Subject NOT available

Income-tax

Rate of income-tax

Rate of ¹ Surcharge

( I

2 '5 per cent. ;

(it) on the income by w:iy of royal- ties payable by an Indian concern in pursuance of an agreement made by it with the Indian concern alter the 31st day of March, 1961, and which has been approved by the Central Government 50 per cent.

• 2 '5 p er cent.;

(Hi) on the income by way of fees payable by an Indian concern for render- ing technical services in pursuance of an agreement made by it with the Indian concern after the 29th day of February, 1964, and which has been approved by the Central Government

50 pea- <;ent..

(iv) on the income by way of

interest payable on a tax free security 44 per cent. •2:2 per cent. ;

70 per cent. 3\5 per cent.

(v) on any other income

PART III

Rates for calculating or charging income-tax in certain cases, deducting

income-tax from income changeable under t\ve hedd "Salaries" or

any payment referred to in sub-section (9) of section 80E and com-

puting "advance tax".

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

Paragraph A

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

Rates of income-tax

(l) where the total income cOes not exceed

Rs, 5,000

'Nil',

(2) where the total income exceeds 10 per cent, of the amount by which Rs. 5,000 but does not exceed Rs. 10,000 the total income exceeds Rs. 5,000;

(3) where the total income exceeds Rs. soqplusij per cent, of the amount Rs. 10,000 but does not exceed Rs. 15,000 by which the total. inqdme exceeds

Rs. 10,000; '

(,4) where the total income exceeds Rs. 1,350 fr/ws 23 per cent, of the amount R3. i5,oja but dJes not exceed Rs: 20,000 by -which the total; Income .exceeds

R. 15,000; ' ' ' ' „ . ,' •", '

(5) where the total income Texceeds Rs. 2,500 plus 30 per cent", of the Rs. ao,ooo but does not exceed Rs.25,000 amount by which the total income

" • • • '> ;• exceeds Rs. 20,000; ,-• {

j V

, (6) where the total income exceeds Rs. 4,000 plus 40 per cent, of the Rsi 25,000'but docs not exceed amount bywhich the ;total income ¹ H si 3 0 , 0 00

- •

. e x c e e ds R SJ 2 5 , 0 0 0; ;; ",

• • •' [ i'

'

•

-• •

. •

' • :' 1

• ( 7) w h e re t h e, t o t al i n c o me e x c e e ds R s. 6 , 6 o oT

tp l us 3 0, [ p er c e n t, of t he

Rs. 30,000 but does not cxceed.Rs. 40^000 amount by which the'total income

exceeds Rs. 30,600 j *

(8) where the total ^income exceeds Rs. 11,000 plus 60 per icent. fpf the RsV 40,000 but docs not exceed Rs.6o,ooo amount by which the , total income

exceeds Rs. 40,000; '.

(9) where the total income exceeds Re. 23,000 plus 70 per cent, of the Rs 60,000 but does not exceed Rs. amount by which the total income 80,000j

exceeds Rs. 60,000j

R s. 80,000;

(10) where the total income exceeds Rs. 37,000 p/us 75 per cent, of the amount Rs. 80,000 but does not exceed Rs. by which the total income exceeds 1,00,000A

' 'v

( n) where the total income exceeds Rs. 52,000 plus 80 percent, of the . , 'Rs. ijOOjpoo but does nQt^ exceed Rs. amount by which the total income 2,00,000 ,i , .! exceeds Rs. i,00,000; '•

Rs. 2,00,0001

(12) where the total income exceeds Rs. 1,32,000 plus 85 per cejijt., of the amount by which the total lacome exceeds Rs. 2,00,000;

Provided that for the purposes of this Paragraph, in the case of a Hindu undivided family which, at any time during the previous year , relevant to the assessment year commencing on the 1st day of April, "1973 satisfies either of the following two conditions, nam&Iy: —

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

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

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

(ii) where the total income exeeeds Rs. T,00.0 bMt.does not exceed Rs. 7,660, the income-tax payable thereon shall not exceed f If orty per cent, of^the amount by which the totaj, income exceeds Rs. 7,000. " ' '

Surcharge on income-tax

The amount of Income-tax computed In accordance with the pre- ceding provisions of this Paragraph shall be increased by a surcharge lor purposes of the Union calculated at the following rates, namely;—i

(a) In a^case^where the total income 10 per cent;

does not exceed Rs. 15,000

(b) in any other case 15 per cent:

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

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

,j

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

Paragraph B

In the case of every co-operative society,—

Rates of income-tax

(1) where the total income does 15 per cent of the total income;

not exceed Rs. 10,000

(2) where the total income exceeds Rs. 1,500 plus 25 per cent, of the Rs. 10,000 but does not exceed Rs. amount by which the total income 20,000

exceeds Rs. 10,000;

R* 20,000

(3). whore the total Income exceeds Rs. 4,000 plus 40 per cent, of the amount by which the total income exceeds Rs. 20,000.

Surcharge on income-tax

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

Paragraph C

In the case of every registered firm,—

Rates of income-tax

(1) where the total income does not Nil;

exceed Rs. 10,000

(2) where the total income exceeds 4 per cent . of the amount by which Rs. 10,000 but does not exceed Rs. the total Income exceeds Rs. 10,000;

(3) where the total income exceeds Rs. 600 plus 6 per cent, of the amount by which the total income exceeds Rs. 25,000;

Rs. 25, 000 but does not exceed Rs. 50,000

(4) where the total income exceeds

Rs. 50, 000 but does not exceed Rs. 1,00,000

Rs. 2,100 plus T2 per cent, of the amount by which the total income exceeds Rs. 50,000;

(5) where the total income exceeds

Rs. 1,00,000

Rs 8,10c plus 20 per cent, of the amount by which the total income exceeds Rs. 1,00,000.

Surcharges on income-tax

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

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

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

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

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

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

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

Paragraph D

In the case of every local authority,—

Rate of income-tax

On the whole of the total income 50 per cent.

Surcharge on income-tax

The amount of income-tax computed at the rate hereinbefore speci- fied shall be increased by a surcharge for purposes of the Union cal- culated at the rate of fifteen per cent, of such income-tax .

Paragraph E • •

In the case of the Life Insurance Corporation of India established

31 of 1956.

under the Life Insurance Corporation Act, 1956,—

Rates of income-tax

(i) on that part of its total income 52 • 5 per cent.;

which consists of profits and gains from life insurance business

(it) on the balance; if any, of the the rate of income-tax applicable, in total income ?'; accordance with Paragraph F of this^i

Part, to the total income of a domes-1 tic company which is a company in which the public are substantially interested.

Surcharge on income-tax

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

Paragraph F

31 at 1956.

In t he case of a company, other than the Life Insurance Corporation of India established under t he Life Insurance Corporation Act, 1956,—

Rates of income-tax

I. In t he case of a domestic company,—

fi) where the company is a company

in which the public are substantially in- terested,—

(1) in a case where the total 45 per cent, of the total income;

income does not exceed Rs. 50,000

(ii) in a case where the total 55 p ;r cent, of the totallincomer

income exceeds Rs. 50,000

(2) where the compiny is not a company in which the public are substantially interested,—

(z) in the case of an industrial com-

pany—

(a) on so much of the total income 55 per cent;

as does not exceed Rs. 10,00,000

(b) on the balance, if any, of the total 60 percent;

income

(ii) in any other case 65 per cent, of t he total income:

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

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

(b) eighty per cent, of the amount by which its total income

exceeds Rs. 50,000.

II. In the case of a company other than a domestic company—

(0 on so much of the total income as

consists of—

(a) royalties received from an Indian

concern in pursuance of an agreement made by it with the Indian concern after the 31 st day of March, 1961, or

(i) fees for rendering technical services

received from an Indfah concern in pur- suance of an agreement made by it wHh the Indianconcern after the 29th day of February, 1964.

and where such agreement has, in either case, been approved by the Central Government 50 per cent;

(it) on the balance, if any, ofthetotalin- 70 per cent,

come

Surcharge on income-tax

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

THE SECOND SCHEDULE

(Sec section 61)

PART I

In the First Schedule to the Tariff Act, in Item No. 28 (28) (b), for each of the entires in the fifth and sixth columns, the entry "60 per cent, ad valorem." shall be substituted.

PART II

Item No.

Name of Nature of article duty

Preferential rate of duly if Duration cf the article is the produce protective

Standard rate of duty or manufacture of rates of duty

The United Ring dom

A British Colony

1

6 7

4

5

2 3

In the First Schedule to the Tariff Act, for Item No. 22(5X6), the following Item shall be substituted, namely:—

Rs, 14-40

(b) Drugs Preferen-

"22(5)

per litre or 60 per cent, ad

Rs. 14-40 per litre or 60 per cent, ad

valorem,

and medi tial Revc- cines con- nue. taining spirit.

valorem,

Rs.  14-40
 per  litre
 or 60 per
 cent, ad
 valorem,
 whichever,     whichever     whichever
 is  higher,    is higher,    is  higher,
 plus           plus          plus
 Rs. 5 -oo      Rs. 5 '00     Rs.  5-00
 perlitre       per litre.    per litre.

THE THIRD SCHEDULE

[See section 64 (c)]

PARTI

In the First Schedule to the Central Excises Act,—

(i) in Item No. 1A, for each of the entries in the third column against sub-items (1) and (4), the entry "One rupee per kilogram." shall be substituted;

(ii) in Item No. ID, for the entry in the third column, the entry "Twenty per cent, ad valorem." shall be substituted;

(in) in Item No. 2, for the entry in the third column, against sub- item (1), the entry "One hundred rupees per quintal." shall be sub- stituted;

(iv) in Item No. 4,—

(a) Under "I Unmanufactured Tobacco—", for the entries in the third column against sub-items (1), (2), (3), (4), (5), (6) and (8), the entries "Five rupees.", "Forty rupees,", "Four rupees.", "Four rupees.", "Three rupees.", "Four rupees." and "Fifty paise." shall, respectively, be substituted;

(b) under "II. Manufactured tobacco—•", for the entry in the third column against sub-item (2), the entry "Two hundred per cent, ad valorem." shall be substituted;

(v) in Item No. 6, for the entry in the third column, the entry "One thousand rupees per kilolitre at fifteen degrees of Centigrade thermometer." shall be substituted;

(vi) in Item No. 7. for the entry in the third column, the entry "Three hundred rupees per kilolitre at fifteen degrees of Centigrade thermometer." shall be substituted;

(vii) in Item No. 8, for the entry in the third column against each of the sub-items (a) and (b), the entry "Five hundred rupees per kilolitre at fifteen degrees of Centigrade thermometer." shall be sub- stituted;

(viii) in Item No. 9, for the entry in the third column, the entry "Two hundred rupees per kilolitre at fifteen degrees of Centigrade thermometer." shall be substituted;

(ix) in Item No. 10, for the entry in the third column, the entry "One hundred rupees per kilolitre at fifteen degrees of Centigrade thermometer," shall be substituted;

(x) in Item No. 11, for the entry in the third column against each of the sub-items (1) and (2), the entry "One hundred rupees per metric tonne." shall be substituted;

(xi) in Item No. 12, for the entry in the third column, the entry "One hundred rupees per metric tonne." shall be substituted;

(xii) in Item No. 14, for the entries in the third column against sub-items I(l)(i), 1(1) (ii), 1(2), 1(3) (i), I(3) (it), I(3) (iii), I(3) (iv), I (4) (i), I (4) (ii), I (4) (in), I (4A), 1(5), II (i), II (ii), III (i), III ii) and Ill(iii), the entries "Thirty rupees per quintal.", "One hundred rupees per quintal.", "Twenty-five rupees per quintal.", "Forty rupees per quintal.", "Fifty paise per litre.", "One rupee and fifty paise per litre.", "One hundred rupees per quintal.", "Thirty rupees per quintal.", "One rupee per litre.", "Three hundred rupees per quintal.", "One rupee per litre, if in liquid form and Thirty rupees per quintal if in any other form.", "Fifty paise per litre.", "Twenty- five paise per litre.", "Two rupees and fifty paise per litre.", "One hundred rupees' per quintal." and "Two rupees and fifty paise per litre." shall, respectively, be substituted;

(xiii) in Item No. 14BB, for the entry in the third column, the entry "Twenty per cent, ad valorem." shall be substituted;

(xiv) in Item No. 14C, for the entry in the third column, the entry "Twenty rupees per quintal." shall be substituted;

(xv) in each of the Item Nos. 14D and 14DD, for the entry in the third column, the entry "Twenty per cent, ad valorem." shall be sub- stituted;

(xvi) in Item No. 14F, for the entry in the third column, the entry "Thirty per cent, ad valorem" shall be substituted;

(xvii) in Item No. 14HH, for the entry in the third column, the entry "Fifteen per cent, ad valorem." shall be substituted;

(xviii) in Item No. 15, for the entries in the third column against sub-items 1(1), 1(2) and II, the entries "Ten per cent, ad valorem." "Twenty per cent, ad valorem" and "Ten per cent, ad valorem." shall, respectively, be substituted;

(xix) in Item No. 15A, for the entries in the third column against sub-items (1), (2), (3) and (4), the entries "Forty per cent, ad valorem." "Forty per cent, ad valorem.", "Fifty per cent, ad valorem.", and "Fifty per cent, od valorem." shall, respectively, be substituted;

(xx) in Item No. 16, for the Entries iri the third column against sub-items (1) and (3), the entries "Fifty per cent, ad valorem." and "Twenty per cent, ad valorem." shall, respectively, be substituted

(xxi) in Item No. 16A, for the entries in the third column against sub-items (1), (2), (3) and (4), the entries "Fifty per cent, ad valorem.", "Thirty per cent, ad valorem.", "Twenty, per cent, ad valorem." and "Twenty per cent, ad valorem." shall, respectively, be substituted;

(xxii) in Item No. 17, for the entries in the third column against sub-items (1), (2), (3) and (4), the entries "Two rupees per kilogram.", "One rupee per kilogram.", "Fifty paise per kilogram." and "One rupee per kilogram." shall, respectively, be substituted;

(xxiii) in Item No. 19,—

(a) in the second column, in the opening portion,—

(1) for the brackets, figures and words,—

"(ii) 40 per cent, or more by weight of silk; or

(iii) 60 per cent, or more by weight of rayon or

artificial silk

the brackets, figures and words,—

" (ii) 40 per cent, or more by weight of silk;

(iii) 60 per cent, or more by weight of rayon or

artificial silk;

(iu) 50 per cent, or more by weight of jute (includ-

ing Bimlipatam jute or mesta fibre):",

shall be substituted

(2) in the proviso, for the words, brackets and figures "referred to in (i) to (Hi)", the words, brackets and figures "referred to in (i) to (iu)" shall be substituted;

(b) for the entry in the third column against sub-item 1(1), the entry "Fifteen per cent, ad valorem." shall be substituted;

(xxiv) in Item No. 20,—

(a) in the second column, in the opening portion,—

(1) for the brackets, figures and words,—

"(iii) if it contains no cotton and no artificial silk and

less than 40 per cent, by weight of silk; or

(iu) if manufactured on a handloom: ",

the brackets, figures and words,—

"(iii) if it contains no cotton and no artificial silk and

less than 40 per cent, by weight of silk;

(iv) if it contains 50 per cent, or more by weight of

jute (including Bimlipatam jute or mesta fibre); or

"(v) if manufactured on a handloom:",

shall be substituted;

(2) in the proviso, for the words, brackets and figures "referred to in (i) to (iv)", the words, brackets and figures "referred to in (i) to (u)⁷¹ sfiall be substituted;

(b) for the entry in the third column, against sub-item (1), the entry "Fifty paise per square metre." shall be substituted;

(xxv) in Item No. 21, for the entry in the third column against sub-item (1), the entry "Ten per cent, ad valorem." shall be substitu- ted;

(xxvi) in Item] No. 22, —

(a) in the second column, in the opening portion,—

(1) for the brackets, figures and words,—

"(Hi) if it contains cotton and less than 60 per cent, by weight of rayon or artificial silk; or

(iv) if it contains no cotton and less than 40 per cent, by weight of wool and less than 40 per cent, by weight Of rayon or artificial silk:", or

the brackets, figures and words,—

"(in) if it contains cotton and less than 60 per cent, by weight of rayon or artificial silk; or

(iv) if it contains no cotton and less than 40 per cent, by weight of wool and less than 40 per cent, by weight of rayon or artificial silk; or

#

(v) if it contains 50 per cent, or more by weight of jute (including Bimlipatam jute or mesta fibre):",

shall be substituted;

(2) in th*e proviso, for the words, brackets and figures "referred to in (i) to (iv)", the words, brackets and figures "referred to in (i) to (v)" shall be substituted;

(fa) for the entry in the third column against sub-item (1), the entry "Twenty per cent, ad valorem plus rupees five per square metre." shall be substituted;

(xxvii) in Item No. 23, for the entry in the third column, the entry "Twenty-five per cent, ad valorem." shall be substituted;

(xocviii) in, Item No. 23A, for the entries in the third column against sub-items (1) and (2), the entires "Twenty per cent, ad valorem." and "Ten per cent, ad valorem." shall, respectively, be substituted;

(xxix) in Item No. 25, for the entry in the third column, the entry "Fifty rupees per metric tonne." shall be substituted;

(xxx) in Item No. 26, for the entry in the third column, the entry "One hundred rupees per metric tonne." shall be substituted;

(xxxi) in Item No. 26AA, for the entries in the third column against sub-items (i), (ia), (ii), (in), (iv) and (v), the entries "Seventy- five rupees per metric tonne plus the excise duty for the time being leviable on steel ingots.", "Seventy-five rupees per metric tonne pitta the excise duty for the time being leviable on steel ingots.", "Five hundred rupees per metric tonne plus the excise duty for the time being leviable on steel ingots.", "Five hundred rupees per metric tonne plus the excise duty for the time being leviable on steel ingots.",, "Five hundred rupees per metric tonne plus the excise duty for the time being leviable on pig iron or steel ingots, as the case may be." and "Two hundred rupees per metric tonne plus the excise duty foi the time being leviable on steel ingots.", shall, respectively, be sub- stituted;

(xxxii) in Item No. 27,—

(a) in the second column, for the brackets, letter, words and figures,—

"(c) Foils, that is a product of thickness (excluding any backing) not exceeding 0.15 millimetre.",

the brackets, letter, words and figures,—

"(c) Foils (whether or not embossed, cut to shape, per- forated, coated, printed, or backed with paper or other re- inforcing material), of a thickness (excluding any backing) not exceeding 0.15 millimetre.",

shall be substituted;

(b) for each of the entries in the third column against sub-items (a) (i), (a) (ii), (b), (c), (d), (e) and (f), the entry "Thirty per cent, ad valorem" shall be substituted;

(xxxiii) in Item No. 28, for the entry in the third column, the entry "Six hundred rupees per metric tonne." shall be substituted;

(xxxiv) in Item No. 29, for the entries in the third column against sub-items (i) and (ii), the entries "Fifteen per cent, ad valorem/', and "Ten per cent, ad valorem", shall, respectively, be substituted;

(xxxv) in Item No. 29A, for the entries in the third column against sub-items (1), (2) and (3), the entries "Sixty per cent, ad valorem.", "Sixty per cent, ad valorem." and "Seventy-five per cent, ad valorem. " shall, respectively, be substituted;

(xxxvi) in Item No. 30, for the entries in the third column against sub-items (1), (2)(i), (2>(u), (3) and (4), the entries "Twenty per cent, ad valorem", "Fifteen per cent, ad valorem.", "Ten per per cent, ad valorem.", "Twenty per cent, ad ualorem." and "Twenty per cent, ad valorem", shall, respectively, be substituted;

(xxxvn) in Item No. 31, for the entries in the third column against sub-items (1), (2) and (3), the entries "Twenty per cent, ad valorem, ", "Twenty per cent ad valorem. " and "Twenty- five per cent, ad valorem. ", shall, respectively, be substituted;

(xxxviil) in Item No. 33, for the entries in the third column against sub-items (1), (2) and (3), the entries "Ten per cent. ad valorem.", "Fifteen per cent, ad valorem. " and "Fifteen per cent. ad valorem. " shall, respectively, be substituted;

(xxxix) In Item No. 33B, for the entry in the third column against sub-item (ii), the entry "Ten per cent, ad valorem. " shall be substituted;

(xZ) in Item No. 34, for the entries in the third column against sub-items (1), (2), (3), (3a) and (4), the entries "Two hundred and fifty rupees each or ten per cent, ad valorem, whichever is higher. ", "One thousand and five hundred rupees each or fifteen per cent, ad valorem, whichever is higher.", "Four thousand rupees each or twenty per cent, ad valorem, whichever is higher.", "Fifteen per cent, ad valorem.", and "Three thousand rupees each or fifteen per cent, ad valorem, whichever is higher.", shall, respectively, be substituted;

(xli) in Item No. 37, under "II. Exposed.—", for the entries in the second and third columns, the following entries shall be substi- tuted, namely: —

Of a width of below 30 mm in

30 mm or higher width

"(1) News-reels and shorts One rupee per metre. Fifty paise per metre, not exceeding 500 metres.

(2) Feature films, advertise- Two rupees per metre One rupee per metre";

ment shorts, and films not otherwise specified.

PART II

Item No. Description of goods Rate of duty

_Ji) (2)

(3)

In the First Schedule to the Central Excises Act,—

(i) in Item No. 4, under "II. Manufactured tobacco—•", for sub- item (1), the following sub-item shall be substituted, namely: —

"(1) Cigars and cheroots Twenty-five rupees per hundred.";

(ii) for Item No. 11A, the following Item shall be substituted, namely: —

"11A ALL PRODUCTS DERIVED FROM REFINING OF CRUDE PETROLEUM OR SHALE (WHETHER GASEOUS, LIQUID, SEMI- SOLID OR SOLID IN FORM), NOT OTHERWISE SPECIFIED IN- CLUDING REFINERY GASES, LUBRICATING OIL AND GREASES, WAXES AND COKE—

(T") Mineral turnpentine oiL Twenty per cent, ad valorem plus one hundred rupees per metric tonnes

Item No. Description of goods Rate of duty

(i)

(2)

(3)

(2) Liquefied petroleum gas Two hundred and fifty rupees

per metric tonne.

(3) Waxes Twenty per cent, dd valorem

plus two hundred rupees per metric tonne.

(4) Others Twenty per cent, ad valorem";

(iil) for Item No. ITB, the following Item shall be substituted, namely:—

'11B BLENDED OR COMPOUNDED Twenty per cent, ad valorem:;

LUBRICATING OILS AND GREASES—

"Blended or compounded lubricating oils and greases" means lubricating oils and greases obtained by straight blending of mineral oils, or by blending or compounding of mineral oils with any other ingredients.

Explanation.—The expression

"mineral oil" has the meaning assigned to it in Explanation I to ITcm No. 6.

(iv) for Item No. 18, the following Item shall be substituted, namely :—

'18 RAYON AND SYNTHETIC Sixty rupees per

FIBRES AND YARN, IN OR kilggram IN RELATION TO THE MA- NUFACTURE OF WHICH ANY PROCESS IS ORDINARILY CARRIED ON WITH THE AID OF POWER.

Explanation.— "Rayon and synthetic fibres and yarn" shall be deemed to include—

(i) man-made fibres;

(ii) spun (discontinuous) yarn containing not less than ninety per cent, by weight of man-made fibres culculited on the total fibre content;

(iii) man-made filament

(continuous) yarn; and

(iv) man-made metallic yarn.

Irem No. Description of goodr- Rale of duty

I 2 3

(v) for Ttem No. TSA, the following Item shall be substitute namely:—

cr8A COTTON TWIST, YARN AND

THREAD, ALL SORTS, CONTAINING NOT LESS THAN NINETY PER CENT. BY WEIGHT OF COTTON CALCULATED ON THH TOTAL FIBRE CONTENT, WHETHER SIZED OR UNSIZED IN ALL FORMS INCLUDING SKEINS, HANKS, COPS, CONES, BOBBINS, PIRNS, SPOOLS, REELS, CHEESES, BALLS OR ON WARP BEAMS, IN OR ON RELATION TO THE MANUFACTURE OF WHICH ANY PROCESS TS ORDINARILY

CARRIED ON WITH THE

AID OF POWER —

(r) of counts 29 or more Five rupees per kilogram.

(2) of counts less than 29. One rupee per kilogram.';

Explanation.—(1) "Count¹¹ means

the size of grey yarn (excluding any sizing material) expressed as the number of TOOO metie hanks per one-holf kilogram.

(2) For muliiplc-fold yarn, "count" means to count of the basic single yarn.

(vi) for Item No. r8B, the following Item shall be substi-

tuted, namely:—

'18B. WOOLLEN YARN, ALL SORTS

INCLUDING KNITTING WOOL, CONTAINING NOT LESS THAN NINETY PER CENT BYWHIGHT OF WOOL CALCULATED ON THE TOTAL FIBRE CONTENT, IN OR IN RELATION TO THE MANU- FACTURE OF WHICH ANY PROCESS IS ORDINARILY CARRIED ON WITH THE AID OF POWER—

(r) Worsted yam—

(a) of48s counts and more Thirty percent, advalorem.

Item No,

Description of goods

Rate of duty

( i)

(3)

( 2)

(b) of less than 48s counts Twenty per cent, ad valorem.

(2) Others

Ten per cent, ad valorem. ';

Explanation.—"Count" means

the size of single yarn expressed as the number of 560 yard hanks per pound. (vit) after Item No. T8B, the following Items shall be inserted i lamely :—

"18C

Twenty per cent, advalorem.

SILK YARN, ALL SORTS, CONTAINING NOT LESS THAN NINETY PER CENT BY WEIGHT OF SILK (INCLUDING SILK NOIL) CALCULATED ON THE TOTAL FIBRE CONTENT, IN OR IN RELATION TO THE MANUFACTURE OF WHICH ANY PROCESS IS ORDINARILY CARRIED ON WITH THE AID OF POWER.

Four hundred rupees per metric tonne.

JUTE TWIST, YARN, THREAD ROPE AND TWINE, ALL SORTS, CONTAINING NOT LESS THAN NINETY PER CENT. BY WEIGHT OF J UTE (INCLUDING BIMLIPA- TAM JUTE OR MESTA FIB- RE) CALCULATED ON THE TOTAL FIBRE CONTENT, IN OR IN RELATION TO THE MANUFACTURE OF WHICH ANY PROCESS IS ORDINARILY CARRIED ON WITH THE AID OF POWER.

18E

Rupees fifty per kilogram." ;

YARN, ALL SORTS, NOT ELSEWHERE SPECIFIED, IN OR IN RELATION TO THE MANUFACTURE OF WHICH ANY PROCESS IS ORDINARILY CARRIED ON WITH THE AID OF POWER AND CONTAINING ANY TWO OR MORE OF THE FOLLOWING FIBRES, NAMELY:—

(i) cotton; ("'O silk; (fit) wool; (iv) jute (including Bimli- patam jute or mesta fibre); and

(v) man-made fibres.

Item No.

Description of goods Rate of duty

GO

(3)

CO

(viii) for Item No. 22A, the following Item shall be substituted

] namely:—

"22A JUTE MANUFACTURES (IN- CLUDING MANUFAC- TURES OF BIMLIPATAM JUTE OR OF MESTA FIBRE), ALL SORTS, NOT ELSE- WHERE SPECIFIED, BUT EXCLUDING ANY SUCH MANUFACTURE—

(1) if it contains 40 per cent. or more by weight of wool; or

(it) if it contains no wool of less than 40 per cent, by weight of wool and less than 50 per cent, by weight of jute (including Bimlipatam jute or mesta fibre)—

(1) Hessians Six hundred rupees per metric tonne.

(2) Others Four hundred rupees per metric

tonne." ;

(ix) after Item No. 22A, the following Item shall be inserted, namely:—

TEXTILE FABRICS NOT Fifteen per cent, ad valorem.";

"22AA

ELSEWHERE SPECIFIED, AND CONTAINING ANY TWO OR MORE OF THE FOLLOWING FIBRES, NAMELY:—

(i) cotton;

(it) silk;

(Hi) wool;

(iv) jute (including Bimli- patam jute or mesta fibre); and

(v) man-made fibres.

(x) for Item No. 33A, the following Item shall be substituted, namely:—

"33A WIRELESS RECEIVING SETS ALL SORTS, INCLUDING TRANSISTOR SETS AND RADIOGRAMS, WITH OR WITHOUT LOUDSPEAKER—

(1) Broadcast television re- Twenty per cent, ad valorem.

ceiver sets

(2) Others Three hundred rupees per set.";

Item No. Description of goods

Rate of duty

( 2)

(3)

(xi) for Item No. 37BJ the following Item shall be substituted, namely:—

'37B CINEMATOGRAPH PROJEC- TORS AND PARTS THERE- OF—

(1) Cinematograph projectois Twenty per cent, ad valorem, (2) Parts thereof Thirty per cent, ad valcncm" ; Explanation.—-For the pur- poses of this Item, "Cine- matograph projectors'¹ means cinematograph pro- jectors whether in a com- pletely assembled condi- tion or otherwise.

'•"--•"' "•' " ' THE FOURTH SCHEDULE

(See section 66)

In the First Schedule to the Additional Duties of Excise Act,—

(i) in Item No. 4,—

(a) under "I. Unmanufactured tobacco ", for the entries in the third column against sub-items (1), (2), (3), (4), (5), (6) and (8), the entries "Sixty paise. ", "Five rupees and fifty paise. ", "One rupee. ", "Fifty paise. ", "Fifty paise. ", "Seventy- five paise." and "Ten paise." shall, respectively, be substituted;

(b) under "II. Manufactured tobacco—", for the entry in the third column against sub-item (2), the entry "One hundred per cent, ad valorern." shall be substituted;

(ii) in Item No. 22, for the entry in the third column against sub-item (1), the entry "Seven and a half per cent, ad valorem plus two rupees per square metre." shall be substituted.

THE FIFTH SCHEDULE

(See section 67)

In the Table annexed to sub-section (1) of section 3 of the Mineral

Products Act,—

(i) for the entry in the second column against item 3, the entry "Eight hundred and fifty rupees per kilolitre at fifteen degrees of Centigrade thermometer." shall be substituted;

(ii) for the entry in the second column against item 7, the entry "Eight hundred and fifty rupees per metric tonne." shall be substituted.

STATEMENT OF OBJECTS AND REASONS

The object of the Bill is to give effect to the financial proposals of the Central Government for the financial year 1972-73. The notes on clauses explain the various provisions contained in the Bill.

NEW DELHI; Y. B. CHAVAN.

The 16th March, 1972.

PRESIDENT'S RECOMMENDATION UNDER ARTICLES 117 AND 274 OF THE CONSTITUTION OF INDIA

[Copy of letter No. F. 3(28)-B/72, dated the lGth March, 1972 from Shri Y. B. Chavan, Minister of Finance to the Secretary, Lok Sabha.]

The President, having been informed of the subject matter of the proposed Bill, recommends under article 117(1) and (3) read with article 274(1) of the Constitution of India, the introduction of the Finance Bill, 1972 to the Lok Sabha and also recommends to the Lok Sabha the consideration of the Bill.

2. The BUI will be introduced in the Lok Sabha immediately after the presentation of the Budget on the 16th March, 1972.

Notes on clauses

Clause 2, read with the First Schedule to the Bill, seeks to prescribe the rates at which income-tax, including surcharges thereon, is to be levied on incomes chargeable to tax for the assessment year 1972-73. Further, it lays down the rates at which tax is to be deducted at source during the financial year 1972-73 from incomes (other than income com- prised in payments made to contractors and sub-contractors) subject to such deduction under the Income-tax Act; and the rates at which "advance tax" is to be paid and tax is to be calculated or charged in special cases for the financial year 1972-73.

Rates of income-tax for the assessment year 1972-73—The rates of income-tax (including surcharges) in the case of non-corporate taxpayers on incomes liable to tax for the assessment year 1972-73 are the same as those specified in Part III of the First Schedule to the Finance (No. 2) Act, 1971 for purposes of deduction of tax at source from "Salaries" and for computation of "advance tax" payable during the financial year 1971-72. In the case of corporate taxpayers, the rates of basic income-tax on incomes liable to tax for the assessment year 1972-73 are the same as those laid down in Part III of the First Schedule to the Finance (No. 2) Act, 1971 for purposes of computing "advance tax" payable by companies during the financial year 1971-72. The income-tax payable by companies will, how- ever, be increased by a surcharge thereon calculated at the rate of 2.5 per cent. These rates have been specified in Part I of the First Schedule to the Bill.

Rates for deduction of tax at source during the financial year 1972-73 from incomes other than "Salaries".—Part II of the First Schedule to the Bill specifies the rates at which income-tax (including surcharge where applicable) is to be deducted at source during the financial year 1972-73 from incomes other than "Salaries" and the retirement annuities referred to in .section 80E(9) of the Income-tax Act. These rates vary in certain respects from the rates specified in Part II of the First Schedule to the Finance (No. 2) Act, 1971 for deduction of tax at source from incomes other than "Salaries" and retirement, annuities during the financial year 1971-72. The Finance (No. 2) Act, 1971 did not prescribe any rate for deduction of income-tax at source from income by way of lottery winnings and prizes in cross-word puzzles. The Bill provides for the deduction of income-tax in respect of such incomes, in the case of resident recipients other than companies, at the rate of 34.5 per cent (which is made up of basic income- tax 30 per cent and surcharge 4.5 per cent.). The rates for deduction of income-tax from incomes payable to domestic as well as foreign companies are being enhanced in the context of the provision in the Bill providing for the levy of surcharge on income-tax payable by all companies. In res- pect of income by way of interest other than "Interest on securities" payable to a domestic company, tax will be deducted at the rate of 21 per

cent, (made up of income-tax at 20 per cent, and surcharge at 1 per cent.) as against 20 per cent, formerly. Similarly, in respect of any other income (excluding interest payable on a tax free security), tax will be deducted at the rate of 23 per cent, (made up of income-tax at 22 per cent and sur- charge at 1 per cent.) as against 22 per cent, hitherto. In respect of divi- dends payable by a domestic company on shares in that company held by a foreign company tax will be deducted at the rate of 25.725 per rent. (made up of income-tax at 24.5 per cent and surcharge at 1.225 per cent) as against 24-5 per cent formerly. In respect of income by way n" royalties and technical service fees payable by an Indian concern to a foreign company under approved agreement, tax will be deducted at tin: rate of 52.5 per cent (made up of income-tax at 50 per cent, and surcharge at 2.5 per cent) as against 50 per cent during the financial year 1971-72, In respect of income by way of interest payable on a tax fret; security to a foreign company, tax will be deducted at the rate of 46.2 per cent (made up of income-tax at 44 per cent and surcharge at 2.2 per cent) as against 44 per cent formerly. Similarly, in respect nf other incomes payable to a foreign company, tax will be deducted at the rate of 73.5 per cent (made up of income-tax at 70 per cent and surcharge at 3.5 per cent) as against 70 per cent during the financial year 1971-72.

Rates for deduction of tax at source from "Salaries" and retirement annuities, computation of "advance tax" and charging of income-tax in .special cases during the financial year 1972-73.—The rates at which income- tax (including surcharges) is to be deducted at source from "Salaries" and retirement annuities referred to in section 80E(9) of the Income-lax Act, and also the rates at which advance tax U to be paid and inenme-tax is to be calculated or charged in special cases for the financial year 1972-73 in the case of non-corporate taxpayers, are the same as those specified in Tart III of the First Schedule to the Finance (No. 2) Act, 1971 for similar purposes.

In the case of Life Insurance Corporation of India and other companies, the basic rates of income-tax specified :i- ""^rt III nf th" First Schedule for the computation of "advance tar:" .ire the same as those specified for the purposes of levy of t;>.v n-i income assessable for the assessment year 1972-73. The income-t:\ --•vable by the Life Insurance Corporation ami other companies will, hownvor, be increased by a surcharge thereon uf thf_- rate of 5 per cent.

Clause 3.—

Sub-clause (a) eeks tn amend, with effect from 1st; April, 1973, clause (14) of section " of the Tneome-tax Act relating to 1hf- definition of the term "capital nsse¹". The effect of this amendment will be th^i jewellery will also be treated as a capital a?set and profits and gains arising from the transfer of -jewellery will" be liable to tax as income under the head "Capital gains". The expro-^ion "jewellery" will include- -

(a) ornaments made of gold, silver, platinum or any other precious metal or any alloy containing one 74 THE GAZETTE OF INDIA EXTRAOEDINAEY [PJVRT I]..

(b) precious or semi-precious atones, whether or not set in any furniture, utensil or other article or worked or sewn into any wearing apparel.

Sub-clause (b) seeks, to make two amendments in clause (24) of section 2 of the Income-tax Act which demies "income",

Under the first amendment, voluntary contributions received bv a charitable or religious trust or institution, regardless of whether such trust or institution, has been created or established wholly or partly for charitable or religious purposes, will be regarded as income. Contributions received with a specific direction that they shall form part of the corpus of the trust or institution will, however, not be treated as income. It is being specifically clarified that the term "trust" will include any other legal obligation. This amendment will take effect from the 1st April, 1973 and will accordingly apply in rela- tion to the assessment year 1973-74 and subsequent years.

The second amendment seeks to extend, with effect from 1st April, 1972, the definition of "income" so as to Include within its scope winnings from lotteries, crossword puzzles, races including horse races, card games, other games of any sort or from gambling or betting.

Sub-clause (c) seeks to amend clause (37A) of section 2 of the Income-tax Act- The amendment is consequential to the insertion of new section 194B in the Income-tax Act under clause 28 of the Bill. Under this amendment, the rates in force for the purposes of deduction of income-tax at source from winnings from lotteries and crossword puzzles will be those specified in this behalf in the relevant Finanae Act. This amendment will take effect from 1st April, 1972

Clause 4,—This clause seeks to amend section 10 of the Income-tax Act relating to incomes not included in the total income.

Sub-clause (a) seeks to substitute, wiJb effect from 1st April, 1972, the existing clause (3) of section 10 by a new clause. Under the new clause (3), receipts of a casual and non-recurring nature (other than lottery winnings) will qualify for exemption only up *o Rs. 1,000 in the aggregate ,i^d the balance will be chargeable to tax. The exemption of the first Rs. 1,000 of income will, however, not be available in respect of capital gains, receipts arising from business or exercise of a profession or occupa tion as also roceipis by way of odditions to remunerp¹inn of an employee, as at present-

Lottery winnings hnw been excluded in view of the position that, in the case of non-corporate taxpayers, lotterv winnings up to Rs. 5,000 will be allowed is an outright deduction in determining the taxable income under tH> new section 80V proposed to be inserted under clause 22 of the Bill.

In vipw of the specific provision being made under clause 59 of the Bill, casual rind non-recurring receipts will continue to be exempt from incorn" tax for the assessment year 1972-73 in the same manner as hitherto.

Sub-clause (b) seeks to amend clause (10) of section 10 of the Income- tax Act. Under the amendments, exemption from income-tax in respect of gratituties received by employees of statutory corporations and employees in the private sector will be available only if such gratuities are received on retirement, in capacitation or death of the employee or on termination of his employment. The exempt amount of gratuities in the case of both categories of employees will be subject to a ceiling limit of one-half month's salary for each year of completed service, calculated on the basis of the average salary for the three years immediately pre- ceding the year in which the gratuity is paid, or 15 months' salary so calcu- lated or Rs. 24,000, whichever is the least. The amendments will come into force with effect from the 1st April, 1973 and will accordingly apply in relation to the assessment year 1973-74 and subsequent years.

Sub-clause (c) seeks to amend clause (25) of section 10 of the Income- tax Act. Under this amendment, income of approved gratuity funds will be exempt from income-tax with effect from the assessment year 1973-74.

Clause 5.—This clause seeks to amend, with effect from the 1st April, 1973, clause (c) of sub-section (1) of section 11 of the Income-tax Act relating to income from property held under trust for charitable or reli- gious purposes. The amendment is of a drafting nature and is for harmonising the language of the said clause (c) with the other clauses of that sub-section and new section 12 proposed to be substituted for the existing section 12 under clause 6 of the Bill.

Clause 6.—This clause seeks to substitute section¹ 12 of the Income-tax * Act, relating to income of trusts or institutions from voluntary contri- butions, by two new sections 12 and 12A.

Under new section 12, any voluntary contributions received by a trust created wholly for charitable or religious purposes or by an institution established wholly for such purposes shall, for purposes of section 11, be regarded as income derived from property held under trust wholly for charitable or religious purposes. Contributions made with a specific direc- tion that they shall form part of the corpus of the trust or institution will, however, not be treated as income derived from property. The provisions of section 13 will also apply in relation to voluntary contributions in the same manner as they apply in relation to income derived from property helrl under trust. As a result of this provision, voluntary contributions received bv charitable or religious trusts or institutions will qualify for o^emotion from income-tax only if the conditions specified in section 11 regarding application of income or accumulation thereof are satisfied. Further, the trust or institution will forfeit exemption from tax if anv part of its income or property is applied for the benefit of the author of the Iru^t or founder of the institution, a person who made a substantial contri- bution to the trust, the relatives of such author, founder, etc.

New Section 12A seeks to provide that exemption from income-tax in respect of income derived from property or by way of voluntary contri- bu+ions bv charitable or religious trusts or Institutions will be available onlv if the following conditions are fulfilled:—

(i) The person in receipt of the income makes an aDplication for registration of the trust or the institution to the Comrmssiorifir. nf

Income-tax before 1st July, 1973 or before the expiry of a period of one year from the date of the creation of the trust or establishment of the institution, whichever is later. (The Commissioner of Income-tax is, however, being empowered to admit, in his direction, belated appli- cations for registration in deserving cases).

(ii) Where the total income of the trust or institution (without giving effect to the provisions of sections 11 and 12) exceeds Rs. 25,000 in any previous year, the accounts of the trust or institution for that year have been audited by a chartered accountant or any other accountant entitled to be appointed as an auditor of companies.

The new sections 12 and 12A will take effect from the 1st April, 1973 and will, accordingly, apply in relation to the assessment year 1973-74 and subsequent years.

Clause 7.—This clause seeks to make certain amendments in section 13 of the Income-tax Act relating to forfeiture of the exemption from income- tax of charitable and religious trusts in certain cases.

Sub-clause (a) (i) seeks to amend sub-section (1) of section 13. Under the amendment, private religious trusts, as also charitable trusts or insti- tutions established after 31st March, 1962 for the benefit of any particular religious community or caste, will cease to be entitled to exemption from Income-tax in respect of their income by way of voluntary contributions. Since under the new section 12 the provisions of section 13 will apply in relation to income from voluntary contributions in the same manner as they apply in relation to income derived from property held under trust, charitable or religious trusts or institutions will forfeit exemption from income-tax, also where any part of their income by way of voluntary contributions ensures or, as the case may be, is used during the previous year for the benefit of the author of the trust, the founder of the insti- tution, a person who has made a substantial contribution thereto, their relatives, etc.

Sub-clause (b) seeks to make an amendment in the existing provision under which a charitable or religious trust or institution forfeits exemption from tax if a substantial portion of its income or property is diverted during the previous year in favour of the author, founder, substantial contributor, their relatives, etc. Under this amendment, It is being clari- fied that the exemption will be lost if the aggregate of the income or pro- perty diverted in favour of any such person during the previous year ; exceeds Rs. 1,000.

Sub-clauses (c) and (e) seek to enlarge the class of persons referred to in sub-aection (3) of section 13 of the Income-tax Act by including therein trustees of trusts, managers of institutions, their relatives and concerns in which such trustees, managers and relatives have a substantial interest. The effect of these amendments will be that where any income or property of the trust or institution is used for the benefit of any trustee of the trust or manager of the institution or any relative of such trustee or manager or any concern in which such trustee, manager or relative has a substantial interest, the exemption from jncomeTtax will be forfeited. The sqope of

the expression "relative" is also being enlarged so as to include relatives through marriage.

,

Sub-clause (d).—The amendment is consequential to the substitution of section 12 of the Income-tax Act by a new section under clause 6 of the Bill.

Under the amendment in item (ii) of sub-clause (a), it is being clarified that in determining whether any part of the income or property of the trust or institution has been used for the benefit of any specified person during any period before 1st July, 1972, the amendments now proposed to be made in section 13 will be ignored.

These amendments will take effect from 1st April, 1973 and will, accordingly, apply in relation to the assessment year 1973-74 and subse- quent years.

Clause 8 seeks to amend section 45 of the Income-tax Act relating to capital gains.

The amendment is consequential to the insertion of a new section 54C in the Income-tax Act under clause 9 of the Bill.

Clause 9 seeks to insert, with effect from 1st April, 1973, a new section 54C in the Income-tax Act. The effect of this section will be that where any jewellery held for personal use is transferred and other jewellery for personal use is acquired within six months of such transfer, any profits and gains arising from the transfer will not be liable to tax if the whole of the full value of the consideration for the transfer is used in acquiring the new jewellery. Where only a part of such consideration is used in acquir- ing the new jewellery, a proportionate part of the capital gain will not be liable to tax.

Clause 10 seeks to amend section 56 of the Income-tax Act relating to income from other sources. The effect of this amendment will be that winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort and from gambling or betting will be chargeable to income-tax under the head "Income from other sources".

This amendment will take effect from 1st April, 1972, but in view of the specific provision, being made under clause 59 of the Bill, winnings from lotteries, etc., will remain exempt from income-tax for the assessment year 1972-73.

Clause 11 seeks to insert a new section 74A in the Income-tax Act. The new section makes provisions as to set off of losses from specified sources, namply, lotteries; crossword puzzles; races; card games; other games of any sort and betting or gambling of any form or nature not falling under any of the above categories. For the purpose of set off of losses, each of the above sources will bo treated as a separate source and the losses from each such source would be set off only against income from that source. This amendment will take effect from 1st April, 1972.

Clause 12 seeks to amend section 75 of the Income-tax Act relating to losses of registered firms. This amendment is consequential to the inser- tion of new section 74A in the Income-tax Act under clause 11 of the Bill.

Clause 13 seeks to amend section 77 of the Income-tax Act relating to losses of unregistered firms or their partners. This amendment is conse- quential to the insertion of new section 74A in the Income-tax Act under clause 11 of the Bill

Clause 14 seeks to amend section 80A of the Income-Act tax relating tc deductions to be made in computing total income. This amendment is consequential to the insertion of a new section 80V in the Income-tax Act under clause 22 of the Bill.

Clause 15 seeks to omit with effect from 1st April, 1973 the definition of "priority industry" from section 80B relating to definitions for purposes of Chapter VIA of the Income-tax Act. The omission is consequential to the omission of section 801 of the Income-tax Act under clause 18 of the Bill.

Clause 16 seeks to amend section 80C of the Income-tax Act relating to deduction in respect of life insurance premia, contributions to provident funds, etc.

Sub-clause (a).—Under the amendments in this sub-clause, contri- butions made by an individual out of his income chargeable to tax for participation in the Unit-linked Insurance Plan, 1971 of the Unit Trust of India will qualify for the special deduction under section 80C in the same manner as life insurance premia, contributions to recognised provident funds, etc. Likewise, a deduction will also be available in respect of contributions made by any one member of an association of persons or body of individuals consisting only of husband and wife governed by the system of community of property in force in the Union territories of Dadra and Nagar Haveli and Goa, Daman and Diu.

Sub-clause (b).—Under the amendment in this sub-clause, where a member participating in the Unit-linked Insurance Plan withdraws from the Plan before paying contributions for a period of 5 years, no deduc- tion will be allowed in respect of the contributions made in the year of withdrawal. Further, an amount equal to the aggregate of the deductions allowed in respect of contributions to the Plan in the past years will be included in his total income of the previous year in which he with- draws from the Plan. It is being specifically provided that, for this purpose, the deduction allowed in respect of contributions made in any previous year will be the difference between the amount by which the total deduction actually allowed for that year exceeds the deduction which would have been allowed if no such contribution had been paid in that year. In other words, the contributions shall be related to the top slab of the qualifying amount of savings in the relevant year.

These amendments will take effect from 1st April, 1973 and will accordingly apply in relation to the assessment year 1973-74 and sub- sequent years.

Clause 17 seeks to amend section 80G of the Income-tax Act relating to deduction in respect of donations to certain funds, charitable insti- tutions, etc. These amendments are consequential to the substitution of section 12 of the Income-tax Act by two new sections 12 and 12A under clause 6 of the Bill.

Clause 18 seeks to omit section 801 of the Income-tax Acti relating to deduction in respect of profits and gains from priority industries in the case of certain companies. The omission will take effect from 1st April, 1973 and, as such, the special deduction available to certain domestic companies of an amount equal to 5 per cent, of their profits from priority industries will not be available for the assessment year 1973-74 and subsequent years.

Clause 19 seeks to amend sub-sections (1) and (3) of section 80J of the Income-tax Act with effect from the 1st day of April, 1973. The amendments are consequential to the omission of section 801 of the Income-tax Act under clause 18 of. the Bill.

Clause 20 seeks to amend section 80L of the Income-tax Act relating to deduction in respect of interest on certain securities, dividends, etc. in computing the total income of an individual or a Hindu undivided family. Under the amendment, dividends received by an assessee from a co-operative society will also be included in the categories of financial assets income from which qualifies for deduction up to Rs. 3,000 in the aggregate under this section. The amendment will take effect from 1st April, 1973 and will, therefore, apply for the assessment year 1973-74 and subsequent years.

Clause 21 seeks to omit with effect from 1st April, 1973 section 80Q of the Income-tax Act relating to deduction in respect of dividends from co-operative societies in computing the total income of the assessee. This deduction will not, therefore, be available for the assessment year 1973-74 and subsequent years. Dividends from co-operative societies will, however, qualify for inclusion in the categories of financial assets income wherefrom qualifies for deduction up to Rs. 3,000 in the aggregate in view of the amendment proposed to be made to section 80L of the Income-tax Act under clause 20 of the Bill.

Clause 22 seeks to insert a new section 80V in the Income-tax Act. Under the new section, in computing the taxable income of non-corporate assessees, the whole of the income by way of lottery winnings will be allowed as a deduction if the gross total income of the assessee does not exceed Rs. 10,000 or if the winnings do not exceed Rs. 5,000. Otherwise, the deduction will be allowed in an amount equal to Rs. 5,000 plus 50 per cent, of the balance of the income by way of lottery winnings.

This amendment will take effect from 1st April. 1972. In view of. the specific provision being made under clause 59 of the Bill, lottery winnings will, however, not be chargeable to tax for the assessment year 1972-73.

Clause 23 seeks to substitute section 90 of the Income-tax Act by a new section. Under the new section, the Central Government will be empowered to enter into an agreement with the Government of a foreign

country not only for the avoidance or relief of double taxation of income under the Income-tax Act and under any corresponding law in force in that foreign country, as at present, but also for enabling the exchange of information for the prevention of evasion or avoidance of income-tax or for recovery of income-tax in either treaty country . The amendment wiircome into force with effect from 1st April, 1972.

Clause 24 seeks to amend section 125 of the Income-tax Act relating to powers of Commissioners respecting specified areas, cases, persons, etc This amendment is consequential to the insertion of a new section 228A under clause 39 of the Bill.

Clause 25 seeks to amend, with effect from 1st April, 1972, sections 132A, 201, 213 to 217, 220, 243 and 244 of the Income-tax Act as also rulfc 60 of the Second Schedule to that Act. Under these amendments, the rate of interest chargeable from or payable to assessees or other persons under the aforesaid provisions of the Income-tax Act will be increased from 9 per cent, per annum to 12 per cent, per annum.

Clause 26 seeks to amend, with effect from 1st April, 1972, section 139 of the Income-tax Act relating to furnishing of returns of income.

Sub-clause (a).—The amendment in this sub-clause seeks to provide that voluntary returns of income in the case of tax payers having income from business or profession shall be furnished within four months (as against six months under the existing law) of the close of the accounting year or by the 30th June of the assessment year, whichever is later.

Sus-clause (b) seeks to make a consequential change in sub-section (2) of section 139 necessitated by the proposed amendment to sub-section (8) of that section under sub-clause (d).

Sub-clause (c) seeks to substitute a new sub-section (4A) for the existing sub-section (4A) of section 139 of the Income-tax Act. Under the new sub-section, every person in receipt of income derived from property held under trust or other legal obligation for charitable or religious purposes or from voluntary contributions on behalf of such trust or institution will be required to furnish a return of income if the total income, ignoring the exemption under sections 11 and 12 of the Income-tax Act, exceeds the maximum amount not chargeable to income-tax.

Sub-clause (d) seeks to provide that interest for delay or default in furnishing the return of income will in aU cases be charged from the expiry of the due date for furnishing such return voluntarily under section 139(1). The rate of interest chargeable for delay or default m furnishing returns of income is also being increased from 9 per cent per annum to 12 per cent per annum. The existing provision enabling the Income-tax Officer to reduce or waive the interest payable by an assessee m such cases and under such circumstances as may be pres- cribed in the Income-tax Rules is being continued.

Clause 27 seeks to amend section 164 of the Income-tax Act relating to the charge of tax where share of beneficiaries is unknown These amendments are consequential to the substitution of section 12 of the Income-tax Act by a new section under clause 6 of the Bill

Clause 28 seeks to insert two new sections 194B and 194C in the Income-tax Act.

Under new section 194B, income-tax will be deducted at source from winnings from lotteries or crossword puzzles at the rates in force (i.e., the rates as may be prescribed in the Finance Act for the relevant year) where the payment exceeds Rs. 1,000. No deduction will, how- ever, be made from any payment made before 1st June, 1972.

Under new section 194C, any person responsible for raying any sum to any contractor (who is resident in India) for carrying out any work (including supply of labour for carrying out any work) in pur- suance of a contract between such contractor and the Central or any State Government, or any local authority, statutory corporation or company, will be required to deduct income-tax at the rate of two per cent, of such sum. The deduction will have to be made at the time of the credit of the amount of the account of, or the payment thereof (by whatever mode) to, the contractor, whichever is earlier. Likewise, every contractor, other than an individual or a Hindu undivided family, who is responsible for paying any sum to any sub-contractor (who is resident in India) in pursuance of a contract with such sub- contractor for carrying out, or for the supply of labour for carrying out, the whole or any part of the work undertaken by the contractor or for supplying, whether wholly or partly, any labour which the contractor had undertaken to supply, will be required to deduct income-tax at the rate of one per cent. of. such sum. No deduction under the provi- sions of this section would, however, be required to be made if the consideration for the contract, in either case, does not exceed five thousand rupees. Further, no deduction of tax will be required to be made from any sum credited or paid before 1st June, 1972. Where the income-tax Officer is satisfied, on an application made by the contrac- tor or the sub-contractor, that the total income of the contractor or the sub-contractor justifies the deduction of tax at any lower rate or, as the case may be, no deduction of tax, he shall give an appropriate certi- ficate in this behalf. When such certificate is given by the income-tax Officer, the person or, as the case may be, the contractor responsible for making the payment shall, until such certificate is cancelled, deduct income-tax at the rate specified in the certificate or deduct no tax, as the case may be.

Clause 29 seeks to amend section 197 of the income-tax Act relating to certificate for deduction of income-tax at source at lower rates. This amendment is consequential to the insertion of new section 194B in the income-tax Act under clause 28 of the Bill.

Clause 30 seeks to amend sections 198, 199', 200, 202 and 203 of the Income-tax Act relating to provisions in respect of tax deducted at source. These amendments are consequential to the insertion of new sections 194B and 194C in the Income-tax Act under clause 28 of the Bill.

Clause 31 seeks to amend section 204 of the Income-tax Act, defln- ing "person responsible for paying". This amendment is consequen- tial to the insertion of new sections 194B and 194C in the Income-tax Act under clause 28 of the pill,

Clause 32 seeks to amend section 205 of the Income-tax Act relating to the bar against direct demand on assessees in cases where tax has been deducted at source. This amendment is consequential to the insertion of new sections 194B and 194C in the Income-tax Act under clause 28 of the Bill.

Clause 33 seeks to amend section 207 of the Income-tax Act defining "advance tax" and "income subject to advance tax". Under this amendment, income by way of winnings from lotteries, crossword puzzles, races including horse races, card games and other garner of any sort of from gambling or betting will not be included in the "income subject to advance tax". No advance tax will, therefore, be payable in respect of income from the sources referred to above. This amend- ment will take effect from 1st April, 1972.

Clause 34 seeks to amend section 208 of the Income-tax Act relating to condition of liability to pay "advance tax". This amendment is consequential to the amendment of section 207 of the Income-tax Act under clause 33 of the Bill.

Clause 35 seeks to amend section 209 of the Income-tax Act relating to computation) of "advance tax". This amendment is consequential to the amendment of section 207 of the Income-tax Act under clause 33 of the Bill.

Clause 36 seeks to amend section 211 of the Income-tax Act relating to instalments of "advance tax". This amendment is consequential to the amendment of section 207 of the Income-tax Act under clause 33 of the Bill.

Clause 37 seeks to amend section 212 of the Income-tax Act relating to estimate of advance tax by assessees. This amendment is consequ- ential to the amendment of section 207 of the Income-tax Act under clause 33 of the Bill.

Clause 38 seeks to amend section 215 of the Income-tax Act relating to interest payable by assessees on short payment of advance tax. This amendment is consequential to the insertion of a new section 194C in the Income-tax Act by clause 28 of the Bill.

Clause 39 seeks to insert a new section 228A in the Income-tax Act. The new section provides for the recovery of tax in pursuance of agree- ments with foreign countries. Sub-section (1) of the new section pro- vides that where an agreement is entered into by the Central Govern- ment with the Government of any foreign country for recovery of income-tax under the Income-tax Act and the corresponding law in force in that foreign country, and the Government of that country or any authority under that Government (which is specified in this behalf in such agreement) sends to the Board, a certificate for recovery of any tax due to such foreign country from any person having property in India, the Board may forward such certificate to any Tax Recovery Officer within whose jurisdiction such property is situated. On receipt of such certificate, the Tax Recovery Officer will proceed to recover the amount specified in such certificate in the same manner in which he would proceed to recover the amount specified in a certificate received

from the Income-tax Officer under section 222 of the Income-tax Act. Any sum recovered by the Tax Recovery Officer will be remitted by him to the Board after deducting his expenses in connection with the recovery proceedings. Sub-section (2) of the new section provides that, notwithstanding the issue of a tax recovery certificate to the Tax Re- covery Officer under section 222 of the Income-tax Act, the Income-tax Officer may, if the assessee in default has property in a foreign country with which the Central Government has entered into an agreement for the recovery of income-tax, forward to the Board a certificate specifying the amount of arrears due from the assessee. The Board may then take such action thereon as it may deem appropriate having regard to the terms of the agreement with such foreign country.

Clause 40 seeks to amend section 252 of the Income-tax Act relating to Appellate Tribunal. Under the proposed amendment, the Central Government will be empowered to appoint one or more members of the Appellate Tribunal to be the Vice-President or, as the case mav be, Vice- Presidents of the Appellate Tribunal. A Vice-President shall exercise such of the powers and perform such of the functions of the President of the Tribunal as may be delegated to him by the President by a general or special order in writing.

Clause 41 seeks to amend sub-section (2) of section 295 of the Income- tax Act relating to the powers of the Centra] Board of Direct Taxes to make rules for carrying out the purposes of that Act.

Under the amendment, the Board will be empowered to prescribe In the Income-tax Rules the circumstances in which, the conditions sub- ject to which and the manner in which, the Appellate Assistant Com- missioner may permit an appellant to produce evidence which he did not produce or which he was not allowed to produce before the Income- tax Officer.

This amendment will take effect from 1st April, 1972.

Clause 42 seeks to make an amendment in .the references below ihe heading to Part C of the Fourth Schedule to the Income-tax Act. The amendment Is consequential to the amendment of section 10(25") of the Income-tax Act under clause 4(c) of the Bill.

Clause 43 seeks to omit with effect from 1st April, 1973 the Sixth Schedule to the Income-tax Act. The omission of the Sixth Schedule is consequential to the omission of section 801 of the Income-tax Act under clause 18 of the Bill.

Clause 44 seeks to amend section 2 of the Wealth-tax Act relating to definitions.

Sub-clause (a) seeks to insert a new clause in section 2 denning a "co-operative society". Under the new clause, a co-operative society is being denned as a co-operative society registered under the Co-operative Societies Act, 1912 or under any other law for the time being in force in any State for the registration of. co-operative societies. The amend- ment will come into force retrospectively from 1st Aptil, 1957, i.e., the date of commencement of the Act.

Sub-clause (b) seeks to make a consequential change by re-lettering the existing clause (ha) as clause (hb).

Clause 45 seeks to make certain amendments to section 5 of the Wealth-tax Act relating to exemption in respect of certain assets.

Sub-clause (a) (i).—Under this amendment, any property held by the trustees on behalf of a provident fund to which the Provident Funds Act, 1925 applies or a recognised provident fund or an approved gratuity fund or an approved superannuation fund will be altogether exempt from wealth-tax. This amendment will apply retrospectively from 1st April, 195T, i.e., the date of commencement of the Wealth-tax Act and will accordingly govern all past as well as future assessments.

Sub-clause (a)(ii) and sub-clause (b).—Under these amendments, the value of. assets forming part of an industrial undertaking belonging to the assessee, as also the value of his interest in the assets forming part of an industrial undertaking belonging to a firm or an association of persons of which he is a partner or a member will be included in the categories of financial assets, investments wherein qualify for exemption from wealth-tax up to an aggregate value of Rs. 1,50,000. For this pur- pose, any land or building or any rights in any land or building or assets which are otherwise exempt from wealth-tax under section 5(1) of the Wealth-tax Act shall not be taken into consideration. An industrial undertaking will, for this purpose, mean an undertaking engaged in the business of generation or distribution of electricity or any other form of power or in the construction of ships or in the manufacture or pro- cessing of goods or in mining.

Sub-clause (c).—Under this amendment, in a case where exemption from wealth-tax in respect of any asset is available subject to the condi- tion that such asset should have been held by the assessee for a period of at least six months ending with the valuation date, the exemption will not be forfeited merely because such asset has not been so held if such asset has been acquired by the conversion of, or in exchange for, or with the proceeds of, or with the money constituting, any other asset exempt from wealth-tax within a period of one month of the conversion, exchange, etc.

The amendments under sub-clause (a)(ii) and sub-clauses (b) and (n) will take effect from 1st April, 1973 and will, therefore, apply for the assessment year 1973-74 and subsequent years.

Clause 46 seeks to insert a new section 21A in the Wealth-tax Act. Under the proposed section, in a case, where any part of the property or income of a charitable or religious trust or institution is used for the benefit of the founder, trustee, etc., for any period during the previous year, such a trust will be liable to pay wealth-tax on the value of its entire property at the rate of 1.5 per cent, or the rate applicable in the case of an individual, whichever is beneficial to the revenue. The pro- visions in this behalf are broadly on the lines of the provision* in section 13 of the Income-tax Act. Accordingly, if any funds of the trust or insti- tution are invested for any period during the previous year in any con- cern in which the author, trustee, etc., has a substantial mterest, U will be deemed that the income or property o* the trust or Institution has

been used for the benefit of the author, trustee, etc. It is, however, being specifically provided that where the investment in the concern in which the author, trustee, etc., have a substantial interest does not exceed 5 per cent, of the capital of the concern, the exemption will be forfeited only in relation to such investment and the other assets of the trust will continue to qualify for tax exemption.

Clause 47 seeks to amend, with effect from 1st April, 1972, sections 31 and 34A of the Wealth-tax Act. The amendments seek to raise the rate of interest chargeable from or payable to assessees or other persons under the aforesaid provisions from the existing rate of 9 per cent, per annum to 12 per cent, per annum.

Clause 48 seeks to amend section 32 of the Wealth-tax Act relating to mode of recovery. This amendment is consequential to the insertion of. a new section 228A in the Income-tax Act and the amendment of section 44A of the Wealth-tax Act under clauses 39 and 49, respectively, of the Bill.

Clause 49 seeks to amend section 44A of the Wealth-tax Act relating to agreements for avoidance or relief of double taxation with respect to wealth-tax. The effect of the amendment will be that the Central Government will be able to enter into an agreement with the Govern- ment of a foreign country not only for the avoidance or relief of double taxation of wealth-tax chargeable under the Wealth-tax Act and a similar tax chargeable under the corresponding law in force in that foreign country, as at present, but also for enabling the exchange of information for the prevention of evasion or avoidance of wealth-tax or for recovery of such tax in the treaty countries. The amendment will take effect from 1st April, 1972.

Clause 50 seeks to amend section 45 of the Wealth-tax Act under which that Act does not apply in certain cases.

Sub-clause (a).—This amendment seeks to clarify that while wealth- tax shall not be levied in respect of the net wealth of entities enumerat- ed in that section, the application of the other provisions of the Act (e.g., calling for evidence from such entities) will not be barred. This amendment will come into force with effect from 1st April, 1972.

Sub-clause (b).—This amendment seeks to include co-operative societies in the list of entities which are not liable to tax under the Wealth-tax Act. This amendment will come into force retrospectively from 1st April, 1957, i.e., the date of commencement of the Wealth-tax Act.

Clause 51 seeks to amend section 46 of the Wealth-tax Act relating to the power of the Central Board of Direct Taxes to make rules for carrying out the purposes of that Act. Under the amendment, the Board will be empowered to prescribe in the Wealth-tax Rules the circumstances in which, the conditions subject to which and the manner in which, the Appellate Assistant Commissioner may permit an appellant to produce evidence which he did not produce or which he was not allowed to produce before the Wealth-tax Officer. This amendment will take effect from 1st April, 1972.

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• • • ——•••"—

Clause 52 seeks to amend, with effect from 1st April, 1972, sections 32 and 33A of the Gift-tax Act. The amendments seek to raise the rate of interest chargeable from or payable to assessees or other persons undsr the aforesaid provisions from the existing rate of 9 per cent, per annum to 12 per cent, per annum.

Clause 53 seeks to amend section 33 of the Gift-tax Act relating to mode of recovery. This amendment is consequential to the insertion of a new section 228A hi the Income-tax Act and the amendment of section 44 of the Gift-tax Act under clauses 39 and 54, respectively, of the Bill.

Clause 54 seeks to amend section 44 of the Gift-tax Act relating to agreements for avoidance or relief of double taxation with respect to gift-tax. The effect of the amendment will be that the Central Govern- ment will be able to enter into an agreement with the Government of a foreign country not only for the avoidance or relief of double taxation of gifts chargeable under the Gift-tax Act and under the corresponding law in force in that foreign country, as at present, but also for the exchange of information for the prevention of evasion or avoidance or for recovery of such tax in either treaty country. This amendment will come into force with effect from 1st April, 1972.

Clause 55 geeks to amend section 45 of the Gift-tax Act which excludes from the purview of the Gift-tax Act any gifts made, inter alia, by an institution or fund the income whereof is exempt from income-tax under section 11 of the Income-tax Act. These amendments are consequential to the substitution of section 12 of the income-tax Act by two new sec- tions 12 and 12A under clause 6 of the Bill. The effect of the proposed amendments will be as under:—

(i) A charitable Institution or fund will not forfeit exemption from gift-tax in respect of gifts made by it merely because (a) subsequent to the gift, any income of the institution or fund by way of voluntary contributions becomes chargeable to income-tax due to non-compliance with the provisions of section 12 of the Income-tax Act relating to the application of income to, or accumulation of income for, charitable or religious purposes in the specified manner; or (b) the institution or fund is denied exemption from income-tax by reason of the non-fulfilment of the conditions in the new section 12A relating to the filing of an application for registration with the Commissioner of Income-tax by the trust or institution or the requirement of compulsory audit of accounts Ey a qualified accountant.

(ii) A charitable institution or fund will not forfeit exemption from gift-tax in respect of gifts made by it merely because such institution or fund forfeits exemption in respect of a part of its income which arises from investments made in a concern in which the founder of the insti- tution or fund or his relatives, etc., have a substantial interest, where the aggregate of the sum invested by the institution or iund in such a concern does not exceed 5 per cent, of the capital of that concern.

These amendments will come into force with effect from 1st April, 1973 and will accordingly apply in relation to the assessment year 1973-74 and subsequent years.

Clause 56 seeks to amend section 46 of the Gift-tax Act relating to the power of the Central Board of Direct Taxes to make rules for carry- ing out the purposes of that Act. Under the amendment, the Board will be empowered to prescribe in the Gift-tax Rules the circumstances in which, the conditions subject to which and the manner in which the Appellate Assistant Commissioner may permit an appellant to produce evidence which he did not produce or which he was not allowed to pro- duce before the Gift-tax Officer. The amendment will take eflect from 1st April, 1972.

Clause 57 seeks to substitute section 24A of. the Companies (Profits) Surtax Act, by a new section.

Under the new section, the Central Government has been empowered to enter into an agreement with the Government of any foreign country not only for the avoidance or relief of double taxation of chargeable profits under the Companies (Profits) Surtax Act and under any law relating to the taxation of income or profits in force in that foreign country, as at present, but also for enabling exchange of information for the prevention of evasion or avoidance or for recovery of such taxes in the treaty countries. The Central Government is also being empowered to make, by notification in the Official Gazette, such provisions as may be necessary for implementing such agreements. The new section will take effect from the 1st April, 1972.

Clause 58 seeks to amend section 25 of the Companies (Profits) Surtax Act relating to the power of the Central Board of Direct Taxes to make rules for carrying out the purposes of that Act. Under the amendment, the Board will be empowered to prescribe in the Companies (Profits) Sur- tax Rules the circumstances in which, the conditions subject to which and the manner in which, the Appellate Assistant Commissioner may permit an appellant to produce evidence which he did not produce or which he was not allowed to produce before the Income-tax Officer. The amendment will take effect from 1st April, 1972.

Clause 59 seeks to provide that notwithstanding the amendments pro- posed to be made to the Income-tax Act under this Bill, income by way of casual and non-recurring receipts will continue to be exempt from income- tax for the assessment year 1972-73 to the same extent as hitherto.

Clause BO seeks to clarify that the proposed increase under the pro- visions of the Bill in the rate of interest chargeable from or payable to assessees or other persons under the Income-tax Act, Wealth-tax Act, Gift- tax Act and the Companies (Profits) Surtax Act, from 9 per cent, per annum to 12 per cent, per annum will apply in respect of any period falling after 31st March, 1972 also in cases where the Interest became chargeable or payable from an earlier date.

Clause 61 read with the Second Schedule seeks to eliminate the margin of Commonwealth preference in respect of (1) certain vitamins and vita- min preparations and (ii) drugs and medicines containing spirit.

Clause 62—

Sub-clauses (1) to (5) seek to provide for the levy of regulatory- duty of customs up to the 15th day of May, 1973 on a flexible basis within the ceiling specified, for regulating or bringing greater economy in imports. Sub-clause (6) seeks to continue up to the passing of this Act, the regulatory duties of customs levied under the Finance Act, 1971 and in force immediately before the 18th March, 1972, subject to any exemption notifications.

Clause 63 seeks to continue for another year the provisions of the Indian Tariff (Amendment) Act, 1949, so as to maintain the status quo In regard to commitments under the General Agreement on Tariffs and Trade.

Clause 64.—Sub-clause (a) seeks to insert a new section 35A in the Central Excises and Salt Act empowering the Central Board of Excise and Customs, of its own motion or otherwise, to call for and examine the record of any proceedings in which any decision or order (not being a decision or order passed on appeal under section 35) has been passed under the Act or the rules. The power cannot however be exercised after one year from the date of the decision or order.

Sub-clause (b) seeks to amend section 36 relating to revision by Cen- tral Government so as to confer similar revisional jurisdiction on the Central Government In respect of decisions or orders passed on appeal under section 35 and on revision under section 35A.

Sub-clause (c) read with the Third Schedule, seeks—

(a) to raise the rates of basic excise duty on—

(1) confectionery and chocolates;

(2) aerated waters;

(3) cured coffee;

(4) tobacco (unmanufactured and manufactured);

(5) mineral fuels falling under items Nos. 6, 7, 8, 9 and 10 of the Central Excise Tariff;

(6) petroleum waxes;

(7) paints and varnishes;

(8) glycerine;

(9) synthetic organic dye-stuffs; and synthetic organic pro- ducts;

(10) cosmetics and toilet preparations; and soap;

(11) fertilisers;

(12) plastic materials, and articles thereof;

(13) tyres; and rubber products;

(14) paper;

(15) woollen fabrics;

(16) cement;

(17) sheet glass and plate glass and laboratory glassware;

(18) iron or steel products; steel ingots; tin plates; and iron in crude form;

(19) aluminium;

(20) internal combustion engines;

(21) electric motors and parts; electric batteries and parts; electric fans; and electric wires and cables (other than insulated wires and cables);

(22) refrigerating and air-conditioning appliances and machinery, and parts;

(23) motor vehicles; and

(24) exposed cinematograph films;

(b) to reduce the basic excise duty on—

(1) vegetable non-essential oils; and

(2) sodium silicate;

(c) to change the tariff description of—

(1) compounded lubricating oils and greases to include straight blended lubricating oils; and

(2) cinematograph projectors to Include parts;

(d) to change the tariff description and to raise the basic excise duty on—

(1) rayon and synthetic fibres and yarn; and woollen yarn;

(2) cotton fabrics; silk fabrics; rayon or art silk fabrics; and jute manufactures; and

(3) wireless receiving sets;

(e) to change the tariff description and to reduce the basic excise duty on cotton twist, yarn and thread:

(f) to change the basis of assessment of asphalt, bitumen and tar from value to weight.

(g) to create new items in the Central Excise Tariff for—

(1) silk yarn; jute twist, yarn, thread, rope and twine; and yarn not otherwise specified; and

(2) textile fabrics, not otherwise specified.

Clause 65—

Sub-clauses (1) to (5) seek to provide for levy of regulatory duties of excise up to the 15th May, 1973 on a flexible basis within the specified ceiling rate, for regulating or bringing greater economy in consumption.

Sub-clause (t>) seeks to continue upto the passing of this Act, the regulatory duties of central excise levied under the Finance Act, 1971, and in force immediately before the 18th March, 1972, subject to any exemption notifications.

Clause 66 read with the Fourth Schedule seeks to amend the Additional

Duties of Excise (Goods of Special Importance) Act, 1957 on (1) unmanu- factured tobacco, (2) cigarettes and (3) art silk fabrics.

Clause 67 read with the Fifth Schedule seeks to raise the ceiling rates

of additional excise duties leviable under the Mineral Products (Additional Duties of Excise and Customs) Act, 1958, on (1) refined diesel oils and vaporising oil; and (2) petroleum products, not otherwise specified.

Clause 68 like section 8 of the Finance Act, 1971, provides that salt shall

be duty free for another year.

Clause 69 seeks to make certain amendments to the Bengal Finance (Sales Tax) Act, 1941, as in force in the Union territory of Delhi (herein- after referred to as Delhi Act).

Sub-clause (a) seeks to amend section 5 of the Delhi Act. Under the amendment, the deduction, for the purpose of computing taxable turnover of a dealer, in respect of sales of goods required by a manufacturer for use by him as raw materials in the manufacture of taxable goods will be available only if the manufacture takes place in Delhi and the goods so manufactured are sold in the Union territory of Delhi or in the course of inter-State trade or commerce or in the course of export from that territory.

Sub-clause (b) seeks to insert six new sections 12A to 12F in the Delhi

Act.

New section 12A seeks to provide that where the ownership of a business is transferred either in whole or in part by sale, gift, leave or licence, hire or in any other manner, the transferor and the trans- feree shall be jointly and severally liable to pay tax (including penalty) remaining unpaid at the time of the transfer. The liability of the transferee will, however, be limited to the value of the assets received by him by such transfer.

New section 12B seeks to provide for recovery of tax (including penalty) from the liquidator in the case of a company in liquidation.

New section 12C seeks to provide that in the case of a firm, the firm and each of its partners will be jointly and severally liable to pay the tax (including penalty) payable by such firm.

New section 12D seeks to provide that where the business in res- pect of which tax is payable, is carried on by a guardian, trustee or agent for the benefit of, or on behalf of, a minor or other incapacitated person, the tax shall be assessed upon and recoverable from su^h guardian, trustee or agent.

New section 12E seeks to provide that where the estate or any portion of the estate of a dealer owning business in respect of which

tax is payable, is under the control of the Court of Wards, the Administrator-General, the Official Trustee or any Receiver or Manager appointed by or under any order of a Court, the tax shall be assessed upon and be recoverable from such Court of Wards, Adminis- trator-General, Official Trustee, Receiver or Manager.

New section 12F seeks to provide that where the business carried on by a firm, association of persons or a Hindu undivided family is discontinued, every person who was at the time of such discontinuance a partner of such firm or a member of such association or family, shall be jointly and severally liable for the payment of the tax (including penalty) payable by such firm, association or family upto the time of such discontinuance. In the case of death of a dealer, the lax (including penalty) shall be payable by his legal representative. The liability of the legal representative will, however, be limited to the estate of the deceased.

Sub-clause (c) seeks to amend section 17 of the Delhi Act. The amend- ment is consequential to the insertion under sub-clause (b), of new section 12A in the Act.

FINANCIAL MEMORANDUM

Clause 40 of the Bill seeks to amend section 252 of the Income-tax

Act to empower the Central Government to appoint one or more Members of the Income-tax Appellate Tribunal to be the Vice-President or Vice- Presidents thereof. It is proposed to have three Vice-Presidents, one at Bombay, another at Delhi and the third at Calcutta and to pay them in addition to the salary payable to them as Members a special pay of Rs. 250 per month.

Provision exists at present for the grant of a special pay (in addition to normal salary as Member) of Rs. 250 per month to the incumbents of three of the po.ste of Members who may be nominated for the purpose. The intention is to convern the three posts of Members carrying the special pay of Rs. 250 as posts of Vice-Presidents of the Tribunal.

Hence the provisions of the clause do not involve any additional ex-

penditure of either a recurring or non-recurring nature.

MEMORANDUM REGARDING DELEGATED LEGISLATION

DIRECT TAXES

Clause 6 seeks to insert a new section 12A in the Income-tax Act which makes the provisions of sections 11 and 12 of the Act inapplicable to the income of any trust or institution unless it has been registered before a specified date by an application made in this behalf in such form and manner as may be prescribed by rules and, in the case of a trust or institution with a total income exceeding Rs. 25,000 in any previous year, unless the accounts of such trust or institution for that year have been audited by an accountant and the report of such audit in such form and containing such particulars as may be prescribed by rules is filed with the return of income.

Clauses 23 seeks to substitute a. new section for section 90 (relating to agreement with foreign countries for the avoidance or relief of double taxation of income under the Income-tax Act and any corresponding law in force in any such foreign country) so as to enlarge the scope of that section to cover the exchange of information for the prevention of eva- sion or avoidance of income-tax or for recovery of income-tax in either treaty country and empowers the Central Government to make", by noti- fication, such provisions as may be necessary for implementing the agree- ment. As the exact provisions to be made will depend on the terms of each agreement, the power is appropriately vested in the Central Govern- ment which will issue the notification with due regard to the provisions of the agreement. Clauses 49, 54 and 57 seek to make corresponding amendments in section 44A of the Wealth-tax Act, section 44 of the Gift- tax Act and section 24A of the Companies (Profits) Surtax Act, respec- tively.

Clause 26 seeks to amend section 139 of the Income-tax Act relating to return of income. The new proviso to section 139 (2) proposed to be substituted by sub-clause (b) of this clause provides for the making of an application, in the manner prescribed by rules, to the Income-tax Offi- cer for extending the date for furnishing the return.

New sub-section (4A) proposed to be substituted by sub-clause (c)

of this clause for existing sub-section (4A) of section 139 of the Income- tax Act. requires every person in receipt of income derived from property held under trust or other legal obligation or of income, being voluntary contributor received by such trust or institution, to furnish in certain cases a return of income in such form and verified in such manner and setting forth such particulars as may be prescribed by rules.

Under the amendment to section 139 (8) (a), proposed in sub-clause (d) of this clause, the Income-tax Officer may, in such cases and under such circumstances as may be prescribed by rules, reduce or waive the interest payable by an assessee who has not furnished the return by the due date.

Clause 41 seeks to amend section 295 of the Income-tax Act so as to take power for the Central Board of Direct Taxes to make rules regarding the circumstances in which, the conditions subject to which and the manner in which, the Appellate Assistant Commissioner may permit an

appellant to produce evidence which he did not produce or which he wa" not allowed to produce before the Income-tax Officer. Clauses 51, 56 and 68 seek to make corresponding amendments in the rule-malcing provision contained in section 46 of the Wealth-tax Act, section 46 of the Gift-tax Act and section 25 of the Companies (Profits) Surtax Act, respectively.

Clause 45 (a) (ii) seeks to amend section 5(1) of the Wealth-tax Act (relating to exemption from wealth-tax of certain assets) so as to exempt (i) the value, as determined in the manner prescribed by rules, of assets forming part of an industrial undertaking belonging to an assessee, and (ii) the value as so determined of the interest of the assessee in the assets forming part of an industrial undertaking belonging to a firm or an asso- ciation of persons of which the assessee is a partner or, as the case may be, a member. As the value has to be determined having regard to the nature of the assets, it is considered that these pertain to matters of detail.

As the matters in respect of which provisions may be made by rules or notifications under the aforementioned provisions pertain to matters of detail or procedure, the delegation of legislative power is of a normal character.

INDIRECT TAXES

Clause 62(1) of the Bill enables the Central Government to levy by notification a regulatory duty of customs at such rate as may be specified in the notification, but subject to the maximum laid down in the said clause. This power will be exercised with a view to regulating or bringing greater economy in imports. Similarly clause 65 (1) of the Bill enables the Central Government to levy by notification a regulatory duty of excise at such rate as may be specified in the notification, but subject to the maximum laid down in the said clause. This power will be exer- cised with a view to regulating or bringing greater economy in consump- tion. The exercise of the powers conferred by clauses 62(1) and 65(1) will depend upon the circumstances prevailing at the time of the notifica- tion and accordingly power is vested only in the Central Government who, while issuing the notification, will have regard to those circum- stances. The delegation of legislative power is thus of normal character.

S. L. SHAKDHER,

Secretary.

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