CHAPTER XII
DETERMINATION OF TAX IN CERTAIN SPECIAL
CASES
14[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 15[R2] [Assessing] Officer shall calculate the total of the
various sums of 16[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.
17[R4] [Tax on long-term
capital gains.
18[R5] 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, 19[R6] [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 19[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 20[R8] [twenty] per cent :
22 [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 ;]
23[R11] [(d)] in any other case 24[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 25[R13] [twenty] per
cent.
The following proviso and Explanation shall be inserted at
the end of sub-section (1) of section 112 by the Finance Act, 1999, w.e.f. 1-4-2000 :
Provided that where
the tax payable in respect of any income arising from the transfer of a
long-term capital asset, being listed securities, 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.
Explanation.—For the purposes
of this sub-section, “listed securities” means the securities—
(a) as defined in
clause (h) of section 2 of the Securities Contracts (Regulation) Act,
1956 (32 of 1956); and
(b) listed in any
recognised stock exchange in
(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.]
27[R15] [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.]
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.
28[R16] 115. [Omitted by the Finance Act, 1987, w.e.f. 1-4-1988.]
29 [R17] [Tax on
dividends, royalty and technical service fees in the case of foreign companies.
30[R18] 115A. 31[R19] [(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 32[R20] [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 32[R21] [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) a
foreign company, includes any income by way of royalty or fees for technical
services 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,—
33[R22] (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;
(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; 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).]
34[R23] (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 35[R24] [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 36[R25] [37[R26] [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 :
38[R27] [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
39[R28] [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.]
40[R29] [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 41[R30] [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.]
42[R31] (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.]
43[R32] [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 44[R33] [***] or clause
(i) or clause (iii) of section 57 or under Chapter VI-A 45[R34] [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
Central Government 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”46[R35] 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 4A47[R36] 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)].
48[R37] [Tax on income from bonds or shares 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 or dividends 49[R38] [other than
dividends referred to in section 115-O], on bonds or shares of an Indian
company issued in accordance with such scheme as the Central Government may, by
notification in the Official Gazette50[R39] , specify in this
behalf 51[R40] [or on bonds or
shares of a public sector company, sold by the Government] and purchased by him
in foreign currency; or
(b) income by way of long-term capital gains arising from the
transfer of bonds or, as the case may be, shares 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 interest or dividends 52[R41] [other than
dividends referred to in section 115-O], as the case may be, in respect of
bonds or shares 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 non-resident would
have been chargeable had his 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
non-resident—
(a) consists
only of income by way of interest or dividends 52a[R42] [other than
dividends referred to in section 115-O] in respect of bonds or, as the case may
be, shares referred to in clause (a) of sub-section (1), no deduction
shall be allowed to him under sections 28 to 44Cor clause (i) or clause (iii)
of section 57or 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 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
shares referred to in clause (b) 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 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.]
The following sub-section (5) shall be inserted after
sub-section (4) of section 115AC by the Finance Act, 1999, w.e.f. 1-4-2000 :
(5) Where the assessee acquired shares or
bonds in an amalgamated or resulting company by virtue of his holding shares
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 the said
sub-section shall apply to such shares or bonds.
The following section 115ACA shall be inserted after
section 115AC by the Finance Act, 1999,
w.e.f. 1-4-2000 :
115ACA.(1) Where the total
income of an assessee, being an individual, who is a resident and an employee
of an Indian company engaged in information technology software and
information technology services (hereafter in this section referred to as the
resident employee), includes—
(a) income by way of dividends, other than
dividends referred to in section 115-O on Global Depository Receipts of
an Indian company engaged in information technology software and information
technology services, issued in accordance with such employees’ stock option
scheme as the Central Government may, by notification in the Official Gazette,
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, 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).
(2) Where
the gross total income of the resident employee—
(a) consists only of income by way of
dividends, 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.
(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
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.
53[R43] [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—
54 [R44] (a) income
54a[R45] [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;
(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 Gazette, specify
in this behalf;
(b) the
expression “securities”55[R46] shall have the
meaning assigned to it in clause (h) of section 2 of the Securities
Contracts (Regulation) Act, 1956 (42 of 1956).]
56[R47] [Tax on profits and gains of life insurance business.
115B.
57[R48] [(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.]
58[R49] [(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 59[R50] [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
notification60[R51] in the Official
Gazette, specify in this behalf :
Provided that where
the assessee makes during the said previous 61[R52] [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.]
62[R53] [Tax on
winnings from lotteries, crossword puzzles, 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 forty 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.]
63[R54] [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.]
[R1]Substituted by the Finance Act, 1965, w.e.f. 1-4-1965.
[R2]Substituted for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R3]Substituted for “income-tax and super tax” by the Finance Act, 1965, w.e.f. 1-4-1965
[R4]Inserted by the Finance Act, 1992, w.e.f. 1-4-1993. Earlier section 112 was omitted by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1968 and replaced by section 80S. Before its omission, the section was first amended by the Finance Act, 1965, w.e.f. 1-4-1965 and then by the Finance (No. 2) Act, 1965, w.e.f. 11-9-1965
[R5]See also Circular No. 721, dated 13-9-1995
[R6]Inserted by the Finance Act, 1994, w.e.f. 1-4-1995
[R7]Inserted by the Finance Act, 1994, w.e.f. 1-4-1995
[R8]Substituted for “thirty” by the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997. Earlier “thirty” was substituted for “forty” by the Finance Act, 1994, w.e.f. 1-4-1995
[R9]The proviso omitted by the Finance Act, 1995, w.e.f. 1-4-1996. Prior to its omission the proviso, as amended by the Finance Act,1994, w.e.f. 1-4-1995, read as under :
‘Provided that in relation to long-term capital gains arising to a venture capital company from the transfer of equity shares of venture capital undertakings, the provisions of sub-clause (ii) shall have effect as if for the words “thirty per cent”, the words “twenty per cent” had been substituted
[R10]Inserted by the Finance Act, 1994, w.e.f. 1-4-1995.
[R11]Existing clause (c) relettered as clause (d) by the Finance Act, 1994, w.e.f. 1-4-1995.
[R12]Inserted by the Finance Act, 1994, w.e.f. 1-4-1995.
[R13]Substituted for “thirty” by the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997
[R14]The Explanation omitted by the Finance Act, 1995, w.e.f. 1-4-1996. Prior to its omission, the Explanation read as under :
‘Explanation.—For the purposes of this sub-section,—
(a) “venture capital company” means such company as is engaged in providing finance to venture capital undertakings mainly by way of acquiring equity shares of such undertakings or, if the circumstances so require, by way of advancing loans to such undertakings, and is approved by the Central Government in this behalf ;
(b) “venture capital undertaking” means such company as the prescribed authority may, having regard to the following factors, approve for the purposes of this sub-section, namely :—
(1) the total investment in the company does not exceed ten crore rupees or such other higher amount as may be prescribed ;
(2) the company does not have adequate financial resources to undertake projects for which it is otherwise professionally or technically equipped ; and
(3) the company seeks
to employ any technology which will result in significant improvement over the
existing technology in
[R15]Inserted by the Finance Act, 1995, w.e.f. 1-7-1995. Earlier section 113 dealing with “Tax in the case of non-resident” was omitted by the Finance Act, 1965, w.e.f. 1-4-1965
[R16]Omitted section 115, as amended by the Finance (No. 2) Act, 1962, w.e.f. 1-4-1962, the Finance Act, 1964, w.e.f. 1-4-1964, the Finance Act, 1965, w.e.f. 1-4-1965, the Finance Act, 1966, w.e.f. 1-4-1966, the Finance (No. 2) Act, 1971, w.e.f. 1-4-1972, the Finance (No. 2) Act, 1974, w.e.f. 1-4-1975, the Finance Act, 1976, w.e.f. 1-4-1977 and the Finance Act, 1985, w.e.f. 1-4-1986, stood as under :
‘115. Tax on capital gains in case of companies.—Where the total income of a company includes any income chargeable under the head “Capital gains” relating to capital assets other than short-term capital assets (such income being hereinafter referred to as long-term capital gains), the income-tax payable shall be the aggregate of—
(i) the amount of income-tax calculated on the amount of long-term capital gains included in the total income—
(a) on so much of the amount of such long-term capital gains as relate to buildings or lands or any rights in buildings or lands, at the rate of fifty per cent ; and
(b) on the balance of such long-term capital gains, if any, at the rate of forty per cent ; and
(ii) the amount of income-tax with which it would have been chargeable had its total income been reduced by the amount of long-term capital gains referred to in clause (i).’
[R17]Inserted by the Finance Act, 1976, w.e.f. 1-6-1976
[R18]See also Circular No. 473, dated 29-10-1986 and Circular No. 740, dated 17-4-1996
[R19]Substituted by the Finance Act, 1994, w.e.f. 1-4-1995. Prior to substitution, sub-section (1), as amended by the Finance (No. 2) Act, 1977, w.e.f. 1-4-1977/1-4-1978, the Finance Act, 1983, w.e.f. 1-6-1983, the Finance Act, 1986, w.e.f. 1-4-1987, the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989 and the Finance Act, 1992, w.e.f. 1-6-1992, read as under :
‘(1) Subject to the provisions of sub-sections (1A) and (2), where the total income of an assessee, being a foreign company, includes any income by way of—
(a) dividends ; or
(aa) interest received from Government or an Indian concern on moneys borrowed or debt incurred by Government or the Indian concern in foreign currency ; or
(ab) income received in respect of units, purchased in foreign currency, of a Mutual Fund specified under clause (23D) of section 10 ; or
(b) royalty or fees for technical services 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,
the income-tax payable shall be the aggregate of—
(i) the amount of income-tax calculated on the amount of income by way of dividends, if any, included in the total income, at the rate of twenty-five per cent ;
(ia) the amount of income-tax calculated on the income, by way of interest referred to in clause (aa), if any, included in the total income, at the rate of twenty-five per cent ;
(ib) the amount of income-tax calculated on the income in respect of units referred to in clause (ab), if any, included in the total income, at the rate of twenty-five per cent ;
(ii) 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 ;
(iii) 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 ; and
(iv) the amount of income-tax with which it would have been chargeable had its total income been reduced by the amount of income referred to in clause (a), clause (aa) and clause (b).
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.
[R20]Inserted by the Finance Act, 1997, w.e.f. 1-4-1998
[R21]Inserted by the Finance Act, 1997, w.e.f. 1-4-1998.
[R22]Substituted by the Finance Act, 1997, w.e.f. 1-4-1998. Prior to its substitution, sub-clauses (A) and (B), read as under :
“(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 ;
(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 ; and”
[R23]Inserted by the Finance (No. 2) Act, 1977, w.e.f. 1-4-1978
[R24]Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1991
[R25]Substituted for “and approved by the Central Government” by the Finance Act, 1992, w.e.f. 1-6-1992
[R26]Substituted for “approved by the Central Government or where the agreement relates to a matter” by the Finance Act, 1994, w.e.f. 1-4-1995
[R27]Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1991
[R28]Renumbered by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1991
[R29]Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1991.
[R30]Substituted for “purposes of the proviso”, by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1991
[R31]Inserted by the Finance Act, 1994, w.e.f. 1-4-1995
[R32]Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1992
[R33]Words “or sub-section (2) of section 48” omitted by the Finance Act, 1992, w.e.f. 1-4-1993
[R34]Inserted by the Finance Act, 1992, w.e.f. 1-4-1993
[R35]For definition of “foreign currency”
[R36]For text of section 4A of the Companies Act, 1956, and notified institutions thereunder,
[R37]Inserted by the Finance Act, 1992, w.e.f. 1-4-1993
[R38]Inserted by the Finance Act, 1997, w.e.f. 1-4-1998.
[R39]Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme has been notified—Notification No. SO 1032(E), dated 24-12-1993.
[R40]Inserted by the Finance (No. 2) Act, 1996, w.e.f. 1-10-1996
[R41]Inserted by the Finance Act, 1997, w.e.f. 1-4-1998.
[R42]Inserted by the Finance Act, 1997, w.e.f. 1-4-1998.
1. Shall be inserted by the Finance Act 1999 w.e.f. 1-4-2000
[R43]Inserted by the Finance Act, 1993, w.e.f. 1-4-1993
[R44]Substituted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999. Prior to its substitution, clause (a), as amended by the Finance Act, 1997, w.e.f. 1-4-1998, read as under :
“(a) income other than income by way of dividends referred to in section 115-O received in respect of securities (other than units referred to in section 115AB) listed in a recognised stock exchange in India in accordance with the provisions of the Securities Contracts (Regulation) Act, 1956 (42 of 1956), and any rules made thereunder; or
[R45]Inserted by the Finance Act, 1999, w.e.f. 1-4-1999.
[R46]For definition of “security”
[R47]Inserted by the Finance Act, 1976, w.e.f. 1-6-1976.
[R48]Inserted by the Finance Act, 1988, w.e.f. 1-4-1989
[R49]Inserted by the Finance Act, 1988, w.e.f. 1-4-1989
[R50]Substituted for “the previous year relevant to the assessment year commencing on the 1st day of April, 1989” by the Finance Act, 1989, w.e.f. 1-4-1990
[R51]For Notified Social Security Fund
[R52]Substituted for “year” by the Finance Act, 1989, w.e.f. 1-4-1990.
[R53]Inserted by the Finance Act, 1986, w.e.f. 1-4-1987
[R54]Inserted by the Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-4-1990.