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SECTION PAGE - RCA & ASSOCIATES · 2018-05-11 · SECTION PAGE I.T. ACT, 1961 I-4 11. Income from...
Transcript of SECTION PAGE - RCA & ASSOCIATES · 2018-05-11 · SECTION PAGE I.T. ACT, 1961 I-4 11. Income from...
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INCOME-TAX ACT
2011
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INITIAL
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CONTENTS
DIVISION ONE 11111Income-tax Act, 1961Income-tax Act, 1961Income-tax Act, 1961Income-tax Act, 1961Income-tax Act, 1961
PAGE
u Arrangement of Sections I-3
u Text of the Income-tax Act, 1961 as amendedby the Finance Act, 2011 1.1
u Appendix : Text of remaining provisions of AlliedActs referred to in Income-tax Act 1.1025
u Subject Index 1.1091
DIVISION TWO 22222Finance Act, 2011Finance Act, 2011Finance Act, 2011Finance Act, 2011Finance Act, 2011
u Arrangement of Sections 2.3
u Text of the Finance Act, 2011 2.5
DIVISION THREE 33333National Tax Tribunal Act, 2005National Tax Tribunal Act, 2005National Tax Tribunal Act, 2005National Tax Tribunal Act, 2005National Tax Tribunal Act, 2005
u Arrangement of Sections 3.3
u Text of the National Tax Tribunal Act, 2005 as amendedup to date 3.5
DIVISION FOUR 44444Securities Transaction TaxSecurities Transaction TaxSecurities Transaction TaxSecurities Transaction TaxSecurities Transaction Tax
u Arrangement of Sections 4.3u Text of the Securities Transaction Tax as amended
up to date 4.5
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DIVISION ONE
Income-taxAct, 1961
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I-3
INCOME-TAX ACT, 1961
Arrangement of Sections
SECTION CHAPTER I PAGE
PRELIMINARY
1. Short title, extent and commencement 1.1
2. Definitions 1.1
3. “Previous year” defined 1.30
CHAPTER IIBASIS OF CHARGE
4. Charge of income-tax 1.30
5. Scope of total income 1.31
5A. Apportionment of income between spouses governedby Portuguese Civil Code 1.32
6. Residence in India 1.32
7. Income deemed to be received 1.34
8. Dividend income 1.34
9. Income deemed to accrue or arise in India 1.35
CHAPTER IIIINCOMES WHICH DO NOT FORM PART OF
TOTAL INCOME
10. Incomes not included in total income 1.40
10A. Special provision in respect of newly established under-takings in free trade zone, etc. 1.103
10AA. Special provisions in respect of newly established units inSpecial Economic Zones 1.110
10B. Special provisions in respect of newly established hundredper cent export-oriented undertakings 1.114
10BA. Special provisions in respect of export of certain articles orthings 1.120
10BB. Meaning of computer programmes in certain cases 1.12210C. Special provision in respect of certain industrial undertak-
ings in North-Eastern Region 1.122
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I.T. ACT, 1961 I-4
11. Income from property held for charitable or religiouspurposes 1.124
12. Income of trusts or institutions from contributions 1.132
12A. Conditions for applicability of sections 11 and 12 1.133
12AA. Procedure for registration 1.135
13. Section 11 not to apply in certain cases 1.136
13A. Special provision relating to incomes of political parties 1.141
13B. Special provisions relating to voluntary contributionsreceived by electoral trust 1.142
CHAPTER IVCOMPUTATION OF TOTAL INCOME
Heads of income
14. Heads of income 1.143
14A. Expenditure incurred in relation to income not includiblein total income 1.143
A.—Salaries
15. Salaries 1.144
16. Deductions from salaries 1.144
17. “Salary”, “perquisite” and “profits in lieu of salary” defined 1.145
B.—[Omitted]
18. [OMITTED BY THE FINANCE ACT, 1988, W.E.F. 1-4-1989] 1.154
19. [OMITTED BY THE FINANCE ACT, 1988, W.E.F. 1-4-1989] 1.154
20. [OMITTED BY THE FINANCE ACT, 1988, W.E.F. 1-4-1989] 1.154
21. [OMITTED BY THE FINANCE ACT, 1988, W.E.F. 1-4-1989] 1.154
C.—Income from house property
22. Income from house property 1.154
23. Annual value how determined 1.154
24. Deductions from income from house property 1.157
25. Amounts not deductible from income from houseproperty 1.159
25A. Special provision for cases where unrealised rent allowedas deduction is realised subsequently 1.159
25AA. Unrealised rent received subsequently to be charged toincome-tax 1.160
25B. Special provision for arrears of rent received 1.160
26. Property owned by co-owners 1.160
27. “Owner of house property”, “annual charge”, etc., defined 1.160
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I-5 ARRANGEMENT OF SECTIONS
D.—Profits and gains of business or profession
28. Profits and gains of business or profession 1.16129. Income from profits and gains of business or profession,
how computed 1.16430. Rent, rates, taxes, repairs and insurance for buildings 1.16431. Repairs and insurance of machinery, plant and furniture 1.16532. Depreciation 1.165
32A. Investment allowance 1.17232AB. Investment deposit account 1.181
33. Development rebate 1.18633A. Development allowance 1.191
33AB. Tea development account, coffee development accountand rubber development account 1.195
33ABA. Site Restoration Fund 1.19933AC. Reserves for shipping business 1.202
33B. Rehabilitation allowance 1.20434. Conditions for depreciation allowance and development
rebate 1.20534A. Restriction on unabsorbed depreciation and unabsorbed
investment allowance for limited period in case of certaindomestic companies 1.206
35. Expenditure on scientific research 1.20735A. Expenditure on acquisition of patent rights or copyrights 1.215
35AB. Expenditure on know-how 1.21735ABB. Expenditure for obtaining licence to operate telecommuni-
cation services 1.21835AC. Expenditure on eligible projects or schemes 1.22035AD. Deduction in respect of expenditure on specified business 1.223
35B. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,1987, W.E.F. 1-4-1989] 1.227
35C. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,1987, W.E.F. 1-4-1989] 1.227
35CC. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,1987, W.E.F. 1-4-1989] 1.228
35CCA. Expenditure by way of payment to associations and insti-tutions for carrying out rural development programmes 1.228
35CCB. Expenditure by way of payment to associations and insti-tutions for carrying out programmes of conservationof natural resources 1.230
35D. Amortisation of certain preliminary expenses 1.23135DD. Amortisation of expenditure in case of amalgamation or
demerger 1.23435DDA. Amortisation of expenditure incurred under voluntary
retirement scheme 1.23435E. Deduction for expenditure on prospecting, etc., for
certain minerals 1.235
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I.T. ACT, 1961 I-6
36. Other deductions 1.23737. General 1.25038. Building, etc., partly used for business, etc., or not exclu-
sively so used 1.25339. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,
1987, W.E.F. 1-4-1989] 1.25340. Amounts not deductible 1.253
40A. Expenses or payments not deductible in certain circum-stances 1.260
41. Profits chargeable to tax 1.26442. Special provision for deductions in the case of business
for prospecting, etc., for mineral oil 1.26743. Definitions of certain terms relevant to income from
profits and gains of business or profession 1.26943A. Special provisions consequential to changes in rate of
exchange of currency 1.27943B. Certain deductions to be only on actual payment 1.28143C. Special provision for computation of cost of acquisition
of certain assets 1.28443D. Special provision in case of income of public financial
institutions, public companies, etc. 1.28544. Insurance business 1.286
44A. Special provision for deduction in the case of trade,professional or similar association 1.286
44AA. Maintenance of accounts by certain persons carrying onprofession or business 1.287
44AB. Audit of accounts of certain persons carrying on businessor profession 1.289
44AC. [OMITTED BY THE FINANCE ACT, 1992, W.E.F. 1-4-1993] 1.29044AD. Special provision for computing profits and gains of busi-
ness on presumptive basis 1.29044AE. Special provision for computing profits and gains of busi-
ness of plying, hiring or leasing goods carriages 1.29244AF. Special provisions for computing profits and gains of retail
business 1.29444B. Special provision for computing profits and gains of ship-
ping business in the case of non-residents 1.29544BB. Special provision for computing profits and gains in con-
nection with the business of exploration, etc., of mineraloils 1.295
44BBA. Special provision for computing profits and gains of thebusiness of operation of aircraft in the case of non-resi-dents 1.296
44BBB. Special provision for computing profits and gains offoreign companies engaged in the business of civil cons-truction, etc., in certain turnkey power projects 1.297
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44C. Deduction of head office expenditure in the case of non-residents 1.297
44D. Special provisions for computing income by way of royal-ties, etc., in the case of foreign companies 1.299
44DA. Special provision for computing income by way of royal-ties, etc., in case of non-residents 1.300
44DB. Special provision for computing deductions in the case ofbusiness reorganization of co-operative banks 1.301
E.—Capital gains45. Capital gains 1.30346. Capital gains on distribution of assets by companies in
liquidation 1.30746A. Capital gains on purchase by company of its own shares or
other specified securities 1.30747. Transactions not regarded as transfer 1.307
47A. Withdrawal of exemption in certain cases 1.31448. Mode of computation 1.31549. Cost with reference to certain modes of acquisition 1.31750. Special provision for computation of capital gains in case
of depreciable assets 1.31950A. Special provision for cost of acquisition in case of depre-
ciable asset 1.32050B. Special provision for computation of capital gains in case
of slump sale 1.32050C. Special provision for full value of consideration in certain
cases 1.32151. Advance money received 1.32252. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988] 1.32253. [OMITTED BY THE FINANCE ACT, 1992, W.E.F. 1-4-1993] 1.32254. Profit on sale of property used for residence 1.323
54A. [OMITTED BY THE FINANCE (NO. 2) ACT, 1971, W.E.F. 1-4-1972] 1.32454B. Capital gain on transfer of land used for agricultural
purposes not to be charged in certain cases 1.32554C. [OMITTED BY THE FINANCE ACT, 1976, W.E.F. 1-4-1976] 1.32654D. Capital gain on compulsory acquisition of lands and buil-
dings not to be charged in certain cases 1.32654E. Capital gain on transfer of capital assets not to be charged
in certain cases 1.32754EA. Capital gain on transfer of long-term capital assets not to
be charged in the case of investment in specifiedsecurities 1.333
54EB. Capital gain on transfer of long-term capital assets not tobe charged in certain cases 1.334
54EC. Capital gain not to be charged on investment in certainbonds 1.335
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54ED. Capital gain on transfer of certain listed securities or unitnot to be charged in certain cases 1.338
54F. Capital gain on transfer of certain capital assets not to becharged in case of investment in residential house 1.339
54G. Exemption of capital gains on transfer of assets in cases ofshifting of industrial undertaking from urban area 1.341
54GA. Exemption of capital gains on transfer of assets in cases ofshifting of industrial undertaking from urban area to anySpecial Economic Zone 1.343
54H. Extension of time for acquiring new asset or depositing orinvesting amount of capital gain 1.345
55. Meaning of “adjusted”, “cost of improvement” and “cost ofacquisition” 1.345
55A. Reference to Valuation Officer 1.349
F.—Income from other sources
56. Income from other sources 1.35057. Deductions 1.35458. Amounts not deductible 1.35559. Profits chargeable to tax 1.357
CHAPTER VINCOME OF OTHER PERSONS, INCLUDED IN
ASSESSEE’S TOTAL INCOME
60. Transfer of income where there is no transfer of assets 1.35761. Revocable transfer of assets 1.35762. Transfer irrevocable for a specified period 1.35763. “Transfer” and “revocable transfer” defined 1.35864. Income of individual to include income of spouse,
minor child, etc. 1.35865. Liability of person in respect of income included in the
income of another person 1.362
CHAPTER VIAGGREGATION OF INCOME AND SET OFF OR
CARRY FORWARD OF LOSS
Aggregation of income
66. Total income 1.36367. [OMITTED BY THE FINANCE ACT, 1992, W.E.F. 1-4-1993] 1.363
67A. Method of computing a member’s share in income ofassociation of persons or body of individuals 1.363
68. Cash credits 1.36469. Unexplained investments 1.364
69A. Unexplained money, etc. 1.36569B. Amount of investments, etc., not fully disclosed in books of
account 1.365
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I-9 ARRANGEMENT OF SECTIONS
69C. Unexplained expenditure, etc. 1.36569D. Amount borrowed or repaid on hundi 1.366
Set off, or carry forward and set off70. Set off of loss from one source against income from
another source under the same head of income 1.36671. Set off of loss from one head against income from another 1.367
71A. Transitional provisions for set off of loss under the head“Income from house property” 1.367
71B. Carry forward and set off of loss from house property 1.36872. Carry forward and set off of business losses 1.368
72A. Provisions relating to carry forward and set off of accumu-lated loss and unabsorbed depreciation allowance inamalgamation or demerger, etc. 1.369
72AA. Provisions relating to carry forward and set off of accumu-lated loss and unabsorbed depreciation allowance in schemeof amalgamation of banking company in certain cases 1.373
72AB. Provisions relating to carry forward and set off of accumu-lated loss and unabsorbed depreciation allowance in busi-ness reorganisation of co-operative banks 1.374
73. Losses in speculation business 1.37673A. Carry forward and set off of losses by specified business 1.377
74. Losses under the head “Capital gains” 1.37774A. Losses from certain specified sources falling under the
head “Income from other sources” 1.37875. Losses of firms 1.37976. [OMITTED BY THE FINANCE ACT, 1992, W.E.F. 1-4-1993] 1.37977. [OMITTED BY THE FINANCE ACT, 1992, W.E.F. 1-4-1993] 1.37978. Carry forward and set off of losses in case of change in
constitution of firm or on succession 1.37979. Carry forward and set off of losses in the case of certain
companies 1.38080. Submission of return for losses 1.380
CHAPTER VI-ADEDUCTIONS TO BE MADE IN COMPUTING
TOTAL INCOMEA.—General
80A. Deductions to be made in computing total income 1.38180AA. [OMITTED BY THE FINANCE ACT, 1997, W.E.F. 1-4-1998] 1.38380AB. Deductions to be made with reference to the income
included in the gross total income 1.38380AC. Deduction not to be allowed unless return furnished 1.383
80B. Definitions 1.383
B.—Deductions in respect of certain payments
80C. Deduction in respect of life insurance premia, deferredannuity, contributions to provident fund, subscription tocertain equity shares or debentures, etc. 1.384
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80CC. [OMITTED BY THE FINANCE (NO. 2) ACT, 1996, W.R.E.F.1-4-1993] 1.392
80CCA. Deduction in respect of deposits under National SavingsScheme or payment to a deferred annuity plan 1.392
80CCB. Deduction in respect of investment made under EquityLinked Savings Scheme 1.394
80CCC. Deduction in respect of contribution to certain pensionfunds 1.394
80CCD. Deduction in respect of contribution to pension schemeof Central Government 1.395
80CCE. Limit on deductions under sections 80C, 80CCC and 80CCD 1.39780CCF. Deduction in respect of subscription to long-term infrastruc-
ture bonds 1.39780D. Deduction in respect of health insurance premia 1.397
80DD. Deduction in respect of maintenance including medicaltreatment of a dependant who is a person with disability 1.399
80DDB. Deduction in respect of medical treatment, etc. 1.40280E. Deduction in respect of interest on loan taken for higher
education 1.40380F. [OMITTED BY THE FINANCE ACT, 1985, W.E.F. 1-4-1986] 1.405
80FF. [OMITTED BY THE FINANCE (NO. 2) ACT, 1980, W.E.F. 1-4-1981] 1.40580G. Deduction in respect of donations to certain funds, chari-
table institutions, etc. 1.40580GG. Deductions in respect of rents paid 1.414
80GGA. Deduction in respect of certain donations for scientificresearch or rural development 1.414
80GGB. Deduction in respect of contributions given by companiesto political parties 1.417
80GGC. Deduction in respect of contributions given by any personto political parties 1.417
C.—Deductions in respect of certain incomes
80H. [OMITTED BY THE TAXATION LAWS (AMENDMENT) ACT,1975, W.E.F. 1-4-1976] 1.417
80HH. Deduction in respect of profits and gains from newlyestablished industrial undertakings or hotel business inbackward areas 1.417
80HHA. Deduction in respect of profits and gains from newlyestablished small-scale industrial undertakings in certainareas 1.420
80HHB. Deduction in respect of profits and gains from projectsoutside India 1.422
80HHBA. Deduction in respect of profits and gains from housingprojects in certain cases 1.425
80HHC. Deduction in respect of profits retained for export business 1.427
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80HHD. Deduction in respect of earnings in convertible foreignexchange 1.434
80HHE. Deduction in respect of profits from export of computersoftware, etc. 1.440
80HHF. Deduction in respect of profits and gains from export ortransfer of film software, etc. 1.443
80-I. Deduction in respect of profits and gains from industrialundertakings after a certain date, etc. 1.446
80-IA. Deductions in respect of profits and gains from industrialundertakings or enterprises engaged in infrastructuredevelopment, etc. 1.451
80-IAB. Deductions in respect of profits and gains by an undertak-ing or enterprise engaged in development of SpecialEconomic Zone 1.467
80-IB. Deduction in respect of profits and gains from certainindustrial undertakings other than infrastructure develop-ment undertakings 1.467
80-IC. Special provisions in respect of certain undertakings orenterprises in certain special category States 1.481
80-ID. Deduction in respect of profits and gains from business ofhotels and convention centres in specified area 1.484
80-IE. Special provisions in respect of certain undertakings inNorth-Eastern States 1.486
80J. [OMITTED BY THE FINANCE (NO. 2) ACT, 1996, W.R.E.F. 1-4-1989] 1.48880JJ. [OMITTED BY THE FINANCE ACT, 1997, W.E.F. 1-4-1998] 1.489
80JJA. Deduction in respect of profits and gains from businessof collecting and processing of bio-degradable waste 1.489
80JJAA. Deduction in respect of employment of new workmen 1.48980K. [OMITTED BY THE FINANCE ACT, 1986, W.E.F. 1-4-1987] 1.49080L. [OMITTED BY THE FINANCE ACT, 2005, W.E.F. 1-4-2006] 1.490
80LA. Deductions in respect of certain incomes of OffshoreBanking Units and International Financial Services Centre 1.492
80M. [OMITTED BY THE FINANCE ACT, 2003, W.E.F. 1-4-2004] 1.49480MM. [OMITTED BY THE FINANCE ACT, 1983, W.E.F. 1-4-1984] 1.495
80N. [OMITTED BY THE FINANCE ACT, 1985, W.E.F. 1-4-1986] 1.49580-O. Deduction in respect of royalties, etc., from certain foreign
enterprises 1.49580P. Deduction in respect of income of co-operative societies 1.49780Q. Deduction in respect of profits and gains from the business
of publication of books 1.50180QQ. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,
1987, W.E.F. 1-4-1989] 1.50180QQA. Deduction in respect of professional income of authors of
text books in Indian languages 1.50280QQB. Deduction in respect of royalty income, etc., of authors of
certain books other than text books 1.502
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80R. Deduction in respect of remuneration from certainforeign sources in the case of professors, teachers, etc. 1.504
80RR. Deduction in respect of professional income from foreignsources in certain cases 1.505
80RRA. Deduction in respect of remuneration received forservices rendered outside India 1.506
80RRB. Deduction in respect of royalty on patents 1.50880S. [OMITTED BY THE FINANCE ACT, 1986, W.E.F. 1-4-1987] 1.51080T. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988] 1.510
80TT. [OMITTED BY THE FINANCE ACT, 1986, W.E.F. 1-4-1987] 1.510
D.—Other deductions80U. Deduction in case of a person with disability 1.51080V. [OMITTED BY THE FINANCE ACT, 1994, W.E.F. 1-4-1995] 1.512
80VV. [OMITTED BY THE FINANCE ACT, 1985, W.E.F. 1-4-1986] 1.513
CHAPTER VI-BRESTRICTION ON CERTAIN DEDUCTIONS
IN THE CASE OF COMPANIES
80VVA. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988] 1.513
CHAPTER VIIINCOMES FORMING PART OF TOTAL INCOME
ON WHICH NO INCOME-TAX IS PAYABLE
81. to [OMITTED BY THE FINANCE (NO. 2) ACT, 1967, W.E.F.85C. 1-4-1968] 1.513
86. Share of member of an association of persons or body ofindividuals in the income of the association or body 1.513
86A. [OMITTED BY THE FINANCE ACT, 1988, W.E.F. 1-4-1989] 1.514
CHAPTER VIIIREBATES AND RELIEFS
A.—Rebate of income-tax
87. Rebate to be allowed in computing income-tax 1.51487A. [OMITTED BY THE FINANCE (NO. 2) ACT, 1967, W.E.F. 1-4-1968] 1.514
88. Rebate on life insurance premia, contribution to providentfund, etc. 1.514
88A. [OMITTED BY THE FINANCE (NO. 2) ACT, 1996, W.R.E.F.1-4-1994] 1.524
88B. [OMITTED BY THE FINANCE ACT, 2005, W.E.F. 1-4-2006] 1.52488C. [OMITTED BY THE FINANCE ACT, 2005, W.E.F. 1-4-2006] 1.52488D. [OMITTED BY THE FINANCE ACT, 2005, W.E.F. 1-4-2006] 1.52588E. Rebate in respect of securities transaction tax 1.525
B.—Relief for income-tax
89. Relief when salary, etc., is paid in arrears or in advance 1.52689A. [OMITTED BY THE FINANCE ACT, 1983, W.E.F. 1-4-1983] 1.526
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CHAPTER IXDOUBLE TAXATION RELIEF
90. Agreement with foreign countries or specified territories 1.52790A. Adoption by Central Government of agreement between
specified associations for double taxation relief 1.52891. Countries with which no agreement exists 1.530
CHAPTER XSPECIAL PROVISIONS RELATING TO AVOIDANCE
OF TAX
92. Computation of income from international transactionhaving regard to arm’s length price 1.531
92A. Meaning of associated enterprise 1.53292B. Meaning of international transaction 1.53392C. Computation of arm’s length price 1.533
92CA. Reference to Transfer Pricing Officer 1.53592CB. Power of Board to make safe harbour rules 1.536
92D. Maintenance and keeping of information and document by persons entering into an international transaction 1.536
92E. Report from an accountant to be furnished by personsentering into international transaction 1.537
92F. Definitions of certain terms relevant to computation ofarm’s length price, etc. 1.537
93. Avoidance of income-tax by transactions resulting intransfer of income to non-residents 1.538
94. Avoidance of tax by certain transactions in securities 1.54094A. Special measures in respect of transactions with persons
located in notified jurisdictional area 1.543
CHAPTER XIADDITIONAL INCOME-TAX ON
UNDISTRIBUTED PROFITS
95. to [OMITTED BY THE FINANCE ACT, 1965, W.E.F. 1-4-1965] 1.544103.104. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988] 1.544105. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988] 1.545106. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988] 1.545107. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988] 1.545
107A. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988] 1.545108. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988] 1.545109. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988] 1.545
CHAPTER XIIDETERMINATION OF TAX IN CERTAIN
SPECIAL CASES
110. Determination of tax where total income includes incomeon which no tax is payable 1.545
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111. Tax on accumulated balance of recognised provident fund 1.545111A. Tax on short term capital gains in certain cases 1.546
112. Tax on long-term capital gains 1.546112A. [OMITTED BY THE FINANCE ACT, 1988, W.E.F. 1-4-1989] 1.548
113. Tax in the case of block assessment of search cases 1.549114. [OMITTED BY THE FINANCE (NO. 2) ACT, 1967, W.E.F. 1-4-1968] 1.549115. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988] 1.549
115A. Tax on dividends, royalty and technical service fees in thecase of foreign companies 1.549
115AB. Tax on income from units purchased in foreign currencyor capital gains arising from their transfer 1.552
115AC. Tax on income from bonds or Global Depository Receiptspurchased in foreign currency or capital gains arisingfrom their transfer 1.554
115ACA. Tax on income from Global Depository Receiptspurchased in foreign currency or capital gains arisingfrom their transfer 1.557
115AD. Tax on income of Foreign Institutional Investors fromsecurities or capital gains arising from their transfer 1.559
115B. Tax on profits and gains of life insurance business 1.560115BB. Tax on winnings from lotteries, crossword puzzles, races
including horse races, card games and other games of anysort or gambling or betting of any form or nature what-soever 1.561
115BBA. Tax on non-resident sportsmen or sports associations 1.561115BBB. Tax on income from units of an open-ended equity
oriented fund of the Unit Trust of India or of MutualFunds 1.562
115BBC. Anonymous donations to be taxed in certain cases 1.5621115BBD. Tax on certain dividends received from foreign
companies 1.563
CHAPTER XII-ASPECIAL PROVISIONS RELATING TO CERTAIN
INCOMES OF NON-RESIDENTS
115C. Definitions 1.563115D. Special provision for computation of total income of non-
residents 1.564115E. Tax on investment income and long-term capital gains 1.565115F. Capital gains on transfer of foreign exchange assets not to
be charged in certain cases 1.565115G. Return of income not to be filed in certain cases 1.566115H. Benefit under Chapter to be available in certain cases even
after the assessee becomes resident 1.566115-I. Chapter not to apply if the assessee so chooses 1.566
1. Shall be inserted by the Finance Act, 2011, w.e.f. 1-4-2012.
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SPECIAL PROVISIONS RELATING TOCERTAIN COMPANIES
115J. Special provisions relating to certain companies 1.567115JA. Deemed income relating to certain companies 1.569
115JAA. Tax credit in respect of tax paid on deemed income relatingto certain companies 1.571
115JB. Special provision for payment of tax by certain companies 1.573
1CHAPTER XII-BASPECIAL PROVISIONS RELATING TO CERTAIN LIMITED
LIABILITY PARTNERSHIPS
1115JC. Special provisions for payment of tax by certain limitedliability partnerships 1.578
1115JD. Tax credit for alternate minimum tax 1.5781115JE. Application of other provisions of this Act 1.5791115JF. Interpretation in this Chapter 1.579
CHAPTER XII-CSPECIAL PROVISIONS RELATING TO
RETAIL TRADE, ETC.
115K. [OMITTED BY THE FINANCE ACT, 1997, W.E.F. 1-4-1998] 1.579
115L. [OMITTED BY THE FINANCE ACT, 1997, W.E.F. 1-4-1998] 1.579
115M. [OMITTED BY THE FINANCE ACT, 1997, W.E.F. 1-4-1998] 1.579
115N. [OMITTED BY THE FINANCE ACT, 1997, W.E.F. 1-4-1998] 1.579
CHAPTER XII-DSPECIAL PROVISIONS RELATING TO TAX ON
DISTRIBUTED PROFITS OF DOMESTIC COMPANIES
115-O. Tax on distributed profits of domestic companies 1.580
115P. Interest payable for non-payment of tax by domesticcompanies 1.581
115Q. When company is deemed to be in default 1.582
CHAPTER XII-ESPECIAL PROVISIONS RELATING TO TAX ON
DISTRIBUTED INCOME
115R. Tax on distributed income to unit holders 1.582
115S. Interest payable for non-payment of tax 1.584
115T. Unit Trust of India or mutual fund to be an assessee indefault 1.584
I-15 ARRANGEMENT OF SECTIONS
1. Chapter XII-BA consisting of sections 115JC, 115JD, 115JE and 115JF shall be inserted bythe Finance Act, 2011, w.e.f. 1-4-2012.
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CHAPTER XII-FSPECIAL PROVISIONS RELATING TO TAX ON INCOME
RECEIVED FROM VENTURE CAPITAL COMPANIESAND VENTURE CAPITAL FUNDS
115U. Tax on income in certain cases 1.585
CHAPTER XII-GSPECIAL PROVISIONS RELATING TO INCOME OF
SHIPPING COMPANIES
A.—Meaning of certain expressions
115V. Definitions 1.586
B.—Computation of tonnage income from businessof operating qualifying ships
115VA. Computation of profits and gains from the business ofoperating qualifying ships 1.586
115VB. Operating ships 1.587115VC. Qualifying company 1.587115VD. Qualifying ship 1.587115VE. Manner of computation of income under tonnage tax
scheme 1.588115VF. Tonnage income 1.588115VG. Computation of tonnage income 1.588115VH. Calculation in case of joint operation, etc. 1.589115V-I. Relevant shipping income 1.589115VJ. Treatment of common costs 1.591
115VK. Depreciation 1.591115VL. General exclusion of deduction and set off, etc. 1.593
115VM. Exclusion of loss 1.593115VN. Chargeable gains from transfer of tonnage tax assets 1.594
115V-O. Exclusion from provisions of section 115JB 1.594
C.—Procedure for option of tonnage tax scheme
115VP. Method and time of opting for tonnage tax scheme 1.594115VQ. Period for which tonnage tax option to remain in force 1.595115VR. Renewal of tonnage tax scheme 1.595115VS. Prohibition to opt for tonnage tax scheme in certain cases 1.595
D.—Conditions for applicability of tonnage tax scheme
115VT. Transfer of profits to Tonnage Tax Reserve Account 1.596115VU. Minimum training requirement for tonnage tax company 1.597115VV. Limit for charter in of tonnage 1.598
115VW. Maintenance and audit of accounts 1.598115VX. Determination of tonnage 1.599
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E.—Amalgamation and demerger of shipping companies115VY. Amalgamation 1.599115VZ. Demerger 1.600
F.—Miscellaneous115VZA. Effect of temporarily ceasing to operate qualifying ships 1.600
G.—Provisions of this Chapter not to apply in certain cases
115VZB. Avoidance of tax 1.600115VZC. Exclusion from tonnage tax scheme 1.601
CHAPTER XII-HINCOME-TAX ON FRINGE BENEFITS
A.—Meaning of certain expressions
115W. Definitions 1.601B.—Basis of charge
115WA. Charge of fringe benefit tax 1.602115WB. Fringe benefits 1.602115WC. Value of fringe benefits 1.605
C.—Procedure for filing of return in respect of fringe benefits,assessment and payment of tax in respect thereof
115WD. Return of fringe benefits 1.607115WE. Assessment 1.608115WF. Best judgment assessment 1.610115WG. Fringe benefits escaping assessment 1.611115WH. Issue of notice where fringe benefits have escaped
assessment 1.611115WI. Payment of fringe benefit tax 1.611115WJ. Advance tax in respect of fringe benefits 1.612
115WK. Interest for default in furnishing return of fringe benefits 1.614115WKA. Recovery of fringe benefit tax by the employer from the
employee 1.614115WKB. Deemed payment of tax by employee 1.614
115WL. Application of other provisions of this Act 1.615115WM. Chapter XII-H not to apply after a certain date 1.615
CHAPTER XIIIINCOME-TAX AUTHORITIES
A.—Appointment and control
116. Income-tax authorities 1.615117. Appointment of income-tax authorities 1.616118. Control of income-tax authorities 1.616119. Instructions to subordinate authorities 1.616
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B.—Jurisdiction
120. Jurisdiction of income-tax authorities 1.618121. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,
1987, W.E.F. 1-4-1988] 1.619121A. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,
1987, W.E.F. 1-4-1988] 1.619122. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,
1987, W.E.F. 1-4-1988] 1.620123. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,
1987, W.E.F. 1-4-1988] 1.620124. Jurisdiction of Assessing Officers 1.620125. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,
1987, W.E.F. 1-4-1988] 1.621125A. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,
1987, W.E.F. 1-4-1988] 1.621126. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,
1987, W.E.F. 1-4-1988] 1.621127. Power to transfer cases 1.621128. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,
1987, W.E.F. 1-4-1988] 1.622129. Change of incumbent of an office 1.622130. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,
1987, W.E.F. 1-4-1988] 1.623130A. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,
1987, W.E.F. 1-4-1988] 1.623
C.—Powers
131. Power regarding discovery, production of evidence, etc. 1.623
132. Search and seizure 1.624
132A. Powers to requisition books of account, etc. 1.633
132B. Application of seized or requisitioned assets 1.634
133. Power to call for information 1.637
133A. Power of survey 1.638
133B. Power to collect certain information 1.641
134. Power to inspect registers of companies 1.642
135. Power of Director General or Director, Chief Commis-sioner or Commissioner and Joint Commissioner 1.642
136. Proceedings before income-tax authorities to be judicialproceedings 1.642
D.—Disclosure of information
137. [OMITTED BY THE FINANCE ACT, 1964, W.E.F. 1-4-1964] 1.642
138. Disclosure of information respecting assessees 1.643
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CHAPTER XIVPROCEDURE FOR ASSESSMENT
139. Return of income 1.644
139A. Permanent account number 1.656
139B. Scheme for submission of returns through Tax ReturnPreparers 1.660
139C. Power of Board to dispense with furnishing documents,etc., with return 1.661
139D. Filing of return in electronic form 1.661
140. Return by whom to be signed 1.662
140A. Self-assessment 1.663
141. [OMITTED BY THE TAXATION LAWS (AMENDMENT) ACT,1970, W.E.F. 1-4-1971] 1.665
141A. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,1987, W.E.F. 1-4-1989] 1.666
142. Inquiry before assessment 1.666
142A. Estimate by Valuation Officer in certain cases 1.669
143. Assessment 1.669
144. Best judgment assessment 1.674
144A. Power of Joint Commissioner to issue directions incertain cases 1.675
144B. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,1987, W.E.F. 1-4-1989] 1.675
144C. Reference to dispute resolution panel 1.676
145. Method of accounting 1.677
145A. Method of accounting in certain cases 1.678
146. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,1987, W.E.F. 1-4-1989] 1.679
147. Income escaping assessment 1.679
148. Issue of notice where income has escaped assessment 1.680
149. Time limit for notice 1.681
150. Provision for cases where assessment is in pursuance of anorder on appeal, etc. 1.682
151. Sanction for issue of notice 1.683
152. Other provisions 1.683
153. Time limit for completion of assessments and reassess-ments 1.684
153A. Assessment in case of search or requisition 1.689
153B. Time-limit for completion of assessment under section 153A 1.690153C. Assessment of income of any other person 1.693
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153D. Prior approval necessary for assessment in cases of search orrequisition 1.693
154. Rectification of mistake 1.694
155. Other amendments 1.695
156. Notice of demand 1.706
157. Intimation of loss 1.706
158. Intimation of assessment of firm 1.706
CHAPTER XIV-ASPECIAL PROVISION FOR AVOIDING
REPETITIVE APPEALS
158A. Procedure when assessee claims identical question of lawis pending before High Court or Supreme Court 1.707
CHAPTER XIV-BSPECIAL PROCEDURE FOR ASSESSMENT
OF SEARCH CASES
158B. Definitions 1.708
158BA. Assessment of undisclosed income as a result of search 1.709
158BB. Computation of undisclosed income of the block period 1.710
158BC. Procedure for block assessment 1.712
158BD. Undisclosed income of any other person 1.713
158BE. Time limit for completion of block assessment 1.713
158BF. Certain interests and penalties not to be levied or imposed 1.715
158BFA. Levy of interest and penalty in certain cases 1.715
158BG. Authority competent to make the block assessment 1.717
158BH. Application of other provisions of this Act 1.717
158BI. Chapter not to apply after certain date 1.717
CHAPTER XVLIABILITY IN SPECIAL CASES
A.—Legal representatives
159. Legal representatives 1.717
B.—Representative assessees - General provisions
160. Representative assessee 1.718
161. Liability of representative assessee 1.719
162. Right of representative assessee to recover tax paid 1.720
C.—Representative assessees - Special cases
163. Who may be regarded as agent 1.720
164. Charge of tax where share of beneficiaries unknown 1.721
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I-21 ARRANGEMENT OF SECTIONS
164A. Charge of tax in case of oral trust 1.725
165. Case where part of trust income is chargeable 1.725
D.—Representative assessees - Miscellaneous provisions
166. Direct assessment or recovery not barred 1.725
167. Remedies against property in cases of representativeassessees 1.725
DD.—Firms, association of persons andbody of individuals
167A. Charge of tax in the case of a firm 1.725
167B. Charge of tax where shares of members in association ofpersons or body of individuals unknown, etc. 1.726
167C. Liability of partners of limited liability partnership inliquidation 1.726
E.—Executors
168. Executors 1.727
169. Right of executor to recover tax paid 1.727
F.—Succession to business or profession
170. Succession to business otherwise than on death 1.727
G.—Partition
171. Assessment after partition of a Hindu undivided family 1.728
H.—Profits of non-residents from occasionalshipping business
172. Shipping business of non-residents 1.730
I.—Recovery of tax in respect of non-residents
173. Recovery of tax in respect of non-resident from his assets 1.732
J.—Persons leaving India
174. Assessment of persons leaving India 1.732
JA.—Association of persons or body of individuals or artificialjuridical person formed for a particular
event or purpose
174A. Assessment of association of persons or body of indi-viduals or artificial juridical person formed for a particularevent or purpose 1.733
K.—Persons trying to alienate their assets
175. Assessment of persons likely to transfer property to avoidtax 1.734
L.—Discontinuance of business, or dissolution
176. Discontinued business 1.734
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177. Association dissolved or business discontinued 1.735
178. Company in liquidation 1.736
M.—Private companies
179. Liability of directors of private company in liquidation 1.737
N.—Special provisions for certain kinds of income
180. Royalties or copyright fees for literary or artistic work 1.738
180A. Consideration for know-how 1.738
O.—[Omitted]
181. [OMITTED BY THE FINANCE ACT, 1988, W.E.F. 1-4-1989] 1.738
CHAPTER XVISPECIAL PROVISIONS APPLICABLE TO FIRMS
A.—Assessment of firms
182. [OMITTED BY THE FINANCE ACT, 1992, W.E.F. 1-4-1993] 1.739
183. [OMITTED BY THE FINANCE ACT, 1992, W.E.F. 1-4-1993] 1.739
184. Assessment as a firm 1.739
185. Assessment when section 184 not complied with 1.740
186. [***] 1.740
C.—Changes in constitution, succession and dissolution
187. Change in constitution of a firm 1.740188. Succession of one firm by another firm 1.741
188A. Joint and several liability of partners for tax payable byfirm 1.741
189. Firm dissolved or business discontinued 1.741189A. Provisions applicable to past assessments of firms 1.742
CHAPTER XVIICOLLECTION AND RECOVERY OF TAX
A.—General
190. Deduction at source and advance payment 1.742191. Direct payment 1.743
B.—Deduction at source
192. Salary 1.743
193. Interest on securities 1.746
194. Dividends 1.749
194A. Interest other than “Interest on securities” 1.750
194B. Winnings from lottery or crossword puzzle 1.754
194BB. Winnings from horse race 1.755
194C. Payments to contractors 1.755
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194D. Insurance commission 1.759
194E. Payments to non-resident sportsmen or sports associa-tions 1.760
194EE. Payments in respect of deposits under National SavingsScheme, etc. 1.760
194F. Payments on account of repurchase of units by MutualFund or Unit Trust of India 1.760
194G. Commission, etc., on the sale of lottery tickets 1.761
194H. Commission or brokerage 1.761
194-I. Rent 1.762
194J. Fees for professional or technical services 1.764
194K. Income in respect of units 1.766
194L. Payment of compensation on acquisition of capital asset 1.767194LA. Payment of compensation on acquisition of certain
immovable property 1.768
194LB. Income by way of interest from infrastructure debt fund 1.768195. Other sums 1.768
195A. Income payable “net of tax” 1.770
196. Interest or dividend or other sums payable to Govern-ment, Reserve Bank or certain corporations 1.770
196A. Income in respect of units of non-residents 1.771196B. Income from units 1.772
196C. Income from foreign currency bonds or shares of Indiancompany 1.772
196D. Income of Foreign Institutional Investors from securities 1.772
197. Certificate for deduction at lower rate 1.773
197A. No deduction to be made in certain cases 1.774
198. Tax deducted is income received 1.776
199. Credit for tax deducted 1.776
200. Duty of person deducting tax 1.777
200A. Processing of statements of tax deducted at source 1.778
201. Consequences of failure to deduct or pay 1.779
202. Deduction only one mode of recovery 1.780
203. Certificate for tax deducted 1.781
203A. Tax deduction and collection account number 1.782
203AA. Furnishing of statement of tax deducted 1.783
204. Meaning of “person responsible for paying” 1.783
205. Bar against direct demand on assessee 1.784
206. Persons deducting tax to furnish prescribed returns 1.784
206A. Furnishing of quarterly return in respect of payment ofinterest to residents without deduction of tax 1.786
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206AA. Requirement to furnish Permanent Account Number 1.787
206B. [OMITTED BY THE FINANCE (NO. 2) ACT, 1996, W.E.F.1-10-1996] 1.788
BB.—Collection at source
206C. Profits and gains from the business of trading in alcoholicliquor, forest produce, scrap, etc. 1.788
206CA. Tax collection account number 1.795
C.—Advance payment of tax
207. Liability for payment of advance tax 1.795
208. Conditions of liability to pay advance tax 1.796
209. Computation of advance tax 1.796
209A. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,1987, W.E.F. 1-4-1988] 1.798
210. Payment of advance tax by the assessee of his ownaccord or in pursuance of order of Assessing Officer 1.798
211. Instalments of advance tax and due dates 1.799
212. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,1987, W.E.F. 1-4-1988] 1.801
213. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,1987, W.E.F. 1-4-1988] 1.801
214. Interest payable by Government 1.801
215. Interest payable by assessee 1.802
216. Interest payable by assessee in case of under-estimate, etc. 1.804
217. Interest payable by assessee when no estimate made 1.804
218. When assessee deemed to be in default 1.805
219. Credit for advance tax 1.805
D.—Collection and recovery
220. When tax payable and when assessee deemed in default 1.806
221. Penalty payable when tax in default 1.808
222. Certificate to Tax Recovery Officer 1.809
223. Tax Recovery Officer by whom recovery is to be effected 1.810
224. Validity of certificate and cancellation or amendmentthereof 1.811
225. Stay of proceedings in pursuance of certificate andamendment or cancellation thereof 1.811
226. Other modes of recovery 1.811
227. Recovery through State Government 1.814
228. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,1987, W.E.F. 1-4-1989] 1.814
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I-25 ARRANGEMENT OF SECTIONS
228A. Recovery of tax in pursuance of agreements with foreigncountries 1.814
229. Recovery of penalties, fine, interest and other sums 1.814
230. Tax clearance certificate 1.815
230A. [OMITTED BY THE FINANCE ACT, 2001, W.E.F. 1-6-2001] 1.817
231. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,1987, W.E.F. 1-4-1989] 1.817
232. Recovery by suit or under other law not affected 1.817
E.—Tax payable under provisional assessment
233. [OMITTED BY THE TAXATION LAWS (AMENDMENT) ACT,1970, W.E.F. 1-4-1971] 1.817
234. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,1987, W.E.F. 1-4-1989] 1.817
F.—Interest chargeable in certain cases
234A. Interest for defaults in furnishing return of income 1.818
234B. Interest for defaults in payment of advance tax 1.820
234C. Interest for deferment of advance tax 1.822
234D. Interest on excess refund 1.825
CHAPTER XVIIIRELIEF RESPECTING TAX ON DIVIDENDS
IN CERTAIN CASES
235. [OMITTED BY THE FINANCE (NO. 2) ACT, 1971, W.E.F. 1-4-1972] 1.825236. Relief to company in respect of dividend paid out of past
taxed profits 1.825236A. Relief to certain charitable institutions or funds in respect
of certain dividends 1.827
CHAPTER XIXREFUNDS
237. Refunds 1.827238. Person entitled to claim refund in certain special cases 1.828239. Form of claim for refund and limitation 1.828240. Refund on appeal, etc. 1.829241. [OMITTED BY THE FINANCE ACT, 2001, W.E.F. 1-6-2001] 1.829242. Correctness of assessment not to be questioned 1.829243. Interest on delayed refunds 1.829244. Interest on refund where no claim is needed 1.830
244A. Interest on refunds 1.831245. Set off of refunds against tax remaining payable 1.833
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CHAPTER XIX-ASETTLEMENT OF CASES
245A. Definitions 1.833245B. Income-tax Settlement Commission 1.835
245BA. Jurisdiction and powers of Settlement Commission 1.835245BB. Vice-Chairman to act as Chairman or to discharge his
functions in certain circumstances 1.836245BC. Power of Chairman to transfer cases from one Bench to
another 1.837245BD. Decision to be by majority 1.837
245C. Application for settlement of cases 1.837245D. Procedure on receipt of an application under section 245C 1.841
245DD. Power of Settlement Commission to order provisionalattachment to protect revenue 1.846
245E. Power of Settlement Commission to reopen completedproceedings 1.846
245F. Powers and procedure of Settlement Commission 1.847245G. Inspection, etc., of reports 1.848245H. Power of Settlement Commission to grant immunity from
prosecution and penalty 1.848245HA. Abatement of proceeding before Settlement Commission 1.849
245HAA. Credit for tax paid in case of abatement of proceedings 1.850245-I. Order of settlement to be conclusive 1.850245J. Recovery of sums due under order of settlement 1.850
245K. Bar on subsequent application for settlement 1.851245L. Proceedings before Settlement Commission to be judicial
proceedings 1.851
245M. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-6-1987] 1.851
CHAPTER XIX-BADVANCE RULINGS
245N. Definitions 1.852
245-O. Authority for advance rulings 1.853
245P. Vacancies, etc., not to invalidate proceedings 1.853
245Q. Application for advance ruling 1.853
245R. Procedure on receipt of application 1.853
245RR. Appellate authority not to proceed in certain cases 1.854
245S. Applicability of advance ruling 1.854
245T. Advance ruling to be void in certain circumstances 1.855
245U. Powers of the Authority 1.855
245V. Procedure of Authority 1.855
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I-27 ARRANGEMENT OF SECTIONS
CHAPTER XXAPPEALS AND REVISION
A.—Appeals to the Deputy Commissioner (Appeals)and Commissioner (Appeals)
246. Appealable orders 1.855246A. Appealable orders before Commissioner (Appeals) 1.859
247. [OMITTED BY THE FINANCE ACT, 1992, W.E.F. 1-4-1993] 1.861248. Appeal by a person denying liability to deduct tax in certain
cases 1.861249. Form of appeal and limitation 1.861250. Procedure in appeal 1.863
251. Powers of the Commissioner (Appeals) 1.864
B.—Appeals to the Appellate Tribunal
252. Appellate Tribunal 1.865253. Appeals to the Appellate Tribunal 1.866254. Orders of Appellate Tribunal 1.869255. Procedure of Appellate Tribunal 1.870
C.—[Omitted by the National Tax Tribunal Act, 2005,with effect from a date yet to be notified]
256. [OMITTED BY THE NATIONAL TAX TRIBUNAL ACT, 2005,WITH EFFECT FROM A DATE YET TO BE NOTIFIED] 1.871
257. Statement of case to Supreme Court in certain cases 1.872258. [OMITTED BY THE NATIONAL TAX TRIBUNAL ACT, 2005,
WITH EFFECT FROM A DATE YET TO BE NOTIFIED] 1.872259. [OMITTED BY THE NATIONAL TAX TRIBUNAL ACT, 2005,
WITH EFFECT FROM A DATE YET TO BE NOTIFIED] 1.872260. Decision of High Court or Supreme Court on the case
stated 1.873
CC.—Appeals to High Court
260A. Appeal to High Court 1.873260B. Case before High Court to be heard by not less than two
Judges 1.874D.—Appeals to the Supreme Court
261. Appeal to Supreme Court 1.875262. Hearing before Supreme Court 1.875
E.—Revision by the Commissioner263. Revision of orders prejudicial to revenue 1.875264. Revision of other orders 1.876
F.—General265. Tax to be paid notwithstanding reference, etc. 1.878266. Execution for costs awarded by Supreme Court 1.878
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267. Amendment of assessment on appeal 1.878268. Exclusion of time taken for copy 1.878
268A. Filing of appeal or application for reference by income-taxauthority 1.879
269. Definition of “High Court” 1.879
CHAPTER XX-AACQUISITION OF IMMOVABLE PROPERTIES IN CERTAINCASES OF TRANSFER TO COUNTERACT EVASION OF TAX
269A. Definitions 1.880269AB. Registration of certain transactions 1.883
269B. Competent authority 1.884269C. Immovable property in respect of which proceedings for
acquisition may be taken 1.885269D. Preliminary notice 1.886269E. Objections 1.887269F. Hearing of objections 1.887269G. Appeal against order for acquisition 1.888269H. Appeal to High Court 1.889269-I. Vesting of property in Central Government 1.890269J. Compensation 1.891
269K. Payment or deposit of compensation 1.893269L. Assistance by Valuation Officers 1.894269M. Powers of competent authority 1.895269N. Rectification of mistakes 1.895
269-O. Appearance by authorised representative or registeredvaluer 1.895
269P. Statement to be furnished in respect of transfers ofimmovable property 1.895
269Q. Chapter not to apply to transfers to relatives 1.896269R. Properties liable for acquisition under this chapter not to
be acquired under other laws 1.896269RR. Chapter not to apply where transfer of immovable pro-
perty made after a certain date 1.896269S. Chapter not to extend to State of Jammu and Kashmir 1.896
CHAPTER XX-BREQUIREMENT AS TO MODE OF ACCEPTANCE, PAYMENT
OR REPAYMENT IN CERTAIN CASES TO COUNTERACTEVASION OF TAX
269SS. Mode of taking or accepting certain loans and deposits 1.897269T. Mode of repayment of certain loans or deposits 1.898
269TT. Mode of repayment of Special Bearer Bonds, 1991 1.899
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SECTION PAGECHAPTER XX-C
PURCHASE BY CENTRAL GOVERNMENT OF IMMOVABLEPROPERTIES IN CERTAIN CASES OF TRANSFER
269U. Commencement of Chapter 1.899269UA. Definitions 1.899269UB. Appropriate authority 1.902269UC. Restrictions on transfer of immovable property 1.903269UD. Order by appropriate authority for purchase by Central
Government of immovable property 1.904269UE. Vesting of property in Central Government 1.905269UF. Consideration for purchase of immovable property by
Central Government 1.906269UG. Payment or deposit of consideration 1.906269UH. Re-vesting of property in the transferor on failure of
payment or deposit of consideration 1.907269UI. Powers of the appropriate authority 1.908269UJ. Rectification of mistakes 1.908
269UK. Restrictions on revocation or alteration of certain agree-ments for the transfer of immovable property or on trans-fer of certain immovable property 1.908
269UL. Restrictions on registration, etc., of documents inrespect of transfer of immovable property 1.909
269UM. Immunity to transferor against claims of transferee fortransfer 1.909
269UN. Order of appropriate authority to be final and conclusive 1.909269UO. Chapter not to apply to certain transfers 1.910269UP. Chapter not to apply where transfer of immovable
property effected after certain date 1.910
CHAPTER XXIPENALTIES IMPOSABLE
270. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,1987, W.E.F. 1-4-1989] 1.910
271. Failure to furnish returns, comply with notices, conceal-ment of income, etc. 1.910
271A. Failure to keep, maintain or retain books of account,documents, etc. 1.917
271AA. Penalty for failure to keep and maintain information anddocument in respect of international transaction 1.917
271AAA. Penalty where search has been initiated 1.917271B. Failure to get accounts audited 1.919
271BA. Penalty for failure to furnish report under section 92E 1.919271BB. Failure to subscribe to the eligible issue of capital 1.919
271C. Penalty for failure to deduct tax at source 1.919271CA. Penalty for failure to collect tax at source 1.920
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271D. Penalty for failure to comply with the provisions of section269SS 1.920
271E. Penalty for failure to comply with the provisions ofsection 269T 1.920
271F. Penalty for failure to furnish return of income 1.921271FA. Penalty for failure to furnish annual information return 1.921271FB. Penalty for failure to furnish return of fringe benefits 1.921
271G. Penalty for failure to furnish information or documentunder section 92D 1.921
272. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,1987, W.E.F. 1-4-1989] 1.921
272A. Penalty for failure to answer questions, sign statements,furnish information, returns or statements, allow inspec-tions, etc. 1.922
272AA. Penalty for failure to comply with the provisions of section133B 1.924
272B. Penalty for failure to comply with the provisions ofsection 139A 1.924
272BB. Penalty for failure to comply with the provisions ofsection 203A 1.925
272BBB. Penalty for failure to comply with the provisions of section206CA 1.925
273. False estimate of, or failure to pay, advance tax 1.925273A. Power to reduce or waive penalty, etc., in certain cases 1.928
273AA. Power of Commissioner to grant immunity from penalty 1.931273B. Penalty not to be imposed in certain cases 1.932
274. Procedure 1.932275. Bar of limitation for imposing penalties 1.933
CHAPTER XXIIOFFENCES AND PROSECUTIONS
275A. Contravention of order made under sub-section (3) ofsection 132 1.935
275B. Failure to comply with the provisions of clause (iib) ofsub-section (1) of section 132 1.935
276. Removal, concealment, transfer or delivery of property tothwart tax recovery 1.935
276A. Failure to comply with the provisions of sub-sections (1)and (3) of section 178 1.935
276AA. [OMITTED BY THE FINANCE ACT, 1986, W.E.F. 1-10-1986] 1.936276AB. Failure to comply with the provisions of sections 269UC,
269UE and 269UL 1.936276B. Failure to pay tax to the credit of Central Government
under Chapter XII-D or XVII-B 1.936276BB. Failure to pay the tax collected at source 1.936
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276C. Wilful attempt to evade tax, etc. 1.937276CC. Failure to furnish returns of income 1.937
276CCC. Failure to furnish return of income in search cases 1.938276D. Failure to produce accounts and documents 1.938
276DD. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,1987, W.E.F. 1-4-1989] 1.939
276E. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,1987, W.E.F. 1-4-1989] 1.939
277. False statement in verification, etc. 1.939277A. Falsification of books of account or document, etc. 1.939
278. Abetment of false return, etc. 1.940278A. Punishment for second and subsequent offences 1.940
278AA. Punishment not to be imposed in certain cases 1.940278AB. Power of Commissioner to grant immunity from prosecution 1.940
278B. Offences by companies 1.941278C. Offences by Hindu undivided families 1.942278D. Presumption as to assets, books of account, etc., in certain
cases 1.942278E. Presumption as to culpable mental state 1.943
279. Prosecution to be at instance of Chief Commissioner orCommissioner 1.943
279A. Certain offences to be non-cognizable 1.944
279B. Proof of entries in records or documents 1.944280. Disclosure of particulars by public servants 1.944
CHAPTER XXII-AANNUITY DEPOSITS
280A.to [OMITTED BY THE FINANCE ACT, 1988, W.E.F. 1-4-1988] 1.945
280X.
CHAPTER XXII-BTAX CREDIT CERTIFICATES
280Y. [OMITTED BY THE FINANCE ACT, 1990, W.E.F. 1-4-1990] 1.945280Z. [OMITTED BY THE FINANCE ACT, 1990, W.E.F. 1-4-1990] 1.945
280ZA. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988] 1.945280ZB. [OMITTED BY THE FINANCE ACT, 1990, W.E.F. 1-4-1990] 1.945280ZC. [OMITTED BY THE FINANCE ACT, 1990, W.E.F. 1-4-1990] 1.945280ZD. [OMITTED BY THE FINANCE ACT, 1990, W.E.F. 1-4-1990] 1.945280ZE. [OMITTED BY THE FINANCE ACT, 1990, W.E.F. 1-4-1990] 1.946
CHAPTER XXIIIMISCELLANEOUS
281. Certain transfers to be void 1.946281A. [REPEALED BY THE BENAMI TRANSACTIONS (PROHIBITION)
ACT, 1988, W.E.F. 19-5-1988] 1.946
I-31 ARRANGEMENT OF SECTIONS
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I.T. ACT, 1961 I-32
281B. Provisional attachment to protect revenue in certain cases 1.946282. Service of notice generally 1.947
282A. Authentication of notices and other documents 1.948282B. [OMITTED BY THE FINANCE ACT, 2011, W.E.F. 1-4-2011] 1.948
283. Service of notice when family is disrupted or firm, etc., isdissolved 1.949
284. Service of notice in the case of discontinued business 1.949285. Submission of statement by a non-resident having liaison
office 1.949285A. [OMITTED BY THE FINANCE ACT, 1988, W.E.F. 1-4-1988] 1.949285B. Submission of statements by producers of cinematograph
films 1.949285BA. Obligation to furnish annual information return 1.950
286. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-6-1987] 1.952287. Publication of information respecting assessees in certain
cases 1.952287A. Appearance by registered valuer in certain matters 1.952
288. Appearance by authorised representative 1.952288A. Rounding off of income 1.955288B. Rounding off amount payable and refund due 1.955
289. Receipt to be given 1.955290. Indemnity 1.955291. Power to tender immunity from prosecution 1.955292. Cognizance of offences 1.956
292A. Section 360 of the Code of Criminal Procedure, 1973, andthe Probation of Offenders Act, 1958, not to apply 1.956
292B. Return of income, etc., not to be invalid on certain grounds 1.956292BB. Notice deemed to be valid in certain circumstances 1.957
292C. Presumption as to assets, books of account, etc. 1.957293. Bar of suits in civil courts 1.958
293A. Power to make exemption, etc., in relation to participationin the business of prospecting for, extraction, etc., ofmineral oils 1.958
293B. Power of Central Government or Board to condone delaysin obtaining approval 1.959
293C. Power to withdraw approval 1.959294. Act to have effect pending legislative provision for charge
of tax 1.959294A. Power to make exemption, etc., in relation to certain Union
territories 1.959295. Power to make rules 1.960296. Rules and certain notifications to be placed before
Parliament 1.962
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297. Repeals and savings 1.963298. Power to remove difficulties 1.965
ARRANGEMENT OF SCHEDULESSCHEDULE
The First Schedule INSURANCE BUSINESS 1.966The Second Schedule PROCEDURE FOR RECOVERY OF TAX 1.968The Third Schedule PROCEDURE FOR DISTRAINT BY ASSESS-
ING OFFICER OR TAX RECOVERYOFFICER 1.993
The Fourth Schedule PART A - RECOGNISED PROVIDENTFUNDS 1.994
PART B - APPROVED SUPERANNUATIONFUNDS 1.1002
PART C - APPROVED GRATUITY FUNDS 1.1006
The Fifth Schedule LIST OF ARTICLES AND THINGS 1.1009
The Sixth Schedule [OMITTED BY THE FINANCE ACT, 1972,W.E.F. 1-4-1973] 1.1010
The Seventh Schedule PART A - MINERALS 1.1011
PART B - GROUPS OF ASSOCIATED MINERALS 1.1011The Eighth Schedule LIST OF INDUSTRIALLY BACKWARD
STATES AND UNION TERRITORIES 1.1012
The Ninth Schedule [OMITTED BY THE TAXATION LAWS(AMENDMENT AND MISCELLANEOUSPROVISIONS) ACT, 1986, W.E.F. 1-4-1988] 1.1013
The Tenth Schedule [OMITTED BY THE FINANCE ACT, 1999,W.E.F. 1-4-2000] 1.1013
The Eleventh Schedule LIST OF ARTICLES OR THINGS 1.1013The Twelfth Schedule PROCESSED MINERALS AND ORES 1.1014The Thirteenth Schedule LIST OF ARTICLES OR THINGS 1.1015The Fourteenth Schedule LIST OF ARTICLES OR THINGS OR OPERATIONS 1.1019APPENDIX TEXT OF REMAINING PROVISIONS OF
ALLIED ACTS REFERRED TO IN INCOME-TAX ACT 1.1025
SUBJECT INDEX 1.1091
I-33 ARRANGEMENT OF SECTIONS
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I-34
BLANK
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INCOME-TAX ACT, 1961*[43 OF 1961]
[AS AMENDED BY FINANCE ACT, 2011]
An Act to consolidate and amend the law relating toincome-tax and super-tax
BE it enacted by Parliament in the Twelfth Year of the Republic ofIndia as follows :—
CHAPTER I
PRELIMINARY
Short title, extent and commencement.11. 2(1) This Act may be called the Income-tax Act, 1961.(2) It extends to the whole of India.(3) Save as otherwise provided in this Act, it shall come into force on the 1st dayof April, 1962.
Definitions.2. In this Act, unless the context otherwise requires,—
3[(1) “advance tax” means the advance tax payable in accordance with theprovisions of Chapter XVII-C;]
1.1
1. For applicability of the Act to State of Sikkim, see section 26 of the Finance Act, 1989.For extension of Act to Continental Shelf of India, see Notification No. GSR 304(E), dated31-3-1983. For details, see Taxmann’s Master Guide to Income-tax Act.
2. For effective date for the applicability of the Act in the State of Sikkim, see NotificationNo. SO 148(E), dated 23-2-1989. For details, see Taxmann’s Master Guide to Income-taxAct.
3. Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.*Amendments made by the Finance Act, 2011 notwithstanding the dates from which theycome into effect have been printed in italics enclosed with bold square brackets.Amendments made by the Finance Act, 2010 coming into force from 1-4-2011 have also beenprinted in italics but enclosed within medium square brackets.
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4[5(1A)] 6“agricultural income”7 means8—9[(a) any rent10 or revenue10 derived10 from land10 which is situated in
India and is used for agricultural purposes;](b) any income derived from such land10 by—
(i) agriculture10; or(ii) the performance by a cultivator or receiver of rent-in-kind of
any process ordinarily employed by a cultivator or receiverof rent-in-kind to render the produce raised or received byhim fit to be taken to market10; or
(iii) the sale by a cultivator or receiver of rent-in-kind of theproduce raised or received by him, in respect of which noprocess has been performed other than a process of thenature described in paragraph (ii) of this sub-clause ;
(c) any income derived from any building owned and occupied bythe receiver of the rent or revenue of any such land, or occupiedby the cultivator or the receiver of rent-in-kind, of any land withrespect to which, or the produce of which, any process mentionedin paragraphs (ii) and (iii) of sub-clause (b) is carried on :9[Provided that—(i) the building is on or in the immediate vicinity of the land, and
is a building which the receiver of the rent or revenue or thecultivator, or the receiver of rent-in-kind, by reason of hisconnection with the land, requires as a dwelling house, or asa store-house, or other out-building, and
(ii) the land is either assessed to land revenue in India or issubject to a local rate assessed and collected by officers of theGovernment as such or where the land is not so assessed toland revenue or subject to a local rate, it is not situated—(A) in any area which is comprised within the jurisdiction
of a municipality (whether known as a municipality,municipal corporation, notified area committee, townarea committee, town committee or by any other name)
S. 2(1A) I.T. ACT, 1961 1.2
4. Renumbered as clause (1A) by the Direct Tax Laws (Amendment) Act, 1987, w.e.f.1-4-1989.
5. For relevant case laws, see Taxmann’s Master Guide to Income-tax Act.6. See rules 7 and 8 for manner of computation of income which is partially agricultural and
partially from business. See also rules 7A & 7B.7. The Finance Act, 1973 introduced for the first time a scheme of partially integrated
taxation of non-agricultural income with incomes derived from agriculture for thepurposes of determining the rate of income-tax that will apply to certain non-corporateassessees. The scheme is since continued by the Annual Finance Acts. The provisionsapplicable for the assessment year 2011-12 are contained in section 2(2)/2(13)(c) and PartIV of the First Schedule to the Finance Act, 2011.
8. See also Circular No. 310, dated 29-7-1981 and Circular No. 5/2003, dated 22-5-2003. Fordetails, see Taxmann’s Master Guide to Income-tax Act.
9. Substituted by the Taxation Laws (Amendment) Act, 1970, w.r.e.f. 1-4-1962.10. For meaning of the terms/expressions “rent”, “revenue”, “derived”, “revenue derived from
land”, “such land”, “agriculture” and “market”, see Taxmann’s Direct Taxes Manual, Vol. 3.
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or a cantonment board and which has a population ofnot less than ten thousand according to the last preced-ing census of which the relevant figures have beenpublished before the first day of the previous year ; or
(B) in any area within such distance, not being more thaneight kilometres, from the local limits of any municipal-ity or cantonment board referred to in item (A), as theCentral Government may, having regard to the extentof, and scope for, urbanisation of that area and otherrelevant considerations, specify in this behalf by notifi-cation in the Official Gazette11.]
12[13[Explanation 1.]—For the removal of doubts, it is hereby declaredthat revenue derived from land shall not include and shall be deemednever to have included any income arising from the transfer of anyland referred to in item (a) or item (b) of sub-clause (iii) of clause (14)of this section.]14[Explanation 2.—For the removal of doubts, it is hereby declaredthat income derived from any building or land referred to in sub-clause (c) arising from the use of such building or land for any purpose(including letting for residential purpose or for the purpose of anybusiness or profession) other than agriculture falling under sub-clause (a) or sub-clause (b) shall not be agricultural income.]15[Explanation 3.—For the purposes of this clause, any income de-rived from saplings or seedlings grown in a nursery shall be deemedto be agricultural income;]
16[17[(1B)] “amalgamation”, in relation to companies, means the merger of oneor more companies with another company or the merger of two ormore companies to form one company (the company or companieswhich so merge being referred to as the amalgamating company orcompanies and the company with which they merge or which isformed as a result of the merger, as the amalgamated company) insuch a manner that—(i) all the property of the amalgamating company or companies
immediately before the amalgamation becomes the property ofthe amalgamated company by virtue of the amalgamation ;
(ii) all the liabilities of the amalgamating company or companiesimmediately before the amalgamation become the liabilities ofthe amalgamated company by virtue of the amalgamation ;
1.3 CH. I - PRELIMINARY S. 2(1B)
11. For specified urban areas, refer Taxmann’s Direct Taxes Circulars.12. Inserted by the Finance Act, 1989, w.r.e.f. 1-4-1970.13. Explanation renumbered as Explanation 1 by the Finance Act, 2000, w.e.f. 1-4-2001.14. Inserted, ibid.15. Inserted by the Finance Act, 2008, w.e.f. 1-4-2009.16. Inserted by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1967.17. Renumbered as clause (1B) by the Direct Tax Laws (Amendment) Act, 1987, w.e.f.
1-4-1989.
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(iii) shareholders holding not less than 18[three-fourths] in value of theshares in the amalgamating company or companies (other thanshares already held therein immediately before the amalga-mation by, or by a nominee for, the amalgamated company or itssubsidiary) become shareholders of the amalgamated companyby virtue of the amalgamation,
otherwise than as a result of the acquisition of the property of onecompany by another company pursuant to the purchase of suchproperty by the other company or as a result of the distribution ofsuch property to the other company after the winding up of the first-mentioned company ;]
19[(1C) “Additional Commissioner” means a person appointed to be an Addi-tional Commissioner of Income-tax under sub-section (1) of section117;
(1D) “Additional Director” means a person appointed to be an AdditionalDirector of Income-tax under sub-section (1) of section 117 ;]
(2) “annual value”, in relation to any property, means its annual value asdetermined under section 23 ;
(3) 20[* * *](4) “Appellate Tribunal” means the Appellate Tribunal constituted under
section 252 ;(5) “approved gratuity fund” means a gratuity fund which has been and
continues to be approved by the 21[Chief Commissioner or Commis-sioner] in accordance with the rules contained in Part C of the FourthSchedule ;
(6) “approved superannuation fund” means a superannuation fund orany part of a superannuation fund which has been and continues tobe approved by the 21[Chief Commissioner or Commissioner] inaccordance with the rules contained in Part B of the Fourth Sche-dule ;
22(7) “assessee”23 means a person by whom 24[any tax] or any other sum ofmoney is payable under this Act, and includes—(a) every person in respect of whom any proceeding under this Act
has been taken for the assessment of his income 25[or assessmentof fringe benefits] or of the income of any other person in respectof which he is assessable, or of the loss sustained by him or bysuch other person, or of the amount of refund due to him or tosuch other person ;
S. 2(7) I.T. ACT, 1961 1.4
18. Substituted for “nine-tenths” by the Finance Act, 1999, w.e.f. 1-4-2000.19. Clauses (1C) and (1D) inserted by the Finance Act, 2007, w.r.e.f. 1-6-1994.20. Clause (3) omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.21. Substituted for “Commissioner”, ibid.22. For relevant case laws, see Taxmann’s Master Guide to Income-tax Act.23. For meaning of the term “assessee”, see Taxmann’s Direct Taxes Manual, Vol. 3.24. Substituted for “income-tax or super-tax” by the Finance Act, 1965, w.e.f. 1-4-1965.25. Inserted by the Finance Act, 2005, w.e.f. 1-4-2006.
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(b) every person who is deemed to be an assessee under any provi-sion of this Act ;
(c) every person who is deemed to be an assessee in default underany provision of this Act ;
26[(7A) “Assessing Officer” means the Assistant Commissioner 27[or DeputyCommissioner] 28[or Assistant Director] 27[or Deputy Director] or theIncome-tax Officer who is vested with the relevant jurisdiction byvirtue of directions or orders issued under sub-section (1) or sub-section (2) of section 120 or any other provision of this Act, and the29[Additional Commissioner or] 30[Additional Director or] 31[JointCommissioner or Joint Director] who is directed under clause (b) ofsub-section (4) of that section to exercise or perform all or any of thepowers and functions conferred on, or assigned to, an AssessingOfficer under this Act ;]
(8) “assessment”32 includes reassessment ;(9) “assessment year” means the period of twelve months commencing
on the 1st day of April every year ;33[(9A) “Assistant Commissioner” means a person appointed to be an Assistant
Commissioner of Income-tax 34[or a Deputy Commissioner ofIncome-tax] under sub-section (1) of section 117 ;]
35[(9B) “Assistant Director” means a person appointed to be an AssistantDirector of Income-tax under sub-section (1) of section 117;]
(10) “average rate of income-tax” means the rate arrived at by dividing theamount of income-tax calculated on the total income, by such totalincome ;
36[(11) “block of assets” means a group of assets falling within a class of assetscomprising—(a) tangible assets, being buildings, machinery, plant or furniture;
1.5 CH. I - PRELIMINARY S. 2(11)
26. Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.27. Inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.28. Inserted by the Finance (No. 2) Act, 1996, w.e.f. 1-10-1996.29. Inserted by the Finance Act, 2007, w.r.e.f. 1-6-1994.30. Inserted, ibid., w.r.e.f. 1-10-1996.31. Substituted for “Deputy Commissioner or Deputy Director” by the Finance (No. 2) Act,
1998, w.e.f. 1-10-1998. Earlier “or Deputy Director” was inserted by the Finance (No. 2) Act,1996, w.e.f. 1-10-1996.
32. For the meaning of the term “assessment”, see Taxmann’s Direct Taxes Manual, Vol. 3.33. Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.34. Inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.35. Inserted by the Finance Act, 2007, w.r.e.f. 1-4-1988.36. Substituted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999. Prior to its substitution, clause
(11), as inserted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986,w.e.f. 1-4-1988, read as under :‘(11) “block of assets” means a group of assets falling within a class of assets, being
buildings, machinery, plant or furniture, in respect of which the same percentageof depreciation is prescribed ;’
Original clause was earlier omitted by the Finance Act, 1965, w.e.f. 1-4-1965.
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(b) intangible assets, being know-how, patents, copyrights, trade-marks, licences, franchises or any other business or commercialrights of similar nature,
in respect of which the same percentage of depreciation is pre-scribed ;]
(12) “Board” means the 37[Central Board of Direct Taxes constitutedunder the Central Boards of Revenue Act, 1963 (54 of 1963)] ;
38[(12A) “books or books of account” includes ledgers, day-books, cash books,account-books and other books, whether kept in the written form oras print-outs of data stored in a floppy, disc, tape or any other form ofelectro-magnetic data storage device;]
39(13) “business”40 includes any trade40, commerce or manufacture or anyadventure40 or concern in the nature of trade40, commerce or manu-facture ;
41(14) “capital asset” means property42 of any kind held by an assessee,whether or not connected with his business or profession, but doesnot include—(i) any stock-in-trade, consumable stores or raw materials held for
the purposes of his business or profession ;43[(ii) personal effects44, that is to say, movable property (including
wearing apparel and furniture) held for personal use 44 by theassessee or any member of his family dependent on him, butexcludes—(a) jewellery;(b) archaeological collections;(c) drawings;
S. 2(14) I.T. ACT, 1961 1.6
37. Substituted for “Central Board of Revenue constituted under the Central Board ofRevenue Act, 1924 (4 of 1924)” by the Central Boards of Revenue Act, 1963, w.e.f. 1-1-1964.
38. Inserted by the Finance Act, 2001, w.e.f. 1-6-2001.39. For relevant case laws, see Taxmann’s Master Guide to Income-tax Act.40. For the meaning of the terms/expressions “business”, “trade”, “adventure” and “in the
nature of trade”, see Taxmann’s Direct Taxes Manual, Vol. 3.41. For relevant case laws, see Taxmann’s Master Guide to Income-tax Act.42. For the meaning of the term “property”, see Taxmann’s Direct Taxes Manual, Vol. 3.43. Substituted by the Finance Act, 2007, w.e.f. 1-4-2008. Prior to its substitution, sub-clause
(ii), as substituted by the Finance Act, 1972, w.e.f. 1-4-1973, read as under :‘(ii) personal effects, that is to say, movable property (including wearing apparel and
furniture, but excluding jewellery) held for personal use by the assessee or anymember of his family dependent on him.Explanation.—For the purposes of this sub-clause, “jewellery” includes—
(a) ornaments made of gold, silver, platinum or any other precious metal or anyalloy containing one or more of such precious metals, whether or notcontaining any precious or semi-precious stone, and whether or not workedor sewn into any wearing apparel;
(b) precious or semi-precious stones, whether or not set in any furniture, utensilor other article or worked or sewn into any wearing apparel;’
44. For the meaning of the expressions “personal effects” and “personal use”, see Taxmann’sDirect Taxes Manual, Vol. 3.
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(d) paintings;(e) sculptures; or(f) any work of art.Explanation.—For the purposes of this sub-clause, “jewellery”includes—(a) ornaments made of gold, silver, platinum or any other
precious metal or any alloy containing one or more of suchprecious metals, whether or not containing any precious orsemi-precious stone, and whether or not worked or sewn intoany wearing apparel;
(b) precious or semi-precious stones, whether or not set in anyfurniture, utensil or other article or worked or sewn into anywearing apparel ;]
45[(iii) agricultural land46 in India, not being land situate—(a) in any area which is comprised within the jurisdiction of a
municipality46 (whether known as a municipality, municipalcorporation, notified area committee, town area committee,town committee, or by any other name) or a cantonmentboard and which has a population46 of not less than tenthousand according to the last preceding census of which therelevant figures have been published before the first day ofthe previous year ; or
(b) in any area within such distance, not being more than eightkilometres, from the local limits of any municipality orcantonment board referred to in item (a), as the CentralGovernment may, having regard to the extent of, and scopefor, urbanisation of that area and other relevant consider-ations, specify in this behalf by notification in the OfficialGazette47;]
48[(iv) 6½ per cent Gold Bonds, 1977,49[or 7 per cent Gold Bonds, 1980,]50[or National Defence Gold Bonds, 1980,] issued by the CentralGovernment ;]
51[(v) Special Bearer Bonds, 1991, issued by the Central Government ;]52[(vi) Gold Deposit Bonds issued under the Gold Deposit Scheme, 1999
notified by the Central Government ; ]
1.7 CH. I - PRELIMINARY S. 2(14)
45. Substituted for “(iii) agricultural land in India” by the Finance Act, 1970, w.e.f. 1-4-1970.46. For the meaning of the terms/expressions “agricultural land”, “municipality” and “popu-
lation”, see Taxmann’s Direct Taxes Manual, Vol. 3.47. For specified urban areas, refer Taxmann’s Direct Taxes Circulars.48. Inserted by the Taxation Laws (Amendment) Act, 1962, w.e.f. 13-12-1962.49. Inserted by the Finance (No. 2) Act, 1965, w.e.f. 1-4-1965.50. Inserted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1965, w.e.f.
4-12-1965.51. Inserted by the Special Bearer Bonds (Immunities and Exemptions) Act, 1981, w.e.f.
12-1-1981.52. Inserted by the Finance Act, 1999, w.e.f. 1-4-2000.
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53[54(15) 55“charitable purpose”56 includes relief of the poor, education56, medi-cal relief, 57[preservation of environment (including watersheds, for-ests and wildlife) and preservation of monuments or places or objectsof artistic or historic interest,] and the advancement of any other56object of general public utility:Provided that the advancement of any other object of general publicutility shall not be a charitable purpose, if it involves the carrying onof any activity in the nature of trade, commerce or business, or anyactivity of rendering any service in relation to any trade, commerceor business56, for a cess or fee or any other consideration, irrespectiveof the nature of use or application, or retention, of the income fromsuch activity:]58[Provided further that the first proviso shall not apply if the aggre-gate value of the receipts from the activities referred to therein is58a[ten lakh rupees] or less in the previous year;]
59[(15A) “Chief Commissioner” means a person appointed to be a ChiefCommissioner of Income-tax under sub-section (1) of section 117 ;]
60[61[(15B)] “child”, in relation to an individual, includes a step-child and anadopted child of that individual ;]
62[(16) “Commissioner” means a person appointed to be a Commissioner ofIncome-tax under sub-section (1) of section 117 63[* * *] ;]
64[(16A) “Commissioner (Appeals)” means a person appointed to be a Commis-sioner of Income-tax (Appeals) under sub-section (1) of section 117 ;]
65[(17) “company” means—(i) any Indian company, or
(ii) any body corporate incorporated by or under the laws of acountry outside India, or
S. 2(17) I.T. ACT, 1961 1.8
53. Substituted by the Finance Act, 2008, w.e.f. 1-4-2009. Prior to its substitution, clause (15),as amended by the Finance Act, 1983, w.e.f. 1-4-1984, read as under :‘(15) “charitable purpose” includes relief of the poor, education, medical relief, and the
advancement of any other object of general public utility;’54. See also Circular No. 395, dated 24-9-1984 and No. 11/2008, dated 19-12-2008. For details,
see Taxmann’s Master Guide to Income-tax Act.55. For relevant case laws, see Taxmann’s Master Guide to Income-tax Act.56. For the meaning of terms/expressions “charitable purpose”, “education”, “object of
general public utility” and “any trade, commerce or business”, see Taxmann’s DirectTaxes Manual, Vol. 3.
57. Inserted by the Finance (No. 2) Act, 2009, w.r.e.f. 1-4-2009.58. Inserted by the Finance Act, 2010, w.r.e.f. 1-4-2009.
58a. Words “twenty-five lakh rupees” shall be substituted for “ten lakh rupees” by the FinanceAct, 2011, w.e.f. 1-4-2012.
59. Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.60. Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976.61. Renumbered by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.62. Substituted by the Finance Act, 1970, w.e.f. 1-4-1970.63. Words “, and includes a person appointed to be an Additional Commissioner of Income-
tax under that sub-section” omitted by the Direct Tax Laws (Amendment) Act, 1987,w.e.f. 1-4-1988.
64. Inserted by the Finance (No. 2) Act, 1977, w.e.f. 10-7-1978.65. Substituted by the Finance (No. 2) Act, 1971, w.e.f. 1-4-1971.
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(iii) any institution, association or body which is or was assessable orwas assessed as a company for any assessment year under theIndian Income-tax Act, 1922 (11 of 1922), or which is or wasassessable or was assessed under this Act as a company for anyassessment year commencing on or before the 1st day of April,1970, or
(iv) any institution, association or body, whether incorporated or notand whether Indian or non-Indian, which is declared by generalor special order of the Board to be a company :Provided that such institution, association or body shall be deemedto be a company only for such assessment year or assessmentyears (whether commencing before the 1st day of April, 1971, oron or after that date) as may be specified in the declaration ;]
(18) “company in which the public are substantially interested”—a com-pany is said to be a company in which the public66 are substantiallyinterested—
67[(a) if it is a company owned by the Government or the Reserve Bankof India or in which not less than forty per cent of the shares areheld (whether singly or taken together) by the Government or theReserve Bank of India or a corporation owned by that bank ; or]
68[(aa) if it is a company which is registered under section 25 of theCompanies Act, 1956 (1 of 1956)69 ; or
(ab) if it is a company having no share capital and if, having regard toits objects, the nature and composition of its membership andother relevant considerations, it is declared by order of the Boardto be a company in which the public are substantially interested :Provided that such company shall be deemed to be a company inwhich the public are substantially interested only for such assess-ment year or assessment years (whether commencing before the1st day of April, 1971, or on or after that date) as may be specifiedin the declaration ; or]
70[(ac) if it is a mutual benefit finance company, that is to say, a companywhich carries on, as its principal business, the business ofacceptance of deposits from its members and which is declaredby the Central Government under section 620A71 of the Com-panies Act, 1956 (1 of 1956), to be a Nidhi or Mutual BenefitSociety ; or]
72[(ad) if it is a company, wherein shares (not being shares entitled to afixed rate of dividend whether with or without a further rightto participate in profits) carrying not less than fifty per cent of
1.9 CH. I - PRELI