(1) This Act may be called the Finance Act, 1984.

(2) Save as otherwise provided in this Act, Sections 2 to 34 and Section 54 shall be deemed to have come into force on the 1st day of April, 1984.

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, 1984, 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, C and D of that Part apply, by a surcharge for purposes of the Union; and

(b) in the cases to which Paragraph E of that Part applies, by a surcharge,

calculated in each case in the manner provided therein:

Provided that where an assessee, being a company, has made, during the financial year commencing on the 1st day of April, 1983, any deposit with the Industrial Development Bank of India established under the Industrial Development Bank of India Act, 1964 (18 of 1964) under the Companies Deposits (Surcharge on Income-tax) Scheme, 1983, then, the surcharge on income-tax payable by the company,

(a) in a case where the amount of the deposit so made is equal to, or exceeds, one-half of the amount of surcharge on income-tax payable by it, shall be reduced by one-half of the amount of surcharge payable by it; and

(b) in a case where the amount of the deposit so made falls short of one-half of the amount of surcharge on income-tax payable by it, shall be reduced by the amount of the deposit.

(2) In the cases to which Sub-Paragraph I or Sub-Paragraph II of Paragraph A of Part I of the First Schedule applies, where the assessee has, in the previous year, any net agricultural income exceeding six hundred rupees, in addition to total income, and the total income exceeds,

(i) in a case to which the said Sub-Paragraph I applies, fifteen thousand rupees, and

(ii) in a case to which the said Sub-Paragraph II applies, twelve thousand rupees,

then,

(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,

(i) in a case to which the said Sub-Paragraph I applies, the first fifteen thousand rupees, and

(ii) in a case to which the said Sub-Paragraph II applies, the first eight thousand rupees,

of the total income but without being liable to tax], only for the purpose of charging income-tax in respect of the total income; and

(b) the income-tax chargeable shall be calculated as follows:

(i) the total income and the net agricultural income shall be aggregated and the amount of income-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:

Provided that in a case referred to in the said Sub-Paragraph II, for the purpose of determining the amount of income-tax in accordance with this sub-clause, the provisions of clause (ii) of the proviso below Sub-Paragraph II and the provisions relating to surcharge on income-tax in the said Sub-Paragraph II shall not apply;

(ii) the net agricultural income shall be increased,

(A) in a case to which the said Sub-Paragraph I applies, by a sum of fifteen thousand rupees; and

(B) in a case to which the said Sub-Paragraph II applies, by a sum of eight thousand rupees,

and the amount of income-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:

Provided that in a case referred to in the said Sub-Paragraph II, for the purposes of determining the amount of income-tax in accordance with this sub-clause, the provisions of clause (ii) of the proviso below the said Sub-Paragraph II and the provisions relating to surcharge on income-tax in the said Sub-Paragraph II shall not apply;

(iii) the amount of income-tax determined in accordance with sub-clause (i) shall be reduced by the amount of income-tax determined in accordance with sub-clause (ii):

Provided that in a case referred to in the said Sub-Paragraph II, where the sum so arrived at exceeds sixty per cent. of the amount by which the total income exceeds twelve thousand rupees, the excess shall be disregarded;

(iv) the amount of income-tax determined in accordance with sub-clause (iii) shall be increased by a surcharge of purposes of the Union calculated at the rate of twelve and a half per cent. of such income-tax and the sum so arrived at shall be the income-tax in respect of the total income.

(3) In cases to which the provisions of Chapter XII or Chapter XII-A or Section 164 or Section 164-A or Section 167-A of the Income-tax Act, 1961 (43 of 1961) (hereinafter referred to as the Income-tax Act) apply, 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-BB, 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 case 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 cases to which the provisions of Chapter XII or Chapter XII-A or sub-section (1-A) of Section 161 or Section 164 or Section 164-A or Section 167-A of the Income-tax Act apply, advance tax shall be computed with reference to the rates imposed by this sub-section or the rates as specified in that Chapter or section, as the case may be:

Provided further that an assessee, being a company, may, in lieu of payment of the amount of surcharge on income-tax at the rate specified in Paragraph E of Part III of the First Schedule, make a deposit under the scheme framed under sub-section (7) before the last instalment of advance tax is due in its case, and where it does so, the surcharge on income-tax payable by the company,

(i) in a case where the amount of the deposit so made is equal to or exceeds the amount of surcharge on income-tax payable by it, shall be nil; and

(ii) in a case where the amount of the deposit so made falls short of the amount of surcharge on income-tax payable by it, shall be reduced by the amount of the deposit.

(6) In the case 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 exceeding six hundred rupees, in addition to total income and the total income exceeds,

(i) in a case to which the said Sub-Paragraph I applies, fifteen thousand rupees, and

(ii) in a case to which the said Sub-Paragraph II applies, twelve 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 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,

(i) in a case to which the said Sub-Paragraph I applies, the first fifteen thousand rupees, and

(ii) in a case to which the said Sub-Paragraph II applies, the first eight 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:

Provided that in a case referred to in the said Sub-Paragraph II, for the purposes of determining the amount of income-tax or advance tax in accordance with this sub-clause, the provisions of class (ii) of the proviso below the said Sub-Paragraph II and the provisions relating to surcharge on income-tax in the said Sub-Paragraph II shall not apply;

(ii) the net agricultural income shall be increased,

(A) in a case to which the said Sub-Paragraph I applies, by a sum of fifteen thousand rupees; and

(B) in a case to which the said Sub-Paragraph II applies, by a sum of eight 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 the said Sub-Paragraph I or, as the case may be, the said Sub-Paragraph II, as if the net agricultural income as so increased were the total income:

Provided that in a case referred to in the said Sub-Paragraph II, for the purposes of determining the amount of income-tax or advance tax in accordance with this sub-clause, the provisions of clause (ii) of the proviso below the said Sub-Paragraph II and the provisos relating to surcharge on income-tax in the said Sub-Paragraph II shall not apply;

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

Provided that in a case referred to in the said Sub-Paragraph II, where the sum so arrived at exceeds sixty per cent. of the amount by which the total income exceeds twelve thousand rupees, the excess shall be disregarded;

(iv) the amount of income-tax or advance tax determined in accordance with sub-clause (iii) shall be increased by a surcharge for purposes of the Union calculated at the rate of twelve and a half per cent. of such income-tax or, as the case may be, advance tax and the sum so arrived at shall be the income-tax or, as the case may be, advance tax in respect of the total income.

(7) Where an assessee, being a company, makes, during the financial year commencing on the 1st day of the April, 1984, any deposit with the Industrial Development Bank of India established under the Industrial Development Bank of India Act, 1964 (13 of 1964) under any such scheme as the Central Government may, by notification in the Official Gazette, frame in this behalf, then the surcharge on income-tax payable by the company for the assessment year commencing on the 1st day of April, 1985,

(i) in a case where the amount of the deposit so made is equal to or exceeds the amount of surcharge on income-tax payable by it, shall be nil; and

(ii) in a case where the amount of the deposit so made falls short of the amount of surcharge on income-tax payable by it, shall be reduced by the amount of the deposit.

(8) 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-tax under the Income-tax Act for the assessment year commencing on the 1st day of April, 1984, 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 carriage, by road or inland waterways, of passengers or goods or in the construction of ships or in the execution of projects or in the manufacture or processing of goods or in mining.

Explanation. For the purposes of this clause,

(i) 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 carriage, by road or inland water-ways, of passengers or goods or in the construction of ships or in the execution of projects or in the manufacture or processing of goods or in mining, if the income attributable to any one or more or 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;

(ii) project means a project for the construction of a building, road, dam, bridge or other structure or assembly or installation of any machinery or plant;

(d) insurance commission means any remuneration or rewards, 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 or in the First Schedule but not defined in this sub-section and defined in the Income-tax Act shall have the meanings respectively assigned to them in that Act.

DIRECT TAXES

Income-tax

In Section 10 of the Income-tax Act, in clause (30), after the words tea bushes , the words or for rejuvenation or consolidation of areas used for cultivation of tea shall be inserted with effect from the 1st day of April, 1985.

In Section 11 of the Income-tax Act, in sub-section (5), after clause (x) and the Explanation thereto, the following clause shall be inserted with effect from the 1st day of April, 1985, namely:

(xi) deposits with the Industrial Development Bank of India established under the Industrial Development Bank of India Act, 1964 (18 of 1964). .

In Section 33-B of the Income-tax Act, before the Explanation, the following proviso shall be inserted with effect from the 1st day of April, 1985, namely:

Provided that no deduction under this section shall be allowed in relation to the assessment year commencing on the 1st day of April, 1985 or any subsequent assessment year. .

In Section 35 of the Income-tax Act,

(a) in sub-section (2), in clause (i-a),

(i) before the Explanation, the following proviso shall be inserted, namely:

Provided that no deduction shall be admissible under this clause in respect of any expenditure incurred on the acquisition of any land, whether the land is acquired as such or as part of any property, after the 29th day of February, 1984 ;

(ii) the Explanation shall be numbered as Explanation 1 and after Explanation 1 as so numbered, the following Explanation shall be inserted, namely:

Explanation 2. For the purposes of this clause,

(a) land included any interest in land; and

(b) the acquisition of any land shall be deemed to have been made by the assessee on the date on which the instrument of transfer of such land to him has been registered under the Registration Act, 1908 (16 of 1908), or where he has taken or retained the possession of such land or any part thereof in performance of a contract of the nature referred to in Section 53-A of the Transfer of Property Act, 1882 (4 of 1882), the date on which he has so taken or retained possession of such land or part; ;

(b) in sub-section (2-A), for the words Where the assessee pays an assessee has incurred any expenditure , the words, figures and of March, 1984, the assessee pays any sum shall be substituted;

(c) in sub-section (2-B) in clause (a), for the words Where an assessee has incurred any expenditure, the words, figures and letters Where, before the 1st day of March, 1984 an assessee has incurred any expenditure shall be substituted.

In Section 35-C of the Income-tax Act, in sub-section (1), in clause (a), after the words, figures and letters after the 29th day of February, 1968 , the words, figures and letters but before the 1st day of March, 1984 shall be inserted.

In Section 36 of the Income-tax Act, sub-section (1), in clause (ii-a), after the words payment of any salary, the words, figures and letters for any period of employment before the 1st day March, 1984 shall be inserted.

In Section 40 of the Income-tax Act, in clause (c), with effect from the 1st day of April, 1985

(a) in sub-clause (A), for the words seventy-two thousand rupees , the words one hundred and two thousand rupees shall be substituted;

(b) in sub-clause (B), for the words six thousand rupees , the words eight thousand five hundred rupees shall be substituted.

In Section 40-A of the Income-tax Act,

(a) in sub-section (5), with effect from the 1st day of April, 1985,

(1) in clause (a), in the first proviso, for the words seventy-two thousand rupees , the words one hundred and two thousand rupees shall be substituted;

(2) in clause (c), in sub-clause (i),

(i) for the words five thousand rupees , the words seven thousand five hundred rupees shall be substituted;

(ii) for the words sixty thousand rupees , the words ninety thousand rupees shall be substituted;

(iii) after the proviso, the following proviso shall be inserted, namely:

Provided further that in relation to any month or part thereof comprised in any such previous year as is relevant to the assessment year commencing on the 1st day of April, 1985, or any subsequent assessment year, the reference to five thousand rupees in the preceding proviso shall be construed as a reference to seven thousand five hundred rupees . ;

(b) in sub-section (6), for the words sixty thousand rupees , the words ninety thousand rupees shall be substituted with effect from the 1st day of April, 1985;

(c) after sub-section (8), the following sub-sections shall be inserted and shall be deemed to have been inserted to have been inserted with effect from the 1st day of April, 1980, namely:

(9) No deduction shall be allowed in respect of any sum paid by the assessee as an employer towards the setting up or formation of, or as contribution to, any fund, trust, company, association of persons, body of individuals, society registered under the Societies Registration Act, 1860 (21 of 1860) or other institution, for any purpose, except where such sum is so paid, for the purposes and to the extent provided by or under clause (iv) or clause (v) of sub-section (1) of Section 36 or, as required by or under any other law for the time being in force.

(10) Notwithstanding anything contained in sub-section (9), where the Income-tax Officer is satisfied that the fund, trust, company, association of persons, body of individuals, society or other institution referred to in that sub-section has, before the 1st day of March, 1984, bona fide laid out or expended any ex-penditure (not being in the nature of capital expenditure) wholly and exclusively for the welfare of the employees of the assessee referred to in sub-section (9) out of the sum referred to in that sub-section, the amount of such expenditure shall, in case no deduction has been allowed to the assessee in respect of such sum and subject to the other provisions of this Act, be deducted in computing the income referred to in Section 28 of the assessee of the previous year in which such expenditure is so laid out or expended, as if such expenditure had been laid out or expended by the assessee.

(11) Where the assessee has, before the 1st day of March, 1984, paid any sum to any fund, trust, company, association of persons, body of individuals, society or other institution referred to in sub-section (9), then, notwithstanding anything contained in any other law or in any instrument, he shall be entitled

(i) to claim that so much of the amount paid by him as has not been laid out or expended by such fund, trust, company, association of persons, body of individuals, society or other institution (such amount being hereinafter referred to as the unutilised amount) be repaid to him, and where any claim is so made, the unutilised amount shall be repaid, as soon as may be, to him;

(ii) to claim that any asset, being land, building, machinery, plant or furniture acquired or constructed by the fund, trust, company, association of persons, body of individuals, society or other institution out of the sum paid by the assessee, be transferred to him, and where any claim is so made, such asset shall be transferred, as soon as may be, to him .

After Section 44-AA of the Income-tax Act, the following section shall be inserted with effect from the 1st day of April, 1985, namely:

44-AB. Audit of accounts of certain persons carrying on business or profession. Every person,

(a) carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds forty lakh rupees in any previous year or years relevant to the assessment year commencing on the 1st day of April, 1985 or any subsequent assessment year; or

(b) carrying on profession shall, if his gross receipts in profession exceed ten lakh rupees in any previous year or year relevant to the assessment year commencing on the 1st day of April, 1985 or any subsequent assessment year,

get his accounts of such previous year or years audited by an accountant before the specified date and obtain before that date the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed:

Provided that in a case where such person is required by or under any other law to get his accounts audited by an accountant, it shall be sufficient compliance with the provisions of this section if such person gets the accounts of such business or profession audited under such law before the specified date and obtains before that date the report of the audit as required under such other law and a further report in the form prescribed under this section.

Explanation. For the purposes of this section,

(i) accountant shall have the same meaning as in the Explanation below sub-section (2) of Section 288;

(ii) specified date , in relation to the accounts of the previous years relevant to an assessment year, means the date of the expiry of four months from the end of the previous year, or where there is more than one previous year, from the end of the previous year which expired last before the commencement of the assessment year, or the 30th day of June of the assessment year, whichever is later. .

In Section 80-CC of the Income-tax Act, in sub-section (3), for clause (c), the following clause shall be substituted, namely:

(c) the shares forming part of the issue are offered for subscription to the public and such offer for subscription is made by the company before the 1st day of April, 1987; .

Section 80-D of the Income-tax Act shall be omitted with effect from the 1st day of April, 1985.

In Section 80-E of the Income-tax Act, in sub-section (1), after the words he has paid, the words, figures and letters, before the 1st day of March, 1984, shall be inserted.

In Section 80-L of the Income-tax Act, in sub-section (1), with effect from the 1st day of April, 1985,

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

(ii-a) interest on deposits under such National Deposit Scheme as may be framed by the Central Government and notified by it in this behalf in the Official Gazette; ;

(b) in clause (iii), for the words under any scheme , the words under any other scheme shall be substituted;

(c) the following provisos shall be inserted at the end, namely:

Provided that where the gross total income of the assessee includes any income by way of interest on any deposits referred to in clause (ii-a) or income in respect of units referred to in clause (v), there shall be allowed in computing the total income of the assessee a further deduction of an amount equal to so much of such income as has not been allowed by way of deduction under the foregoing provisions of this sub-section; so, however, that the amount of such further deduction shall not exceed three thousand rupees:

Provided further that where any income by way of interest on any deposits referred to in clause (ii-a) remains unallowed after the deduction under the foregoing provisions of this section, there shall be allowed in computing the total income of the assessee, an additional deduction of an amount equal to so much of such income as has remained unallowed; so however, that the amount of such additional deduction shall not exceed two thousand rupees. .

In Section 80-M of the Income-tax Act, in sub-section (1), with effect from the 1st day of April, 1985,

(a) for the words an amount equal to , the words an amount equal to sixty per cent. of such income, shall be substituted;

(b) clauses (a) and (b) shall be omitted.

In Section 80-N of the Income-tax Act, for the words a deduction of the whole of the income, the words a deduction of an amount equal to fifty per cent. of income shall be substituted with effect from the 1st day of April, 1985.

In Section 80-O of the Income-tax Act, for the words a deduction of the whole of the income , the words a deduction of an amount equal to fifty per cent. of the income shall be substituted with effect from the 1st day of April, 1985.

Section 80-U of the Income-tax Act shall be numbered as subsection (1) with effect from the 1st day of April, 1985, and,

(a) in sub-section (1) as so numbered, in clause (ii), after the words and brackets a permanent physical disability (other than blindness) , the words being a permanent physical disability specified in the rules made in this behalf by the Board, and shall be inserted with effect from the 1st day of April, 1985;

(b) after sub-section (1) as so numbered, the following sub-section shall be inserted with effect from the 1st day of April, 1985, namely:

(2) The Board shall, in making any rules for specifying any disability for the purposes of clause (ii) of sub-section (1), have regard to the nature of such disability and the effect which such disability is likely to have on the capacity of a person subject thereto, or suffering therefrom, to engage in a gainful employment or occupation. .

In Section 161 of the Income-tax Act, after sub-section (1), the following sub-section shall be inserted with effect from the 1st day of April, 1985, namely:

(1-A) Notwithstanding anything contained in sub-section (1), where any income in respect of which the person mentioned in clause (iv) of sub-section (1) of Section 160 is liable as representative assessee consists of, or includes, profits and gains of business, tax shall be charged on the whole of the income in respect of which such person is so liable at the maximum marginal rate:

Provided that the provisions of this sub-section shall not apply where such profits and gains are receivable under a trust declared by any person by will exclusively for the benefit of any relative dependent on him for support and maintenance, and such trust is the only trust so declared by him.

Explanation. For the purposes of this sub-section, maximum marginal rate shall have the meaning assigned to it in Explanation 2 below sub-section (3) of Section 164. .

In Section 164 of the Income-tax Act, with effect from the 1st day of April, 1985,

(a) in sub-section (1), after the proviso, the following proviso shall be inserted, namely:

Provided further that where any income in respect of which the person mentioned in clause (iv) of sub-section (1) of Section 160 is liable as representative assessee consists of, or includes, profits and gains of business, the preceding proviso shall apply only if such profits and gains are receivable under a trust declared by any person by will exclusively for the benefit of any relative dependent on him for support and maintenance, and such trust is the only trust so declared by him. ;

(b) to sub-section (2), the following proviso shall be added, namely:

Provided that in a case where the whole or any part of the relevant income is not exempt under Section 11 or Section 12 by virtue of the provisions contained in clause (c) or clause (d) of sub-section (1) of Section 13, tax shall be charged on the relevant income or part of relevant income at the maximum marginal rate. ;

(c) in sub-section (3), after the proviso and before Explanation 1, the following provisos shall be inserted, namely:

Provided further that where the relevant income consists of, or includes, profits and gains of business, the preceding proviso shall apply only if the income is receivable under a trust declared by any person by will exclusively for the benefit of any relative dependent on him for support and maintenance, and such trust is the only trust so declared by him:

Provided also that in a case where the whole or any part of the relevant income is not exempt under Section 11 or Section 12 by virtue of the provisions contained in clause (c) or clause (d) of sub-section (1) of Section 13, tax shall be charged on the relevant income or part of relevant income at the maximum marginal rate. .

In Section 193 of the Income-tax Act, in the proviso, after clause (iv) the following clause shall be inserted with effect from the 1st day of June, 1984, namely:

(v) any interest payable to an individual, who is resident in India, on debentures issued by a company in which the public are substantially interested, being debentures listed on a recognised stock exchange in India in accordance with the Securities Contracts (Regulation) Act, 1956 (42 of 1956), and any rules made thereunder, if

(a) the interest is paid by the company by an account payee cheque; and

(b) the amount of such interest or, as the case may be, the aggregate of the amounts of such interest paid or likely to be paid during the financial year by the company to such individual does not exceed one thousand rupees. .

In Section 194 of the Income-tax Act, for the first proviso, the following proviso shall be substituted with effect from the 1st day of June 1984, namely:

Provided that no such deduction shall be made in the case of a shareholder, being an individual, who is resident in India, of a company in which the public are substantially interested, if

(a) the dividend is paid by such company by an account payee cheque; and

(b) the amount of such dividend or, as the case may be, the aggregate of the amounts of such dividend distributed or paid or likely to be distributed or paid during the financial year by the company to the shareholder does not exceed one thousand rupees: .

In Section 252 of the Income-tax Act,

(a) after sub-section (4), the following sub-section shall be inserted, namely:

(4-A) The Central Government may appoint one of the Vice-Presidents of the Appellate Tribunal to be the Senior Vice-President thereof. ;

(b) in sub-section (5), for the words A Vice-President, the words The Senior Vice-President or a Vice-President shall be substituted.

In Section 269-C of the Income-tax Act, in sub-section (1), for the words twenty-five thousand rupees , the words one hundred thousand rupees shall be substituted with effect from the 1st day of June, 1984.

In Section 269-F of the Income-tax Act, in sub-section (6), in clause (a), for the words twenty-five thousand rupees , the words one hundred thousand rupees shall be substituted with effect from the 1st day of June, 1984.

In Section 269-P of the Income-tax Act, in sub-section (1), in the proviso, for the words ten thousand rupees , the words fifty thousand rupees shall be substituted with effect from the 1st day of June, 1984.

In Chapter XX-B of the Income-tax Act,

(a) in the heading, for the words mode of repayment, the words Mode of Acceptance, payment or repayment shall be substituted;

(b) before Section 269-T, the following section shall be inserted, namely:

269-SS. Mode of taking or accepting certain loans and deposits. No person shall, after the 30th day of June, 1984, take or accept form any other person (hereafter in this section referred to as the depositor) any loan or deposit otherwise than by an account payee cheque or account payee bank draft if,

(a) the amount of such loan or deposit or the aggregate amount of such loan and deposit; or

(b) on the date of taking or accepting such loan or deposit, any loan or deposit taken or accepted earlier by such person from the depositor is remaining unpaid (whether repayment has fallen due or not), the amount or the aggregate amount remaining unpaid; or

(c) the amount or the aggregate amount referred to in clause (a) together with the amount or the aggregate amount referred to in clause (b),

Is ten thousand rupees or more:

Provided that the provisions of this section shall not apply to any loan or deposit taken or accepted from, or any loan or deposit taken or accepted by,

(a) Government;

(b) any banking company, post office savings bank or co-operative bank;

(c) any corporation established by a Central, State or Provincial Act;

(d) any Government company as defined in Section 617 of the Companies Act, 1956 (1 of 1956);

(e) such other institution, association or body or class of institutions, associations or bodies which the Central Government may, for reasons to be recorded in writing, notify in this behalf in the Official Gazette.

Explanation. For the purposes of this section,

(i) banking company shall have the meaning assigned to it in clause (a) of the Explanation to sub-section (8) of Section 40-A;

(ii) co-operative bank shall have the meaning assigned to it in Part V of the Banking Regulation Act, 1949 (10 of 1949);

(iii) loan or deposit means loan or deposit of money. .

In Section 269-T of the Income-tax Act, in the Explanation, after clause (i) the following clause shall be inserted, namely:

(i-a) co-operative bank shall have the meaning assigned to it in Part V of the Banking Regulation Act, 1949; .

In the Income-tax Act, after Section 271-A, the following section shall be inserted with effect from the 1st day of April, 1985, namely:

271-B. Failure to get accounts audited. If any person fails, without reasonable cause, to get his accounts audited in respect of any previous year or years relevant to an assessment year or obtain a report of such audit as required under Section 44-AB, the Income-tax Officer may direct that such person shall pay, by way of penalty, a sum equal to one-half per cent. of the total sales, turnover or gross receipts, as the case may be, in business, or of the gross receipts in profession, in such previous year or years or a sum of one hundred thousand rupees, whichever is less. .

In the Income-tax Act, after Section 276-D, the following section shall be inserted, namely:

276-DD. Failure to comply with the provisions or Section 269-SS. If a person, without reasonable cause or excuse, takes or accepts any loan or deposit in contravention of the provisions of Section 269-SS, he shall be punishable with imprisonment for a term which may extend to two years and shall also be liable to fine equal to the amount of such loan or deposit. .

In Section 281-A of the Income-tax Act,

(a) in sub-section (1), for the portion beginning with the words the real owner of such property unless, and ending with the words to the Income-tax Officer , the following shall be substituted, namely:

the real owner of such property unless notice in the prescribed form and containing the prescribed particulars in respect of the property has been given by the claimant within a period of one year from the date of acquisition of the property to the Commissioner ;

(b) after sub-section (1), the following sub-sections shall be inserted, namely:

(1-A) Where any such property is acquired by the claimant before the 1st day of March, 1984, the provisions of sub-section (1) shall be deemed to have been fulfilled if notice in the prescribed form and containing the prescribed particulars in respect of the property is given by the claimant, within a period of one year from the said date, to the Commissioner.

(1-B) Notwithstanding anything contained in sub-section (1) or sub-section (1-A), in relation to any suit relating to any immovable property of a value not exceeding fifty thousand rupees, the provisions of sub-section (1) or, as the case may be, sub-section (1-A), shall be deemed to have been fulfilled if, at any time before the suit, notice in the prescribed form and containing the prescribed particulars in respect of the property has been given by the claimant to the Commissioner. ;

(c) for sub-section (2), the following sub-section shall be substituted, namely:

(2) The Commissioner shall, on the an application made in the prescribed manner, by the claimant or any person acting on his behalf or claiming under him, and on payment of the prescribed fees, issues, for the purposes of a suit referred to in sub-section (1), a certified copy of any notice given by the claimant under sub-section (1) or sub-section (1-A) or sub-section (1-B), within fourteen days from the date of receipt of the application. .

The following amendments (being amendments of a consequential nature) shall be made in the Income-tax Act with effect from the 1st day of April, 1985, namely:

(a) in Section 246, in sub-section (2), after clause (g), the following clause shall be inserted, namely:

(gg) an order imposing a penalty under Section 271-B; ;

(b) in the Ninth Schedule, for the brackets, words, figures and letters [See Section 32(1)(vi) and Section 80-M(1)(a)(i)] , the brackets, words and figures [See Section 32(1)(vi)] shall be substituted.

Wealth-tax

In the Wealth-tax Act, with effect from the 1st day of April, 1985,

(a) in Section 5,

(i) in sub-section (1),

(1) in clause (iv), in the proviso, for the words one hundred thousand rupees , at both the places where they occur, the words two hundred thousand rupees shall be substituted;

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

(xxv-a) any deposits under such National Deposit Scheme as may be framed by the Central Government and notified by it in this behalf in the Official Gazette; ;

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

(xxvii-a) any deposits with the Industrial Development Bank of India established under the Industrial Development Bank of India Act, 1964; ;

(ii) in sub-section (1-A),

(1) for the brackets and figures (xxvi), (xxvi), , the brackets, figures and letters (xxv-a), (xxvi), (xxvii), (xxvii-a), shall be substituted:

(2) for the words one hundred and sixty-five thousand rupees, at both the places where they occur, the words two hundred and sixty-five thousand rupees shall be substituted;

(3) after the proviso, the following provisos shall be inserted, namely:

Provided further that where the assets of the assessee include any assets, being units referred to in clause (xxv) or any deposit referred to in clause (xxv-a), wealth-tax shall be payable by the assessee in respect of, and there shall not be included in the net wealth of the assessee, so much of the value of such assets as has not been excluded from the net wealth of the assessee under this sub-section; so, however, that the value of the assets excluded under this proviso shall not exceed thirty-five thousand rupees:

Provided also that where the value of any assets, being deposits referred to in clause (xxv-a), has not been excluded from the net wealth of the assessee under the foregoing provisions of this sub-section, so much of the value of such assets as has not been so excluded shall be excluded from the net wealth of the assessee; so, however, that the value of the assets so excluded under this proviso shall not exceed twenty-five thousand rupees. .

(iii) in sub-section (3), for the brackets and figures (xxvi), (xxvii), , the brackets, figures and letters (xxv-a), (xxvi), (xxvii), (xxvii-a), shall be substituted;

(b) in Section 21-A,

(1) for the portion beginning with the brackets, figure and words (i) any part of such property and ending with the words beneficial to the revenue: , the following shall be substituted, namely:

(i) any part of such property or any income of such trust [whether derived from such property or from voluntary contributions referred to in sub-clause (ii-a) of clause (24) of Section 2 of the Income-tax Act] is used or applied, directly or indirectly, for the benefit of any person referred to in sub-section (3) of Section 13 of the Income-tax Act, or

(ii) any part of the income of the trust [whether derived from such property or from voluntary contributions referred to in sub-clause (ii-a) of clause (24) of Section 2 of the Income-tax Act], being a trust created on or after the 1st day of April, 1962, enures, directly or indirectly, for the benefit of any person referred to in sub-section (3) of Section 13 of the said Act, or

(iii) any funds of the trust are invested or deposited, or any shares in a company are held by the trust, in contravention of the provisions of clause (d) of sub-section (1) of Section 13 of the Income-tax Act,

wealth-tax shall leviable upon, and recoverable from, the trustee or manager (by whatever name called) in the like manner and to the same extent as if the property were held by an individual who is a citizen of India and resident in India for the purposes of this Act, but without excluding the value of any asset under sub-section (1) of Section 5, and at the maximum marginal rate: ;

(2) after the second proviso, the following proviso shall be inserted, namely:

Provided also that,

(a) in the case of any association referred to in clause (21) of Section 10 of the Income tax Act,

(i) the provisions of clause (i) and clause (ii) shall not apply; and

(ii) the other provisions of this section shall apply with the modifications that,

(1) for the words, brackets, letter and figures in contravention of the provisions of clause (d) of sub-section (1) of Section 13 of the Income-tax Act , the words brackets and figures in contravention of the provisions contained in the proviso to clause (21) of Section 10 of the Income-tax Act had been substituted; and

(2) for the words at the maximum marginal rate , the words and figures at the rates specified in Part I of Schedule I in the case of an individual had been substituted;

(b) in the case of any institution, fund or trust referred to in clause (22) or clause (22-A) or clause (23-B) or clause (23-C) of Section 10 of the Income-tax Act, the provisions of clause (i) to (iii) shall not apply. ;

(3) in the Explanation, after clause (a), the following clause shall be inserted, namely:

(aa) maximum marginal rate means the rate of wealth-tax applicable in relation to the highest slab of wealth in the case of an individual as specified in Part I of Schedule I; .

INDIRECT TAXES

Customs

The Customs Tariff Act, 1975 (hereinafter referred to as the Customs 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 Customs Tariff Act, or in that Schedule, as amended from time to time, there shall be levied and collected as an auxiliary duty of customs an amount equal to fifty 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) (hereinafter referred to as the Customs Act).

(2) Sub-section (1) shall cease to have effect after the 31st day of March, 1985, 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, or any other law for the time being in force.

(4) The provisions of the Customs Act 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 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 Section 28 of the Customs Act, in sub-section (1), after the proviso, the following Explanation shall be inserted, namely:

Explanation. Where the service of the notice is stayed by an order of a Court, the period of such stay shall be excluded in computing the aforesaid period of one year or six months or five years, as the case may be. .

In Section 61 of the Customs Act, to sub-section (2), the following proviso shall be added, namely:

Provided that the Board may, if it considers it necessary so to do in the public interest, waive, by special order and under circumstances of an exceptional nature to be specified in such order, the whole or part of any interest payable under this sub-section in respect of any warehoused goods. .

In Section 129 of the Customs Act,

(a) for sub-section (2), the following sub-sections shall be substituted, namely:

(2) A judicial member shall be a person who has for at least ten years held a judicial office in the territory of India or who has been a member of the Central Legal Service and has held a post in Grade I of that service or any equivalent or higher post for at least three years, or who has been an advocate for at least ten years.

Explanation. For the purposes of this sub-section,

(i) in computing the period during which a person has held judicial office in the territory of India, there shall be included any period, after he has held any judicial office, during which the person has been an advocate or has held the office of a member of a tribunal or any post, under the Union or a State, requiring special knowledge of law;

(ii) in computing the period during which a person has been an advocate, there shall be included any period during which the person has held a judicial office or the office of a member of a tribunal or any post, under the Union or a State requiring special knowledge of law after he became an advocate.

(2-A) A technical member shall be a person shall be a person who has been a member of the Indian Customs and Central Excise Service, Group A, and has held the post of Collector of Customs or Central Excise or any equivalent or higher post for at least three years. ;

(b) after sub-section (4), the following sub-section shall be inserted, namely:

(4-A) The Central Government may appoint one of the Vice-Presidents of the Appellate Tribunal to be the Senior Vice-President thereof. ;

(c) in sub-section (5), for the words The Vice-President , the words The Senior Vice-President or a Vice-President shall be substituted.

In Section 129-A of the Customs Act,

(a) in sub-section (1), in the proviso, for the words provided that , the following shall be substituted, namely:

Provided that no appeal shall lie to the Appellate Tribunal and the Appellate Tribunal shall not have jurisdiction to decide any appeal in respect of any order referred to in clause (b) if such order relates to,

(a) any goods imported or exported as baggage;

(b) any goods loaded in a conveyance for importation into India, but which are not unloaded at their place of destination in India, or so much of the quantity of such goods as has not been unloaded at any such destination if goods unloaded at such destination are short of the quantity required to be unloaded at that destination;

(c) payment of drawback as provided in Chapter X, and the rules made thereunder:

Provided further that ;

(b) after sub-section (1), the following sub-section shall be inserted, namely:

(1-A) Every appeal against any order of the nature referred to in the first proviso to sub-section (1), which is pending immediately before the commencement of Section 40 of the Finance Act, 1984, before the Appellate Tribunal and any matter arising out of or connected with such appeal and which is so pending shall stand transferred on such commencement to the Central Government and the Central Government shall deal with such appeal or matter under Section 129-DD as if such appeal or matter were an application or a matter arising out of an application made to it under that section. .

In Section 129-C of the Customs Act, in sub-section (4), for the words ten thousand rupees , the words fifty thousand rupees shall be substituted.

In Section 129-D of the Customs Act, in sub-section (3), for the words two year, the words one year shall be substituted.

After Section 129-D of the Custom Act, the following section shall be inserted, namely:

129-DD. Revision by Central Government. (1) The Central Government may, on the application of any person aggrieved by any order passed under Section 128-A, where the order is of the nature referred to in the first proviso to sub-section (1) of Section 129-A, annul or modify such order.

Explanation. For the purposes of this sub-section, order passed under Section 128-A includes an order passed under that section before the commencement of Section 40 of the Finance Act, 1984, against which an appeal has not been preferred before such commencement and could have been, if the said section had not come into force, preferred after such commencement, to the Appellate Tribunal.

(2) An application under sub-section (1) shall be made within three months from the date of the communication to the applicant of the order against which the application is being made:

Provided that the Central Government may, if it is satisfied that the applicant was prevented by sufficient cause from presenting the application within the aforesaid period of three months, allow it to be presented within a further period of three months.

(3) An application under sub-section (1) shall be in such form and shall be verified in such manner as may be specified by rules made in this behalf and shall be accompanied by a fee of two hundred rupees.

(4) The Central Government may, of its own motion, annul or modify any order referred to in sub-section (1).

(5) No order enhancing any penalty or fine in lieu of confiscation or confiscating goods of greater value shall be passed under this section,

(a) in any case in which an order passed under Section 128-A has enhanced any penalty or fine in lieu of confiscation or has confiscated goods of greater value, and

(b) in any other case, unless the person affected by the proposed order has been given notice to show cause against it within one year from the date of the order sought to be annulled or modified.

(6) Where the Central Government is of opinion that any duty of customs has not been levied or has been short-levied, no order levying or enhancing the duty shall be made under this section unless the person affected by the proposed order is given notice to show cause against it within the time limit specified in Section 28. .

Excise

In Section 2 of the Central Excises and Salt Act, 1944 (1 of 1944) (hereinafter referred to as the Central Excises Act), in clause (f), after sub-clause (viii), the following sub-clause shall be inserted, namely:

(ix) in relation to artificial or synthetic resins and plastic materials, includes their conversion into moulding powders; .

In Section 3 of the Central Excises Act, in sub-section (1), in the proviso,

(a) for the words excisable goods which are produced or manufactured in a free trade zone and brought to any other place in India shall be an amount equal to , the following shall be substituted, namely:

excisable goods which are produced or manufactured,

(i) in a free trade zone and brought to any other place in India; or

(ii) by a hundred per cent. export-oriented undertaking and allowed to be sold in India,

shall be an amount equal to ;

(b) for Explanation 2, the following Explanation shall be substituted, namely:

Explanation 2. In this proviso,

(i) free trade zone means the Kandla Free Trade Zone and the Santa Cruz Electronics Export Processing Zone and includes any other free trade zone which the Central Government may, by notification in the Official Gazette, specify in this behalf;

(ii) hundred per cent. export-oriented undertaking means an undertaking which has been approved as a hundred per cent. export-oriented undertaking by the Board appointed in this behalf by the Central Government in exercise of the powers conferred by Section 14 of the Industries (Development and Regulation) Act, 1951 (65 of 1951), and the rules made under that Act. .

In sub-section (4) of Section 4 of the Central Excises Act, in sub-clause (ii) of clause (d), in the Explanation, in clause (i), for the words or reduction of duty of excise on such goods equal to, any duty of excise already paid , the words and figures or reduction of duty of excise already paid , the words and figures or reduction of duty of excise under such Act on such goods equal to, any duty of excise under such Act, or the additional duty under Section 3 of the Customs Tariff Act, 1975 (51 of 1975), already paid shall be substituted.

In Section 35-B of the Central Excises Act,

(a) in sub-section (1), in the proviso, for the words Provided that , the following shall be substituted, namely:

Provided that no appeal shall lie to the Appellate Tribunal and the Appellate Tribunal shall not have jurisdiction to decide any appeal in respect of any order referred to in clause (b) if such order relates to,

(a) a case of loss of goods, where the loss occurs in transit from a factory to a warehouse or to another factory, or from one warehouse to another, or during the course of processing of the goods in a warehouse or in storage, whether in a factory or in a warehouse;

(b) a rebate of duty of excise on goods exported to any country or territory outside India or on excisable materials used in the manufacture of goods which are expected to any country or territory outside India;

(c) goods exported outside India (except to Nepal or Bhutan) without payment of duty:

Provided further that ;

(b) after sub-section (1), the following sub-section shall be inserted, namely:

(1-A) Every appeal against any order of the nature referred to in the first proviso to sub-section (1), which is pending immediately before the commencement of Section 47 of the Finance Act, 1984, before the Appellate Tribunal and any matter arising out of, connected with, such appeal and which is so pending shall stand transferred on such commencement to the Central Government, and the Central Government shall deal with such appeal or matter under Section 35-EE as if such appeal or matter were an application or a matter arising out of an application made to it under that section. .

In Section 35-D of the Central Excises Act, in sub-section (3), for the words ten thousand rupees the words fifty thousand rupees shall be substituted.

In Section 35-E of the Central Excises Act, in sub-section (3), for the words two years , the words one year shall be substituted.

After Section 35-E of the Central Excises Act, the following section shall be inserted, namely:

35-EE. Revision by Central Government. (1) The Central Government may, on the application of any person aggrieved by any order passed under Section 35-A. where the order is of the nature referred to in the first proviso to sub-section (1) of Section 35-B, annul or modify such order.

Explanation. For the purposes of this sub-section, order passed under Section 35-A includes an order passed under that section before the commencement of Section 47 of the Finance Act, 1984 against which an appeal has not been preferred before such commencement and could have been, if the said section had not come into force, preferred after such commencement, to the Appellate Tribunal.

(2) An application under sub-section (1) shall be made within three months from the date of the communication to the applicant of the order against which the application is being made:

Provided that the Central Government may, if it is satisfied that the applicant was prevented by sufficient cause from presenting the application within the aforesaid period of three months, allow it to be presented within a further period of three months.

(3) An application under sub-section (1) shall be in such form and shall be verified in such manner as may be specified by rules made in this behalf and shall be accompanied by a fee of two hundred rupees.

(4) The Central Government may, of its own motion, annul or modify any order referred to in sub-section (1).

(5) No order enhancing any penalty or fine in lieu of conflscation or confiscating goods of greater value shall be passed under this section,

(a) in any case in which an order passed under Section 35-A has enhanced any penalty or fine in lieu of confiscation or has confiscated goods of greater value, and

(b) in any other case, unless the person affected by the proposed order has been given notice to show cause against it within one year from the date of the order sought to be annulled or modified.

(6) Where the Central Government is of opinion that any duty of excise has not been levied or has been short-levied, no order levying or enhancing the duty shall be made under this section unless the person affected by the proposed order is given notice to show cause against it within the time limit specified in Section 11-A. .

The First schedule to the Central Excises Act,

(a) shall be amended in the manner specified in the Third Schedule; and

(b) shall, with effect from such 1date as the Central Government may, by notification in the Official Gazette, appoint, be also amended in the manner specified in the Fourth Schedule.

(1) In the case of goods chargeable with a duty of excise under the Central Excises Act, as amended from time to time, read with any notification for the time being in force issued by the Central Government in relation to the duty so chargeable (not being a notification providing for any exemption for giving credit with respect to, or reduction of duty of excise under the said Act on such goods equal to, any duty of excise under the said Act, or the additional duty under Section 3 of the Customs Tariff Act already paid on the raw material or component parts used in the production or manufacture of such goods), there shall be levied and collected a special duty of excise equal to ten per cent. of the amount so chargeable on such goods.

(2) Sub-section (1) shall cease to have effect after the 31st day of March, 1985, 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 special 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 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 special 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 Fifth Schedule.

MISCELLANEOUS

In the Unit Trust of India Act, 1963, in sub-section (1) of Section 32, with effect from the 1st day of April, 1985.

(a) clause (b) and clause (ba) shall be omitted;

(b) in Explanation I,

(i) in clause (a), for the words, brackets and letters clauses (aa) and (b) , the word, brackets and letters clause (aa) shall be substituted;

(ii) in clause (b), for the words, brackets and letters clauses (ba) and (bb), the words, brackets and letters clause (bb) shall be substituted.

In the Gold (Control) Act, 1968

(a) in sub-section (2) of Section 81-B, for the words ten thousand rupees , the words fifty thousand rupees the words fifty thousand rupees shall be substituted;

(b) in sub-section (3) of Section 82, for the words two years, the words one year shall be substituted.

(See Section 2)

PART I

Income-tax and surcharge 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 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 rate of twelve and a half per cent. of such income-tax.

In the case of every Hindu undivided family which at any time during the previous year has at least one member whose total income of the previous year relevant to the assessment year commencing on the 1st day of April, 1984 exceeds Rs. 15,000,

Provided that for the purpose of this Sub-Paragraph,

(i) no income-tax shall be payable on a total income not exceeding Rs. 12,000;

(ii) where the total income exceeds Rs. 12,000 but does not exceed Rs. 17,610, the income-tax payable thereon shall not exceed forty per cent. of the amount by which the total income exceeds Rs. 12,000.

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 twelve and a half per cent. of such income-tax.

In the case of every co-operative society,

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

In the case of every registered firm, not being a case to which Sub-Paragraph II of this Paragraph 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 rate of twelve and a half per cent. of such income-tax.

In the case of every 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,

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 twelve and a half per cent. of such income-tax.

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 in accordance with the preceding provisions of this Paragraph shall be increased by a surcharge for purposes of the Union calculated at the rate of twelve and a half per cent. of such income-tax.

In the case of a company,

The amount of income-tax computed in accordance with the preceding provisions of this Paragraph 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-BB, 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:

Explanation. For the purposes of this Part, investment income, long-term capital gains and non-resident Indian shall have the meanings assigned to them in Chapter XII-A of the Income-tax Act.

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 of 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 form 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 XII or Chapter XII-A or sub-section (1-A) of Section 161 or Section 164 or Section 164-A of the Income-tax Act at the rates as specified in that Chapter or section], 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 rate of twelve and a half per cent. of such income-tax.

In the case of every Hindu undivided family which at any time during the previous year has at least one member whose total income of the previous year relevant to the assessment year commencing on the 1st day of April, 1985 exceeds Rs. 15,000,

Provided that for the purposes of this Sub-Paragraph,

(i) no income-tax shall be payable on a total income not exceeding Rs. 12,000;

(ii) where the total income exceeds Rs. 12,000 but does not exceed Rs. 17,610, the income-tax payable thereon shall not exceed forty per cent. of the amount by which the total income exceeds Rs. 12,000.

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

In the case of every co-operative society,

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

In the case of every registered firm, not being a case to which Sub-Paragraph II of this Paragraph 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 rate of twelve and a half percent. of such income-tax.

In the case of every registered firm whose total income includes income derived from a profession carried on by it and the income so included in not less than fifty-one per cent. of such total income.

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 twelve and a half per cent. of such income-tax.

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 in accordance with the preceding provisions of this Paragraph shall be increased by a surcharge for purposes of the Union calculated at the rate of twelve and a half per cent. of such income-tax.

In the case of a company,

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

PART IV

[See Section 2(8)(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 source 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 or 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 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 has total income not exceeding the maximum amount not chargeable to tax in the case of an unregistered firm 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 the maximum amount not chargeable to tax in the case of an association of persons or a body of individuals (other than a Hindu undivided family, a Company or a firm) 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 the previous 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 previous 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 a 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. (1) Where the assessee has, in the previous year relevant to the assessment year commencing on the 1st day of April, 1984, any agricultural income and the net result of the computation of the agricultural income of the assessee for any one or more of the previous years relevant to the assessment years commencing on the 1st day of April, 1976 or the 1st day of April, 1977 or the 1st day of April, 1978 or the 1st day of April, 1979 or the 1st day of April, 1980 or the 1st day April, 1981 or the 1st day of April, 1982 or the 1st day of April, 1983, is a loss, then, for the purposes of sub-section (2) of Section 2 of this Act,

(i) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1976, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1977 or the 1st day of April, 1978 or the 1st day of April, 1979 or the 1st day of April, 1980 or the 1st day of April, 1981 or the 1st day of April, by 1982 or the 1st day of April, 1983,

(ii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1977, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1978 or the 1st day of April, 1979 or the 1st day of April, 1980 or the 1st day of April, 1981 or the 1st day of April, 1982 or the 1st day of April, 1983,

(iii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1978, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1979 or the 1st day of April, 1980 or the 1st day of April, 1981 or the 1st day of April, 1982 or the 1st day of April, 1983,

(iv) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1979, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1980 or the 1st day of April, 1981 or the 1st day of April, 1982 or the 1st day of April, 1983,

(v) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1980, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1981 or the 1st day of April, 1982 or the 1st day of April, 1983,

(vi) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1981, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1982 or the 1st day of April, 1983,

(vii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1982, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1983, and

(viii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1983.

shall be set off against the agricultural income of the assessee for the previous year relevant to the assessment year commencing on the 1st day of April, 1984.

(2) Where the assessee has, in the previous year relevant to the assessment year commencing on the 1st day April, 1985 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 that previous year, in such other period, any agricultural income and the net result of the computation of the agricultural income of the assessee for any one or more of the previous years relevant to the assessment years commencing on the 1st day of April, 1977 or the 1st day of April, 1978 or the 1st day of April, 1979 or the 1st day of April, 1980 or the 1st day of April, 1981 or the 1st day of April, 1982 or the 1st day of April, 1983 or the 1st day of April, 1984, is a loss, then, for the purposes of sub-section (6) of Section 2 of this Act,

(i) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1977, to the extent, if any such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1978 or the 1st day of April, 1979 or the 1st day of April, 1980 or the 1st day of April, 1981 or the 1st day of April, 1982 or the 1st day of April, 1983 or the 1st day or April, 1984,

(ii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1978, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1979 or the 1st day of April, 1980 or the 1st day of April, 1981 or the 1st day of April, 1982 or the 1st day of April, 1983 or the 1st day of April, 1984,

(iii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1979, to the extent, if any such loss has been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1980 or the 1st day of April, 1981 or the 1st day of April, 1982 or the 1st day of April, 1983 or the 1st day of April, 1984,

(iv) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1980, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1981 or the 1st day of April, 1982 or the 1st day of April, 1983 or the 1st day of April, 1984,

(v) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1981 to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1982 or the 1st day of April, 1983 or the 1st day of April, 1984,

(vi) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1982, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1983 or the 1st day of April, 1984,

(vii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1983, to the extent, if any, loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1984, and

(viii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1984,

shall be set off against the agricultural income of the assessee for the previous year relevant to the assessment year commencing on the 1st day of April, 1985 or the period aforesaid.

(3) Where a change has occurred in the constitution of a firm, nothing in sub-rule (1) or sub-rule (2) shall entitle the firm to set off so much of the loss proportionate to the share of a retired or deceased partner 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 as exceeds his share of profits, if any, of the previous year in the firm, or entitle any partner to the benefit of any portion of the said loss (computed in the manner aforesaid) which is not apportionable to him,

(4) Where any person deriving any agricultural income from any source has been succeeded in such capacity by another person, otherwise than by inheritance, nothing in sub-rule (1) or sub-rule (2) shall entitle any person, other than the person incurring the loss, to have it set off under sub-rule (1) or, as the case may be, sub-rule (2).

(5) Notwithstanding anything contained in this rule, no loss which has not been determined by the Income-tax Officer under the provisions of these rules or the rules contained in Part IV of the First Schedule to the Finance Act, 1976 (66 of 1976) or of the First Schedule to the Finance (No. 2) Act, 1977 (29 of 1977), or of the Schedule to the Finance Act, 1978 (19 of 1978), or the First Schedule to the Finance Act, 1979 (21 of 1979), or of the First Schedule to the Finance (No. 2) Act, 1980 (44 of 1980), or of the First Schedule to the Finance Act, 1981 (16 of 1981), of the First Schedule to the Finance Act, 1982 (14 of 1982), or of the First Schedule to the Finance Act, 1983 (11 of 1983), shall be set off under sub-rule (1) or, as the case may be, sub-rule (2).

Rule 10. 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 11. 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 12. 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 35)

PART I

In the First Schedule to the Customs Tariff Act,

(i) in Heading No. 26.02/04, for the entry in column (3), the entry 100% shall be substituted;

(ii) in sub-heading No. (1) of Heading No. 27.10, for the entry in column (3), the entry 100% shall be substituted;

(iii) in Heading No. 27.12/13, for the entry in column (3), the entry 100% shall be substituted;

(iv) in sub-heading No. (2) of Heading No. 53.01/05, for the entry in column (3), the entry 100% plus Rs 10 per kilogram shall be substituted;

(v) in Heading No. 98.01/02, for the entry in column (3), the entry 200% shall be substituted.

PART II

[See Section 51(a)]

PART I

In the First Schedule to the Central Excises Act,

(i) Item No. 1-F shall be omitted;

(ii) Item No. 11-B shall be omitted;

(iii) Item No. 22-D shall be omitted;

(iv) Item No. 23-D shall be omitted;

(v) Item No. 24 shall be omitted.

PART II

[See Section 51(b)]

[See Section 53]

1. 1-8-1984, vide Notification No. G.S.R. 507(E), dated 11-7-1984, Gazette of India, Part II, Section 3(i).