INCOME-TAX ACT, 1961
[43 OF 1961]
[AS
AMENDED BY FINANCE ACT, 2006 AND THE TAXATION LAWS (AMENDMENT) ACT, 2006]
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
Short title,
extent and commencement.
1. (1) This Act may be called the Income-tax Act, 1961.
(2) It extends to the whole of
(3) Save as otherwise provided in this Act, it
shall come into force on the 1st day of April, 1962.
2.In this Act, unless the context otherwise requires,—
[(1) “advance tax” means the advance tax payable
in accordance with the provisions of Chapter XVII-C;]
[ (1A)] “agricultural
income” means—
[(a) any
rent or revenue derived from land which is situated in
(b) any income derived from such landby—
(i) agriculture;
or
(ii) the performance by a cultivator or receiver of
rent-in-kind of any process ordinarily employed by a cultivator or receiver of
rent-in-kind to render the produce raised or received by him fit to be taken to
market; or
(iii) the sale by a cultivator or receiver of
rent-in-kind of the produce raised or received by him, in respect of which no process
has been performed other than a process of the nature described in paragraph (ii)
of this sub-clause ;
(c) any income derived from any building owned and
occupied by the receiver of the rent or revenue of any such land, or occupied
by the cultivator or the receiver of rent-in-kind, of any land with respect to
which, or the produce of which, any process mentioned in paragraphs (ii)
and (iii) of sub-clause (b) is carried on :
[Provided that—
(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 Gazette.]
[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 ;]
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;]
[ (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
[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 ;
(3)
[* * *]
(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 [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 [Chief
Commissioner or Commissioner] in accordance with the rules contained in Part B
of the Fourth Schedule ;
(7) “assessee” means a person by whom [any tax] or any other sum
of money is payable under this Act, and includes—
(a) every person in respect of whom any proceeding
under this Act has been taken for the assessment of his income [or
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 ;
[(7A) “Assessing Officer”
means the Assistant Commissioner [or Deputy Commissioner][or Assistant Director]
[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
[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”
includes reassessment ;
(9) “assessment
year” means the period of twelve months commencing on the 1st day of April
every year ;
[(9A) “Assistant Commissioner” means a person
appointed to be an Assistant Commissioner of Income-tax [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 ;
[(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, trademarks, 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 [Central Board of Direct Taxes constituted under the Central Boards
of Revenue Act, 1963 (54 of 1963)] ;
[(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;]
(13) “business”includes any trade, commerce or manufacture or any
adventure or concern in the nature of trade, commerce or
manufacture ;
(14) “capital
asset” means property of any kind held by an assessee,
whether or not connected with his business or profession, but does not include—
(i) any
stock-in-trade, consumable stores or raw materials held for the purposes of his
business or profession ;
[(ii) personal
effects, that is to say, movable property (including wearing apparel and
furniture, but excluding jewellery) held for personal
use by the assessee or any member of his family
dependent on him.
Explanation.—For the purposes of this
sub-clause, “jewellery” includes—
(a) ornaments made of gold, silver, platinum or any
other precious metal or any alloy containing one or more of such precious
metals, whether or not containing any precious or semi-precious stone, and
whether or not worked or sewn into any wearing apparel ;
(b) precious or semi-precious stones, whether or
not set in any furniture, utensil or other article or worked or sewn into any
wearing apparel ;]
[(iii) agricultural land 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
Gazette;]
[(iv) 6½ per cent Gold Bonds, 1977, [or 7 per cent
Gold Bonds, 1980,] [or National Defence Gold Bonds,
1980,] issued by the Central Government ;]
[(v) Special Bearer Bonds, 1991, issued by the
Central Government ;]
[(vi) Gold Deposit Bonds issued under the Gold
Deposit Scheme, 1999 notified by the Central Government ;]
(15) “charitable purpose” includes relief of the
poor, education, medical relief, and the advancement of any other object of
general public utility [* * *] ;
[(15A) “Chief Commissioner” means a person appointed
to be a Chief Commissioner of Income-tax under sub-section (1) of section 117
;]
[ [(15B)]
“child”, in relation to an individual, includes a step-child and an adopted
child of that individual ;]
[(16) “Commissioner” means a person appointed to be
a Commissioner of Income-tax under sub-section (1) of section 117 [* * *] ;]
[(16A) “Commissioner (Appeals)” means a person
appointed to be a Commissioner of Income-tax (Appeals) under sub-section (1) of
section 117 ;]
[(17) “company” means—
(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 publicare substantially
interested—
[(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]
[(aa) if it is a company which is registered under
section 25 of the Companies Act, 1956 (1 of 1956); 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]
[(ac) if it is a mutual benefit finance company, that
is to say, a company which carries on, as its principal business, the business
of acceptance of deposits from its members and which is declared by the Central
Government under section 620A of the Companies Act, 1956 (1 of 1956), to be a Nidhi or Mutual Benefit Society ; or]
[(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
;]
[(b) if it is a company which is not a 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 thereunder ;
[(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
[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 ;
[(19A) “Deputy
Commissioner” means a person appointed to be a Deputy Commissioner of
Income-tax [* * *] under sub-section (1) of section 117 ;
[(19AA) “demerger”,
in relation to companies, means the transfer, pursuant to a scheme of
arrangement under sections 391 to 394 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 [such conditions as may be notified in the
Official Gazette, 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) [or an Additional Commissioner of Income-tax (Appeals)]
under sub-section (1) of section 117 ;]
[(19C) “Deputy Director” means a person appointed to
be a Deputy Director of Income-tax [* * *] under sub-section (1) of section 117
;]
(20)
“director”, “manager” and “managing agent”, in relation to a company, have the
meanings respectively assigned to them in the Companies Act, 1956 (1 of 1956) ;
[(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 [an Additional Director of
Income-tax or] a [Joint] Director of Income-tax or an Assistant Director [or
Deputy Director] of Income-tax ;]
(22) “dividend” includes—
(a) any distribution by a company of accumulated
profits, whether capitalised or not, if such
distribution entails the release by the company to its shareholders of all or
any part of the assets of the company ;
(b) any distribution to its shareholders by a
company of debentures, 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 profits, whether capitalised or
not ;
(c) any distribution made to the shareholders of a
company on its liquidation, to the extent to which the distribution is
attributable to the accumulated profits of the company immediately before its
liquidation, whether capitalised or not ;
(d) any distribution to its shareholders by a
company on the reduction of its capital, to the extent to which the company
possesses accumulated profits which arose after the end of the previous year
ending next before the 1st day of April, 1933, whether such accumulated profits
have been capitalised or not ;
(e) any payment by a company, not being a company
in which the public are substantially interested, of any sum (whether as
representing a part of the assets of the company or otherwise) [made after the
31st day of May, 1987, by way of advance or loan to a shareholder, being a
person who is the beneficial owner of shares (not being shares entitled to a
fixed rate of dividend whether with or without a right to participate in
profits) holding not less than ten per cent of the voting power, or to any
concern in which such shareholder is a member or a partner and in which he has
a substantial interest (hereafter in this clause referred to as the said
concern)] or any payment by any such company on behalf, or for the individual
benefit, of any such shareholder, to the extent to which the company in either
case possesses accumulated profits ;
but “dividend” does not include—
(i) a
distribution made in accordance with sub-clause (c) or sub-clause (d)
in respect of any share issued for full cash consideration, where the holder of
the share is not entitled in the event of liquidation to participate in the
surplus assets ;
[(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, [and before the 1st day of
April, 1965] ;]
(ii) any advance or loan made to a shareholder [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;
[(iv) any payment made by a company on purchase
of its own shares from a shareholder in accordance with the provisions of
section 77A 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, [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].
[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 ;]
[(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 ;]
[(22AA) “document”
includes an electronic record as defined in clause (t) of sub-section (1) of section 2 of the Information Technology Act, 2000
(21 of 2000);]
[ [(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)
“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 ;
[(23A) “foreign
company” means a company which is not a domestic company ;]
[(23B) “fringe benefits” means any fringe benefits referred to in section
115WB;]
(24) “income”
includes—
(i) profits and
gains ;
(ii) dividend ;
[(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 [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) [ [or by any university or other educational
institution referred to in sub-clause (vi) or by any hospital or other
institution referred to in sub-clause (via)]] 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 ;
[(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 perquisite, whether
convertible into money or not, obtained from a company either by a director or
by a person who has a substantial interest in the company, or by a relative of
the director or such person, and any sum paid by any such company in respect of
any obligation which, but for such payment, would have been payable by the
director or other person aforesaid ;
[(iva) the value of any benefit or perquisite, whether
convertible into money or not, obtained by any representative assessee mentioned in clause (iii) or clause (iv)
of sub-section (1) of section 160 or by any person on whose behalf or for whose
benefit any income is receivable by the representative assessee
(such person being hereafter in this sub-clause referred to as the
“beneficiary”) and any sum paid by the representative assessee
in respect of any obligation which, but for such payment, would have been
payable by the beneficiary ;]
(v) any sum chargeable to income-tax under clauses
(ii) and (iii) of section 28 or section 41 or section 59 ;
[(va) any sum chargeable to income-tax under clause
(iiia) of section 28 ;]
[(vb) any sum chargeable to income-tax under clause
(iiib) of section 28 ;]
[(vc) any sum chargeable to income-tax under clause
(iiic) of section 28 ;]
[(vd)] the value of any benefit or perquisite taxable
under clause (iv) of section 28 ;
[(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 ;
The following sub-clause (viia)
shall be inserted after sub-clause (vii) of clause (24) of section 2 by the
Finance Act, 2006, w.e.f. 1-4-2007 :
(viia) the profits and gains of
any business of banking (including providing credit facilities) carried on by a
co-operative society with its members;
(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;]
[(ix) any winnings from lotteries, crossword puzzles,
races including horse races, card games and other games of any sort or from
gambling or betting of any form or nature whatsoever.]
[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 ;]
[(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 ;]
[(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*, the expression “Keyman insurance policy”
shall have the meaning assigned to it in the Explanation to clause (10D)
of section 10 ;]
[(xii) any
sum referred to in [clause (va)] of section
28;]
[(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 [* * *]
section 117 ;
[(25A) “
(a) as respects any period, for the purposes of
section 6 ; and
(b) as respects any period included in the previous
year, for the purposes of making any assessment for the assessment year
commencing on the 1st day of April, 1963, or for any subsequent year ;]
(26) “Indian
company” means a company formed and registered under the Companies Act, 1956 (1
of 1956), and includes—
(i) a company
formed and registered under any law relating to companies formerly in force in
any part of
[(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
[(iii) in
the case of any of the Union territories of Dadra and
Nagar Haveli, Goa†, Daman and Diu, and
Provided that the [registered or, as the case may be, principal office of the
company, corporation, institution, association or body] in all cases is in
[(26A) “infrastructure
capital company” means such company which makes investments by way of acquiring
shares or providing long-term finance to any enterprise or undertaking wholly
engaged in the business referred to in sub-section (4) of section 80-IA or
sub-section (1) of section 80-IAB or an undertaking developing and building a
housing project referred to in sub-section (10) of section 80-IB or a project
for constructing a hotel of not less than three-star category as classified by
the Central Government or a project for constructing a hospital with at least
one hundred beds for patients;
(26B) “infrastructure capital
fund” means such fund operating under a trust deed registered under the
provisions of the Registration Act, 1908 (16 of 1908) established to raise
monies by the trustees for investment by way of acquiring shares or providing
long-term finance to any enterprise or undertaking wholly engaged in the
business referred to in sub-section (4) of section 80-IA or sub-section (1) of
section 80-IAB or an undertaking developing and building a housing project
referred to in sub-section (10) of section 80-IB or a project for constructing
a hotel of not less than three-star category as classified by the Central
Government or a project for constructing a hospital with at least one hundred
beds for patients;]
(27)
[* * *]
(28) “Inspector
of Income-tax” means a person appointed to be an Inspector of Income-tax under
sub-section [(1)] of section 117 ;
[ (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
;]
[(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 ;]
[(28BB) “insurer” means an insurer, being an
Indian insurance company, as defined under clause (7A) of section 2 of
the Insurance Act, 1938 (4 of 1938), which has been granted a certificate of
registration under section 3 of that Act;]
[(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) ;
[(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 ;]
[(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 [, association of persons or, as the case may be, body of
individuals] as specified in the Finance Act of the relevant year ;]
[(29D) “National Tax Tribunal” means the National Tax
Tribunal established under section 3 of the National Tax Tribunal Act, 2005;]
(30) “non-resident”
means a person who is not a “resident” [, and for the purposes of sections 92,
93 [* * *] and 168, includes a person who is not ordinarily resident within the
meaning of clause (6) of section 6] ;
(31) “person”
includes—
(i) an
individual,
(ii) a Hindu undivided family,
(iii) a company,
(iv) a firm,
(v) an association of persons or a body of
individuals, whether incorporated or not,
(vi) a local authority, and
(vii) every artificial juridical person, not falling
within any of the preceding sub-clauses.
[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 ;
(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 [Assessing] Officer has served a notice of his intention of treating him as
the principal officer thereof ;
(36) “profession”
includes vocation;
[(36A) “public
sector company” means any corporation established by or under any Central,
State or Provincial Act or a Government company as defined in section 617 of
the Companies Act, 1956 (1 of 1956) ;]
(37)
“public servant” has the same meaning as in section 21 of the Indian Penal Code
(45 of 1860) ;
[(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” [* * *] or [computation of the “advance
tax” payable under Chapter XVII-C in a case not falling under [section 115A or
section 115B [or section 115BB [or section 115BBB] or section 115E] or] section
164 [or section 164A [* * *]] [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 [in a case falling under section 115A or section 115B [or section 115BB
[or section 115BBB] or section 115E] or section 164 [or section 164A [* * *]]
[or section 167B], the rate or rates specified in section 115A or [section 115B
or section 115BB [or section 115BBB] or section 115E or section 164 or section
164A [* * *] [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 [, 194B] [, 194BB] [and 194D, the rate or rates of
income-tax specified in this behalf in the Finance Act of the relevant year ;]
[(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, or an agreement notified by
the Central Government under section 90A, whichever is applicable by virtue of
the provisions of section 90, or section 90A, as the case may be];
(38) “recognised provident fund” means a provident fund which has
been and continues to be recognised by the [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)
[Omitted by the Finance Act, 1992, w.e.f. 1-4-1993;]
(40) “regular
assessment” means the assessment made under [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 ;
[(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
[ (42A)
[“short-term capital asset” means a capital asset held by an assessee for not more than [thirty-six] months immediately
preceding the date of its transfer :]
[Provided that in the case of a share
held in a company [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] [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.]
[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 [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 ;
[(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 ;]
[(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
;]
[(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 ;]
[(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 ;]
[(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.]
[Explanation 2.—For the purposes of this
clause, the expression “security” shall have the meaning assigned to it in
clause (h) of section 2 of the Securities Contracts (Regulation) Act,
1956 (42 of 1956) ;]
[(42B) “short-term
capital gain” means capital gain arising from the transfer of a short-term
capital asset ;]
[(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 ;]
[(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 [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] ;]
[(43A) “tax
credit certificate” means a tax credit certificate granted to any person in
accordance with the provisions of Chapter XXII-B and any scheme made thereunder ;]
(43B) [*
* *]
[(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 [and also to exercise
or perform such powers and functions which are conferred on, or assigned to, an
Assessing Officer under this Act and which may be prescribed];]
(45) “total
income” means the total amount of income referred to in section 5, computed in
the manner laid down in this Act ;
(46) [*
* *]
(47) [“transfer”,
in relation to a capital asset, includes,—
(i) the sale,
exchange or relinquishment of the asset ; or
(ii) the extinguishment of any rights therein ; or
(iii) the compulsory acquisition thereof under any
law ; or
(iv) in a case where the asset is converted by the
owner thereof into, or is treated by him as, stock-in-trade of a business
carried on by him, such conversion or treatment ;] [or]
[(iva) the maturity
or redemption of a zero coupon bond; or]
[(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 53A 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) “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.
[***]]
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.]