[43
OF 1961]
[AS AMENDED BY FINANCE ACT, 2005]
An Act to consolidate and amend the law relating to income-tax and
super-tax
Be it enacted by Parliament in the Twelfth Year
of the
CHAPTER I
PRELIMINARY
Short
title, extent and commencement.
1[2] 1. 2[3] (1) This
Act may be called the Income-tax Act,1961.
(2) It extends to the whole of India.
(3) Save as otherwise provided in this Act, it shall come into force on the 1st day of April, 1962.
2. In this
Act, unless the context otherwise requires,—
3[4] (1) “advance
tax” means the advance tax payable in accordance with the provisions of Chapter
XVII-C;]
4[5] [5[6] (1A) 6[7] “agricultural
income”7[8]
means8[9] —
9[10] [(a) any rent10[11] or revenue derived from land10[12] which is situated in India and is used
for agricultural purposes;]
(b) any
income derived from such land10[13] by—
(ii) the
performance by a cultivator or receiver of rent-in-kind of any process
ordinarily employed by a cultivator or receiver of rent-in-kind to render the
produce raised or received by him fit to be taken to market10[15] ; or
(iii) the
sale by a cultivator or receiver of rent-in-kind of the produce raised or
received by him, in respect of which no process has been performed other than a
process of the nature described in paragraph (ii) of this sub-clause;
(c) any
income derived from any building owned and occupied by the receiver of the rent
or revenue of any such land, or occupied by the cultivator or the receiver of
rent-in-kind, of any land with respect to which, or the produce of which, any
process mentioned in paragraphs (ii)
and (iii) of sub-clause (b) is carried on:
(i) the
building is on or in the immediate vicinity of the land, and is a building
which the receiver of the rent or revenue or the cultivator, or the receiver of
rent-in-kind, by reason of his connection with the land, requires as a dwelling
house, or as a store-house, or other out-building, and
(ii) the
land is either assessed to land revenue in
(A) in
any area which is comprised within the jurisdiction of a municipality (whether known
as a municipality, municipal corporation, notified area committee, town area
committee, town committee or by any other name) or a cantonment board and which
has a population of not less than ten thousand according to the last preceding
census of which the relevant figures have been published before the first day
of the previous year; or
(B) in
any area within such distance, not being more than eight kilometres, from the
local limits of any municipality or cantonment board referred to in item (A), as the Central Government may,
having regard to the extent of, and scope for, urbanisation of that area and
other relevant considerations, specify in this behalf by notification in the
Official Gazette11[17] .]
12[18] [13[19] [Explanation
1.]—For the removal of doubts, it is hereby declared that revenue
derived from land shall not include and shall be deemed never to have included
any income arising from the transfer of any land referred to in item (a) or item (b) of sub-clause (iii)
of clause (14) of this section;]
14[20] [Explanation
2.—For the removal of doubts, it is hereby declared that income derived
from any building or land referred to in sub-clause (c) arising from the use of such building or land for any purpose
(including letting for residential purpose or for the purpose of any business
or profession) other than agriculture falling under sub-clause (a) or sub-clause (b) shall not be agricultural income;]
15[21] [16[22] [(1B)] “amalgamation”, in relation to companies,
means the merger of one or more companies with another company or the merger of
two or more companies to form one company (the company or companies which so
merge being referred to as the amalgamating company or companies and the
company with which they merge or which is formed as a result of the merger, as
the amalgamated company) in such a manner that—
(i) all
the property of the amalgamating company or companies immediately before the amalgamation
becomes the property of the amalgamated company by virtue of the amalgamation;
(ii) all
the liabilities of the amalgamating company or companies immediately before the
amalgamation become the liabilities of the amalgamated company by virtue of the
amalgamation;
(iii) shareholders
holding not less than 17[23] [three-fourths] in value of the shares in the amalgamating
company or companies (other than shares already held therein immediately before
the amalgamation by, or by a nominee for, the amalgamated company or its
subsidiary) become shareholders of the amalgamated company by virtue of the
amalgamation,otherwise than as a result of the acquisition of the property of
one company by another company pursuant to the purchase of such property by the
other company or as a result of the distribution of such property to the other
company after the winding up of the first-mentioned company;]
(2) “annual
value”, in relation to any property, means its annual value as determined under
section 23;
(4) “Appellate
Tribunal” means the Appellate Tribunal constituted under section 252;
(5) “approved
gratuity fund” means a gratuity fund which has been and continues to be
approved by the 19[25] [Chief Commissioner or Commissioner] in
accordance with the rules contained in Part C of the Fourth Schedule;
(6) “approved
superannuation fund” means a superannuation fund or any part of a
superannuation fund which has been and continues to be approved by the 19[26] [Chief Commissioner or Commissioner] in
accordance with the rules contained in Part B of the Fourth Schedule;
20[27] (7) “assessee”21[28] means a person by whom 22[29] [any tax] or any other sum of money is
payable under this Act, and includes—
(a) every
person in respect of whom any proceeding under this Act has been taken for the
assessment of his income 23[30] [or assessment of fringe benefits]
or of the income of any other person in respect of which he is assessable, or
of the loss sustained by him or by such other person, or of the amount of
refund due to him or to such other person;
(b) every
person who is deemed to be an assessee under any provision of this Act;
(c) every
person who is deemed to be an assessee in default under any provision of this Act;
24[31] [(7A) “Assessing Officer” means the Assistant
Commissioner 25[32] [or Deputy Commissioner] 26[33] [or Assistant Director] 25[34] [or Deputy Director] or the Income-tax
Officer who is vested with the relevant jurisdiction by virtue of directions or
orders issued under sub-section (1) or sub-section (2) of section 120 or any
other provision of this Act, and the 27[35] [Joint Commissioner or Joint Director] who
is directed under clause (b) of
sub-section (4) of that section to exercise or perform all or any of the powers
and functions conferred on, or assigned to, an Assessing Officer under this
Act;]
(8) “assessment”28[36] includes reassessment;
(9) “assessment
year” means the period of twelve months commencing on the 1st day of April
every year;
29[37] [(9A) “Assistant Commissioner” means a person
appointed to be an Assistant Commissioner of Income-tax 30[38] [or a Deputy Commissioner of Income-tax]
under sub-section (1) of section 117;]
(10) “average
rate of income-tax” means the rate arrived at by dividing the amount of
income-tax calculated on the total income, by such total income;
31[39] [(11) “block of assets” means a group of assets
falling within a class of assets comprising—
(a) tangible
assets, being buildings, machinery, plant or furniture;
(b) intangible
assets, being know-how, patents, copyrights, trade-marks, licences, franchises
or any other business or commercial rights of similar nature,in respect of
which the same percentage of depreciation is prescribed;]
(12) “Board”
means the 32[40] [Central Board of Direct Taxes constituted
under the Central Boards of Revenue Act, 1963 (54 of 1963)];
33[41] [(12A) “books or books of account” includes
ledgers, day-books, cash books, account-books and other books, whether kept in
the written form or as print-outs of data stored in a floppy, disc, tape or any
other form of electro-magnetic data storage device;]
34[42] (13) “business”35[43] includes any trade35[44] , commerce or manufacture or any adventure35[45] or concern in the nature of trade35[46] , commerce or manufacture;
36[47] (14) “capital asset” means property37[48] of any kind held by an assessee, whether
or not connected with his business or profession, but does not include—
(i) any
stock-in-trade, consumable stores or raw materials held for the purposes of his
business or profession;
38[49] [(ii) personal effects39[50] , that is to say, movable property
(including wearing apparel and furniture, but excluding jewellery) held for
personal use39[51] by the assessee or any member of his
family dependent on him.
Explanation.—For the purposes of
this sub-clause, “jewellery” includes—
(a) ornaments
made of gold, silver, platinum or any other precious metal or any alloy containing
one or more of such precious metals, whether or not containing any precious or
semi-precious stone, and whether or not worked or sewn into any wearing
apparel;
(b) precious
or semi-precious stones, whether or not set in any furniture, utensil or other
article or worked or sewn into any wearing apparel;]
40[52] [(iii) agricultural land41[53] in India, not being land situate—
(a) in
any area which is comprised within the jurisdiction of a municipality41[54] (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 population41[55] 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
(b) in
any area within such distance, not being more than eight kilometres, from the
local limits of any municipality or cantonment board referred to in item (a), as the Central Government may,
having regard to the extent of, and scope for, urbanisation of that area and
other relevant considerations, specify in this behalf by notification in the
Official Gazette42[56] ;]
43[57] [(iv) 6½ per cent Gold Bonds, 1977,44[58] [or 7 per cent Gold Bonds, 1980,] 45[59] [or National Defence Gold Bonds, 1980,]
issued by the Central Government;]
46[60] [(v) Special Bearer Bonds, 1991, issued by
the Central Government;]
47[61] [(vi) Gold
Deposit Bonds issued under the Gold Deposit Scheme, 1999 notified by the
Central Government;]
48[62] (15) 49[63] “charitable purpose”50[64] includes relief of the poor, education50[65] , medical relief, and the advancement of
any other 50[66] object of general public utility
51[67] [* * *];
52[68] [(15A) “Chief Commissioner” means a person
appointed to be a Chief Commissioner of Income-tax under sub-section (1) of
section 117;]
53[69] [54[70] [(15B)]
“child”, in relation to an individual,
includes a step-child and an adopted child of that individual;]
55[71] [(16) “Commissioner”
means a person appointed to be a Commissioner of Income-tax under sub-section
(1) of section 117 56[72] [* *
*];]
57[73] [(16A) “Commissioner
(Appeals)” means a person appointed to be a Commissioner of Income-tax
(Appeals) under sub-section (1) of section 117;]
(i) any
Indian company, or
(ii) any
body corporate incorporated by or under the laws of a country outside
(iii) any
institution, association or body which is or was assessable or was assessed as
a company for any assessment year under the Indian Income-tax Act, 1922 (11 of
1922), or which is or was assessable or was assessed under this Act as a
company for any assessment year commencing on or before the 1st day of April,
1970, or
(iv) any
institution, association or body, whether incorporated or not and whether
Indian or non-Indian, which is declared by general or special order of the
Board to be a company:
Provided
that such institution, association or body shall be deemed to be a company only
for such assessment year or assessment years (whether commencing before the 1st
day of April, 1971, or on or after that date) as may be specified in the
declaration;]
(18) “company
in which the public are substantially interested”—a company is said to be a
company in which the public59[75] are substantially interested—
60[76] [(a) if it is a company owned by the
Government or the Reserve Bank of India or in which not less than forty per
cent of the shares are held (whether singly or taken together) by the
Government or the Reserve Bank of India or a corporation owned by that bank;
or]
61[77] [(aa) if it is a company which is registered
under section 25 of the Companies Act, 1956 (1 of 1956)62[78] ; or
(ab) if
it is a company having no share capital and if, having regard to its objects,
the nature and composition of its membership and other relevant considerations,
it is declared by order of the Board to be a company in which the public are
substantially interested:
Provided
that such company shall be deemed to be a company in which the public are
substantially interested only for such assessment year or assessment years
(whether commencing before the 1st day of April, 1971, or on or after that
date) as may be specified in the declaration; or]
63[79] [(ac) if it is a mutual benefit finance
company, that is to say, a company which carries on, as its principal business,
the business of acceptance of deposits from its members and which is declared
by the Central Government under section 620A64[80] of the Companies Act, 1956 (1 of 1956),
to be a Nidhi or Mutual Benefit
Society; or]
65[81] [(ad) if it is a company, wherein shares (not
being shares entitled to a fixed rate of dividend whether with or without a
further right to participate in profits) carrying not less than fifty per cent
of the voting power have been allotted unconditionally to, or acquired
unconditionally by, and were throughout the relevant previous year beneficially
held by, one or more co-operative societies;]
66[82] [(b) if it is a company which is not a 67[83] private company as defined in the
Companies Act, 1956 (1 of 1956), and the conditions specified either in item (A) or in item (B) are fulfilled, namely:—
(A) shares
in the company (not being shares entitled to a fixed rate of dividend whether
with or without a further right to participate in profits) were, as on the last
day of the relevant previous year, listed in a recognised stock exchange in
India in accordance with the Securities Contracts (Regulation) Act, 1956 (42 of
1956), and any rules made there under;
68[84] [(B) shares in the company (not being shares
entitled to a fixed rate of dividend whether with or without a further right to
participate in profits) carrying not less than fifty per cent of the voting
power have been allotted unconditionally to, or acquired unconditionally by,
and were throughout the relevant previous year beneficially held by—
(a) the
Government, or
(b) a
corporation established by a Central, State or Provincial Act, or
(c) any
company to which this clause applies or any subsidiary company of such company 69[85] [if the whole of the share capital of such
subsidiary company has been held by the parent company or by its nominees
throughout the previous year.]
Explanation.—In its application to
an Indian company whose business consists mainly in the construction of ships
or in the manufacture or processing of goods or in mining or in the generation
or distribution of electricity or any other form of power, item (B) shall have effect as if for the
words “not less than fifty per cent”, the words “not less than forty per cent”
had been substituted;]]
(19) “co-operative
society” means a co-operative society registered under the Co-operative
Societies Act, 1912 (2 of 1912), or under any other law for the time being in
force in any State for the registration of co-operative societies;
70[86] [(19A) “Deputy Commissioner” means a person
appointed to be a Deputy Commissioner of Income-tax 71[87] [* * *] under sub-section (1) of section
117;
72[88] [(19AA) “demerger”, in relation to companies, means the
transfer, pursuant to a scheme of arrangement under sections 391 to 39473[89] of the Companies Act, 1956 (1 of 1956),
by a demerged company of its one or more undertakings to any resulting company
in such a manner that—
(i) all
the property of the undertaking, being transferred by the demerged company,
immediately before the demerger, becomes the property of the resulting company
by virtue of the demerger;
(ii) all
the liabilities relatable to the undertaking, being transferred by the demerged
company, immediately before the demerger, become the liabilities of the
resulting company by virtue of the demerger;
(iii) the
property and the liabilities of the undertaking or undertakings being
transferred by the demerged company are transferred at values appearing in its
books of account immediately before the demerger;
(iv) the
resulting company issues, in consideration of the demerger, its shares to the
shareholders of the demerged company on a proportionate basis;
(v) the
shareholders holding not less than three-fourths in value of the shares in the
demerged company (other than shares already held therein immediately before the
demerger, or by a nominee for, the resulting company or, its subsidiary) become
shareholders of the resulting company or companies by virtue of the demerger,
otherwise than as a result of the
acquisition of the property or assets of the demerged company or any
undertaking thereof by the resulting company;
(vi) the
transfer of the undertaking is on a going concern basis;
(vii) the
demerger is in accordance with the conditions, if any, notified under
sub-section (5) of section 72A by the Central Government in this behalf.
Explanation 1.—For the purposes of this
clause, “undertaking” shall include any part of an undertaking, or a unit or
division of an undertaking or a business activity taken as a whole, but does
not include individual assets or liabilities or any combination thereof not
constituting a business activity.
Explanation 2.—For the purposes of
this clause, the liabilities referred to in sub-clause (ii), shall include—
(a) the
liabilities which arise out of the activities or operations of the undertaking;
(b) the
specific loans or borrowings (including debentures) raised, incurred and
utilised solely for the activities or operations of the undertaking; and
(c) in
cases, other than those referred to in clause (a) or clause (b),
so much of the amounts of general or multipurpose borrowings, if any, of the
demerged company as stand in the same proportion which the value of the assets
transferred in a demerger bears to the total value of the assets of such
demerged company immediately before the demerger.
Explanation 3.—For determining the value of the property referred to in
sub-clause (iii), any change in the value of assets consequent to their
revaluation shall be ignored.
Explanation 4.—For the purposes of this clause, the splitting up or the
reconstruction of any authority or a body constituted or established under a
Central, State or Provincial Act, or a local authority or a public sector
company, into separate authorities or bodies or local authorities or companies,
as the case may be, shall be deemed to be a demerger if such split up or reconstruction
fulfils 74[90] [such conditions as may
be notified in the Official Gazette75[91] , by the
Central Government];
(19AAA) “demerged
company” means the company whose undertaking is transferred, pursuant to a
demerger, to a resulting company;]
(19B) “Deputy
Commissioner (Appeals)” means a person appointed to be a Deputy Commissioner of
Income-tax (Appeals) 76[92] [or an Additional Commissioner of
Income-tax (Appeals)] under sub-section (1) of section 117;]
77[93] [(19C) “Deputy Director” means a person appointed
to be a Deputy Director of Income-tax 78[94] [* * *] under sub-section (1) of section
117;]
(20) 79[95] “director”, “manager” and “managing
agent”, in relation to a company, have the meanings respectively assigned to them
in the Companies Act, 1956 (1 of 1956);
80[96] [(21) “Director General or Director” means a
person appointed to be a Director General of Income-tax or, as the case may be,
a Director of Income-tax, under sub-section (1) of section 117, and includes a
person appointed under that sub-section to be 81[97] [an Additional Director of Income-tax or]
a 82[98] [Joint] Director of Income-tax or an
Assistant Director 83[99] [or Deputy Director] of Income-tax;]
(22) 84[100] “dividend”85[101]
includes—
(a) any
distribution85[102]
by a company of accumulated profits85[103] ,
whether capitalised or not, if such distribution entails the release by the
company to its shareholders of all or any part of the assets of the company;
(b) any
distribution85[104]
to its shareholders by a company of debentures, debenture-stock, or deposit
certificates in any form, whether with or without interest, and any
distribution to its preference shareholders of shares by way of bonus, to the
extent to which the company possesses accumulated profits86[105] ,
whether capitalised or not;
(c) any
distribution86[106]
made to the shareholders of a company on its liquidation, to the extent to
which the distribution is attributable to the accumulated profits of the company
immediately before its liquidation, whether capitalised or not;
(d) any
distribution87[107]
to its shareholders by a company on the reduction of its capital, to the extent
to which the company possesses accumulated profits87[108]
which arose after the end of the previous year ending next before the 1st day
of April, 1933, whether such accumulated profits have been capitalised or not;
(e) any payment by a
company, not being a company in which the public are substantially interested,
of any sum (whether as representing a part of the assets of the company or
otherwise) 88[109] [made after the 31st day
of May, 1987, by way of advance or loan to a shareholder89[110] , being a person who is
the beneficial owner of shares (not being shares entitled to a fixed rate of
dividend whether with or without a right to participate in profits) holding not
less than ten per cent of the voting power, or to any concern in which such
shareholder is a member or a partner and in which he has a substantial interest
(hereafter in this clause referred to as the said concern)] or any payment by
any such company on behalf, or for the individual benefit, of any such
shareholder, to the extent to which the company in either case possesses
accumulated profits87[111] ;but “dividend” does not
include—
(i) a
distribution made in accordance with sub-clause (c) or sub-clause (d)
in respect of any share issued for full cash consideration, where the holder of
the share is not entitled in the event of liquidation to participate in the
surplus assets;
90[112] [(ia) a
distribution made in accordance with sub-clause (c) or sub-clause (d)
in so far as such distribution is attributable to the capitalised profits of
the company representing bonus shares allotted to its equity shareholders after
the 31st day of March, 1964, 91[113] [and
before the 1st day of April, 1965];]
(ii) any
advance or loan made to a shareholder 92[114] [or
the said concern] by a company in the ordinary course of its business, where
the lending of money is a substantial part of the business of the company;
(iii) any
dividend paid by a company which is set off by the company against the whole or
any part of any sum previously paid by it and treated as a dividend within the
meaning of sub-clause (e), to
the extent to which it is so set off;
93[115] [(iv) any
payment made by a company on purchase of its own shares from a shareholder in
accordance with the provisions of section 77A 94[116] of the Companies Act, 1956 (1 of 1956);
(v) any
distribution of shares pursuant to a demerger by the resulting company to the
shareholders of the demerged company (whether or not there is a reduction of
capital in the demerged company).]
Explanation 1.—The expression
“accumulated profits”, wherever it occurs in this clause, shall not include
capital gains arising before the 1st day of April, 1946, or after the 31st day
of March, 1948, and before the 1st day of April, 1956.
Explanation 2.—The expression
“accumulated profits” in sub-clauses (a),
(b), (d) and (e), shall
include all profits of the company up to the date of distribution or payment
referred to in those sub-clauses, and in sub-clause (c) shall include all profits of the company up to the date of
liquidation, 95[117] [but
shall not, where the liquidation is consequent on the compulsory acquisition of
its undertaking by the Government or a corporation owned or controlled by the
Government under any law for the time being in force, include any profits of
the company prior to three successive previous years immediately preceding the
previous year in which such acquisition took place].
96[118] [Explanation 3.—For the purposes of
this clause,—
(a) “concern”
means a Hindu undivided family, or a firm or an association of persons or a
body of individuals or a company;
(b) a
person shall be deemed to have a substantial interest in a concern, other than
a company, if he is, at any time during the previous year, beneficially entitled
to not less than twenty per cent of the income of such concern;]
97[119] [(22A) “domestic
company” means an Indian company, or any other company which, in respect of its
income liable to tax under this Act, has made the prescribed arrangements for the
declaration and payment, within India, of the dividends (including dividends on
preference shares) payable out of such income;]
98[120] [(22AA) “document”
includes an electronic record as defined in clause (t)99[121]
of
sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of
2000);]
1[122] [2[123] [(22B)] “fair
market value”, in relation to a capital asset, means—
(i) the
price that the capital asset would ordinarily fetch on sale in the open market
on the relevant date; and
(ii) where
the price referred to in sub-clause (i)
is not ascertainable, such price as may be determined in accordance with the
rules made under this Act;]
(23) 3[124] “firm”,
“partner” and “partnership” have the meanings respectively assigned to them in
the Indian Partnership Act, 1932 (9 of 1932); but the expression “partner”
shall also include any person who, being a minor, has been admitted to the
benefits of partnership;
4[125] [(23A)“foreign company” means a company
which is not a domestic company;]
The following clause
(23B) shall be inserted after clause (23A) of section 2 by the Finance Act,
2005, w.e.f. 1-4-2006:
(23B) “fringe
benefits” means any fringe benefits referred to in section 115WB;
5[126] (24) “income”6[127]
includes6[128] —
(ii) dividend;
7[130] [(iia) voluntary
contributions received by a trust created wholly or partly for charitable or
religious purposes or by an institution established wholly or partly for such
purposes 8[131] [or
by an association or institution referred to in clause (21) or clause (23),
or by a fund or trust or institution referred to in sub-clause (iv) or sub-clause (v) of clause (23C) of section 10].
Explanation.—For the purposes of
this sub-clause, “trust” includes any other legal obligation;]
(iii) the
value of any perquisite or profit in lieu of salary taxable under clauses (2) and (3) of section 17;
9[132] [(iiia) any
special allowance or benefit, other than perquisite included under sub-clause (iii), specifically granted to the
assessee to meet expenses wholly, necessarily and exclusively for the
performance of the duties of an office or employment of profit;
(iiib) any
allowance granted to the assessee either to meet his personal expenses at the
place where the duties of his office or employment of profit are ordinarily
performed by him or at a place where he ordinarily resides or to compensate him
for the increased cost of living;]
(iv) the
value of any benefit or perquisite10[133] ,
whether convertible into money or not, obtained from a company either by a
director or by a person who has a substantial interest in the company, or by a
relative of the director or such person, and any sum paid by any such company
in respect of any obligation which, but for such payment, would have been
payable by the director or other person aforesaid;
11[134] [(iva) the
value of any benefit or perquisite10[135] ,
whether convertible into money or not, obtained by any representative assessee
mentioned in clause (iii) or clause
(iv) of sub-section (1) of
section 160 or by any person on whose behalf or for whose benefit any income is
receivable by the representative assessee (such person being hereafter in this
sub-clause referred to as the “beneficiary”) and any sum paid by the
representative assessee in respect of any obligation which, but for such
payment, would have been payable by the beneficiary;]
(v) any
sum chargeable to income-tax under clauses (ii) and (iii) of
section 28 or section 41 or section 59;
12[136] [(va) any
sum chargeable to income-tax under clause (iiia) of section 28;]
13[137] [(vb) any
sum chargeable to income-tax under clause (iiib) of section 28;]
14[138] [(vc) any
sum chargeable to income-tax under clause (iiic) of section 28;]
15[139] [(vd)] the
value of any benefit or perquisite taxable under clause (iv) of section 28;
16[140] [(ve) any
sum chargeable to income-tax under clause (v) of section 28;]
(vi) any
capital gains chargeable under section 45;
(vii) the
profits and gains of any business of insurance carried on by a mutual insurance
company or by a co-operative society, computed in accordance with section 44 or
any surplus taken to be such profits and gains by virtue of provisions
contained in the First Schedule;
(viii) [Omitted by the Finance Act, 1988, w.e.f.
1-4-1988. Original sub-clause (viii) was inserted by the Finance Act, 1964, w.e.f. 1-4-1964;]
17[141] [(ix) any
winnings from lotteries18[142] ,
crossword puzzles, races including horse races, card games and other games of any
sort or from gambling or betting of any form or nature whatsoever.]
19[143] [Explanation.—For the purposes of this
sub-clause,—
(i) “lottery”
includes winnings from prizes awarded to any person by draw of lots or by
chance or in any other manner whatsoever, under any scheme or arrangement by
whatever name called;
(ii) “card game and other game of any sort”
includes any game show, an entertainment programme on television or electronic
mode, in which people compete to win prizes or any other similar game;]
20[144] [(x) any
sum received by the assessee from his employees as contributions to any
provident fund or superannuation fund or any fund set up under the provisions
of the Employees’ State Insurance Act, 1948 (34 of 1948), or any other fund for
the welfare of such employees;]
21[145] [(xi) any
sum received under a Keyman insurance policy including the sum allocated by way
of bonus on such policy.
Explanation.—For the purposes of
this clause*[146] ,
the expression “Keyman insurance policy” shall have the meaning assigned to it
in the Explanation to clause (10D) of section 10;]
22[147] [(xii) any
sum referred to in 23[148] [clause
(va)] of section 28;]
24[149] [(xiii) any sum referred to in
clause (v) of sub-section (2)
of section 56;]
(25) “Income-tax
Officer” means a person appointed to be an Income-tax Officer under 25[150] [*
* *] section 117;
26[151] [(25A) “India”
shall be deemed to include the Union territories of Dadra and Nagar Haveli, Goa†[152] ,
Daman and Diu, and Pondicherry,—
(a) as
respects any period, for the purposes of section 6; and
(b) as
respects any period included in the previous year, for the purposes of making any
assessment for the assessment year commencing on the 1st day of April, 1963, or
for any subsequent year;]
(26) “Indian
company” means a company formed and registered under the Companies Act, 1956 (1
of 1956), and includes—
(i) a
company formed and registered under any law relating to companies formerly in
force in any part of India (other than the State of Jammu and Kashmir 27[153] [and
the Union territories specified in sub-clause (iii) of this clause]);
28[154] [(ia) a
corporation established by or under a Central, State or Provincial Act;
(ib) any
institution, association or body which is declared by the Board to be a company
under clause (17);]
(ii) in
the case of the State of
29[155] [(iii) in
the case of any of the Union territories of Dadra and Nagar Haveli, Goa†[156] ,
Daman and Diu, and Pondicherry, a company formed and registered under any law for
the time being in force in that Union territory:]
Provided
that the 30[157] [egistered
or, as the case may be, principal office of the company, corporation,
institution, association or body] in all cases is in India;
(28) “Inspector
of Income-tax” means a person appointed to be an Inspector of Income-tax under
sub-section 32[159] [(1)]
of section 117;
33[160] [34[161] (28A) “interest”
means interest payable in any manner in respect of any moneys borrowed or debt
incurred (including a deposit, claim or other similar right or obligation) and
includes any service fee or other charge in respect of the moneys borrowed or
debt incurred or in respect of any credit facility which has not been
utilised;]
35[162] [(28B) “interest
on securities” means,—
(i) interest
on any security of the Central Government or a State Government;
(ii) interest
on debentures or other securities for money issued by or on behalf of a local
authority or a company or a corporation established by a Central, State or
Provincial Act;]
36[163] [(28BB) “insurer” means an
insurer, being an Indian insurance company, as defined under clause (7A)
of section 2 37[164] of the Insurance Act, 1938 (4 of 1938), which has been
granted a certificate of registration under section 3 of that Act;]
38[165] [(28C) “Joint
Commissioner” means a person appointed to be a Joint Commissioner of Income-tax
or an Additional Commissioner of Income-tax under sub-section (1) of section
117;
(28D) “Joint
Director” means a person appointed to be a Joint Director of Income-tax or an
Additional Director of Income-tax under sub-section (1) of section 117;]
(29) “legal
representative” has the meaning assigned to it in clause (11) of section 2 of the Code of Civil
Procedure, 1908 (5 of 1908)39[166] ;
40[167] [(29A) “long-term
capital asset” means a capital asset which is not a short-term capital asset;
(29B) “long-term
capital gain” means capital gain arising from the transfer of a long-term
capital asset;]
41[168] [(29C) “maximum
marginal rate” means the rate of income-tax (including surcharge on income-tax,
if any) applicable in relation to the highest slab of income in the case of an
individual 42[169] [,
association of persons or, as the case may be, body of individuals] as
specified in the Finance Act of the relevant year;]
(30) “non-resident”
means a person who is not a “resident” 43[170] [,
and for the purposes of sections 92, 93 44[171] [*
* *] and 168, includes a person who is not ordinarily resident within the
meaning of clause (6) of
section 6];
45[172] (31) “person”
includes—
(ii) a
Hindu undivided family46[174] ,
(iii) a
company,
(v) an
association of persons47[176]
or a body of individuals47[177] ,
whether incorporated or not,
(vi) a
local authority, and
(vii) every
artificial juridical person, not falling within any of the preceding
sub-clauses.
48[178] [Explanation.—For the purposes of this
clause, an association of persons or a body of individuals or a local authority
or an artificial juridical person shall be deemed to be a person, whether or
not such person or body or authority or juridical person was formed or
established or incorporated with the object of deriving income, profits or
gains;]
(32) “person
who has a substantial interest in the company”, in relation to a company, means
a person who is the beneficial owner of shares, not being shares entitled to a fixed
rate of dividend whether with or without a right to participate in profits,
carrying not less than twenty per cent of the voting power;
(33) “prescribed”
means prescribed by rules made under this Act;
(34) “previous
year” means the previous year as defined in section 3;
49[179] (35) “principal
officer”, used with reference to a local authority or a company or any other
public body or any association of persons or any body of individuals, means—
(a) the
secretary, treasurer, manager or agent of the authority, company, association
or body, or
(b) any
person connected with the management or administration of the local authority,
company, association or body upon whom the 50[180] [Assessing]
Officer has served a notice of his intention of treating him as the principal
officer thereof;
51[181] (36) “profession”
includes vocation52[182] ;
53[183] [(36A) “public
sector company” means any corporation established by or under any Central, State
or Provincial Act or a Government company54[184]
as defined in section 617 of the Companies Act, 1956 (1 of 1956);]
(37) 55[185] “public
servant” has the same meaning as in section 21 of the Indian Penal Code (45 of
1860);
56[186] [(37A) “rate
or rates in force” or “rates in force”, in relation to an assessment year or
financial year, means—
(i) for
the purposes of calculating income-tax under the first proviso to sub-section
(5) of section 132, or computing the income-tax chargeable under sub-section
(4) of section 172 or sub-section (2) of section 174 or section 175 or
sub-section (2) of section 176 or deducting income-tax under section 192 from
income charge-able under the head “Salaries” 57[187] [*
* *] or 58[188] [computation
of the “advance tax” payable under Chapter XVII-C in a case not falling under 59[189] [section
115A or section 115B 60[190] [or
section 115BB 61[191] [or
section 115BBB] or section 115E] or] section 164 60[192]
[or section 164A 62[193] [*
* *]] 63[194] [or
section 167B], the rate or rates of income-tax specified in this behalf in the
Finance Act of the relevant year, and for the purposes of computation of the
“advance tax” payable under Chapter XVII-C 64[195] [in
a case falling under section 115A or section 115B 65[196] [or
section 115BB 66[197] [or
section 115BBB] or section 115E] or section 164 65[198] [or
section 164A 67[199] [*
* *]] 68[200] [or
section 167B], the rate or rates specified in section 115A or 69[201] [section
115B or section 115BB 70[202] [or
section 115BBB] or section 115E or section 164 or section 164A 67[203] [*
* *] 68[204] [or
section 167B], as the case may be,] or the rate or rates of income-tax
specified in this behalf in the Finance Act of the relevant year, whichever is
applicable;]
(ii) for
the purposes of deduction of tax under sections 193, 194, 194A 71[205] [,
194B] 72[206] [,
194BB] 73[207] [and
194D], the rate or rates of income-tax specified in this behalf in the Finance
Act of the relevant year;]
74[208] [(iii) for
the purposes of deduction of tax under section 195, the rate or rates of
income-tax specified in this behalf in the Finance Act of the relevant year or
the rate or rates of income-tax specified in an agreement entered into by the
Central Government under section 90, whichever is applicable by virtue of the
provisions of section 90;]
75[209] (38) “recognised
provident fund” means a provident fund which has been and continues to be
recognised by the 76[210] [Chief
Commissioner or Commissioner] in accordance with the rules contained in Part A
of the Fourth Schedule, and includes a provident fund established under a
scheme framed under the Employees’ Provident Funds Act, 1952 (19 of 1952);
(39) 77[211] [Omitted by the Finance Act, 1992, w.e.f.
1-4-1993;]
(40) “regular
assessment” means the assessment made under 78[212] [sub-
section (3) of] section 143 or section 144;
(41) “relative”,
in relation to an individual, means the husband, wife, brother or sister or any
lineal ascendant or descendant of that individual;
79[213] [(41A) “resulting company”
means one or more companies (including a wholly owned subsidiary thereof) to
which the undertaking of the demerged company is transferred in a demerger and,
the resulting company in consideration of such transfer of undertaking, issues
shares to the shareholders of the demerged company and includes any authority
or body or local authority or public sector company or a company established,
constituted or formed as a result of demerger;]
(42) “resident”
means a person who is resident in
80[214] [81[215] (42A) 82[216] [“short-term
capital asset” means a capital asset held by an assessee for not more than 83[217] [thirty-six]
months immediately preceding the date of its transfer:]
84[218] [Provided
that in the case of a share held in a company 85[219] [or
any other security listed in a recognised stock exchange in India or a unit of
the Unit Trust of India established under the Unit Trust of India Act, 1963 (52
of 1963) or a unit of a Mutual Fund specified under clause (23D) of section 10] 86[220] [or a zero coupon bond],
the provisions of this clause shall have effect as if for the words “thirty-six
months”, the words “twelve months” had been substituted.]
87[221] [Explanation 1].—(i) In determining the period for
which any capital asset is held by the assessee—
(a) in
the case of a share held in a company in liquidation, there shall be excluded
the period subsequent to the date on which the company goes into liquidation;
(b) in
the case of a capital asset which becomes the property of the assessee in the
circumstances mentioned in 88[222] [sub-section
(1)] of section 49, there shall be included the period for which the asset was
held by the previous owner referred to in the said section;
89[223] [(c) in
the case of a capital asset being a share or shares in an Indian company, which
becomes the property of the assessee in consideration of a transfer referred to
in clause (vii) of section 47,
there shall be included the period for which the share or shares in the
amalgamating company were held by the assessee;]
90[224] [(d) in
the case of a capital asset, being a share or any other security (hereafter in this
clause referred to as the financial asset) subscribed to by the assessee on the
basis of his right to subscribe to such financial asset or subscribed to by the
person in whose favour the assessee has renounced his right to subscribe to
such financial asset, the period shall be reckoned from the date of allotment
of such financial asset;
(e) in
the case of a capital asset, being the right to subscribe to any financial
asset, which is renounced in favour of any other person, the period shall be
reckoned from the date of the offer of such right by the company or
institution, as the case may be, making such offer;]
91[225] [(f) in
the case of a capital asset, being a financial asset, allotted without any
payment and on the basis of holding of any other financial asset, the period
shall be reckoned from the date of the allotment of such financial asset;]
92[226] [(g) in the case of a
capital asset, being a share or shares in an Indian company, which becomes the property
of the assessee in consideration of a demerger, there shall be included the
period for which the share or shares held in the demerged company were held by
the assessee;]
93[227] [(h) in
the case of a capital asset, being trading or clearing rights of a recognised
stock exchange in India acquired by a person pursuant to demutualisation or
corporatisation of the recognised stock exchange in India as referred to in
clause (xiii) of section 47, there shall be included the period for
which the person was a member of the recognised stock exchange in India
immediately prior to such demutualisation or corporatisation;
(ha) in the case of a capital asset, being equity share or shares
in a company allotted pursuant to demutualisation or corporatisation of a recognised
stock exchange in India as referred to in clause (xiii) of section 47, there shall be included the period for
which the person was a member of the recognised stock exchange in India
immediately prior to such demutualisation or corporatisation.]
(ii) In
respect of capital assets other than those mentioned in clause (i), the period for which any capital
asset is held by the assessee shall be determined subject to any rules which
the Board may make in this behalf.]
94[228] [Explanation 2.—For the purposes of
this clause, the expression “security”95[229]
shall have the meaning assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act,
1956 (42 of 1956);]
96[230] [(42B) “short-term
capital gain” means capital gain arising from the transfer of a short-term
capital asset;]
97[231] [(42C) “slump
sale” means the transfer of one or more undertakings as a result of the sale
for a lump sum consideration without values being assigned to the individual
assets and liabilities in such sales.
Explanation 1.—For the purposes of this clause, “undertaking” shall have
the meaning assigned to it in Explanation
1 to clause (19AA).
Explanation 2.—For the removal of doubts, it is hereby declared that the
determination of the value of an asset or liability for the sole purpose of
payment of stamp duty, registration fees or other similar taxes or fees shall
not be regarded as assignment of values to individual assets or liabilities;]
98[232] [(43) “tax”
in relation to the assessment year commencing on the 1st day of April, 1965,
and any subsequent assessment year means income-tax chargeable under the
provisions of this Act, and in relation to any other assessment year income-tax
and super-tax chargeable under the provisions of this Act prior to the
aforesaid date 99[233] [and in relation to the assessment year commencing
on the 1st day of April, 2006, and any subsequent assessment year includes the
fringe benefit tax payable under section 115WA];]
1[234] [(43A) “tax
credit certificate” means a tax credit certificate granted to any person in
accordance with the provisions of Chapter XXII-B2[235]
and any scheme made there under;]
4[237] [(44) “Tax
Recovery Officer” means any Income-tax Officer who may be authorised by the
Chief Commissioner or Commissioner, by general or special order in writing, to
exercise the powers of a Tax Recovery Officer;]
(45) “total
income” means the total amount of income referred to in section 5, computed in
the manner laid down in this Act;
6[239] (47) 7[240] [“transfer”8[241] ,
in relation to a capital asset, includes,—
(i) the
sale8[242] ,
exchange8[243]
or relinquishment8[244]
of the asset; or
(ii) the
extinguishment of any rights therein8[245] ;
or
(iii) the
compulsory acquisition thereof under any law; or
(iv) in
a case where the asset is converted by the owner thereof into, or is treated by
him as, stock-in-trade of a business carried on by him, such conversion or
treatment;] 9[246] [or]
The following
sub-clause (iva) shall be inserted after sub-clause (iv) in clause (47) of
section 2 by the Finance Act, 2005, w.e.f. 1-4-2006:
(iva) the maturity or redemption of a zero coupon
bond; or
9[247] [(v) any
transaction involving the allowing of the possession of any immovable property
to be taken or retained in part performance of a contract of the nature
referred to in section 53A10[248]
of the Transfer of Property Act, 1882 (4 of 1882); or
(vi) any
transaction (whether by way of becoming a member of, or acquiring shares in, a
co-operative society, company or other association of persons or by way of any
agreement or any arrangement or in any other manner whatsoever) which has the
effect of transferring, or enabling the enjoyment of, any immovable property.
Explanation.—For the purposes of
sub-clauses (v) and (vi), “immovable property” shall have
the same meaning as in clause (d)
of section 269UA.]
(48) 11[249] [Omitted by the Finance Act, 1992, w.e.f.
1-4-1993.]
The following clause
(48) shall be inserted after clause (47) of section 2 by the Finance Act, 2005,
w.e.f. 1-4-2006:
(48) “Zero coupon bond” means a bond—
(a) Issued by any infrastructure capital company
or infrastructure capital fund or public sector company on or after the 1st day
of June, 2005;
(b) In respect of which no payment and
benefit is received or receivable before maturity or redemption from
infrastructure capital company or infrastructure capital fund or public sector
company; and
(c) Which the Central Government may, by
notification in the Official Gazette, specify in this behalf.
Explanation.—for the purposes of this clause, the expressions “infrastructure capital company” and “infrastructure capital fund” shall have the same meanings respectively assigned to them in clauses (a) and (b) of Explanation 1 to clause (23G) of section 10.
12[250] [“Previous year” defined.
3. For the purposes of this Act, “previous year” means the financial year
immediately preceding the assessment year:
Provided that, in the case of a business or profession newly set up, or a source of income newly coming into existence, in the said financial year, the previous year shall be the period beginning with the date of setting up of the business or profession or, as the case may be, the date on which the source of income newly comes into existence and ending with the said financial year.]
[1]Amendments made by the Finance Act, 2005, notwithstanding the dates from which they come into effect have been printed in italics enclosed with bold square brackets. Amendments made by the Finance (No. 2) Act, 2004, coming into force from April 1, 2005 have also been printed in italics but enclosed within medium square brackets.
[2]For
applicability of the Act to State of Sikkim, see section 26 of the
Finance Act, 1989.
For extension of Act to Continental Shelf of India, see Notification No. GSR 304(E), dated 31-3-1983.
[3]For effective date for the applicability of the Act in
the State of Sikkim, see Notification No. SO 148(E), dated 23-2-1989.
[4]Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.
[5]Renumbered as clause (1A) by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.
[6]For relevant case laws,
[7]See rules 7
and 8 for manner of computation of income which is partially agricultural and
partially from business. See also Appendix Two for an
analysis of rules 7 and 8. See also rule 7A (income from manufacture of
rubber) and rule 7B (income from manufacture of coffee).
[8]The Finance Act, 1973 introduced for the first time a scheme of partially integrated taxation of non-agricultural income with incomes derived from agriculture for the purposes of determining the rate of income-tax that will apply to certain non-corporate assessees. The scheme is since continued by the Annual Finance Acts. The provisions applicable for the assessment year 2005-2006 are contained in section 2(2)/2(12)(c) and Part IV of the First Schedule to the Finance Act, 2005.
[9]See also
Circular No. 310, dated 29-7-1981 and Circular No. 5/2003, dated 22-5-2003.
[10]Substituted by the Taxation Laws (Amendment) Act,
1970, w.r.e.f. 1-4-1962.
[11]For meaning of the terms/expressions “rent”,
“revenue”, “derived”, “revenue derived from land”, “such land”, “agriculture”
and “market”
[12]For meaning of the terms/expressions “rent”,
“revenue”, “derived”, “revenue derived from land”, “such land”, “agriculture”
and “market”
[13]For meaning of the terms/expressions “rent”,
“revenue”, “derived”, “revenue derived from land”, “such land”, “agriculture”
and “market”
[14]For meaning of the terms/expressions “rent”,
“revenue”, “derived”, “revenue derived from land”, “such land”, “agriculture”
and “market”
[15]For meaning of the terms/expressions “rent”,
“revenue”, “derived”, “revenue derived from land”, “such land”, “agriculture”
and “market”
[16]Substituted by the Taxation Laws (Amendment) Act,
1970, w.r.e.f. 1-4-1962.
[18]Inserted by the Finance Act, 1989, w.r.e.f. 1-4-1970.
[19]Explanation renumbered as Explanation
1 by the Finance Act, 2000, w.e.f. 1-4-2001.
[20]Inserted by the Finance
Act, 2000, w.e.f. 1-4-2001.
[21]Inserted by the Finance (No. 2) Act, 1967, w.e.f.
1-4-1967.
[22]Renumbered as clause (1B) by the Direct Tax
Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.
[23]Substituted for “nine-tenths” by the Finance Act,
1999, w.e.f. 1-4-2000.
[24]Clause (3) omitted by the Direct Tax Laws
(Amendment) Act, 1987, w.e.f. 1-4-1988.
[25]Substituted for “Commissioner” by the Direct Tax Laws
(Amendment) Act, 1987, w.e.f. 1-4-1988.
[26]Substituted for “Commissioner” by the Direct Tax Laws
(Amendment) Act, 1987, w.e.f. 1-4-1988.
[27]For relevant case laws
[28]For meaning of the term “assessee”
[29]Substituted for “income-tax or super-tax” by the
Finance Act, 1965, w.e.f. 1-4-1965.
[30]The italicised words shall be inserted by the Finance
Act, 2005, w.e.f. 1-4-2006.
[31]Inserted by the Direct Tax Laws (Amendment) Act, 1987,
w.e.f. 1-4-1988.
[32]Inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.
[33]Inserted by the Finance (No. 2) Act, 1996, w.e.f.
1-10-1996.
[34]Inserted by the Finance (No. 2) Act, 1998, w.e.f.
1-10-1998.
[35]Substituted for “Deputy Commissioner or Deputy
Director” by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. Earlier “or
Deputy Director” was inserted by the Finance (No. 2) Act, 1996, w.e.f.
1-10-1996.
[36]For the meaning of the term “assessment”
[37]Inserted by the Direct Tax Laws (Amendment) Act, 1987,
w.e.f. 1-4-1988.
[38]Inserted by the Finance (No. 2) Act, 1998, w.e.f.
1-10-1998.
[39]Substituted
by the Finance (No. 2) Act, 1998 w.e.f. 1-4-1999. Prior to its
substitution, clause (11), as inserted by the Taxation Laws (Amendment
& Miscellaneous Provisions) Act, 1986, w.e.f. 1-4-1988, read as under :
‘(11) “block of assets” means a group of assets falling
within a class of assets, being buildings, machinery, plant or furniture, in
respect of which the same percentage of depreciation is prescribed ;’
Original clause was earlier omitted by the Finance Act, 1965, w.e.f. 1-4-1965.
[40]Substituted for “Central
Board of Revenue constituted under the Central Board of Revenue Act, 1924 (4 of
1924)” by the Central Boards of Revenue Act, 1963, w.e.f. 1-1-1964.
[41]Inserted by the Finance Act, 2001, w.e.f. 1-6-2001.
[42]For relevant case laws,
see Case Laws
[43]For the meaning of the terms/expressions “business”,
“trade”, “adventure” and “in the nature of trade”
[44]For the meaning of the terms/expressions “business”, “trade”,
“adventure” and “in the nature of trade”
[45]For the meaning of the terms/expressions “business”,
“trade”, “adventure” and “in the nature of trade”
[46]For the meaning of the terms/expressions “business”,
“trade”, “adventure” and “in the nature of trade”
[49]Substituted by the Finance Act, 1972, w.e.f. 1-4-1973.
[52]Substituted for “(iii) agricultural land in
India” by the Finance Act, 1970, w.e.f. 1-4-1970.
[57]Inserted by the Taxation Laws (Amendment) Act, 1962,
w.e.f. 13-12-1962.
[58]Inserted by the Finance (No. 2) Act, 1965, w.e.f.
1-4-1965.
[59]Inserted by the Taxation Laws (Amendment &
Miscellaneous Provisions) Act, 1965, w.e.f. 4-12-1965.
[60]Inserted by the Special Bearer Bonds (Immunities and
Exemptions) Act, 1981, w.e.f. 12-1-1981.
[61]Inserted by the Finance Act, 1999, w.e.f. 1-4-2000.
[62]See also
Circular No. 395, dated 24-9-1984.
[64]For the meaning of terms/expression “charitable
purpose”, “education” and “object of general public utility”
[65]For the meaning of terms/expression “charitable
purpose”, “education” and “object of general public utility”
[66]For the meaning of terms/expression “charitable
purpose”, “education” and “object of general public utility”
[67]“not involving the carrying on of any activity for
profit” omitted by the Finance Act, 1983, w.e.f. 1-4-1984.
[72]Words “, and includes a person appointed to be an Additional
Commissioner of Income-tax under that sub-section” omitted by the Direct Tax
Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[76]Substituted
by the Finance Act, 1964, w.e.f. 1-4-1964.
[77]Inserted
by the Finance (No. 2) Act, 1971, w.e.f. 1-4-1971.
[78]For text of section 25 of the Companies Act, 1956, see
Appendix One.
[79]Inserted
by the Finance Act, 1985, w.r.e.f. 1-4-1984.
[80]For
text of section 620A of the Companies Act, 1956, and notified Nidhi(s)
thereunder, see Appendix One.
[81]Inserted
by the Finance Act, 1992, w.e.f. 1-4-1993.
[82]Substituted by the Finance Act, 1969, w.e.f. 1-4-1970.
Earlier, clause (b) was amended first by the Finance Act, 1965, w.e.f.
1-4-1965 and then by the Finance Act, 1966, w.e.f. 1-4-1966.
[83]Clause
(iii) of section 3(1) of the Companies Act, 1956, defines “private
company”. For text of section 3, see Appendix One.
[84]Substituted
by the Finance Act, 1983, w.e.f. 2-4-1983.
[85]Substituted
for “where such subsidiary company fulfils the conditions laid down in clause (b)
of section 108” by the Finance Act, 1987, w.e.f. 1-4-1988.
[86]Inserted
by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[87]Words “or an Additional Commissioner of Income-tax” omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. Earlier the quoted words were inserted by the Finance Act, 1994, w.e.f. 1-6-1994.
[88]Clauses
(19AA) and (19AAA) inserted by the Finance Act, 1999, w.e.f.
1-4-2000.
[89]For
text of sections 391 to 394 of the Companies Act, 1956, see Appendix
One.
[90]Substituted
for “the conditions specified in sub-clauses (i) to (vii) of this
clause, to the extent applicable” by the Finance Act, 2000, w.e.f. 1-4-2000.
[92]Inserted
by the Finance Act, 1994, w.e.f. 1-6-1994.
[93]Inserted by the Finance Act, 1994, w.e.f. 1-6-1994.
[94]Words
“or an Additional Director of Income-tax” omitted by the Finance (No. 2) Act,
1998, w.e.f. 1-10-1998.
[95]Clauses
(13), (24) and (25) of section 2 of the Companies Act,
1956, define expressions “director”, “manager” and “managing agent”,
respectively. For text of provisions, see Appendix One.
[96]Substituted
by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[97]Inserted
by the Finance Act, 1994, w.e.f. 1-6-1994.
[98]Substituted for “Deputy” by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.
[99]Inserted
by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.
[101]For
the meaning of the terms “dividend”, “distribution” and “profits”
[102]For
the meaning of the terms “dividend”, “distribution” and “profits”
[103]For
the meaning of the terms “dividend”, “distribution” and “profits”
[104]For
the meaning of the terms “dividend”, “distribution” and “profits”
[105]For
the meaning of the terms “profits” and “distribution”
[106]For
the meaning of the terms “profits” and “distribution”
[107]For
the meaning of the terms “profits” and “distribution”
[108]For the meaning of the terms “profits” and “distribution”
[109]Substituted for “by way of advance or loan to a shareholder, being a person who has a substantial interest in the company,” by the Finance Act, 1987, w.e.f. 1-4-1988.
[110]For
the meaning of the term “shareholder”
[111]For
the meaning of the terms “profits” and “distribution”
[112]Inserted
by the Finance Act, 1965, w.e.f. 1-4-1965.
[113]Inserted
by the Finance Act, 1966, w.e.f. 1-4-1966.
[114]Inserted
by the Finance Act, 1987, w.e.f. 1-4-1988.
[115]Inserted
by the Finance Act, 1999, w.e.f. 1-4-2000.
[116]For
text of section 77A of the Companies Act, 1956, see Appendix One.
[117]Inserted by the Direct Taxes (Amendment) Act, 1964, w.r.e.f. 1-4-1962.
[118]Inserted
by the Finance Act, 1987, w.e.f. 1-4-1988.
[119]Inserted
by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.
[120]Inserted
by the Finance Act, 2001, w.e.f. 1-6-2001.
[121]For
definition of “document” under section 2(1)(t) of the Information
Technology Act, 2000, see Appendix One.
[122]Inserted
by the Finance Act, 1964, w.e.f. 1-4-1964.
[123]Renumbered
as clause (22B) by the Direct Tax Laws (Amendment) Act, 1987, w.e.f.
1-4-1989.
[124]Section
4 of the Indian Partnership Act, 1932, defines expressions “firm”, “partner”
and “partnership” as follows:
‘ “Partnership” is the relation
between persons who have agreed to share the profits of a business carried on
by all or any of them acting for all.
Persons who have entered into partnership with one another are called individually “partners” and collectively “a firm”, and the name under which their business is carried on is called the “firm name”.’
[125]Inserted
by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.
[126]For
relevant case laws, see case laws
[127]For
the meaning of the terms/expression “income”, “includes” and “profits and
gains”
[128]For the meaning of the terms/expression “income”, “includes” and “profits and gains”
[130]Inserted by the Finance Act, 1972, w.e.f. 1-4-1973.
[131]Substituted for “or by a trust or institution of
national importance referred to in clause (d) of sub-section (1) of
section 80F” by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.
Earlier, the said expression was substituted for “, not being contributions
made with a specific direction that they shall form part of the corpus of the
trust or institution” by the Direct Tax Laws (Amendment) Act, 1987, with effect
from the same date.
[132]Inserted by the Direct Tax Laws (Amendment) Act, 1989, w.r.e.f. 1-4-1962.
[133]For
the meaning of the expression “benefit or perquisite”
[134]Inserted
by the Finance (No. 2) Act, 1980, w.e.f. 1-4-1980.
[135]For the meaning of the expression “benefit or perquisite”
[136]Inserted by the Finance Act, 1990, w.r.e.f. 1-4-1962.
[137]Inserted
by the Finance Act, 1990, w.r.e.f. 1-4-1967.
[138]Inserted by the Finance Act, 1990, w.r.e.f. 1-4-1972.
[139]Relettered
by the Finance Act, 1990, w.r.e.f. 1-4-1962. Earlier the original sub-clause (va)
was inserted by the Finance Act, 1964, w.e.f. 1-4-1964.
[140]Inserted
by the Finance Act, 1992, w.e.f. 1-4-1993.
[141]Inserted
by the Finance Act, 1972, w.e.f. 1-4-1972.
[143]Inserted by the Finance Act, 2001, w.e.f. 1-4-2002.
[144]Inserted by the Finance Act, 1987, w.e.f. 1-4-1988.
[145]Inserted by the Finance (No. 2) Act, 1996, w.e.f. 1-10-1996.
[146]Should
be read as “sub-clause”.
[147]Inserted
by the Finance Act, 2002, w.e.f. 1-4-2003.
[148]Substituted for “clause (vii)” by the Finance Act, 2003, w.e.f. 1-4-2003.
[149]Inserted
by the Finance (No. 2) Act, 2004, w.e.f. 1-4-2005.
[150]Words
“sub-section (1) of” omitted by the Direct Tax Laws (Amendment) Act, 1989,
w.r.e.f. 1-4-1988. Earlier, that expression was inserted by the Direct Tax Laws
(Amendment) Act, 1987, with effect from the same date.
[151]Inserted by the Taxation Laws (Extension to Union Territories) Regulation, 1963, w.e.f. 1-4-1963.
[152]Now State of Goa.
[153]Inserted
by the Taxation Laws (Extension to Union Territories) Regulation, 1963, w.e.f.
1-4-1963.
[154]Inserted
by the Finance (No. 2) Act, 1971, w.e.f. 1-4-1971.
[155]Inserted
by the Taxation Laws (Extension to Union Territories) Regulation, 1963, w.e.f.
1-4-1963.
[156]Now
State of Goa.
[157]Substituted for
“registered office of the company” by the Finance (No. 2) Act, 1971, w.e.f.
1-4-1971.
[158]Omitted
by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[159]Substituted
for “(2)” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[160]Inserted
by the Finance Act, 1976, w.e.f. 1-6-1976.
[161]See
also Letter F. No. 164/18/77-IT(A-I), dated 13-7-1978.
[162]Inserted
by the Finance Act, 1988, w.e.f. 1-4-1989.
[163]Inserted
by the Finance Act, 2001, w.e.f. 1-4-2002.
[164]For
text of section 2(7A) of the Insurance Act, see Appendix
One.
[165]Inserted
by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.
[166]Clause
(11) of section 2 of the Code of Civil Procedure defines “legal
representative” as follows:
‘(11) “legal representative” means a person who in law represents the estate of a deceased person, and includes any person who intermeddles with the estate of the deceased and where a party sues or is sued in a representative character the person on whom the estate devolves on the death of the party so suing or sued ;’
[167]Inserted
by the Finance Act, 1987, w.e.f. 1-4-1988.
[168]Inserted
by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.
[169]Inserted
by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1991.
[170]Inserted
by the Finance Act, 1999, w.e.f. 1-4-1999. Earlier these words were omitted by
the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999.
[171]“,
113” omitted by the Finance Act, 1965, w.e.f. 1-4-1965.
[172]For
relevant case laws, see case laws
[175]For the meaning of the term/expressions “firm”,
“association of persons” and “body of individuals”
[176]For the meaning of the term/expressions “firm”,
“association of persons” and “body of individuals”
[177]For the meaning of the term/expressions “firm”,
“association of persons” and “body of individuals”
[178]Inserted
by the Finance Act, 2002, w.e.f. 1-4-2002.
[179]For relevant case laws, see Case Laws
[180]Substituted
for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[181]For
relevant case laws, see case laws
[182]For
the meaning of the term “vocation”
[183]Inserted
by the Finance Act, 1987, w.e.f. 1-4-1987.
[184]Section
617 of the Companies Act, 1956, defines “Government company” as follows:
‘617. Definition of “Government company”.—For the purposes of this Act, Government company means any company in which not less than fifty-one per cent of the paid-up share capital is held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments and includes a company which is a subsidiary of a Government company as thus defined.’
[185]Section
21 of the Indian Penal Code defines “public servant”. For text of section 21, see
Appendix One.
[186]Inserted
by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1967.
[187]“or
sub-section (9) of section 80E from any payment referred to therein” omitted by
the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. Originally, the
said expression was inserted by the Finance Act, 1968, w.e.f. 1-4-1968.
[188]Substituted
for ‘computation of the “advance tax” payable under Chapter XVII-C, the rate or
rates of income-tax specified in this behalf in the Finance Act of the relevant
year’ by the Finance Act, 1970, w.e.f. 1-4-1971.
[189]Inserted
by the Finance Act, 1976, w.e.f. 1-6-1976.
[190]Inserted
by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[191]Inserted
by the Finance Act, 2002, w.e.f. 1-4-2003.
[193]“or
section 167A” omitted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f.
1-4-1989.
Earlier this expression was inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[195]Substituted for “in a case falling under section 164,
the rate specified in that section” by the Finance Act, 1976, w.e.f. 1-6-1976.
[197]Inserted
by the Finance Act, 2002, w.e.f. 1-4-2003.
[199]“or section 167A” omitted by the Direct Tax Laws
(Amendment) Act, 1989, w.e.f. 1-4-1989. Earlier this expression was inserted by
the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[201]Substituted for “section 115B or, as the case may be,
section 164” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[203]“or section 167A” omitted by the Direct Tax Laws
(Amendment) Act, 1989, w.e.f. 1-4-1989. Earlier this expression was inserted by
the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[208]Substituted by the Finance Act, 1992, w.e.f. 1-6-1992.
Prior to its substitution, sub-clause (iii) was inserted by the Finance
(No. 2) Act, 1991, w.e.f. 1-10-1991.
[210]Substituted for “Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[211]Prior to omission, clause (39) was substituted
by the Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-4-1989. Earlier
clause (39) was omitted by the Direct Tax Laws (Amendment) Act, 1987,
w.e.f. 1-4-1989 and was later reintroduced by the Direct Tax Laws (Amendment)
Act, 1989, w.e.f. 1-4-1989.
[214]Inserted by the Finance (No. 2) Act, 1962, w.e.f. 1-4-1962.
[215]See also Circular No. 415, dated 14-3-1985 and Circular No. 704, dated 28-4-1995. For details and relevant case laws
[216]Substituted for the portion beginning with “short-term
capital asset” and ending with “preceding the date of its transfer ;” by the
Finance Act, 1973, w.e.f. 1-4-1974. Earlier clause (42A) was first
amended by the Finance Act, 1966, w.e.f. 1-4-1966 and later by the Finance Act,
1968, w.e.f. 1-4-1969.
[217]Substituted for “sixty” by the Finance (No. 2) Act, 1977, w.e.f. 1-4-1978.
[226]Inserted
by the Finance Act, 1999, w.e.f. 1-4-2000.
[227]Inserted
by the Finance Act, 2003, w.e.f. 1-4-2004.
[228] Inserted by the Finance Act, 1994, w.e.f.
1-4-1995.
[229]Clause (h) of section 2
of the Securities Contracts (Regulation) Act, 1956, defines “securities” as
follows :
‘(h) “securities” include—
(i) shares,
scrips, stocks, bonds, debentures, debenture stock or other marketable
securities of a like nature in or of any incorporated company or other body
corporate;
(ia) derivative;
(ib) units
or any other instrument issued by any collective investment scheme to the
investors in such schemes;
(ic) security
receipt as defined in clause (zg) of section 2 of the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest Act,
2002;
(id) units
or any other such instrument issued to the investors under any mutual fund
scheme;
(ii) Government
securities;
(iia) such
other instruments as may be declared by the Central Government to be
securities; and
(iii) rights or interest in securities;’
[230]Inserted
by the Finance Act, 1987, w.e.f. 1-4-1988.
[231]Inserted by the Finance Act, 1999, w.e.f. 1-4-2000. Earlier clause (42C) was inserted by the Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-4-1990 and later on omitted by the Finance Act, 1990, w.e.f. 1-4-1990.
[232]Substituted
by the Finance Act, 1965, w.e.f. 1-4-1965.
[233]The
italicised words shall be inserted by the Finance Act, 2005, w.e.f. 1-4-2006.
[234]Inserted
by the Finance Act, 1965, w.e.f. 1-4-1965.
[235]Chapter
XXII-B was omitted by the Finance Act, 1990, w.e.f. 1-4-1990.
[236]Omitted by the Direct Tax Laws (Amendment) Act, 1987,
w.e.f. 1-4-1989. Original clause (43B) was inserted by the Finance (No.
2) Act, 1971, w.e.f. 1-1-1972.
[237]Substituted by the Direct Tax Laws (Amendment) Act,
1987 [as amended by the Direct Tax Laws (Amendment) Act, 1989], w.r.e.f.
1-4-1988. Prior to its substitution, clause (44), was substituted by the
Finance Act, 1963, w.r.e.f. 1-4-1962.
[238]Omitted
by the Finance Act, 1965, w.e.f. 1-4-1965.
[239]For
relevant case laws, see Case Laws
[240]Substituted
by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-4-1985.
[241]For the
meaning of the terms/expression “transfer”, “sale”, “exchange”,
“relinquishment” and “extinguishment of any rights therein”
[242]For the
meaning of the terms/expression “transfer”, “sale”, “exchange”,
“relinquishment” and “extinguishment of any rights therein”
[243]For the
meaning of the terms/expression “transfer”, “sale”, “exchange”,
“relinquishment” and “extinguishment of any rights therein”
[244]For the
meaning of the terms/expression “transfer”, “sale”, “exchange”,
“relinquishment” and “extinguishment of any rights therein”
[245]For the
meaning of the terms/expression “transfer”, “sale”, “exchange”,
“relinquishment” and “extinguishment of any rights therein”
[246]Inserted
by the Finance Act, 1987, w.e.f. 1-4-1988.
[247]Inserted
by the Finance Act, 1987, w.e.f. 1-4-1988.
[248]For
text of section 53A of the Transfer of Property Act, 1882, see Appendix
One.
[249]Prior
to its omission clause (48) was omitted by the Direct Tax Laws
(Amendment) Act, 1987, w.e.f. 1-4-1989. Later it was reintroduced by the Direct
Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.
[250]Substituted
by the Finance Act, 1999, w.e.f. 1-4-2000. Prior to its substitution, section 3
was amended by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989 and
the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.