(1) This Act may be called the Finance Act, 1973.

(2) Save as otherwise provided in this Act, Sections 2 to 23 shall be deemed to have come into force on the 1st day of April, 1973.

RATES OF INCOME-TAX

(1) Subject to the provisions of sub-sections (2) and (3), for the assessment year commencing on the 1st day of April, 1973, income-tax shall be charged at the rates specified in Part I of the First Schedule and shall be increased,

(a) in the cases to which Paragraphs A, B and D of that Part apply, by a surcharge for purposes of the Union;

(b) in the cases to which Paragraph C of that Part applies, by a surcharge for purposes of the Union and a special surcharge for purposes of the Union; and

(c) in the cases to which Paragraphs E and F of that Part apply, by a surcharge,

calculated in each case in the manner provided therein.

(2) In making any assessment for the assessment year commencing on the 1st day of April, 1973, where the total income of a company, other than the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956), includes any profits and gains from life insurance business, the income-tax payable by it shall be the aggregate of the income-tax calculated

(i) on the amount of profits and gains from life insurance business so included, at the rate applicable in the case of the Life Insurance Corporation of India, in accordance with Paragraph E of Part I of the First Schedule, to that part of its total income which consists of profits and gains from life insurance business; and

(ii) on the remaining part of its total income, at the rate applicable to the company on its total income.

(3) In cases to which Chapter XII or Section 164 of the Income-tax Act, 1961 (43 of 1961) (hereinafter referred to as the Income-tax Act) applies, the tax chargeable shall be determined as provided in that Chapter or that section, and with reference to the rates imposed by sub-section (1) or the rates as specified in that Chapter or section, as the case may be.

(4) In cases in which tax has to be deducted under Sections 193, 194, 194-A, 194-B, 194-D and 195 of the Income-tax Act at the rates in force, the deduction shall be made at the rates specified in Part II of the First Schedule.

(5) Subject to the provisions of sub-section (6), in cases in which income-tax has to be calculated under the first proviso to sub-section (5) of Section 132 of the Income-tax Act or charged under sub-section (4) of Section 172 or sub-section (2) of Section 174 or Section 175 or sub-section (2) of Section 176 of the said Act or deducted under Section 192 of the said Act from income chargeable under the head Salaries or deducted under sub-section (9) of Section 80-E of the said Act from any payment referred to in the said sub-section (9) or in which the advance tax payable under Chapter XVII-C of the said Act has to be computed, at the rate or rates in force, such income-tax or, as the case may be, advance tax shall be so calculated, charged, deducted or computed at the rate or rates specified in Part III of the First Schedule:

Provided that in respect of any income chargeable to tax under Section 164 of the Income-tax Act at the rate of sixty-five per cent., advance tax shall be computed at that rate.

(6) In the cases to which Sub-Paragraph I or Sub-Paragraph II of Paragraph A of Part III of the First Schedule applies, where the assessee has, in the previous year or, if by virtue of any provision of the Income-tax Act income-tax is to be charged in respect of the income of a period other than the previous year, in such other period, any net agricultural income, in addition to total income, and the total income exceeds five thousand rupees, then, in calculating income-tax under the first proviso to sub-section (5) of Section 132 of the Income-tax Act or in charging income-tax under sub-section (2) of Section 174 or Section 175 or sub-section (2) of Section 176 of the said Act or in computing the advance tax payable under Chapter XVII-C of the said Act, at the rate or rates in force,

(a) the net agricultural income shall be taken into account, in the manner provided in clause (b) (that is to say, as if the net agricultural income were comprised in the total income after the first five thousand rupees of the total income but without being liable to tax), only for the purpose of calculating, charging or computing such income-tax or, as the case may be, advance tax in respect of the total income; and

(b) such income-tax or, as the case may be, advance tax shall be so calculated, charged or computed as follows:

(i) the total income and the net agricultural income shall be aggregated and the amount of income-tax or advance tax shall be determined in respect of the aggregate income at the rates specified in Sub-Paragraph I or, as the case may be, Sub-Paragraph II of the said Paragraph A, as if such aggregate income were the total income;

(ii) the net agricultural income shall be increased by a sum of five thousand rupees and the amount of income-tax or advance tax shall be determined in respect of the net agricultural income as so increased at the rates specified in Sub-Paragraph I or, as the case may be, Sub-Paragraph II of the said Paragraph A, as if the net agricultural income as so increased were the total income;

(iii) the amount by which income-tax or, as the case may be advance tax determined in accordance with sub-clause (i) exceeds the amount of income-tax or advance tax determined in accordance with sub-clause (ii) shall be the income-tax or advance tax in respect of the total income:

Provided that in cases where Sub-Paragraph I of the said Paragraph A applies,

(A) where the aggregate income referred to in sub-clause (i) exceeds fifteen thousand rupees but does not exceed fifteen thousand one hundred and eighty rupees, the provisions of that Sub-Paragraph relating to surcharge on income-tax shall, for the purposes of determining the amount of income-tax or advance tax under sub-clause (ii), apply subject to the modifications that such surcharge shall be calculated at the rate arrived at by dividing the amount of surcharge on income-tax calculated in respect of the aggregate income by the amount of income-tax (excluding surcharge) calculated in respect of the aggregate income and that the provisions of the proviso at the end of that Sub-Paragraph shall not apply;

(B) where the aggregate income referred to in sub-clause (i) exceeds fifteen thousand one hundred and eighty rupees, the provisions of that Sub-Paragraph relating to surcharge on income-tax shall, for the purposes of determining the amount of income-tax or advance tax under sub-clause (ii), apply subject to the modifications that such surcharge shall be calculated at the rate of fifteen per cent. and that the provisions of the proviso at the end of that Sub-Paragraph shall not apply.

(7) For the purposes of this section and the First Schedule,

(a) company in which the public are substantially interested means a company which is such a company as is referred to in Section 108 of the Income-tax Act;

(b) domestic company means an Indian company or any other company which, in respect of its income liable to income-tax under the Income-tax Act for the assessment year commencing on the 1st day of April, 1973, 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 in accordance with the provisions of Section 194 of that Act;

(c) industrial company means a company which is mainly engaged in the business of generation or distribution of electricity or any other form of power or in the construction of ships or in the manufacture or processing of goods or in mining;

Explanation. For the purposes of this clause, a company shall be deemed to be mainly engaged in the business of generation or distribution of electricity or any other form of power or in the construction of ships or in the manufacture or processing of goods or in mining, if the income attributable to any one or more of the aforesaid activities included in its total income of the previous year (as computed before making any deduction under Chapter VI-A of the Income-tax Act) is not less than fifty-one per cent. of such total income;

(d) insurance commission means any remuneration or reward, whether by way of commission or otherwise, for soliciting or procuring insurance business (including business relating to the continuance, renewal or revival of policies of insurance);

(e) net agricultural income in relation to a person means the total amount of agricultural income, from whatever source derived of that person computed in accordance with the rules contained in Part IV of the First Schedule;

(f) tax-free security means any security of the Central Government issued or declared to be income-tax free, or any security of a State Government issued income-tax free the income-tax whereon is payable by the State Government;

(g) all other words and expressions used in this section and the First Schedule but not defined in this sub-section and deisclaimer, see under Help.

DIRECT TAXES

Income-tax

In Section 2 of the Income-tax Act,

(a) in clause (37-A), in sub-clause (ii), after the figures and letter 194-B , the figures and letter , 194-D shall be inserted;

(b) in clause (42-A), for the portion beginning with the words short-term capital asset means a capital asset and ending with the words notwithstanding that such capital asset has been held by the assessee for not more than twenty-four months immediately preceding the date of its transfer. , the following shall be substituted with effect from the 1st day of April, 1974, namely:

short-term capital asset means a capital asset held by an assessee for not more than sixty months immediately preceding the date of its transfer. .

In Section 28 of the Income-tax Act, in clause (ii), after sub-clause (c), the following sub-clause shall be inserted, and shall be deemed to have been inserted, with effect from the 1st day of April, 1972, namely:

(d) any person, for or in connection with the vesting in the Government, or in any corporation owned or controlled by the Government, under any law for the time being in force, of the management of any property or business; .

In Section 35-B of the Income-tax Act, in sub-section (1),

(a) the Explanation shall be numbered, and shall be deemed to have been numbered, as Explanation 1, with effect from the 1st day of April, 1968; and

(b) after Explanation 1 as so numbered, the following Explanation shall be inserted, and shall be deemed to have been inserted, with effect from the 1st day of April, 1968, namely:

Explanation 2. For the purposes of sub-clause (iii) and sub-clause (viii) of clause (b), expenditure incurred by an assessee engaged in the business of

(i) operation of any ship or other vessel, aircraft or vehicle, or

(ii) carriage of, or making arrangements for carriage of, passengers, livestock, mail or goods,

on or in relation to such operation or carriage or arrangements for carriage (including in each case expenditure incurred on the provision of any benefit, amenity or facility to the crew, passengers or livestock) shall not be regarded as expenditure incurred by the assessee on the supply outside India of services or facilities. .

In Section 45 of the Income-tax Act (as amended by Section 8 of the Finance Act, 1972 (16 of 1972)), for the words, figures and letters Sections 53, 54, 54-B and 54-C , the words, figures and letters Sections 53, 54, 54-B, 54-C and 54-D shall be substituted with effect from the 1st day of April, 1974.

After Section 54-C (inserted by Section 9 of the Finance Act, 1972 (16 of 1972)) of the Income-tax Act, the following section shall be inserted with effect from the 1st day of April, 1974, namely:

54-D. Capital gain on compulsory acquisition of lands and buildings not to be charged in certain cases. Where the capital gain arises from the transfer by way of compulsory acquisition under any law of a capital asset, being land or building or any right in land or building, forming part of an industrial undertaking belonging to the assessee which, in the two years immediately preceding the date on which the transfer took place, was being used by the assessee for the purposes of the business of the said undertaking, and the assessee has within a period of three years after that date purchased any other land or building or any right in any other land or building or constructed any other building for the purposes of shifting or re-establishing the said undertaking or setting up another industrial undertaking, then, instead of the capital gain being charged to income-tax as the income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say,

(i) if the amount of the capital gain is greater than the cost of the land, building or right so purchased or the building so constructed (such land, building or right being hereafter in this section referred to as the new asset), the difference between the amount of the capital gain and the cost of the new asset shall be charged under Section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be nil; or

(ii) if the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under Section 45; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be reduced by the amount of the capital gain. .

In Section 80-C of the Income-tax Act, with effect from the 1st day of April, 1974,

(a) for sub-section (1), the following sub-section shall be substituted, namely:

(1) In computing the total income of an assessee, there shall be deducted, in accordance with and subject to the provisions of this section, an amount calculated, with reference to the aggregate of the sums specified in sub-section (2), at the following rates, namely:

(b)in sub-section (2),

(i) for sub-clause (ii) of clause (a), the following sub-clause shall be substituted, namely:

(ii) to effect or to keep in force a contract for a deferred annuity on the life of the assessee or on the life of the wife or husband or any child of the assessee:

Provided that such contract does not certain a provision for the exercise by the insured of an option to receive a cash payment in lieu of the payment of the annuity; ;

(ii) in clause (g), for item (2) of sub-clause (i), the following item shall be substituted, namely:

(2) to effect or to keep in force a contract for a deferred annuity on the life of any member of such association or body or any child of any of the members of such association or body:

Provided that such contract does not contain a provision for the exercise by the insured of an option to receive a cash payment in lieu of the payment of the annuity; or .

In Section 80-G of the Income-tax Act, with effect from the 1st day of April, 1974,

(a) in sub-section (5),

(i) in clause (i), after the words, brackets, figures and letter or clause (22-A) , the words, brackets and figures or clause (23) shall be inserted;

(ii) in clause (v), after the words or affiliated to any University established by law , the following words, brackets and figures shall be inserted, namely:

, or is an institution approved by the Central Government for the purposes of clause (23) of Section 10, ;

(b) after Explanation 3 below sub-section (5), the following Explanation shall be inserted, namely:

Explanation 4. For the purposes of this section, an association approved by the Central Government for the purposes of clause (23) of Section 10 shall also be deemed to be an institution, and, every association or institution approved by the Central Government for the purposes of the said clause shall be deemed to be an institution established in India for a charitable purpose. .

In Section 80-J of the Income-tax Act, clause (c) of sub-section (6) shall be omitted with effect from the 1st day of April, 1974.

In Section 80-S of the Income-tax Act, for the words, brackets and figures provisions of clause (ii) of Section 28, , the words, brackets, letters and figures provisions of sub-clause (a) or sub-clause (b) or sub-clause (c) of clause (ii) of Section 28, shall be substituted, and shall be deemed to have been substituted, with effect from the 1st day of April, 1972.

In Section 104 of the Income-tax Act, with effect from the 1st day of April, 1974,

(a) in sub-section (1), after the words the amount of dividends actually distributed, if any , the words , within the said period of twelve months shall be inserted;

(b) in sub-section (2), in clauses (i) and (ii), after the words the payment of a dividend or a larger dividend than that declared , the words, brackets and figure within the period of twelve months referred to in sub-section (1) shall be inserted.

In Section 105 of the Income-tax Act, in sub-section (1), with effect from the 1st day of April, 1974,

(a) in clause (i), after the words has distributed , the words, brackets and figures , within the period of twelve months referred to in sub-section (1) of Section 104, shall be inserted;

(b) in clause (ii), after the words whose distribution , the words, brackets and figures , within the period of twelve months referred to in sub-section (1) of Section 104, shall be inserted;

(c) in clause (iii), after the words has distributed , the words, brackets and figures , within the period of twelve months referred to in sub-section (1) of Section 104, shall be inserted;

(d) the following Explanation shall be inserted at the end, namely:

Explanation. For the purposes of clause (iv) of this sub-section, the sum distributed as dividends means,

(a) where in relation to the assessment made under Section 143 or Section 144, any further distribution of dividends was made by the company in pursuance of a notice under this sub-section, the aggregate of the following sums, namely:

(i) the sum distributed as dividends within the period of twelve months referred to in sub-section (1) of Section 104, and

(ii) the sum distributed as dividends within the period of three months from the receipt of the said notice;

(b) where an order under Section 107-A has been made by the Board in relation to the assessment made under Section 143 or Section 144, the sum distributed as dividends within the period determined by the Board under the provisions of sub-section (4) of Section 107-A;

(c) in any other case, the sum distributed as dividends within the period of twelve months referred to in sub-section (1) of Section 104. .

In Section 112-A of the Income-tax Act, in clause (b), for the words, brackets and figures clause (ii) of Section 28 , the words, brackets, letters and figures sub-clause (a) or sub-clause (b) or sub-clause (c) of clause (ii) of Section 28 shall be substituted, and shall be deemed to have been substituted, with effect from the 1st day of April, 1972.

In Section 155 of the Income-tax Act,

(a) after sub-section (8), the following sub-section shall be inserted, and shall be deemed to have been inserted, with effect from the 1st day of April, 1970, namely:

(9) Where in the assessment for any year, a capital gain arising from the transfer of any such capital asset as is referred to in Section 54-B is charged to tax and within a period of two years after the date of the transfer the assessee purchases any other land for being used for agricultural purposes, the Income-tax Officer shall amend the order of assessment so as to exclude the amount of the capital gain not chargeable to tax under the provisions of Section 54-B and the provisions of Section 154 shall, so far as may be, apply thereto, the period of four years specified in sub-section (7) of that section being reckoned from the date of the assessment. ;

(b) after sub-section (9) as so inserted, the following sub-section shall be inserted, with effect from the 1st day of April, 1974, namely:

(10) Where in the assessment for any year, a capital gain arising from the transfer by way of compulsory acquisition of any such capital asset as is referred to in Section 54-D is charged to tax and within a period of three years after the date of the transfer, the assessee purchases any other land or building or any right in any other land or building or constructs any other building for the purposes of shifting or re-establishing the industrial undertaking referred to in that section or setting up another industrial undertaking, the Income-tax Officer shall amend the order of assessment so as to exclude the amount of the capital gain not chargeable to tax under the provisions of Section 54-D, and the provisions of Section 154 shall, so far as may be, apply thereto, the period of four years specified in sub-section (7) of that section being reckoned from the date of the assessment. .

In Section 194-C of the Income-tax Act,

(a) in sub-section (1),

(i) in clause (d), for the word company, , the words company; or shall be substituted;

(ii) after clause (d), the following clause shall be inserted, namely:

(e) any co-operative society, ;

(b) in sub-section (3),

(i) in clause (ii), for the word and figures June, 1972. , the words and figures June, 1972; or shall be substituted;

(ii) after clause (ii), the following clause shall be inserted, namely:

(iii) any sum credited or paid before the 1st day of June, 1973, in pursuance of a contract between the contractor and a co-operative society or in pursuance of a contract between such contractor and the sub-contractor in relation to any work (including supply of labour for carrying out any work) undertaken by the contractor for the co-operative society. .

After Section 194-C of the Income-tax Act, the following section shall be inserted, namely:

194-D. Insurance commission. Any person responsible for paying to a resident any income by way of remuneration or reward, whether by way of commission or otherwise, for soliciting or procuring insurance business (including business relating to the continuance, renewal or revival of policies of insurance) shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rates in force:

Provided that no deduction shall be made under this section from any such income credited or paid before the 1st day of June, 1973. .

In Section 197 of the Income-tax Act, in clause (a) of sub-section (1), after the figures and letter 194-B , the figures and letter , 194-D shall be inserted.

In Sections 198, 199, 200, 202, 203, 204, and 205, in sub-clause (iii) of clause (a) of Section 209, and in sub-section (5) of Section 215, of the Income-tax Act, after the word, figures and letter Section 194-C , the word, figures and letter , Section 194-D shall be inserted.

Wealth-tax

In the Schedule to the Wealth-tax Act, 1957, in Paragraph A of Part I, with effect from the 1st day of April, 1974,

(a) in item (1), for the words In the case of every individual or Hindu undivided family , the words, brackets, figure and letter In the case of every individual or Hindu undivided family, not being a Hindu undivided family to which item (1-A) of this Paragraph applies shall be substituted;

(b) after item (1), the following item shall be inserted, namely:

(1-A) In the case of every Hindu undivided family which has at least one member whose net wealth assessable for the assessment year exceeds Rs. 1,00,000

Provided that for the purposes of this item,

(i) no wealth-tax shall be payable where the wealth does not exceed Rs. 2,00,000;

(ii) the wealth-tax payable shall, in no case, exceed 10 per cent. of the amount by which the net wealth exceeds Rs. 2,00,000. .

Gift-tax

In Section 5 of the Gift-tax Act, 1958, in clause (v) of sub-section (1), after the words fund established , the words or deemed to be established shall be inserted with effect from the 1st day of April, 1974.

Surtax

In the Companies (Profits) Surtax Act, 1964, with effect from the 1st day of April, 1974,

(a) in the First Schedule, in clause (i) of Rule 3, for the words its debentures , the words, brackets and figures the debentures referred to in clause (iv), shall be substituted;

(b) in the Second Schedule,

(i) in Rule 1, for clause (iv), the following clause shall be substituted, namely:

(iv) the debentures, if any, issued by it to the public:

Provided that according to the terms and conditions of issue of such debentures, they are not redeemable before the expiry of a period of seven years from the date of issue thereof; and ;

(ii) in Rule 3, for the words, brackets and figures issue of debentures or borrowing of any moneys referred to in clause (v) of Rule 1 or is reduced by any amount on account of reduction of paid-up share capital or redemption of any debentures , the words, brackets and figures issue of the debentures referred to in clause (iv), or borrowings of any moneys referred to in clause (v), of Rule 1 or is reduced by any amount on account of reduction of paid-up share capital or redemption of such debentures shall be substituted.

Miscellaneous

Notwithstanding anything contained in the Income-tax Act or the Companies (Profits) Surtax Act, 1964 (7 of 1964), the Credit Guarantee Corporation of India Limited (a company formed and registered under the Companies Act, 1956 (1 of 1956)) shall not be liable to pay any tax, under either of the two Acts first-mentioned, on its income, profits or gains for the previous year relevant to the assessment year commencing on the 1st day of April, 1972 and for the 1[seven previous years] next following that previous year.

INDIRECT TAXES

The Indian Tariff Act, 1934 (hereinafter referred to as the Tariff Act) shall be amended in the manner specified in the Second Schedule.

(1) In the case of goods mentioned in the First Schedule to the Tariff Act, or in that Schedule as amended form time to time, there shall be levied and collected as an auxiliary duty of customs an amount equal to twenty per cent. of the value of the goods as determined in accordance with the provisions of Section 14 of the Customs Act, 1962 (52 of 1962).

(2) Sub-section (1) shall cease to have effect after the 31st day of March, 1974, except as respects things done or omitted to be done before such cesser; and Section 6 of the General Clauses Act, 1897 (10 of 1897), shall apply upon such cesser as if the said sub-section had then been repealed by a Central Act.

(3) The auxiliary duties of customs referred to in sub-section (1) shall be in addition to any duties of customs chargeable on such goods under the Customs Act, 1962 (52 of 1962), or any other law for the time being in force.

(4) The provisions of the Customs Act, 1962 (52 of 1962), and the rules and regulations made thereunder, including those relating to refunds and exemptions from duties, shall, as far as may be, apply in relation to the levy and collection of the auxiliary duties of customs leviable under this section in respect of any goods as they apply in relation to the levy and collection of the duties of customs on such goods under that Act or those rules and regulations, as the case may be.

In the Indian Tariff (Amendment) Act, 1949, in Sections 4 and 5, for the figures 1973 , the figures 1974 shall be substituted.

The Central Excises and Salt Act, 1944 (hereinafter referred to as the Central Excises Act) shall be amended in the manner specified in the Third Schedule.

(1) In the case of goods mentioned in the First Schedule to the Central Excises Act, or in that Schedule as amended from time to time, there shall be levied and collected as an auxiliary duty of excise an amount equal to twenty per cent. of the value of the goods as determined in accordance with the provisions of Section 4 of the Central Excises Act.

(2) Sub-section (1) shall cease to have effect after the 31st day of March, 1974, except as respects things done or omitted to be done before such cesser; and Section 6 of the General Clauses Act, 1897 (10 of 1897), shall apply upon such cesser as if the said sub-section had then been repealed by a Central Act.

(3) The auxiliary duties of excise referred to in sub-section (1) shall be in addition to any duties of excise chargeable on such goods under the Central Excises Act or any other law for the time being in force.

(4) The auxiliary duties of excise referred to in sub-section (1) shall be levied for the purposes of the Union and the proceeds thereof shall not be distributed among the States.

(5) The provisions of the Central Excises Act and the rules made thereunder, including those relating to refunds and exemptions from duties, shall, as far as may be, apply in relation to the levy and collection of the auxiliary duties of excise leviable under this section in respect of any goods as they apply in relation to the levy and collection of the duties of excise on such goods under that Act or those rules, as the case may be.

The Additional Duties of Excise (Goods of Special Importance) Act, 1957 (hereinafter referred to as the Additional Duties of Excise Act) shall be amended in the manner specified in the Fourth Schedule.

For the year beginning on the 1st day of April, 1973, no duty under the Central Excises Act or the Tariff Act shall be levied in respect of salt manufactured in, or imported into India.

(See Section 2)

PART I

Income-tax and surcharges on income-tax

In the case of every individual or Hindu undivided family or unregistered firm or other association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of Section 2 of the Income-tax Act, not being a case to which any other Paragraph of this Part applies,

Provided that for the purposes of this Paragraph, in the case of a Hindu undivided family which at any time during the previous year satisfies either of the following two conditions, namely:

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

(b) that it has at least two members entitled to claim partition who are not lineally descended one from the other and who are not lineally descended from any other living member of the family,

(i) no income-tax shall be payable on a total income not exceeding Rs. 7,000;

(ii) where the total income exceeds Rs. 7,000 but does not exceed Rs. 7,660, the income-tax payable thereon shall not exceed forty per cent. of the amount by which the total income exceeds Rs. 7,000.

The amount of income-tax computed in accordance with the proceeding provisions of this Paragraph shall be increased by a surcharge for purposes of the Union calculated at the following rates, namely:

Provided that the amount of surcharge payable shall, in no case, exceed the aggregate of the following sums, namely:

(i) an amount calculated at the rate of 10 per cent. on the amount of income-tax on an income of Rs. 15,000, if such income had been the total income (the income of Rs. 15,000 for this purpose being computed as if such income included income from various sources in the same proportion as the total income of the person concerned); and

(ii) 40 per cent. of the amount by which the total income exceeds Rs. 15,000.

In the case of every co-operative society,

The amount of income-tax computed at the rate hereinbefore specified shall be increased by a surcharge for purposes of the Union calculated at the rate of fifteen per cent. of such income-tax.

In the case of every registered firm,

The amount of income-tax computed at the rate hereinbefore specified shall be increased by the aggregate of surcharges for purposes of the Union calculated as specified hereunder:

(a) in the case of a registered firm whose total income includes income derived from a profession carried on by it and the income so included is not less than fifty-one per cent. of such total income, a surcharge calculated at the rate of ten per cent. of the amount of income-tax computed at the rate hereinbefore specified;

(b) in the case of any other registered firm, a surcharge calculated at the rate of twenty per cent. of the amount of income-tax computed at the rate hereinbefore specified; and

(c) a special surcharge calculated at the rate of fifteen per cent. on the aggregate of the following amounts, namely:

(i) the amount of income-tax computed at the rate hereinbefore specified; and

(ii) the amount of the surcharge calculated in accordance with clause (a) or, as the case may be, clause (b).

Explanation. For the purposes of this Paragraph, registered firm includes an unregistered firm assessed as a registered firm under clause (b) of Section 183 of the Income-tax Act.

In the case of every local authority,

On the whole of the total income 50 per cent.

The amount of income-tax computed at the rate hereinbefore specified shall be increased by a surcharge for purposes of the Union calculated at the rate of fifteen per cent. of such income-tax.

In the case of the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956),

The amount of income-tax computed at the rate hereinbefore specified shall be increased by a surcharge calculated at the rate of five per cent. of such income-tax.

In the case of a company, other than the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956),

Provided that the income-tax payable by a domestic company, being a company in which the public are substantially interested, the total income of which exceeds Rs. 50,000, shall not exceed the aggregate of

(a) the income-tax which would have been payable by the company if its total income had been Rs. 50,000 (the income of Rs. 50,000 for this purpose being computed as if such income included income from various sources in the same proportion as the total income of the company); and

(b) eighty per cent. of the amount by which its total income exceeds Rs. 50,000.

The amount of income-tax computed at the rate hereinbefore specified shall be increased by a surcharge calculated at the rate of five per cent. of such income-tax.

PART II

In every case in which under the provisions of Sections 193, 194, 194-A, 194-B, 194-D and 195 of the Income-tax Act, tax is to be deducted at the rates in force, deduction shall be made from the income subject to deduction, at the following rates:

PART III

Rates for calculating or charging income-tax in certain cases, deducting income-tax from income chargeable under the head Salaries or any payment referred to in sub-section (9) of Section 80-E and computing advance tax

In cases in which income-tax has to be calculated under the first proviso to sub-section (5) of Section 132 of the Income-tax Act or charged under sub-section (4) of Section 172 or sub-section (2) of Section 174 or Section 175 or sub-section (2) of Section 176 of the said Act or deducted under Section 192 of the said Act from income chargeable under the head Salaries or deducted under sub-section (9) of Section 80-E of the said Act from any payment referred to in the said sub-section (9) or in which the advance tax payable under Chapter XVII-C of the said Act has to be computed, at the rate or rates in force, such income-tax or, as the case may be, advance tax (not being advance tax in respect of any income chargeable to tax under Section 164 of the Income-tax Act at the rate of sixty-five per cent.) shall be so calculated, charged, deducted or computed at the following rate or rates:

In the case of every individual or Hindu undivided family or unregistered firm or other association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of Section 2 of the Income-tax Act, not being a case to which Sub-Paragraph II of this Paragraph or any other Paragraph of this Part applies,

The amount of income-tax computed in accordance with the preceding provisions of this Sub-Paragraph shall be increased by a surcharge for purposes of the Union calculated at the following rates, namely:

Provided that the amount of surcharge payable shall, in no case, exceed the aggregate of the following sums, namely:

(i) an amount calculated at the rate of 10 per cent. on the amount of income-tax on an income of Rs. 15,000, if such income had been the total income (the income of Rs. 15,000 for this purpose being computed as if such income included income from various sources in the same proportion as the total income of the person concerned); and

(ii) 40 per cent. of the amount by which the total income exceeds Rs. 15,000.

In the case of every Hindu undivided family which has at least one member whose total income of the previous year relevant to the assessment year commencing on the 1st day of April, 1974 exceeds Rs. 5,000,

The amount of income-tax computed in accordance with the preceding provisions of this Sub-Paragraph shall be increased by a surcharge for purposes of the Union calculated at the rate of fifteen per cent. of such income-tax.

In the case of every co-operative society,

The amount of income-tax computed at the rate hereinbefore specified shall be increased by a surcharge for purposes of the Union calculated at the rate of fifteen per cent. of such income-tax.

In the case of every registered firm,

The amount of income-tax computed at the rate hereinbefore specified shall be increased by the aggregate of surcharges for purposes of the Union calculated as specified hereunder:

(a) in the case of a registered firm whose total income includes income derived from a profession carried on by it and the income so calculated is not less than fifty-one per cent. of such total income, a surcharge calculated at the rate of ten per cent. of the amount of income-tax computed at the rate hereinbefore specified;

(b) in the case of any other registered firm, a surcharge calculated at the rate of twenty per cent. of the amount of income-tax computed at the rate hereinbefore specified; and

(c) a special surcharge calculated at the rate of fifteen per cent. on the aggregate of the following amounts, namely:

(i) the amount of income-tax computed at the rate hereinbefore specified; and

(ii) the amount of the surcharge calculated in accordance with clause (a) or, as the case may be, clause (b).

Explanation. For the purposes of this Paragraph, registered firm includes an unregistered firm assessed as a registered firm under clause (b) of Section 183 of the Income-tax Act.

In the case of every local authority,

On the whole of the total income50 per cent.

The amount of income-tax computed at the rate hereinbefore specified shall be increased by a surcharge for purposes of the Union calculated at the rate of fifteen per cent. of such income-tax.

In the case of the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956),

The amount of income-tax computed at the rate hereinbefore specified shall be increased by a surcharge calculated at the rate of five per cent. of such income-tax.

In the case of a company, other than the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956),

Provided that the income-tax payable by a domestic company, being a company in which the public are substantially interested, the total income of which exceeds Rs. 1,00,000, shall not exceed the aggregate of

(a) the income-tax which would have been payable by the company of its total income had been Rs. 1,00,000 (the income of Rs. 1,00,000 for this purpose being computed as if such income included income from various sources in the same proportion as the total income of the company); and

(b) eighty per cent. of the amount by which its total income exceeds Rs. 1,00,000.

The amount of income-tax computed at the rate hereinbefore specified shall be increased by a surcharge calculated at the rate of five per cent. of such income-tax.

PART IV

[See Section 2(7)(e)]

Rules for computation of net agricultural income

Rule 1. Agricultural income of the nature referred to in sub-clause (a) of clause (1) of Section 2 of the Income-tax Act shall be computed as if it were income chargeable to income-tax under that Act under the head Income from other sources and the provisions of Sections 57 to 59 of that Act shall, so far as may be, apply accordingly:

Provided that sub-section (2) of Section 58 shall apply subject to the modification that the reference to Section 40-A therein shall be construed as not including a reference to sub-sections (3) and (4) of Section 40-A.

Rule 2. Agricultural income of the nature referred to in sub-clause (b) or sub-clause (c) of clause (1) of Section 2 of the Income-tax Act [other than income derived from any building required as a dwelling house by the receiver of the rent or revenue or the cultivator or the receiver of rent-in-kind referred to in the said sub-clause (c)] shall be computed as if it were income chargeable to income-tax under that Act under the head Profits and gains of business or profession and the provisions of Sections 30, 31, 32, 34, 36, 37, 38, 40, 40-A [other than sub-sections (3) and (4) thereof], 41, 43 and 43-A of the Income-tax Act shall, so far as may be, apply accordingly.

Rule 3. Agricultural income of the nature referred to in sub-clause (c) of clause (1) of Section 2 of the Income-tax Act, being income derived from any building required as a dwelling house by the receiver of the rent or revenue or the cultivator or the receiver of rent-in-kind referred to in the said sub-clause (c), shall be computed as if it were income chargeable to income-tax under that Act under the head Income from house property and the provisions of Sections 23 to 27 of that Act shall so far as may be, apply accordingly:

Provided that sub-section (2) of the said Section 23 shall apply subject to the modifications that the references to total income therein shall be construed as references to net agricultural income and that the words, figures and letter and before making any deduction under Chapter VI-A shall be omitted.

Rule 4. Notwithstanding anything contained in any other provisions of these rules, in a case where the assessee derives income from sale of tea grown and manufactured by him in India, such income shall be computed in accordance with Rule 8 of the Income-tax Rules, 1962, and sixty per cent. of such income shall be regarded as the agricultural income of the assessee.

Rule 5. Where the assessee is a partner of a registered firm or an unregistered firm assessed as a registered firm under clause (b) of Section 183 of the Income-tax Act, which in the previous year has any agricultural income, or is a partner of an unregistered firm which has not been assessed as a registered firm under clause (b) of the said Section 183 and which in the previous year has either no income chargeable to tax under the Income-tax Act or has total income not exceeding five thousand rupees but has any agricultural income, then, the agricultural income or loss of the firm shall be computed in accordance with these rules and his share in the agricultural income or loss of the firm shall be computed in the manner laid down in sub-section (1), sub-section (2) and sub-section (3) of Section 67 of the Income-tax Act and the share so computed shall be regarded as the agricultural income or loss of the assessee.

Rule 6. Where the assessee is a member of an association of persons or a body of individuals (other than a Hindu undivided family, a company or a firm) which in the previous year has either no income chargeable to tax under the Income-tax Act or has total income not exceeding five thousand rupees but has any agricultural income, then, the agricultural income or loss of the association or body shall be computed in accordance with these rules and the share of the assessee in the agricultural income or loss so computed shall be regarded as the agricultural income or loss of the assessee.

Rule 7. Where the result of the computation for any assessment year in respect of any source of agricultural income is a loss, such loss shall be set off against the income of the assessee, if any, for that assessment year from any other source of agricultural income:

Provided that where the assessee is a partner of an unregistered firm which has not been assessed as a registered firm under clause (b) of Section 183 of the Income-tax Act or is a member of an association of persons or body of individuals and the share of the assessee in the agricultural income of the firm, association or body, as the case may be, is a loss, such loss shall not be set off against any income of the assessee from any other source of agricultural income.

Rule 8. Any sum payable by the assessee on account of any tax levied by the State Government on the agricultural income shall be deducted in computing the agricultural income.

Rule 9. Where the net result of the computation made in accordance with these rules is a loss, the loss so computed shall be ignored and the net agricultural income shall be deemed to be nil.

Rule 10. The provisions of the Income-tax Act relating to procedure for assessment (including the provisions of Section 288-A relating to rounding off of income) shall, with the necessary modifications, apply in relation to the computation of the net agricultural income of the assessee as they apply in relation to the assessment of the total income.

Rule 11. For the purposes of computing the net agricultural income of the assessee, the Income-tax Officer shall have the same powers as he has under the Income-tax Act for the purposes of assessment of the total income.

(See Section 24)

PART I

In the First Schedule to the Tariff Act,

(i) in Item No. 29, for the entry in the fourth column, the entry Fifty paise per linear metre. shall be substituted;

(ii) in Item No. 72-A, in the proviso to sub-item (i),

(a) the words in advance of their importation shall be omitted;

(b) the words and such contract or contracts has or have been so registered before any order is made by the proper officer of customs permitting the clearance for home consumption, or deposit in a warehouse of such items, components or raw materials shall be inserted at the end.

PART II

(See Section 27)

PART I

In the First Schedule to the Central Excises Act,

(i) in Item No. 2,

(a) for the words Ten per cent. ad valorem in the third column against sub-item (2), the words Twenty per cent. ad valorem shall be substituted;

(b) the Explanation shall be numbered as Explanation I and after the Explanation, as so numbered, the following Explanation shall be inserted, namely:

Explanation II. For the purposes of sub-item (2), instant coffee includes instant coffee containing any ingredient in addition to coffee. ;

(ii) in Item No. 14, the following Explanation shall be inserted at the end, namely:

Explanation. This Item does not include carbon black. ;

(iii) in Item No. 14-B, for the entry in the second column, the following entry shall be substituted, namely:

CAUSTIC SODA AND CAUSTIC POTASH, WHETHER IN A SOLID FORM OR IN LYE. ;

(iv) in Item No. 14-C, for the entry in the third column, the entry Ten per cent. ad valorem. shall be substituted;

(v) in Item No. 14-F, after sub-item (ii), the following sub-item shall be inserted, namely:

(iii) Shaving creams, whether or not containing soap or detergents. ;

(vi) in Item No. 16-B, for the entry in the third column against sub-item (ii), the entry Twenty-five per cent. ad valorem. shall be substituted;

(vii) in Item No. 18-E, for the entries in the second column, the following entry shall be substituted, namely:

YARN, ALL SORTS, NOT ELSEWHERE SPECIFIED, IN OR IN RELATION TO THE MANUFACTURE OF WHICH ANY PROCESS IS ORDINARILY CARRIED ON WITH THE AID OF POWER. ;

(viii) in Item No. 22-AA, for the entries in the second column, the following entry shall be substituted, namely:

TEXTILE FABRICS, NOT ELSEWHERE SPECIFIED. ;

(ix) in Item No. 33-C, for the entry in the third column, the entry Twenty-five per cent. ad valorem. shall be substituted;

(x) in Item No. 34-A, for the entry in the third column, the entry Twenty per cent. ad valorem. shall be substituted;

PART II

(See Section 29)

1. Substituted for six previous years by Act 21 of 1979, Section 45 (w.r.e.f. 1-4-1979).