Section - 10, Income-tax Act, 1961 - 2015

Section - 10, Income-tax Act, 1961 - 2015

CHAPTER IIIINCOMES WHICH DO NOT FORM PART OF TOTAL INCOME

Incomes not included in total income.10. In computing the total income of a previous year of any person, any income falling within any of thefollowing clauses shall not be included—

(1) agricultural income ;34(2) 35[subject to the provisions of sub-section (2) of section 64,] any sum received by an individual as

a member of a Hindu undivided family, where such sum has been paid out of the income of thefamily, or, in the case of any impartible estate, where such sum has been paid out of the income ofthe estate belonging to the family ;

36[(2A) 37in the case of a person being a partner of a firm which is separately assessed as such, his share inthe total income of the firm.

Explanation.—For the purposes of this clause, the share of a partner in the total income of a firmseparately assessed as such shall, notwithstanding anything contained in any other law, be anamount which bears to the total income of the firm the same proportion as the amount of his sharein the profits of the firm in accordance with the partnership deed bears to such profits ;]

(3) 38[***]39[(4) (i) in the case of a non-resident, any income by way of interest on such securities or bonds as the

Central Government may, by notification in the Official Gazette40, specify in this behalf, includingincome by way of premium on the redemption of such bonds :

41[Provided that the Central Government shall not specify, for the purposes of this sub-clause,such securities or bonds on or after the 1st day of June, 2002;]

42[43(ii) in the case of an individual, any income by way of interest on moneys standing to hiscredit in a Non-Resident (External) Account in any bank in India in accordance with 44[theForeign Exchange Management Act, 1999 (42 of 1999)], and the rules made thereunder :

Provided that such individual is a person resident outside India as defined in clause (q) of section245 of the said Act or is a person who has been permitted by the Reserve Bank of India tomaintain the aforesaid Account ;]]

46[***]47[(4B) in the case of an individual, being a citizen of India or a person of Indian origin, who is a

non-resident, any income from interest on such savings certificates issued 48[before the 1st day ofJune, 2002] by the Central Government as that Government may, by notification in the OfficialGazette49, specify in this behalf :

Provided that the individual has subscribed to such certificates in convertible foreign exchangeremitted from a country out-side India in accordance with the provisions of 50[the ForeignExchange Management Act, 1999 (42 of 1999)], and any rules made thereunder.

Explanation.—For the purposes of this clause,—

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(a) a person shall be deemed to be of Indian origin if he, or either of his parents or any of hisgrandparents, was born in undivided India ;

(b) "convertible foreign exchange" means foreign exchange which is for the time beingtreated by the Reserve Bank of India as convertible foreign exchange for the purposes of50[the Foreign Exchange Management Act, 1999 (42 of 1999)], and any rules madethereunder ;]

51[(5) in the case of an individual, the value of any travel concession or assistance received by, or due to,him,—

(a) from his employer for himself and his family, in connection with his proceeding on leaveto any place in India ;

(b) from his employer or former employer for himself and his family, in connection with hisproceeding to any place in India after retirement from service or after the termination ofhis service,

subject to such conditions as may be prescribed52 (including conditions as to number of journeysand the amount which shall be exempt per head) having regard to the travel concession orassistance granted to the employees of the Central Government :

Provided that the amount exempt under this clause shall in no case exceed the amount ofexpenses actually incurred for the purpose of such travel.

Explanation.—For the purposes of this clause, "family", in relation to an individual, means—(i) the spouse and children of the individual ; and

(ii) the parents, brothers and sisters of the individual or any of them, wholly or mainlydependent on the individual; ]

(5A) 53[Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;](5B) 54[Omitted by the Finance Act, 2002, w.e.f. 1-4-2003;]

(6) in the case of an individual who is not a citizen of India,—(i) 55[***]

56[(ii) the remuneration received by him as an official, by whatever name called, of anembassy, high commission, legation, commission, consulate or the trade representationof a foreign State, or as a member of the staff of any of these officials, for service insuch capacity :

Provided that the remuneration received by him as a trade commissioner or otherofficial representative in India of the Government of a foreign State (not holding officeas such in an honorary capacity), or as a member of the staff of any of those officials,shall be exempt only if the remuneration of the corresponding officials or, as the casemay be, members of the staff, if any, of the Government resident for similar purposesin the country concerned enjoys a similar exemption in that country :

Provided further that such members of the staff are subjects of the countryrepresented and are not engaged in any business or profession or employment in Indiaotherwise than as members of such staff ;]

(iii) to (v) [Sub-clause (ii) substituted for sub-clauses (ii) to (v) by the Finance Act, 1988, w.e.f.1-4-1989;]

(vi) the remuneration received by him as an employee of a foreign enterprise for servicesrendered by him during his stay in India, provided the following conditions arefulfilled—

(a) the foreign enterprise is not engaged in any trade or business in India ;


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(b) his stay in India does not exceed in the aggregate a period of ninety days in suchprevious year ; and

(c) such remuneration is not liable to be deducted from the income of the employerchargeable under this Act ;

(via) 57[Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;](vii) 58[Omitted by the Finance Act, 1993, w.e.f. 1-4-1993;]

(viia) 59[Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;](viii) any income chargeable under the head "Salaries" received by or due to any such

individual being a non-resident as remuneration for services rendered in connection withhis employment on a foreign ship60 where his total stay in India does not exceed in theaggregate a period of ninety days in the previous year ;

(ix) 61[Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;](x) 61[Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]

62[(xi) the remuneration received by him as an employee of the Government of a foreign Stateduring his stay in India in connection with his training in any establishment or office of, orin any undertaking owned by,—

(i) the Government ; or(ii) any company in which the entire paid-up share capital is held by the Central

Government, or any State Government or Governments, or partly by the CentralGovernment and partly by one or more State Governments ; or

(iii) any company which is a subsidiary of a company referred to in item (ii) ; or(iv) any corporation established by or under a Central, State or Provincial Act ; or(v) any society registered under the Societies Registration Act, 1860 (14 of 1860), or

under any other corresponding law for the time being in force and whollyfinanced by the Central Government, or any State Government or StateGovernments, or partly by the Central Government and partly by one or moreState Governments ;]

63[(6A) where in the case of a foreign company deriving income by way of royalty or fees for technicalservices received from Government or an Indian concern in pursuance of an agreement made bythe foreign company with Government or the Indian concern after the 31st day of March, 197664[but before the 1st day of June, 2002] 65[and,—

(a) where the agreement relates to a matter included in the industrial policy, for the timebeing in force, of the Government of India, such agreement is in accordance with thatpolicy ; and

(b) in any other case, the agreement is approved by the Central Government, the tax on such income is payable, under the terms of the agreement, by Government or the Indianconcern to the Central Government, the tax so paid].

Explanation.—For the purposes of this clause 66[and clause (6B)],—(a) "fees for technical services" shall have the same meaning as in Explanation 2 to clause

(vii) of sub-section (1) of section 9 ;(b) "foreign company" shall have the same meaning as in section 80B ;(c) "royalty" shall have the same meaning as in Explanation 2 to clause (vi) of sub-section

(1) of section 9;]


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66[(6B) where in the case of a non-resident (not being a company) or of a foreign company derivingincome (not being salary, royalty or fees for technical services) from Government or an Indianconcern in pursuance of an agreement entered into 67[before the 1st day of June, 2002] by theCentral Government with the Government of a foreign State or an international organisation, thetax on such income is payable by Government or the Indian concern to the Central Governmentunder the terms of that agreement or any other related agreement approved 67[before that date]by the Central Government, the tax so paid ;]

68[(6BB) where in the case of the Government of a foreign State or a foreign enterprise deriving incomefrom an Indian company engaged in the business of operation of aircraft, as a consideration ofacquiring an aircraft or an aircraft engine (other than payment for providing spares, facilities orservices in connection with the operation of leased aircraft) on lease under 69[an agreemententered into after the 31st day of March, 1997 but before the 1st day of April, 1999, or enteredinto after the 70[31st day of March, 71[2007]] and approved by the Central Government in thisbehalf] and the tax on such income is payable by such Indian company under the terms of thatagreement to the Central Government, the tax so paid.

Explanation.—For the purposes of this clause, the expression "foreign enterprise" means aperson who is a non-resident;]

72[(6C) any income arising to such foreign company, as the Central Government may, by notification73

in the Official Gazette, specify in this behalf, by way of 74[royalty or]fees for technical servicesreceived in pursuance of an agreement entered into with that Government for providing servicesin or outside India in projects connected with security of India ;]

(7) any allowances or perquisites 75paid or allowed as such outside India by the Government to acitizen of India for rendering service outside India ;

(8) in the case of an individual who is assigned to duties in India in connection with anyco-operative technical assistance programmes and projects in accordance with an agreemententered into by the Central Government and the Government of a foreign State (the termswhereof provide for the exemption given by this clause)—

(a) the remuneration received by him directly or indirectly from the Government of thatforeign State for such duties, and

(b) any other income of such individual which accrues or arises outside India, and is notdeemed to accrue or arise in India, in respect of which such individual is required to payany income or social security tax to the Government of that foreign State ;

76[(8A) in the case of a consultant—

(a) any remuneration or fee received by him or it, directly or indirectly, out of the funds madeavailable to an international organisation [hereafter referred to in this clause and clause(8B) as the agency] under a technical assistance grant agreement between the agency andthe Government of a foreign State ; and

(b) any other income which accrues or arises to him or it outside India, and is not deemed toaccrue or arise in India, in respect of which such consultant is required to pay any incomeor social security tax to the Government of the country of his or its origin.

Explanation.—In this clause, "consultant" means—(i) any individual, who is either not a citizen of India or, being a citizen of India, is not

ordinarily resident in India ; or(ii) any other person, being a non-resident,

engaged by the agency for rendering technical services in India in connection with any technical


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assistance programme or project, provided the following conditions are fulfilled, namely :—(1) the technical assistance is in accordance with an agreement entered into by the Central

Government and the agency ; and(2) the agreement relating to the engagement of the consultant is approved by the prescribed

authority77 for the purposes of this clause ;(8B) in the case of an individual who is assigned to duties in India in connection with any technical

assistance programme and project in accordance with an agreement entered into by the CentralGovernment and the agency—

(a) the remuneration received by him, directly or indirectly, for such duties from anyconsultant referred to in clause (8A) ; and

(b) any other income of such individual which accrues or arises outside India, and is notdeemed to accrue or arise in India, in respect of which such individual is required to payany income or social security tax to the country of his origin, provided the followingconditions are fulfilled, namely :—

(i) the individual is an employee of the consultant referred to in clause (8A) and is either nota citizen of India or, being a citizen of India, is not ordinarily resident in India ; and

(ii) the contract of service of such individual is approved by the prescribed authority78 beforethe commencement of his service ;]

(9) the income of any member of the family of any such individual as is referred to in clause (8)78[or clause (8A) or, as the case may be, clause (8B)] accompanying him to India, whichaccrues or arises outside India, and is not deemed to accrue or arise in India, in respect ofwhich such member is required to pay any income or social security tax to the Government ofthat foreign State 79[or, as the case may be, country of origin of such member];

80[81(10) 82(i) any death-cum-retirement gratuity received under the revised Pension Rules of theCentral Government or, as the case may be, the Central Civil Services (Pension) Rules, 1972,or under any similar scheme applicable to the members of the civil services of the Union orholders of posts connected with defence or of civil posts under the Union (such members orholders being persons not governed by the said Rules) or to the members of the all-Indiaservices or to the members of the civil services of a State or holders of civil posts under a Stateor to the employees of a local authority or any payment of retiring gratuity received under thePension Code or Regulations applicable to the members of the defence services ;

(ii) any gratuity received under the Payment of Gratuity Act, 1972 (39 of 1972), to the extentit does not exceed an amount calculated in accordance with the provisions of sub-sections (2)and (3) of section 483 of that Act ;

(iii) any other gratuity received by an employee on his retirement or on his becomingincapacitated prior to such retirement or on termination of his employment, or any gratuityreceived by his widow, children or dependants on his death, to the extent it does not, in eithercase, exceed one-half month's salary for each year of completed service84, 85[calculated on thebasis of the average salary for the ten months immediately preceding the month in which anysuch event occurs, subject to such limit86 as the Central Government may, by notification inthe Official Gazette, specify in this behalf having regard to the limit applicable in this behalf tothe employees of that Government] :

Provided that where any gratuities referred to in this clause87 are received by an employeefrom more than one employer in the same previous year, the aggregate amount exempt fromincome-tax under this clause 88[shall not exceed the limit so specified] :


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Provided further that where any such gratuity or gratuities was or were received in any one ormore earlier previous years also and the whole or any part of the amount of such gratuity orgratuities was not included in the total income of the assessee of such previous year or years,the amount exempt from income-tax under this clause 88[shall not exceed the limit sospecified] as reduced by the amount or, as the case may be, the aggregate amount not includedin the total income of any such previous year or years.

89[* * *] Explanation.—90[In this clause, and in clause (10AA)], "salary" shall have the meaningassigned to it in clause (h) of rule 2 of Part A of the Fourth Schedule ;]

91[92(10A) 93(i) any payment in commutation of pension received under the Civil Pensions(Commutation) Rules of the Central Government or under any similar scheme applicable 94[tothe members of the civil services of the Union or holders of posts connected with defence or ofcivil posts under the Union (such members or holders being persons not governed by the saidRules) or to the members of the all-India services or to the members of the defence services orto the members of the civil services of a State or holders of civil posts under a State or to theemployees of a local authority] or a corporation established by a Central, State or ProvincialAct ;

(ii) any payment in commutation of pension received under any scheme of any other employer,to the extent it does not exceed—(a) in a case where the employee receives any gratuity, the commuted value of one-third of

the pension which he is normally entitled to receive, and(b) in any other case, the commuted value of one-half of such pension, such commuted value being determined having regard to the age of the recipient, the state ofhis health, the rate of interest and officially recognised tables of mortality ;

95[* * *] 96[ (iii) any payment in commutation of pension received from a fund under clause (23AAB);]

97[98(10AA) (i) any payment received by an employee of the Central Government or a State Governmentas the cash equivalent of the leave salary99 in respect of the period of earned leave at hiscredit at the time of his 99retirement 1[whether] on superannuation or otherwise ;

(ii) any payment of the nature referred to in sub-clause (i) received by an employee, otherthan an employee of the Central Government or a State Government, in respect of so much ofthe period of earned leave at his credit 99at the time of his retirement 1[whether] onsuperannuation 99or otherwise as does not exceed 2[ten] months, calculated on the basis ofthe average salary drawn by the employee during the period of ten months immediatelypreceding his retirement 1[whether] on superannuation or otherwise, 3[subject to such limit asthe Central Government may, by notification in the Official Gazette, specify in this behalfhaving regard to the limit4 applicable in this behalf to the employees of that Government] :

Provided that where any such payments are received by an employee from more than oneemployer in the same previous year, the aggregate amount exempt from income-tax underthis sub-clause 5[shall not exceed the limit so specified] :

Provided further that where any such payment or payments was or were received in any oneor more earlier previous years also and the whole or any part of the amount of such paymentor payments was or were not included in the total income of the assessee of such previousyear or years, the amount exempt from income-tax under this sub-clause 6[shall not exceed


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the limit so specified], as reduced by the amount or, as the case may be, the aggregate amountnot included in the total income of any such previous year or years.

7[* * *] Explanation.—For the purposes of sub-clause (ii),— 8[* * *] the entitlement to earned leave of an employee shall not exceed thirty days for everyyear of actual service rendered by him as an employee of the employer from whose servicehe has retired ;

9[* * *]10[(10B) any compensation received by a workman under the Industrial Disputes Act, 1947 (14 of

1947), or under any other Act or Rules, orders or notifications issued thereunder or under anystanding orders or under any award, contract of service or otherwise, 11[at the time of hisretrenchment :

Provided that the amount exempt under this clause shall not exceed—(i) an amount calculated in accordance with the provisions of 12clause (b) of section 25F of

the Industrial Disputes Act, 1947 (14 of 1947) ; or13[(ii) such amount, not being less than fifty thousand rupees, as the Central Government may,

by notification14 in the Official Gazette, specify in this behalf,] whichever is less : Provided further that the preceding proviso shall not apply in respect of any compensationreceived by a workman in accordance with any scheme which the Central Government may,having regard to the need for extending special protection to the workmen in the undertaking towhich such scheme applies and other relevant circum-stances, approve in this behalf.]

Explanation.—For the purposes of this clause—(a) compensation received by a workman at the time of the closing down of the undertaking

in which he is employed shall be deemed to be compensation received at the time of hisretrenchment ;

(b) compensation received by a workman, at the time of the transfer (whether by agreementor by operation of law) of the ownership or management of the undertaking in which he isemployed from the employer in relation to that undertaking to a new employer, shall bedeemed to be compensation received at the time of his retrenchment if—

(i) the service of the workman has been interrupted by such transfer ; or(ii) the terms and conditions of service applicable to the workman after such transfer

are in any way less favourable to the workman than those applicable to himimmediately before the transfer ; or

(iii) the new employer is, under the terms of such transfer or otherwise, legally notliable to pay to the workman, in the event of his retrenchment, compensation onthe basis that his service has been continuous and has not been interrupted bythe transfer ;

15(c) the expressions "employer" and "workman" shall have the same meanings as in theIndustrial Disputes Act, 1947 (14 of 1947);]

16[(10BB) any payments made under the Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985 (21of 1985), and any scheme framed thereunder except payment made to any assessee inconnection with the Bhopal Gas Leak Disaster to the extent such assessee has been allowed adeduction under this Act on account of any loss or damage caused to him by such disaster ;]


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17[(10BC) any amount received or receivable from the Central Government or a State Government or alocal authority by an individual or his legal heir by way of compensation on account of anydisaster, except the amount received or receivable to the extent such individual or his legal heirhas been allowed a deduction under this Act on account of any loss or damage caused by suchdisaster.

Explanation.—For the purposes of this clause, the expression "disaster" shall have the meaningassigned to it under clause (d) of section 218 of the Disaster Management Act, 2005 (53 of2005);]

19[(10C) 20any amount received2122[or receivable]by an employee of—(i) a public sector company ; or

(ii) any other company ; or(iii) an authority established under a Central, State or Provincial Act ; or(iv) a local 23[authority ; or]

24[(v) a co-operative society ; or(vi) a University established or incorporated by or under a Central, State or Provincial Act

and an institution declared to be a University under section 3 of the University GrantsCommission Act, 1956 (3 of 1956) ; or

(vii) an Indian Institute of Technology within the meaning of clause (g) of section 325of theInstitutes of Technology Act, 1961 (59 of 1961) ; or

26[(viia) any State Government; or]27[(viib) the Central Government; or]28[(viic) an institution, having importance throughout India or in any State or States, as the

Central Government may, by notification in the Official Gazette29, specify in this behalf;or]

(viii) such institute of management as the Central Government may, by notification30 in theOfficial Gazette, specify in this behalf,]

31[on his] 32[voluntary retirement or termination of his service, in accordance with any schemeor schemes of voluntary retirement or in the case of a public sector company referred to insub-clause (i), a scheme of voluntary separation, to the extent such amount does not exceedfive lakh rupees] :

Provided that the schemes of the said companies or authorities 33[or societies or Universitiesor the Institutes referred to in sub-clauses (vii) and (viii)], as the case may be, governing thepayment of such amount are framed in accordance with such guidelines (including inter aliacriteria of economic viability) as may be 34prescribed35[***]:

Provided further that where exemption has been allowed to an employee under this clause forany assessment year, no exemption thereunder35a shall be allowed to him in relation to anyother assessment year :]

36[Provided also that where any relief has been allowed to an assessee under section 89 forany assessment year in respect of any amount received or receivable on his voluntaryretirement or termination of service or voluntary separation, no exemption under this clauseshall be allowed to him in relation to such, or any other, assessment year;]

37[(10CC) in the case of an employee, being an individual deriving income in the nature of a perquisite,not provided for by way of monetary payment, within the meaning of clause (2) of section 17,the tax on such income actually paid by his employer, at the option of the employer, on behalf


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of such employee, notwithstanding anything contained in section 20038 of the Companies Act,1956 (1 of 1956);]

39[(10D) any sum received under a life insurance policy, including the sum allocated by way of bonus onsuch policy, other than—(a) any sum received under sub-section (3) of section 80DD or sub-section (3) of section

80DDA*; or(b) any sum received under a Keyman insurance policy; or(c) any sum received under an insurance policy issued on or after the 1st day of April, 2003

40[but on or before the 31st day of March, 2012] in respect of which the premiumpayable for any of the years during the term of the policy exceeds twenty per cent of theactual capital sum assured 40[; or]

40[(d) any sum received under an insurance policy issued on or after the 1st day of April, 2012in respect of which the premium payable for any of the years during the term of thepolicy exceeds ten per cent of the actual capital sum assured:]

Provided that the provisions of 41[sub-clauses (c) and (d)] shall not apply to any sumreceived on the death of a person:

Provided further that for the purpose of calculating the actual capital sum assured under42[sub-clause (c)], effect shall be given to the 43[Explanation to sub-section (3) of section80C or the Explanation to sub-section (2A) of section 88, as the case may be] :

44[Provided also that where the policy, issued on or after the 1st day of April, 2013, isfor insurance on life of any person, who is—

(i) a person with disability or a person with severe disability as referred to in section80U; or

(ii) suffering from disease or ailment as specified in the rules made under section80DDB,

the provisions of this sub-clause shall have effect as if for the words "ten per cent", thewords "fifteen per cent" had been substituted.]

45[Explanation 1].—For the purposes of this clause, "Keyman insurance policy" means a lifeinsurance policy taken by a person on the life of another person who is or was the employee ofthe first-mentioned person or is or was connected in any manner whatsoever with the businessof the first-mentioned person 46[and includes such policy which has been assigned to a person,at any time during the term of the policy, with or without any consideration];]

47[Explanation 2.—For the purposes of sub-clause (d), the expression "actual capital sumassured" shall have the meaning assigned to it in the Explanation to sub-section (3A) ofsection 80C;]

(11) any payment from a provident fund to which the Provident Funds Act, 1925 (19 of 1925),applies 48[or from any other provident fund set up by the Central Government and notified49

by it in this behalf in the Official Gazette];49a [ (11A) any payment from an account, opened in accordance with the Sukanya Samriddhi Account

Rules, 2014 49b made under the Government Savings Bank Act, 1873 (5 of 1873); ](12) the accumulated balance due and becoming payable to an employee participating in a

recognised provident fund, to the extent provided in rule 8 of Part A of the Fourth Schedule ;50[(13) any payment from an approved superannuation fund made—

(i) on the death of a beneficiary ; or


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(ii) to an employee in lieu of or in commutation of an annuity on his retirement at or after aspecified age or on his becoming incapacitated prior to such retirement ; or

(iii) by way of refund of contributions on the death of a beneficiary ; or(iv) by way of refund of contributions to an employee on his leaving the service in connection

with which the fund is established otherwise than by retirement at or after a specified ageor on his becoming incapacitated prior to such retirement, to the extent to which suchpayment does not exceed the contributions made prior to the commencement of this Actand any interest thereon;]

51[52(13A) any special allowance specifically granted to an assessee by his employer to meet expenditureactually incurred on payment of rent (by whatever name called) in respect of residentialaccommodation occupied by the assessee, to such extent 53[* * *] as may be prescribed54

having regard to the area or place in which such accommodation is situate and other relevantconsiderations.]

55[Explanation.—For the removal of doubts, it is hereby declared that nothing contained inthis clause shall apply in a case where—(a) the residential accommodation occupied by the assessee is owned by him ; or(b) the assessee has not actually incurred expenditure on payment of rent (by whatever name

called) in respect of the residential accommodation occupied by him ;]56[(14) (i) any such special allowance or benefit, not being in the nature of a perquisite within the

meaning of clause (2) of section 17, specifically granted to meet expenses wholly, necessarily andexclusively incurred57 in the performance of the duties of an office or employment of profit57,58[as may be prescribed], to the extent to which such expenses are actually incurred for thatpurpose ;

(ii) any such allowance granted to the assessee either to meet his personal expenses at the placewhere the duties of his office or employment of profit59 are ordinarily performed by him or at theplace where he ordinarily resides, or to compensate him for the increased cost of living, 60[as maybe prescribed and to the extent as may be prescribed] :]

61[Provided that nothing in sub-clause (ii) shall apply to any allowance in the nature of personalallowance granted to the assessee to remunerate or compensate him for performing duties of aspecial nature relating to his office or employment unless such allowance is related to the place ofhis posting or residence ;]

(14A) 62[***](15) 63[(i) income by way of interest, premium on redemption or other payment on such securities,

bonds, annuity certificates, savings certificates, other certificates issued by the CentralGovernment and deposits as the Central Government may, by notification64 in the OfficialGazette, specify in this behalf, subject to such conditions and limits as may be specified in the saidnotification ;]

65[(iib) 66[in the case of an individual or a Hindu undivided family,] interest on such CapitalInvestment Bonds as the Central Government may, by notification67 in the Official Gazette,specify in this behalf :]

68[Provided that the Central Government shall not specify, for the purposes of this sub-clause,such Capital Investment Bonds on or after the 1st day of June, 2002;]

69[(iic) in the case of an individual or a Hindu undivided family, interest on such Relief Bonds70

as the Central Government may, by notification in the Official Gazette, specify in this behalf ;]


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71[(iid) interest on such bonds, as the Central Government may, by notification72 in the OfficialGazette, specify, arising to—

(a) a non-resident Indian, being an individual owning the bonds ; or(b) any individual owning the bonds by virtue of being a nominee or survivor of the

non-resident Indian ; or(c) any individual to whom the bonds have been gifted by the non-resident Indian :

Provided that the aforesaid bonds are purchased by a non-resident Indian in foreignexchange and the interest and principal received in respect of such bonds, whether ontheir maturity or otherwise, is not allowable to be taken out of India :

Provided further that where an individual, who is a non-resident Indian in any previousyear in which the bonds are acquired, becomes a resident in India in any subsequent year,the provisions of this sub-clause shall continue to apply in relation to such individual :

Provided also that in a case where the bonds are encashed in a previous year prior totheir maturity by an individual who is so entitled, the provisions of this sub-clause shallnot apply to such individual in relation to the assessment year relevant to such previousyear :

73[Provided also that the Central Government shall not specify, for the purposes of thissub-clause, such bonds on or after the 1st day of June, 2002.]

Explanation.—For the purposes of this sub-clause, the expression "non-resident Indian"shall have the meaning assigned to it in clause (e) of section 115C;]

(iii) interest on securities held by the Issue Department of the Central Bank of Ceylonconstituted under the Ceylon Monetary Law Act, 1949;

74[(iiia) interest payable to any bank incorporated in a country outside India andauthorised to perform central banking functions in that country on any deposits made byit, with the approval of the Reserve Bank of India, with any scheduled bank.

Explanation.—For the purposes of this sub-clause, "scheduled bank" shall have themeaning assigned to it in 75[clause (ii) of the Explanation to clause (viia) of sub-section(1) of section 36];]

76[(iiib) interest payable to the Nordic Investment Bank, being a multilateral financialinstitution constituted by the Governments of Denmark, Finland, Iceland, Norway andSweden, on a loan advanced by it to a project approved by the Central Government interms of the Memorandum of Understanding entered into by the Central Governmentwith that Bank on the 25th day of November, 1986;]

77[(iiic) interest payable to the European Investment Bank, on a loan granted by it inpursuance of the framework-agreement for financial co-operation entered into on the25th day of November, 1993 by the Central Government with that Bank;]

(iv) interest payable—78[(a) by Government or a local authority on moneys borrowed by it before the 1st day of June,

2001 from, or debts owed by it before the 1st day of June, 2001 to, sources outsideIndia;]

(b) by an industrial undertaking in India on moneys borrowed by it under 79[a loan agreemententered into before the 1st day of June, 2001 with any such financial institution] in aforeign country as may be approved80 in this behalf by the Central Government bygeneral or special order ;


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81(c) by an industrial undertaking in India on any moneys borrowed or debt incurred by it82[before the 1st day of June, 2001]in a foreign country in respect of the purchase outsideIndia of raw materials 83[or components] or capital plant and machinery, 84[to the extentto which such interest does not exceed the amount of interest calculated at the rateapproved by the Central Government in this behalf85, having regard to the terms of theloan or debt and its repayment.]

86[87[Explanation 1.]—For the purposes of this item, "purchase of capital plant andmachinery" includes the purchase of such capital plant and machinery under ahire-purchase agreement or a lease agreement with an option to purchase such plant andmachinery.]

88[Explanation 2.—For the removal of doubts, it is hereby declared that the usanceinterest payable outside India by an undertaking engaged in the business of ship-breakingin respect of purchase of a ship from outside India shall be deemed to be the interestpayable on a debt incurred in a foreign country in respect of the purchase outside India;]

89[(d) by the Industrial Finance Corporation of India established by the Industrial FinanceCorporation Act, 1948 (15 of 1948), or the Industrial Development Bank of Indiaestablished under the Industrial Development Bank of India Act, 1964 (18 of 1964), 90[orthe Export-Import Bank of India established under the Export-Import Bank of India Act,1981 (28 of 1981),] 91[or the National Housing Bank established under section 3 of theNational Housing Bank Act, 1987 (53 of 1987),] 92[or the Small Industries DevelopmentBank of India established under section 3 of the Small Industries Development Bank ofIndia Act, 1989 (39 of 1989),] or the Industrial Credit and Investment Corporation ofIndia [a company formed and registered under the Indian Companies Act, 1913 (7 of1913)], on any moneys borrowed by it from sources outside India 93[before the 1st day ofJune, 2001],to the extent to which such interest does not exceed the amount of interestcalculated at the rate approved by the Central Government in this behalf, having regard tothe terms of the loan and its repayment;]

94[(e) by any other financial institution established in India or a banking company towhich the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank orbanking institution referred to in section 51 of that Act), on any moneys borrowed by itfrom sources outside India 95[before the 1st day of June, 2001]under a loan agreementapproved by the Central Government where the moneys are borrowed either for thepurpose of advancing loans to industrial undertakings in India for purchase outside Indiaof raw materials or capital plant and machinery or for the purpose of importing any goodswhich the Central Government may consider necessary to import in the public interest, tothe extent to which such interest does not exceed the amount of interest calculated at therate approved by the Central Government in this behalf, having regard to the terms of theloan and its repayment;]

96[(f) by an industrial undertaking in India on any moneys borrowed by it in foreigncurrency from sources outside India under a loan agreement approved by the CentralGovernment 97[before the 1st day of June, 2001]having regard to the need for industrialdevelopment in India, to the extent to which such interest does not exceed the amount ofinterest calculated at the rate approved by the Central Government in this behalf, havingregard to the terms of the loan and its repayment;

98[(fa) by a scheduled bank 99[***] 1[to a non-resident or to a person who is notordinarily resident within the meaning of sub-section (6)† of section 6] on deposits inforeign currency where the acceptance of such deposits by the bank is approved by the


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Reserve Bank of India. 2[Explanation.—For the purposes of this item, the expression "scheduled bank" meansthe State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955),a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38of 1959), a corresponding new bank constituted under section 3 of the BankingCompanies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or undersection 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act,1980 (40 of 1980), or any other bank being a bank included in the Second Schedule to theReserve Bank of India Act, 1934 (2 of 1934), but does not include a co-operative bank;]

3[(g) by a public company formed and registered in India with the main object of carryingon the business of providing long-term finance for construction or purchase of houses inIndia for residential purposes, 4[being a company eligible for deduction under clause (viii)of sub-section (1) of section 36] on any moneys borrowed by it in foreign currency fromsources outside India under a loan agreement approved by the Central Government5[before the 1st day of June, 2003], to the extent to which such interest does not exceedthe amount of interest calculated at the rate approved by the Central Government in thisbehalf, having regard to the terms of the loan and its repayment.]

Explanation.—For the purposes of 6[items (f) 7[, (fa)] and (g)], the expression 8"foreigncurrency" shall have the meaning assigned to it in 9[the Foreign Exchange ManagementAct, 1999 (42 of 1999)];]

10[(h) by any public sector company in respect of such bonds or debentures and subjectto such conditions, including the condition that the holder of such bonds or debenturesregisters his name and the holding with that company, as the Central Government may, bynotification11 in the Official Gazette, specify in this behalf;]

12[(i) by Government on deposits made by an employee of the Central Government or aState Government 13[or a public sector company], in accordance with such scheme as theCentral Government may, by notification14 in the Official Gazette, frame in this behalf,out of the moneys due to him on account of his retirement, whether on superannuation orotherwise.]

15[16[Explanation 1].—For the purposes of this sub-clause, the expression "industrialundertaking" means any undertaking which is engaged in—

(a) the manufacture or processing of goods; or17[(aa) the manufacture of computer software or recording of programme on any disc, tape,

perforated media or other information device; or](b) the business of generation or distribution of electricity or any other form of power; or

18[(ba) the business of providing telecommunication services; or](c) mining; or(d) the construction of ships; or

19[(da) the business of ship-breaking; or]20[(e) the operation of ships or aircrafts or construction or operation of rail systems.]]

21[Explanation 1A.—For the purposes of this sub-clause, the expression "interest" shall notinclude interest paid on delayed payment of loan or on default if it is in excess of two per cent perannum over the rate of interest payable in terms of such loan.]


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22[Explanation 2.—For the purposes of this clause, the expression "interest" includes hedgingtransaction charges on account of currency fluctuation;]

23[(v) interest on—(a) securities held by the Welfare Commissioner, Bhopal Gas Victims, Bhopal, in the Reserve

Bank's SGL Account No. SL/DH 048;(b) deposits for the benefit of the victims of the Bhopal gas leak disaster held in such

account, with the Reserve Bank of India or with a public sector bank, as the CentralGovernment may, by notification24 in the Official Gazette, specify, whether prospectivelyor retrospectively but in no case earlier than the 1st day of April, 1994 in this behalf.

Explanation.—For the purposes of this sub-clause, the expression "public sector bank" shall havethe meaning assigned to it in the Explanation to clause (23D);]

25[(vi) interest on Gold Deposit Bonds issued under the Gold Deposit Scheme, 1999 notified bythe Central Government;]

26[(vii) interest on bonds—(a) issued by a local authority or by a State Pooled Finance Entity; and(b) specified by the Central Government by notification27 in the Official Gazette.

Explanation.—For the purposes of this sub-clause, the expression "State Pooled Finance Entity"shall mean such entity which is set up in accordance with the guidelines for the Pooled FinanceDevelopment Scheme notified by the Central Government in the Ministry of UrbanDevelopment;]

28[(viii) any income by way of interest received by a non-resident or a person who is notordinarily resident, in India on a deposit made on or after the 1st day of April, 2005, in anOffshore Banking Unit29referred to in clause (u) of section 2 of the Special Economic Zones Act,2005;]

30[(15A) any payment made, by an Indian company engaged in the business of operation of aircraft, toacquire an aircraft or an aircraft engine (other than a payment for providing spares, facilities orservices in connection with the operation of leased aircraft) on lease31 from the Government of aforeign State or a foreign enterprise under an agreement 32[33[, not being an agreement enteredinto between the 1st day of April, 1997 and the 31st day of March, 1999,] and] approved by theCentral Government in this behalf :

34[Provided that nothing contained in this clause shall apply to any such agreement entered intoon or after the 35[1st day of April, 36[2007]].]

Explanation.—For the purposes of this clause, the expression "foreign enterprise" means aperson who is a non-resident;]

37(16) 38scholarships granted to meet the cost of education38a;39[(17) any income by way of—

(i) daily allowance received by any person by reason of his membership of Parliament or ofany State Legislature or of any Committee thereof; 40[* * *]

41[(ii) any allowance received by any person by reason of his membership of Parliament underthe Members of Parliament (Constituency Allowance) Rules, 1986;

42[(iii) any constituency allowance received by any person by reason of his membership of anyState Legislature under any Act or rules made by that State Legislature;]]]

43[(17A) any payment made, whether in cash or in kind,—


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(i) in pursuance of any award instituted in the public interest by the Central Government orany State Government or instituted by any other body and approved44 by the CentralGovernment in this behalf; or

(ii) as a reward by the Central Government or any State Government for such purposes asmay be approved44 by the Central Government in this behalf in the public interest;]

45[(18) any income by way of—

(i) pension received by an individual who has been in the service of the Central Governmentor State Government and has been awarded "Param Vir Chakra" or "Maha Vir Chakra" or"Vir Chakra" or such other gallantry award as the Central Government may, bynotification46 in the Official Gazette, specify in this behalf;

(ii) family pension received by any member of the family of an individual referred to insub-clause (i).

Explanation.—For the purposes of this clause, the expression "family" shall have the meaningassigned to it in the Explanation to clause (5);]

(18A) 47[Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]48[(19) family pension received by the widow or children or nominated heirs, as the case may be, of a

member of the armed forces (including paramilitary forces) of the Union, where the death ofsuch member has occurred in the course of operational duties, in such circumstances and subjectto such conditions, as may be prescribed49;]

50[(19A) the annual value of any one palace in the occupation of a Ruler, being a palace, the annual valuewhereof was exempt from income-tax before the commencement of the Constitution(Twenty-sixth Amendment) Act, 1971, by virtue of the provisions of the Merged States (TaxationConcessions) Order, 1949, or the Part B States (Taxation Concessions) Order, 1950, or, as thecase may be, the Jammu and Kashmir (Taxation Concessions) Order, 1958:

Provided that for the assessment year commencing on the 1st day of April, 1972, the annualvalue of every such palace in the occupation51 of such Ruler during the relevant previous yearshall be exempt from income-tax;]

52(20) the income of a local authority which is chargeable under the head 53[* * *] "Income from houseproperty", "Capital gains" or "Income from other sources" or from a trade or business carried onby it which accrues or arises from the supply of a commodity or service 54[(not being water orelectricity) within its own jurisdictional area or from the supply of water or electricity within oroutside its own jurisdictional area].

55[Explanation.—For the purposes of this clause, the expression "local authority" means—(i) Panchayat as referred to in clause (d) of article 243 of the Constitution56; or

(ii) Municipality as referred to in clause (e) of article 243P of the Constitution57; or(iii) Municipal Committee and District Board,

legally entitled to, or entrusted by the Government with, the control or management of aMunicipal or local fund; or

(iv) Cantonment Board as defined in section 358 of the Cantonments Act, 1924 (2 of 1924);](20A) 59[***]

60[61(21) 62any income of a 63[research association] for the time being approved for the purpose of clause(ii) 64[or clause (iii)]of sub-section (1) of section 35:

Provided that the 63[research association]—


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(a) applies its income, or accumulates it for application, wholly and exclusively to the objectsfor which it is established, and the provisions of sub-section (2) and sub-section (3) ofsection 11 shall apply in relation to such accumulation subject to the followingmodifications, namely :—

(i) in sub-section (2),—(1) the words, brackets, letters and figure "referred to in clause (a) or

clause (b) of sub-section (1) read with the Explanation to thatsub-section" shall be omitted;

(2) for the words "to charitable or religious purposes", the words "for thepurposes of 65[scientific research or research in social science orstatistical research]" shall be substituted;

(3) the reference to "Assessing Officer" in clause (a) thereof shall beconstrued as a reference to the "prescribed authority" referred to inclause (ii) 64[or clause (iii)]of sub-section (1) of section 35;

(ii) in sub-section (3), in clause (a), for the words "charitable or religious purposes",the words "the purposes of 65[scientific research or research in social science orstatistical research]" shall be substituted; and

66[(b) does not invest or deposit its funds, other than—

(i) any assets held by the 67[research association] where such assets form part ofthe corpus of the fund of the association as on the 1st day of June, 1973;

(ii) any assets (being debentures issued by, or on behalf of, any company orcorporation), acquired by the 67[research association] before the 1st day ofMarch, 1983;

(iii) any accretion to the shares, forming part of the corpus of the fund mentioned insub-clause (i), by way of bonus shares allotted to the 67[research association];

(iv) voluntary contributions received and maintained in the form of jewellery,furniture or any other article as the Board may, by notification in the OfficialGazette, specify,

for any period during the previous year otherwise than in any one or more of the forms ormodes specified in sub-section (5) of section 11:]

68[Provided further that the exemption under this clause shall not be denied in relation tovoluntary contribution, other than voluntary contribution in cash or voluntary contribution of thenature referred to in clause (b) of the first proviso to this clause, subject to the condition that suchvoluntary contribution is not held by the 67[research association], otherwise than in any one ormore of the forms or modes specified in sub-section (5) of section 11, after the expiry of one yearfrom the end of the previous year in which such asset is acquired or the 31st day of March, 1992,whichever is later:

Provided also] that nothing contained in this clause shall apply in relation to any income of the67[research association], being profits and gains of business, unless the business is incidental to theattainment of its objectives and separate books of account are maintained by it in respect of suchbusiness:]

69[Provided alsothat where the 67[research association]is approved by the Central Governmentand subsequently that Government is satisfied that—

(i) the 67[research association]has not applied its income in accordance with the provisions


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contained in clause (a) of the first proviso; or(ii) the 67[research association]has not invested or deposited its funds in accordance with the

provisions contained in clause (b) of the first proviso; or(iii) the activities of the 67[research association]are not genuine; or(iv) the activities of the 70[research association]are not being carried out in accordance with

all or any of the conditions subject to which such association was approved, it may, at any time after giving a reasonable opportunity of showing cause against the proposedwithdrawal to the concerned association, by order, withdraw the approval and forward a copy ofthe order withdrawing the approval to such association and to the Assessing Officer;]

(22) 71[Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;](22A) 72[Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]

73[(22B) any income of such news agency set up in India solely for collection and distribution of newsas the Central Government may, by notification74 in the Official Gazette, specify in this behalf:

Provided that the news agency applies its income or accumulates it for application solely forcollection and distribution of news and does not distribute its income in any manner to itsmembers:

Provided further that any notification issued by the Central Government under this clauseshall, at any one time, have effect for such assessment year or years, not exceeding threeassessment years (including an assessment year or years commencing before the date on whichsuch notification is issued) as may be specified in the notification:]

75[Provided also that where the news agency has been specified, by notification, by theCentral Government and subsequently that Government is satisfied that such news agency hasnot applied or accumulated or distributed its income in accordance with the provisionscontained in the first proviso, it may, at any time after giving a reasonable opportunity ofshowing cause, rescind the notification and forward a copy of the order rescinding thenotification to such agency and to the Assessing Officer;]

(23) 76[Omitted by the Finance Act, 2002, w.e.f. 1-4-2003;]77[78(23A) any income (other than income chargeable under the head 79[* * *] "Income from house

property" or any income received for rendering any specific services or income by way ofinterest or dividends derived from its investments) of an association or institution established inIndia having as its object the control, supervision, regulation or encouragement of theprofession of law, medicine, accountancy, engineering or architecture or such otherprofession80 as the Central Government may specify in this behalf, from time to time, bynotification in the Official Gazette:

Provided that—(i) the association or institution applies its income, or accumulates it for application, solely to

the objects for which it is established; and(ii) the association or institution is for the time being approved81 for the purpose of this

clause by the Central Government by general or special order:] 82[Provided further that where the association or institution has been approved by the CentralGovernment and subsequently that Government is satisfied that—

(i) such association or institution has not applied or accumulated its income in accordancewith the provisions contained in the first proviso; or


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(ii) the activities of the association or institution are not being carried out in accordance withall or any of the conditions subject to which such association or institution was approved,

it may, at any time after giving a reasonable opportunity of showing cause against theproposed withdrawal to the concerned association or institution, by order, withdraw theapproval and forward a copy of the order withdrawing the approval to such association orinstitution and to the Assessing Officer;]

83[(23AA) any income received by any person on behalf of any Regimental Fund or Non-Public Fundestablished by the armed forces of the Union for the welfare of the past and present membersof such forces or their dependants;]

84[(23AAA) any income received by any person on behalf of a fund established, for such purposes as maybe notified85 by the Board in the Official Gazette, for the welfare of employees or theirdependants and of which fund such employees are members if such fund fulfils the followingconditions, namely :—(a) the fund—

(i) applies its income or accumulates it for application, wholly and exclusively tothe objects for which it is established; and

(ii) invests its funds and contributions and other sums received by it in the forms ormodes specified in sub-section (5) of section 11;

(b) the fund is approved by the 86[Principal Commissioner or] Commissioner in accordancewith the rules87 made in this behalf:

Provided that any such approval shall at any one time have effect for such assessment year oryears not exceeding three assessment years as may be specified in the order of approval;]

88[(23AAB) any income of a fund, by whatever name called, set up by the Life Insurance Corporation ofIndia on or after the 1st day of August, 1996 89[or any other insurer] under a pensionscheme,—(i) to which contribution is made by any person for the purpose of receiving pension from

such fund;(ii) which is approved by the Controller of Insurance 89-90[or the Insurance Regulatory and

Development Authority established under sub-section (1) of section 3 of the InsuranceRegulatory and Development Authority Act, 1999 (41 of 1999), as the case may be].

Explanation.—For the purposes of this clause, the expression "Controller of Insurance" shallhave the meaning assigned to it in clause (5B) of section 2 of the Insurance Act, 1938 (4 of1938)91;]

92[(23B) any income of an institution constituted as a public charitable trust or registered under theSocieties Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act inforce in any part of India, and existing solely for the development of khadi or village industries orboth, and not for purposes of profit, to the extent such income is attributable to the business ofproduction, sale, or marketing, of khadi or products of village industries:

Provided that—(i) the institution applies its income, or accumulates it for application, solely for the

development of khadi or village industries or both; and(ii) the institution is, for the time being, approved for the purpose of this clause by the Khadi

and Village Industries Commission: Provided further that the Commission shall not, at any one time, grant such approval for morethan three assessment years beginning with the assessment year next following the financial year


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in which it is granted: 93[Provided also that where the institution has been approved by the Khadi and Village IndustriesCommission and subsequently that Commission is satisfied that—

(i) the institution has not applied or accumulated its income in accordance with theprovisions contained in the first proviso; or

(ii) the activities of the institution are not being carried out in accordance with all or any ofthe conditions subject to which such institution was approved,

it may, at any time after giving a reasonable opportunity of showing cause against the proposedwithdrawal to the concerned institution, by order, withdraw the approval and forward a copy ofthe order withdrawing the approval to such institution and to the Assessing Officer.]

Explanation.—For the purposes of this clause,—(i) "Khadi and Village Industries Commission" means the Khadi and Village Industries

Commission established under the Khadi and Village Industries Commission Act, 1956(61 of 1956);

(ii) 94"khadi" and "village industries" have the meanings respectively assigned to them in thatAct;]

95[(23BB) any income of an authority (whether known as the Khadi and Village Industries Board or byany other name) established in a State by or under a State or Provincial Act for thedevelopment of khadi or village industries in the State.

Explanation.—For the purposes of this clause, 94"khadi" and "village industries" have themeanings respectively assigned to them in the Khadi and Village Industries Commission Act,1956 (61 of 1956);]

95[(23BBA) any income of any body or authority (whether or not a body corporate or corporation sole)established, constituted or appointed by or under any Central, State or Provincial Act whichprovides for the administration of any one or more of the following, that is to say, publicreligious or charitable trusts or endowments (including maths, temples, gurdwaras, wakfs,churches, synagogues, agiaries or other places of public religious worship) or societies forreligious or charitable purposes registered as such under the Societies Registration Act, 1860(21 of 1860), or any other law for the time being in force:

Provided that nothing in this clause shall be construed to exempt from tax the income of anytrust, endowment or society referred to therein;]

96[(23BBB) any income of the European Economic Community derived in India by way of interest,dividends or capital gains from investments made out of its funds under such scheme97 as theCentral Government may, by notification in the Official Gazette, specify in this behalf.

Explanation.—For the purposes of this clause, "European Economic Community" means theEuropean Economic Community established by the Treaty of Rome of 25th March, 1957;]

98[(23BBC ) any income of the SAARC Fund for Regional Projects set up by Colombo Declaration issuedon the 21st day of December, 1991 by the Heads of State or Government of the MemberCountries of South Asian Association for Regional Cooperation established on the 8th day ofDecember, 1985 by the Charter of the South Asian Association for Regional Cooperation;]

99[(23BBD) any income of the Secretariat of the Asian Organisation of the Supreme Audit Institutionsregistered as "ASOSAI-SECRETARIAT" under the Societies Registration Act, 1860 (21 of1860) for 1[ten previous years relevant to the assessment years beginning on the 1st day ofApril, 2001 and ending on the 31st day of March, 2011];


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(23BBE) any income of the Insurance Regulatory and Development Authority established undersub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act,1999 (41 of 1999);]

2[(23BBF) any income of the North-Eastern Development Finance Corporation Limited, being acompany formed and registered under the Companies Act, 1956 (1 of 1956)3 :

Provided that in computing the total income of the North-Eastern Development FinanceCorporation Limited, the amount to the extent of—

(i) twenty per cent of the total income for assessment year beginning on the 1st day of April,2006;

(ii) forty per cent of the total income for assessment year beginning on the 1st day of April,2007;

(iii) sixty per cent of the total income for assessment year beginning on the 1st day of April,2008;

(iv) eighty per cent of the total income for assessment year beginning on the 1st day of April,2009;

(v) one hundred per cent of the total income for assessment year beginning on the 1st day ofApril, 2010 and any subsequent assessment year or years,

shall be included in such total income;]4[(23BBG) any income of the Central Electricity Regulatory Commission constituted under sub-section

(1) of section 76 of the Electricity Act, 2003 (36 of 2003);]5[(23BBH) any income of the Prasar Bharati (Broadcasting Corporation of India) established under

sub-section (1) of section 3 of the Prasar Bharati (Broadcasting Corporation of India) Act,1990 (25 of 1990);]

6[7(23C) any income received by any person on behalf of—

(i) the Prime Minister's National Relief Fund; or(ii) the Prime Minister's Fund (Promotion of Folk Art); or

(iii) the Prime Minister's Aid to Students Fund; 8-9[or]10[(iiia) the National Foundation for Communal Harmony; or]

10a [ (iiiaa) the Swachh Bharat Kosh, set up by the Central Government; or(iiiaaa) the Clean Ganga Fund, set up by the Central Government; or ]

11[(iiiab) any university or other educational institution12 existing12 solely for educationalpurposes and not for purposes of profit, and which is wholly or substantially financedby the Government12a; or

(iiiac) any hospital or other institution for the reception and treatment of persons sufferingfrom illness or mental defectiveness or for the reception and treatment of personsduring convalescence or of persons requiring medical attention or rehabilitation,existing solely for philanthropic purposes and not for purposes of profit, and which iswholly or substantially financed by the Government12a.

13[Explanation.—For the purposes of sub-clauses (iiiab) and (iiiac), any university orother educational institution, hospital or other institution referred therein, shall beconsidered as being substantially financed by the Government for any previous year,if the Government grant to such university or other educational institution, hospitalor other institution exceeds such percentage of the total receipts including anyvoluntary contributions, as may be prescribed12a, of such university or other


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educational institution, hospital or other institution, as the case may be, during therelevant previous year]; or

(iiiad) any university or other educational institution12 existing12 solely for educationalpurposes and not for purposes of profit if the aggregate annual receipts of suchuniversity or educational institution do not exceed the amount of annual receipts asmay be prescribed14; or

(iiiae) any hospital or other institution for the reception and treatment of persons sufferingfrom illness or mental defectiveness or for the reception and treatment of personsduring convalescence or of persons requiring medical attention or rehabilitation,existing solely for philanthropic purposes and not for purposes of profit, if theaggregate annual receipts of such hospital or institution do not exceed the amount ofannual receipts as may be prescribed14; or]

15[(iv) 16any other fund or institution established for charitable purposes 17[which may beapproved by the prescribed authority18], having regard to the objects of the fund orinstitution and its importance throughout India or throughout any State or States; or

(v) 19any trust (including any other legal obligation) or institution wholly for publicreligious purposes or wholly for public religious and charitable purposes, 20[whichmay be approved by the prescribed authority21], having regard to the manner in whichthe affairs of the trust or institution are administered and supervised for ensuring thatthe income accruing thereto is properly applied for the objects thereof;

22[(vi) any university or other educational institution existing23 solely for educationalpurposes23 and not for purposes of profit, other than those mentioned in sub-clause(iiiab) or sub-clause (iiiad) and which may be approved24 by the prescribedauthority25; or

(via) any hospital or other institution for the reception and treatment of persons sufferingfrom illness or mental defectiveness or for the reception and treatment of personsduring convalescence or of persons requiring medical attention or rehabilitation,existing solely for philanthropic purposes and not for purposes of profit, other thanthose mentioned in sub-clause (iiiac) or sub-clause (iiiae) and which may beapproved26 by the prescribed authority27:]

Provided that the fund or trust or institution 28[or any university or other educational institution29

or any hospital or other medical institution] referred to in sub-clause (iv) or sub-clause (v) 28[orsub-clause (vi) or sub-clause (via)] shall make an application in the prescribed form30 and mannerto the prescribed authority31 for the purpose of grant of the exemption, or continuance thereof,under sub-clause (iv) or sub-clause (v) 32[or sub-clause (vi) or sub-clause (via)]:

33[Provided further that the prescribed authority, before approving any fund or trust orinstitution or any university or other educational institution or any hospital or other medicalinstitution, under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via), may callfor such documents (including audited annual accounts) or information from the fund or trust orinstitution or any university or other educational institution or any hospital or other medicalinstitution, as the case may be, as it thinks necessary in order to satisfy itself about thegenuineness of the activities of such fund or trust or institution or any university or othereducational institution or any hospital or other medical institution, as the case may be, and theprescribed authority may also make such inquiries as it deems necessary in this behalf:]


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Provided also that the fund or trust or institution 34[or any university or other educationalinstitution35 or any hospital or other medical institution] referred to in sub-clause (iv) orsub-clause (v) 34[or sub-clause (vi) or sub-clause (via)]—36[(a) applies its income, or accumulates it for application, wholly and exclusively to the objects

for which it is established and in a case where more than fifteen per cent of its income isaccumulated on or after the 1st day of April, 2002, the period of the accumulation of theamount exceeding fifteen per cent of its income shall in no case exceed five years; and]

37[(b) does not invest or deposit its funds, other than—

(i) any assets held by the fund, trust or institution 38[or any university or othereducational institution39 or any hospital or other medical institution] where suchassets form part of the corpus of the fund, trust or institution 40[or any universityor other educational institution or any hospital or other medical institution] as onthe 1st day of June, 1973;

41[(ia) any asset, being equity shares of a public company, held by any university orother educational institution or any hospital or other medical institution wheresuch assets form part of the corpus of any university or other educationalinstitution or any hospital or other medical institution as on the 1st day of June,1998;]

(ii) any assets (being debentures issued by, or on behalf of, any company orcorporation), acquired by the fund, trust or institution 42[or any university orother educational institution43 or any hospital or other medical institution] beforethe 1st day of March, 1983;

(iii) any accretion to the shares, forming part of the corpus mentioned in sub-clause(i) 44[and sub-clause (ia)], by way of bonus shares allotted to the fund, trust orinstitution 45[or any university or other educational institution or any hospital orother medical institution] ;


for any period during the previous year otherwise than in any one or more of the forms ormodes specified in sub-section (5) of section 11:]

Provided also that the exemption under sub-clause (iv) or sub-clause (v) shall not be denied inrelation to any funds invested or deposited before the 1st day of April, 1989, otherwise than in anyone or more of the forms or modes specified in sub-section (5) of section 11 if such funds do notcontinue to remain so invested or deposited after the 30th day of March, 46[1993] :

47[Provided also that the exemption under sub-clause (vi) or sub-clause (via) shall not be deniedin relation to any funds invested or deposited before the 1st day of June, 1998, otherwise than inany one or more of the forms or modes specified in sub-section (5) of section 11 if such funds donot continue to remain so invested or deposited after the 30th day of March, 2001:]

48[Provided also that the exemption under sub-clause (iv) or sub-clause (v) 47[or sub-clause (vi)or sub-clause (via)] shall not be denied in relation to voluntary contribution, other than voluntarycontribution in cash or voluntary contribution of the nature referred to in clause (b) of the thirdproviso to this sub-clause, subject to the condition that such voluntary contribution is not held bythe trust or institution 49[or any university or other educational institution or any hospital or othermedical institution], otherwise than in any one or more of the forms or modes specified in


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sub-section (5) of section 11, after the expiry of one year from the end of the previous year inwhich such asset is acquired or the 31st day of March, 1992, whichever is later:]

Provided also that nothing contained in sub-clause (iv) or sub-clause (v) 50[or sub-clause (vi) orsub-clause (via)] shall apply in relation to any income of the fund or trust or institution 50[or anyuniversity or other educational institution or any hospital or other medical institution], beingprofits and gains of business, unless the business is incidental to the attainment of its objectivesand separate books of account are maintained by it in respect of such business:

Provided also that any 51[notification issued by the Central Government under sub-clause (iv) orsub-clause (v), before the date on which the Taxation Laws (Amendment) Bill, 2006 receives theassent of the President*, shall, at any one time52, have effect for such assessment year or years,not exceeding three assessment years] (including an assessment year or years commencing beforethe date on which such notification is issued) as may be specified in the notification:]

53[Provided also that where an application under the first proviso is made on or after the date onwhich the Taxation Laws (Amendment) Bill, 2006 receives the assent of the President,* everynotification under sub-clause (iv) or sub-clause (v) shall be issued or approval under 54[sub-clause(iv) or sub-clause (v) or] sub-clause (vi) or sub-clause (via) shall be granted or an order rejectingthe application shall be passed within the period of twelve months from the end of the month inwhich such application was received:

Provided also that where the total income, of the fund or trust or institution or any university orother educational institution or any hospital or other medical institution referred to in sub-clause(iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via), without giving effect to the provisionsof the said sub-clauses, exceeds the maximum amount which is not chargeable to tax in anyprevious year, such trust or institution or any university or other educational institution or anyhospital or other medical institution shall get its accounts audited in respect of that year by anaccountant as defined in the Explanation below sub-section (2) of section 288 and furnish alongwith the return of income for the relevant assessment year, the report of such audit in theprescribed form55 duly signed and verified by such accountant and setting forth such particulars asmay be prescribed:]

56[Provided also that any amount of donation received by the fund or institution in terms ofclause (d) of sub-section (2) of section 80G57[in respect of which accounts of income andexpenditure have not been rendered to the authority prescribed under clause (v) of sub-section(5C) of that section, in the manner specified in that clause, or] which has been utilised forpurposes other than providing relief to the victims of earthquake in Gujarat or which remainsunutilised in terms of sub-section (5C) of section 80G and not transferred to the Prime Minister'sNational Relief Fund on or before the 31st day of March, 58[2004] shall be deemed to be theincome of the previous year and shall accordingly be charged to tax:]

59[***] 60[Provided alsothat where the fund or trust or institution or any university or other educationalinstitution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause(v) or sub-clause (vi) or sub-clause (via) does not apply its income during the year of receipt andaccumulates it, any payment or credit out of such accumulation to any trust or institutionregistered under section 12AA or to any fund or trust or institution or any university or othereducational institution or any hospital or other medical institution referred to in sub-clause (iv) orsub-clause (v) or sub-clause (vi) or sub-clause (via) shall not be treated as application of income tothe objects for which such fund or trust or institution or university or educational institution orhospital or other medical institution, as the case may be, is established :


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Provided also that where the fund or institution referred to in sub-clause (iv) or trust or institutionreferred to in sub-clause (v) is notified by the Central Government 61[or is approved by theprescribed authority, as the case may be,] or any university or other educational institutionreferred to in sub-clause (vi) or any hospital or other medical institution referred to in sub-clause(via), is approved by the prescribed authority and subsequently that Government or the prescribedauthority is satisfied that—

(i) such fund or institution or trust or any university or other educational institution or anyhospital or other medical institution has not—

(A) applied its income in accordance with the provisions contained in clause (a) ofthe third proviso; or

(B) invested or deposited its funds in accordance with the provisions contained inclause (b) of the third proviso; or

(ii) the activities of such fund or institution or trust or any university or other educationalinstitution or any hospital or other medical institution—

(A) are not genuine; or(B) are not being carried out in accordance with all or any of the conditions subject

to which it was notified or approved, it may, at any time after giving a reasonable opportunity of showing cause against the proposedaction to the concerned fund or institution or trust or any university or other educationalinstitution or any hospital or other medical institution, rescind the notification or, by order,withdraw the approval, as the case may be, and forward a copy of the order rescinding thenotification or withdrawing the approval to such fund or institution or trust or any university orother educational institution or any hospital or other medical institution and to the AssessingOfficer:]

62[Provided also that in case the fund or trust or institution or any university or othereducational institution or any hospital or other medical institution referred to in the first provisomakes an application on or after the 1st day of June, 2006 for the purposes of grant of exemptionor continuance thereof, such application shall be 63[made on or before the 30th day ofSeptember of the relevant assessment year] from which the exemption is sought :]

64[Provided also that any anonymous donation referred to in section 115BBC on which tax ispayable in accordance with the provisions of the said section shall be included in the totalincome :]

65[Provided also that all pending applications, on which no notification has been issued undersub-clause (iv) or sub-clause (v) before the 1st day of June, 2007, shall stand transferred on thatday to the prescribed authority and the prescribed authority may proceed with such applicationsunder those sub-clauses from the stage at which they were on that day:]

66[Provided also that the income of a trust or institution referred to in sub-clause (iv) orsub-clause (v) shall be included in its total income of the previous year if the provisions of thefirst proviso to clause (15) of section 2 become applicable to such trust or institution in the saidprevious year, whether or not any approval granted or notification issued in respect of such trustor institution has been withdrawn or rescinded :]

67[Provided alsothat where the fund or institution referred to in sub-clause (iv) or the trust orinstitution referred to in sub-clause (v) has been notified by the Central Government orapproved by the prescribed authority, as the case may be, or any university or othereducational institution referred to in sub-clause (vi) or any hospital or other medicalinstitution referred to in sub-clause (via), has been approved by the prescribed authority, and


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the notification or the approval is in force for any previous year, then, nothing contained inany other provision of this section [other than clause (1) thereof] shall operate to exclude anyincome received on behalf of such fund or trust or institution or university or othereducational institution or hospital or other medical institution, as the case may be, from thetotal income of the person in receipt thereof for that previous year.

Explanation.—In this clause, where any income is required to be applied or accumulated, then,for such purpose the income shall be determined without any deduction or allowance by way ofdepreciation or otherwise in respect of any asset, acquisition of which has been claimed as anapplication of income under this clause in the same or any other previous year;]

68[(23D) 69[70[71[subject to the provisions of Chapter XII-E, any income of]—](i) a Mutual Fund registered under the Securities and Exchange Board of India Act, 1992 (15

of 1992) or regulations made thereunder;(ii) such other Mutual Fund set up by a public sector bank or a public financial institution or

authorised by the Reserve Bank of India and subject to such conditions as the CentralGovernment may, by notification72 in the Official Gazette, specify in this behalf.]

Explanation.—For the purposes of this clause,—(a) the expression "public sector bank" means the State Bank of India constituted under the

State Bank of India Act, 1955 (23 of 1955), a subsidiary bank as defined in the StateBank of India (Subsidiary Banks) Act, 1959 (38 of 1959), a corres-ponding new Bankconstituted under section 3 of the Banking Companies (Acquisition and Transfer ofUnder-takings) Act, 1970 (5 of 1970), or under section 3 of the Banking Companies(Acquisition and Transfer of Under-takings) Act, 1980 (40 of 1980) 73[and a bankincluded in the category "other public sector banks" by the Reserve Bank of India];

(b) the expression "public financial institution" shall have the meaning assigned to it insection 4A of the Companies Act, 1956 (1 of 1956)74;]

75[(c) the expression "Securities and Exchange Board of India" shall have the meaning assignedto it in clause (a) of sub-section (1) of section 2 of the Securities and Exchange Board ofIndia Act, 1992 (15 of 1992);]

76[(23DA) any income of a securitisation trust from the activity of securitisation.

Explanation.—For the purposes of this clause,—(a) "securitisation" shall have the same meaning as assigned to it,—

(i) in clause (r) of sub-regulation (1)of regulation 277 of the Securities andExchange Board of India (Public Offer and Listing of Securitised DebtInstruments) Regulations, 2008 made under the Securities and Exchange Boardof India Act, 1992 (15 of 1992) and the Securities Contracts (Regulation) Act,1956 (42 of 1956); or

(ii) under the guidelines on securitisation of standard assets issued by the ReserveBank of India;

(b) "securitisation trust" shall have the meaning assigned to it in the Explanation belowsection 115TC;]

(23E) 78[Omitted by the Finance Act, 2002, w.e.f. 1-4-2003;]79[(23EA) any income 80[, by way of contributions received from recognised stock exchanges and the

members thereof,] of such Investor Protection Fund set up by recognised stock exchanges inIndia, either jointly or separately, as the Central Government may, by notification81 in theOfficial Gazette, specify in this behalf:


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Provided that where any amount standing to the credit of the Fund and not charged toincome-tax during any previous year is shared, either wholly or in part, with a recognised stockexchange, the whole of the amount so shared shall be deemed to be the income of the previousyear in which such amount is so shared and shall accordingly be chargeable to income-tax;]

82[(23EB) any income of the Credit Guarantee Fund Trust for Small 83[***] Industries, being a trustcreated by the Government of India and the Small Industries Development Bank of Indiaestablished under sub-section (1) of section 3 of the Small Industries Development Bank ofIndia Act, 1989 (39 of 1989), for five previous years relevant to the assessment years beginningon the 1st day of April, 2002 and ending on the 31st day of March, 2007;]

84[(23EC) any income, by way of contributions received from commodity exchanges and the membersthereof, of such Investor Protection Fund set up by commodity exchanges in India, eitherjointly or separately, as the Central Government may, by notification in the Official Gazette,specify in this behalf:

Provided that where any amount standing to the credit of the said Fund and not charged toincome-tax during any previous year is shared, either wholly or in part, with a commodityexchange, the whole of the amount so shared shall be deemed to be the income of the previousyear in which such amount is so shared and shall accordingly be chargeable to income-tax.

Explanation.—For the purposes of this clause, "commodity exchange" shall mean a "registeredassociation" as defined in clause (jj) of section 2 of the Forward Contracts (Regulation) Act,1952 (74 of 1952)85;]

86[(23ED) any income, by way of contributions received from a depository, of such Investor ProtectionFund set up in accordance with the regulations by a depository as the Central Governmentmay, by notification in the Official Gazette, specify in this behalf:

Provided that where any amount standing to the credit of the Fund and not charged toincome-tax during any previous year is shared, either wholly or in part with a depository, thewhole of the amount so shared shall be deemed to be the income of the previous year in whichsuch amount is so shared and shall, accordingly, be chargeable to income-tax.

Explanation.—For the purposes of this clause,—(i) "depository" shall have the same meaning as assigned to it in clause (e) of sub-section (1)

of section 287 of the Depositories Act, 1996 (22 of 1996);(ii) "regulations" means the regulations made under the Securities and Exchange Board of

India Act, 1992 (15 of 1992) and the Depositories Act, 1996 (22 of 1996);] Following clause (23EE) shall be inserted after clause (23ED) of section 10 by the FinanceAct, 2015, w.e.f. 1-4-2016 :

(23EE) any specified income of such Core Settlement Guarantee Fund, set up by a recognised clearingcorporation in accordance with the regulations, as the Central Government may, by notificationin the Official Gazette, specify in this behalf:

Provided that where any amount standing to the credit of the Fund and not charged toincome-tax during any previous year is shared, either wholly or in part with the specifiedperson, the whole of the amount so shared shall be deemed to be the income of the previous yearin which such amount is so shared and shall, accordingly, be chargeable to income-tax.

Explanation.—For the purposes of this clause,—(i) "recognised clearing corporation" shall have the same meaning as assigned to it in

clause (o) of sub-regulation (1) of regulation 287a of the Securities Contracts(Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012 madeunder the Securities and Exchange Board of India Act, 1992 (15 of 1992) and the


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Securities Contracts (Regulation) Act, 1956 (42 of 1956);(ii) "regulations" means the Securities Contracts (Regulation) (Stock Exchanges and

Clearing Corporations) Regulations, 2012 made under the Securities and ExchangeBoard of India Act, 1992 (15 of 1992) and the Securities Contracts (Regulation) Act,1956 (42 of 1956);

(iii) "specified income" shall mean,—(a) the income by way of contribution received from specified persons;(b) the income by way of penalties imposed by the recognised clearing corporation

and credited to the Core Settlement Guarantee Fund; or(c) the income from investment made by the Fund;

(iv) "specified person" shall mean,—(a) any recognised clearing corporation which establishes and maintains the Core

Settlement Guarantee Fund;(b) any recognised stock exchange being a shareholder in such recognised clearing

corporation or a contributor to the Core Settlement Guarantee Fund; and(c) any clearing member contributing to the Core Settlement Guarantee Fund;

88[(23F) any income by way of dividends or long-term capital gains of a venture capital fund or a venturecapital company from investments made by way of equity shares in a venture capital undertaking:

Provided that such venture capital fund or venture capital company is approved for the purposesof this clause by the prescribed autho-rity89 in accordance with the rules90 made in this behalfand satisfies the prescribed conditions :

Provided further that any approval by the prescribed authority shall, at any one time, haveeffect for such assessment year or years, not exceeding three assessment years, as may bespecified in the order of approval :

91[Provided also that nothing contained in this clause shall apply in respect of any investmentmade after the 31st day of March, 1999.]

92[* * *] 92[* * *] Explanation.—For the purposes of this clause,—

(a) "venture capital fund" means such fund, operating under a trust deed registered under theprovisions of the Registration Act, 1908 (16 of 1908), established to raise monies by thetrustees for investments mainly by way of acquiring equity shares of a venture capitalundertaking in accordance with the prescribed guidelines;

(b) "venture capital company" means such company as has made investments by way ofacquiring equity shares of venture capital undertakings in accordance with the prescribedguidelines;

93[(c) "venture capital undertaking" means such domestic company whose shares are not listedin a recognised stock exchange in India and which is engaged in the business ofgeneration or generation and distribution of electricity or any other form of power orengaged in the business of providing telecommunication services or in the business ofdeveloping, maintaining and operating any infrastructure facility or engaged in themanufacture or production of such articles or things (including computer software) asmay be notified by the Central Government in this behalf; and


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(d) "infrastructure facility" means a road, highway, bridge, airport, port, rail system, a watersupply project, irrigation project, sanitation and sewerage system or any other publicfacility of a similar nature as may be notified by the Board in this behalf in the OfficialGazette and which fulfils the conditions specified in sub-section (4A) of section 80-IA;]

94-95[(23FA) any income by way of dividends 96[, other than dividends referred to in section 115-O], orlong-term capital gains of a venture capital fund or a venture capital company frominvestments made by way of equity shares in a venture capital undertaking :

Providedthat such venture capital fund or venture capital company is approved, for thepurposes of this clause, by the Central Government on an application made to it inaccordance with the rules97 made in this behalf and which satisfies the prescribed conditions:

Provided further that any approval by the Central Government shall, at any one time, haveeffect for such assessment year or years, not exceeding three assessment years, as may bespecified in the order of approval :

98[Provided also that nothing contained in this clause shall apply in respect of anyinvestment made after the 31st day of March, 2000.]

Explanation.—For the purposes of this clause,—(a) "venture capital fund" means such fund, operating under a trust deed registered under the

provisions of the Registration Act, 1908 (16 of 1908), established to raise monies by thetrustees for investments mainly by way of acquiring equity shares of a venture capitalundertaking in accordance with the prescribed guidelines;

(b) "venture capital company" means such company as has made investments by way ofacquiring equity shares of venture capital undertakings in accordance with the prescribedguidelines; and

(c) "venture capital undertaking" means such domestic company whose shares are not listedin a recognised stock exchange in India and which is engaged in the—

(i) business of—(A) software;(B) information technology;(C) production of basic drugs in the pharmaceutical sector;(D) bio-technology;(E) agriculture and allied sectors; or(F) such other sectors as may be notified by the Central Government in this

behalf; or(ii) production or manufacture of any article or substance for which patent has been

granted to the National Research Laboratory or any other scientific researchinstitution approved by the Department of Science and Technology;]

99[(23FB) any income of a venture capital company or venture capital fund 1-2[from investment] in aventure capital undertaking.

Following proviso shall be inserted to clause (23FB) of section 10 by the Finance Act,2015, w.e.f. 1-4-2016 :

Provided that nothing contained in this clause shall apply in respect of any income of aventure capital company or venture capital fund, being an investment fund specified in clause(a) of the Explanation 1 to section 115UB, of the previous year relevant to the assessment yearbeginning on or after the 1st day of April, 2016.


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3[Explanation.—For the purposes of this clause,—(a) "venture capital company" means a company which—

(A) has been granted a certificate of registration, before the 21st day of May, 2012,as a Venture Capital Fund and is regulated under the Securities and ExchangeBoard of India (Venture Capital Funds) Regulations, 1996 (hereinafter referredto as the Venture Capital Funds Regulations) made under the Securities andExchange Board of India Act, 1992 (15 of 1992); or

(B) has been granted a certificate of registration as Venture Capital Fund as asub-category of Category I Alternative Investment Fund and is regulated underthe Securities and Exchange Board of India (Alternative Investment Funds)Regulations, 2012 (hereinafter referred to as the Alternative Investment FundsRegulations) made under the Securities and Exchange Board of India Act, 1992(15 of 1992), and which fulfils the following conditions, namely:—

(i) it is not listed on a recognised stock exchange;(ii) it has invested not less than two-thirds of its investible funds in unlisted

equity shares or equity linked instruments of venture capitalundertaking; and

(iii) it has not invested in any venture capital undertaking in which itsdirector or a substantial shareholder (being a beneficial owner of equityshares exceeding ten per cent of its equity share capital) holds, eitherindividually or collectively, equity shares in excess of fifteen per cent ofthe paid-up equity share capital of such venture capital undertaking;

(b) "venture capital fund" means a fund—(A) operating under a trust deed registered under the provisions of the Registration

Act, 1908 (16 of 1908), which—(I) has been granted a certificate of registration, before the 21st day of

May, 2012, as a Venture Capital Fund and is regulated under theVenture Capital Funds Regulations; or

(II) has been granted a certificate of registration as Venture Capital Fund asa sub-category of Category I Alternative Investment Fund under theAlternative Investment Funds Regulations and which fulfils thefollowing conditions, namely:—

(i) it has invested not less than two-thirds of its investible funds inunlisted equity shares or equity linked instruments of venturecapital undertaking;

(ii) it has not invested in any venture capital undertaking in whichits trustee or the settler holds, either individually orcollectively, equity shares in excess of fifteen per cent of thepaid-up equity share capital of such venture capitalundertaking; and

(iii) the units, if any, issued by it are not listed in any recognisedstock exchange; or

(B) operating as a venture capital scheme made by the Unit Trust of India establishedunder the Unit Trust of India Act, 1963 (52 of 1963);

(c) "venture capital undertaking" means—(i) a venture capital undertaking as defined in clause (n) of regulation 2 of the


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Venture Capital Funds Regulations; or(ii) a venture capital undertaking as defined in clause (aa) of sub-regulation (1) of

regulation 2 of the Alternative Investment Funds Regulations4;] 5[***] Following clauses (23FBA) and (23FBB) shall be inserted after clause (23FB) of section 10by the Finance Act, 2015, w.e.f. 1-4-2016 :

(23FBA) any income of an investment fund other than the income chargeable under the head "Profitsand gains of business or profession";

(23FBB) any income referred to in section 115UB, accruing or arising to, or received by, a unit holderof an investment fund, being that proportion of income which is of the same nature as incomechargeable under the head "Profits and gains of business or profession".

Explanation.—For the purposes of clauses (23FBA)and (23FBB), the expression "investmentfund" shall have the meaning assigned to it in clause (a) of the Explanation 1 to section 115UB;

6[(23FC) any income of a business trust by way of interest received or receivable from a special purposevehicle.

Explanation.—For the purposes of this clause, the expression "special purpose vehicle" meansan Indian company in which the business trust holds controlling interest and any specificpercentage of shareholding or interest, as may be required by the regulations under which suchtrust is granted registration;]

Following clause (23FCA) shall be inserted after clause (23FC) of section 10 by the FinanceAct, 2015, w.e.f. 1-4-2016 :

(23FCA) any income of a business trust, being a real estate investment trust, by way of renting orleasing or letting out any real estate asset owned directly by such business trust.

Explanation.—For the purposes of this clause, the expression "real estate asset" shall have thesame meaning as assigned to it in clause (zj)of sub-regulation (1) of regulation 26a of theSecurities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014made under the Securities and Exchange Board of India Act, 1992 (15 of 1992);

6[(23FD) any distributed income, referred to in section 115UA, received by a unit holder from thebusiness trust, not being that proportion of the income which is of the same nature as theincome referred to in clause (23FC) 6b[or clause (23FCA)];]

(23G) 7[Omitted by the Finance Act, 2006, w.e.f. 1-4-2007;]8[9(24) any income chargeable under the heads "Income from house property" and "Income from other

sources" of—(a) a registered union within the meaning of the Trade Unions Act, 1926 (16 of 1926), formed

primarily for the purpose of regulating the relations between workmen and employers orbetween workmen and workmen;

(b) an association of registered unions referred to in sub-clause (a);](25) (i) interest on securities which are held by, or are the property of, any provident fund to which the

Provident Funds Act, 1925 (19 of 1925), applies, and any capital gains of the fund arising from thesale, exchange or transfer of such securities;

(ii) any income received by the trustees on behalf of a recognised provident fund; (iii) any income received by the trustees on behalf of an approved superannuation fund; 10[(iv) any income received by the trustees on behalf of an approved gratuity fund;]

11[(v) any income received—


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(a) by the Board of Trustees constituted under the Coal Mines Provident Funds andMiscellaneous Provisions Act, 1948 (46 of 1948), on behalf of the Deposit-linkedInsurance Fund established under section 3G of that Act; or

(b) by the Board of Trustees constituted under the Employees' Provident Funds andMiscellaneous Provisions Act, 1952 (19 of 1952), on behalf of the Deposit-linkedInsurance Fund established under section 6C of that Act;]

12[(25A) any income of the Employees' State Insurance Fund set up under the provisions of theEmployees' State Insurance Act, 1948 (34 of 1948);]

13[(26) 14in the case of a member of a 15Scheduled Tribe as defined in clause (25) of article 366 of theConstitution, residing16 in any area specified16 in Part I or Part II of the Table appended toparagraph 20 of the Sixth Schedule to the Constitution or in the 17[States of Arunachal Pradesh,Manipur, Mizoram, Nagaland and Tripura] or in the areas covered by notification No. TAD/R/35/50/109, dated the 23rd February, 1951, issued by the Governor of Assam under the proviso tosub-paragraph (3) of the said paragraph 20 [as it stood immediately before the commencement ofthe North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971)] 18[or in the Ladakh region ofthe State of Jammu and Kashmir], any income which accrues or arises to him,—

(a) from any source in the areas 19[or States aforesaid], or(b) by way of dividend or interest on securities;]

20[(26A) any income accruing or arising to any person 21[* * *] from any source in the district of Ladakhor outside India in any previous year relevant to any assessment year commencing before the 1stday of April, 22[1989], where such person is resident in the said district in that previous year :

Provided that this clause shall not apply in the case of any such person unless he was resident inthat district in the previous year relevant to the assessment year commencing on the 1st day ofApril, 1962.

23[Explanation 1].—For the purposes of this clause, a person shall be deemed to be resident inthe district of Ladakh if he fulfils the requirements of sub-section (1)24 or sub-section (2) orsub-section (3) or sub-section (4) of section 6, as the case may be, subject to the modificationsthat—

(i) references in those sub-sections to India shall be construed as references to the saiddistrict; and

(ii) in clause (i) of sub-section (3), reference to Indian company shall be construed asreference to a company formed and registered under any law for the time being in forcein the State of Jammu and Kashmir and having its registered office in that district in thatyear.]

25[Explanation 2.—In this clause, references to the district of Ladakh shall be construed asreferences to the areas comprised in the said district on the 30th day of June, 1979;]

(26AA) 26[* * *]27[(26AAA) 28in case of an individual, being a Sikkimese, any income which accrues or arises to him—

(a) from any source in the State of Sikkim; or(b) by way of dividend or interest on securities:

Provided that nothing contained in this clause shall apply to a Sikkimese woman who, on or afterthe 1st day of April, 2008, marries an individual who is not a Sikkimese.

Explanation.—For the purposes of this clause, "Sikkimese" shall mean—(i) an individual, whose name is recorded in the register maintained under the Sikkim


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Subjects Regulation, 1961 read with the Sikkim Subject Rules, 1961 (hereinafter referredto as the "Register of Sikkim Subjects"), immediately before the 26th day of April, 1975;or

(ii) an individual, whose name is included in the Register of Sikkim Subjects by virtue of theGovernment of India Order No. 26030/36/90-I.C.I., dated the 7th August, 1990 andOrder of even number dated the 8th April, 1991; or

(iii) any other individual, whose name does not appear in the Register of Sikkim Subjects, butit is established beyond doubt that the name of such individual's father or husband orpaternal grand-father or brother from the same father has been recorded in that register;]

29[(26AAB) any income of an agricultural produce market committee or board constituted under any lawfor the time being in force for the purpose of regulating the marketing of agriculturalproduce;]

30[(26B) any income of a corporation established by a Central, State or Provincial Act or of any otherbody, institution or association (being a body, institution or association wholly financed byGovernment) where such corporation or other body or institution or association has beenestablished or formed for promoting the interests of the 31[members of the Scheduled Castesor the Scheduled Tribes or backward classes or of any two or all of them].

32[Explanation.—For the purposes of this clause,—(a) 33"Scheduled Castes" and 34"Scheduled Tribes" shall have the meanings respectively

assigned to them in clauses (24) and (25) of article 366 of the Constitution;(b) "backward classes" means such classes of citizens, other than the Scheduled Castes and

the Scheduled Tribes, as may be notified—(i) by the Central Government; or

(ii) by any State Government, as the case may be, from time to time;]

35[(26BB) any income of a corporation established by the Central Government or any State Governmentfor promoting the interests of the members of a minority community.

Explanation.—For the purposes of this clause, "minority community" means a communitynotified36 as such by the Central Government in the Official Gazette in this behalf;]

37[(26BBB) any income of a corporation established by a Central, State or Provincial Act for the welfareand economic upliftment of ex-servicemen being the citizens of India.

Explanation.—For the purposes of this clause, "ex-serviceman" means a person who hasserved in any rank, whether as combatant or non-combatant, in the armed forces of the Unionor armed forces of the Indian States before the commencement of the Constitution (butexcluding the Assam Rifles, Defence Security Corps, General Reserve Engineering Force,Lok Sahayak Sena, Jammu and Kashmir Militia and Territorial Army) for a continuous periodof not less than six months after attestation and has been released, otherwise than by way ofdismissal or discharge on account of misconduct or inefficiency, and in the case of a deceasedor incapacitated ex-serviceman includes his wife, children, father, mother, minor brother,widowed daughter and widowed sister, wholly dependant upon such ex-servicemanimmediately before his death or incapacitation;]

38[(27) any income of a co-operative society formed for promoting the interests of the members ofeither the Scheduled Castes or Scheduled Tribes or both referred to in clause (26B) :

Provided that the membership of the co-operative society consists of only other co-operativesocieties formed for similar purposes and the finances of the society are provided by theGovernment and such other societies;]


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(28) 39[* * *](29) 40[Omitted by the Finance Act, 2002, w.e.f. 1-4-2003;]

41[(29A) any income accruing or arising to—

(a) the Coffee Board constituted under section 4 of the Coffee Act, 1942 (7 of 1942) in anyprevious year relevant to any assessment year commencing on or after the 1st day ofApril, 1962 or the previous year in which such Board was constituted, whichever is later;

(b) the Rubber Board constituted under sub-section (1) of section 4 of the Rubber Board Act,1947 (24 of 1947) in any previous year relevant to any assessment year commencing onor after the 1st day of April, 1962 or the previous year in which such Board wasconstituted, whichever is later;

(c) the Tea Board established under section 4 of the Tea Act, 1953 (29 of 1953) in anyprevious year relevant to any assessment year commencing on or after the 1st day ofApril, 1962 or the previous year in which such Board was constituted, whichever is later;

(d) the Tobacco Board constituted under the Tobacco Board Act, 1975 (4 of 1975) in anyprevious year relevant to any assessment year commencing on or after the 1st day ofApril, 1975 or the previous year in which such Board was constituted, whichever is later;

(e) the Marine Products Export Development Authority established under section 4 of theMarine Products Export Development Authority Act, 1972 (13 of 1972) in any previousyear relevant to any assessment year commencing on or after the 1st day of April, 1972or the previous year in which such Authority was constituted, whichever is later;

(f) the Agricultural and Processed Food Products Export Development Authority establishedunder section 4 of the Agricultural and Processed Food Products Export DevelopmentAct, 1985 (2 of 1986) in any previous year relevant to any assessment year commencingon or after the 1st day of April, 1985 or the previous year in which such Authority wasconstituted, whichever is later;

(g) the Spices Board constituted under sub-section (1) of section 3 of the Spices Board Act,1986 (10 of 1986) in any previous year relevant to any assessment year commencing onor after the 1st day of April, 1986 or the previous year in which such Board wasconstituted, whichever is later;]

42[(h) the Coir Board established under section 4 of the Coir Industry Act, 1953 (45 of 1953);]43[(30) 44in the case of an assessee who carries on the business of growing and manufacturing tea in

India, the amount of any subsidy received from or through the Tea Board under any suchscheme45 for replantation or replacement of tea bushes 46[or for rejuvenation or consolidation ofareas used for cultivation of tea] as the Central Government may, by notification in the OfficialGazette, specify:

Provided that the assessee furnishes to the 47[Assessing] Officer, along with his return ofincome48 for the assessment year concerned or within such further time as the 47[Assessing]Officer may allow, a certificate from the Tea Board as to the amount of such subsidy paid to theassessee during the previous year.

Explanation.—In this clause, "Tea Board" means the Tea Board established under section 4 of theTea Act, 1953 (29 of 1953);]

49[(31) in the case of an assessee who carries on the business of growing and manufacturing rubber,coffee, cardamom or such other commodity in India, as the Central Government may, bynotification in the Official Gazette, specify in this behalf, the amount of any subsidy received fromor through the concerned Board under any such scheme for replantation or replacement of rubberplants, coffee plants, cardamom plants or plants for the growing of such other commodity or for


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rejuvenation or consolidation of areas used for cultivation of rubber, coffee, cardamom or suchother commodity as the Central Government may, by notification in the Official Gazette, specify:

Provided that the assessee furnishes to the Assessing Officer, along with his return of income50

for the assessment year concerned or within such further time as the Assessing Officer may allow,a certificate from the concerned Board, as to the amount of such subsidy paid to the assesseeduring the previous year.

Explanation.—In this clause, "concerned Board" means,—(i) in relation to rubber, the Rubber Board constituted under section 4 of the Rubber Act,

1947 (24 of 1947),(ii) in relation to coffee, the Coffee Board constituted under section 4 of the Coffee Act,

1942 (7 of 1942),(iii) in relation to cardamom, the Spices Board constituted under section 3 of the Spices Board

Act, 1986 (10 of 1986),(iv) in relation to any other commodity specified under this clause, any Board or other

authority established under any law for the time being in force which the CentralGovernment may, by notification in the Official Gazette, specify in this behalf;]

51[(32) in the case of an assessee referred to in sub-section (1A) of section 64, any income includible inhis total income under that sub-section, to the extent such income does not exceed one thousandfive hundred rupees in respect of each minor child whose income is so includible;]

52[(33) any income arising from the transfer of a capital asset, being a unit of the Unit Scheme, 1964referred to in Schedule I to the Unit Trust of India (Transfer of Undertaking and Repeal) Act,2002 (58 of 2002)53and where the transfer of such asset takes place on or after the 1st day ofApril, 2002;]

54[(34) any income by way of dividends referred to in section 115-O; 55[***]

56[(34A) any income arising to an assessee, being a shareholder, on account of buy back of shares (notbeing listed on a recognised stock exchange) by the company as referred to in section 115QA;]

(35) any income by way of,—(a) income received in respect of the units of a Mutual Fund specified under clause (23D); or(b) income received in respect of units from the Administrator of the specified undertaking;

or(c) income received in respect of units from the specified company:

Provided that this clause shall not apply to any income arising from transfer of units of theAdministrator of the specified undertaking or of the specified company or of a mutual fund, as thecase may be.

Explanation.—For the purposes of this clause,—(a) "Administrator" means the Administrator as referred to in clause (a) of section 2 of the

Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002)57;(b) "specified company" means a company as referred to in clause (h) of section 2 of the Unit

Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002)57;58[(35A) any income by way of distributed income referred to in section 115TA received from a

securitisation trust by any person being an investor of the said trust. Explanation.—For the purposes of this clause, the expressions "investor" and "securitisationtrust" shall have the meanings respectively assigned to them in the Explanation below section


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115TC;](36) any income arising from the transfer of a long-term capital asset, being an eligible equity share in

a company purchased on or after the 1st day of March, 2003 and before the 1st day of March,2004 and held for a period of twelve months or more.

Explanation.—For the purposes of this clause, "eligible equity share" means,—(i) any equity share in a company being a constituent of BSE-500 Index of the Stock

Exchange, Mumbai as on the 1st day of March, 2003 and the transactions of purchaseand sale of such equity share are entered into on a recognised stock exchange in India;

(ii) any equity share in a company allotted through a public issue on or after the 1st day ofMarch, 2003 and listed in a recognised stock exchange in India before the 1st day ofMarch, 2004 and the transaction of sale of such share is entered into on a recognisedstock exchange in India;]

59[(37) in the case of an assessee, being an individual or a Hindu undivided family, any income chargeableunder the head "Capital gains" arising from the transfer of agricultural land, where—

(i) such land is situate in any area referred to in item (a) or item (b) of sub-clause (iii) ofclause (14) of section 2;

(ii) such land, during the period of two years immediately preceding the date of transfer, wasbeing used for agricultural purposes by such Hindu undivided family or individual or aparent of his;

(iii) such transfer is by way of compulsory acquisition under any law, or a transfer theconsideration for which is determined or approved by the Central Government or theReserve Bank of India;

(iv) such income has arisen from the compensation or consideration for such transfer receivedby such assessee on or after the 1st day of April, 2004.

Explanation.—For the purposes of this clause, the expression "compensation orconsideration" includes the compensation or consideration enhanced or further enhancedby any court, Tribunal or other authority;

(38) any income59a arising from the transfer of a long-term capital asset, being an equity sharein a company or a unit of an equity oriented fund 60[or a unit of a business trust]where—

(a) the transaction of sale of such equity share or unit is entered into on or after the date onwhich Chapter VII of the Finance (No. 2) Act, 2004 comes into force61; and

(b) such transaction is chargeable to securities transaction tax under that Chapter : 62[Provided that the income by way of long-term capital gain of a company shall be taken intoaccount in computing the book profit and income-tax payable under section 115JB :]

63 [ 63a[Provided furtherthat the provisions of this clause shall not apply in respect of anyincome arising from transfer of units of a business trust which were acquired in consideration ofa transfer referred to in clause (xvii) of section 47.]]

Explanation.—For the purposes of this clause, "equity oriented fund" means a fund—(i) where the investible funds are invested by way of equity shares in domestic companies to

the extent of more than 64[sixty-five] per cent of the total proceeds of such fund; and(ii) which has been set up under a scheme of a Mutual Fund specified under clause (23D) :

Provided that the percentage of equity shareholding of the fund shall be computed with referenceto the annual average of the monthly averages of the opening and closing figures;]


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65[(39) any specified income, arising from any international sporting event held in India, to the person orpersons notified66 by the Central Government in the Official Gazette, if such international sportingevent—

(a) is approved by the international body regulating the international sport relating to suchevent;

(b) has participation by more than two countries;(c) is notified66 by the Central Government in the Official Gazette for the purposes of this

clause. Explanation.—For the purposes of this clause, "the specified income" means the income, of thenature and to the extent, arising from the international sporting event, which the CentralGovernment may notify66 in this behalf;

(40) any income of any subsidiary company by way of grant or otherwise received from an Indiancompany, being its holding company engaged in the business of generation or transmission ordistribution of power if receipt of such income is for settlement of dues in connection withreconstruction or revival of an existing business of power generation:

Provided that the provisions of this clause shall apply if reconstruction or revival of any existingbusiness of power generation is by way of transfer of such business to the Indian company notifiedunder sub-clause (a) of clause (v) of sub-section (4) of section 80-IA;

(41) any income arising from transfer of a capital asset, being an asset of an undertaking engaged in thebusiness of generation or transmission or distribution of power where such transfer is effected onor before the 31st day of March, 2006, to the Indian company notified under sub-clause (a) ofclause (v) of sub-section (4) of section 80-IA;]

67[(42) any specified income arising to a body or authority which—

(a) has been established or constituted or appointed under a treaty or an agreement enteredinto by the Central Government with two or more countries or a convention signed by theCentral Government;

(b) is established or constituted or appointed not for the purposes of profit;(c) is notified by the Central Government in the Official Gazette68 for the purposes of this

clause. Explanation.—For the purposes of this clause, "specified income" means the income, of thenature and to the extent, arising to the body or authority referred to in this clause, which theCentral Government may notify68 in this behalf;]

69[(43) any amount received by an individual as a loan, either in lump sum or in instalment, in atransaction of reverse mortgage referred to in clause (xvi) of section 47;]

70[(44) any income received by any person for, or on behalf of, the New Pension System Trust establishedon the 27th day of February, 2008 under the provisions of the Indian Trusts Act, 1882 (2 of1882);]

71[(45) any allowance or perquisite, as may be notified72 by the Central Government in the OfficialGazette in this behalf, paid to the Chairman or a retired Chairman or any other member or retiredmember of the Union Public Service Commission;]

73[(46) any specified income arising to a body or authority or Board or Trust or Commission (by whatevername called) which—

(a) has been established or constituted by or under a Central, State or Provincial Act, orconstituted by the Central Government or a State Government, with the object ofregulating or administering any activity for the benefit of the general public;


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(b) is not engaged in any commercial activity; and(c) is notified74 by the Central Government in the Official Gazette for the purposes of this

clause. Explanation.—For the purposes of this clause, "specified income" means the income, of thenature and to the extent arising to a body or authority or Board or Trust or Commission (bywhatever name called) referred to in this clause, which the Central Government may, bynotification in the Official Gazette, specify in this behalf;

(47) any income of an infrastructure debt fund, set up in accordance with the guidelines as may beprescribed,75 which is notified by the Central Government in the Official Gazette for the purposesof this clause;]

76[(48) any income received in India in Indian currency by a foreign company on account of 77[sale ofcrude oil, any other goods or rendering of services, as may be notified by the Central Governmentin this behalf, to any person] in India:

Provided that—(i) receipt of such income in India by the foreign company is pursuant to an agreement or an

arrangement entered into by the Central Government or approved by the CentralGovernment;

(ii) having regard to the national interest, the foreign company and the agreement orarrangement are notified78 by the Central Government in this behalf; and

(iii) the foreign company is not engaged in any activity, other than receipt of such income, inIndia;]

79[(49) any income of the National Financial Holdings Company Limited, being a company set up by theCentral Government, of any previous year relevant to any assessment year commencing on orbefore the 1st day of April, 2014.]

34. For relevant case laws, see Taxmann's Master Guide to Income-tax Act.35. Inserted by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971.36. Inserted by the Finance Act, 1992, w.e.f. 1-4-1993. Earlier, clause (2A) was inserted by the Direct

Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989 and was omitted by the Direct Tax Laws(Amendment) Act, 1989, with effect from the same date.

37. See Circular No. 8/2014, dated 31-3-2014 (Interpretation of section 10(2A) where income of firm isexempt). For details, see Taxmann's Master Guide to Income-tax Act.

38. Omitted by the Finance Act, 2002, w.e.f. 1-4-2003. Prior to its omission, clause (3), as substituted bythe Finance Act, 1972, w.e.f. 1-4-1972 and amended by the Finance Act, 1986, w.e.f. 1-4-1987,Finance (No. 2) Act, 1991, w.e.f. 1-10-1991 and Finance Act, 1992, w.e.f. 1-4-1992, read as under :'(3) any receipts which are of a casual and non-recurring nature, to the extent such receipts do not

exceed five thousand rupees in the aggregate : Provided that where such receipts relate to winnings from races including horse races, theprovisions of this clause shall have effect as if for the words "five thousand rupees", the words"two thousand five hundred rupees" had been substituted :

Provided further that this clause shall not apply to—(i) capital gains chargeable under the provisions of section 45; or


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(ii) receipts arising from business or the exercise of a profession or occupa-tion; or(iii) receipts by way of addition to the remuneration of an employee;'

39. Substituted for clauses (4) and (4A) by the Direct Tax Laws (Amendment) Act, 1987, w.e.f.1-4-1989. Prior to their substitution, clause (4) was amended by the Finance Act, 1964, w.e.f.1-4-1964. Clause (4A) was inserted by the Finance Act, 1964, w.e.f. 1-4-1965, subsequentlyamended by the Finance Act, 1968, w.e.f. 1-4-1969 and substituted by the Finance Act, 1982, w.e.f.1-4-1982.

40. For specified securities, see Notification No. SO 3331, dated 19-10-1965. For details, see Taxmann'sMaster Guide to Income-tax Act.

41. Inserted by the Finance Act, 2002, w.e.f. 1-4-2003.42. Substituted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1991.43. See also Circular No. 592, dated 4-2-1991. For details, see Taxmann's Master Guide to Income-tax

Act.44. Substituted for "the Foreign Exchange Regulation Act, 1973 (46 of 1973)" by the Finance Act, 2013,

w.e.f. 1-4-2013.45. Section 2(w) of FEMA, 1999 defines "person resident outside India", see Appendix.46. Omitted by the Finance Act, 2005, w.e.f. 1-4-2006. Prior to its omission, second proviso, as inserted

by the Finance (No. 2) Act, 2004, w.e.f. 1-4-2006, read as under :

"Provided further that nothing contained in this sub-clause shall apply to any income by way ofinterest paid or credited on or after the 1st day of April, 2005 to the Non-Resident (External)Account of such individual;"

47. Inserted by the Finance Act, 1982, w.e.f. 1-4-1983.48. Inserted by the Finance Act, 2002, w.e.f. 1-4-2003.49. For specified savings certificates, see Notification No. SO 653(E), dated 8-9-1982. For details, see

Taxmann's Master Guide to Income-tax Act.50. Substituted for "the Foreign Exchange Regulation Act, 1973 (46 of 1973)" by the Finance Act, 2013,

w.e.f. 1-4-2013.51. Substituted by the Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-4-1989. Earlier clause

(5) was amended by the Finance Act, 1975, w.e.f. 1-4-1975, the Taxation Laws (Amendment) Act,1970, w.r.e.f. 1-4-1962 and the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.

52. Rule 2B prescribes the conditions as well as quantum of exemption, which are as follows :

Conditions to be satisfied - Conditions to be satisfied are as under :

♦ The exemption is admissible on the value of any travel concession or assistance received by or dueto an assessee from his employer or former employer, as the case may be, for himself and his family,in connection with his proceeding (i) on leave to any place in India, or (ii) to any place in India afterthe retirement from service, or (iii) to any place in India after the termination of his service.

♦ The exemption is admissible in respect of actual expenditure incurred for journeys performed, notonly by the assessee but also by his family.

For this purpose, 'family' means (i) the spouse and children of the assessee, and (ii) the parents,brothers and sisters of the assessee provided that they are wholly or mainly dependent on theassessee. With effect from 1-10-1997, the Central Civil Service Leave Travel Concession Rules havebeen amended in this respect.

♦ The exemption can be availed only in respect of two journeys performed in a block of fourcalendar years. For this purpose, the first four-year block commenced with the calendar year 1986.Thus, the four-year blocks will be 1986-89, 1990-93, 1994-97, 1998-2001, 2002-05, 2006-09 and soon.


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♦ If an assessee has not availed travel concession or assistance during any of the specified four-yearblock periods on one of the two permitted occasions, or on both occasions, exemption can beclaimed provided he avails the concession or assistance in the calendar year immediately followingthat block. This is popularly known as the 'carry-over' concession. In such cases, the exemption soavailed will not be counted for purposes of regulating the future exemptions allowable for thesucceeding block of four years.

Quantum of exemption.—The basic rule is that the quantum of exemption will be limited to theactual expenses incurred on the journey. This pre-supposes that, without performing any journey andincurring expenses thereon, no exemption can be claimed.

In addition to the above general limitation, the quantum of exemption will also be subject to thefollowing maximum limits, depending upon the mode of transport used or available:

JOURNEYS PERFORMED ON OR AFTER 1-10-1997

■ For journeys performed by Air ■ Air economy fare of the national carrier (IndianAirlines or Air India) by the shortest route to theplace of destination.

■ Where place of origin of journey anddestination are connected by rail andthe journey is performed by any modeof transport other than by air

■ Air-conditioned first class rail fare by the shortestroute to the place of destination.

■ Where place of origin of journey anddestination or part thereof are notconnected by rail

■ (i) Where a recognised public transport systemexists, the first class or deluxe class fare on suchtransport by the shortest route to the place ofdestination.(ii) Where no recognised public transport systemexists, the air-conditioned first class rail fare, forthe distance of the journey by the shortest route, asif the journey has been performed by rail.

Restricted concession for children.—Under sub-rule (4) of rule 2B, inserted with effect from1-10-1997, exemption on travel concession will not be admissible to more than two survivingchildren of an individual born after 1-10-1998. This restriction will not however apply in respect ofchildren born before 1-10-1998, and also in cases where an individual, after getting one child, begetsmultiple children (twins/triplets/quadruplets, etc.) on the second occasion. The implications of thisrestriction will be as follows :

♦ In respect of journeys performed on or before 1-10-1998 exemption will be admissible inrespect of all the surviving children of the individual.

♦ In respect of journeys performed after 1-10-1998- the exemption will be admissible to all surviving children born before 1-10-1998;- in addition, the exemption will be admissible to only two surviving children born on or

after 1-10-1998. In reckoning this limit of two children, children born out of multiplebirth after the first child will be treated as 'one child' only.

It may be noted that section 2(15B) of the Act defines a 'child' as includes 'a step-child and anadopted child of the individual'. Hence the aforesaid restrictions will operate in respect ofstep-children and adopted children also provided they are born on or after 1-10-1998.


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53. Prior to its omission, clause (5A) was inserted by the Taxation Laws (Amendment) Act, 1984, w.r.e.f.1-4-1982.

54. Prior to its omission, clause (5B), as inserted by the Finance Act, 1993, w.e.f. 1-4-1994 and later onamended by the Finance Act, 1999, w.e.f. 1-4-1999, read as under :

'(5B) in the case of an individual who renders services as a technician in the employment(commencing from a date after the 31st day of March, 1993) of the Government or of a localauthority or of any corporation set up under any special law or of any such institution or bodyestablished in India for carrying on scientific research as is approved for the purposes of thisclause by the prescribed authority or in any business carried on in India and the individual wasnot resident in India in any of the four financial years immediately preceding the financial yearin which he arrived in India and the tax on his income for such services chargeable under thehead "Salaries" is paid to the Central Government by the employer [which tax, in the case ofan employer, being a company, may be paid notwithstanding anything contained in section 200of the Companies Act, 1956 (1 of 1956)], the tax so paid by the employer for a period notexceeding forty-eight months commencing from the date of his arrival in India :

Provided that the Central Government may, if it considers it necessary or expedient in thepublic interest so to do, waive the condition relating to non-residence in India as specified inthis clause in the case of any individual who is employed in India for designing, erection orcommissioning of machinery or plant or supervising activities connected with such designing,erection or commissioning.

Explanation.—For the purposes of this clause, "technician" means a person having specialisedknowledge and experience in—

(i) constructional or manufacturing operations, or in mining or in the generation ofelectricity or any other form of power, or

(ii) agriculture, animal husbandry, dairy farming, deep sea fishing or ship building, or(iii) such other field as the Central Government may, having regard to availability of

Indians having specialised knowledge and experience therein, the needs of the countryand other relevant circumstances, by notification in the Official Gazette, specify,

who is employed in India in a capacity in which such specialised knowledge and experience areactually utilised ;'

55. Omitted by the Finance Act, 2002, w.e.f. 1-4-2003. Prior to its omission, sub-clause (i), assubstituted by the Taxation Laws (Amendment) Act, 1970, w.r.e.f. 1-4-1962 and amended by theFinance (No. 2) Act, 1977, w.r.e.f. 1-4-1972 and the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999,read as under :"(i) subject to such conditions as the Central Government may prescribe, passage moneys or the

value of any free or concessional passage received by or due to such individual—(a) from his employer, for himself, his spouse and children, in connection with his

proceeding on home leave out of India ;(aa) [* * *](b) from his employer or former employer for himself, his spouse and children, in

connection with his proceeding to his home country out of India after retirement fromservice in India or after the termination of such service ;"

56. Substituted for sub-clauses (ii) to (v) by the Finance Act, 1988, w.e.f. 1-4-1989.57. Prior to its omission, sub-clause (via) was inserted by the Taxation Laws (Amendment) Act, 1975,

w.e.f. 1-10-1975.58. Prior to omission, sub-clause (vii) was amended by the Finance Act, 1964, w.e.f. 1-4-1964, Finance

Act, 1965, w.e.f. 1-4-1965 and Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971.59. Prior to its omission, sub-clause (viia) was inserted by the Taxation Laws (Amendment) Act, 1970,


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w.e.f. 1-4-1971 and later on amended by the Direct Taxes (Amendment) Act, 1974, w.r.e.f.1-4-1973, Finance Act, 1979, w.e.f. 1-6-1979, Finance Act, 1988, w.e.f. 1-4-1988, Finance Act,1992, w.e.f. 1-6-1992 and Finance Act, 1993, w.e.f. 1-4-1993.

60. For the meaning of the term "ship", see Taxmann's Direct Taxes Manual, Vol. 3.61. Prior to omission, sub-clauses (ix) and (x) were inserted by the Finance Act, 1964, w.e.f. 1-4-1964.62. Inserted by the Finance Act, 1976, w.e.f. 1-4-1976.63. Inserted by the Finance Act, 1983, w.e.f. 1-4-1984.64. Inserted by the Finance Act, 2002, w.e.f. 1-4-2003.65. Substituted for "and approved by the Central Government, the tax on such income is payable, under

the terms of such agreement, by Government or the Indian concern to the Central Government, thetax so paid" by the Finance Act, 1992, w.e.f. 1-6-1992.

66. Inserted by the Finance Act, 1988, w.e.f. 1-4-1988.67. Inserted by the Finance Act, 2002, w.e.f. 1-4-2003.68. Inserted by the Finance Act, 1997, w.e.f. 1-4-1998.69. Substituted for "an agreement entered after the 31st day of March, 1997 (but before the 1st day of

April, 1999) and approved by the Central Government in this behalf" by the Finance (No. 2) Act,2004, w.e.f. 1-4-2006. Words "30th day of September, 2005" substituted for "31st day of March,2005" by the Finance Act, 2005, w.e.f. 1-4-2006. Earlier the bracketed words were amended by theFinance Act, 1999, w.e.f. 1-4-2000.

70. Substituted for "30th day of September, 2005" by the Taxation Laws (Amendment) Act, 2005, w.e.f.1-4-2006.

71. Substituted for "2006" by the Finance Act, 2006, w.e.f. 1-4-2007.72. Inserted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.73. For notified companies, see Taxmann's Master Guide to Income-tax Act.74. Inserted by the Finance Act, 2003, w.e.f. 1-4-2004.75. For the meaning of the expression "paid or allowed ... by the Government", see Taxmann's Direct

Taxes Manual, Vol. 3.76. Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1991.77. The prescribed authority under rule 16B is Additional Secretary, Department of Economic Affairs in

Ministry of Finance, Government of India in concurrence with Member (Income-tax), CBDT.78. Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1991.79. Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1991.80. Substituted by the Finance Act, 1974, w.e.f. 1-4-1975. Original clause was amended first by the

Finance Act, 1972, w.e.f. 1-4-1973 and then by the Finance Act, 1974, w.r.e.f. 1-6-1972/1-4-1962.81. See also Letter F. No. 1(79)-62/TPL, dated 13-12-1962 and Letter F. No. 194/6/73-IT (A-I), dated

19-6-1973. For details, see Taxmann's Master Guide to Income-tax Act.82. For relevant case laws, see Taxmann's Master Guide to Income-tax Act.83. For text of sub-sections (2) and (3) of section 4 of the Payment of Gratuity Act, 1972, see

Appendix.

The limit laid down under section 4(3) of the Payment of Gratuity Act, 1972 [as amended by thePayment of Gratuity (Amendment) Act, 2010, with effect from 24-5-2010] is Rs. 10,00,000.

84. For the meaning of the expression "each year of completed service", see Taxmann's Direct TaxesManual, Vol. 3.

85. Substituted for "calculated on the basis of the average salary for the three years immediatelypreceding the year in which the gratuity is paid, subject to a maximum of *thirty-six thousand rupeesor twenty months' salary so calculated, whichever is less" by the Direct Tax Laws (Amendment) Act,1987, w.e.f. 1-4-1989.

*Substituted for "thirty thousand rupees" by the Finance Act, 1983, w.r.e.f. 1-4-1982.


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86. Rs. 10,00,000 has been specified as the limit in case of retirement, etc., on or after 24-5-2010 videNotification No. SO 1414(E), dated 11-6-2010. For details, see Taxmann's Master Guide toIncome-tax Act. See also footnote No. 83 above.

87. For meaning of the expression "this clause", see Taxmann's Direct Taxes Manual, Vol. 3.88. Substituted for "shall not exceed *thirty-six thousand rupees" by the Direct Tax Laws (Amendment)

Act, 1987, w.e.f. 1-4-1989.

*Substituted for "thirty thousand rupees" by the Finance Act, 1983, w.r.e.f. 1-4-1982.

89. Omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. Original third and fourthprovisos were inserted by the Finance Act, 1983, w.r.e.f. 1-4-1982.

90. Substituted for "In this clause" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.91. Inserted by the Finance (No. 2) Act, 1965, w.r.e.f. 1-4-1962.92. See also Circular No. 286, dated 17-11-1980 and Circular No. 623, dated 6-1-1992. For details, see

Taxmann's Master Guide to Income-tax Act.93. For relevant case laws, see Taxmann's Master Guide to Income-tax Act.94. Substituted for "to the members of the Defence Services or to the employees of a State Government,

a local authority" by the Finance Act, 1974, w.r.e.f. 1-4-1962.95. Proviso omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.96. Inserted by the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997.97. Inserted by the Finance Act, 1982, w.r.e.f. 1-4-1978.98. For relevant case laws, see Taxmann's Master Guide to Income-tax Act.99. For the meaning of the terms "salary", "retirement", "at the time of his retirement" and "or

otherwise", see Taxmann's Direct Taxes Manual, Vol. 3.1. Inserted by the Taxation Laws (Amendment) Act, 1984, w.r.e.f. 1-4-1978.2. Substituted for "eight" by the Finance Act, 1999, w.r.e.f. 1-4-1998. Earlier "eight" was substituted for

"six" by the Direct Tax Laws (Amendment) Act, 1987, w.r.e.f. 1-7-1986.3. Substituted for "or thirty thousand rupees, whichever is less" by the Direct Tax Laws (Amendment)

Act, 1987, w.r.e.f. 1-7-1986.4. Specified exemption limit applicable in relation to employees who retire, whether on superannuation

or otherwise, after 1-4-1998 : Rs. 3,00,000 - Notification No. SO 588(E), dated 31-5-2002. Fordetails, see Taxmann's Master Guide to Income-tax Act.

5. Substituted for "shall not exceed thirty thousand rupees" by the Direct Tax Laws (Amendment) Act,1987, w.r.e.f. 1-7-1986.

6. Substituted for "shall not exceed thirty thousand rupees" by the Direct Tax Laws (Amendment) Act,1987, w.r.e.f. 1-7-1986.

7. Third and fourth provisos omitted by the Direct Tax Laws (Amendment) Act, 1987, w.r.e.f. 1-7-1986.Prior to their omission, the third and fourth provisos were amended by the Taxation Laws(Amendment) Act, 1984, w.r.e.f. 1-4-1978.

8. "(i)" omitted by the Direct Tax Laws (Amendment) Act, 1987, w.r.e.f. 1-7-1986.9. Clause (ii) omitted by the Direct Tax Laws (Amendment) Act, 1987, w.r.e.f. 1-7-1986.10. Inserted by the Finance Act, 1975, w.e.f. 1-4-1976.11. Substituted for the following by the Finance Act, 1985, w.e.f. 1-4-1986 :

"at the time of his retrenchment, to the extent such compensation does not exceed—

(i) an amount calculated in accordance with the provisions of clause (b) of section 25F of theIndustrial Disputes Act, 1947 (14 of 1947) ; or

(ii) twenty thousand rupees,

whichever is less."

12. Clause (b) of section 25F of the Industrial Disputes Act, 1947, read as follows :


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"(b) the workman has been paid, at the time of retrenchment, compensation which shall beequivalent to fifteen days' average pay for every completed year of continuous service or anypart thereof in excess of six months ; and"

13. Substituted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.14. Maximum limit is Rs. 5,00,000 where retrenchment is on or after 1-1-1997 - Notification No. 10969

[F. No. 200/21/97-IT(A-I)], dated 25-6-1999.15. For text of clause (g) and clause (s) of section 2 of the Industrial Disputes Act, 1947, defining

"employer" and "workman", respectively, see Appendix.16. Inserted by the Finance Act, 1992, w.e.f. 1-4-1992.17. Inserted by the Finance Act, 2007, w.r.e.f. 1-4-2005.18. For the definition of term "disaster", see Appendix.19. Substituted by the Finance Act, 1993, w.e.f. 1-4-1993. Prior to substitution, clause (10C) was

inserted by the Finance Act, 1987, w.e.f. 1-4-1987 and later substituted by the Finance Act, 1992,w.e.f. 1-4-1993.

20. See also Circular No. 640, dated 26-11-1992 and Circular F. No. 184/7/2003-ITAT, dated 4-3-2004.For details, see Taxmann's Master Guide to Income-tax Act.

21. For the meaning of expression "amount received", see Taxmann's Direct Taxes Manual, Vol. 3.22. Inserted by the Finance Act, 2003, w.e.f. 1-4-2004.23. Substituted for "authority," by the Finance Act, 1994, w.e.f. 1-4-1995.24. Inserted by the Finance Act, 1994, w.e.f. 1-4-1995.25. Clause (g) of section 3 of the Institutes of Technology Act, 1961, defines "Institute" as follows :

'(g) "Institute" means any of the Institutions mentioned in section 2 and includes the IndianInstitute of Technology, Kharagpur, incorporated under the Indian Institute of Technology(Kharagpur) Act, 1956 (5 of 1956);'

26. Inserted by the Finance Act, 2001, w.e.f. 1-4-2001.27. Inserted by the Finance Act, 2001, w.e.f. 1-4-2001, w.e.f. 1-4-2002.28. Inserted by the Finance Act, 2002, w.e.f. 1-4-2002.29. For notified institutions, see Taxmann's Master Guide to Income-tax Act.30. For notified Institutes of Management, see Taxmann's Master Guide to Income-tax Act.31. Substituted for "at the time of his" by the Finance Act, 2003, w.e.f. 1-4-2004.32. Substituted for "voluntary retirement, in accordance with any scheme or schemes of voluntary

retirement, to the extent such amount does not exceed five lakh rupees" by the Finance Act, 2000,w.e.f. 1-4-2001.

33. Inserted by the Finance Act, 1994, w.e.f. 1-4-1995.34. Rule 2BA prescribes requirements for a Scheme of Voluntary Retirement, which are as follows :

(1) It applies to an employee who has completed ten years of service or completed 40 years of age.This condition is not applicable in case of amount received by an employee of a public sectorcompany under scheme of voluntary separation framed by the said company. (2) It applies to allemployees (by whatever name called), including workers and executives of the company/authority/co-operative society excepting directors of the company/co-operative society. (3) The scheme ofvoluntary retirement/separation has been drawn to result in overall reduction in the existing strengthof the employees. (4) The vacancy caused by voluntary retirement/separation is not to be filled up,nor, the retiring employee is to be employed in another company or concern belonging to the samemanagement. (5) The amount receivable on account of voluntary retirement/separation of theemployees, does not exceed the amount equivalent to three months' salary for each completed yearof service or salary at the time of retirement multiplied by the balance months of service left beforethe date of his retirement on superannuation.

35. Words "and such schemes in relation to companies referred to in sub-clause (ii) or co-operativesocieties referred to in sub-clause (v) are approved by the Chief Commissioner or, as the case may


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be, Director-General in this behalf" omitted by the Finance Act, 2000, w.e.f. 1-4-2001. Earlier thequoted words were amended by the Finance Act, 1994, w.e.f. 1-4-1995.

35a. For the meaning of the term "thereunder", see Taxmann's Direct Taxes Manual, Vol. 3.36. Inserted by the Finance (No. 2) Act, 2009, w.e.f. 1-4-2010.37. Inserted by the Finance Act, 2002, w.e.f. 1-4-2003.38. There is no provision corresponding to section 200 of the Companies Act, 1956 in the Companies

Act, 2013.39. Substituted by the Finance Act, 2003, w.e.f. 1-4-2004. Prior to its substitution, clause (10D), as

inserted by the Finance (No. 2) Act, 1991, w.r.e.f. 1-4-1962, and later on amended by the FinanceAct, 1995, w.e.f. 1-4-1996 and Finance (No. 2) Act, 1996, w.e.f. 1-10-1996, read as under :

'(10D) any sum received under a life insurance policy, including the sum allocated by way of bonus onsuch policy other than any sum received under sub-section (3) of section 80DDA or under aKeyman insurance policy.

Explanation.—For the purposes of this clause, "Keyman insurance policy" means a lifeinsurance policy taken by a person on the life of another person who is or was the employee ofthe first mentioned person or is or was connected in any manner whatsoever with the businessof the first mentioned person;'

40. Inserted by the Finance Act, 2012, w.e.f. 1-4-2013.41. Substituted for "this sub-clause" by the Finance Act, 2012, w.e.f. 1-4-2013.*With effect from 1-4-2004, section 80DD has been substituted for sections 80DD & 80DDA.42. Substituted for "this sub-clause" by the Finance Act, 2012, w.e.f. 1-4-2013.43. Substituted for "Explanation to sub-section (2A) of section 88" by the Finance Act, 2005, w.e.f.

1-4-2006.44. Inserted by the Finance Act, 2013, w.e.f. 1-4-2014.45. Explanation renumbered as Explanation 1 by the Finance Act, 2012, w.e.f. 1-4-2013.46. Inserted by the Finance Act, 2013, w.e.f. 1-4-2014.47. Inserted by the Finance Act, 2012, w.e.f. 1-4-2013.48. Inserted by the Finance Act, 1968, w.e.f. 1-4-1969.49. For notified public provident fund, see Notification No. SO 2430, dated 2-7-1968. For details, see

Taxmann's Master Guide to Income-tax Act.49a. Inserted by the Finance Act, 2015, w.e.f. 1-4-2015.49b. For details, see Taxmann's Direct Taxes Manual, Vol. 2.50. Substituted by the Finance Act, 1965, w.r.e.f. 1-4-1962.51. Inserted by the Direct Taxes (Amendment) Act, 1964, w.e.f. 6-10-1964.52. See also Circular No. 90, dated 26-6-1972, Letter F. No. 12/19/64-IT(A-I), dated 2-1-1967 and

Circular No. 17/2014, dated 10-12-2014 (Production of rent receipts). For details, see Taxmann'sMaster Guide to Income-tax Act.

53. "(not exceeding four hundred rupees per month)" omitted by the Finance Act, 1986, w.e.f. 1-4-1987.Earlier, in this omitted expression "four" was substituted for "three" by the Finance Act, 1975, w.e.f.1-4-1975.

54. Rule 2A prescribes the quantum of exemption available, which will be the least of the following :Bombay/Calcutta/Delhi/Madras Other Cities

■ Allowance actually received ■ Allowance actually received

■ Rent paid in excess of 10% of salary ■ Rent paid in excess of 10% of salary

■ 50 per cent of salary ■ 40 per cent of salary

'Salary' for this purpose includes basic salary as well as dearness allowance if the terms ofemployment so provide. It also includes commission based on a fixed percentage of turnover


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achieved by an employee as per terms of contract of employment but excludes all other allowancesand perquisites. In view of Explanation (ii) to rule 2A, basic pay, dearness allowance andcommission are determined on 'due' basis in respect of the period during which rentalaccommodation is occupied by the employee in the previous year. Thus, emoluments of a periodother than previous year are not to be considered, even though such amount is received (as well astaxed) during the previous year. Again, emoluments of the period during which rentalaccommodation is not occupied in the previous year are left out of computation. It is important tonote that where rent paid is 10 per cent or less than 10 per cent of salary, no exemption will beadmissible. Again exemption is denied where an employee lives in his own house, or in a house forwhich he does not pay rent.

55. Inserted by the Taxation Laws (Amendment) Act, 1984, w.r.e.f. 1-4-1976.56. Substituted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. Prior to its

substitution, clause (14) was amended by the Finance Act, 1975, w.r.e.f. 1-4-1962.57. For the meaning of the term/expression "incurred" and "office or employment of profit", see

Taxmann's Direct Taxes Manual, Vol. 3.58. Substituted for "as the Central Government may, by notification in the Official Gazette, specify" by

the Finance Act, 1995, w.e.f. 1-7-1995.

For prescribed allowances, see rule 2BB(1).

59. For the meaning of the expression "office or employment of profit", see Taxmann's Direct TaxesManual, Vol. 3.

60. Substituted for "as the Central Government may, by notification in the Official Gazette, specify, tothe extent specified in the notification" by the Finance Act, 1995, w.e.f. 1-7-1995.

For prescribed allowances, see rule 2BB(2).

61. Inserted by the Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-4-1989.62. Omitted by the Finance Act, 2002, w.e.f. 1-4-2003. Prior to its omission, clause (14A), as inserted by

the Finance Act, 1989, w.e.f. 1-4-1989, read as under :' (14A) any income received by a public financial institution as exchange risk premium from any

person borrowing foreign currency from such institution, provided the amount of such premiumis credited by such institution to a fund specified under clause (23E).

Explanation.—For the purposes of this clause,—(i) the expression "public financial institution" shall have the meaning assigned to it in

section 4A of the Companies Act, 1956 (1 of 1956) ;(ii) the expression "exchange risk premium" means a premium paid by a person borrowing

foreign currency from a public financial institution to cover the risk which may beborne by such institution on account of fluctuations in exchange rate of foreigncurrencies borrowed by such institution ;'

63. Substituted for sub-clauses (i), (ia), (ib), (ii) and (iia) by the Direct Tax Laws (Amendment) Act,1987, w.e.f. 1-4-1989. Original sub-clauses (ia) and (ib) were inserted by the Taxation Laws(Amendment & Miscellaneous Provisions) Act, 1965, w.e.f. 4-12-1965 and Special Bearer Bonds(Immunities & Exemptions) Act, 1981, w.e.f. 12-1-1981, respectively; sub-clause (ii) was amendedby the Finance (No. 2) Act, 1965, w.e.f. 11-9-1965, the Finance Act, 1979, w.e.f. 1-4-1980 and theFinance Act, 1987, w.r.e.f. 1-4-1983; and sub-clause (iia) was inserted by the Finance Act, 1968,w.e.f. 1-4-1969.

64. For notified securities, bonds, annuity certificates, savings certificates, etc., see Taxmann's MasterGuide to Income-tax Act.

65. Inserted by the Finance Act, 1982, w.e.f. 1-4-1983.66. Inserted by the Finance Act, 1983, w.e.f. 1-4-1983.


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67. For notified capital investment bonds, see Taxmann's Master Guide to Income-tax Act.68. Inserted by the Finance Act, 2002, w.e.f. 1-4-2003.69. Inserted by the Finance Act, 1988, w.e.f. 1-4-1989.70. For details, see Taxmann's Master Guide to Income-tax Act.71. Inserted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.72. For specified NRI bonds, see Taxmann's Master Guide to Income-tax Act.73. Inserted by the Finance Act, 2002, w.e.f. 1-4-2003.74. Inserted by the Finance Act, 1985, w.e.f. 1-4-1985.75. Substituted for "the Explanation to clause (iii) of sub-section (5) of section 11" by the Direct Tax

Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.76. Inserted by the Taxation Laws (Amendment) Act, 2003, w.r.e.f. 1-4-2001.77. Inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-4-2005.78. Substituted by the Finance Act, 2001, w.e.f. 1-4-2002. Prior to its substitution, item (a), as amended

by the Finance Act, 1983, w.e.f. 1-4-1983, read as under :"(a) by Government or a local authority on moneys borrowed by it from, or debts owed by it to,

sources outside India ;"79. Substituted for "a loan agreement entered into with any such financial institution" by the Finance

Act, 2001, w.e.f. 1-4-2002.80. For approved institutions, see Taxmann's Master Guide to Income-tax Act.81. See also Letter [F. No. 21/221/64-IT(A-I)], dated 24-8-1964. For details, see Taxmann's Master

Guide to Income-tax Act. For form of application for obtaining exemption, log on towww.taxmann.com.

82. Inserted by the Finance Act, 2001, w.e.f. 1-4-2002.83. Inserted by the Finance Act, 1983, w.e.f. 1-4-1983.84. Substituted for "in any case where the loan or debt is approved by the Central Government, having

regard to its terms generally and in particular to the terms of its repayment" by the Finance Act,1964, w.e.f. 1-4-1964.

85. For the meaning of the term "in this behalf", see Taxmann's Direct Taxes Manual, Vol. 3.86. Inserted by the Finance Act, 1983, w.e.f. 1-4-1983.87. Explanation renumbered as Explanation 1 by the Taxation Laws (Amendment) Act, 2003, w.r.e.f.

1-4-1962.88. Inserted by the Taxation Laws (Amendment) Act, 2003, w.r.e.f. 1-4-1962.89. Inserted by the Direct Taxes (Amendment) Act, 1974, w.r.e.f. 1-4-1973.90. Inserted by the Finance Act, 1983, w.e.f. 1-4-1983.91. Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1991.92. Inserted by the Finance Act, 1992, w.e.f. 1-4-1992.93. Inserted by the Finance Act, 2001, w.e.f. 1-4-2002.94. Inserted by the Direct Taxes (Amendment) Act, 1974, w.r.e.f. 1-4-1973.95. Inserted by the Finance Act, 2001, w.e.f. 1-4-2002.96. Inserted by the Finance Act, 1976, w.e.f. 1-6-1976.97. Inserted by the Finance Act, 2001, w.e.f. 1-4-2002.98. Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1991.99. Words "before the 1st day of April, 2005" omitted by the Finance Act, 2005, w.e.f. 1-4-2006. Earlier

the quoted words were inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-4-2006.1. Inserted by the Finance Act, 1993, w.e.f. 1-4-1993.2. Substituted by the Finance Act, 2007, w.e.f. 1-4-2007. Prior to its substitution, the Explanation read

as under :

'Explanation.—For the purposes of this item, the expression "scheduled bank" shall have themeaning assigned to it in clause (ii) of the Explanation to clause (viia) of sub-section (1) of section36;'


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3. Inserted by the Finance Act, 1983, w.e.f. 1-4-1983.4. Substituted for "being a company approved by the Central Government for the purposes of clause

(viii) of sub-section (1) of section 36" by the Finance Act, 2000, w.e.f. 1-4-2000.5. Inserted by the Finance Act, 2003, w.e.f. 1-4-2004.6. Substituted for "this item" by the Finance Act, 1983, w.e.f. 1-4-1983.7. Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1991.8. For text of section 2(m) of FEMA, 1999, defining "foreign currency", see Appendix.9. Substituted for "the Foreign Exchange Regulation Act, 1973 (46 of 1973)" by the Finance Act, 2013,

w.e.f. 1-4-2013.†Should be read as 'clause (6)'.10. Inserted by the Finance Act, 1987, w.e.f. 1-4-1987.11. For specified bonds/debentures of public sector companies, log on to www.taxmann.com.12. Inserted by the Finance Act, 1989, w.e.f. 1-4-1990.13. Inserted by the Finance Act, 1990, w.e.f. 1-4-1991.14. For notified deposit schemes for retired Government employees/employees of public sector

companies, refer Taxmann's Direct Taxes Manual, Vol. 3. No new account can be opened under theSchemes, from the close of business on 9-7-2004. For details, see Taxmann's Master Guide toIncome-tax Act.

15. Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1991.16. Explanation renumbered as Explanation 1 by the Finance Act, 1999, w.e.f. 1-4-2000.17. Inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999.18. Inserted by the Finance Act, 1997, w.e.f. 1-4-1998.19. Inserted by the Taxation Laws (Amendment) Act, 2003, w.r.e.f. 1-4-1991.20. Substituted by the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997. Prior to its substitution, clause (e) was

inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1991.21. Substituted by the Finance Act, 2001, w.e.f. 1-4-2002. Prior to its substitution, Explanation 1A, as

inserted by the Finance Act, 2000, w.e.f. 1-4-2001, read as under :

'Explanation 1A.—For the purposes of this sub-clause, the expression "interest" shall not includeinterest paid on delayed payment of loan or on default.'

22. Inserted by the Finance Act, 1999, w.e.f. 1-4-2000.23. Substituted by the Finance Act, 1995, w.e.f. 1-4-1995. Prior to its substitution, sub-clause (v) was

inserted by the Finance Act, 1990, w.r.e.f. 1-4-1989 and later amended by the Finance Act, 1993,w.r.e.f. 2-11-1992.

24. For notified accounts, see Taxmann's Master Guide to Income-tax Act.25. Inserted by the Finance Act, 1999, w.e.f. 1-4-2000.26. Substituted by the Finance Act, 2007, w.e.f. 1-4-2008. Prior to its substitution, sub-clause (vii), as

inserted by the Finance Act, 2000, w.e.f. 1-4-2001, read as under :"(vii) interest on bonds—

(a) issued by a local authority; and(b) specified by the Central Government by notification in the Official Gazette;"

27. For notified bonds issued by local authorities, see Taxmann's Master Guide to Income-tax Act.28. Inserted by the Special Economic Zones Act, 2005, w.e.f. 10-2-2006.29. For definition of "offshore banking unit", see Appendix.30. Substituted by the Finance Act, 1995, w.e.f. 1-4-1996. Prior to its substitution, clause (15A) was

inserted by the Income-tax (Amendment) Act, 1989, w.e.f. 24-1-1989.31. For the meaning of the expression "to acquire aircraft on lease", see Taxmann's Direct Taxes

Manual, Vol. 3.32. Inserted by the Finance Act, 1997, w.e.f. 1-4-1998.33. Substituted for "entered before the 1st day of April, 1997" by the Finance Act, 1999, w.e.f.


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1-4-2000.34. Inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-4-2006.35. Substituted for "1st day of October, 2005" by the Taxation Laws (Amendment) Act, 2005, w.e.f.

1-4-2006. Earlier "1st day of October, 2005" was substituted for "1st day of April, 2005" by theFinance Act, 2005, w.e.f. 1-4-2006.

36. Substituted for "2006" by the Finance Act, 2006, w.e.f. 1-4-2007.37. See also Letter [F. No. 24/35/66-IT(A-I)], dated 4-10-1966, Letter [F. No. 24/2/69-IT (A-I)], dated

14-1-1968, Letter [F. No. 24/25/68-IT(A-I)], dated 18-9-1966, Letter [F. No. 24/22/67-IT(A-I)],dated 7-7-1967, Letter [F. No. 25/37/66-IT(A-I)], dated 2-12-1966, Letter [F. No. 24/7/64-IT(A-I)],dated 24-3-1964, Letter [F. No. 24/4/64-IT(A-I)], dated 12-2-1964, Letter [F. No. 24/34/62-IT(A-I)],dated 25-1-1963, Circular No. 3(XXIII-23), dated 12-1-1961, Circular No. 49(XXIII-12), dated13-12-1956, Income-tax Circulars, published by Directorate of Inspection (Research, Statistics andPublication), 1968 edn., page 89 and Circular No. 11(XXIII-24), dated 4-4-1961. For details, seeTaxmann's Master Guide to Income-tax Act.

38. For relevant case laws, see Taxmann's Master Guide to Income-tax Act.38a. For the meaning of the expression "cost of education", see Taxmann's Direct Taxes Manual, Vol. 3.39. Substituted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f.

1-4-1986. Prior to its substitution, clause (17) was amended by the Finance Act, 1976, w.e.f.1-4-1976.

40. Word "and" omitted by the Finance Act, 1987, w.r.e.f. 1-4-1986.41. Substituted by the Finance Act, 1987, w.r.e.f. 1-4-1986. Earlier sub-clause (ii) was amended by the

Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986, w.e.f. 1-4-1986.42. Substituted by the Finance Act, 2006, w.e.f. 1-4-2007. Prior to its substitution, sub-clause (iii), as

amended by the Finance Act, 1997, w.e.f. 1-4-1998, read as under :"(iii) all other allowances not exceeding two thousand rupees per month in the aggregate received by

any person by reason of his membership of any State Legislature or of any Committee thereof,which the Central Government may, by notification in the Official Gazette, specify in thisbehalf;"

43. Substituted for clauses (17A), (17B) and (18) by the Direct Tax Laws (Amendment) Act, 1987, w.e.f.1-4-1989. Original clauses (17A) and (17B) were inserted by the Direct Taxes (Amendment) Act,1974, w.r.e.f. 1-4-1973. Clause (17A) was later on amended by the Finance Act, 1980, w.e.f.1-4-1980.

44. For notified awards/rewards, see Taxmann's Master Guide to Income-tax Act.45. Inserted by the Finance Act, 1999, w.e.f. 1-4-2000.46. For notified gallantry awards, see Taxmann's Master Guide to Income-tax Act.47. Prior to its omission, clause (18A) was inserted by the Rulers of Indian States (Abolition of

Privileges) Act, 1972, w.e.f. 9-9-1972.48. Inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-4-2005. Earlier original clause (19) was omitted

by the Rulers of Indian States (Abolition of Privileges) Act, 1972, w.e.f. 2-4-1973.49. See rule 2BBA for prescribed circumstances and conditions.50. Inserted by the Rulers of Indian States (Abolition of Privileges) Act, 1972, w.r.e.f. 28-12-1971.51. For the meaning of the term "occupation", see Taxmann's Direct Taxes Manual, Vol. 3.52. For relevant case laws, see Taxmann's Master Guide to Income-tax Act.53. ' "Interest on securities", ' omitted by the Finance Act, 1988, w.e.f. 1-4-1989.54. Substituted for "within its own jurisdictional area" by the Finance (No. 2) Act, 1971, w.e.f. 1-4-1972.55. Inserted by the Finance Act, 2002, w.e.f. 1-4-2003.56. See Appendix.57. For text of article 243P of the Constitution, see Appendix.58. For text of section 3 of the Cantonments Act, 1924, see Appendix.59. Omitted by the Finance Act, 2002, w.e.f. 1-4-2003. Prior to its omission, clause (20A), as inserted by


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the Finance Act, 1970, w.r.e.f. 1-4-1962, read as under :"(20A) any income of an authority constituted in India by or under any law enacted either for the

purpose of dealing with and satisfying the need for housing accommodation or for the purposeof planning, development or improvement of cities, towns and villages, or for both;"

60. Substituted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1990. Earlier clause (21)was amended by the Finance Act, 1983, w.e.f. 1-4-1984, Direct Tax Laws (Amendment) Act, 1987,w.e.f. 1-4-1989 and Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.

61. See also Circular No. 400, dated 19-10-1984 and Circular No. 584, dated 13-11-1990. For details,see Taxmann's Master Guide to Income-tax Act.

For relevant case laws, see Taxmann's Master Guide to Income-tax Act.

62. See rule 17 and Form No. 10, for notice of accumulation of income by charitable trust or institution[to be furnished before expiry of time allowed under section 139(1)].

63. Substituted for "scientific research association" by the Finance Act, 2010, w.e.f. 1-4-2011.64. Inserted by the Finance Act, 2010, w.e.f. 1-4-2011.65. Substituted for "scientific research" by the Finance Act, 2010, w.e.f. 1-4-2011.66. Substituted by the Finance Act, 1992, w.r.e.f. 1-4-1990.67. Substituted for "scientific research association" by the Finance Act, 2010, w.e.f. 1-4-2011.68. Substituted for "Provided further" by the Finance (No. 2) Act, 1991, w.r.e.f. 1-4-1990.69. Inserted by the Finance Act, 2002, w.e.f. 1-4-2003.70. Substituted for "scientific research association" by the Finance Act, 2010, w.e.f. 1-4-2011.71. Clauses (22) and (22A) are now re-enacted in section 10(23C).72. Prior to its omission, clause (22A) was inserted by the Finance Act, 1970, w.e.f. 1-4-1970.73. Inserted by the Finance Act, 1994, w.e.f. 1-4-1994.74. For notified news agencies, see Taxmann's Master Guide to Income-tax Act.75. Inserted by the Finance Act, 2002, w.e.f. 1-4-2003.76. Prior to its omission, clause (23), as amended by the Direct Tax Laws (Amendment) Act, 1987,

w.e.f. 1-4-1989, Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989, substituted by the DirectTax Laws (Amendment) Act, 1989, w.e.f. 1-4-1990 and further amended by the Finance (No. 2) Act,1991, w.r.e.f. 1-4-1990, Finance Act, 1992, w.r.e.f. 1-4-1990/w.e.f. 1-4-1992 and Finance Act, 2000,w.e.f. 1-4-2001, read as under :

'(23) any income of an association or institution established in India which may be notified by theCentral Government in the Official Gazette having regard to the fact that the association orinstitution has as its object the control, supervision, regulation or encouragement in India of thegames of cricket, hockey, football, tennis or such other games or sports as the CentralGovernment may, by notification in the Official Gazette, specify in this behalf :

Provided that the association or institution shall make an application in the prescribed formand manner to the prescribed authority for the purpose of grant of the exemption, orcontinuance thereof, under this clause:

Provided further that the Central Government may, before notifying the association orinstitution under this clause, call for such documents (including audited annual accounts) orinformation from the association or institution as it thinks necessary in order to satisfy itselfabout the genuineness of the activities of the association or institution and that Governmentmay also make such inquiries as it may deem necessary in this behalf :

Provided also that the association or institution,—(a) applies its income or accumulates it for application, wholly and exclusively to the

objects for which it is established and the provisions of sub-section (2) and sub-section(3) of section 11 shall apply in relation to such accumulation subject to the followingmodifications, namely :—


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(i) in sub-section (2),—(1) the words, brackets, letters and figure "referred to in clause (a) or

clause (b) of sub-section (1) read with the Explanation to thatsub-section" shall be omitted;

(2) for the words "to charitable or religious purposes", the words "for thepurposes of games or sports" shall be substituted;

(3) the reference to "Assessing Officer" in clause (a) thereof shall beconstrued as a reference to the "prescribed authority" referred to inthe first proviso to this clause;

(ii) in sub-section (3), in clause (a), for the words "charitable or religiouspurposes", the words "the purposes of games or sports" shall be substituted;and

(b) does not invest or deposit its funds, other than—(i) any assets held by the association or institution where such assets form part of

the corpus of the fund of the association or institution as on the 1st day ofJune, 1973;

(ii) any assets (being debentures issued by, or on behalf of, any company orcorporation), acquired by the association or institution before the 1st day ofMarch, 1983;

(iii) any accretion to the shares, forming part of the corpus of the fund mentionedin sub-clause (i), by way of bonus shares allotted to the association orinstitution;


for any period during the previous year otherwise than in any one or more of the formsor modes specified in sub-section (5) of section 11; and

(c) does not distribute any part of its income in any manner to its members except asgrants to any association or institution affiliated to it;

(d) applies the amount received by way of donations referred to in clause (c) ofsub-section (2) of section 80G for purposes of development of infrastructure for gamesor sports in India or for sponsoring of games and sports in India :

Provided also that the exemption under this clause shall not be denied in relation to any fundsinvested or deposited before the 1st day of April, 1989 otherwise than in any one or more ofthe forms or modes specified in sub-section (5) of section 11 if such funds do not continue toremain so invested or deposited after the 30th day of March, 1993 :

Provided also that the exemption under this clause shall not be denied in relation to voluntarycontribution, other than voluntary contribution in cash or voluntary contribution of the naturereferred to in clause (b) of the third proviso to this clause, subject to the condition that suchvoluntary contribution is not held by the association or institution, otherwise than in any one ormore of the forms or modes specified in sub-section (5) of section 11, after the expiry of oneyear from the end of the previous year in which such asset is acquired or the 31st day ofMarch, 1992, whichever is later :

Provided also that nothing contained in this clause shall apply in relation to any income of theassociation or institution, being profits and gains of business, unless the business is incidental tothe attainment of its objectives and separate books of account are maintained by it in respect of


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such business : Provided also that any notification issued by the Central Government under this clause inrelation to any association or institution shall, at any one time, have effect for such assessmentyear or years, not exceeding three assessment years (including an assessment year or yearscommencing before the date on which such notification is issued), as may be specified in thenotification*;'

For approved sports associations/institutions, log on to www.taxmann.com.77. Inserted by the Finance (No. 2) Act, 1965, w.r.e.f. 1-4-1962.78. See also Circular No. 584, dated 13-11-1990. For details, see Taxmann's Master Guide to Income-tax

Act.79. ' "Interest on securities" or' omitted by the Finance Act, 1988, w.e.f. 1-4-1989.80. For specified professions, see Taxmann's Master Guide to Income-tax Act.81. For approved association/institution, see Taxmann's Master Guide to Income-tax Act.82. Inserted by the Finance Act, 2002, w.e.f. 1-4-2003.83. Inserted by the Finance (No. 2) Act, 1980, w.r.e.f. 1-4-1962.84. Inserted by the Finance Act, 1995, w.e.f. 1-4-1996.85. For notified purposes, see Taxmann's Master Guide to Income-tax Act.86. Inserted by the Finance (No. 2) Act, 2014, w.r.e.f. 1-6-2013.87. See rule 16C and Form No. 9.88. Inserted by the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997.89-90. Inserted by the Finance Act, 2001, w.e.f. 1-4-2002.91. For text of section 2(5B) of the Insurance Act, 1938, see Appendix.92. Inserted by the Finance Act, 1974, w.e.f. 1-6-1974.93. Inserted by the Finance Act, 2002, w.e.f. 1-4-2003.94. Clauses (d) and (h) of section 2 of the Khadi and Village Industries Commission Act, 1956, define

"khadi" and "village industries" as follows :'(d) "khadi" means any cloth woven on handlooms in India from cotton, silk or woollen yarn

handspun in India or from a mixture of any two or all of such yarns;(h) "village industries" means all or any of the industries specified in the Schedule and includes any

other industry deemed to be specified in the Schedule by reason of a notification under section3.'

95. Inserted by the Finance Act, 1979, w.r.e.f. 1-4-1962.96. Inserted by the Finance Act, 1993, w.e.f. 1-4-1994.97. For notified scheme, see Taxmann's Master Guide to Income-tax Act. For text of scheme, see

Taxmann's Direct Taxes Manual, Vol. 3.98. Inserted by the Finance (No. 2) Act, 1996, w.r.e.f. 1-4-1992.99. Inserted by the Finance Act, 2001, w.e.f. 1-4-2001.1. Substituted for "seven previous years relevant to the assessment years beginning on the 1st day of

April, 2001 and ending on the 31st day of March, 2008" by the Finance Act, 2007, w.e.f. 1-4-2008.Earlier the quoted words weresubstituted for "three previous years relevant to the assessment yearsbeginning on the 1st day of April, 2001 and ending on the 31st day of March, 2004" by the FinanceAct, 2003, w.e.f. 1-4-2004.

2. Inserted by the Taxation Laws (Amendment) Act, 2006, w.r.e.f. 1-4-2006.3. Now Companies Act, 2013.4. Inserted by the Finance Act, 2007, w.e.f. 1-4-2008.5. Inserted by the Finance Act, 2012, w.e.f. 1-4-2013.6. Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976.7. See also Circular No. 7/2010, dated 27-10-2010, Circular No. 557, dated 19-3-1990, Circular No.

580, dated 14-9-1990 and Circular No. 584, dated 13-11-1990. For details, see Taxmann's Master


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Guide to Income-tax Act.8-9. Reintroduced by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Earlier, it was

omitted by the Direct Tax Laws (Amendment) Act, 1987, with effect from the same date.10. Inserted by the Finance Act, 1993, w.e.f. 1-4-1993.10a. Sub-clauses (iiiaa) and (iiiaaa) inserted by the Finance Act, 2015, w.e.f. 1-4-2015.11. Sub-clauses (iiiab) to (iiiae) inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999.12. For the meaning of the terms "educational institution" and "existing", see Taxmann's Direct Taxes

Manual, Vol. 3.12a. See rule 2BBB for prescribed percentage of Government Grant for considering University, hospital,

etc., as substaintially financed by Govt.13. Inserted by the Finance (No. 2) Act, 2014, w.e.f. 1-4-2015.14. Amount prescribed is Rs. 1 crore vide rule 2BC.15. Substituted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1990. Earlier, sub-clauses

(iv) and (v) were omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989 and laterreintroduced by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989.

16. For complete list of approved funds/institutions, log on to www.taxmann.com.17. Substituted for "which may be notified by the Central Government in the Official Gazette" by the

Finance Act, 2007, w.e.f. 1-6-2007.18. With effect from 15-11-2014 prescribed authority is Commissioner of Income-tax (Exemptions). See

rule 2C and Form No. 56. See also Notification No. SO 675(E), dated 5-3-2015. For details, seeTaxmann's Master Guide to Income-tax Act.

19. For complete list of approved trusts/institutions, log on to www.taxmann.com.20. Substituted for "which may be notified by the Central Government in the Official Gazette" by the

Finance Act, 2007, w.e.f. 1-6-2007.21. With effect from 15-11-2014 prescribed authority is Commissioner of Income-tax (Exemptions). See

also rule 2C and Form No. 56. For details, see Taxmann's Master Guide to Income-tax Act andTaxmann's Income-tax Rules.

22. Sub-clauses (vi) and (via) inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999.23. For the meaning of the terms "educational purposes" and "existing", see Taxmann's Direct Taxes

Manual, Vol. 3.24. For notified university/educational institutions, log on to www.taxmann.com.25. With effect from 15-11-2014 prescribed authority is Commissioner of Income-tax (Exemptions). See

also rule 2CA and Form No. 56D. See also SO 676(E), dated 5-3-2015. For details, see Taxmann'sMaster Guide to Income-tax Act and Taxmann's Income-tax Rules.

26. For notified hospital/institution, log on to www.taxmann.com.27. With effect from 15-11-2014 prescribed authority is Commissioner of Income-tax (Exemptions). See

also rule 2CA and Form No. 56D. For details, see Taxmann's Master Guide to Income-tax Act andTaxmann's Income-tax Rules.

28. Inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999.29. For the meaning of the expression "other educational institution".30. See rule 2C/Form No. 56 and rule 2CA/Form No. 56D.31. With effect from 15-11-2014 the prescribed authority for purposes of section 10(23C)(iv)/(v), under

rule 2C, as well as for purposes of section 10(23C)(vi)/(via), under rule 2CA, is Commissioner ofIncome-tax (Exemptions).

32. Inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999.33. Substituted by the Finance Act, 2007, w.e.f. 1-6-2007. Prior to its substitution, the second proviso, as

amended by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999 and later on substituted by the FinanceAct, 1999, w.e.f. 1-4-1999,read as under :

"Provided further that the Central Government, before notifying the fund or trust or institution, orthe prescribed authority, before approving any university or other educational institution or any


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hospital or other medical institution, under sub-clause (iv) or sub-clause (v) or sub-clause (vi) orsub-clause (via), may call for such documents (including audited annual accounts) or informationfrom the fund or trust or institution or any university or other educational institution or any hospitalor other medical institution, as the case may be, as it thinks necessary in order to satisfy itself aboutthe genuineness of the activities of the fund or trust or institution or any university or othereducational institution or any hospital or other medical institution, as the case may be, and theCentral Government or the prescribed authority, as the case may be, may also make such inquiries asit deems necessary in this behalf :"

34. Inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999.35. For the meaning of the expression "other educational institution", see Taxmann's Direct Taxes

Manual, Vol. 3.36. Substituted by the Finance Act, 2002, w.e.f. 1-4-2003. Prior to its substitution, clause (a) was

amended by the Finance Act, 2001, w.e.f. 1-4-2002, read as under :"(a) applies its income, or accumulates it for application, wholly and exclusively to the objects for

which it is established and in a case where more than twenty-five per cent of its income isaccumulated on or after the 1st day of April, 2001, the period of the accumulation of theamount exceeding twenty-five per cent of its income shall in no case exceed five years; and"

37. Substituted by the Finance Act, 1992, w.r.e.f. 1-4-1990.38. Inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999.39. For the meaning of the expression "other educational institution", see Taxmann's Direct Taxes

Manual, Vol. 3.40. Inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999.41. Inserted by the Finance Act, 2001, w.e.f. 1-4-2001.42. Inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999.43. For the meaning of the expression "other educational institution", see Taxmann's Direct Taxes

Manual, Vol. 3.44. Inserted by the Finance Act, 2001, w.e.f. 1-4-2001.45. Inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999.46. Substituted for "1992" by the Finance Act, 1992, w.e.f. 1-4-1992. Earlier "1992" was substituted for

"1990" by the Finance (No. 2) Act, 1991, w.r.e.f. 1-4-1990.47. Inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999.48. Inserted by the Finance (No. 2) Act, 1991, w.r.e.f. 1-4-1990.49. Inserted by the Finance Act, 1998, w.e.f. 1-4-1999.50. Inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999.51. Substituted for "notification issued by the Central Government under sub-clause (iv) or sub-clause

(v) shall, at any one time, have effect for such assessment year or years, not exceeding threeassessment years" by the Taxation Laws (Amendment) Act, 2006, w.r.e.f. 1-4-2006.

52. See also Circular No. 7/2010, dated 27-10-2010. For details, see Taxmann's Master Guide toIncome-tax Act.

53. Inserted by the Taxation Laws (Amendment) Act, 2006, w.r.e.f. 1-4-2006.54. Inserted by the Finance Act, 2007, w.e.f. 1-6-2007.55. See rule 16CC and Form No. 10BB. Under proviso to rule 12(2) audit report shall be furnished

electronically.56. Inserted by the Taxation Laws (Amendment) Act, 2001, w.r.e.f. 3-2-2001.57. Inserted by the Finance Act, 2002, w.r.e.f. 3-2-2001.*13-7-2006.58. Substituted for "2003" by the Finance Act, 2003, w.r.e.f. 3-2-2001. Earlier "2003" was substituted

for "2002" by the Finance Act, 2002, w.r.e.f. 3-2-2001.59. Omitted by the Finance Act, 2002, w.e.f. 1-4-2002. Prior to its omission, the proviso, as inserted by

the Finance Act, 2001, w.e.f. 1-4-2002, read as under :


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"Provided also that where the total receipts of the fund or institution referred to in sub-clause (iv) orof any trust or institution referred to in sub-clause (v) or of any University or other educationalinstitution referred to in sub-clause (vi) or of any hospital or other institution referred to insub-clause (via) exceed one crore rupees in any preceding year, the fund or trust or institution orUniversity or other educational institution or hospital or other institution, as the case may be, shall—

(i) publish its accounts in a local newspaper; and(ii) furnish along with the application prescribed in the first proviso to this clause, the copy of the

local newspaper in which such accounts have been published;"60. Inserted by the Finance Act, 2002, w.e.f. 1-4-2003.61. Inserted by the Finance Act, 2007, w.e.f. 1-6-2007.62. Inserted by the Finance Act, 2006, w.e.f. 1-6-2006.63. Substituted for "made at any time during the financial year immediately preceding the assessment

year" by the Finance (No. 2) Act, 2009, w.r.e.f. 1-4-2009.64. Inserted by the Finance Act, 2006, w.e.f. 1-4-2007.65. Inserted by the Finance Act, 2007, w.e.f. 1-6-2007.66. Inserted by the Finance Act, 2012, w.r.e.f. 1-4-2009.67. Inserted by the Finance (No. 2) Act, 2014, w.e.f. 1-4-2015.68. Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.69. Substituted for the portion beginning with the words "any income of such Mutual Fund" and ending

with the words "specify in this behalf" by the Finance Act, 1995, w.e.f. 1-7-1995. Prior tosubstitution, the said portion, as amended by the Finance Act, 1988, w.e.f. 1-4-1988, the Direct TaxLaws (Amendment) Act, 1989, w.r.e.f. 1-4-1988 and the Finance Act, 1992, w.e.f. 1-4-1993, read asunder :

"any income of such Mutual Fund set up by a public sector bank or a public financial institution orauthorised by the Securities and Exchange Board of India or the Reserve Bank of India and subjectto such conditions as the Central Government may, by notification in the Official Gazette, specify inthis behalf."

70. Substituted for "any income of—" by the Finance Act, 1999, w.e.f. 1-4-2000.71. Substituted for "any income of" by the Finance Act, 2003, w.e.f. 1-4-2004. Earlier the words

"subject to the provisions of Chapter XII-E," were omitted by the Finance Act, 2002, w.e.f.1-4-2003.

72. For notified mutual funds, see Taxmann's Master Guide to Income-tax Act.73. Inserted by the Finance (No. 2) Act, 2009, w.e.f. 1-4-2010.74. Now section 2(72) of the Companies Act, 2013. For text of section 2(68), see Appendix.75. Inserted by the Finance Act, 1992, w.e.f. 1-4-1993.76. Inserted by the Finance Act, 2013, w.e.f. 1-4-2014.77. For definition of "securitisation" under regulation 2(1)(r) of the SEBI (Public Offer and Listing of

Securitised Debt Instruments) Regulations, 2008, see Appendix.78. Prior to its omission, clause (23E), as inserted by the Finance Act, 1989, w.e.f. 1-4-1989, read as

under :'(23E) any income of such Exchange Risk Administration Fund set up by public financial institutions,

either jointly or separately, as the Central Government may, by notification in the OfficialGazette, specify in this behalf:

Provided that where any amount standing to the credit of the Fund and not charged toincome-tax during any previous year is shared, either wholly or in part, with a public financialinstitution, the whole of the amount so shared shall be deemed to be the income of the previousyear in which such amount is so shared and shall accordingly be chargeable to income-tax.


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Explanation.—For the purposes of this clause, the expression "public financial institution" shallhave the meaning assigned to it in section 4A of the Companies Act, 1956 (1 of 1956);'

79. Inserted by the Finance Act, 2000, w.e.f. 1-4-2001.80. Inserted by the Finance Act, 2006, w.e.f. 1-4-2007.81. For notified Investor Protection Fund, see Taxmann's Master Guide to Income-tax Act.82. Inserted by the Finance Act, 2002, w.e.f. 1-4-2002.83. Word "Scale" omitted by the Finance Act, 2003, w.r.e.f. 1-4-2002.84. Inserted by the Finance Act, 2007, w.e.f. 1-4-2008.85. For definition of "Commodity exchange", see Appendix.86. Inserted by the Finance Act, 2013, w.e.f. 1-4-2014.87. For definition of "depository" under section 2(1)(e) of the Depositories Act, 1996, see Appendix.87a. For definition of "recognised clearing corporation", see Appendix.88. Inserted by the Finance Act, 1995, w.e.f. 1-4-1996.89. Prescribed authority is Director of Income-tax (Exemptions).90. See rule 2D and Form Nos. 56A, 56B and 56C.91. Inserted by the Finance Act, 1999, w.e.f. 1-4-2000.92. Third and fourth provisos omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999. Prior to their

omission, the third and fourth provisos, were inserted by the Finance Act, 1995, w.e.f. 1-4-1996,read as under :

"Provided also that if the aforesaid equity shares are transferred (other than in the event of the saidshares being listed in a recognised stock exchange in India) by a venture capital fund or a venturecapital company to any person at any time within a period of three years from the date of theiracquisition, the aggregate amount of income by way of dividends on such equity shares which hasnot been included in the total income of the previous year or years preceding the previous year inwhich such transfer has taken place shall be deemed to be the income of the venture capital fund orof the venture capital company of the previous year in which such transfer has taken place:

Provided also that the exemption shall not be allowed in respect of the long-term capital gains, ifany, arising on such transfer of equity shares as is mentioned in the third proviso."

93. Clauses (c) and (d) substituted for clause (c) by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999. Priorto substitution, clause (c) was amended by the Finance Act, 1997, w.e.f. 1-4-1998.

94-95. Inserted by the Finance Act, 1999, w.e.f. 1-4-2000.96. Inserted by the Finance Act, 2003, w.e.f. 1-4-2004. Earlier, it was omitted by the Finance Act, 2002,

w.e.f. 1-4-2003.97. See rule 2DA and Form Nos. 56AA, 56BA and 56CA.98. Inserted by the Finance Act, 2000, w.e.f. 1-4-2001.99. Inserted by the Finance Act, 2000, w.e.f. 1-4-2001.1-2. Substituted for "set up to raise funds for investment" by the Finance Act, 2007, w.e.f. 1-4-2008.3. Substituted for Explanation 1 by the Finance Act, 2013, w.e.f. 1-4-2013. Prior to its substitution,

Explanation 1, as amended by the Finance Act, 2001, w.e.f. 1-4-2001, Finance (No. 2) Act, 2004,w.e.f. 1-10-2004, Finance Act, 2007, w.e.f. 1-4-2008 and Finance Act, 2012, w.e.f. 1-4-2013, read asunder :

'Explanation 1.—For the purposes of this clause,—

(a) "venture capital company" means such company—(i) which has been granted a certificate of registration under the Securities and Exchange

Board of India Act, 1992 (15 of 1992), and regulations made thereunder;


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(ii) which fulfils the conditions as may be specified, with the approval of the CentralGovernment, by the Securities and Exchange Board of India, by notification in theOfficial Gazette, in this behalf;

(b) "venture capital fund" means such fund—(i) operating under a trust deed registered under the provisions of the Registration Act,

1908 (16 of 1908) or operating as a venture capital scheme made by the Unit Trust ofIndia established under the Unit Trust of India Act, 1963 (52 of 1963);

(ii) which has been granted a certificate of registration under the Securities and ExchangeBoard of India Act, 1992 (15 of 1992), and regulations made thereunder;

(iii) which fulfils the conditions as may be specified, with the approval of the CentralGovernment, by the Securities and Exchange Board of India, by notification in theOfficial Gazette, in this behalf; and

(c) "venture capital undertaking" means a venture capital undertaking referred to in the Securitiesand Exchange Board of India (Venture Capital Funds) Regulations, 1996 made under theSecurities and Exchange Board of India Act, 1992 (15 of 1992);'

4. For text of regulation 2(1)(aa) of SEBI (Alternative Investment Funds) Regulations, 2012, seeAppendix.

5. Omitted by the Finance (No. 2) Act, 2004, w.e.f. 1-10-2004. Prior to its omission, Explanation 2 wasinserted by the Finance Act, 2001, w.e.f. 1-4-2001, read as under :

"Explanation 2.—For the removal of doubts it is hereby declared that the income of a venturecapital company or venture capital fund shall continue to be exempt if the shares of the venturecapital undertaking, in which the venture capital company or venture capital fund has made theinitial investment, are subsequently listed in a recognised stock exchange in India;"

6. Clauses (23FC) and (23FD) inserted by the Finance (No. 2) Act, 2014, w.e.f. 1-4-2015.6a. For definition of "real estate trust", see Appendix.6b. Italicised words shall be inserted by the Finance Act, 2015, w.e.f. 1-4-2016.7. Prior to its omission, clause (23G) was inserted by the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997 and

later on amended by the Finance Act, 1997, w.e.f. 1-4-1998, substituted by the Finance (No. 2) Act,1998, w.e.f. 1-4-1999 and further amended by the Income-tax (Second Amendment) Act, 1998,w.e.f. 1-4-1999, Finance Act, 1999, w.e.f. 1-4-2000, Finance Act, 2000, w.e.f. 1-4-2000/1-4-2001,Finance Act, 2001, w.e.f. 1-4-2002, Finance Act, 2002, w.e.f. 1-4-2003, Finance Act, 2003, w.e.f.1-4-2004/w.r.e.f. 1-4-2002, Finance (No. 2) Act, 2004, w.e.f. 1-4-2005 and Special Economic ZonesAct, 2005, w.e.f. 10-2-2006, read as under :

'(23G) any income by way of dividends, other than dividends referred to in section 115-O, interest orlong-term capital gains of an infrastructure capital fund or an infrastructure capital company ora co-operative bank from investments made on or after the 1st day of June, 1998 by way ofshares or long-term finance in any enterprise or undertaking wholly engaged in the businessreferred to in sub-section (4) of section 80-IA or sub-section (3) of section 80-IAB or a housingproject referred to in sub-section (10) of section 80-IB or a hotel project or a hospital projectand which has been approved by the Central Government on an application made by it inaccordance with the rules made in this behalf and which satisfies the prescribed conditions :

Provided that the income, by way of dividends, other than dividends referred to in section115-O, interest or long-term capital gains of an infrastructure capital company, shall be takeninto account in computing the book profit and income-tax payable under section 115JB.

Explanation 1.—For the purposes of this clause,—(a) "infrastructure capital company" means such company as has made investments by

way of acquiring shares or providing long-term finance to an enterprise wholly


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engaged in the business referred to in this clause;(b) "infrastructure capital fund" means such fund operating under a trust deed registered

under the provisions of the Registration Act, 1908 (16 of 1908) established to raisemonies by the trustees for investment by way of acquiring shares or providinglong-term finance to an enterprise wholly engaged in the business referred to in thisclause;

(c) [***](d) "long-term finance" shall have the meaning assigned to it in clause (viii) of sub-section

(1) of section 36;(e) "co-operative bank" shall have the meaning assigned to it in clause (dd) of section 2 of

the Deposit Insurance and Credit Guarantee Corporation Act, 1961 (47 of 1961);(f) "interest" includes any fee or commission received by a financial institution for giving

any guarantee to, or enhancing credit in respect of, an enterprise which has beenapproved by the Central Government for the purposes of this clause;

(g) "hotel project" means a project for constructing a hotel of not less than three-starcategory as classified by the Central Government;

(h) "hospital project" means a project for constructing a hospital with at least one hundredbeds for patients.

Explanation 2.—For the removal of doubts, it is hereby declared that any income by way ofdividends, interest or long-term capital gains of an infrastructure capital fund or aninfrastructure capital company from investments made before the 1st day of June, 1998 by wayof shares or long-term finance in any enterprise carrying on the business of developing,maintaining and operating any infrastructure facility shall not be included and the provisions ofthis clause as it stood immediately before its amendment by the Finance (No. 2) Act, 1998 (21of 1998) shall apply to such income;'

8. Substituted by the Finance (No. 2) Act, 1996, w.e.f. 1-4-1997. Prior to its substitution, clause (24) wasamended by the Finance Act, 1988, w.e.f. 1-4-1989.

9. For relevant case laws, see Taxmann's Master Guide to Income-tax Act.10. Inserted by the Finance Act, 1972, w.e.f. 1-4-1973.11. Inserted by the Labour Provident Fund Laws (Amendment) Act, 1976, w.e.f. 1-8-1976.12. Inserted by the Finance Act, 1995, w.r.e.f. 1-4-1962.13. Substituted by the North-Eastern Areas (Reorganisation) (Adaptation of Laws on Union Subjects)

Order, 1974, with retrospective effect from 21-1-1972. Earlier, clause (26) was amended first by theState of Nagaland (Adaptation of Laws on Union Subjects) Order, 1965, with retrospective effectfrom 1-12-1963 and then by the Taxation Laws (Amendment) Act, 1970, with retrospective effectfrom 1-4-1962.

14. For relevant case laws, see Taxmann's Master Guide to Income-tax Act.15. Clause (25) of article 366 of the Constitution defines "Scheduled Tribes" as under :

'(25) "Scheduled Tribes" means such tribes or tribal communities or parts of or groups within suchtribes or tribal communities as are deemed under article 342 to be Scheduled Tribes for thepurposes of this Constitution;'

16. For the meaning of the terms "residing" and "residing in any area specified", see Taxmann's DirectTaxes Manual, Vol. 3.

17. Substituted for "States of Nagaland, Manipur and Tripura or in the Union territories of ArunachalPradesh and Mizoram" by the Finance Act, 1994, w.e.f. 1-4-1995.

18. Inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999.19. Substituted for ", States or Union territories aforesaid" by the Finance Act, 1994, w.e.f. 1-4-1995.20. Inserted by the Finance (No. 2) Act, 1965, w.r.e.f. 1-4-1962.


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21. "(not being an individual who is in the service of Government)" omitted by the Finance (No. 2) Act,1971, w.r.e.f. 1-4-1962.

22. Substituted for "1986" by the Finance Act, 1985, w.e.f. 1-4-1985. Earlier "1986" was substituted for"1983" by the Finance Act, 1983, w.e.f. 1-4-1983, "1983" was substituted for "1980" by the FinanceAct, 1980, w.e.f. 1-4-1980, "1980" was substituted for "1975" by the Finance (No. 2) Act, 1977,w.r.e.f. 1-4-1975 and "1975" was substituted for "1970" by the Finance (No. 2) Act, 1971, w.r.e.f.1-4-1970.

23. Renumbered as Explanation 1 by the Finance Act, 1983, w.r.e.f. 1-4-1980.24. Should be read as clause (1), etc.25. Inserted by the Finance Act, 1983, w.r.e.f. 1-4-1980.26. Omitted by the Finance Act, 1997, w.e.f. 1-4-1998. Prior to its omission, clause (26AA) was inserted

by the Finance Act, 1989, w.e.f. 1-4-1990.27. Inserted by the Finance Act, 2008, w.r.e.f. 1-4-1990.28. See Instruction No. 8/2008, dated 29-7-2008. For details, see Taxmann's Master Guide to

Income-tax Act.29. Inserted by the Finance Act, 2008, w.e.f. 1-4-2009.30. Inserted by the Finance Act, 1980, w.r.e.f. 1-4-1972.31. Substituted for "members of either the Scheduled Castes or the Scheduled Tribes or of both" by the

Finance Act, 1994, w.r.e.f. 1-4-1993.32. Substituted by the Finance Act, 1994, w.r.e.f. 1-4-1993. Earlier, Explanation was inserted by the

Finance Act, 1980, w.r.e.f. 1-4-1972.33. Clause (24) of article 366 of the Constitution defines "Scheduled Castes" as under:

'(24) "Scheduled Castes" means such castes, races or tribes or parts of or groups within such castes,races or tribes as are deemed under article 341 to be Scheduled Castes for the purposes of thisConstitution;'

34. For definition of "Scheduled Tribes", see footnote 15 on page 1.110 ante.35. Inserted by the Finance Act, 1995, w.e.f. 1-4-1995.36. For notified minority communities, see Taxmann's Master Guide to Income-tax Act.37. Inserted by the Finance Act, 2003, w.e.f. 1-4-2004.38. Inserted by the Finance Act, 1992, w.r.e.f. 1-4-1989. Earlier clause (27) was omitted by the Finance

Act, 1975, w.e.f. 1-4-1976 and re-enacted in section 80JJ with modification. Originally, clause (27)was inserted by the Finance Act, 1964, w.e.f. 1-4-1964 and later on amended by the Finance (No. 2)Act, 1967, w.e.f. 1-4-1967.

39. Omitted by the Finance Act, 1997, w.e.f. 1-4-1998. Prior to its omission, clause (28) was inserted bythe Finance Act, 1965, w.e.f. 1-4-1965 and substituted by the Finance (No. 2) Act, 1965, w.e.f.11-9-1965.

40. Prior to its omission, clause (29) was inserted by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1968.41. Inserted by the Finance Act, 1999, w.e.f. 11-5-1999.42. Inserted by the Finance Act, 2008, w.r.e.f. 1-4-2002.43. Inserted by the Taxation Laws (Amendment) Act, 1970, w.r.e.f. 1-4-1969.44. See rule 8(2).45. For specified schemes, see Taxmann's Master Guide to Income-tax Act.46. Inserted by the Finance Act, 1984, w.e.f. 1-4-1985.47. Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.48. Rule 12 provides that the return of income shall not be accompanied by any document or copy of

any account or form or report of audit required to be attached with return of income under any ofthe provisions of the Act.

49. Inserted by the Finance Act, 1988, w.e.f. 1-4-1989.50. See footnote No. 48 above.51. Inserted by the Finance Act, 1992, w.e.f. 1-4-1993.


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52. Inserted by the Finance Act, 2003, w.e.f. 1-4-2003. Earlier clause (33) was inserted by the FinanceAct, 1997, w.e.f. 1-4-1998, substituted by the Finance Act, 1999, w.e.f. 1-4-2000, amended by theFinance Act, 2001, w.r.e.f. 1-4-2000 and later on omitted by the Finance Act, 2002, w.e.f. 1-4-2003.Prior to omission, clause (33) read as under :

"(33) any income by way of—(i) dividends referred to in section 115-O; or

(ii) income received in respect of units from the Unit Trust of India established under theUnit Trust of India Act, 1963 (52 of 1963); or

(iii) income received in respect of the units of a mutual fund specified under clause (23D) : Provided that this clause shall not apply to any income arising from transfer of units of theUnit Trust of India or of a mutual fund, as the case may be."

53. For text of the Unit Trust of India (Transfer of Undertaking & Repeal) Act, 2002, see Taxmann'sDirect Taxes Manual, Vol. 3.

54. Clauses (34), (35) and (36) inserted by the Finance Act, 2003, w.e.f. 1-4-2004.55. Explanation omitted by the Finance Act, 2011, w.e.f. 1-6-2011. Prior to omission, Explanation, as

inserted by the Special Economic Zones Act, 2005, w.e.f. 10-2-2006, read as under :

"Explanation.—For the removal of doubts, it is hereby declared that the dividend referred to insection 115-O shall not be included in the total income of the assessee, being a Developer orentrepreneur;"

56. Inserted by the Finance Act, 2013, w.e.f. 1-4-2014.57. For text of the Unit Trust of India (Transfer of Undertaking & Repeal) Act, 2002, see Taxmann's

Direct Taxes Manual, Vol. 3.58. Inserted by the Finance Act, 2013, w.e.f. 1-4-2014.59. Clauses (37) and (38) inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-4-2005.59a. For the meaning of the term "income", see Taxmann's Direct Taxes Manual, Vol. 3.60. Inserted by the Finance (No. 2) Act, 2014, w.e.f. 1-4-2015.61. 1st October, 2004 vide SO 1058(E), dated 28-9-2004.62. Inserted by the Finance Act, 2006, w.e.f. 1-4-2007.63. Second proviso shall be omitted by the Finance Act, 2015, w.e.f. 1-4-2016.63a. Inserted by the Finance (No. 2) Act, 2014, w.e.f. 1-4-2015.64. Substituted for "fifty" by the Finance Act, 2006, w.e.f. 1-6-2006.65. Clauses (39) to (41) inserted by the Taxation Laws (Amendment) Act, 2005, w.e.f. 1-4-2006.66. For notified persons, notified sporting events and specified income, see Taxmann's Master Guide to

Income-tax Act.67. Inserted by the Finance Act, 2006, w.e.f. 1-4-2006.68. For notified authority, see Taxmann's Master Guide to Income-tax Act.69. Inserted by the Finance Act, 2008, w.e.f. 1-4-2008.70. Inserted by the Finance (No. 2) Act, 2009, w.r.e.f. 1-4-2009.71. Inserted by the Finance Act, 2011, w.r.e.f. 1-4-2008.72. For notified allowances/perquisites, see Taxmann's Master Guide to Income-tax Act.73. Inserted by the Finance Act, 2011, w.e.f. 1-6-2011.74. For notified Board/Trust/Commission and standard process for filing application, see Taxmann's

Master Guide to Income-tax Act.75. See rule 2F.76. Inserted by the Finance Act, 2012, w.e.f. 1-4-2012.77. Substituted for "sale of crude oil to any person" by the Finance Act, 2013, w.e.f. 1-4-2014.78. For notified foreign company/agreement or arrangement, see Taxmann's Master Guide to Income-tax

Act.


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79. Inserted by the Finance Act, 2013, w.e.f. 1-4-2013.


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Section - 10, Income-tax Act, 1961 - 2015

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Transcript of Section - 10, Income-tax Act, 1961 - 2015