Tamil nadu act 056 of 1994 : Tamil Nadu Agricultural Income-Tax (Amendment) Act, 1994

Section 1. Short title and commencement

1. Short title and commencement.- (1) This Act may be called the Tamil Nadu Agricultural Income-Tax (Amendment) Act, 1994.

(2) It shall be deemed to have come into force on the 1st day of April, 1994.

Section 2. Amendment of section 5

2. Amendment of section 5.- In section 5 of the Tamil Nadu Agricultural Income-tax Act, 1955 (Tamil Nadu Act V of 1955),-

(1) in clause (c), after the words "for the purpose of the land", the words "from which the agricultural income is derived" shall be added;

(2) in clause (g)-

(i) for the words "and of transporting such crop", the words "and of replanting or transporting such crop" shall be substituted;

(ii) for the words "such cultivation and transport or both", the words "such cultivation, replantation or transportation" shall be substituted;

(iii) for the first proviso, the following provise shall be substituted, namely:-

"Provided that in any particular year the total replanting expenditure shall not exceed the amount necessary for replanting 3.33 per cent of the acreage if the crop is rubber or coffee, 1.66 per cent if the crop is arecanut, 2.5 per cent if the crop is tea and 10 per cent if the crop is cardamom."

(3) for clause (k), the following clause shall be substituted, namely:-

"(k)(i) any interest paid in the previous year on any born owed working capital and actually spent on the land from which the agricultural income is derived;"

(ii) any interest paid in the previous year on any amount borrowed and actually spent on any capital expenditure for the benefit of the land from which the agricultural income is derived:

Provided that the need for borrowing was genuine having due regard to the assets of the assessee at the time:

Provided further that such borrowings shall be from-

(i) any banking company to which the Banking Regulation Act, 1949 (Central Act 10 of 1949), applies;

(ii) any scheduled bank;

(iii) any public financial institution;

(iv) any State financial corporation established under section 3 or section 3-A or an institution notified under section 46 of the State Financial Corporations Act, 1951 (Central Act 63 of 1951);

(v) any State industrial investment corporation within the meaning of section 617 of the Companies Act, 1956 (Central Act 1 of 1956);

(vi) any other financial institution notified in this behalf by the Government in the Tamil Nadu Government Gazette.

Explanation.- For the purposes of this clause,-

(a) "scheduled book" means-

(i) the State Bank of India constituted under the State Bank of India Act, 1955 (Central Act 23 of 1955);

(ii) a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (Central Act 38 of 1959);

(iii) a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (Central Act 5 of 1970); or under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (Central Act 40 of 1980); or

(iv) any other bank being a bank included in the Second Schedule to the Reserve Bank of India Act, 1934 (Central Act II of 1934),

but does not include a co-operative bank;

(b) "public financial institution" shall have the meaning assigned to it in section 4-A of the Companies Act, 1956 (Central Act 1 of 1956):

Provided also that any interest paid on any amount borrowed for the payment of salaries, bonus and advertisements shall not be allowed for deduction under this clause.";

(4) for clause (1) including the provisos and the Explanation thereunder, the following shall be substituted, namely:-

"(1) any sum paid to an employee as bonus for services rendered where such sum would not have been payable to him as profit or dividend if it had not been paid as bonus:

Provided that the bonus is of a reasonable amount with reference to-

(i) the pay of such employee and the conditions of his service;

(ii) the income from the land in the year in question; and

(iii) the general practice prevalent in similar cases;";

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

"(p) any sum paid by the assessee as an employer by way of contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of employees:

Provided that no deduction shall be made under this section if it has already been made in the assessment under the Income-tax Act, 1961 (Central Act 43 of 1961), or is allowable in assessing the person to tax under that Act.

Explanation I.- For the purpose of this section, "paid" means actually paid or incurred according to the method of accounting upon the basis of which agricultural income is computed under this section; "plant" includes vehicles and scientific apparatus purchased for the purpose of deriving the agricultural income; and "written down value" means-

(i) in the case of assets acquired in the previous year, the actual cost to the assessee; and

(ii) in the case of assets acquired before the previous year, the actual cost to the assessee less such sum as may be prescribed.

Explanation II.- Nothing contained in this section shall be deemed to entitle a person deriving agricultural income to the deduction of any expenditure laid out or expended for the cultivation, upkeep or maintenance of immature plants from which no agricultural income has been derived during the previous year