and used in Indian territorial waters by a person resident in India; and
(iii) it is brought into use by the Indian company at any time within a period of thirty-three years next following the 1st day of April, 1948.
(6) This section applies to the business of any hotel, where all the following conditions are fulfilled, namely:—
(a) the business of the hotel is not formed by the splitting up, or the reconstruction, of a business already in existence or by the transfer to a new business of a building previously used as a hotel or of any machinery or plant previously used for any purpose;
(b) the business of the hotel is owned and
carried on by a company registered in
(c) [***]
(d) the hotel is for the time being approved for the purposes of this sub-section by the Central Government;
(e) the business of the hotel starts functioning on or after the 1st day of April, 1961, but before the1st day of April, 1981.
Explanation.—Where in the case of the business of a hotel, any building, or any part thereof, previously used as a hotel, or any machinery or plant, or any part thereof, previously used for any purpose, is transferred to a new business and the total value of the building, machinery or plant or part so transferred does not exceed twenty per cent of the total value of the building, machinery or plant used in the business, then, for the purposes of clause (a) of this sub-section, the condition specified therein shall be deemed to have been complied with and the total value of the building, machinery or plant or part so transferred shall not be taken into account in computing the capital employed in the business of the hotel.
(6A) Where the assessee is a person other than a company or a co-operative society, the deduction under sub-section (1) from profits and gains derived from an industrial undertaking shall not be admissible unless the accounts of the industrial undertaking for the previous year relevant to the assessment year for which the deduction is claimed have been audited by an accountant, as defined in the Explanation below sub-section (2) of section 288, and the assessee furnishes, along with his return of income, the report of such audit in the prescribed form + duly signed and verified by such accountant.
(6B) Where any goods held for the purposes of the business of the industrial undertaking or the hotel or the operation of the ship are transferred to any other business carried on by the assessee, or where any goods held for the purposes of any other business carried on by the assessee are transferred to the buisness of the industrial undertaking or the hotel or the operation of the ship and, in either case, the consideration, if any, for such transfer as recorded in the accounts of the business of the industrial undertaking or the hotel or the operation of the ship does not correspond to the market value of such goods as on the date of the transfer, then, for the purposes of the deduction under this section, the profits and gains of the industrial undertaking or the business of the hotel or the operation of the ship shall be computed as if the transfer, in either case, had been made at the market value of such goods as on that date :
Provided that where, in the opinion of the Assessing Officer, the computation of the profits and gains of the industrial undertaking or the business of the hotel or the operation of the ship in the manner hereinbefore specified presents exceptional difficulties, the Assessing Officer may compute such profits and gains on such reasonable basis as he may deem fit.
Explanation.—In this sub-section, “market vlaue”, in relation to any goods, means the price that such goods would ordinarily fetch on sale in the open market.
(6C) Where it appears to the Assessing Officer that, owing to the close connection between the assessee carrying on the business of the industrial undertaking or the hotel or the operation of the ship to which this section applies and any other person, or for any other reason, the course of business between them is so arranged that the business transacted between them produces to the assessee more than the ordinary profits which might be expected to arise in the business of the indusrial undertaking or the hotel or the operation of the ship, the Assessing Officer shall, in computing the profits and gains of the industrial under taking or the hotel or the ship for the purposes of the deduction under this section, take the amount of profits as may be reasonably deemed to have been derived therefrom.
(7) The Central Government may, after making such inquiry as it may think fit, direct, by notification in the Official 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.”
*See rule19A.
† See rule 18C and Form No. 10D.
[276]Inserted by the Finance Act, 1989, w.e.f. 1-4-1990. Earlier section 80JJ, as inserted by the Finance Act, 1975, w.e.f. 1-4-1976, amended by the Finance (No. 2) Act, 1980, w.e.f. 1-4-1981 and the Finance Act, 1983, w.e.f. 1-4-1984 and omitted by the Finance Act, 1985, w.e.f. 1-4-1986, stood as under:
“Deduction in respect of profit and gains from business of livestock breeding or poultry or dairy farming.—Where the gross total income of an assessee includes any profits and gains derived from a business of livestock breeding, or poultry or dairy farming, there shall be allowed, in computing the total income of the assessee, a deduction as specified hereunder, namely:—
(a) in a case where the amount of such profits and gains does not exceed, in the agrgregate, fifteen thousand rupees, the whole of such amount; and
(b) in any other case, fifteen per cent of the aggregate amount of such profits and gains or fifteen thousand rupees, whichever is higher :
Provided that in computing the aggregate amount of such profits and gains in a case where the profits and gains derived from a busienss of poultry farming exceed one hundred thousand rupees, such excess shall be ignored.”
[277]For relevant case laws, se Income-tax Act.
[278]Prior to omission, section 80JJA stood as under:
“Where the gross total income of an assessee includes any profits and gains derived from a business of growing mushrooms, not being profits and gains that are in the nature of agricultural income, there shall be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to one-third of such profits and gains or ten thousand rupees, whichever is less.”
[279]Omitted section 80K was originally inserted from 1-4-1968 by the Finance (No. 2) Act, 1967, and amended from the same date. The section, as substituted by the Taxation Laws (Amendment) Act, 1970, with retrospective effect from 1-4-1968 and amended by the Finance Act, 1975, w.e.f. 1-4-1975, stood as follows:
“Where the gross total income of an assessee, being—
(a) the owner of any share or shares in a company, or
(b) a person who is cahrgeable to tax under this Act on the income by way of dividends on any share or shares in a company owned by any other person.
includes any income by way of dividends paid or deemed to have been paid 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 deduciton 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 for the assessment year commencing on the1st day of April, 1968, or for any subsequent assessment year:
Provided that no deduction under this section shall be allowed in respect of any income by way of dividends which is attributable to the profits and gains derived by the company from an industrial undertaking which begins to manufacture or produce articles or to operate its cold storage plant or plants after the 31st day of March, 1976, or from a ship which is first brought into use after that date or from the business of a hotel which starts functioning after that date.”
[280]Substituted by the Finance Act, 1970, w.e.f. 1-4-1971.
Original section was inserted by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1968
and was later on substituted by the Finance Act, 1968, w.e.f. 1-4-1969.
[281]See also Press Note, dated 30-3-1982, issued by the Press Information Bureau, Circular No. 243 dated 22-6-1978, Circular No. 406, dated 15-1-1985 and Circular No. 64, dated 25-8-1971 and Circular No. 687, dated 19-8-1994. For details and for relevant case laws, see n’s Master Guide to Income-tax Act.
[282]Substituted for “Where the gross total income of an
assessee includes any income by way of—”by the Finance (No. 2) Act, 1971,
w.e.f. 1-4-1972.
[283]word “or” omitted by the Finance Act, 1994, w.r.e.f. 1-4-1968.
[284]Omitted ibid. Prior to its omission, clause (c),
as amended by the Taxation Laws (Amedment) Act, 1984,
w.r.e.f. 1-4-1972, read as under:
“(c) an association of persons or a body of individuals consisting, in either case, only of husband and wife governed by the system of community of property in force in the Union territories of Dadra and Nagar Haveli and Goa, Daman and Diu.”
[285]“(not being interest payable under section 280D in
respect of any annuity deposit made under Chapter XXII-A)” omitted by the
Finance Act, 1988, w.e.f 1-4-1988.
[286]Substituted by the Finance (No. 2) Act, 1991, w.e.f.
1-4-1992. Prior to substitution sub-clause (ia),
as inserted by the Direct Tax Laws (Second Amendmet)
Act, 1989, w.r.e.f. 1-4-1984, read as under:
“(ia) interest on National Savings Certificates (VI Issue) and National Savings Certificates (VII Issue) issued under the Government Savings Certificates Act, 1959 (46 of 1959);”
[287]Substituted by the Finance Act, 1986, w.e.f. 1-4-1987.
[288]For complete list of notified debentures, bonds or
institutions, see n’s Master Guide to Income-tax Act.
[289]Explanation
omitted by the Finance Act, 1987, w.e.f. 1-4-1987. Omitted Explanation,
which was part of clause (ii), as substittued
by the Finance Act, 1986, w.e.f. 1-4-1987, read as under:
‘Explanation.—For the purposes of this clasue, “public sector company” means any corporation established by or under any Central, State or Provincial Act or a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956);’
[290]Inserted by the Finance Act, 1984, w.e.f. 1-4-1985.
For National Deposits Scheme, refer n’s Direct Taxes Circulars 1994 edn., Vol. 1, pp. 1.990-1.1000. It has since been discontinued on and from 1-4-1987, vide Notification No. F.4(13) W & M/87, dated 31-3-1987. See n’s Master Guide to Income-tax Act.
[291]Inserted by the Finance Act, 1984, w.e.f. 1-4-1985.
[292]For other notified schemes, see Income-tax Act.
[293]Inserted by the Finance Act, 1988, w.e.f. 1-4-1989.
[295]“or” omitted by the Finance (No. 2) Act, 1971, w.e.f.
1-4-1972.
[296]Inserted by the Finance Act, 1983, w.e.f. 1-4-1984.
For the banks notified under this clause, see n’s Master Guide to Income-tax Act.
[297] Substituted by the Finance (No. 2) Act, 1980, w.e.f. 1-4-1981.
[298]“or with a 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 for residential purposes” omitted by the Finance Act, 1988, w.e.f. 1-4-1989.
[299]“or, as the case may be, the
company”, ibid.
[300]Inserted by the Taxation Laws (Amendment) Act, 1975,
w.e.f. 1-4-1976.
[301]. Inserted
by the Finance (No. 2) Act, 1971, w.e.f 1-4-1972.
[302]Inserted by the Finance Act, 1972, w.e.f. 1-4-1973.
[303]Inserted, ibid.
[304]Inserted by the Finance Act, 1988, w.e.f. 1-4-1989.
[305]Substituted for “(a)” and “(b)”
respectively by the Finance Act, 1982, w.e.f. 1-4-1983.
1. Substituted for “ten” by the Finance Act, 1995, w.e.f. 1-4-1996. However, “twelve” shall be substituted for “thirteen” by the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997. Earlier “ten” was substituted for “seven” by the Finance Act, 1993, w.e.f. 1-4-1994; “seven” was substituted for “four” by the Finance Act, 1983, w.e.f. 1-4-1984 and “four” was substituted for “three” by the Finance Act, 1982, w.e.f. 1-4-1983.
[306]1. Substituted for “ten” by the Finance Act, 1995, w.e.f. 1-4-1996. However, “twelve” shall be substituted for “thirteen” by the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997. Earlier “ten” was substituted for “seven” by the Finance Act, 1993, w.e.f. 1-4-1994; “seven” was substituted for “four” by the Finance Act, 1983, w.e.f. 1-4-1984 and “four” was substituted for “three” by the Finance Act, 1982, w.e.f. 1-4-1983.
[308]1. Substituted for “ten” by the Finance Act, 1995, w.e.f. 1-4-1996. However, “twelve” shall be substituted for “thirteen” by the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997. Earlier “ten” was substituted for “seven” by the Finance Act, 1993, w.e.f. 1-4-1994; “seven” was substituted for “four” by the Finance Act, 1983, w.e.f. 1-4-1984 and “four” was substituted for “three” by the Finance Act, 1982, w.e.f. 1-4-1983.
[309]Proviso omitted by the Finance Act, 1983, w.e.f.
1-4-1984. The original proviso was inserted by the Finance Act, 1982, w.e.f.
1-4-1983.
[310]Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.
Prior to omission, existing first and second provisos as inserted by the
Finance Act, 1984, w.e.f. 1-4-1985 and later substituted by the Finance Act,
1988, w.e.f. 1-4-1989, read as under :
“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 deduction under the foregoing provisons of this sub-section; so, however, that the amount
of such further deduction shall not exceed three thousand rupees:
Provided further that where any income by way of interest on any deposits referred to in clause (iia) or any dividends referred to in clause (iv) remains unallowed after the deduction under the foregoing provisions of this section, there shall be allowed in computing the total income of the assessee, an additional deduction of an amount equal to so much of such income as has remained unallowed; so, however, that the amount of such additional deduction shall not exceed three thousand rupees.”
[311]Inserted by the Finance Act, 1990, w.e.f. 1-4-1990.
[312]Clause (2) of section 2 of the public Debt Act, 1944,
defines “Government security” as follows:
‘(2) “Governemnt
security” means—
(a) a security, created and issued, whether before or after the commencement of this Act, by the Central Government for the purpose of raising a public loan, and having one of the follwoing forms, namely :—
(i) stock transferable by registration in the books of the Bank; or
(ii) a promissory note payable to order; or
(iii) a bearer bond payable to bearer; or
(iv) a form prescribed in this behalf;
(b) any other security created and issued by the Central Government in such form and for such of the purposes of this Act as may be prescribed;’
[313]Omitted by the Finance Act, 1986, w.e.f. 1-4-1987.
Prior to its omission, sub-section (2) stood as under:
“(2) In a case where the assessee is entitled also to the deduction under section 80K in relation to the whole or any part of the income by way of dividends referred to in clause (iv) of sub-section (1), only so much of such income by way of dividends as may remain after the deduction under section 80K shall be taken into account for the purpose of allowing the deduction under sub-section (1).”
[314]Inserted by the Taxation Laws (Amendment) Act, 1984,
with retrospective effect from 1-4-1976.
[315]See also
Circular No. 58, dated 15-4-1971. For details, see Income-tax Act.
[316]For text of section 25 of the Companies Act, 1956, see
Appendix One.
[317]Inserted by the Finance Act, 1993, w.e.f. 1-4-1994.
[318]For text of section 4A of the Companies Act, 1956, and
notified institution thereunder, see Appendix
One.
[319]Prior to its omission, section 80MM was amended by the
Finance Act, 1970, w.e.f. 1-4-1970, the Finance (No. 2) Act, 1971, w.e.f.
1-4-1972 and the Finance Act, 1974, w.e.f. 1-4-1975.
[320]Omitted section was amended by the Finance Act, 1968,
w.e.f. 1-4-1969, the Finance (No. 2) Act, 1971, w.e.f. 1-4-1972, the Finance
Act, 1974, w.r.e.f. 1-4-1969/w.e.f. 1-4-1975 and the
Finance Act, 1984, w.e.f. 1-4-1985.
[321]Substituted by the Finance (No. 2) Act, 1971, w.e.f.
1-4-1972. This topic was originally dealt with by section 85C which was
inserted by the Finance Act, 1966, w.e.f. 1-4-1966. Section 80-O was inserted,
in place of section 85C which was deleted, by the Finance (No. 2) Act, 1967,
w.e.f. 1-4-1968. Section 80-O was later on amended by the Finance Act, 1968, w.e.f.
1-4-1969.
[322]See also
Circular No. 253, dated 30-4-1979, Circular No. 533, dated 27-3-1989, Circular
No. 575, dated 31-8-1990, Circular No. 700, dated 23-3-1995 and Circular No.
731, dated 20-12-1995. For details, see Income-tax Act.
[323]For relevant case laws, see Income-tax Act.
[324]Substituted for “(1) Where the gross total income of
an assessee, being an Indian company or a person (other than a company) who is
resident in
[325]Inserted by the Finance (No. 2) Act, 1991, w.e.f.
1-4-1992.
[326]Substituted for “technical services” by the Finance
(No. 2) Act, 1991, w.e.f. 1-4-1992.
[327]Words “under an agreement approved in this behalf by
the Chief Commissioner or the Director General;” omitted by the Finance (No. 2)
Act, 1991, w.e.f. 1-4-1992. Earlier these words were substituted for “under an
agreement approved by the Board in this behalf” by the Finance Act, 1988,
w.e.f. 1-4-1989.
[328]Substituted for “and such income is received in convertible foreign exchange in India, there shall be allowed, in accordance with and subject to the provisions of this section, a deduction of an amount equal to fifty per cent of the income so received in India in computing the total income of the assessee” (as it stood after the amendment made by the Finance Act, 1987) by the Finance Act, 1988, w.e.f. 1-4-1988. The amendment effected by the said Finance Act was reverted back to the provision as it stood prior to the amendment made by the Finance Act, 1987, w.e.f. 1-4-1988. Earlier, this portion of the section was amended by the Finance Act, 1974, with retrospective effect from 1-4-1972 and later on by the Finance Act, 1984, w.e.f. 1-4-1985.
[329]Omitted by the Finance (No. 2) Act, 1991, w.e.f.
1-4-1992. Prior to omission, the provisos as substituted by the Finance Act,
1988, w.e.f. 1-4-1989, read as under :
“Provided that the application for the approval of the agreement referred to in this section is made to the Chief Commissioner or, as the case may be, the Director General in the prescribed form and verified in the prescribed manner before the 1st day of October of the assessment year in 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.”
[330]Inserted by the Finance Act, 1987, w.e.f. 1-4-1988.
[331]Word “also” omitted by the Finance (No. 2) Act, 1991,
w.e.f. 1-4-1992.
[332]Substituted for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[333]Substituted for “Commissioner” by the Direct Tax Laws
(Amendment) Act, 1987, w.e.f. 1-4-1988.
[334]Substituted for following Explanation, which was earlier inserted by the Finance Act, 1974, with retrospective effect from 1-4-1972, by the Finance Act, 1985, w.e.f. 1-4-1986:
“Explanation.—The provisions of the Explanation to section 80N shall apply for the purposes of this section as they apply for the purposes of that section.”
[335]Substituted for the following clause (ii) by the Finance Act, 1987, w.e.f. 1-4-1988:
“(ii) any income used
by the assessee outside
[336]Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1992.
[337]Omitted by the Finance Act, 1974, w.e.f. 1-4-1975.
[338]Inserted, in place of section 81 which was deleted, by
the Finance (No. 2) Act, 1967, w.e.f. 1-4-1968.
[339]See also
Circular No. 319, dated 11-1-1982 and Circular No. 722, dated 19-9-1995. For
details, see Income-tax Act.
For relevant case laws, see n’s Master Guide to Income-tax Act.
[340]Inserted by the Finance (No. 2) Act, 1971, w.e.f.
1-4-1972.
[341]Inserted by the Finance (No. 2) Act, 1971, w.e.f.
1-4-1972.
[342]Inserted, ibid.
[343]Substituted by the Finance Act, 1983, w.e.f. 1-4-1984.
Earlier it was substituted by the Finance Act, 1978, w.e.f. 1-4-1979.
[344]For definition of “Government company”
[345]Substituted for “does not exceed twenty thousand
rupees” by the Finance Act, 1979, w.e.f. 1-4-1980. Italicised
words were substituted for “fifteen thousand” by the Finance Act, 1969, w.e.f.
1-4-1970.
[346]“chargeable under section 18”
omitted by the Finance Act, 1988, w.e.f. 1-4-1989.
[347]“section 80H or” omitted by
Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976.
[348]Inserted by the Direct Taxes (Amendment) Act, 1974,
w.e.f. 1-4-1974.
[349]Inserted by the Finance (No. 2) Act, 1977, w.e.f. 1-4-1978.
[350]Inserted by the Finance Act, 1982, w.e.f. 1-4-1983.
[351]Inserted by the Finance Act, 1983, w.e.f. 1-4-1983.
[352]Inserted by the Direct Tax Laws (Amendment) Act, 1989,
w.e.f. 1-4-1989.
[353]Inserted by the Finance (No. 2) Act, 1980, w.e.f.
1-4-1981.
[354]Inserted by the Finance Act, 1993, w.r.e.f. 1-4-1991.
[355]Section 80J has now been omitted by the Finance (No. 2) Act, 1996, w.r.e.f. 1-4-1989.
[356]Inserted by the Finance Act, 1989, w.e.f. 1-4-1990. Earlier “or section 80JJ” was inserted by the Finance Act, 1975, w.e.f. 1-4-1976 and later on was omitted by the Finance Act, 1985, w.e.f. 1-4-1986.
[357]“or section 80JJA”, which expression was earlier inserted by the Finance Act, 1979, w.e.f. 1-4-1980, omitted by the Finance Act, 1983, w.e.f. 1-4-1984.
[359]Inserted by the Direct Taxes (Amendment) Act, 1974, w.e.f. 1-4-1974.
[363]Inserted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.
[366]Substituted for “section 80J and section 80JJ” by the Finance Act, 1985, w.e.f. 1-4-1986. Earlier, “section 80J and section 80JJ” was substituted for “section 80J, section 80JJ and section 80JJA” by the Finance Act, 1983, w.e.f. 1-4-1984, “section 80J, section 80JJ and section 80JJA” substituted for “section 80J and section 80JJ” by the Finance Act, 1979, w.e.f. 1-4-1980 and “sections 80J and 80JJ” substituted for “and section 80J” by the Finance Act, 1975, w.e.f. 1-4-1976.
Section 80J has now been omitted by the Finance (No. 2) Act, 1996, w.r.e.f. 1-4-1989.
[369]Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1992. Earlier section 80Q was omitted by the Finance Act, 1972, w.e.f. 1-4-1973. Originally, it was inserted, in place of section 82 which was deleted, by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1968.
[370]See also Circular No. 706, dated 26-6-1995. For details, see n’s Master Guide to Income-tax Act.
For relevant case laws, see n’s Master Guide to Income-tax Act.
[371]Prior to its omission, section 80QQ, as amended by the
Direct Taxes (Amendment) Act, 1974, w.e.f. 1-4-1974, Finance Act, 1975, w.e.f.
1-4-1975, Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976, Finance (No. 2)
Act, 1977, w.e.f. 1-4-1978, Finance Act, 1979, w.e.f.
1-4-1980 and Finance Act, 1981, w.e.f. 1-4-1981, stood as under:
‘(1) Where in the case of an assessee the
gross total income of the previous year relevant to the assessment year
commencing on the 1st day of April, 1971, or to any one of the fourteen
assessment years next following that assessment year, includes any profits and
gains derived from a business carried on in India of printing and publication
of books or publication of books, there shall, in accordance with and subject
to the provisions of this section, be allowed, in computing the total income of
the assessee, a deduction from such profits and gains of an amount equal to
twenty per cent thereof.
(2) In a case where the assessee is entitled also to the deduction under section 80HH or section 80HHA or section 80-I or section 80J or section 80P, in relation to any part of the profits and gains referred to in sub-section (1), the deduction under sub-section (1) shall be allowed with reference to such profits and gains included in the gross total income as reduced by the deductions under section 80HH, section 80HHA, section 80-I, section 80J and section 80P.
(3) For the purposes of this section “books” shall not include newspapers, journals, magazines, diaries, brochures, tracts, pamphlets and other publications of a similar nature, by whatever name called.’
[372]Inserted by the Finance Act, 1979, w.e.f. 1-4-1980.
[373]Substituted
for the words “commencing on the 1st day of April, 1980, or to any one of the
nine assessment years next following that assessment year, includes” by the Finance
(No. 2) Act, 1991, w.e.f. 1-4-1992. Earlier word “nine” was substituted for
“four” by the Finance Act, 1985, w.e.f. 1-4-1985.
[374]For text of Eighth Schedule to the Constitution, see
Appendix One.
[375]This topic was dealt with by original section 80F which was inserted by the Finance (No. 2) Act, 1967, with retrospective effect from 1-4-1966. Section 80R was introduced, in place of section 80F which was deleted, by the Finance Act, 1967, w.e.f. 1-4-1968.
[376]For relevant case laws, se Income-tax Act.
[377]Substituted for “such other association or body established
outside
[378]Substituted for the words “allowed a deduction from such remuneration of an amount equal to fifty per cent thereof, in computing the total income of the individual:” by the Finance Act, 1990, w.e.f. 1-4-1991.
[379]The following shall be substituted for the portion beginning with the words “equal to” and ending with the words “whichever is higher” by the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997:
“equal to seventy-five per cent of such remuneration, as is brought into India by, or on behalf of, the assessee in convertible foreign exchange within a period of six months from the end of the previous year or where the Chief Commissioner or Commissioner is satisfied (for reasons to be recorded in writing) that the assessee is, for reasons beyond his control unable to do so within the said period of six months, within such further period as the Chief Commissioner or Commissioner may allow in this behalf:
Provided that no deduction under this section shall be allowed unless the assessee furnishes a certificate, in the prescribed form, along with the return of income, certifying that the deduction has been correctly claimed in accordance with the provisions of this section.”
[380]Omitted by the Finance Act, 1990, w.e.f. 1-4-1991.
Prior to omission, proviso read as under:
“Provided that where the individual renders
continuous service outside
[381]Inserted
by the Finance Act, 1969, w.e.f. 1-4-1970.
[382]See also Circular No. 31, dated 25-10-1969 and Circular No. 675, dated 3-1-1994. For details, see Income-tax Act
[383]Substituted for “musician or actor” by the Finance
(No. 2) Act, 1980, w.e.f. 1-4-1980.
[384]Substituted for the words “and such income is received in, or brought into, India by him or on his behalf in accordance with the Foreign Exchange Regulation Act, 1947 (7 of 1947), and any rules made thereunder, there shall be allowed a deduction from such income of an amount equal to twenty-five per cent of the income so received or brought, in computing the total income of the individual” by the Finance Act, 1990, w.e.f. 1-4-1991.
[385]The following shall be substituted for the portion beginning with the words “equal to” and ending with the words “whichever is higher” by the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997 :
“equal to seventy-five per cent of such income, as is brought into India by, or on behalf of, the assessee in convertible foreign exchange within a period of six months from the end of the previous year or where the Chief Commissioner or Commissioner is satisfied (for reasons to be recorded in writing) that the assessee is, for reasons beyond his control unable to do so within the said period of six months, within such further period as the Chief Commissioner or Commissioner may allow in this behalf:
Provided that no deduction under this section shall be allowed unless the assessee furnishes a certificate, in the prescribed form, along with the return of income, certifying that the deduction has been correctly claimed in accordance with the provisions of this section.”
[386]Substituted by the Finance (No.2) Act, 1977, w.e.f. 1-4-1978. Original section was inserted by the Finance Act, 1975, w.e.f. 1-4-1975.
[387]. See also Circular No. 356, dated 17-3-1983 and Circular No. 705, dated 20-6-1995. For details, see n’s Master Guide to Income-tax Act.
[388]Substituted for “of an amount equal to fifty per cent thereof” by the Finance Act, 1987, w.e.f. 1-4-1988.
[389]The following shall be substituted for the portion beginning with the words “equal to” and ending with the words “whichever is higher” by the Finance (No.2) Act, 1996, w.e.f. 1-4-1997 :
“equal to seventy-five per cent of such remuneration as is brought into India by, or on behalf of, the assessee in convertible foreign exchange within a period of six months from the end of the previous year or where the Chief Commissioner or Commissioner is satisfied (for reasons to be recorded in writing) that the assessee is, for reasons beyond his control unable to do so within the said period of six months, within such further period as the Chief Commissioner or Commissioner may allow in this behalf:
Provided that no deduction under this sub-section shall be allowed unless the assessee furnishes a certificate, in the prescribed from, along with the return of income, certifying that the deduction has been correctly claimed in accordance with the provisions of this section.”
[390]Omitted by the Finance Act, 1990, w.e.f. 1-4-1991. Prior to omission, proviso read as under:
“Provided that where the individual renders
continuous service outside
[391]For definition of “foreign currency”
[392]Prescribed fields under rule 11C are as follows :
1.
Profession of actuaries;
2.
Banking;
3. Insurance;
4. Journalism.
[393]Omitted section 80S, as amended by the Finance Act,
1973, with retrospective effect from 1-4-1972, stood as under
:
“Where the gross total income of an assessee not being a company includes any income by way of compensation or other payment which is chargeable as the profits and gains of business or profession in accordance with the provisions of sub-clause (a) or sub-clause (b) or sub-clause (c) of clause (ii) of section 28, there shall be allowed, in computing the total income of the 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.”
[394]Section 80T, as amended by the Finance (No.2) Act,
1971, w.e.f. 1-4-1972, the Finance (No.2) Act, 1974, w.e.f. 1-4-1975, the
Finance (No.2) Act, 1980, w.e.f. 1-4-1981, the Finance Act, 1982, w.e.f.
1-4-1983 and the Finance Act, 1986, w.e.f. 1-4-1987, stood as under :
‘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 long-term capital gains do not exceed ten thousand rupees, the whole of such long-term capital gains ;
(b) in any other case, ten thousand rupees as increased by a sum equal to—
(A) fifty 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 or gold, bullion or jewellery, exceed ten thousand rupees ;
(B) sixty per cent of the amount by which the long-term capital gains relating to any other capital assets exceed ten thousand rupees :
Provided that where the long-term capital gains relate to—
(i) buildings or lands or any rights in buildings or lands;
(ii) gold, bullion or jewellery; and
(iii) any other capital asset,
or to any two of the categories of capital assets mentioned in the foregoing clauses of this proviso (the assets falling under each clause being treated as a separate category), the deduction of ten thousand rupees referred to in this clause shall be allowed in the following order, namely :—
(1) the deduction shall first be allowed against long-term capital gains relating to the assets mentioned in clause (i);
(2) next, where the amount of the long-term capital gains relating to the assets mentioned in clause (i) is less than ten thousand rupees, a deduction equal to the amount of the difference between ten thousand rupees and such capital gains shall be allowed against the long-term capital gains relating to the assets mentioned in clause (ii); and
(3) thereafter, the balance, if any, of the said ten thousand rupees shall be allowed as a deduction against the long-term capital gains relating to the assets mentioned in clause (iii),
and the provisions of sub-clause (A) and sub-clause (B) of this clause shall apply as if the references to ten thousand rupees therein were references to the amount of deduction allowed in accordance with clauses (1), (2) and (3) of this proviso.’
[395]Section
80TT, as amended by the Finance (No. 2) Act, 1980, w.e.f. 1-4-1981, stood as
under:
“Where the gross total income of an assessee, not being a
company, includes any income by way of winnings from any lottery (such income being hereafter in this
section referred to as winnings), there shall be allowed, in computing the
total income of the assessee, a deduction from the winnings of an amount equal
to,—
(a) in a case where the winnings do not exceed five thousand
rupees, the whole of such winnings;
(b) in any other case, five thousand rupees as increased by a sum equal to fifty per cent of the amount by which the winnings exceed five thousand rupees.”
[396]Inserted by the Finance Act, 1968, w.e.f. 1-4-1969.
[397]Substituted by the finance (No. 2) Act, 1991, w.e.f. 1-4-1992. Prior to substitution, section 80U, as amended by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971, Finance (No. 2) Act, 1980, w.e.f. 1-4-1981, Finance Act, 1984, w.e.f. 1-4-1985, Finance Act, 1987, w.e.f. 1-4-1988, Direct Tax Laws (Amendment) Act, 1987, w.e.f 1-4-1988 and the Finance Act, 1989, w.e.f 1-4-1990, read as under :
“80U. Deduction in the case of totally blind or physically handicapped resident persons.—(1) In computing the total income of an individual, being a resident, who, as at the end of the previous year,—
(i) is totally blind, or
(ii) is subject to or suffers from a permanent physical disability (other than blindness) being a permanent physical disability specified in the rules made in this behalf by the Board, and which has the effect of reducing substantially his capacity to engage in a gainful employment or occupation, or
(iii) is subject to mental retardation to the extent specified in the rules made in this behalf by the Board, and which has the effect of reducing substantially his capacity to engage in a gainful employment or occupation,
there shall be allowed a deduction of a sum of fifteen thousand rupees :
Provided that such individual produces before the Assessing Officer , in respect of the first assessment year for which deduction is claimed under this section,—
(a) in a case referred to in clause (i), a certificate as to his total blindness from a registered medical practitioner being an oculist;
(b) in a case referred to in clause (ii), a certificate as to the permanent physical disability referred to in the said clause from a registered medical practitioner; and
(c) in a case referred to in clause (iii), a certificate as to the mental retardation from a psychiatrist working in a Government hospital.
(2) The Board shall, in making any rules for specifying any disability or mental retardation for the purposes of clause (ii) or clause (iii), as the case may be, of sub-section (1), have regard to the nature of such disability or mental retardation and the effect which such disability or mental retardation is likely to have on the capacity of a person subject thereto, or suffering therefrom, to engage in a gainful employment or occupation.”
[398]See also
Circular No. 653, dated 15-6-1993. For details, see Income-tax Act.
[399]For relevant case laws, see Income-tax.
[400]See rule 11D
for specified categories of ‘permanent physical disability’.
[401]Substituted for “twenty” by the Finance Act, 1995,
w.e.f. 1-4-1996.
[402]Prior to omission section 80V, as inserted by the
Finance Act, 1993, w.e.f. 1-4-1994, read as under :
“80V. Deduction from gross total income of the parent in certain cases. - Where a minor child, whose income is included in the total income of one of his parents under sub-section (1A) of section 64, is suffering from any disability of the nature specified in section 80U, then, in computing the total income of such parent, there shall be allowed from the gross total income of such parent a deduction of a sum to which such minor child would have been entitled under section 80U had the total income of such minor child been computed separately.”
Earlier existing section 80V was inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976 and later on omitted by the Finance Act, 1985, w.e.f. 1-4-1986.
[403]Omitted section 80VV read as under :
“In computing the total income of an
assessee, there shall be allowed by way of deduction any expenditure incurred by
him in the previous year in respect of any proceedings before any income-tax
authority or the Appellate Tribunal or any Court relating to the determination
of any liability under this Act, by way of tax, penalty or interest :
Provided that no deduction under this section shall, in any case, exceed in the aggregate five thousand rupees.”