This Act may be called the Finance Act, 1951.

(1) Subject to the provisions of sub-sections (3), (4) and (5), for the year beginning on the 1st day of April, 1[1953],

(a) income-tax shall be charged at the rates specified in Part I of the First Schedule, increased in each case by a surcharge for the purposes of the Union at the rate specified therein in respect of each such rate of income-tax, and

(b) rates of super-tax shall, for the purposes of Section 55 of the Indian Income-tax Act, 1922 (11 of 1912) (hereinafter referred to as the Income-tax Act ), be those specified in Part II of the First Schedule, increased in the cases to which Paragraphs A, B and C of that Part apply, by a surcharge for the purposes of the Union at the rate specified therein in respect of each such rate of super-tax.

(2) In making any assessment for the year ending on the 31st day of March, 2[1954], there shall be deducted from the total income of an assessee, in accordance with the provisions of Section 15-A of the Income-tax Act, an amount equal to one-fifth of the earned income, if any, included in his total income but not exceeding in any case four thousand rupees.

(3) In making any assessment for the year ending on the 31st day of March, 3[1954],

(a) where the total income of an assessee, not being a company, includes any income chargeable under the head Salaries as reduced by the deduction for earned income appropriate thereto, or any income chargeable under the head Interest on securities , or any income from dividends in respect of which by virtue of Section 49-B of the Income-tax Act he is deemed himself to have paid the income-tax imposed under that Act, the income-tax payable by the assessee on that part of his total income which consists of such inclusions shall be an amount bearing to the total amount of income-tax payable according to the rates applicable under the operation of the Finance Act, 1950 (25 of 1950), on his total income the same proportion as the amount of such inclusions bears to his total income;

(b) where the total income of an assessee, not being a company, includes any income chargeable under the head Salaries on which super-tax has been or might have been deducted under the provisions of sub-section (2) of Section 18 of the Income-tax Act, the super-tax payable by the assessee on that portion of his total income which consists of such inclusion shall be an amount bearing to the total amount of super-tax payable, according to the rates applicable under the operation of the Finance Act, 1950, on his total income the same proportion as the amount of such inclusion bears to his total income.

(4) In making any assessment for the year ending on the 31st day of March, 4[1954],

(a) where the total income of a company includes any profits and gains from life insurance business, the super-tax otherwise payable by the company on the whole of such total income shall be reduced by an amount which bears to that super-tax the same proportion as the amount of such inclusion bears to its total income or by an amount computed at the rate of

(i) two annas in the rupee in the case of a mutual insurance company as defined in Section 95 of the Insurance Act, 1938 (4 of 1938), and

(ii) one-and-a-half annas in the rupee in the case of any other company

on the amount of such inclusion, whichever is less;

(b) where the total income of an assessee, not being a company, includes any profits and gains from life insurance business, the income-tax and super-tax payable by the assessee on the part of his total income which consists of such inclusion shall be an amount bearing to the total amount of such taxes payable on his total income according to the rates applicable under the operation of the Indian Finance Act, 1942 (12 of 1942), increased in respect of each such rate by one-twentieth thereof, the same proportion as the amount of such inclusion bears to his total income, so however that the aggregate of the taxes so computed in respect of such inclusion shall not in any case exceed the amount of tax payable on such inclusion at the rate of five annas in the rupee.

(5) In cases to which Section 17 of the Income-tax Act applies, the tax chargeable shall be determined as provided in that section, but with reference to the rates imposed by sub-section (1) and in accordance, where applicable, with the provisions of sub-sections (3) and (4) of this section.

(6) for the purposes of making any deduction of income-tax in the year beginning on the 1st day of April, 5[1953], under sub-section (2) or sub-section (2-B) of Section 18 of the Income-tax Act from any earned income chargeable under the head Salaries , the estimated total income of the assessee under this head shall, in computing the income-tax to be deducted, be reduced by an amount equal to one-fifth of such earned income, but not exceeding in any case four thousand rupees; but no abatement shall be allowed by the person responsible for paying the salary in respect of any donations made by the assessee to which Section 15-B of the Income-tax Act is or may be applicable.

(7) For the purposes of this section and of the rates of tax imposed thereby, the expression total income means total income as determined for the purposes of income-tax or super-tax, as the case may be, in accordance with the provisions of the Income-tax Act, and the expression earned income has the meaning assigned to it in clause (6-AA) of Section 2 of that Act.

With effect from the 1st day of April, 1951 the following sub-section shall be substituted for sub-section (1) of Section 17 of the Income-tax Act, namely:

(1) Where a person is not resident in the taxable territories and is not a company, the tax, including super-tax, payable by him or on his behalf on his total income shall be an amount equal to

(a) the income-tax which would be payable on his total income at the maximum rate, plus

(b) either the super-tax which would be payable on his total income at the rate applicable in the case of an individual to the slab next to the slab exempt from super-tax, or the super-tax which would be payable on his total income if it were the total income of a person resident in the taxable territories, whichever is greater:

Provided that any such person may, on the first occasion on which he is assessable for any year subsequent to the year ending on the 31st day of March, 1951 and before the 30th day of June in that year, or where the first occasion on which he is so assessable falls during the year ending on the 31st day of March, 1952, before such date as the Central Board of Revenue may, by notification in the Official Gazette, specify in this behalf, by notice in writing to the Income-tax Officer declare (such declaration being final and being applicable to all assessments thereafter) that the tax, including super-tax payable by him or on his behalf on his total income shall be determined with reference to is total world income, and thereupon such tax shall be an amount bearing to the total amount of tax including super-tax which would have been payable on his total world income had it been his total income the same proportion as his total income bears to his total world income.

In the First Schedule to the Indian Tariff Act, 1934 (32 of 1934)

(a) in Item 27(5), for the entry in the fourth column, the following entry shall be substituted, namely:

Three annas per Imperial gallon or 15 per cent. ad valorem, whichever is higher. ;

(b) in Item 27(7), in the fourth column,

(i) for the entry against sub-item (a), the entry

Rs 18.12 per ton or 15 per cent. ad valorem, whichever is higher. shall be substituted, and

(ii) for the entry against sub-item (b), the entry

15 per cent. ad valorem shall be substituted;

(c) in Item 27(8) for the entry in the fourth column, the entry

Three annas per Imperial gallon or 15 per cent. ad valorem, whichever is higher. ; shall be substituted;

(d) for Items 75(9), 75(10) and 75(11), the following Items shall be substituted, namely:

When any goods chargeable with a duty of customs under the First Schedule to the Indian Tariff Act, 1934 (32 of 1934) or under that Schedule read with any notification of the Central Government for the time being in force, are assessed to duty, there shall, up to the 31st day of March, 1952 be levied and collected as an addition to, and in the same manner as, the total amount so chargeable

(a) a sum equal to 155 per cent. of such amount, in the case of goods comprised in Items 22(2) and 22(4);

(b) a sum equal to 55 per cent. of such amount, in the case of goods comprised in Items 48, 48(1), 48(2), 48(4), 48(5), 48(6), 48(7), 48(8), 48(10) and 51(2), and in the case of textile manufactures specified in Item 49 when made wholly or mainly of any of the fabrics specified in Items 48, 48(1), 48(4), 48(5), 48(7) or 48(10);

(c) a sum equal to 45 per cent. of such amount in the case of goods comprised in Items 47(2), 59(2), 59(4) and 59(5);

(d) a sum equal to 25 per cent. of such amount, in the case of goods comprised in any Item of the said Schedule other than those specified in clauses (a), (b) or (c) of this section, or in the Second or Third Schedule to this Act; and

(e) a sum equal to 5 per cent. of such amount, in the case of goods comprised in any of the Items of the said Schedule specified in the Third Schedule to this Act;

Provided that in the case of goods comprised in Items 48 to 48(10), both inclusive, and in the case of textile manufactures specified in sub-items (a) and (b) of Item 49, if the duty of excise for the time being leviable on like goods or, as the case may be, on the fabrics of which such textile manufacturers are wholly or mainly made, exceeds the sum of

(i) the duty of customs chargeable under the First Schedule to the Indian Tariff Act, 1934, or under that Schedule read with any notification of the Central Government for the time being in force, and

(ii) the additional duty of customs chargeable under clause (b) or clause (d) of this section,

there shall, up to the 31st. day of March, 1952, be levied and collected as a further addition to, and in the same manner as, the duties of customs so chargeable an amount equal to the aforesaid excess.

In the Second Schedule to the Indian Tariff Act, 1934 (32 of 1934),

(a) in Item 2(i), for the entry in the last column, the entry Rs 350 shall be substituted;

(b) in Item 6, for the entry in the second column, the following entry shall be substituted, namely;

Cloth

cloth means cloth of any description manufactured either wholly from cotton or partly from cotton and partly from any other substance and containing not less than ten per cent. of cotton by weight, but does not include

(i) cloth of handloom manufacture;

(ii) superfine and fine cloth, that is to say, cloth in which the count of warp yarn (whether single or folded) is 35s or finer; and

(iii) furnishing fabrics, hosiery, apparel, blankets, bed-covers, towels, dusters and napkins;

(c) after Item 12, the following Item shall be inserted, namely:

(1) In the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944),

(a) in Item 4 in sub-item (a), after the words motor vehicle the words or aircraft shall be inserted, and

(b) for Item 9 the following Item shall be substituted, namely:

9. TOBACCO

Tobacco means any form of tobacco, whether cured or uncured, and whether manufactured or not, and includes the leaf, stalks and stems of the tobacco plant, but does not include any part of the tobacco plant while still attached to the earth.

(2) The amendments made in the Central Excises and Salt Act, 1944, by sub-section (1) shall be deemed to have had effect on and from the 1st day of March, 1951, and accordingly

(a) refunds shall be made of all duties collected which would not have been collected if the amendments had come into force on that day, and

(b) recoveries shall be made of all duties which have not been collected but which would have been collected if the amendments had so come into force.

When any goods chargeable with a duty of excise under the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) are assessed to duty, there shall, up to the 31st day of March, 1952, be levied and collected as an addition to, and in the same manner as, the total amount so chargeable

(a) as respects motor spirit as defined in Item No. 4 of that Schedule, a surcharge equal to 5 per cent. of such amount;

(b) as respects cigarettes specified in Item 9II(2)

(i) where the retail price is at a rate exceeding 2 annas, but not exceeding 5 annas per ten cigarettes, a surcharge calculated at three pies for every ten cigarettes, and

(ii) where the retail price is at a rate exceeding 5 annas per ten cigarettes, a surcharge calculated at the rate of six pies for every ten cigarettes.

For the year beginning on the 1st day of April, 1951, no duty shall be levied on salt manufactured in, or imported by sea or land into, the territory of India excluding the State of Jammu and Kashmir.

(See Section 2)

Part I

A. In the case of every individual, Hindu undivided family, unregistered firm and other association of persons, not being a case to which Paragraph B or Paragraph C of this Part applies

Provided that

(i) no income-tax shall be payable on a total income which before deduction of the allowance, if any, for earned income, does not exceed the limit specified below;

(ii) the income-tax payable shall in no case exceed half the amount by which the total income (before deduction of the said allowance, if any, for earned income) exceeds the said limit;

(iii) the income-tax payable on the total income as reduced by the allowance for earned income shall not exceed either

(a) a sum bearing to half the amount by which the total income (before deduction of the allowance for earned income) exceeds the said limit the same proportion as such reduced total income bears to the unreduced total income, or

(b) the income-tax payable on the income so reduced at the rates herein specified,

whichever is less.

The limit referred to in the above proviso shall be

(i) Rs 6[8,400] in the case of every Hindu undivided family which satisfies as at the end of the previous year either of the following conditions, namely:

(a) that it has at least two members entitled to claim partition who are not less than 18 years of age; or

(b) that it has at least two members entitled to claim partition neither of whom is a lineal descendant of the other and both of whom are not lineally descended from any other living member of the family; and

(ii) Rs 7[4,200] in every other case.

Explanation. For the purposes of this paragraph, in the case of every Hindu undivided family governed by the Mitakshara law, a son shall be deemed to be entitled to claim partition of the co-parcenary against his father or grandfather, not withstanding any custom to the contrary:

Provided further that

(i) no surcharge shall be payable on a total income which before deduction of the allowance, if any, for earned income does not exceed the limit specified below;

(ii) the surcharge payable shall in no case exceed half the amount by which the total income (before deduction of the said allowance, if any, for earned income) exceeds the said limit.

The limit referred to in the above proviso shall be

(i) Rs 14,400 in the case of every Hindu undivided family referred to in the preceding proviso;

(ii) Rs 7,200 in every other case.

B. In the case f every company

Provided that in the case of a company which, in respect of its profits liable to tax under the Income-tax Act for the year ending on the 31st day of March, 8[1954], has made the prescribed arrangements for the declaration and payment within the territory of India excluding the State of Jammu and Kashmir, of the dividends payable out of such profits, and has deducted super-tax from the dividends in accordance with the provisions of sub-section (3-D) or (3-E) of Section 18 of that Act

(i) where the total income, as reduced by seven annas in the rupee and by the amount, if any, exempt from income-tax, exceeds the amount of any dividends (including dividends payable at a fixed rate) declared in respect of the whole or part of the previous year for the assessment for the year ending on the 31st day of March, 9[1954], and no order has been made under sub-section (1) of Section 23-A of the Income-tax Act, a rebate shall be allowed, at the rate of one anna per rupee on the amount of such excess;

(ii) where the amount of dividends referred to in clause (i) above exceeds the total income as reduced by seven annas in the rupees and by the amount, if any, exempt from income-tax, there shall be charged on the total income an additional income-tax equal to the sum, if any, by which the aggregate amount of income-tax actually borne by such excess (hereinafter referred to as the excess dividend ) falls short of the amount calculated at the rate of five annas per rupee on the excess dividend.

For the purposes of the above proviso, the expression dividend shall have the meaning assigned to it in clause (6-A) of Section 2 of the Income-tax Act, but any distribution included in that expression, made during the year ending on the 31st day of March, 10[1954], shall be deemed to be a dividend declared in respect of the whole or part of the previous year.

For the purposes of clause (ii) of the above proviso, the aggregate amount of income-tax actually borne by the excess dividend shall be determined as follows:

(i) the excess dividend shall be deemed to be out of the whole or such portion of the undistributed profits of one or more years immediately preceding the previous year as would be just sufficient to cover the amount of the excess dividend and as have not likewise been taken into account to cover an excess dividend of a preceding year;

(ii) such portion of the excess dividend as is deemed to be out of the undistributed profits of each of the said years shall be deemed to have borne tax,

(a) if an order has been made under sub-section (1) of Section 23-A of the Income-tax Act, in respect of the undistributed profit of that year, at the rate of five annas in the rupee, and

(b) in respect of any other year, at the rate applicable to the total income of the company, for that year reduced by the rate at which rebate, if any, was allowed on the undistributed profits.

C. In the case of every local authority and in every case in which under the provisions of the Income-tax Act, income-tax is to be charged at the maximum rate

Part II

A. In the case of every individual, Hindu undivided family, unregistered firm and other association of persons, not being a case to which any other paragraph of this Part applies

C. In the case of an association of persons being a co-operative society (other than the Sanikatta Saltowners' Society in the State of Bombay) for the time being registered under the Co-operative Societies Act, 1912 (1 of 1912) or under any law of a State governing the registration of co-operative societies

Provided that

(i) a rebate at the rate of three annas per rupee of the total income shall be allowed in the case of any company which

(a) in respect of its profits liable to tax under the Income-tax Act for the year ending on the 31st day of March, 11[1954], has made the prescribed arrangements for the declaration and payment in the territory of India excluding the State of Jammu and Kashmir of the dividend payable out of such profits and for the deduction of super-tax from dividends in accordance with the provisions of sub-section (3-D) or (3-E) of Section 18 of that Act, and

(b) is a public company with total income not exceeding Rs 25,000;

(ii) a rebate at the rate of two annas per rupee of the total income shall be allowed in the case of any company which satisfies condition (a), but not condition (b), of the preceding clause; and

(iii) a rebate at the rate of 12[one anna and six pies per rupee on so much of the total income as consists of dividends from a subsidiary Indian company, and a rebate at the rate of six pies per rupee on any other income included in the total income] shall be allowed in the case of any company which not being entitled to a rebate under either of the preceding clauses, is

(a) a public company whose shares were offered for sale in a recognised stock exchange at any time during the previous year, or

(b) a company all of whose shares were held at the end of the previous year by one or more such public companies as aforesaid:

Provided further that the super-tax payable by a company the total income of which exceeds Rs 25,000 shall not exceed the aggregate of

(a) the super-tax which would have been payable by the company if its total income had been Rs 25,000, and

(b) half the amount by which its total income exceeds Rs 25,000.

Explanation. For the purposes of this paragraph of this Part, a company shall be deemed to be a public company only if it is neither a private company within the meaning of the Indian Companies Act, 1913 (6 of 1913), nor a company in which shares carrying more than fifty per cent. of the total voting power were, at any time during the previous year, held or controlled by less than six persons.

(See Section 5)

Goods comprised in the following Items of the First Schedule to the Indian Tariff Act, 1934 (32 of 1934), namely,

2, 4(1), 4(3), 4(4), 4(5), 7(1), 8(1), 8(4), 8(5), 9(6), 9(7), 12(6), 13(8), 13(9), 15(5), 15(9), 15(10), 15(11), 15(12), 16, 16(1), 16(3), 20(6), 20(7), 21(4), 21(5), 21(6), 21(7), 21(8), 21(9), 22(3), 22(5), 27(1), 27(3), 27(4), 27(9), 28(21), 28(22), 28(23), 28(24), 28(25), 28(26), 28(27), 28(28), 28(29), 28(30), 30(1), 30(2), 30(11), 30(12), 30(13), 31(4), 40(6), 40(7), 44(1), 45(3), 49(c), 49(2), 52(4), 53(2), 55(1), 55(2), 55(3), 60(4), 60(5), 61(11), 71(9), 71(10), 72(4), 72(5), 72(26), 72(27), 72(28), 73(4), 73(8), 73(9), 73(10), 73(11), 73(12), 74(4), 76, 77(4), 78(1), 79 and 84(1).

(See Section 5)

Goods comprised in the following Items of the First Schedule to the Indian Tariff Act, 1934 (32 of 1934), namely,

4, 8(2), 9(3), 9(5), 11(2), 11(4), 11(5), 11(6), 13(4), 15, 20(2), 21(3), 24, 24(1), 24(2), 24(3), 25(1), 27(2), 27(5), 27(6), 27(7), 27(8), 28, 28(4), 28(8), 28(14), 28(15), 28(16), 28(17), 28(18), 28(19), 28(20), 28(31), 29, 29(1), 30, 30(7), 30(9), 30(10), 34(3), 40(4), 40(5), 43, 44, 45, 45(4), 45(5), 46, 46(3), 47, 51, 55, 60, 60(2), 60(3), 60(6), 60(7), 61(2), 61(3), 61(8), 61(9), 62(1), 62(2), 63(14), 63(30), 63(31), 63(32), 63(33), 63(34), 63(35), 64, 64(3), 64(4), 65, 66, 66(1), 67, 67(1), 67(2), 68, 68(2), 69(2), 70, 70(1), 70(2), 70(3), 70(4), 70(5), 70(6), 70(9), 71(2), 71(3), 71(7), 71(8), 71(11), 72, 72(1), 72(2), 72(3), 72(11), 72(12), 72(13), 72(14), 72(15), 72(16), 72(17), 72(18), 72(19), 72(20), 72(21), 72(22), 72(23), 72(24), 72(25), 72(33), 72(34), 73(2), 73(7), 73(14), 73(15), 73(16), 74(2), 75, 75(1), 75(2), 75(3), 75(5), 75(6), 75(7), 75(8), 75(9), 75(10), 75(11), 75(12), 75(13), 77(2), 77(5), 78, 82(1), 82(3), 84, 85 and 85(1).

1. Substituted for 1951 by Act 14 of 1953, Section 2.

2. Substituted for 1952 by Act 14 of 1953, Section 2.

3. Substituted for 1952 by Act 14 of 1953, Section 2.

4. Substituted for 1952 by Act 14 of 1953, Section 2.

5. Substituted for 1951 by Act 14 of 1953, Section 2.

6. Substituted for 7,200 by Act 14 of 1953, Section 2.

7. Substituted for 3,600 by Act 14 of 1953, Section 2.

8. Substituted for 1952 by Act 14 of 1953, Section 2.

9. Substituted for 1952 by Act 14 of 1953, Section 2.

10. Substituted for 1952 by Act 14 of 1953, Section 2.

11. Substituted for 1952 by Act 14 of 1953, Section 2.

12. Substituted for one anna per rupee of the total income by Act 14 of 1953, Section 2.