CHAPTER XII
Determination of tax in certain special cases
46[R1] Determination of tax where total income includes income on which
no tax is payable.
110. Where there is included in the total income of an assessee any income on which no income-tax is payable under the provisions of this Act, the assessee shall be entitled to a deduction, from the amount of income-tax with which he is chargeable on his total income, of an amount equal to the income-tax calculated at the average rate of income-tax on the amount on which no income-tax is payable.]
Tax on accumulated balance of recognised provident fund.
111. (1) Where
the accumulated balance due to an employee participating in a recognised provident
fund is included in his total income, owing to the provisions of rule 8 of Part
A of the Fourth Schedule not being applicable, the 47[R2] [Assessing] Officer shall calculate the total
of the various sums of 48[R3] [tax] in accordance with the provisions of
sub-rule (1) of rule 9 thereof.
(2) Where
the accumulated balance due to an employee participating in a recognised
provident fund which is not included in his total income under the provisions
of rule 8 of Part A of the Fourth Schedule becomes payable, super-tax shall be
calculated in the manner provided in sub-rule (2) of rule 9 thereof.
49[R4] Tax
on short term capital gains in certain cases.
111A. (1) Where the total income of an assessee
includes any income chargeable under the head “Capital gains”, arising from the
transfer of a short-term capital asset, being an equity share in a company or a
unit of an equity oriented fund and—
(a) the transaction of sale
of such equity share or unit is entered into on or after the date on which
Chapter VII of the Finance (No. 2) Act, 2004 comes into force; and
(b) such
transaction is chargeable to securities transaction tax under that Chapter,the tax payable by the assessee on the total income
shall be the aggregate of—
(i) the amount of income-tax
calculated on such short-term capital gains at the rate of ten per cent; and
(ii) the amount of
income-tax payable on the balance amount of the total income as if such balance
amount were the total income of the assessee:
Provided that
in the case of an individual or a Hindu undivided family, being a resident,
where the total income as reduced by such short-term capital gains is below the
maximum amount which is not chargeable to income-tax, then, such short-term
capital gains shall be reduced by the amount by which the total income as so
reduced falls short of the maximum amount which is not chargeable to income-tax
and the tax on the balance of such short-term capital gains shall be computed
at the rate of ten per cent.
(2) Where the gross total income of an
assessee includes any short term capital gains referred to in sub-section (1),
the deduction under Chapter VI-A shall be allowed from the gross total income
as reduced by such capital gains.
(3) Where the total income of an assessee includes
any short term capital gains referred to in sub-section (1), the rebate under
section 88 shall be allowed from the income-tax on the total income as reduced
by such capital gains.
Explanation.—For the purposes of this section, the expression “equity oriented fund” shall have the meaning assigned to it in the Explanation to clause (38) of section 10.]
50[R5] Tax
on long-term capital gains.
51[R6] 112.(1) Where the total income of an
assessee includes any income, arising from the transfer of a long-term capital
asset, which is chargeable under the head “Capital gains”, the tax payable by
the assessee on the total income shall be the aggregate of,—
(a) in the case of an individual or a Hindu undivided family, 52[being a resident,]—
(i) the
amount of income-tax payable on the total income as reduced by the amount of
such long-term capital gains, had the total income as so reduced been his total
income ; and
(ii) the amount of income-tax calculated on such long-term
capital gains at the rate of twenty per cent :
Provided that where the total income as reduced by
such long-term capital gains is below the maximum amount which is not
chargeable to income-tax, then, such long-term capital gains shall be reduced
by the amount by which the total income as so reduced falls short of the
maximum amount which is not chargeable to income-tax and the tax on the balance
of such long-term capital gains shall be computed at the rate of twenty per cent ;
(b) in the case of a 53[R7] [domestic] company,—
(i) the
amount of income-tax payable on the total income as reduced by the amount of
such long-term capital gains, had the total income as so reduced been its total
income ; and
(ii) the
amount of income-tax calculated on such long-term capital gains at the rate of 54[R8] [twenty] per cent :
56[R10] (c) in
the case of a non-resident (not being a company) or a foreign company,—
(i) the
amount of income-tax payable on the total income as reduced by the amount of
such long-term capital gains, had the total income as so reduced been its total
income ; and
(ii) the amount of income-tax calculated on such long-term
capital gains at the rate of twenty per cent ;]
57[R11] (d)] in
any other case
58[R12] [of
a resident],—
(i) the amount of income-tax payable on the total income as reduced by the amount of long-term capital gains, had the total income as so reduced been its total income ; and
(ii) the amount of income-tax calculated on such long-term
capital gains at the rate of 59[R13] [twenty]
per cent.
61[R15] Provided that where the tax payable in respect of any
income arising from the transfer of a long-term capital asset, being listed
securities 62[R16] or
unit] 63[R17] [or zero coupon bond], exceeds ten per cent of the amount of capital gains before giving
effect to the provisions of the second proviso to section 48, then, such excess shall be ignored for the
purpose of computing the tax payable by the assessee.
64[R18] Explanation.—For the purposes of this sub-section,—
(a) “listed securities” means the securities—
(i) as defined in clause (h)
of section 265[R19] of the
Securities Contracts (Regulation) Act, 1956 (32 of 1956); and
(ii) listed in any recognised stock exchange in
(b) “unit” shall have the meaning assigned to it in clause (b) of Explanation to section 115AB.]]
(2) Where the gross total income of an
assessee includes any income arising from the transfer of a long-term capital
asset, the gross total income shall be reduced by the amount of such income and
the deduction under Chapter VI-A shall be allowed as if the gross total income
as so reduced were the gross total income of the assessee.
(3) Where the total income of an assessee includes any income arising from the transfer of a long-term capital asset, the total income shall be reduced by the amount of such income and the rebate under section 88 shall be allowed from the income-tax on the total income as so reduced.
Tax on interest on National Savings Certificates (First Issue).
112A. [Omitted by the Finance Act, 1988, w.e.f. 1-4-1989. Original section 112A was inserted by the Finance (No. 2) Act, 1965, w.e.f. 11-9-1965 and later on amended by the Finance Act, 1966, w.e.f. 1-4-1966, Finance (No. 2) Act, 1967, w.e.f. 1-4-1968, Taxation Laws (Amendment) Act, 1970, with retrospective effect from 1-4-1968/1969 and Finance Act, 1973, with retrospective effect from 1-4-1972.]
66[R20] Tax in the case of block assessment of
search cases.
113. The
total undisclosed income of the block period, determined under section
158BC, shall be chargeable to tax at the
rate of sixty per cent:]
67[R21] Provided that the tax chargeable under this section shall be increased by a surcharge, if any, levied by any Central Act and applicable in the assessment year relevant to the previous year in which the search is initiated under section 132 or the requisition is made under section 132A.]
Tax on capital gains in cases of assessees other than companies.
114. [Omitted by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1968 and reintroduced with material modifications in section 80T. Section 114 was substituted first by the Finance (No. 2) Act, 1962, w.e.f. 1-4-1962 and later on amended by the Finance Act, 1964, w.e.f. 1-4-1964, the Finance Act, 1965, w.e.f. 1-4-1965, the Finance (No. 2) Act, 1965, w.e.f. 11-9-1965 and the Finance Act, 1966, w.e.f. 1-4-1966.]
Tax on capital gains in case of companies.
115. 68[R22] [Omitted by the Finance Act, 1987, w.e.f. 1-4-1988.]
69[R23] Tax on dividends, royalty and technical service fees in
the case of foreign companies.
70[R24] 115A. 71[R25] (1) Where the total income of—
(a) a non-resident (not being a company) or of a foreign
company, includes any income by way of—
(i) dividends 72[R26] [other
than dividends referred to in section 115-O] ; or
(ii) interest received from Government or an Indian concern on
monies borrowed or debt incurred by Government or the Indian concern in foreign
currency; or
(iii) income received in respect of units, purchased in foreign
currency, of a Mutual Fund specified under clause (23D) of section 10 or of the Unit Trust of India,the
income-tax payable shall be aggregate of—
(A) the
amount of income-tax calculated on the amount of income by way of dividends 72[R27] [other
than dividends referred to in section 115-O], if any, included in the total
income, at the rate of twenty per cent ;
(B) the
amount of income-tax calculated on the amount of income by way of interest
referred to in sub-clause (ii),
if any, included in the total income, at the rate of twenty per cent ;
(C) the
amount of income-tax calculated on the income in respect of units referred to
in sub-clause (iii), if any,
included in the total income, at the rate of twenty per cent; and
(D) the
amount of income-tax with which he or it would have been chargeable had his or
its total income been reduced by the amount of income referred to in sub-clause
(i), sub-clause (ii) and sub-clause (iii) ;
(b) 73[R28] [a non-resident (not being a company) or a foreign company, includes any income by way of royalty or fees for technical services other than income referred to in sub-section (1) of section 44DA] received from Government or an Indian concern in pursuance of an agreement made by the foreign company with Government or the Indian concern after the 31st day of March, 1976, and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy, then, subject to the provisions of sub-sections (1A) and (2), the income-tax payable shall be the aggregate of,—
74[R29] [(A) the
amount of income-tax calculated on the income by way of royalty, if any,
included in the total income, at the rate of thirty per cent if such royalty is
received in pursuance of an agreement made on or before the 31st day of May,
1997 and twenty per cent where such royalty is received in pursuance of an
agreement made after the 31st day of May, 1997 75[R30] [but before the 1st
day of June, 2005];
The following sub-clause (AA) shall be inserted after sub-clause (A) in
clause (b) of sub-section (1) of section 115A by the Finance Act, 2005,
w.e.f. 1-4-2006:
(AA) the amount of income-tax calculated on the income by way of
royalty, if any, included in the total income, at the rate of ten per cent if
such royalty is received in pursuance of an agreement made on or after the 1st
day of June, 2005;
(B) the amount of income-tax calculated on
the income by way of fees for technical services, if any, included in the total
income, at the rate of thirty per cent if such fees for technical services are
received in pursuance of an agreement made on or before the 31st day of May,
1997 and twenty per cent where such fees for technical services are received in
pursuance of an agreement made after the 31st day of May, 1997 75[R31] [but before the 1st
day of June, 2005] ; and]
The following sub-clause (BB) shall be inserted after sub-clause (B) in
clause (b) of sub-section (1) of section 115A by the Finance Act, 2005,
w.e.f. 1-4-2006 :
(BB) the
amount of income-tax calculated on the income by way of fees for technical
services, if any, included in the total income, at the rate of ten per cent if
such fees for technical services are received in pursuance of an agreement made
on or after the 1st day of June, 2005; and
(C) the amount of income-tax with which it would have been chargeable
had its total income been reduced by the amount of income by way of royalty and
fees for technical services.
Explanation.—For the purposes of
this section,—
(a) “fees for technical services” shall have the same meaning as in Explanation 2 to clause (vii) of sub-section (1) of section 9 ;
(b) “foreign currency” shall have the same meaning as in the Explanation below item (g) of sub-clause (iv) of clause (15) of section 10 ;
(c) “royalty” shall have the same meaning as in Explanation 2 to clause (vi) of sub-section (1) of section 9 ;
(d) “Unit
Trust of India” means the Unit Trust of India established under the Unit Trust
of India Act, 1963 (52 of 1963).]
76[R32] (1A)
Where the royalty referred to in
clause (b) of sub-section (1)
is in consideration for the transfer of all or any rights (including the
granting of a licence) in respect of copyright in any book to an Indian concern
77[R33] [or
in respect of any computer software to a person resident in India], the
provisions of sub-section (1) shall apply in relation to such royalty as if the
words 78[R34] [79[R35] [the
agreement is approved by the Central Government or where it relates to a
matter] included in the industrial policy, for the time being in force, of the
Government of India, the agreement is in accordance with that policy] occurring
in the said clause had been omitted :
Provided that such book is on a subject, the books on which are permitted,
according to the Import Trade Control Policy of the Government of India for the
period commencing from the 1st day of April, 1977, and ending with the 31st day
of March, 1978, to be imported into India under an Open General Licence :
80[R36] Provided further that such computer software is permitted according to the Import Trade
Control Policy of the Government of India for the time being in force to be
imported into
81[R37] Explanation 1].—In this sub-section, “Open General Licence” means an Open General
Licence issued by the Central Government in pursuance of the Imports (Control)
Order, 1955.]
82[R38] Explanation 2.—In this sub-section, the expression “computer
software” shall have the meaning assigned to it in clause (b) of the Explanation to section 80HHE.]
(2) Nothing contained in sub-section (1) shall apply in relation
to any income by way of royalty received by a foreign company from an Indian
concern in pursuance of an agreement made by it with the Indian concern after
the 31st day of March, 1976, if such agreement is deemed, for the 83[R39] [purposes
of the first proviso] to clause (vi)
of sub-section (1) of section 9, to have been made before the 1st day of April,
1976; and the provisions of the annual Finance Act for calculating, charging,
deducting or computing income-tax shall apply in relation to such income as if
such income had been received in pursuance of an agreement made before the 1st
day of April, 1976.]
84[R40] [(3)
No deduction in respect of any
expenditure or allowance shall be allowed to the assessee under sections 28 to
44C and section 57 in computing
his or its income referred to in sub-section (1).
(4) Where in the case of an assessee referred
to in sub-section (1),—
(a) the gross total income consists only of the income referred
to in clause (a) of that
sub-section, no deduction shall be allowed to him or it under Chapter VI-A;
(b) the
gross total income includes any income referred to in clause (a) of that sub-section, the gross
total income shall be reduced by the amount of such income and the deduction
under Chapter VI-A shall be allowed as if the gross total income as so reduced
were the gross total income of the assessee.
(5) It shall not be necessary for an assessee referred to in
sub-section (1) to furnish under sub-section (1) of section 139 a return of his or its income if—
(a) his
or its total income in respect of which he or it is assessable under this Act
during the previous year consisted only of income referred to in clause (a) of sub-section (1); and
(b) the tax deductible at source under the provisions of Chapter XVII-B has been deducted from such income.]
85[R41] Tax on income from units purchased in
foreign currency or capital gains arising from their transfer.
115AB. (1) Where the total income of an assessee, being
an overseas financial organisation (hereinafter referred to as Offshore Fund)
includes—
(a) income received
in respect of units purchased in foreign currency; or
(b) income by way
of long-term capital gains arising from the transfer of units purchased in
foreign currency,the income-tax payable shall be the
aggregate of—
(i) the
amount of income-tax calculated on the income in respect of units referred to
in clause (a), if any, included
in the total income, at the rate of ten per cent;
(ii) the
amount of income-tax calculated on the income by way of long-term capital gains
referred to in clause (b), if
any, included in the total income, at the rate of ten per cent; and
(iii) the amount of income-tax with which the Offshore Fund would have been chargeable had its total income been reduced by the amount of income referred to in clause (a) and clause (b).
(2) Where the gross total
income of the Offshore Fund,—
(a) consists
only of income from units or income by way of long-term capital gains arising
from the transfer of units, or both, no deduction shall be allowed to the
assessee under sections 28 to 44C 86[R42] [***]
or clause (i) or clause (iii) of section 57 or under Chapter
VI-A 87[R43] [and
nothing contained in the provisions of the second proviso to section 48 shall
apply to income referred to in clause (b)
of sub-section (1)];
(b) includes
any income referred to in clause (a),
the gross total income shall be reduced by the amount of such income and the
deduction under Chapter VI-A shall be allowed as if the gross total income as
so reduced were the gross total income of the assessee.
Explanation.—For the purposes of
this section,—
(a) “overseas
financial organisation” means any fund, institution, association or body,
whether incorporated or not, established under the laws of a country outside
India, which has entered into an arrangement for investment in India with any
public sector bank or public financial institution or a mutual fund specified
under clause (23D) of section
10 and such arrangement is approved by the 88[R44] [Securities
and Exchange Board of India, established under the Securities and Exchange
Board of India Act, 1992 (15 of 1992),] for this purpose;
(b) “unit” means unit of a mutual fund specified under clause (23D) of section 10 or of the Unit
Trust of India;
(c) “foreign currency”89[R45]
shall have the meaning as in the Foreign Exchange Regulation Act, 1973 (46 of
1973);
(d) “public sector bank” shall have the meaning assigned to it in
clause (23D) of section 10;
(e) “public financial institution” shall have the meaning
assigned to it in section 4A90[R46] of
the Companies Act, 1956 (1 of 1956);
(f) “Unit Trust of India” means the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963)].
91[R47] Tax on income from bonds or Global
Depository Receipts purchased in foreign currency or capital gains arising from
their transfer.
115AC. (1) Where
the total income of an assessee, being a non-resident, includes—
(a) income by way of interest on bonds of an Indian company issued in accordance with such scheme as the Central Government may, by notification in the Official Gazette92[R48] , specify in this behalf, or on bonds of a public sector company sold by the Government, and purchased by him in foreign currency; or
(b) income by way of dividends 93[R49] [,
other than dividends referred to in section 115-O,] on Global Depository Receipts—
(i) issued in
accordance with such scheme as the Central Government may, by notification in
the Official Gazette 94[R50] ,
specify in this behalf, against the initial issue of shares of an Indian
company and purchased by him in foreign currency through an approved
intermediary; or
(ii) issued against the shares of a public sector company sold by
the Government and purchased by him in foreign currency through an approved
intermediary; or
(iii) 95[R51] [issued
or] re-issued in accordance with such scheme as the Central Government may, by
notification in the Official Gazette94[R52] ,
specify in this behalf, against the existing shares of an Indian company
purchased by him in foreign currency through an approved intermediary; or
(c) income by way of long-term capital gains arising from the
transfer of bonds referred to in clause (a)
or, as the case may be, Global Depository Receipts referred to in clause (b), the income-tax payable shall be
the aggregate of—
(i) the amount of
income-tax calculated on the income by way of interest or dividends 97[R54] [,
other than dividends referred to in section 115-O] , as the case may be, in respect of bonds
referred to in clause (a) or
Global Depository Receipts referred to in clause (b), if any, included in the total income, at the rate of ten per
cent;
(ii) the amount of
income-tax calculated on the income by way of long-term capital gains referred
to in clause (c), if any, at
the rate of ten per cent; and
(iii) the amount of income-tax with which the non-resident would
have been chargeable had his total income been reduced by the amount of income
referred to in clauses (a), (b) and (c).
(2) Where
the gross total income of the non-resident—
(a) consists only of
income by way of interest or dividends 97a[R55] [,
other than dividends referred to in section 115-O] in respect of bonds referred to in clause (a) of sub-section (1) or, as the case may be, Global Depository
Receipts referred to in clause (b)
of that sub-section, no deduction shall be allowed to him under sections 28 to
44C or clause (i) or clause (iii) of section 57 or under Chapter VI-A;
(b) includes
any income referred to in clause (a)
or clause (b) or clause (c) of sub-section (1), the gross
total income shall be reduced by the amount of such income and the deduction
under Chapter VI-A shall be allowed as if the gross total income as so reduced,
were the gross total income of the assessee.
(3) Nothing contained in the first and second
provisos to section 48 shall apply for the computation of long-term capital
gains arising out of the transfer of long-term capital asset, being bonds or
Global Depository Receipts referred to in clause (c) of sub-section (1).
(4) It shall not be
necessary for a non-resident to furnish under sub-section (1) of section 139 a
return of his income if—
(a) his
total income in respect of which he is assessable under this Act during the
previous year consisted only of income referred to in clauses (a) and (b) of sub-section (1); and
(b) the tax deductible at source under the provisions of Chapter
XVII-B has been deducted from such income.
(5) Where the assessee
acquired Global Depository Receipts or bonds in an amalgamated or resulting company
by virtue of his holding Global Depository Receipts or bonds in the
amalgamating or demerged company, as the case may be, in accordance with the
provisions of sub-section (1), the provisions of that sub-section shall apply
to such Global Depository Receipts or bonds.
Explanation.—For the purposes of this section,—
(a) “approved intermediary” means an intermediary who is approved
in accordance with such scheme as may be notified98[R56] by
the Central Government in the Official Gazette;
(b) “Global Depository Receipts” shall have the same meaning as in clause (a) of the Explanation to section 115ACA.]
99[R57] Tax on income from Global depository receipts purchased in foreign currency or capital gains
arising from their transfer.
115ACA. 1[R58] [(1)
Where the total income of an assessee,
being an individual, who is a resident and an employee of an Indian company
engaged in specified knowledge based industry or service, or an employee of its
subsidiary engaged in specified knowledge based industry or service (hereafter
in this section referred to as the resident employee), includes—
(a) income
by way of dividends
2[R59] [,
other than dividends referred to in section 115-O,] on Global Depository
Receipts of an Indian company engaged in specified knowledge based industry or
service, issued in accordance with such Employees’ Stock Option Scheme as the
Central Government may, by notification in the Official Gazette3, specify in this behalf and purchased by him
in foreign currency; or
(b) income by way of long-term capital gains arising from the
transfer of Global Depository Receipts referred to in clause (a),the income-tax payable shall be
the aggregate of—
(i) the
amount of income-tax calculated on the income by way of dividends 2[R60] [, other
than dividends referred to in section 115-O,] in respect of Global Depository
Receipts referred to in clause (a),
if any, included in the total income, at the rate of ten per cent;
(ii) the
amount of income-tax calculated on the income by way of long-term capital gains
referred to in clause (b), if
any, at the rate of ten per cent; and
(iii) the amount of income-tax with which the resident employee
would have been chargeable had his total income been reduced by the amount of
income referred to in clauses (a)
and (b).
Explanation.—For the purposes of this sub-section,—
(a) “specified knowledge based industry or service” means—
(i) information
technology software;
(ii) information
technology service;
(iii) entertainment
service;
(iv) pharmaceutical
industry;
(v) bio-technology industry; and
(vi) any other
industry or service, as may be specified by the Central Government, by
notification in the Official Gazette;
(b) “subsidiary”
shall have the meaning assigned to it in section 44 of the Companies Act, 1956 (1 of 1956) and
includes subsidiary incorporated outside
(2) Where the gross total income of the resident employee—
(a) consists
only of income by way of dividends 5[R61] [,
other than dividends referred to in section 115-O,] in respect of Global Depository Receipts referred to in clause (a) of sub-section (1), no deduction
shall be allowed to him under any other provision of this Act;
(b) includes any income referred to in
clause (a) or clause (b) of sub-section (1), the gross
total income shall be reduced by the amount of such income and the deduction
under any provision of this Act shall be allowed as if the gross total income
as so reduced were the gross total income of the assessee.section 48
shall apply for the computation of long-term capital gains arising out of the
transfer of long-term capital asset, being Global Depository Receipts referred
to in clause (b) of sub-section
(1).
Explanation.—For the purposes of
this section,—
(a) “Global
Depository Receipts” means any instrument in the form of a depository receipt
or certificate (by whatever name called) created by the Overseas Depository
Bank outside India and issued to non-resident investors against the issue of
ordinary shares or foreign currency convertible bonds of issuing company;
(b) “information technology service” means any service which
results from the use of any information technology software over a system of
information technology products for realising value addition;
(c) “information technology software” means any representation of instructions, data, sound or image, including source code and object code, recorded in a machine readable form and capable of being manipulated or providing inter-activity to a user, by means of an automatic data processing machine falling under heading information technology products but does not include non-information technology products;
(d) “Overseas
Depository Bank” means a bank authorised by the issuing company to issue Global
Depository Receipts against issue of Foreign Currency Convertible Bonds or
ordinary shares of the issuing company.]
6[R62] Tax on income of Foreign Institutional
Investors from securities or capital gains arising from their transfer.
115AD. (1) Where
the total income of a Foreign Institutional Investor includes—
7[R63] [(a) income 8[R64] [other
than income by way of dividends referred to in section 115-O] received in
respect of securities (other than unit referred to in section 115AB); or]
(b) income by way of short-term or long-term capital gains
arising from the transfer of such securities,the
income-tax payable shall be the aggregate of—
(i) the
amount of income-tax calculated on the income in respect of securities referred
to in clause (a), if any,
included in the total income, at the rate of twenty per cent;
(ii) the amount of income-tax calculated on the income by way of
short-term capital gains referred to in clause (b), if any, included in the total income, at the rate of thirty
per cent :
9[R65] Provided
that
the amount of income-tax calculated on the income by way of short-term capital
gains referred to in section 111A shall be at the rate of ten per cent;]
(iii) the
amount of income-tax calculated on the income by way of long-term capital gains
referred to in clause (b), if
any, included in the total income, at the rate of ten per cent; and
(iv) the amount of income-tax with which the Foreign Institutional Investor would have been chargeable had its total income been reduced by the amount of income referred to in clause (a) and clause (b).
(2) Where the gross total income of the Foreign Institutional
Investor—
(a) consists
only of income in respect of securities referred to in clause (a) of sub-section (1), no deduction
shall be allowed to it under sections 28 to 44C or clause (i) or clause (iii) of section 57 or under Chapter VI-A;
(b) includes
any income referred to in clause (a)
or clause (b) of sub-section
(1), the gross total income shall be reduced by the amount of such income and the
deduction under Chapter VI-A shall be allowed as if the gross total income as
so reduced, were the gross total income of the Foreign Institutional Investor.
(3) Nothing contained in the first and second provisos to section
48 shall apply for the computation of
capital gains arising out of the transfer of securities referred to in clause (b) of sub-section (1).
Explanation.—For the purposes of
this section,—
(a) the expression “Foreign Institutional Investor” means such
investor as the Central Government may, by notification in the Official Gazette10[R66] ,
specify in this behalf;
(b) the expression “securities”11[R67] shall have the meaning assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956).]
12[R68] Tax on profits and gains of life
insurance business.
115B. 13[R69] [(1)]
Where the total income of an
assessee includes any profits and gains from life insurance business, the
income-tax payable shall be the aggregate of—
(i) the
amount of income-tax calculated on the amount of profits and gains of the life
insurance business included in the total income, at the rate of twelve and
one-half per cent; and
(ii) the amount of income-tax with which the assessee would have
been chargeable had the total income of the assessee been reduced by the amount
of profits and gains of the life insurance business.]
14[R70] (2) Notwithstanding anything contained in
sub-section (1) or in any other law for the time being in force or any
instrument having the force of law, the assessee shall, in addition to the
payment of income-tax computed under sub-section (1), deposit, during 15[R71] [the
previous years relevant to the assessment years commencing on the 1st day of
April, 1989 and the 1st day of April, 1990], an amount equal to thirty-three
and one-third per cent of the amount of income-tax computed under clause (i) of sub-section (1), in such social
security fund (hereafter in this sub-section referred to as the security fund),
as the Central Government may, by notification16 in the Official Gazette, specify in this
behalf :
Provided that where the assessee makes during the said previous 17[R72] [years]
any deposit of an amount of not less than two and one-half per cent of the
profits and gains of the life insurance business in the security fund, the
amount of income-tax payable by the assessee under the said clause (i) shall be reduced by an amount
equal to two and one-half per cent of such profits and gains and, accordingly,
the deposit of thirty-three and one-third per cent required to be made under
this sub-section shall be calculated on the income-tax as so reduced.]
18[R73] Tax on winnings from lotteries,
crossword puzzles, and races including horse races, card games and other games
of any sort or gambling or betting of any form or nature whatsoever.
115BB. Where
the total income of an assessee includes any income by way of winnings from any
lottery or crossword puzzle or race including horse race (not being income from
the activity of owning and maintaining race horses) or card game and other game
of any sort or from gambling or betting of any form or nature whatsoever, the
income-tax payable shall be the aggregate of—
(i) the
amount of income-tax calculated on income by way of winnings from such lottery
or crossword puzzle or race including horse race or card game and other game of
any sort or from gambling or betting of any form or nature whatsoever, at the
rate of 19[R74] [thirty]
per cent; and
(ii) the amount of income-tax with which the assessee would have
been chargeable had his total income been reduced by the amount of income
referred to in clause (i).
Explanation.—For the purposes of this section, “horse race” shall have the same meaning as in section 74A.]
20[R75] Tax on non-resident sportsmen or sports
associations.
115BBA. (1) Where the total income of an
assessee,—
(a) being a sportsman (including an athlete), who is not a citizen
of
(i) participation in
(ii) advertisement; or
(iii) contribution of
articles relating to any game or sport in
(b) being a non-resident sports association
or institution, includes any amount guaranteed to be paid or payable to such
association or institution in relation to any game (other than a game the
winnings wherefrom are taxable under section 115BB) or sport played in India, the
income-tax payable by the assessee shall be the aggregate of—
(i) the amount of income-tax calculated on income referred to in
clause (a) or clause (b) at the rate of ten per cent; and
(ii) the amount of income-tax with which the assessee would have
been chargeable had the total income of the assessee been reduced by the amount
of income referred to in clause (a)
or clause (b) :
Provided that no deduction in respect of any expenditure or allowance shall be
allowed under any provision of this Act in computing the income referred to in
clause (a) or clause (b).
(2) It shall not be necessary for the assessee to furnish under
sub-section (1) of section 139 a
return of his income if—
(a) his
total income in respect of which he is assessable under this Act during the
previous year consisted only of income referred to in clause (a) or clause (b) of sub-section (1); and
(b) the tax deductible at source under the provisions of Chapter XVII-B has been deducted from such income.]
21[R76] Tax on income from units of an
open-ended equity oriented fund of the Unit Trust of
115BBB.(1) Where the total income of an
assessee includes any income from units of an open-ended equity oriented fund
of the Unit Trust of India or of a Mutual Fund, the income-tax payable shall be
the aggregate of—
(a) the
amount of income-tax calculated on income from units of an open-ended equity
oriented fund of the Unit Trust of India or of a Mutual Fund, at the rate of
ten per cent; and
(b) the amount of income-tax with which the assessee would have
been chargeable had his total income been reduced by the amount of income
referred to in clause (a).
(2) Nothing contained in sub-section (1)
shall apply in relation to any income from units of an open-ended equity
oriented fund of the Unit Trust of India or of the Mutual Fund arising after
the 31st day of March, 2003.
Explanation.—For the purposes of this section, the expressions “Mutual Fund”,
“open-ended equity oriented fund” and “Unit Trust of India” shall have the
meanings respectively assigned to them in the Explanation to section 115T.]