Subject NOT available

THE FIRST SCHEDULE

(Sit Motion 2)

PART I

iNCOMt-TA* "N" M " C " * t O i; O" INCOME-TAX

& P*MWfc A

In the MM of every tadlvirfual or Hindu undivided family or

unregistered firm or other association of persona or body of

Individual*, whether incorporated or not, or every artificial

10 juridical person referred to in sub-clause fvii) of clauue f3l) of

Motion I ef the Income-t"x Act, not being • case to which

Sub-Paragraph n of thin Paragraph or any other Paragraph of

thla Part applies,—

R*Us "(Inctmt-iat

11 (1) where the total Income does Nil

not exoeed Ra. 16,000

(2) where the total inuome e x- 30 per cent, of the amount

oeeda R e. 16,000 but doe* not by which the total income

exoeed Ra. 28,000 exceoda Ra.IB, 000;

X0 O) where the total income R a . 3 , 0 00 plus 34 per cent.

exceed* Ha. 26,000 but doea of the amount by which the

not exoeed Ha. 30,000 total income exceed*

R " . 2 5 , 0 0 0;

(4) where the total ineome R * . 4 , 7 00 plus 40 per cent.

IS exoeed* m*.SO,000 but doee of the amount by whloh the

not exoeed Ra. SO, 000 total income exceed*

R 8 . 3 0 . 0 0 0;

(B) where the total income R*. 12,700 plus 50 per cent,

exceed* Re, 60,000 but doe* not of the amount by whloh the

30 exoeed Ra. 70,000

total Income exoeed*

R * . 8 0 , 0 0 0;

(6) where the total Ineome R*. 22,700 plus SB per

exceed* R * . 7 0 , 0 00 but doe* not cent, of the amount by

•xce"d Ra. 1 , 0 0 , 0 00 whloh the total Income

exoeeda R " . 7 0 , 0 0 0;

36

(7) where the total lnoome B a . 3 9 , 2 00 plus 60 per

exoeed* • *. 1,00,000 cent, of the amount by

whloh the tout income

exoeed* Rr. 1,00,000.

40 Surchvi$ on income-tax

The amouat of income-tax computed In accordance with the

preceding provision* ef thla Wr-Paragraph "hall be increased

by a eurokmrg* for purpoM* of the Union calculated at the fate

of ten per oent. of auAh l""ome-tax.

$o THK GAZS'jm Off IUI&A, WitmAGBBiliMW CPAB*U

Sub-ParaaraohU

ia the case of every Hindu undivided family which at any time

during the previous yearbttB'Wleaflttme member whose total

Income of the previous year rfeltVMrffto the assessment year

commencing on'tte aW'day'of Jkprtly'408* "KD""d"As. 15,000, 5

Rotes .>J ttttmrnax

(1) where the total income- fM;

does not exceed Rs. 8,000

(2J Where ^h&toto'ftittOme Z2 per Ottftt; c^'016 ^MfiHarbv" exceeds RW:fr;066 bufdoe'tf'nbt wnWtlie total income exceeds 10 exfeee'l i&:iitt;fflft It's. 8

W ^ h e W ' t S e¹^ tf&>Me fcff.-f.wpiffS zrpBrtrtfnU 6f exoeeds RB. 15,000 but does not the amount By "wnieifthetotaj exceed Ha. 20,000 tacome; fixoeeds Hs. 15,000;

(4) where the total income Rs. 2,890 plus 35 per cent, of 15

exceeds B". 20,000 but dons not ilur amoun^y^tfift: thWtotal

exceed Ra. 26,000

income exceeds B8?56V6tf6|a

W " * " * fe tbe.total "laac&e a","4ii&*aiplu*.AO(t"er.o*iit.fJ^f

exo"*"t R*JE6v"0"ibut * "n not theiinomtdb hy;"hi*hclh" tottfl

exoeodRnlSO.000 Income exceed*'B#ea6

<")'wterrtMltotMl MMtfle Ra^"""i|A""pJ60/ttertoaBt.(a>f

•x"*edJP"*. Stf.flOO but "W"*jQot the a*wuaf"#""h"*.t" "bMfe>x€*

exoMd BiViftyOO* Income eAdttaSi JIM. WH>0"0|Jon

(7) where the total Income Rs. 16,640 plus 60 per cent, of

exo*fldjB".l*0,0" th*m<*mtM"**"fr1*tHoi*l 25

lnooHte'*te4*d#Mil Mflofoi

Provided thai fQjr,tt^i""poBea of this Sub-Paragraph, —

#>; W. !"SoipwMta"BlWU be payi^fcQni^jJji^toopms^)

(if) ^nrffetto total mcome exceeds Rs. 12f;'(K)a'b'it!%JeVa6" 30

exceed Ra. 17,610, Snto^oome-tax payable thereon shall not

exceed ,lort". per cent^of the amount by which.the total income

exceeds na.v2.DO6.

Sutckdi&t on income-tax

The amount of income-tax computed In accordance with the 35

by a otr^qpifcWpfapdMM of the Union oal6Qfteim*-"4

ten pef^^nlV 6*^d^4n1^m16-tax.

Paragraph 6

In the caae of every co-operative society, 40

Rtaes oimcoiwttu.

does not exceed Rs. 10,000 • 'ftittV&eY

SK.W Tflte <>XZB?rrK OP INDU KXTRAOHJ>INA31Y. 8J

(2) where the total Income EB. 1,500'jMi12fc percent;' of

exceeds Ra. 10,000 bufcdQe*"oofc;fctatfSamountby which the total

exceed Rs. 20,000 tnqome exceeds Rs, JO, 000;

(3) where the total Income rfs. 4,000 pllis 40 per cent, of

5 exceeds Rs. 20.000 th$ amount bv which the total

inpome. exoeedk Rff. 20.000.

Surcharge OH incom$i.ax'

pui mount pUncpme-tax compu,te0 j&aoowaiince-with the

preca^g-prpvjsioa* pi this Paragraph Btttfl keihttfea""fl by a

10 surcharge for purposes of the Union calculated at XKtneaUS of

ten per cant., olsuoh Income-tax.

Paragraph C

tStib-Parafltaplfel

In the case "f "v"ryr registered firm, not being a case to

15 which. Sub-Paragraph If $ $^ ^ 5 " Wh "PP"""" ~

Rausofiricomt'tai

(1) > Whow thte tot"l lntome N/I;

does not exceed Ra. 10<0fr0

30

Surcharge 6n ihcome-tai

such total income, —

Rates of income-tax

(1) where the total income

Nil

does not exoeed Ra. lft, 000

(2) where the total Income

4 per cent, of the amount by s

which the total Income exoeeds

Rs. 10,000;

exceeds Rs. 10,000 but does not

exoeed JU. 25,000

(3) where the total income

Ra. 600 plus 7 per cent of th*

amount by which the total income

exceed* Ra. 26, OOOj 10

exceed* Re. 25,000 but does not

exoe"d Ra. 60,000

(4) where the total income

Rs. 2, SAO plus 13 per cent, of the

amount by which the total

Income exceeds Rs. 60,000;

exceed* Re. 60,00Q but does not

exoeed Ra. 1,00,000

(6) where the total income

exceeda Ra. 1,00,000

Rs. 8,860 plus 22 per cent, of

the amount by which the total 18

Income exceeds Ra. 1,00,000.

The amount of Income-tax computed In accordance with the

preceding provisions of tola Sub-Paragraph shall be Increased

by a surcharge for purposes of the Union calculated at the rate ao

of ten per cant, of ouch Income-tax.

Explanation .—Bor the purposes of this Paragraph, "regis-

tered firm" inoludes an unregistered firm assessed as a regis-

tered firm under olause (b) of aoctton 183 of the Income-tax Act.

Paragraph D

35 In the case of every local authority,—

Rate "f income-tax

On the whole of the total income 60 per cent.

Surcharge on income-tax

The amount of Income-tax oomputed at the rate hereinbefore 30

specified shall be Increased by a auroharge for purposes of the

Union calculated at the rate of ten per cent, of such inoome-tax

Paragraph E

In the case of a company, —

Rates of income-tax

38 L In the case of a domestic company,—

(1) when the company Is

a company in which the public

are substantially Interested, —

ft) in a oame where the 46 per oant. of the total lncomei 40

total Income does not exoeed

Ra. 1,00,000

55 per cent, of the total Income;

(ii) in a o iw where the

total Income exoeedi

Ra. 1,00,000

(2) whore the company is

s not a company In which the public are substantially Interested, —

(i) in the cage of an

industrial company, __

10

55 per cent, of the total' income)

(a) where the total

income doea not exceed

Be. 2,00,000

(b) where the total

80 per cent, of the total income)

15

income exceeds

RB. 2,00,000

(ii) in any other case

65 per cent, of the total ineonaet

Provided tfcat-

(i) the Income-tax payable by a domestic company, being

a company la which the public are substantially interested.

*° the total Income of which exceeds As. 1,00,000, shall not

exceed the aggregate o f-

(•) the income-tax which would hava^been payable by

the oompany If Its total Income had been Us. 1,0*. 00*

(the teeome of Ba. 1,00,000 for this purpose beUg ooaa-

" pvted M U "ue" l a o om included l&oome from various

soaroes in the sasie proportion as the total IKMSM of

Ike oompany)) and

(k) eighty per cent, of the aaount by whloh Us total

lMMsae exceeds Us. 1.00, OOOt

•0 (U) the taoosae-tax payable by a doeaeetlo oosofany. aoib

being a oompasy In which the public are snbstaatislly

interested, whloh la an Industrial oompany and the total

laoom* of watoh exceeds Bs.z.00,000, shall "ot exceed

I* (*) tfce Income-tax which would have been payable by

tfae oontpaay if its total income had been Ba. 1,00,000

(the Income of Us. 1,00,000 for this purpose being oom-

iwilsil aa If such income Included income from various

souroes In the same proportion as the total income of

40 the company); and

ft) eighty per cent of the amount by which Its total

income exceeds Ra. 2,00,000,

n. In the case of a company other than a domestic oompaay, —

(i) on so much of the total

*• income as consists of—

(a) royalties received

from an Indian concern In

84 THB-WiZSmXQFWBmyBXmKmiMimM [PAtiH

6

"pitrUattam Of On agreement

made by It with the Indian

concern after the 31st day

of March, 1961 but before

the 1st day of April, 1"W"

or

fb) fees for rendering

10

technical services received

from an Indian oohoern i n .,

j^irsuan^ ^m agreement

made by It with the Indian

concern after the 29th day

18

before the 1st day of April,

1976,

50"p6r

*ritfMttn"*>ofr*ff%emeftt=ft"*',

la either cage, been approved

by the Central Government

6f^t^al^*dHt

20

Surcharge mincomt-tax

rife ljiKjuiii oi looomf-q^ ggpftptecriA aoooraanoe wtn the

prece^lmarproynroBB oi tail >^r*Jt"Pn*6"U W I6bWW*d by a

•uronWflrt c"TdUI"(ia^t^" raw oi two *M a half p ir of nt.

of iudn~IiUSoln"^ti[x.

w

PART H

194, 1WA, i " B, 1"*BB, lMD'"iidlbtl ofth* li"oom#-tatM&*

tax 1" to!l*d*^cteJ at ffi*]tW* ifl f6Wrf;'d**ottbn ifcall b# • 30

mad* fre*'tt#fckto^*'*ib

InootnA^a^

aatoj>£

Rate of

iftMfOnarjfe

~t. tonne oa"e t)i * pervtin

otb"f Ittin a 66mp*hy—

/ i) where the person la

MUldwt toJftdlao-r

10 per cent.

Nil

40

*'

fi) on Income by way of

tni"rMtotteF*te*"'iht"r*M

on seourttlea"

3 per osnt

f") on lncomo by way of

winnings from lolterioH amJ

orosaword puz/.loH

3 p"r cent.

40 On) on income by wuy of winnlngH from h<>rH" racOH

Income-tax

Rate of surcharge

Rate of income-tax

(iv) on Income by way of

10 per cent.

Nil 6

Insurance commission

Nil

10 per cent.

(v) on Inoome by way of

interest payable on

¹⁰

fA) any security, other than a tax-free security, of the Central or a State Govern- ment;

(B) any debentures or other securities for money Issued by or on behalf of

15 any local authority or a cor-

poration established by a Central, State or Provincial Act;

(C) any debentures issued

20 by a company where mich debentures are listed In a recognised stock exchange lr India in accordance with the 25 Securities Contracts (Regu-

latton) Act, 1956, and any rules made thereunder

20 per cent. 2 per cent.

(vi) on any other Income (excluding interest payable on a tax-free security)

³⁰ fb) where the person Is not

resident In India—

(i) on the whole income (excluding Interest payable on a tax-free security)

Income-tax at 30 per cent, and surcharge at 3 per cent, of the amount of the inoome,

38

or

40

income-tax and surcharge on Income-tax in respect of the income at the rates prescribed in Sub-Paragraph I of Paragraph A of Part m of this Schedule, If suoh income had been the total Income,

whichever 1B higher;

(if) on income by way of 16 per cent. 1.5 per cent.

*5

interest payable on a tax- free security

Income-tax

Rate of

income-tax

Rate of

surcharge

2. In the case of a company—

(a) where the company 1B a

5 domestic oompany—

(i) on income by way of

20 per cent.

0.6 per oent.

Interest other than "Interest

on securities"

21.5 per cent.

0.5 per cent. io

(ii) on any other income

(excluding Interest payable

on a tax-free security)

(b) where the oompany Is not

a domestic company—

(i) on income by way of

25 per cent.

NU 16 dividends payable by any domestic oompany

40 per oent.

Ml

20

25

30 (ii) on Income by way of royalty payable by an Indian concern In pursuance of an agreement made by It with the Indian oonoem after the 31st day of March, 1076, where such royalty Is In consideration for the transfer of 111 or any rights (Including the granting of a licence) in respect of copyright In any book on a subject referred to In the proviso to sub-section (lA)of section USA of the

Income-tax Act, to the Indian

concern

(Hi) on Income by way of

38

40 royalty / n ot being royalty of the nature referred to In sub-Item (b) C")7 payable by an Indian oonoern In pursuanoe of an agreement made by It with the fiidlan concern and which has been approved by the Central Government,—

1.25 percent.

50 per cent

(A) where the agreement

Is made after the 31st day

45

Income-tax

Rate of

surcharge

Rate of

Income-tax

of March, 1961 but before

5 the 1st day of April, 1976

(Q) where the agreement

Is made after the 31st day

of March, 1976—

20 per cent.

(I) on so much of the

Nil

10 amount of such Income as

oons lsts of lump sum con-

sideration for the transfer

outside India of, or the

Imparting of information

15 outside India In respect

of, any data, documenta-

tion, drawing or specifi-

cation relating to any

patent, invention, model,

20 design, secret formula or

process, or trade mark or

similar property

40 per cent.

(2) on the balance, if

Nil

any, of such Income

25 (iv) on inoome by way of

fees for technical services

payable by an Indian concern

in pursuance of an agreement

made by It with the Indian

30 concern and which has been

approved by the Central

Government—

60 per cent.

1.25 per cent.

(A) where the agreement

is made after the 29th day

35 of February, 1964 but

before the 1st day of

April, 1976

Nil

40 per oent.

(B) where the agreement

Is made after the 31st day

40 of March, 1976

1.1 per cent.

44 per oent.

(v) on income by way of

Interest payable on a tax-

free security

1.76 per cent

70 per cent.

(vi) on any other Income

PART HI

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

income-tax from income chargeable under the head "Salaries" or my

payment referred to in sub-section (9) of section BOE and computing

''advance tax",

5 la 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 lo 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, 15 as the case may be, "advance tax" (not being "advance tax" In respect of any income chargeable to tax under Chapter XII or seotion 164 or section 164A or section 167A of the Income-tax Act at the rates as specified in that Chapter or section), shall be so calcula- ted, charged, deducted or computed at the following rate or rates:— 20

Paragraph A

Sub-Paragraph I

In the case of every Individual or Hindu undivided family

or unregistered firm or other association of persons or body

of Individuals, whether Incorporated or not, or every artificial 25

Juridical person referred to in sub-clause (vii) of clause /3I) of

section 2 of the Income-tax Aot, not being a oaae to which Sub-

Paragraph n of this Paragraph or any other Paragraph of thin

Part applies,—

Rotes of income-tax

30

Nil;

(1) where the total Income

does not exceed Rs. 15,000

(2) where the total income

30 per cent, of the amount

by which the total Income

exoeeds Rs. IS,000; 35

exoeeds Rs. 15,000 but does not

exceed Rs. 25,000

(3) where the total Income

exoeeds Rs. 25,000 but does

not exceed Rs. 30,000

Ri. 3,000 plus 34 per cent,

of the amount by which the

total Income exoeeds Rs. 25,000;

(4) where the total Income

exceeds Rs. 30,000 but does not

exceed Rs. 50,000

Rs. 4,700 plus 40 per cent.of

the amount by which the total 40

Income exoeeds Ra. 30,000;

(5) where the total Income

exceeds Rs. 50,000 but does

not exceed Rs. 60,000

45

Rs.12,700 plus 60 per cent,

of the amount by which the

total income exceeds

Rs. 50,000;

(6) where the total Income

exceeds Rs.60,000 but does not exoeed Ra. 70.000

Rs.17,700 plus 52.5 per oent. of th" amount by which the total Income exceeds Ra. 80,000;

(7) where the total Income

5

exceeds Rs.70,000 but does not exceed Rs. 85, 000

Rs.22,950 plus 55 per cent of the amount by which the total income exceeds Re.70,000;

Re. 31, 200 plus 57.5 per

(8) where the total income

exceeds Rs.85, 000 but does not exceed Ra. 1,00,000

10

cent, of the amount by which the total Income exceeds Rs.88,000;

(9) where the total Income

exceeds Rs.1, 00, 000

Ra.39, 825 plus 60 per cent, of the amount by which the total income exceeds Rs. 1,00, 000.

15

Surcharge on income-tax

2ij

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

Sub-Paragraph II

In the case of every Hindu undivided family which at any time

during the previous year has at least one member whose total income of the previous year relevant to the assessment year commencing on the 1st day of April* 1983 exceeds Re. 15,000, —

25

Raits of income-tax

Nil;

(1) where the total income

does not exceed Rs. 8,000

(2) where the total Income

30

exceeds Us. 8,000 but does not exceed Rs. 15,000

22 per cent, of the amount by which the total income exceeds Rs. 8,000;

Rs. 1,540 p!us 27 per cent, of the amount by which the total income exceeds Rs. 15, OuO;

(3) where the total Income exceeds Rs. 15,000 but does not exceed Ra. 20,000

35

Rs. 2,890 plus 35 per cent, of the amount by which the total income exceeds Rs.20,000;

(4) where the total income exceeds Rs. 20,000 hut does not exceed Ra. 25,000

(5) where the total income

exceeds Rs. 25,000 but does not exceed Rs. 30,000

40

Rs. 4,640 plus 40 per cent, of the amount by which the total income exceeds Rs. 25,000;

(6) where the total income exceeds Rs. 30,00C but does not exceed Re. 50,000

Rs. 6,640 plus 50 per cent, of the amount by which the total income exceeds Rs. 30,000;

45

(7) where the total Income

exoeeds RB. 50,000

Rs. 16,640 plus 60 per cent,

of the amount by which the total

Income exceeds Ra.00,000:

Provided that for the purposes of this Sub-Paragraph, —

(i) no Income-tax shall be payable on a total Income not 5

exceeding Rs. 12,000;

(ii) where the total Income exoeeds RB. 12,000 but does

not exceed Be. 17,610, the Income-tax payable thereon shall

not exceed forty per cent, of the amount by which the total

Income exceeds Rs. 12,000.

Surcharge on income-tax

The amount of Income-tax computed in accordance with the

preceding provisions of this Sub-Paragraph shall be Increased

by a surcharge for purposes of the Union calculated at the rate

of ten per cent, of such income-tax.

,„ ID

Paragraph B

In the case of every co-operative sooiety,—

Rates of income-tax

(1) where the total income

does not exceed RB. 10,000

IS per cent, of the total

Income;

on (2) where the total Income

exoeeds RB. 10,000 but does

not exceed RB. 20,000

Rs. 1,500 plus 25 per cent,

of the amount by which the

total income exoeeds

Rs. 10,000;

(3) where the total income

exceeds RB. 20,000

Rs. 4,000 plus 40 per cent. 25

of the amount by whloh the

total income exoeeds

Rs. 20.000.

Surcharge on income-tax

The amount of inoome-tax computed in accordance with the 30

preceding provisions of this Paragraph Bhall be Increased by a

surcharge for purposes of the Union calculated at the rate of

ten per cent, of such income-tax.

Paragraph C

Sub-Para&raph I

JO In the case of every registered firm, not being a oase to

which Sub-Paragraph II of this Paragraph applies,—

Rates of income-tax

Nil

(1) where the total income

40 doe" not exceed Ra. 10,000

(2) where the total Income 5 per oent. of the amount by

exceeds Rs. 10,000 but does not which the total Income exceeds

exoeedRs. 25,000 Rs. 10,000;

(3) where the total Income Rs. 750 plus 7 per oent. of

5 exceeds Rs. 25,000 but does not the amount by which the total

exceed Re. 50,000 Income exceeds Rs. 25,000;

(4) where the total Income Rs. 2, S00 plus 16 per cent,

exceeds Re. 50,000 but does not of the amount by which the

exceed Rs. 1,00,000 total Income exceeds

10

Rs. 60,000;

(5) where the total Income Rs. 10,000 plus 24 per cent,

exceeds Rs. 1,00,000 of the amount by which the

total income exceeds

Rs. 1,00,000.

¹⁵

Surcharge on income-tax

The amount of Income-tax computed in accordance with the

preceding provisions of this Sub-Paragraph shall be increased

by a surcharge for purposes of the Union calculated at the rate

often per cent, of such income-tax.

²⁰

Sub-Paragraph II

In the case of every registered firm whoBe total income

includes Income derived from a profession carried on by It

and the Income so included is not less than fifty-one per oent.

of auoh total income,—

25 Rates of income-tax

(1) where the total inoome Nil

does not exceed Rs. 10,000

(2) where the total Inoome 4 per cent, of the amount by

exceeds Rs. 10,000 but docs not which the total income exceeds

30 exoe*dRa. 26,000 U s. 10,000;

(3) where the total income Rs. 600 plus 7 per cent, of

exceeds Rs. 25,000 but does the amount by which the total

not exceed Rs. 50,000 Income exceeds Rs. 25,000;

(4) where the total income Rs. 2,360 plus 13 per cent.

35 exceeds Rs. 60,000 but does of the amount by which the

not exceed Rs. 1,00,000 total Income exceeds

Rs. 60,000;

(5) where the total Income Rs. 8,860 plus 22 per cent.

exceeds Rs. 1,00,000 of the amount by which the

40

total

Income exceeds

Rs. 1,00,000.

aurcnarge on income-tax

The amount of Income-tax oomputed in accordance with the

preoeding provlslona of this Sub-Paragraph Bhall be Increased

by a surcharge for purposes of the Union calculated at the rate

of ten per cent, of such income-tax.

5 Explanation •—For the purposes of this Paragraph, "registered firm" includes an unregistered firm assessed as a registered firm under olauee (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 oomputed at the rate hereinbefore

specified shall be Increased by a surcharge for purposes of the 15

Union calculated at the rate of ten per cent, of such Income-tax,

Paragraph E

In the oase of a company, —

Rates of income-tax

I. In the case of a domestic company, —

20 (1) where the company ie a

company in which the public

are substantially interested, —

(i) In a oase where the 45 per cent, of the total income;

25 total income does not exceed Rs. 1,00,000

*

(ii) in a case where the total 55 per cent, of the total income;

Income exceeds Rs. 1,00,000

(2) where the company Is not

3° a company in which the public are substantially Interested, —

(i) in the case of an

Industrial company, —

(a) where the total 55 per cent, of the total income;

35 Income does not exceed Rs. 2,00.000

(b) where the total 60 P"r cent, of the total income;

Income exoeods Rs. 2,00,000

(ii) in any other case 66 p"r cent, of the total income:

Provided that —-

(i) the Income-tax payable by & domestic company, being a

company in which the public are substantially Interested, the

total tncome of which exceeds Rs. l,00,000,shall not exceed the

5 aggregate of —

fa) the income-tax which would have been payable by the

company If Its total Income had been Rs. 1,00,000 (the Income

of RB. 1,00,000 for this purpose being computed an if cnich

income Included Income from various sources in the same

10 proportion as the total income of the company); and

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

exceeds Rs. 1,00,000;

(Ii) the income-tax payable by a domestic company, not being a

company in which the public are substantially interested, whloh

15 1B an Industrial company and the total Income of which exceeds

Rs.2,00,000, shall not exoeed the aggregate of—

20

fa) the Income-tax whloh would have been payable by the

company If Its total Income had been Ra" 2, Q0,000 (the Income

of Rs. 2,00,000 for this purpose being computed as If suoh

Income included income from various source a in the same

proportion as the total income of the company); and

(b) eighty per oant. of the amount by which its total Income

•xoMds Rs. 2,00,000.

H. In the case of a company other than a domestic company, —

26

(i) on BO muoh of the total

Income aa oonslsts of —

(a) royalties received from

30

an Indian oonoern In pursu-

ance of an agreement made by

it with the Indian oonoern

after the 31st day of March,

1961 hut before the 1st day of

April, 1976, or

{b) feea for tendering technical

36 servloes reoeived from an Indian

oonoern In pursuance of an agree-

ment made by it with the Indian

ooncern after the 80th day of Feb-

ruary, 1964 but before the 1st

40 day of April, 1976,

60 per cent.

and where such agreement has,

In either case, been approved

by the Central Government

(ii) on the balance, if any,

70 per cent.

45 of the total inoome

Surcharge on income'tax

The amount of Income-tux computed In accordance with the

preceding provisions of this Paragraph shall be Increased by a

surcharge calculated at the rate of two and a half per cent,

of such Income-tax.

§

PART IV

fc" section 2(7Y"j|

RULES rod COMPUTATION OF NET AGKIOILTUHAL INCOME

Rule 1. — Agricultural Income of the nature referred to in

sub-clause fa) of clause (1) of section 2 of the Income-tax Act JQ

shall be computed as If It were Income chargeable to Income-tax

under that Act under the head "Income from other sources" and

the provisions of Motions 5? to 59 of that Act shall, so far as may

be, apply accordingly:

Provided that sub-section (2) of section 58 shall apply subject Jtfi

to the modification that the reference to section- 40A therein shall

bd construed as not Including a reference to sub-sections (3] and

(4) of section 40A.

Rule 2. — Agricultural income of the nature-referred to In

sub-clause (b) or sub-dauan (c) of clause f 1) of section 2 of the 20

Income-tax Act [other than Income dertved from any building

required as a dwelling house by the receiver of the rent or revenue

or the cultivator or the receiver of rent-ln-klnd referred to in

the said sub-clause (cjjshall be computed as If It were Income

chargeable to income-tax under that Act under the head "Profits 25

and gains of business or profession" and the provisions of

sections 3 0 , 3 1 , 3 2 , 3 4 , 3 6 , 3 7 , 3 8 , 4 0 , 4 0A [other than sub-

sections (3) and (4) thereof), 41, 43 and 43A of the Income-tax

Act shall, so far as may be, cpply accordingly.

Rule 3. — Agricultural income of the nature referred to In SQ

sub-clause (c) of clause (1) of section 2 of the Income-tax Act,

being income dertved from any building required as a dwelling

house by the receiver of the rent or revenue or the cultivator

or the receiver of rent- in-kind referred to In the aald sub-

clause (c) shall be computed as If It were Income chargeable 3E

to Income-tax under that Act under the bead "Income from

house property" and the provisions of sections 23 to 27 of that

Act shall, so far as may be, apply accordingly:

Provided that sub-section (2) of the said section 23 shall apply

subject to the modifications that the references to "total Income" 40

therein shall be construed as references to net agricultural

income and that the words, figures and letter "and before mak-

ing any deduction under Chapter VIA" shall be omitted.

Rule 4. - Notwithstanding anything contained In any other

provisions of these rules, In a case where the a s s e s s ee derives *5

Income from sale of tea grown and manufactured by him In

India, each Income shall be computed In accordance with ruin

8 of the Income-tax Rules, 19R2, and sixty per cent, of such

Income shall be regarded as the agricultural Income ot the

assessee,

B Rule 5 — Where the assepsee Is a partner of a registered

firm or an unregistered firm assessed as a registered firm

under clause (b) of section 183 of the Income-tax Act, which

m the previous year has any agricultural Income, or Is a

partner of an unregistered firm which has not been assessed

10 a* a registered firm under clause (b) of the said section 163

and which in the previous year has either no income charge -

able to tax under the Income-tax Act or has total income not

exceeding the maximum amount not chargeable to tax In the

case of an unregistered firm but has any agricultural Income,

IB then, the agricultural income or loss of the firm shall be

computed In accordance with these rules and hie share In the

agricultural Income or loss of the firm shall be computed in

the manner laid down In sub-section (1), sub-section (2) and

sub-section ($) of section 67 of the Income-tax Act and the

20 a hare so computed shall be regarded as the agricultural income

or loss of the assessee.

Rule 6, — Where the asseasee la a member of an association

of persons or a body ot Individuals (other than a Hindu undivided

family, a company or a firm) which in the previous year has

25 either no Income ohargeabkr to tax under the Income-tax Act or

has total Income not exceeding the maximum amount not charge-

able to tax in the case of an association of persons or a body

of Individuals (other than a Hindu undivided family, a company

or a firm) but has any agricultural Income, then, the agrlcul-

30 tural income or loss of the association or body shall be com-

puted in accordance with these rules and the share of the

assessee In the agricultural income or loss so computed shall

be regarded as the agricultural Income or loss of the assessee.

Rule 7. — Where the result of the computation for the previous

36 year In respect of any source of agricultural Income is a loss*,

such loss shall be set off against the Income of the assessee,

If any, for that previous year from any other source of agricul-

tural Income:

Provided that where the assessee Is a partner of an un-

40 registered firm which has not been assessed as a registered

firm under clause (b) of section 183 of the Income-tax Act

or I* a member of an association of persons or a body of

individuals and the share of the assessee In the agricultural

Income of the firm, association or body, as the case may be,

46 Is a loss, such loss shall not be set off against any income

of the assessee from any cither source of agricultural income.

Rule 8. — Any sum payable by the assessee on account ot any

tax levied by the State Government on the agricultural income

shall be deducted In computing the agricultural income.

60 Rule 9 - - (1) Where the assessee has, In the previous year re-

levant to the assessment year commencing on the 1st day of April,

1962, any agricultural Income and the net result of the computation

of the agricultural income pf the aeeessee foi any one or more of

the previous yearn relevant to the assessment yeara commencing on

the lat day of April, 1974 or the 1st day of April, 1975 or the let

day of April, 1976 or the 1st day of April, 1977 or the 1st day o' 5

April, 1978 or tho 1st day of April, 1979 or the 1st day of April,

I960 or the 1st day of April, 1981,1B a loss, then, for

the purposes of subjection (2) of eectlon 2 of this Act, -

(i) the loes so computed for the previous year relevant to the

assessment year commencing on the 1st day of April, 1974, to 10

the extent, if anv, auch loss has not been eet off against the

agricultural income for the previous year relevant to the

assessment year commencing on the 1st Hay of April. 1975 or the

lat day of April, 1976 or the 1st day of April, 1977 or the 1st

day of April, 1978 or the 1st day of April, 1979 or the 1st day IB

of April, I860 or the 1st day of April, 1981,

(ii) the lost so computed for the previous year relevant to

the assessment year commencing on the 1st day of April, 1975,

to the extent, if any, such loss has not been set off against the

agricultural income for the previous year relevant to the 20

assessment year commencing on the 1st day of April, 1070

or the 1st day of April, 1977 or the 1st day of April, 1978 or

the 1st day of April, 1979 or the 1st day of April^MO

or the lat day of April, 1981,

(Hi) the lots io computed for the previous year relevant *&

to the assessment year commencing on the lat day of April,

1976, to the extent, If any, such loss km* sot been set off

against the agricultural income for the previous year

relevant to the assessment year commencing on the 1st

day of April, 1977 or the lat day of April, 1978 or the 1st SO

day of April, 1979 or thft lat day of April, 1980 or the lat

day of April, 1981,

(iv) the loss so computed tor the previous year relevant

to the assessment year commencing on the lat day of April,

1977, to the extent, If any, such loss has not been set off 35

against the agricultural income for the previous year

relevant to the assessment year commencing on the 1st day

of April * 1978 or the lat day of April, 1979 or the 1st day

of April, 1980 or the 1st day of April, 1981,

(V) the loss so computed for the previous year relevant 40

to the assessment year commencing on the 1st day of April •

1978, to the extent, if any, such loss has not been set off

against the agricultural income for the previous year

relevant to the assessment year commencing on the 1st day

of April, 1979 or the lat day of April, 1980 or the 1st day 46

of April, 1981,

(vi) the loss so computed for the previous year relevant

to the assessment year commencing on the 1st day of April,

1979, to the extent, If any, suoh loss has not been set off

against the agricultural Income fqr the previous year 50

relevant to the assessment year commencing on the lat

day of April, 1980 or the 1st day of April, 1981,

(vii) tbe loan BO oompaUd for the previous year

relevant to the assessment year commencing on the 1st

day of April, 1980, to the extent, if any. "uch loss has

not been set off against the agricultural Income for the

5 previous year relevant to the assessment year commenc-

ing on the 1st day of April, 1681, and

(viii) the loss "o* computed for the previous year relevant

to th* a"se*oin"ftt year commencing on the l it day of April,

1981,

10 snail be set off against the agricultural Income of tbe assessee

tor the previous year relevant to the assessment year commenc-

ing on the 1st day of April, 1982.

(2) Where cue assesaee halt, In the previous year relevant

to the assessment year commencing on the 1st day of April,

15 1983 or, If by virtue of any provision of the Income-tax Act,

income-tax is to be charged in respect of the income of a

period other than that previous year, In such other period,

any agricultural income and the net result of the computation

of tbe agricultural income of the assesses for any one or more

20 of the previous years relevant to the assessment years

commencing on the 1st day of April, 1974 or the 1st day of

April, 1876 or the 1st day of April, 1976 or the 1st day of

April, 1977 or the 1st day of April, 1978 or the 1st day of

April, 1979 or the let day of April, 1980 or the let day of

25 April, 1981 or the lat day of April, 1982,U a lose, then,

for the purposes of sub-section (6) of section 2 of this Act, -

ft) the loss so computed for the previous year relevant

to the assessment year commencing on the l"t day of April,

1974, to the extent, if any, such loss has not been set off

30 against the agricultural Income for the previous year

relevant to the assessment year commencing on the 1st day

of April, 1975 or the 1st day of April, 1976 or the 1st day

of April, 1977 or the 1st day of April, 1978 or the 1st day

of April, 1979 or the 1st day of April, 1980 or the 1st day

35 of April, 1981 or the 1st day of April, 1982,

(H) the loss so computed for the previous year relevant

to the assessment year commencing on the 1st day of April,

1975, to the extent, if any, such loss has not been set off

against the agricultural income for the previous year

40 relevant to the assessment year commencing on the 1st day

of April, 1976 or the 1st day of April, 1977 or the 1st day

of April, 1978 or the 1st day of April, 1979 or the 1st day

of April, 1980 or the 1st day of April, 1981 or the 1st day

of April, 1982,

48 (Hi) the loss eo computed for the previous year relevant

to the assessment year commencing on the 1st day of April,

1976, to the extent, if any, such loss has not been set eff

against the agricultural income for the previous year

relevant to the assessment year commencing on the 1st day

60 of April, 1977 or the 1st day of April., 1978 or the 1st day

of April, 1979 or the 1st day of April, 1980 or the 1st day

of April, 1981 or the 1st day of April, 1982,

(iv) the loss so computed for the previous year relevant

to the assessment year commencing on the 1st day of April,

1977, to the extent, if any, such loss has not been set off

against the agricultural Income for the previous year

relevant to the assessment year commencing on the 1st day 6

of April, 1978 or the 1st day of April, 1979 or the 1st day

of April, 1980 or the 1st day of April, 1981 or the 1st day

of April, 1982,

(v) the loss so computed for the previous year relevant

to the assessment year commencing on the 1st day of April, 10

1978, to the extent, if any, such loss has not been set off

against the agricultural Income for the previous year

relevant to the assessment year commencing on the 1st day

of April, 1979 or the 1st day of April, 1*980 or the 1st day

of April, 1981 or the let day of April, 1982, 15

(vl) the loss so oomputed for the previous year relevant

to the assessment year commencing on the 1st day of April,

1979, to the extent, if any, such loss has not been set off

against the agricultural Income for the previous year

relevant to the assessment year oommencing on the 1st day 20

of April, 1980 or the 1st day of April, 1981 or the 1st day

of April, 1982,

(vii) the loss so computed for the previous year relevant

to the assessment year commencing on the 1st day of April,

1980, to the extent, If any, such loss has not been set off 26

against the agricultural Income for the previous year

relevant to the assessment year commencing on the 1st

day of April, 1981 or tho 1st day of April, 1982,

(vlii) the loss so oomputed for the previous year

relevant to the assessment year oommencing on the 1st 30

day of April, 1981, to the extent, If any, such loss has not

been set off against the agricultural Income for the

previous year relevant to the assessment year commencing

on the 1st day of April, 1982, and

fix), me lose ao computed for the previous year

relevant to the assessment year commencing on the

1st day of April, 1982,

shall be set off against the a perl cultural Income of the Hssemee

for the previous year relevant to the assessment year commenc-

ing on the 1st day of April, 1983, or tho period aforesaid. 40

(3) Where a change has occurred in the constitution of

50

a firm, nothing in sub-rule (I) or sub-rule (2) shall entitle

the firm to set off so much of the lose proportionate to the

share of a retired or deceased partner computed in the

manner laid down in sub-section (1), sub-section (2) and 45

Bub-section(3) of section 67 of the Income-tax Act as exceeds

his share of profits, if any, of the previous year in the firm,

or entitle any partner to the benefit of any portion of the said

loss (computed in the manner aforesaid) which Is not

apportionable to him.

(4) Where any person deriving any agricultural income

from any source has been succeeded in such capacity by

another person, otherwise than by inheritance, nothing in

Bub-rule (I) or sub-rule (2) shall entitle AIW person, other

6 than the person incurring the loss, to have it set off under

sub-rule (1) or, as the case may be, sub-rule (2).

(5) Notwithstanding anything contained in this rule,

no loss which has not been determined by the Incomp-tax

Officer under the provisions of these rules or the rules

10 contained in Part IV of the First Schedule to the Finance

Act, 1974, or of the First Schedule to the Finance Aot, 1975,

or of the First Schedule to the Finance Act, 1976, or of the

First Schedule to the Finance (No.2) Act, 1977, or of the

Schedule to the Finance Act, 1978, or of the First Schedule

18 to the Finance Aot, 1979, or of the First Schedule to the

" of 1974.

26 of 1975.

66 of W76-

" of 1*77.

19o("7B.

21 of 1979.

44 of 1980,

Finance (No. 2) Act, 1980, or of the First Schedule to the

ttoflMl

Finance Aot, 1981, shall be set off under sub-rule (1) or,

as the oaae may be, sub-rule (2),

Rule 10.— Where the net result of the computation

20 made In accordance with these rules Is a loss, the loss so

computed shall be Ignored and the net agricultural Income

shall be deemed to be nil.

Rule 11. *- The provisions of the Income-tax Aot

relating to procedure for assessment (Including the

2ft provisions of section 288A relating to rounding off of

Income) iball, with the necessary modifications, apply In

relation to the computation of the net agricultural Income

of the assesses as they apply In relation to the assessment

of the total Income.

SO Rule 12. — F or the p u r p o s es of computing the net

agricultural income of the aasessee, the Income-tax Officer

shall have the same powers as he has under the Income-tax

Aot for the purposes of assessment of the total Income.

THE SECOND SCHEDULE

(Set section 43)

PART I

In the First Schedule to the Customs Tariff Act. -

(i) in Chapter 27, -

5

CD for Note 5, the following Note shall be substituted,

namely:—

'5. "Flash point" shall be determined In accordance

with the terte prescribed in this behalf In the rules

made under the Petroleum Act, 1934 (30 of 1934),'; 10

(21 after Note 6, the folio wing.Note shall be Inserted,

namely:—

'7. "Carbon residue" and "colour comparison test"

shall be determined or done in the manner prescribed

In this behalf by the Central Government by notification 15

in the Official Gazette \

(3) in Heading N o . 2 7 . 1 0 ,-

(a) In sub-beading No. (2), in column (2), for the

words and figures "which hae Us flashing point below

34.4* Centigrade", the words and figures "which has 20

Its flash point below 25° Centigrade" shall be

substituted;

(b) In sub-heading No. (3), In column (2), for the

words "which has a smoke point of twenty millimetres

-or more", the words "which has a smoke point of 26

eighteen millimetres or more" shall be substituted:

(c) in sub-heading No. (5), in column (2), -

(1) the words "and vaporising oil" shall be

omitted;

(2) for the words and figures "which has Its flashing 30

poitB at or above 24.4° Centigrade", the words and

figures "which has Its flash point at or above C5°

Centigrade" shall be substituted;

(3) for clauses (0 and (U), the following clauses

shall be substituted, namely:— 35

"(f) the oil has a smoke point of 10 millimetres

or more but less than 20 millimetres, or

(II) the o}l has a smoke point of less than

10 millimetres but has a viscosity of less than 60

seconds by Redwood I Vieoometer at 37.8°

Centigrade and satisfies the following conditions;

fu) leavee carbon residue of lees than^ per cent

by weight wben tented by Ramebottom Carbon

5 Residue Apparatus, and

fb) is lighter in colour than 0.04 Normal

Iodine Solution when tested by colour comparison

test.";

(d) in sub-heading No. (e), in column (2), -

10 H) for clauses (i) to (Hi)-, the following clauses

shall be substituted, namely:—

"(i) has its flash point at or above 66° Centigrade,

(ii)t has a smoke point of less than 10

millimetres,

15 f'"} leaves carbon residue of not less than i per

cent, by weight when tested by Ramsbottom

Carbon Residue Apparatus,

Civ) Is as dark a*, or darker than, 0.04 Normal

Iodine solution when tested by colour comparison

20 test, and";

(2) clause (iv) shall be renumbered as clause (V);

(e) In sub-heading No. (7), In column (2). -

(1) for clauses (i) to (Hi), the following clauses

shall be substituted, namely:—

26 'TO has its flash point at or above 66°

Centigrade,

(it) has a smoke point of less than 10

millimetres,

(Hi) leaves carbon residue of not less than i per

30 cent, by weight when tested by Ramsbottom

Carbon Residue Apparatus,

(iv) la as dark as, or darker than, 0.04

Normal Iodine solution when tested by colour

comparison test, and";

35 (2) clause (iv) shall be renumbered as clause^);

(/) In sub-heading No. (8), in column (2), for the

words "flashing point", the words "flashpoint"

shall be substituted;

(fl) In sub-heading No. (9), In column (2), for the

40 words "flashing point", the words "flash point"

shall be substituted;

(H) In Heading N o . 3 2 . 0 4 / 1 2 ,-

(1) in sub-heading No. (1), for the entry In column<3),

the entry "160%" shall be substituted;

(2) in mib-heading No. (2), for the entry in column(3),

th* entry "150%" shall be substituted;

(3) In sub-beading No. (3), for the entry In column (3),

me entry "100%" shall be substituted;

(4) Jn sub-heading No. (4), for the entry In column(3), 5

the entry "100%" shall be substituted:

f 5) in sub-heading No. (5), for the entry In column(3),

the entry "100%" shall be substituted;

(6) In sub-heading No. (8), tor the entry la columa(3),

(he entry "100%" shall be substituted; 10

(7) In sub-heading No. (7), for the cutrlet in

oolumns (3) and (4), fee entries "100%" and ""0%"

shall, respectively, be substituted;

(Hi) In Heading No. 39.01/08, for th" entry IB column(3),

the entry "180%" shall be substituted;

is (iv) In Heading No. 45.01/04, for the entry 1B column ("),

th* entry "60%" shall be substituted;

fv) In sub-Jieading No. ff) of Heading No.48.01/21, far

the entry in column (8), the entry "40% plm Hi. 1600 pmt

tome" shall be substituted;

20 (vi) In Heading Ho. 78.03/06, for the entry In oolumn(3),

th*"ntry l160%" shall be substituted;

(14i) In Heading No.73.13, -

(1^ In sub-heading No. (1), for the entry In oolumn(3),

the entry "60%" tbali be substituted; 26

(I) in sub-heading No. (2), for the entry in column(3),

the entry "60%" shall be substituted;

30 (vM) in sub-h*adtng No. (2) of Heading No. 74.07/08, ft"r the entry m column (3), the entry "100%" shall be substituted;

(it) in "wb-ne"dtng No. (2) of Heading No.79.01, for the

entry In column $), the entry ""0%" shall be substituted;

fx) lnsab^headlngNo.(a)ofHeadingNo.84.5l/56, for

the entry in column (3), the entry "100%" shall be

substituted;

35 (xf) in Psadlng No. 86.16, for the entry in column (3), the

entry >'100V "hall be substituted;

fxJO i& Sfltidlng No.88.17, for th" "ot*?y In column (B),

(xiii) in Heading No. 8 5 . 2 8, for the entry in column (3),

the e n t ry "100%" shall be substituted;

(xiv) in aub-heading No. (1) of Heading N o . 9 0. 08, for

the e n t ry in column (3), the entry "100%" shall be

5 substituted;

(xv) in Heading No.90.13, for the entry in column (3),

the entry "100%" shall be 'substituted;

(xvi) ineob-heading No.(2)of Heading No.90.29, in

column (2), for the words "similar semi-conductor devices or

10 electronic microcircults", the words "similar

semi-conductor devices or light emitting diodea or electronic microcircuits" shall be substituted.

PART U

Heading ; Sub-heading

15 No-

Rate of duty Standard Prefer-

Duration when ratas of duty are protective

ential Areas

{{^{{FOOTNOTE (1)}}}}

(4)

(6)

No. and description of article (2)

In the First Schedule to the Customs Tariff Act, in

20 Heading No.29.01/45, after sub-heading No. (21), the

following sub-heading shall be inserted, namely:—

100% •• ¹!

"(22) Aniline (aniline oil)

25

PART HI

In the Second Schedule to the Customs Tariff Act, in Heading No. 12, for eaoh of the entries in column (3), the entry "10%" shall be substituted.

THE THIRD SCHEDULE

(Set section 49)

Item No.

Description of goods

Rate of duty

(3)

(1)

(2)

5 In the First Schedule to the Central Excises Act,—

(i) In Item No. 6, in the entry In the second column,—

10 (a) for the words "which has its flashing point below seventy-six degrees of Fahrenheit's thermo- meter", the words "whioh has Its flash point below twenty-five degrees of Centigrade thermo- mster'V shall be substituted;

(o) for [• xplatation 11, the following Explanation

shall be substituted, namely:--

Expl at ation II.— "Flash point" shall be

15 determined in accordance with the tests specified in this behalf in the rules made under the Petroleum Aot, 1S34 (30 of 1934). ;

fii) for Item No. 7, the following Item shall be

substituted, namely:—

20 1. KEROSENE (WHICH IS ORDINARILY USED

AS AN ILLUMINANT IN OIL BURNING LAMPS), AND AVIATION TURBINE FUEL, that is to say, any mineral oil (excluding mineral colza oil and turpentine substitute) which has a smoke point of eighteen millimetres or more and has a final boiling point not exoeeding three hundred degrees of Centigrade thermometer —

(i) Aviation Turbine Fuel.

Five hundred rupees per kilolitre at fifteen degrees of 30 Centigrade thermo- meter.

(H) Others.

Five hundred rupees per kilolitre at fifteen degrees of 35 Centigrade thor mo- meter.

explanation h — The expression "mineral oil" has the meaning assign- ed to it in Explanation I to Item No. 6.

Explanation II. - "Smoke point" shall be determined In the apparatus 40 known as the Smoke Point Lamp In the manner specified in thia behalf bf *• Central OovaMiBM*t by notification in the Official Gazette.

Fxplanation III.— "Final boiling point" shall be determined in the manner specified in this behalf by the Central Government by notification in the Official Gazette.';

(Hi) for Item NO. 8, the following Item aholl be

5

substituted, namely 1—

8. REFINED DIESEL OILS, thai is to say,

10

One thousand rupees pei' kilolitre at fifteen degrees of Centlffrado thermo- meter.

any mineral oil (excluding mineral colza otl and turpentine Bubetitute), which has its flaBh point at or above twenty-five degrees of Centigrade thermometer, and satisfies either of the follow- ing requirements :—

(I) the oil has a smoke point of ten millimetres

or more but IGBB than twenty millimetres; or

15

(ii) the oil hae a smoke point of less than

ten millimetres but has a viscosity of less than fifty secondB by Redwood I Viscometer at 37.8 degreeB of Centigrade thermometer and satisfies the following conditions:—

(a) the oil leaves carbon residue of leBs

20

than i per cent, by weight when tested by Ramsbottom Carbon Residue Apparatus, and

25

(b) the oil is lighter in colour than 0. 04 Normal Iodine solution when tested by colour comparison test.

Explanation I. — The expressions "mineral oil" and "flash point"

30

have the meanings respectively assigned to them In Explanations I and U to Item No. 6, and the expression "smoke point" has the meaning assigned to it In Explanation u to Item No. 7.

Explanation 11 ,— "Carbon residue" and "colour comparison test" shall be determined or done in the manner specified in this behalf by the Central Government by notification in the Official Gazette.

Explanation III/. — This Item does not include -

35

fa) base mineral oils (suitable for use in the manufacture of lubricat- ing oils and greases), including mineral oils commonly known as Transformer oil base stock or Transformer oil feed stock; and

(b) lubricating oils including spindle oils, flushing oils and jute batching o i l s . ';

40

(iv) fo r Item No. 9, the following Item shall be

substituted, namely: —

'9. DIESEL OIL, NOT OTHERWISE SPECIFIED,

that ia to say, any mineral oil which -

fi) has a smoke point of less than ten

45

millimetres,

Two hundred rupees per kilolitre at fifteen degrees of Centigrade thermo- meter.

( 3)

( 2)

(U) possesses a viscosity of loss than one

hundred seconds by Redwood I Vlscometer at

37.8 degrees of Centigrade thermometer •

(Hi) Itavas carbon r"stdue of not lass

5

tbtn i per cent, by weight when tested

by Ramabottom Carbon Residue

ApparatuB, and

(iv) is as dark as, or darker than,

10

0. 04 Normal Iodine solution when tested

by colour oomparlson test.

Explanation. — The expressions "mineral oil" and "smoke point"

have the meanings respectively assigned to them in Explanation I to

Item No. 6 and Explanation II to Item No. 7, and the expressions

"carbon residue" and "colour comparison test" have the meanings 15

assigned to them In Explanation II to Item No, 8.';

(V) for Item No. 10, the following Item shall be

substituted, namely:—

'10. FURNACE OIL, that Is to say, any mineral

oil which —

fit has a smoke point of less than ten

millimetres,

One hundred and

fifty rupees per 20

kilolitre at fifteen

degrees of Centi-

grade thermometer.

25

(U) possesses a visooslty of one hundred

seconds or more by Redwood I Viscometer

at 37.8 degrees of Centigrade thermometer,

30

(Hi) leaves carbon residue of not less

than i per cent, by weight when tested in

Ramsbottom Carbon Residue Apparatus,

and

(iv) Is as dark aa, or darker than, 0.04 Normal

Iodine solution when tested by colour comparison

test.

Explanation I .- The expressions, "mineral oil" and "smoke point"

have the meanings respectively assigned to them In Explanation I to 35

Item No. 6 and Explanation l{ to Item No, 7, and the expressions

"carbon residue" and "colour comparison test" have the meanings

assigned to them In Explanation II to Item No. 8.

Explanation U .— This Item does not include —

40

1

Co) base mineral oils suitable for use in the

manufacture of lubricating oile and greaBee; an<

(b) lubricating oils Including axle oil.';

u•J U)

(vi) for Item No. 11, the following Horn shall ho

substituted, namely:—

•1

COKBj

5

1, COAL (EXCLUDING LIGNITE) AND COKE ALL

SORTS, INCLUDING CALCINED PETROLEUM

ASPHALT, BITUMEN AND TAK -

(1) Coal and coke not elsewhere apei;ifi^!. Ten rupees per

nistrie tonne.

(2) Petroleum coke, other than calcine 1

Twenty per cent.

petroleum coke.

10

ad valorem r im iwo tlious u¹' ujH't's p or m e t r ic toni"KL.

(3) Calcined petroleum coke.

Twenty per cent.

ad valorem.

f4\ Asphalt and bitumen (including cutback

15

Two hundred rupees

per metric tonne.

bitumen and asphalt) natural or produced

from petroleum or shale.

(5) Tar distilled from coal or lignite and

One hundred rupees

per metric tonne.' ;

20

other mineral tars, Including partially

distilled tars and blendB of pltoh with

creosote oils or with other coal tar

dietUlatlon produots.

(Vii) for Item No. HA, the following Item shall

be substituted, namely:—

25 "HA.

ALL PRODUCTS DERIVED FROM REFINING

OF CRUDE PETROLEUM OR SHALE

(WHETHER LIQUID, SEMI-SOLID OR SOLID

IN FORM), NOT OTHERWISE SPECIFIED,

INCLUDING LUBRICATING OLL8 AND

GREASES AND WAXES —

30

fl) Mineral turpentine oil.

Twenty p"r cent,

idvfltoremplusfour

hundred rupeeB per

metric tonne.

35

(2) Waxes.

Twenty per cent.

ad valorem plus

Blx hundred rupees

per metric tonne-

O) (a) Base mineral oils (suitable for

40

Three thousand and

five hundred rupees

per metric tonne.

use in the manufacture of lubricat-

ing oils and greases), including

mineral oils commonly known as

Transformer oil base stock or

Transformer oil feed stock;

C3)

CD

Three thousand and five hundred rupees per metric tonne.

(b) Lubricating oils {Including spindle oils, flushing oils, jute batching OIIB and axle oil) and lubricating greases.

5

(4) Others.

Twenty per cent. ad valorem, plus two thousand rupees per metric tonne.";

10 (viii) after Item No.. HA, the following Item

ahall be inserted, namely:—

"11AA. PETROLEUM GASES -

CD Liquified petroleum gaseB.

Four hundred rupees per metric tonne.

(2) Other petroleum gases and gaseous

hydrocarbons derived from refining of crude petroleum or shale.

Twenty per cent. is ad valorem plus two thousand rupees per metrio tonne.";

(ix) Item No. 11C shall be omitted

(x) Item Xo. 11D shall be omitted

20

Cii> for Item No. 15A, the following Item shall

be substituted, namely;—

"15A, ARTIFICIAL OB SYNTHETIC RESINS

AND PLASTIC MATERIALS; AND OTHEH MATERIALS AND ARTICLES SPECIFIED BELOW -

25

(1) Condensation, polycondensatlon and

Fifty per cent, ad valorem.

30

36

40 poly addition products, whether or not modified or polymerised, and whether or not linear (for example, pJieno-plaats, amlno-plaata, alkyda, polyallyl esters and other unsaturated polyesters, ulUcones); polymerisation and co-polymerlsatlon products (for example, polyethylene, polytetrahaloethylenes, polyiso- butylene, polyBtyrene, polyvlnyl chloride, polyvlnyl acetate, polyvlnyl chloroacetate and other polyvlnyl derivatives, polyacryllc and polymethacryllc derivatives, coumarone- Indene reslne); regenerated cellulose; cellulose nitrate, cellulose acetate and other cellulose e s t e r s, cellulose ethers and other chemical derivatives of cellulose, plasticlsed or not (for example, collodions, celluloid); vulcanised fibre; hardened proteins (for example, hardened casein and hardened gelatin); natural resins modified by fusion

45

2)

(run RuniE); artificial rosins obtained by

oaterlflcatlon of natural resins or of realnlc

acids (ester gums); chemical derivatives

5 of natural rubber (for example, chlorinat-

ed rubber, rubber hydrochlorlde, oxidised

rubber, cycllaed rubber); other high

polymers, artificial resins and artificial

plastic materials, Including alglnlc acid,

IQ Its salts and esters; llnoxyn.

(I) A1 tides of materials described In

sub-Item (1), the following, namely:—

Fifty per cent.

ad valorm*

16

Boards, sheeting, sheets and flLma,

whether lacquered or metallised or

laminated or not; lay flat tubings not

containing any textile material.

(3) Polyure thane foam.

(4) Articles made of polyurethane

20

foam*

SevfAtVrflva Mr

cent* oo fat^rfM.

Seventy-five par

cent, ad vahrem^

Exploitation r.—Sub-Item (1) does not Include, —

(i) polyur ethane foam;

(if) artificial waxes;

(Hi) Btarchea (Including dextrin and oilier forms of modified

25 starches).

Explanation II ._In sub-Hem (1), "condensation, polyoond^MNtlon,

polyaddltlon, polymerisation and oo-polymerisation product*" are to be

taken to apply only to goods of a kind produced by chemical synthesis

answering to one of the following descriptions;-

(a) artlfioal plastics, including artificial

30

resins;

(b) slllcones;

35

(c) resols, liquid pplylsobalylene, and

similar artificial polycondsnsation or poly-

merisation products.

Explanation III .- Sub-Item (1) Is to be taken to apply to-matertala

In the following forms only:—

fa) liquid or pasty (Including emulsion*,

dispersions and solutions);

40 (b) blocks, lumps, powders (includlDg

moulding powders), granules, flakes and

similar bulk forms;

(3)

a)

(c) wustc ami scrap. .

(xii) Item No. 15B shall be omitted;

(liii) Hem No. 15 BB slioll be omlttod;

5 (xiv) inltcnvNo.KiA, after sub-Item (1), the following Explanation shall IMJ Inserted, namely: —

'•Explanation.. — This sub-Item Includes

articles made of latex foam sponge.";

(XV) for Item No. 16B, the fallowing Item shall

10 be Gubetltutedj namely:—

'16B. WOOD AND ARTICLES OF WOOD, THE

Thirty- per cent.

ad valorem;

FOLLOWING, NAMELY:-

PLYWOOD, BLOCK BOARD (INCLUDINC

15

20

25

30 FLUSH DOORS), LAMINBOARD, BATTEN BOARD, HARD OR SOFT WALL BOARDS OR INSULATING BOARD AND VENEERED PANELS, WHETHER OB NOT CONTAINING ANY MATERIAL OTHER THAN WOOD; CELLULAR WOOD PANELS; BUILDING BOARDS OF WOOD PULP OR OF VEGETABLE FIBRE, WHETHER OR NOT BONDED WITH NATURAL OR ARTIFICIAL RESINS OR WITH SIMILAR BINDERS; ARTIFICIAL OH RE- CONSTITUTED' WOOD BEING WOOD SHAVINGS, WOOD CHIPS, SAWDUST, WOOD FLOUH OR OTHER LIGNEOUS WASTE AGGLOMERATED WITH NATURAL OK ARTIFICIAL RESINS OR OTHER ORGANIC BINDING SUBSTANCES, EN SHEETS, BLOCKS, BOARDS OR THE LIKE; AND IMPROVED WOOD, ALL SORTS, WHETHER IN SHEETS, BLOCKS OR IN ANY OTHER FORM, IN- CLUDING ARTICLES OF IMPROVED WOOD.

Exploujbon. — In this Item, "Improved wood" means wood which has

been subjected to cheraloal or physical treatment (being, In the caae of 35

layer § bonded together, treatment In excess of that needed to ensure

a good bond^and which has thereby acquired Increased density or

hardness together with Improved mechanical strength or resistance to

chemical or electrical agencies.';

4 0.

(xvi) for Item No. 17, the following Item shall

be BiibBtltuted, namelyt—

"17. PAPER AND PAPER BOARD, ALL SORTS

4G (including pasteboard, miHboard, Btraw- board, cardboard and corrugated boardj, AND ARTICLES THEBEOF SPECIFIED BELOW.

(3)

(2)

(1)

in or In relation to the manufacture of which any process Is ordinarily carried on with the aid of power —

(I) Uncoated and coated printing and writing

5

paper (other than poster paper).

Twenty-five per cent, ad valorem.

10

(2) Paper board and all other kinds of paper (Including paper or paper boards which have been subjected to various treatments such as coating, Impregnating, corrugation, creplng and design printing), not elsewhere specified —

(a) AH sorts of paper commonly known as Forty per cent, ad valorem.

15

•kraft paper, Including paper and paper board of the type known as Kraft liner or corrugating medium, of a substance equal to or exceeding 65 grams per square metre In each cane.

(b) Others

20

Thirty-two and a half per oenU ad valorem

i3) Carbon and other copying papers

Thirty-two and a half per cent, ad valorem.

25

(Including duplicator stencils) and transfer papers, whether or not out to size and whether or not put up In boxes.

(4) Boxes, cartons, bags and other

Thirty-two and a half per cent, ad valorem.";

30

packing containers (Including flattened or folded boxes and flattened or folded cartons), whether or not printed and whether in assembled or unassembled condition.

(xvii) In sub-Item m of Item No. 18, In the

second column, for entries (i) and(li), the following entries shall be substituted, namely:—

35 " (1) not containing any man-made fibres

of non-oelluloslc origin.

(ii) containing man-made fibres of non-

oellalosic origin.";

(xviii) In Item No. 18A, in the second 40 column, for entries (I) and (ii), the following

entries shall be substituted, namely:--

" (i) not containing any man-made fibres

of non-celluloolc origin.

(3)

w (²)

(ii) containing man-made fibres of non-

celluloslo origin.";

5 (xix) In Item No. 23, for the entry In the third column against nub-Item (1), the entry "Two hundred rupees per metrlo tonne," shall be substituted;

10 (xx) In Item No. 23A, for the entry In the third column against sub-Item (1), the entry "Thirty-five per cent, ad valorem plus five rupees and fifty palse per millimetre thick- ness per square metre." shall be substituted;

(xxi) in Item No.26B, for the entries in the

15

20 third column against sub-Items (1), (la), (2), (2a) and (3), the entries "Three thousand two hundred and seventy-five rupees per metrlo tonne!', "Three thousand two hundred and seventy-five rupees per metric tonne.". "Three thousand eight hundred rupees per metric tonne.", "Four thousand seven hundred and fifty rupees psf metric tonne." and "Forty-five per cent, ad valorem ." shall respectively be substituted;

25 (xx U) In Item No. 27, for each of the entries in the third column, the entry "Fifty per oent. ad valorem plus four thousand rupees per metric tonne." shall be substituted;

30 (xxiii) In Item No. 27A, for each of the entries in the third coloumn against sub- Items (X) and (2), the entry "Eight hundred and forty rupees per metric tonne." shall be substituted;

(xxiv) in Item No. 30, after Explanation II,

the following Explanation shall bo inserted,

namely;—

35 " Explanation HI. — This Item Includes motors equipped with

gears or gear boxes.";

(xxv) after Item No. 37B, the following Item

shall be inserted, namelyi—

"37BB. TELEVISION IMAGE AND SOUND

Twenty-five 40

per cent.

ad valorem. ";

46 RECORDERS AND REPRODUCERS (INCLUD- ING VIDEO CASSETTE RECORDERS AND REPRODUCERS AND VIDEO CASSETTE DECKS),WHETHER OR NOT IN COMBINA- TION WITH ONE OH MORE OF THE FOLLOWING:-

(l) TELEVISION SETS,

(2)

<3)

(!)

(ii) RADIOS (INCLUDING

TRANSISTOR SETS),

(Hi) TELEVISION CAMERAS

(INCLUDING VIDEO CAMERAS).

6

(xxvi) alter Item No, 37C, the following

Item shall be Inserted, namely:—

"37CC. TELEVISION CAMERAS (INCLUD-

Twenty-five per

cent, ad valorem.";

ING VIDEO CAMERAS).

10 fxxvfi) for Item No. 39, the following Item

•hall be substituted, namely:—

•39. LIGHTERS, NOT ELSEWHERE

Three rupees

per lighter. >,

SPECIFIED.

i

IB

20

"Lighter" means t any mechanical,

ohemloal, electrical or electronic

(containing pieiso-electric materials)

contrivance for causing ignition, which

is portable and which operates by produolng

a spark or flame whether by itself or

when brought into contact with gas, and

inoludes a lighter Issued from a factory

In an incomplete state or requiring for

its completion the addition of a flint.

(xxviii) after Item No. 46, the following Item

26 shall be inserted, namelyi—

'47. ELECTRONIC MACHINES FOR GAMES OF

Forty per cent.

ad vahttm.

SKILL OR CHANCE (INCLUDING ELECTRONIC

MACHINES USED FOR TELEVISION GAMES

AND VIDEO GAMES).

30

Explanation. — "Eleotronlo machines" means machines and

apparatus containing thermionic valves or transistors as similar

semi-conductor devices or light emitting diodes or electronic

mioroolroulta or oapacltors other than paper capacitors.';

(xxlx) after Item No. 68, me following Item

35 shall be inserted, namelyi—

"59. ARTICLES OF A KIND USED FOR

BOUND OR SOUND AND IMAGE RECORDING,

WHETHER RECORDED OB NOT, NAMELYi-

40

Twenty-five

per oent.

ad vahtTtm.

(1) Magnetic tapes of width not exoeedlng

6.6 millimetres for sound recording, whether

In spools or in reels.

Twenty-five

percent.

advalorm.

(2) Sound reoorded magnetic tapes

of width not exceeding 6.6 millimetres,

whether In spools or in reels.

(2)

(3)

(1)

(2) Cassette tapes for sound recording.

Twenty-five per cent. ad vdoTOH,

(4) Sound recorded cassette tapes.

Twenty-five per cent. ad valorem.

(5) Prepared media for television Image and sound recording such as video tapes and video discs.

Twenty-five per cent. ad valorem.

(6) Television Image and sound recorded media such as video tapes and video discs.

Twenty-five per cent. ad valoteriu

THE JOURTH SCHEDULE

Ibec oeotlon 5g/

Modifications to the notification of the Government of India In the Ministry of Finance (Department of Revenue) No, G. S. R.77(E) dated the 23rd day of February, 1982

H) The opening paragraph of the notification ohall have effect with respect to any period before the 1st day of April, 1981, as if-

(o) for the figures "120", the figures "93. 50" had

been substituted; and

(b) for the figures "150",occurring for the first time,

the figures "116.65" had been substituted.

(2) The first proviso to the notification shall not

have effect with respect to any period before the 1st day of October, 1981 and the said notification shall have effect with respect to any period before the 1st day of October, 1981 as If it contained the following proviso in place 'of the said first proviso, namely—

"Provided that, —

fa) in the cane of matches packed in boxes in which both the outer slide as well as the Inner slide are made of card board, the amount of exemption shall be increased by sixty palse per gross of boxes;

(b) In the case of matches packed in boxes In which the Inner slide alone Is made of oard board, the amount of exemption shall be increased by twenty-four paise per gross of boxes;

(c) the amount of exemption shall be Increased, or further increased, as the case may be, by fifty palse per gross of boxes if bamboo Is used for the splints or for both eplinte and v"n"ers;

(d) if the splints of such matches are made of bamboo and the matches are packed in boxes of 40 matches, the rate of duty shall be four -fifths of the rate applicable to matches of identical description produced in the same factory but packed in boxes of 50 matches and if such packing in boxen of 50 matches is not done, it shall be four-flfthB of the notionally determined rate for matches packed in boxes of 50 matches. ".

(3) The second provi&o and clauses (f) and (ft) of the. Explanation to the notification shall not have effect with respect to any period before the 1st day of October, 1981.

(4) Clauses, fc), (d) and fe)of the Explanation to the

notification shall not have effeot with respect to any period before the 1st day of April, 1981.

STATEMENT OF OBJECTS AND REASONS

The object of the Bill in to give effect to the financial proposals

of the Central Government for the flnanolal year 1982-83. The

notes on clauses explain the various provisions contained In the

BUI.

New Dcun; PRANAB MUKHERJEE.

The 27th February, 1982.

PRESIDENT'S RECOMMENDATION UNDER ARTICLES 117

AND 274 OF THE CONSTITUTION OF INDIA

£Copy of letter No. JF, 3(l)-B(D)/82 dated the 27th February. 1982

from Shri Pranab Mukherjee, Minister of Finance, to the Secretary,

LokSabha^

The President, having been Informed of the subject matter of the

proposed BUI, recommends under clause (1) of article 117, read

with douse (1) of article 274, of the Constitution of India, the

Introduction of the Finance Bill, 1983 to the Lok Sabha.

2. The BUI will be Introduced In the Lok Sabha Immediately

after the presentation of the Budget on the 27th February, 1982,

Not&s on clauses

ClauBe 2, read with the First Schedule to the Bill, seeks to prescribe the rates at which Income-tax

(including surcharge thereon) is to be levied on income chargeable to tax for the assessment year

1982-83, Further, it lays down the rates at which tax is to be deduoted at source during the financial

year 1982-83 from Inoomes subject to such deduction under the Income-tax Act; and the rates at

which "advance tax" 1B to be paid and tax la to be calculated and charged in special oases for the

financial year 1982-83.

Hates of income-tax for the assessment year 1982-83. —Part I of the First Schedule to the Bill

specifies the rates of income-tax (including surcharge) on inoomes liable to tax for the assessment

year 1982-83. These rates are the same as those specified in Part m of the First Schedule to the

Finance Act, 1981 for the purposes of deduction of tax at source from "Salaries" and for oomputa-

tion of "advance tax" payable during the financial year 1981-82.

Rates for deduction of tax at source during the financial year 1982-83 from Incomes other than

"Salaries".'Part II of the First Schedule to the Bill speolfies the rates at which income-tax

(including surcharge where applicable) Is to be deduoted at source during the financial year 1982-83

from incomes other than "Salaries" and retirement annuities under section 80E(9) of the Income-tax

Act. The rates specified in this Part for deduction of tax at source are the same aB those specified

In Part H of the First Schedule to the Finance Act, 1981 for the purposes of deduction of tax at

source during the financial year 1981-82.

Rates for deduction of tax at source from "Salaries" and retirement annuities, computation of

"advance tax" and charging of Income-tax In special oases during the financial year 1982-83.-

Part III of the First Schedule to the Bill specifies the rates at whloh Income-tax (Including suroharge)

la to be deducted at source from "Salaries" and retirement annuities referred to in section 80E(9) of

the Income-tax Act, and also the rates at which "advance tax" Is to be paid and income-tax is to be

calculated or charged in special oases for the financial year 1982-83.

These rates are the same as those specified In Part I of the First Schedule to the Bill for the

assessment of Incomes liable to tax for the assessment year 1982-83 except for the modification

that in the case of individuals, unspecified Hindu undivided families, unregistered firms, etc. ,the

revised rates of income-tax will be In the slab of Ra. 60,001 to Rs. 70,000, 52.5 per cent, as

against 50% at present, in the slab of Rs. 70,001 to Rs. 85,000, 55% as at present, and for the

slob of Rs. 85,001 to Rs. 1,00,000, 57.5% as against 56% at present. For the slab of incomes

exceeding Rs. 1,00,000, there Is no change In the rate of Income-tax.

Clause 3 seeks to amend olause (1) of section 6 of the Income-tax Aot relating to residence in

India.

Under the existing provisions, an individual is said to be a resident In India in any previous year

If h e-

(a) is in India in that year for a period or periods amounting in all to 182 days or more; or

(b) maintains or causes to be maintained for him a dwelling place In India for a period or

periods amounting In all to 182 days or more In that year and haB been In India for 30 days or

more In that year; or

(c) having within the four years preceding that year been In India for a period or periods

amounting in all to 366 days or more, is in India In that year for 60 days or more.

The Explanation to this clause provides that In the case of an Individual, being a. citizen of

India who la rendering service outside India and who Is In India on leave or vacation, the periods

of 30 days and 60 days referred to in sub-clauses (b) and (c) above shall be taken as 90 days.

The proposed amendments seek to make the following changes In this clause:-

(i) sub-clnuee (b) of clause (1) of section 6 of the Income-tax Act relating to the maintenance of a dwelling place coupled with the stay of 30 days or more in India is proposed to be omitted and will no longer be a test of residence in India;

(ii) a new Explanation is proposed to be substituted for the Explanation below sub-clause (c) of clause (1) of section 6 of the Incoma-tax Act. Under the said sub-clause (c), an-individual is said to be resident In India in any previous year If having been in India for at least 365 days during the four preceding years, he Is In India for at least 60 days in that year.

Clause (a) of the new Explanation seeks to provide that where an individual citizen leaves India in any previous year for the purpose of employment outside India, the period of 60 days referred to in sub-clause (c) will, in tho case of such Indian citizen, be extended to 182 days.

Clause (b) of the now Explanation seeks to provide that an Indian citizen who Is outside India comas on a visit to India in the previous year, the period of 60 days referred to in sub-clause (c) will, In the case of such Indian oitizens, be extended to 90 days.

These amendments will take effect from 1st April, 1983 and will accordingly apply In relation to the-assessment year 1983-84 and subsequent years.

Clause 4 seeks to amand section 10 of the Income-tax Act.

Sub-clause (a) seeks to substitute clause (4A) of the Income-tax Act. Under the existing provisions, any income from Interest on moneys standing to the credit of a non-resident in a Non-resident (External) Account In any bank In India in accordance with the Foreign Exchange Regulation Act is exempt from Income-tax. This provision applies to a non-resident as defined in the Income-tax Act. Under the proposed amendment, the above exemption will be available to all assessees who are persons resident outside India as defined in clause (q) of section 2 of the Foreign Exchange Regulation Act.

This amendment will take effect from 1st April, 1982.

Sub-clause (b) seeks to Insert a new olause (4B) in section 10,

Under the proposed amendment, In the case of an individual being a citizen of India or a person of Indian origin who is a non-resident, the inoome from interest on such savings certificates of the Central Government aa may be notified by that Government in the Official Gazette in this behalf will be exempt from income-tax provided such individual has subscribed to such certificates in foreign currency or other foreign exchange remitted from outside India through official channels.

This amendment will take effect from 1st April, 1983 and will accordingly apply in relation to the assessment year 1983-84 and subsequent years.

Sub-clause (c) seeks to Insert a new clause (10AA) in section 10.

Sub-clause (1) of new clause (10AA) seeks to provide for exemption from Income-tax of the cash equivalent of leave salary payable to an employee of the Central Government or the State Government In respect of the earned leave at his credit at the time of his retirement on super- annuation or otherwise.

Sub-clause (11) of clause (10AA) seeks to provide for exemption In respect of cash equivalent of earned leave to the credit of an employee other than an employee of the Central Government or State Government subject to the maximum of six months' salary on the basis of the average salary drawn by the employee during ten months preceding his retirement or superannuation or Re. 25,500, whichever is leas. Where the employee receives such payment from more than one employer In the same previous year, the maximum amount exempt under this sub-clause will not exceed Rs.25,500.

Further, where such employee receives suqh payments in one or more previous years and such payment was exempt from Income-tax in the respective years, the-maximum amount of exemption from Income-tax under this sub-clause will not exceed Re. 25,500 as reduced by the amount which has already been exempted from Income-tax in any earlier previous year. The Central Government has been empowered to increase the limit of exemptlon-of Rs.25,500 to a higher amount by notification ID the Official Gazette having regard to the maximum amount exempt In the case of Government servants.

In the case of a non-Government servant, the entitlement to earned leave will not exceed 80 days for each year of actual service. Further, for the purpose of sub-clause (LI), salary will have the same meaning as In rule 2(h) of Part A of the Fourth Schedule.

This amendment will take effect from 1st April, 1982.

Sub-clause (d) seeks to Insert a new sub-clause (lib) in clause (15) of section 10 of the Income-tax Act.

Under the proposed amendment, Interest payable on such Capital Investment Bonds as may be notified by the Central Government In tills behalf will not be Included In computing the total income of the recipient of the Interest.

Tnls amendment will take effect from 1st April, 1983 and will accordingly apply In relation to the assessment year 1983-84 and subsequent yearn.

Clause 5 seeks to amend section 13 of the Income-tax Act.

Sub-clause (a) seeks to amend sub-section-(1) of section 13.

Under the existing provisions, If any funds of a charitable or religious trust or Insti- tution are Invested or deposited or remain Invested or deposited in any forms or modes other than those specified In aub-sectlon (5) of section 13, such trust or Institution will forfeit exemption from income-tax for the assessment year 1982-83. The effect of the proposed amendment will be that charitable or religious trusts or institutions would forfeit exemption from income-tax for failure to comply with the provisions of sub-section (6) of section 13 only In relation to any assessment year commencing on or after 1st April, 1983.

Sub-clause (b) seeks to amend sub-section (5) of section 13.

Under the existing provisions, Immovable property does not constitute an approved form or mode of Investment In respect of certain- categories of funds of charitable or reUglous trusts or Institutions. The effect of the proposed amendment will be that Investment In Immovable property will also constitute an approved form or mode of Investment of funds iby charitable or religious trusts or Institutions.

These amendments will take effect from 1st April, 1982..

Clause 6 seeks to make an amendment In clause (1) of section 16 of the Income-tax

Act relating to standard deduction In the case of salaried aseessees.

Under the existing provisions, a standard deduction Is granted to salaried asseesees at a uniform rate of twenty per cent, of such salary, subject to a maximum of Hs.5,000,

Under the proposed amendment, the standard deduction wlll.be allowed at the enhanced rate of twenty-five per cent., subject to the existing ceiling of Rs.5,000.

Thin amendment will take effect from 1st April, 1S<83 and will accordingly apply

in relation to the assessment year 1983-84 and subsequent years.

Clause 7 seeks to amend section 23 of the Income-tax Act.

Sub-claune (a) seeks to amend the second proviso to sub-section (1) of section 23.

Under the proposed amendment, the existing concession In the case of let-out residential units constructed on or after 1st April, 1978 (by way of reduction of the annual value of each such resi- dential unit by an amount up to Rs. 2,400 for a period of 5 years) is being enlarged In relation to let-out residential units constructed after 3lst March. 1982. In respect of let-out residential units

constructed after 31et March 1982, the annual value will be reduced. In each case, by an amount up to

R B . 3, 600 for a year, for a period of 5 years from the date of completion of the building.

Sub-clause (b) seeks to amend sub-section (2) of section 23.

Under the existing provisions, the annual value of a self-occupied house property is first deter-

mined in the same manner as if the property had been let and then it Is further reduced by one -half

of the amount no determined or Rs. 1^00, whichever is less. Under the proposed amendment, the

quantum of reduction Is being raised from Rs, 1,800 t o E s. 3,600.

These amendments will take effect from 1st April, 1983 and will accordingly apply in relation to the

assessment year 1983-64 and subsequent years.

Clause 8 seeks to amend sub-section <2B) of section 32A of the Income-tax Act.

Under the existing provisions, investment allowance at the higher rate of 35% is allowed In respect

of machinery and plant installed after the 30th day of June, 1977, but before the 1st day of April, 1982,

for the manufacture or production of any article or thing which is manufactured or produced by using

any technology or other Know-how developed in, or whioh Is Invented by, a laboratory owned or

financed by the Government or a laboratory owned by a public sector company or a University or a

recognised institution, subject to the fulfilment of the conditions specified In sub-section (2B) of

section 32A. The proposed amendment seeks to extend the date before which the installation of any

such machinery and plant would qualify for the Investment allowance at the higher rate of 35% to 1st

April, 1987.

This amendment will take effect from 1st April, 1982.

Clause 9 seeks to insert a new section 36CCB In the Inoome-tax Act relating to expenditure by way

of payment to associations and institutions for carrying out any approved programmes of conservation

of natural resources.

Sub-section (1) of new section 35CCB provides that an assessee who makes any payment to'an associ-

ation or institution which has as Its object the undertaking of programmes of conservation of natural

resources to be used for carrying out any such programmes will be allowed deduction of the amount

of such expenditure incurred during the previous year.

Sub-section (2) of new section 35CCB provides that a deduction under sub-section (1) will not be

allowed unless the association or institution is approved by the prescribed authority who will not grant

such apprrtval for more than 3 years at a time.

Sub-section (3) of new section 35CCB provides that where a deduction Is claimed and allowed for

any assessment ye^r under this section, no deduction will be al'owed In respect of such expenditure

under any other provision of the Income-tax Act for the same or any other assessment year.

This amendment will take effect from 1st June, 1982.

Clause JO seeks to amend sub-section (1) of section 36.

Sub-tclauee (a) seeks to amend clause (vlla) of sub-section (1).

Under the existing provisions, any provision for bad and doubtful debts made by a scheduled bank,

in relation to advances made by its rural branches, In an amount not exceeding li per cent, of the

aggregate average advances made by such branches is allowed as deduction In the computation of its

taxable profits. Under the proposed amendment, the provisions of this clause are being extended to

a non-scheduled bank as well.

Stfb-clause (b) seeks to Insert a new clause (villa) In sub-section (1) of section 36.

Und*^ the proposed amendment, scheduled banks, other than foreign banks, engaged in banking

operations outside India will be entitled to a deduction, in the computation of their taxable profits,

upto40per cent, of the total income carried by them to the special reserve account. However, thi*

provision applies only to such scheduled bank which is approved by the Central Government for the

purposes of this clause having regard to its capital structure, the extent of its operations outside

India, Its need for resources for operations outside India and other relevant factors. For this

purpose, the expression "scheduled bank" means the State Bank of India, the subsidiary banks of the

State Bank of India, the nationalised banks or any other bank Included in the Second Schedule to the

Reserve Bank of India Act, 1934 but excludes co-operative banks.

These amendments will take effect from 1st April, 1983 and will accordingly apply In relation to

tbe assessment year 1983-84 and subsequent years.

Clause 11 seeks to amend section 54 of the Income-tax Act

Sub-clause (a) seeks to amend sub-section (1) of section 64. Under the proposed amendment, In

the case of an aaflessee being an individual, the long-term capital gains arising on the transfer of a

residential house will be exempt from income-tax If the asseasee has within a period of one year before

or after that date either purchased or within a period of three years after that date constructed a

residential house. For this purpose, long-term capital asset means a capital asset which is not a

short-term capital asset.

Sub-clause (b) seeks to amend sub-section (2) of section 64. Under the proposed amendment, the

capital gains attributable to the enhancement of compensation will be exempt from income-tax if the

assesses haB within a period of three years after the date of the receipt of the additional compensa-

tion oonstruoted a residential house.

These amendments will take effect from 1st April, 1983 and will accordingly apply In relation

to the assessment year 1983-84 and subsequent years.

Clause 12 seeks to Insert a new section 54F in the Income-tax Act,

New section 64F provides that in the case of an asses see being an Individual, the

long-term capital .gains arising from the transfer of an asset will be exempt from income-tax

If he has within a period of one year before or after the date on which the transfer took place

purchased or within a period of three years after that date oonstruoted a residential house. The

exemption of the long-term capital gains wfU be granted proportionately on the basis of the invest-

ment of net consideration either for the purchase or construction of the residential house. This

concession will not be available in a oase where the asseasee owns on the date of the transfer of

the original asset any residential house, or purchases, within the period of one year after such

date or constructs, within the period of three years after such date, any other residential house.

Where the assessee so purchases or constructs a residential house, the capital gains, if not

charged to tax, will be charged to tax aa long-term capital gains of the, year In which the house

Is so purchased or oonstruoted.

Where the new residential house is transferred within a period of three years from the daU

of its purchase or Its construction, the amount of oapital gains arising from the transfer of the

original asset which has not been charged to income-tax will be deemed to be long-term oapital

gains of the previous year in which the new asset is transferred.

This amendment will take effect from 1st April, 1983 and will accordingly' apply in relation

to the assessment year 1983-84 and subsequent years.

Clause 13 seeks to amend section 80C of the Inoome-tax Act relating to deduotion In respect of

life insurance premia, contributions to provident fund, e tc

Sub-clause (a) seeks to substitute •ub-section (1) of section 80C. Under the proponed amendment,

the quantum of deduction from taxable Income In respect of long-term savings through life insurance,

provident fund, etc., Will be varied "o ag to allow a deduotion of the whole of the first Rs. $>W

of the qualifying savings glus 60% of the next Rs. 6,000,piuj 40% of the remainder qualifying

savings.

Sub-clause (b) seeks to insert a new clause (h) in sub-section (2). The proposed amendment seek*

to provide that an Individual, Hindu undivided family or married couple governed by the system

of community of property in specified Union territories will be entitled to a deduction in respect ot

the subscription to notified securities of the Central Government in the seme manner as contributions

to provident fund, life insurance, etc.

Sub-clause (c) seeks to amend sub-section (4) of section 80C, Under the proposed amendment, the

monetary oeiling for contributions to provident fund, life insurance, etc., whloh qualifies for

deduction will be raised from Rs. 30,000 to As. 40,000.

Sub-clause (d) seeks to Insert a new sub-section (6) In section 80C. New subjection (6) seeks to

provide that where an individual, Hindu undivided family or married couple governed by the system

of community of property in speoifled Union territories has effected or kept In force any Insurance

on the life of the specified persons and such aesessee terminates the contract of insurance by

notice to this effect or where the contract ceases to be in force as a result of failure to pay any

premiums by not reviving the contract of insurance before premiums have been paid for a period

of two years, no deduction will be allowed to the assessee in respect of such premium or

premiums paid In the previous year In which the policy Is terminated and deduction allowed In

respect of premium or premiums paid in the immediately preceding previous year shall be deemed

to be the Income of the asseesee of that previous year and will be charged to tax accordingly.

New Explanation 1 provides that the deduction allowed under section 80C in respect of any

premiums paid in any previous year will be the amount by which the actual deduotion allowed under

that section for that year exceeds the amount of deduction whloh would have been allowed for that

year If no such premiums had been so paid. The new Explanation 2 provides that where an

assesses terminates his participation in the Unit-linked Insurance Plan and the contract of

Insurance in the same previous year, the deduotion allowed under section 80C in respect of such

contribution "r premiums paid for the previous year will be the amount by which the deduction

allowed under section 80C for that year exceeds the amount of deduction which would have been

allowed for that year If no contribution or premiums had been paid during that year.

These amendments will take effect from 1st April, 1983 and will accordingly apply in relation to

the assessment year 1S83-84 and subsequent years.

Clause 14 seeks to amend sub-section (2) of section 80CC of the Income-tax Act.

Under the existing provisions, where the specified categories of assessees purchase new equity

shares out of their income chargeable to tax, they are allowed a deduction, in the computation of the

total income, 6t an amount equal to 50 par cent, of the cost of shares so purchased. Where such cost

exceeds Rs. 10,000, the amount with reference to which the deduction Is allowed is limited to Rs. 10,000.

Under the proposed amendment, the monetary limit with reference to which the deduction is allowed is

proposed to be raised to Rs. 20,000.

Thia amendment will take effect from 1st April, 1983 and will accordingly apply In relation to the

assessment year 1983-64 and subsequent years.

Clause 15 seeks to amend sub-section (2) of section 60G of the Income-tax Act relating to deduction

in respect of donations to oertain funds, charitable Institutions, etc.

Under the existing provisions, donations made by an assessee to any fund or institution set up for a

charitable purpose in India qualify for deduction at the general rate of 50 per cent. The amount

qualifying for deduotion is subject to a monetary ceiling of 10 per cent, of the gross total Income,

subject to a maximum of Rs. 5 lakhs. This ceiling does not apply In relation to donations made to

oertain funds of national character, namely, the National Defence Fund, the Jawaharlal Nehru

Memorial Fund, the Prime Minister's Drought Relief Fund and the Prime Minister's National Relief

Fund.

Under the proposed amendment, the National Children's Fund will be placed on par with the funds

of national character, such>as, the National Defence Fund, etc. In other words, the donations made

to the National Children's Fund will qualify for deduction at the rate of 50 per cent, Irrespective of the amount of the donation.

This amendment will take effect from lat April, 1983 and will accordingly apply In relation to the assessment year 1983-84 and subsequent years.

Clause 16 seeks to amend section 80GG of the Income-tax Act relating to deduction In respect of rents paid.

Under the existing provisions, an assessee who is not in receipt of house rent allowance Is entitled to a deduction In respect of house rent paid by him for his own residence in excess of 10% of his total Income,up to a celling of 15% thereof, or Rs. 300 per month, whichever is less. Under the proposed amendment, the monetary celling Is being raised to Rs.400 per month.

This amendment will take effect from 1st April, 1983 and will accordingly apply In relation to the assessment year 1983-84 and subsequent years.

Clause 17 seeks to Insert a new clause (c) in s.ub-sectlon (2) of section 80GGA.

Under the proposed amendment, any sum paid by the assessee not deriving Income under the head "Profits and gains of business or'professlon", in the previous year, to an association or Institution, which has as Its object the undertaking of any programme of conservation of natural resources,to be used for carrying out any programme approved under section 35CCB will qualify for deduction In the computation of his taxable income if such association or institution Is also for the time being approved for the purposes of the said section.

This amendment will take effect from 1st June, 1982.

Clause 18 seeks to Insert a new section 80HHB in the Income-tax Act relating to deduction in respect of profits and gains from projects outside India.

Sub-section (1) of new section 80HHB provides that an Indian company or a non-corporate assesses resident In India will be entitled to a deduction, in the computation of the taxable income, of 25 per cent, of the profits and gains derived from the business of the execution of a foreign project undertaken by the assessee In pursuance of a contract entered Into by him or the execution of any work undertaken by him and forming part of a foreign project undertaken by any other person In pursuance of a contract entered Into by such other person.

The provisions of this sub-section will apply only where the consideration for the execution of the project or such work Is payable In foreign currency.

Sub-section (2) of new seotion 80HHB provides that the provisions of this section wUl apply to any project for which the payment Is made In foreign currency for the purpose of construction of any building, road, dam, bridge or other structure, assembly or Installation of any machinery or plant outside India and for the purpose of execution of such other work as may be prescribed by rules.

Sub-section (3) of new section 80HHB provides that the deduction under this section will be allowed only If the following conditions are satlsfledi-

(i) separate accounts are maintained by the assessee In respect of the profits and gains derived from the business of the execution of the foreign project or the work forming part of the foreign project undertaken by him and in the case of assessees other than Indian companies and co-operative societies, the accounts are audited by a chartered accountant and the assessee furnishes along with his return of income the report of such audit In the prescribed form.

la to be mowed and ^ - H I I L* ? Previous year In which the deduction under this section •Uowad and credited to a foreign project, reserve account to be utlliaed by the a . * . *.

during a period of 5 years for the purposes of the business other than for distribution by way of dividends or profitsj

(111) an amount equal to 25 per cent, of the profits and gains Is brought Into India by the assessee within a period of 6 months from the end of the previous year to foreign exchange.

However, In a case where the amount credited to the foreign projects reserve account or the amount brought into India or both these amounts is leas than 25 per cent, of the profits and gains from the project, the deduction under this section will be limited to the amounts so credited or so brought Into India, whiohever Is less.

Sub-section (4) of new section 80HHB provides that if before the end of 5 years from the end of the previous year in which the deduction under sub-section (1) Is allowed, the aseessee utilises the amount credited to the foreign projects reserve account for distribution by way of dividends or profits or for any other non-business purpose, the deduction originally allowed will be deemed to have been wrongly allowed and the Income-tax Officer may recompute the total Income of the assesses for the relevant previous year and make the necessary rectification within a period of 4 years from the end of the previous year in which the money was so utilised.

This amendment will take effect from 1st April, 1983 and will accordingly apply ID relation to the assessment year 1983-84 and subsequent years.

Clause 19 seeka to amend section SOL of the Income-tax Act relating to deduction In respect of interest on certain securities, dividends, etc.

Under the existing provisions. Individuals, Hindu undivided families and married couple a governed by the system of community of property in certain Union territories are entitled to a deduction up to Rs. 3,000 in the computation of their taxable Income In respect of Income from Investments In specified financial assets.

Under the proposed amendment, the monetary celling for exemption of Income from specified financial assets Is being raised from Rs. 3,000 to Rs.4,000.

This amendment will take effect from 1st April, 1983 and will accordingly apply in relation to the assessment year 1983-84 and subsequent years.

Clause 20 seeks to amend clause (a) of sub-section (1) of section 80M of the Income-tax Act relating to inter-corporate dividends.

Under tho proposed amendment, a doraestlo company receiving Income by way of dividends from any Indian company which is engaged in the manufacture of synthetic rubber and rubber chemicals (Including carbon black) and basic drugs will qualify for complete exemption of such income, as against 60 per cent, thereof hitherto.

This amendment will take effect from 1st April, 1983 and will accordingly apply in relation to the assessment year 1983-84 and subsequent years.

Clause 21 seeks to amend section 80T of the Income-tax Act.

Under the proposed amendment, the deduction In respect of long-term capital gainu exceeding Rs. 5,000 In the case of assessees other than companies will be granted at the rates specified in the Twelfth Schedule proposed to be inserted in the Income-tax Act with reference to the amount of such long-term capital gains as reduced by Rs. 5,000.

It is proposed to provide that where the asaesaee has long-term capital gains relating to buildings or lands, gold,bulllon or jewellery and any other capital asset or any two of them, the deduction of Hs. 5, 000 will be allowed first against the long-term capital gains relating to buildings or lands, next against gold, bullion or jewellery and the balance, if any, against any other capital assets.

It la further proposed'to provide that the deduction under this section in relation to long-term capital gains being gold, bullion or Jewellery, will not exceed Rs. 5,000,

The proposed amendment will take effect from 1st April, 1983 and will accordingly apply In relation to the assessment year 1983-84 and subsequent years.

Clause 22 seeks to insert a new section 89A In the Income-tax Act relating to tax relief in relation to export turnover,

Sub-seotlon (1) of the new section provides that where the export turnover of an Indian company or other non-corporate asseseees resident in India during the previous year relevant to the assessment year 1983-84 or any of the subsequent four assessment years exceeds the export turnover of the corresponding baae year by more than ten per cent., ho will be entitled to deduction from the amount of Income-tax payable by him for that assessment year of the amount specified In sub-section (3). For this purpose, "corresponding base year" means the previous year Immediately preceding the relevant previous year. The expression "export turnover" means the sale proceeds of specified goods or merchandise exported outside India, but excludes freight or insurance attributable to the transport of such goods or merchandise beyond the customs station.

Sub-section (2) of the new section provides that the provisions of this section will apply to the assessment year 1083-84 and four Immediately succeeding assessment years.

Sub-section (3) of the new section provides that the goods or merchandise and the rate at which the amount of deduction under sub-section (1) will be calculated will be specified by the Central Govern- ment by notification In the Official Gazette.

Sub-section (4) of the new section provides that in specifying any goods or merchandise Including the destination of their export and the rate at which the amount of deduction Is to be calculated, the Central Government will take into account certain factors, namely, the cost of manufacture or-produc- tlon of such goods or merchandise, the price of similar goods In the foreign markets, the need to develop foreign markets for the specified goods, the need to earn foreign exchange, and other relevant factors.

Sub-Bectlon (5) of the new section provides that the deduction under sub-section (1) for any assess- ment year will not exceed ten per cent, of the amount of Income-tax payable for that assessment year on the profits and gains derived from the export of such goods or merchandise outside India. Where the total Income of the aeaessee Includes other income besides such profits and galnA, the income-tax payable on Rich profits and gains shall be calculated proportionately.

Sub-section (6) of the new section provldea that the profits and gains derived from the export of goods or merchandise outside India will be computed in accordance with the rules prescribed.

The provisions of the new section will take effect from 1st June, 1982.

Clause 23 seeks to amend section 155 of the Income-tax Act.

Sub-clause (a) seeks to amend sub-section (8) of section 155. This amendment in consequential to the amendment of sub-section (1) of section 54 by sub-clause (a) of clause 11.

Sub-clause (b) seeks to am mid sub-section (8A) of section 155. This amendment is consequential to the amendment of Bub-fiection (2) of section 54 by sub-clause (b) of clause 11.

Sub-clause (c) seeks to Insert a new sub-section (IOC) in section 155. New sub-section (IOC) seeks to provide that where the capital gains arising on the transfer of a capital asset referred to in section 54F Is charged to tax and within a period of one year after the date of the transfer, the assesses purchases or within three years from that date constructs a residential house, the Income-

tax Officer will amend the order of assessment to exempt the amount of capital gains not chargeable

to tax under "ub-section (1) of section 54F. The provisions of section 154 apply in such a case and

the period of four years specified In section 154(I) will be reckoned from the date of the assessment.

These amendments will take effect from 1st April, 1983 and will accordingly apply In relation

to the assessment year 1983-84 and subsequent years.

Clause 24 seeks to Insert a new olause (Ilia) In the proviso to section 193 of the Income-tax Act

relating to deduction of tax at source from interest on securities.

Under the proponed amendment, no tax will be deducted at source from any Interest payable on

such securities of the Central Government or a State Government to ouoh class of persons and

subject to such conditions as may be specified in this behalf by the Central Government by notifica-

tion In the Official Gazette.

This amendment will take effect from 1st June, 1982.

Clause 25 seeks to amend section 194C of the Income-tax Act relating to deduction of tax at

source from payments to contractors and sub-contractors.

Under the existing provisions, income-tax Is deductible at source from Income comprised in

payments made by the Central Government or any State Government, local authorities, statutory

corporations, companies or co-operative societies to contractors engaged for carrying out any work

or for supplying labour for carrying out such work. Similarly, income-tax is deductible from

payments made by contractors, other than individuals or Hindu undivided families to sub-contractors.

No deduction Is, however, required to be made if the consideration for the contract or the sub-

contract does not exceed Rs.5,000. Under the proposed amendment, this monetary limit is being

raised to RB. 10,000.

This amendment will take effect from 1st June, 1982.

Clause 26 seeks to Insert a new section 197A in the Inoome-tax Act relating to non-deduction'of

Income-tax at source in certain cases.

Sub-section (1) of the new section provides that no deduction of inoome-tax will be made from

interest on securities, dividends or Interest other than interest on securities In the

case of a resident Individual ff he furnishes a declaration in writing in duplicate in the prescribed

form and verified In the prescribed manner,to the payer of such income to the effect that his

estimated total income of the previous year in which such income is to be included for computing

hla total income will not exceed the exemption limit.

SUb-sectlon (2) of the new section provides that the payer of the Income referred to In sub-

section (1) will deliver to the Commissioner of Income-tax one copy of the declaration referred to

In sub-section (1) on or before tbe 7th day of the month next following the month In which the

declaration Is furnished to him.

This amendment will take effect from 1st June, 1982.

Clause 27 seeks to Insert a new sub-section (2A) in section 245B of the Income-tax Act.

Under the existing provisions, the Settlement Commission shall consist of a Chairman

and two other members. Under the proposed amendment, the Settlement Commission would be

competent to function as such even when there Is a vacancy in one of the posts of the other members.

If tbe Chairman and the other members so functioning differ on any point or points, the point or

points on which they differ wlU be referred, as soon as may be after the vacancy In the Commission

1* filled, to the member appointed to fill the vacancy and will be decided according to his opinion.

This Amendment will take effect from 1st April, 1982.

Clause 28 seeks to amend sub-section (5) of section 245D of the Income-tax Act.

This amendment is consequential to the amendment made to section 245B of the Income-tax Act by clause 27.

This amendment will take effect from 1st April, 1982.

Clause 29 seeks to amend section 272A of the Income-tax Act.

Sub-clause (a) seeks to Insert a new clause (ba) In sub-section (2) of section 272A. Under the proposed Amendment, if a person falls to deliver or causes to bo delivered In due time, a copy of the declaration mentioned In section 197A, he will be liable to a penalty of an amount which may extend to 10 rupees per day during which the default continues.

Sub-clause (b) seeks to Insert a new'clause (aa) in sub-section (3) of section 272A. The new clause (aa) provides that where a penalty Is Imposable in relation to the default referred to In clause (ba) of sub-section (2), auch penalty will be Imposable by the Commissioner of Income-tax.

This amendment will take effect from 1st June, 1982.

Clause 30 seeks to amend section 279 of the Income-tax Act to provide that no person shall be proceeded against for an offence under section 276AA except at the'instance of the Commissioner.

This amendment will take effect from a date to be notified by the Central Government

Clause 31 seeks to Insert a new Twelfth Schedule In the Income-tax Act.

Under the proposed Twelfth Schedule, the deduction In respect of long-term capital gains referred to In section 80T will be allowed on the basis mentioned therein with reference to the period for which the capital asset has been held by the assessee.

The proposed amendment will take effect from 1st April, 1983 and will accordingly apply In . relation to the assessment year 1983-84 and subsequent years.

Clause 32 seeks to make certain amendments of a consequential nature In different provisions of the Income-tax Act.

The amendment proposed In sub-clause (1) of this clause Is consequential to the Insertion of new section 54F which provides for not charging capital gains on the transfer of certain capital assets. The amendments proposed in clauses (ii) and (Hi) are consequential to the insertion of new section. 80HHB.

These amendments will take effect from 1st April, 1983'and will accordingly apply

In relation to the assessment year 1983-84 and subsequent years.

Clause 33 seeks to amend sub-clause (2) of clause (e) of section 2 of the Wealth-tax Act.

Sub-clause (a) seeks to amend the first proviso to sub-clause (2). Under the existing pro- visions, agricultural land comprised In tea, coffee, rubber and cardamom plantations Is to be regarded as an "asset" for purposes of wealth-tax for the assessment year 1981-82 and subsequent years. The proposed amendment seeks to provide that the agricultural land comprised in these plantations would be regarded as an "asBet" for purposes of wealth-tax for the assessment years 1981-82 and 1982-83 only.

Sab-clause (b) seeks to amend the second proviso to sub-clause (2). The proposed amend-

ment seeks to provide that, for the assessment year 1983-84 and subsequent years, agri-

cultural land (including that comprised in the aforesaid plantations), growing crops (including

fruits on trees), grass or standing trees on ouch land will not constitute an asset for the

purposes of wealth-tax. Similarly, any one building or one group of buildings owned or occupied

by a cultivator of, or receiver of rent or revenue out of, agricultural land which is In the

immediate vicinity of such land and is used by him as a store-house or for keeping livestock,

will not be treated as an "asset" for the purposes of wealth-tax.

These amendments will take effect from 1st April, 1983 and will accordingly apply In

relation to the assessment year 1983-84 and subsequent years.

Clause 34 seeks to amend section 5 of the Wealth-tax Act.

Sub-clause1(a) seeks to amend sub-section (1) of section 5.

Item (1) seeks to omit clauses (iva) and (Ivb) of sub-section (1). The proposed amendment

seeks to omit the references to the exemption of the value of agricultural land or the speci-

fied house property on agricultural land, since these Items have been taken out of the pur-

view of the definition of the term "assets" in section 2(e).

Item (11) seeks to amend the second proviso to clause (vlli) of sub-section (1). Under the

proposed amendment, the value of the conveyance or conveyances exempt from wealth-tax

is belAg raised from Re.30,000 to Bs. 75,000.

Item (ill) seeks to omit clauses (villa) and (villb) of sdb-seotlon (1). The proposed -

amendment seeks to omit the exemption In respect of growing crops on agricultural land

and grass on such land as also trees standing on agricultural land, since these Items are

being excluded from the purview of the definition of the term "assets" referred to In

section 2(e).

Item (lv) seeks to amend clause (x) of sub-section (1), The proposed amendment seeks to raise

the exemption limit In respect of topis and instruments used by a professional to carry on his

profession from B s. 20,000 to B s. 50,000.

Item (v) seeks to Insert new clauses (xvlc) and (xvld) in sub-section (1).

The new clause (xvlc) seeks to provide exemption in respect of the value of savings certificates

to be specified by the Central Government by a notification In the Official Gazette In the case of an

Individual citizen of India or a person of Indian origin not resident In India. This exemption will

be available to such individual If he has subscribed to such certificates In foreign currency or

other foreign exchange remitted from a country outside India through official channels.

The new clause (xvld) of sub-section (1) seeks to provide for exemption from wealth-tax In

respect of the value of specified Capital Investment Bonds without any monetary limit.

Sub-clause (b) seeks to make two amendments In sub-section (1A) of section 5.

The first amendment seeks to omit the reference to clause (Iva) In sub-section (1A). Under

the existing provisions, the value of agricultural land comprised In specified plantations qualifies

for "Mmption from wealth-tax up to Rs. 1.5 lakhs along with the value of other specified

financial assets. Since agricultural land is proposed to be taken out of the purview of the

definition of the term "assets" in section 2(e), clause (Iva), dealing with the exemption of such

agricultural land, la proposed to be omitted.

The aeoond amendment seeks to raise the exemption limit In respect of the value of specified

financial assets from wealth-tax from Rs, 1,5 lakhs to Rs. 1.65 lakhs.

These amendments will take effect from 1st April, 1983 and will accordingly apply In

relation to the assessment year 1983-84 and subsequent years.

Clauue 35 seeks to Insert a new Explanation 1A in section 6 of the Wealth-tax Act.

The new Explanation 1A seeks to provide that the value of an asset telng moneys to the credit of

a person resident outside India In a Non-resident (External) Account will qualify for exemption from

wealth-tax If the Interest on such account is exempt from Income-tax under eectlon 10(4A) of the

Income-lax Act.

This amendment will take effect from 1st April, 1982.

Clause 36 Seeks to insert a new sub-section (2A) in section 22B ot the Wealth-tax Act.

Under the existing provisions, the Settlement Commission shall consist of a Chairman and two

other members. Under the proponed amendment, the Settlement Commission would be competent to

function as such when there is a vacancy in one of the posts of the other members. If the Chairman

and the other member so functioning differ on any point or points, the point or points on which they

differ will be referred, as soon au may be after the vacancy in the Commission is filled, to the

member appointed to fill the vacancy and will be decided according to bis opinion

This amendment will take effect from 1st April, 1082.

Clause 37 seeks to amend sub-section (5) of section 22D of the Wealth-tax Act.

This amendment is consequential to the amendment made to section 22B of the Wealth-tax Act

by clause 36.

This amendment will take effect from 1st April, 1982.

Clause 38 seeks to amend oub-section (1) of section 5 of the Gift-tax Act.

Sub-clause (a) seekB to insert new clauses (lib), (lie) and (lid) In sub-section (1). New clause (lib)

seeks to provide that gifts made by a person resident outside India out of the moneys standing to his

credit in a Non-resident (External) Account maintained in India In any bank in accordance with the

Foreign Exchange Regulation Act, 1073 will b" exempt from gift-tax. For this purpose, "person

resident outside India" has the same meaning as In section. 2(q) of the Foreign Exchange Regulation

Act, 1973.

New clause (lie) seeks to provide that gifts made by an Indian citizen or a person of Indian origin;

who Is not resident in India, to any of his relatives In India of foreign currency or foreign exchange

remitted from a country outside India in accordance with the provisions of the Foreign Exchange

Regulation Act, 1973 will be exempt from gift-tax. For this purpose, a person shall be deemed to

be of Indian origin if he or either of his parent* or any of his grand-parents was born in undivided

India, and the expression "relative" will have the same meaning as In section 2(41) of the Income-tax

Act, The expressions "foreign currency" and 'foreign exchange" will have the Mine meanings

as In the Foreign Exchange Regulation Act, 1973.

New clause (lid) seeks to provide that gifts made by a citizen of India or a person of Indian origin

who is not resident in India to his relatives in India of savings certificates, which may be notified by

the Central Government, will be exempt from gift-tax, t h is is subject Cb the condition that such

person has himself subscribed to such certificates in foreign currency or foreign exchange remitted from outside India. For this purpose, a person will be deemed to be of Indian origin if he or either of his parents or any of his grand-parents was born in undivided India. Further, the expression "relative" used In this clause will have the same meaning as in section 2(41) of the Income-tax Act. The expressions "foreign currency" and "foreign exchange" will have the same meanings as in the Foreign Exchange Regulation Act, 1973.

Sub-olause (b) seeks to insert a new clause (iilc) In sub-section (1). New clause (illc) seeks to provide that gifts made by a subscriber of such Capital Investment Bonds as the Central Government may by notification In the Official Gazette specify will be exempt from gift-rax up to a maximum of Rs. 10, 00, 000 In the aggregate in one or more previous years.

These amendments will take effect from 1st April, 1983 and will accordingly apply in relation to the assessment year 1983-84 and subsequent years,

Clauae 39 seeks to substitute seotion 18A of the Gift-tax Act by a new section.

Under the existing provisions, stamp duty paid on an instrument relating to the gift of any property is allowed a.u a deduction from the gift-tax payable by the assessee In cases where the amount of gift-tax exceeds R s . l, 000. The amount to be allowed as deduction is limited to the amount of duty paid or one-half of the amount by which the gift-tax payable exceeds Ra. 1,000, whichever is less.

The proposed amendment seekfl to modify this provision so as to extend the benefit of this deduc- tion even in cases where the gift-tax payable does not exceed Rs. 1,000. The deduction will, however, be limited to one-half of the gift-tax otherwise payable by the assessee.

This amendment will take effect from 1st April, 1983 and will accordingly apply in relation to the assessment year 1983-84 and subsequent years.

Clause 40 seeks to make two amendments in clause (7) of section 2 of the Interest-tax Act, 1974,

The first amendment seeks to provide that interest on credit sanctioned by a scheduled bank on deferred payment terms in connection with the export of capital plant and machinery will not be Included in the chargeable interest.

The.second amendment seeks to provide that interest on loans in foreign ourrency granted by

the specified industrial finance Institutions for Import of oapltal plant and machinery from abroad

will not be Included In the chargeable interest.

These amendments will take effect from 1st April, 1983 and will accordingly apply In relation

to the assessment year 1983-84 and subsequent years.

Clause 41 seeks to amend sub-seotion (1) of section 6 of the Hotel-Receipts Tax Act, 1080.

Under the proposed amendment, the charges received by an assessee In a previous year in

connection with the provision of residential accommodation, food, drink and other services from a

person within the purview of the Vienna Convention on Diplomatic Relations, 1961 or the Vienna

Convention on Consular Relations, 1963 shall not be Included In the chargeable receipts of an

assessee In suoh previous year.

This amendment will take effeot retrospectively from the date of coming Into force of the Act.

C I I UM 42 seeks to amend sub-section (2) of section 7 of the Hotel-Receipts Tax Act, 1980.

The proposed amendment seeks to provide that the amount of charges which accrue or arise to

Buoh hotel after 27th February, 1982 will" not be taken Into account for computing the chargeable

receipts for the purpose of the Hotel-Receipts Tax Act, 1980.

This amendment will take effect from 1st April, 1982.

Clause 43 read with the Second Schedule seetca to amend the Customs Tariff Act, 1975 to—

(i) rationalise specifications relating to flash and smoke points, carbon residue and colour

comparison test in respect of certain petroleum products by suitably amending the Chapter Notes

and specifications mentioned in the respective Headings covering suoh petroleum products falling

within Chapter 27;

(ii) raise the rate of basic customs duty (standard) on synthetic organic dyestuffs (including

pigment dyeatuffs), certain pigments and colours, palntB, varnishes, enamels, optical bleaching

agents,etc, and also basic customs duty (preferential) in respect of optical bleaching agentsj

(ill) raise the rate of basic customs duty on artificial resins and plastic materials;

flv) raise the rate of basic customs duty on cork and articles thereof;

(v) raise the rate of basic customs duty on newsprint with * view to provide for specific Import

duty on newsprint for printing of newspapers, books and periodicals;

(vl) raise the rate of basic customs duty on certain Items of iron and steel;

(vii) raise the rate of basic customs duty on copper tubes and plpes^etc;

(vlil) raise the rate of basic customs duty on unwrought zinc;

(Lx) raise the rate of basic customs duty on electronic Items such as computers, Instruments

and electrical parts, of certain machinery and apparatus}

(x) amend the description of parts or accessories suitable for use solely or principally with

one or more specified instruments so as to add light emitting diodes;

(xl) raise the rate of customs duty on Aniline (aniline oil);

(xii) fix the rate of export duty on chromlte ore and concentrates onjid valorem basis.

Clause 44 seeks to levy up to the 31st March, 1983, auxiliary duties of customs on all Imported

goods at the rate of 30 per cent,of their value.

Clause 45 seeks to amend section 20(1) of the Customs Act, 1962, so that customs -duties leviable

on the re-lmportatlon of goods produced or manufactured in a free trade zone and initially exported

therefrom, are equated to the excise duty leviable on the direot olearance of suoh goods from the

zone to the rest of the country.

Clause 46 seeks to amend section 3 of the Central Excises Act, to provide for the levy of duty of

excise on excisable goods produced or manufactured In a free trade zone and brought Into the rest

of the country. This duty would be equal to the duties of customs leviable on importation of the

like goods from abroad.

Clause 47 seeks to Insert an Explanation to sub-cectton 4(4)(d)(li) of the Central Exolses Act, to

make It clear that In computing the amount of duty of exolM deductible froin the eum-duty prlo",

the effective amount of duty of excise payable on the goods under assessment shall alone be taken

Into account. This Explanation Is being given effect to retrospectively from 1st October. 1975.

Clause 48 seeks to amend section 37 of the Central Excises Act, so as to empower the Central

Government to make rules for providing incentives for Increased production or Manufacture of

excisable goods by way of remission of, or any concession with respect to, duty of excise payable

thereon.

Clause 49 read with the Third Schedule seeks to amend the First Schedule to the Central Excises

Act,-

(a) to change or amend the tariff description of —

(1) Item Nos. 6 to 11A relating to petroleum produots so as to align the Central Excise

Tariff with the Customs Tariff to facilitate classification of goods for excise and customs duties,

(2) Item No. ISA relating to plastics to align the excise entry with the corresponding entry In

the Customs Tariff and also to keep specified articles of plastics within the purview of this entry.

(3) Item No, 16A relating to rubber products to clarify that articles of latex foam sponge are

Included in sub-Ttem (1).

(4) Item No. 16B relating to plywood,etcv so as to Include flush doors and Improved wood

within the purview of the excise levy under this Item.

(5) Item No. 17 relating to paper and paper produots so as to rationalise the duty structure

onpaper and paper boards and articles thereof.

(6) Item No, 18 relating to man-made fibres and yarns to rationalise the duty structure

applicable to cellulosio spun yarn.

(7) Item No, 18A relating to cotton yarn to rationalise the duty struoture applicable to cotton

yarn,

(8) Item No. 23 relating to cement to raise the rate of duty applicable to cement.

(9) Item No. 23A relating to glass and glassware to revise the basis of assessment of flat

glass from ad. valorem to ad valorem-cum-specific rate of assessment.

(10) Item No, 26B relating to zinc to revise the rates of duties.

(11) Item No. 27 relating to aluminium to revise the rates of duties.

(12) Item No, 27A relating to lead to revise the rates of duties.

(13) Item No. 30 "relating to electric motors so as to specifically include motors equipped with

gsars or gear box within the purview of this Item.

(14) Item No, 30 relating to mechanical lighters to broaden the scope of this Item to Include

electrical and electronic lighters.

(b) to Insert Item Nos. 37BB, 3TCC, 47 and 59 to provide for the levy of excise duty under

specific Items on television image and sound recorders and reproducers, video cassette

recorders and reproducers, television cameras, video cameras, electronic machines for

game a of skill or chance, ( artioles used for sound or Image reoordlng,eto.

descriptions of Item Noa. 6 to 11A relating to petroleum products.

(d) to omit Item Noa. 11C and 11D relating to petroleum products and 15B and 15BB relating to

cellophane and polyester films consequent on the amendment of tariff descriptions of Item Noa. 6

to 11A and 15 A.

Clause 50 seeks to levy up to the 31st day of March, 1983, special duties of excise on all excisable

goods at the rate of 10% of the duty leviable under the Central Exolses Act, read with any notification

for the time-being In force issued under the said Act or the rules made thereunder.

Clause 51 seeks to give retrospective effect to amendments made on the 20th February, 1982, to

rules 9 and 49 of the Central Excise Rules, 1944 relating to charging of duty of excise on excisable

goods used for captive consumption within the factory of production and to validate the collection of

duty made prior to these amendments.

Clause 52 seeks to make the existing scheme of concessional excise duty for the cottage sector of

match Industry retrospectively applicable from the 19th June, 1980 with appropriate modifications.

Clause 53 seeks to amend the Medicinal and Toilet Preparatlona£Exclse Dutiea}Act, 1955

so as to revise the rates of duties on toilet preparations containing alcohol.

Clause 54 seeks to amend the First Schedule to the Indian Post Office Act, 1898 with a view to

revising the postage rates for Letters, Letter-cards, Post cards containing printed communica-

tion, Book, Pattern and Sample packets and Registered Newspapers.

Clause 55 seeks to amend sub-section (2) of section 30 of the Deposit Insurance and Credit

Guarantee Corporation Act, 1961.

The effect of the amendment will be that the Deposit Insurance and Credit Guarantee Corporation will

continue to be exempted from Income-tax for a further period up to and lnolusive of the accounting

year ending on the 31st December, 1986.

Clause 56 seeks to amend clauses

India Act, 1963.

Under the existing clause (b), Individuals, certain Hindu undivided families and married couples

governed by the system of community of property In force In certain Union territories are entitled

to a deduction in the computation of their taxable income, In respect of income from units received

by them as has not been allowed as deduction under section SOL of the Income-tax Act, up to a

maximum of Rs. 2,000. Sub-clause (a) proposes to Increase the said monetary celling to Ra. 3,000.

Under the existing clause (ba), individuals and Hindu undivided families are entitled to exemption

from wealth-tax in respect of the value of units which have not been excluded from their net wealth

under section 5 of the Wealth-tax Act, up to a maximum of Rs. 25,000. Sub-clause (b) proposes to

increase this monetary celling to Rs. 35,000.

Thes" amendments will take effect from 1st April, 1983 and will accordingly apph in relation

to the assessment year 1983-84 and subsequent years.

Clause 67 seeks to provide that the Bank of Bhutan constituted under the Royal Charter of the

Bank of Bhutan 1968 shall not be liable to pay any Income-tax on the interest accruing to that bank

during the period 1st April, 1972 to 31st December, 1986 on the deposits made by it with the

State Bank of India,

MEMORANDUM REGARDING DELEGATED LEGISLATION

Sub-clause (o) of clause 4 of the Bill Beeka to Insert a new clause (10AA) In section 10 of the

Income-tax Act. This new clause seeks to provide for exemption from Income-tax of the cash equivalent of leave salary payable to an employee of the Central Government or the State Government in respect of the earned leave at his credit at the time of his retirement on superannuation or otherwise. Sub-clause (11) of clause (10AA) seeks to provide for exemption In respect of cash equivalent of earned leave to the credit of an employee other than an employee of the Central Government or the State Government subject to the maximum of six months' salary on the basis of average salary drawn by the employee during the ten months preceding his retirement on superannuation or otherwise or Rs.25,500, whichever is less. The Central Government has been empowered to increase the limit of exemption ofRs.25,500 to a higher amount by notification in the Official Gazette having regard to the maximum amount of exemption In the case of Government servants.

Clause 9 Beeka to Insert a new section 35CCB in the Income-tax Act. The new section

provides for the deduction of an expenditure Incurred by an assessee engaged In a business

or profession by way of payment of any sum to an association or Institution having the object

of undertaking any programmes of conservation of natural resources to be used for the purposes

of carrying out such programmes. The deduction will be available only In cases where such

associations or Institutions and such programmes of conservation of natural resources are

approved by the authority prescribed In that behalf by rules made under section 296 of the

Income-tax Act.

Clause 18 of the Bill seeks to Insert a new section SOHHB In the Income-tax Act. The new-

section provides for deduction of 25% of profits and gains derived by an Indian company or a

non-corporate assessee resident In India from the business of execution of projects undertaken

•by It and forming part of the foreign project undertaken in pursuance of a contract with the

Government of a foreign State, any statutory or public authority or agency in the foreign State

or a foreign enterprise. Under sub.section (3) of that section, no deduction shall be allowed m

respect of such profits and gains unless the assesses, other than a company or a co-operative

society, furnishes along with the return of income for the assessment year for which the

deduction, is claimed, a report of audit of the accounts relating to the project In the form to

be prescribed by rules duly signed and verified by an accountant as defined In the Explanation

below sub-section (2) of section 288,

Clause 22 of the Bill seeks to Insert a new section 89A In the Income-tax Act relating to tax

relief In relation to export turnover. The new section 89A provides that where the export turnover of an Indian company or other non-corporate asses see resident in India during the relevant assessment year exceeds the export turnover of the corresponding base year by more than ten per cent., he will be entitled to deduction from the amount of Income-tax payable by him for that assessment year of the amount specified In sub-section (3). Sub-section (3) of the new section provides that the goods or merchandise and the rate at which the amount of deduction under sub-section (1) will be calculated will be specified by the Central Government by notification In the Official Gazette. Further, under sub-section (5) of the new section, the •mount of such deduction for any assessment year shall not exceed ten per cent, of the amount of Income-tax otherwise payable by the assesses for that year on the amount of profit* and gains derived from the export of such goods or merchandise and such amount of profits and f sins shall be computed In accordance with the rules to be made under section 295 of the Act.

Clause 24 of the Bill seeks to insert a new clause (ilia) In the proviso to section 193 of the

Income-tax Act. The proposed amendment seeks to provide that no tax will be deducted at

source from any interest payable on such securities of the Central Government or a State

Government to such class of persons and subject to such conditions as may be specified in

this behalf by the Central Government by notification in the Official Gazette.

Clause 20 of the BUI seeks to insert a new section 197A in the Income-tax Act. Sub-section (1)

of the new section provides that no deduction of income-tax will be made from income from Interest

on securities, dividends or Interest other than Interest on securities in the case of a resident

Individual If he furnishes a declaration in writing In duplicate in the form to be prescribed by

rules and verified in the manner to be prescribed by rules to the payer of such income to the

effect that his estimated total income of the previous year in which such Income Is. to be

Included for computing his total income will not exceed the exemption limit.

Clause 48 of the BUI seeks to amend seotlon 37 of the Central Excise* and Salt Act, so as to

empower the Central Government to make rules for providing Incentives for increased

production or manufacture of excisable goods by way of remission of, or any concession with

respect to, duty of excise payable thereon.

The delegation of legislative power under the aforementioned provisions relates to

matters of procedure or administrative detail or to matters in respect of which It is not

practicable to make detailed provisions. Henoe the delegation of legislative power Is of a

normal character.

AVTAR SINGH RQCHY,

Secretary.

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