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¥ÀæPÀlªÁzÀ F PÉ¼ÀPÀAqÀ The Finance (No. 2) Act, 2009 (No.33 of 2009) C£ÀÄß ¸ÁªÀðd¤PÀgÀ ªÀiÁ»wUÁV

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MINISTRY OF LAW AND JUSTICE

(Legislative Department)

New Delhi, the 19^th August, 2009/Sravana 28, 1931 (saka)

The following Act of Parliament received the assent of the President on the 19^th August, 2009, and

is hereby published for general information:

THE FINANCE (No. 2) ACT, 2009

(NO. 33 OF 2009)

[19^th August, 2009]

An Act to give effect to the financial proposals of the Central Government for the

financial year 2009-2010.

BE it enacted by Parliament in the Sixtieth Year of the Republic of India as follows:

CHAPTER I

PRELIMINARY

1. Short title, and commencement: (1) This Act may be called the Finance (No. 2) Act, 2009

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(2) Save as otherwise provided in this Act, sections 2 to 84 shall be deemed to have come into

force on the 1^st day of April, 2009.

CHAPTER II

RATES OF INCOME-TAX

2. Income –tax: (1) Subject to the provisions of sub-sections (2) and (3), for the assessment year

commencing on the 1^st day of April, 2009, income-tax shall be charged at the rates specified in Part I of

the First Schedule and such tax shall be increased by a surcharge, for purposes of the Union, calculated

in each case in the manner provided therein.

(2) In the cases to which Paragraph A of Part I of the First Schedule applies, where the assessee

has, in the previous year, any net agricultural income exceeding five thousand rupees, in addition to total

income, and the total income exceeds one lakh fifty thousand rupees, then-

(a) the net agricultural income shall be taken into account, in the manner provided in clause (b)

[that is to say, as if the net agricultural income were comprised in the total income after the first one lakh

fifty thousand rupees of the total income but without being liable to tax], only for the purpose of charging

income-tax in respect of the total income, and

(b) the income-tax chargeable shall be calculated as follows:

(i) the total income and the net agricultural income shall be aggregated and the amount of income-

tax shall be determined in respect of the aggregate income at the rates specified in the said Paragraph A,

as if such aggregate income were the total income:

(ii) the net agricultural income shall be increased by a sum of one lakh fifty thousand rupees, and

the amount of income-tax shall be determined in respect of the net agricultural income as so increased at

the rates specified in the said Paragraph A, as if the net agricultural income as so increased were the total

income;

(iii) the amount of income-tax determined in accordance with sub-clause (i) shall be reduced by the

amount of income-tax determined in accordance with sub-clause (ii) and the sum so arrived at shall be

the income-tax in respect of the total income:

Provided that in the case of every woman, resident in India and below the age of sixty –five years

at any time during the previous year, referred to in item (II) of Paragraph A of Part I of the First Schedule,

the provisions of this sub-section shall have effect as if for the words “one lakh fifty thousand rupees” the

words one lakh eighty thousand rupees” had been substituted;

Provided further that in the case of every individual, being a resident in India, who is of the age of

sixty-five years or more at any time during the previous year, referred to in item (III) of Paragraph A of

Part I of the First Schedule, the provisions of this sub-section shall have effect as if for the words “one

lakh fifty thousand rupees” the words “two lakh twenty-five thousand rupees” had been substituted;

Provided also that the amount of income-tax so arrived at, shall be increased by a surcharge, for

purposes of the Union, calculated in each case in the manner provided in that Paragraph and the sum so

arrived at shall be the income-tax in respect of the total income.

(3) In cases to which the provisions of Chapter XII or Chapter XII-A or Chapter XII-H or section

115JB or sub-section (1A) of section 161 or section 164 or section 164A or section 167B of the Income-

tax Act, 1961 (43 of 1961) (hereinafter referred to as the Income-tax Act) apply, the tax chargeable shall

be determined as provided in that Chapter or that section and with reference to the rates imposed by sub-

section (1) or the rates as specified in that Chapter or section, as the case may be;

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Provided that the amount of income-tax computed in accordance with the provisions of section

111A or section 112 shall be increased by a surcharge, for purposes of the Union, as provided in

Paragraph A, B, C, D or E, as the case may be of Part I of the First Schedule.

Provided further that in respect of any income chargeable to tax under sections 115A, 115AB,

115AC, 115ACA, 115AD, 115B, 115BB, 115BBA, 115BBC, 115E and 115JB or fringe benefits chargeable

to tax under section 115WA of the Income-tax Act, the amount of income-tax computed under this sub-

section shall be increased by a surcharge, for purposes of the Union, calculated,-

(a) in the case of every individual, Hindu undivided family, association of persons and body of

individuals, whether incorporated or not, at the rate of ten per cent of such income-tax where the total

income exceeds ten lakh rupees;

(b) in the case of every artificial juridical person referred to in sub-clause (vii) of clause (31) of

section 2 of the Income-tax Act, at the rate of ten percent of such income-tax;

where the total income exceeds one crore rupees;

(d) in the case of every company, other than a domestic company, at the rate of two and one-half

per cent of such income-tax where the total income exceeds one crore rupees;

Provided also that in the case of every company having total income chargeable to tax under

section 115JB of the Income-tax Act, and such income exceeds one crore rupees, the total amount

payable as income-tax and surcharge on such income-tax shall not exceed the total amount payable as

income-tax on a total income of one crore rupees by more than the amount of income that exceeds one

crore rupees;

Provided also that in respect of any fringe benefits chargeable to tax under section 115WA of the

Income-tax Act, income-tax computed under this sub-section shall be increased by a surcharge, for

purposes of the Union, calculated,

(a) in the case of every association of persons and body of individuals, whether incorporated or

not, at the rate of ten per cent of income-tax where the fringe benefits exceed ten lakh rupees;

(b) in the case of every firm, artificial juridical person referred to in sub-clause (v) of clause (a) of

section 115W of the Income-tax Act, and domestic company, at the rate of ten per cent of such income-

tax;

per cent of such income-tax.

(4) In cases in which tax has to be charged and paid under section 115-O or sub-section (2) of

section 115R of the Income-tax Act, the tax shall be charged and paid at the rates as specified in those

section and shall be increased by a surcharge, for purposes of the Union, calculated at the rate of ten per

cent of such tax.

(5) In cases in which tax has to be deducted under sections 193, 194, 194A, 194B, 194BB, 194D

and 195 of the Income-tax Act, at the rates in force, the deductions shall be made at the rates specified in

Part II of the First Schedule and shall be increased by a surcharge, for purpose of the Union, calculated in

cases wherever prescribed, in the manner provided therein.

(6) In cases in which tax has to be deducted under sections 194C, 194E, 194EE, 194F, 194G,

194H, 194-I, 194J, 194LA, 196B, 196C, and 196D of the Income-tax Act, the deductions shall be made at

the rates specified in those sections and shall be increased by a surcharge, for purposes of the Union, in

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the case of every company,. Other than a domestic company, calculated at the rate of two and one-half

per cent, of such tax, where the income or the aggregate of such incomes paid or likely to be paid and

subject to the deduction exceeds one crore rupees.

(7) In cases in which tax has to be collected under the proviso to section 194B of the Income-tax

Act, the collection shall be made at the rates specified in Part-II of the First Schedule, and shall be

increased by a surcharge, for purposes of the Union, calculated, in cases wherever prescribed, in the

manner provided therein.

(8) In cases in which tax has to be collected under section 206C of the Income-tax Act, the

collection shall be made at the rates specified in that section and shall be increased by a surcharge for

purposes of the Union, in the case of every company, other that a domestic company, calculated at the

rate of two and one-half percent, of such tax, where the amount or the aggregate of such amounts

collected and subject to the collection exceeds one crore rupees.

(9) Subject to the provisions of sub-section (10), in cases in which income-tax has to be charged

under sub-section (4) of section 172 or sub-section (2) of section 174 or section 174A or section 175 or

sub-section (2) of section 176 of the Income-tax Act or deducted from or paid on, income chargeable

under the head “Salaries” under section 192 of the said Act or in which the “advance tax” payable under

Chapter XVII-C of the said Act has to be computed at the rate or rates in force, such income-tax or, as the

case may be” advance tax” shall be so charged, deducted or computed at the rate or rates specified in

Part III of the First Schedule and such tax shall be increased by a surcharge, for purposes of the Union,

calculated in such cases and in such manner as provided therein:

Provided that in cases to which the provisions of Chapter XII or Chapter XII-A or section 115JB or

sub-section (1A) of section 161 or section 164 or section 164A or section 167B of the Income-tax Act

apply, “advance tax” shall be computed with reference to the rates imposed by this sub-section or the

rates as specified in that Chapter or section, as the case may be;

Provided further that the amount of “advance tax” computed in accordance with the provisions of

section 111A or section 112 of the Income-tax Act shall be increased by a surcharge, for purposes of the

Union, as provided in Paragraph E of Part III of the First Schedule pertaining to the case of a company:

Provided also that in respect of any income chargeable to tax under sections 115A, 115AB,

115AC, 115ACA, 115AD, 115B, 115BB, 115BBA, 115BBC, 115E and 115JB of the Income-tax Act,

“advance tax” computed under the first proviso shall be increased by a surcharge, for purposes of the

Union, calculated,-

(a) in the case of every domestic company, at the rate of ten per cent. of such “advance tax” where

the total income exceeds one crore rupees;

(b) in the case of every company, other than a domestic company, at the rate of two and one-half

percent, of such “advance tax” where the total income exceeds one crore rupees;

Provided also that in the case of every company having total income chargeable to tax under

section 115JB of the Income-tax Act, and such income exceeds one crore rupees, the total amount

payable as “advance tax” on such income and surcharge thereon, shall not exceed the total amount

payable as “advance tax” on a total income of one crore rupees by more than the amount of income that

exceeds one crore rupees.

(10) In cases to which Paragraph A of Part-III of the First Schedule applies, where the assessee

has, in the previous year, or if by virtue of any provision of the Income-tax Act, income-tax is to be

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charged in respect of the income of a period other than the previous year, in such other period, any net

agricultural income exceeding five thousand rupees, in addition to total income and the total income

exceeds one lakh sixty thousand rupees, then in charging income-tax under sub-section (2) of section

174 or section 174 A or section 175 or sub-section (2) of section 176 of the said Act or in computing the

“advance tax” payable under Chapter XVII-C of the said Act, at the rate or rates in force,-

(a) the net agricultural income shall be taken into account, in the manner provided in clause (b)

[that is to say, as if the net agricultural income were comprised in the total income after the first one lakh

sixty thousand rupees of the total income but without being liable to tax], only for the purpose of charging

or computing such income-tax- or, as the case may be, “advance tax” in respect of the total income; and

(b) such income-tax or, as the case may be, “advance tax” shall be so charged or computed as

follows;

(i) the total income and the net agricultural income shall be aggregated and the amount of income-

tax or “advance tax” shall be determined in respect of the aggregate income at the rates specified in the

said Paragraph A, as if such aggregate income were the total income;

(ii) the net agricultural income shall be increased by a sum of one lakh sixty thousand rupees, and

the amount of income-tax or “advance tax” shall be determined in respect of the net agricultural income as

so increased at the rates specified in the said Paragraph A, as if the net agricultural income were the total

income;

(iii) the amount of income-tax or “advance tax” determined in accordance with sub-clause (i) shall

be reduced by the amount of income-tax or as the case may be, “advance tax” determined in accordance

with sub-clause (ii )and the sum so arrived at shall be the income-tax or, as the case may be, “advance

tax” in respect of the total income:

Provided that in the case of every women, resident in India and below the age of sixty five years at

any time during the previous year, referred to in item (II) of Paragraph A of Part III of the first Schedule,

the provisions of this sub-section shall have effect as if for the words “one lakh sixty thousand rupees” the

words “one lakh ninety thousand rupees” had been substituted:

Provided further that in the case of every individual, being a resident in India, who is of the age of

sixty-five years or more at any time during the previous year, referred to in item (III) of Paragraph A of

Part III of the First Schedule, the provisions of this sub-section shall have effect as if for the words “one

lakh sixty thousand rupees” the words “two lakh forty thousand rupees” had been substituted.

(11) The amount of income-tax as specified in sub-sections (1) to (10) and as increased by the

applicable surcharge, for purposes of the Union, calculated in the manner provided therein, shall be

further increased by an additional surcharge, for purposes of the Union, to be called the “Education Cess

on income-tax” calculated at the rate of two per cent of such income-tax and surcharge so as to fulfill the

commitment of the Government to provide and finance universalised quality basic education:

Provided that nothing contained in this sub-section shall apply to cases in which tax is to be

deducted or collected under the sections of the Income-tax Act mentioned in sub-sections (5), (6), (7) and

(8), if the income subjected to deduction of tax at source or collection of tax at source is paid to a

domestic company and any other person who is resident in India.

(12) The amount of income-tax as specified in sub-sections (1) to (10) and as increased by the

applicable surcharge, for purposes of the Union, calculated in the manner provided therein, shall also be

increased by an additional surcharge, for purposes of the union, to be called the “Secondary and Higher

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Education Cess on income-tax” calculated at the rate of one per cent of such income-tax and surcharge

so as to fulfill the commitment of the Government to provide and finance secondary and higher education:

Provided that nothing contained in this sub-section shall apply to cases in which tax is to be

deducted or collected under the sections of the Income-tax Act mentioned in sub-sections (5), (6), (7) and

(8), if the income subjected to deduction of tax at source or collection of tax at source is paid to a

domestic company and any other person who is resident in India.

(13) For the purposes of this section and the First Schedule-,

(a) “domestic company” means an Indian Company or anyother company which, in respect of its

income liable to income-tax under the Income-tax Act, for the assessment year commencing on the 1^st

day of April, 2009, has made the prescribed arrangements for the declaration and payment within India of

the dividends (including dividends on preference shares) payable out of such income;

(b) “insurance commission” means any remuneration or reward, whether by way of commission or

otherwise, for soliciting or procuring insurance business (including business relating to the continuance,

renewal or revival of policies of insurance);

from whatever source derived, of that person computed in accordance with the rules contained in Part IV

of the First Schedule;

(d) all other words and expressions used in this section and the First Schedule but not defined in

this sub-section and defined in the Income-tax Act shall have the meanings respectively assigned to them

in that Act.

CHAPTER III

DIRECT TAXES

Income-tax

3. Amendment of section 2: In section 2 of the Income-tax Act-

(a) in clause (15), after the words “medical relief,” the words and brackets “preservation of

environment (including watersheds, forests and wildlife) and preservation of monuments or places or

objects of artistic or historic interest,” :shall be inserted;

(b) after clause (22AA), the following clause shall be inserted with effect from the 1^st day of April,

2010, namely:

(22AAA)”electoral trust” means a trust so approved by the Board in accordance with the scheme

made in this regard by the Central Government”

2010, namely:

(23) (i) “firm” shall have the meaning assigned to it in the Indian partnership Act, 1932,(9 of 1932)

and shall include a limited liability partnership as defined in the Limited Liability Partnership Act, 2008

(6 of 2009);

(ii) “partner” shall have the meaning assigned to it in the Indian Partnership Act, 1932, (9 of 1932)

and shall include,-

(a) any person who, being a minor, has been admitted to the benefits of partnership ; and

(b) a partner of a limited liability partnership as defined in the Limited Liability Partnership Act,

2008 (6 of 2009);

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(iii) “partnership” shall have the meaning assigned to it in the Indian Partnership Act, 1932,

(9 of 1932) and shall include a limited liability partnership as defined in the Limited Liability Partnership

Act, 2008 (6 of 2009),

(d) in clause (24),-

(i) in sub-clause (iia), after the word and figures “section 10” the words “or by an electoral trust”

shall be inserted with effect from the 1^st day of April, 2010;

(ii) after sub-clause (xiv), the following sub-clause shall be inserted with effect from the 1^st day of

October, 2009, namely:

“(xv) any sum of money or value of property referred to in clause (vii) of sub-section (2) of section

56’’,

(e) after clause (29B), the following clause shall be inserted, namely:-

“(29BA) “manufacture” with its grammatical variations, means a change in a non-living physical

object or article or thing,-

(a) resulting in transformation of the object or article or thing into a new and distanct object or

article or thing having a different name, character and use; or

(b) bringing into existence of a new and distinct object or article or thing with a different chemical

composition or integral structure’’,

(f) in clause (48),-

(i) in sub-clauses (a) and (b), after the words “public sector company”, the words “or scheduled

bank” shall respectively be inserted;

(ii) after clause (c), the following Explanation shall be inserted, namely:-

Explanation- For the purposes of this clause, the expression “schedule bank” shall have the

meaning assigned to it in clause (ii) of the Explanation to sub-clause (c) of clause (viia) of sub-section (1)

of section 36;

4. Amendment of section 10: In section 10 of the Income –tax Act-

(a) in clause (10C), after the second proviso, the following proviso shall be inserted with effect from

the 1^st day of April, 2010, namely:

“Provided also that where any relief has been allowed to an assessee under section 89 for any

assessment year in respect of any amount received or receivable on his voluntary retirement or

termination of service or voluntary separation, no exemption under this clause shall be allowed to him in

relation to such, or any other, assessment year,”

(b) in clause (23C), in the fourteenth proviso, for the words “made at any time during the financial

year immediately preceding the assessment year”, the words, figures and letters “made on or before the

30^th day of September of the relevant assessment year” shall be substituted;

Companies (Acquisition and Transfer of Undertakings) Act, 1980: (40 of 1980) the words and a bank

included in the category “other public sector banks” by the Reserve Bank of India” shall be inserted with

effect from the 1^st day of April, 2010;

(d) after clause (43), the following clause shall be inserted, namely:

“(44) any income received by any person for, or on behalf of, the New Pension System Trust

established on the 27^th day of February, 2008 under the provisions of the Indian Trusts Act, 1882’

(2 of 1882).’

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5. Amendment of section 10A : In section 10A of the Income-tax Act, in sub-section (1), in the

fourth proviso, for the figures, letters and words “1^st day of April, 2011” the figures, letters and words “1^st

day of April, 2012” shall be substituted.

6. Amendment of section 10AA: In section 10AA of the Income-tax Act, in sub-section (7), for the

words “by the assessee” occurring at the end, the words “by the undertaking” shall be substituted with

effect from the 1^st day of April, 2010.

7. Amendment of section 10B: In section 10B of the Income-tax Act, in sub-section (1), in the

third proviso, for the figures, letters and words “1^st day of April, 2011” the figures, letters and words” 1^st

day of April, 2012” shall be substituted.

8. Insertion of new section 13B: After section 13A of the Income-tax Act, the following section

shall be inserted with effect from the 1^st day of April, 2010, namely:

“13B. Special provisions relating to voluntary contributions received by electoral trust: Any

voluntary contributions received by an electoral trust shall not be included in the total income of the

previous year of such electoral trust if-

(a) such electoral trust distributes to any political party, registered under section 29A of the

Representation of the People Act, 1951 (43 of 1951), during the said previous year, ninety-five per cent of

the aggregate donations received by it during the said previous year along with the surplus, if any,

brought forward from any earlier previous year; and

(b) such electoral trust functions in accordance with the rules made by the Central Government”,

9. Amendment of section 17: In section 17 of the Income-tax Act, in clause (2), with effect from

the 1^st day of April, 2010-

(a) in sub-clause (v), for the words “annuity; and “ the word “annuity” shall be substituted;

(b) for sub-clause (vi), the following sub-clauses shall be substituted, namely;-

‘(vi) the value of any specified security or sweat equity shares allotted or transferred, directly or

indirectly, by the employer, or former employer, free of cost or at concessional rate to the assessee.

Explanation- For the purposes of this sub-clause,-

(a)”specified security” means the securities as defined in clause (h) of section 2 of the Securities

Contracts (Regulation) Act, 1956 (42 of 1956) and where employees’ stock option has been granted

under any plan or scheme therefor, includes the securities offered under such plan or scheme;

(b) “sweat equity shares” means equity shares issued by a company to its employees or directors

at a discount or for consideration other than cash for providing know-how or making available rights in the

nature of intellectual property rights or value additions, by whatever name called;

specified security or sweat equity shares, as the case may be on the date on which the option is

exercised by the assessee as reduced by the amount actually paid by, or recovered from, the assessee in

respect of such security or shares;

(d) “fair market value” means the value determined in accordance with the method as may be

prescribed;

(e) “option” means a right but not an obligation granted to an employee to apply for the specified

security or sweat equity shares at a predetermined price;

(vii) the amount of any contribution to an approved superannuation fund by the employer in respect

of the assessee, to the extent it exceeds one lakh rupees; and

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(viii) the value of any other fringe benefit or amenity as may be prescribed;

10. Amendment of section 28: In section 28 of the Income-tax Act, after clause (vi), the following

clause shall be inserted with effect from the 1^st day of April, 2010, namely:-

“(vii) any sum, whether received or receivable, in cash or kind, on account of any capital asset

(other than land or goodwill or financial instrument) being demolished destroyed, discarded or transferred,

if the whole of the expenditure on such capital asset has been allowed as a deduction under section

35AD’’,

11. Amendment of section 32: In section 32 of the Income-tax, Act, in sub-section (i), in

Explanation 3, for the words ‘the expressions “assets” and “block of assets” the words the expression

“assets” shall be substituted with effect from the 1^st day of April, 2010.

12. Amendment of section 35: In section 35 of the Income-tax Act, in sub-section (2AB), in

clause (1), for the words “the business of manufacture or production of any drugs pharmaceuticals,

electronic equipments, computers, telecommunication equipments, chemicals or any other article or thing

notified by the Board” the words “any business of manufacture or production of any article or thing, not

being an article or thing specified in the list of the Eleventh Schedule” shall be substituted with effect from

the 1^st day of April, 2010.

13. Insertion of new section 35AD: After section 35AC of the Income-tax Act, the following

section shall be inserted with effect from the 1^st day of April 2010, namely:

“35.AD. Deduction in respect of expenditure on specified business: (1) An assessee shall be

allowed a deduction in respect of the whole of any expenditure of capital nature incurred, wholly and

exclusively, for the purposes of any specified business carried on by him during the previous year in

which such expenditure is incurred by him;

Provided that the expenditure incurred, wholly and exclusively, for the purposes of any specified

business, shall be allowed as deduction during the previous year in which he commences operations of

his specified business, if-

(a) the expenditure is incurred prior to the commencement of its operations; and

(b) the amount is capitalised in the books of account of the assessee on the date of

commencement of its operations.

(2) This section applies to the specified business which fulfils all the following conditions, namely

(i) it is not set up by splitting up, or the reconstruction, of a business already in existence;

(ii) it is not set up by the transfer to the specified business of machinery or plant previously used

for any purpose;

(iii) where the business is of the nature referred to in sub-clause (iii) of clause (c) of sub-section

(8), such business,-

(a) is owned by acompany formed and registered in India under the Companies Act, 1956 (1 of

1956) or by a consortium of such companies or by an authority or a board or a corporation established or

constituted under any Central or State Act;

(b) has been approved by the Petroleum and Natural Gas Regulatory Board established under

sub-section (1) of section 3 of the Petroleum and Natural Gas Regulatory Board Act, 2006 (19 to 2006)

and notified by the Central Government in the Official Gazette in this behalf;

carrier basis by any person other than the assessee or an associated person; and

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(d) fulfils any other condition as may be prescribed.

(3) The assessee shall not be allowed any deduction in respect of the specified business under the

provisions of Chapter VIA under the heading “C-Deductions in respect of certain incomes”.

(4) No deduction in respect of the expenditure referred to in sub-section (1) shall be allowed to the

assessee under any other section in any previous year or under this section in any other previous year.

(5) The provisions of this section shall apply to the specified business referred to in sub-section (2)

if it commences its operations-

(a) on or after the 1^st day of April, 2007 where the specified business is in the nature of laying and

operating a cross-country natural gas pipeline network for distribution, including storage facilities being an

integral part of such network ; and

(b) on or after the 1^st day of April, 2009, in all other cases not falling under clause (a)

(6) The assessee carrying on the business of the nature referred to in clause (a) of sub-section (5)

shall be allowed, in addition to deduction under sub-section (1), a further deduction in the previous year

relevant to the assessment year beginning on the 1^st day of April, 2010, of an amount in respect of

expenditure of capital nature incurred during any earlier previous year, if-

(a) the business referred to in clause (a) of sub-section (5) has commenced its operation at any

time during the period beginning on or after the 1^st day of April, 2007 and ending on the 31^st day of March,

2009; and

(b) no deduction for such amount has been allowed or is allowable to the assessee in any earlier

previous year.

(7) The provisions contained in sub-section (6) of section 80A and the provisions of sub-sections

(7) and (10) of section 80-IA shall, so far as may be, apply to this section in respect of goods of services

or assets held for the purposes of the specified business.

(8) For the purposes of this section-,

(a) an “associated person”, in relation to the assessee, means a person.

(i) who participates, directly or indirectly, or through one or more intermediaries in the management

or control or capital of the assessee;

(ii) who holds, directly or indirectly, shares carrying not less than twenty-six per cent. of the voting

power in the capital of the assessee;

(iii) who appoints more than half of the Board of directors or members of the governing board, or

one or more executive directors or executive members of the governing board of the assessee; or

(iv) who guarantees not less than ten per cent of the total borrowings of the assessee;

(b) “cold chain facility” means a chain of facilities for storage or transportation of agricultural and

forest produce, meat and meat products, poultry, marine and dairy products, products of horticulture,

floriculture and apiculture and processed food items under scientifically controlled conditions including

refrigeration and other facilities necessary for the preservation of such produce;

(i) setting up and operating a cold chain facility;

(ii) setting up and operating a warehousing facility for storage of agricultural produce;

(iii) laying and operating a cross-country natural gas or crude or petroleum oil pipeline network for

distribution, including storage facilities being an integral part of such network;

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(d) any machinery or plant which was used outside India by any person other than the assessee

shall not be regarded as machinery or plant previously used for any purpose, if-

(i) such machinery or plant was not, at any time prior to the date of the installation by the

assessee, used in India;

(ii) such machinery or plant is imported into India from any country outside India; and

(iii) no deduction on account of depreciation in respect of such machinery or plant has been

allowed or is allowable under the provisions of this Act in computing the total income of any person for

any period prior to the date of installation of the machinery or plant by the assessee;

(e) where in the case of a specified business, any machinery or plant or any part thereof previously

used for any purpose is transferred to the specified business and the total value of the machinery or plant

or part so transferred does not exceed twenty per cent of the total value of the machinery or plant used in

such business, then for the purposes of clause (ii) of sub-section (2), the condition specified therein shall

be deemed to have been complied with;

(f) any expenditure of capital nature shall not include any expenditure incurred on the acquisition of

any land or good will or financial instrument;

14. Amendment of section 36: In section 36 of the Income-tax Act, in sub-section (1)-

(a) in clause (iiia), in the Explanation, in clause (i), after the words “public sector company” at both

the places where they occur, the words” or scheduled bank” shall be inserted;

(b) in clause (viii), in the Explanation, in clause (b), for sub-clause (i), the following sub-clause shall

be substituted with effect from the 1^st day of April, 2010, namely:

“(i) in respect of the specified entity referred to in sub-clause (i) or sub-clause (ii) or sub-clause(iii)

or sub-clause (iv) of clause (a), the business of providing long-term finance for-

(A) industrial or agricultural development ;

(B) development of infrastructure facility in India; or

15. Amendment of section 40: In section 40 of the Income-tax Act, in clause (b), in sub-clause

(v), for items (1) and (2) the following shall be substituted with effect from the 1^st day of April, 2010

namely:-

“(a) on the first Rs, .3,00,000 of the book

profit or in case of a loss

Rs. 1,50,000 or at the rate of 90 percent of

the book-profit, whichever is more;

(b) on the balance of the book-profit

at the rate of 60 per cent”

16. Amendment of section 40A: In section 40A of the Income-tax Act, in sub-section (3A), after

the proviso, the following proviso shall be inserted with effect from the 1^st day of October, 2009 namely:-

‘Provided further that in the case of payment made for plying, hiring or leasing goods carriages,

the provisions of sub-sections (3) and (3A) shall have effect as if for the words “twenty thousand rupees”

the words “thirty-five thousand rupees” had been substituted;

17. Amendment of section 43: In section 43 of the Income-tax Act, with effect from the 1^st day of

April, 2010-

(a) in clause (1), after Explanation 12, the following Explanation shall be inserted, namely-

“Explanation 13: -The actual cost of any capital asset on which deduction has been allowed or is

allowable to the assessee under section 35AD, shall be treated as nil-

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(a) in the case of such assessee; and

(b) in any other case if the capital asset is acquired or received-

(i) by way of gift or will or an irrevocable trust;

(ii) on any distribution on liquidation of the company; and

(iii) by such mode of transfer as is referred to in clauses (i),

(iv) (v), (vi), (vib), (xiii) and (xiv) of section 47;’

(b) in clause (6), after Explanation 6, the following Explanation shall be inserted, namely:-

Explanation 7- For the purposes, of this clause, where the income of an assessee is derived in

part from agriculture and in part from business chargeable to income-tax under the head “Profits and

gains of business or profession” for computing the written down value of assets acquired before the

previous year, the total amount of depreciation shall be computed as if the entire income is derived from

the business of the assessee under the head “Profits and gains of business or profession” and the

depreciation so computed shall be deemed to be the depreciation actually allowed under this Act;

18. Amendment of section 44AA: In section 44AA of the Income-tax Act, in sub-section (2), with

effect from the 1^st day of April, 2011-

(a) in clause (iii),

(i) for the words figures and letters “section 44AD or section 44AE or section 44AF” the word,

figures and letters “section 44AE” shall be substituted;

(ii) for the words “previous year” occurring at the end, the words “previous year or” shall be

substituted’

(b) after clause (iii), the following clause shall be inserted, namely:

“(iv) where the profits and gains from the business are deemed to be the frofits and gains of the

assessee under section 44AD and he has claimed such income to be lower than the profits and gains so

deemed to be the profits and gains of his business and his income exceeds the maximum amount which

is not chargeable to income-tax during such previous year’’,

19. Amendment of section 44AB: In section 44AB of the Income-tax Act, with effect from the 1^st

day of April, 2011-

(a) in clause (c)

(i) for the words, figures and letters “section 44AD or section 44AE or section 44AF” the word

figures and letters “section 44AE “ shall be substituted;

(ii) for the words “previous year” occurring at the end, the words “previous year; or shall be

substituted.

(b) after clause (c) the following clause shall be inserted, namely-

“(d) carrying on the business shall, if the profits and gains from the business are deemed to be the

profits and gains of such person under section 44AD and be has claimed such income to be lower than

the profits and gains so deemed to be the profits and gains of his business and his income exceeds the

maximum amount which is not chargeable to income-tax in any previous year’’

20. Substitution of new section for section 44AD : For section 44AD of the Income-tax Act, the

following section shall be substituted with effect from the 1^st day of April, 2011, namely:

‘44AD. Special provision for computing profits and gains of business on presumptive

basis: (1) Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an

eligible assessee engaged in an eligible business, a sum equal to eight per cent of the total turnover or

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gross receipts of the assessee in the previous year on account of such business or, as the case may be,

a sum higher than the aforesaid sum claimed to have been earned by the eligible assessee, shall be

deemed to be the profits and gains of such business chargeable to tax under the head “Profits and gains

of business or profession”.

(2) Any deduction allowable under the provisions of sections 30 to 38 shall, for the purposes of

sub-section (1), be deemed to have been already given full effect to and no further deduction under those

sections shall be allowed;

Provided that where the eligible assessee is a firm the salary and interest paid to its partners shall

be deducted from the income computed under sub-section (1) subject to the conditions and limits

specified in clause (b) of section 40.

(3) The written down value of any asset of an eligible business shall be deemed to have been

calculated as if the eligible assessee had claimed and had been actually allowed the deduction in respect

of the depreciation for each of the relevant assessment years.

(4) The provisions of Chapter XVII-C shall not apply to an eligible assessee in so far as they relate

to the eligible business.

(5) Notwithstanding anything contained in the foregoing provisions of this section, an eligible

assessee who claims that his profits and gains from the eligible business are lower than the profits and

gains specified in sub-section (1) and whose total income exceeds the maximum amount which is not

chargeable to income –tax, shall be required to keep and maintain such books of account and other

documents as required under sub-section (2) of section 44AA and get them audited and furnish a report

of such audit as required under section 44AB.

Explanation: For the purposes of this section-

(a) “eligible assessee” means,

(i) an individual, Hindu undivided family or a partnership firm, who is a resident, but not a limited

liability partnership firm as defined under clause (n) of sub-section (1) of section 2 of the Limited Liability

Partnership Act, 2008 (6 of 2009); and

(ii) who has not claimed deduction under any of the sections 10A, 10AA, 10B, 10BA or deduction

under any provisions of Chapter VIA under the heading ”C-Deductions in respect of certain incomes” in

the relevant assessment year;

(b) “eligible business” means,-

(i) any business except the business of plying, hiring or leasing goods carriages referred to in

section 44AE; and

(ii) whose total turnover or gross receipts in the previous year does not exceed an amount of forty

lakh rupees;

21. Amendment of section 44AE: In section 44AE of the Income-tax Act, for sub-section (2), the

following sub-section shall be substituted with effect from the 1^st day of April, 2011, namely:

“(2) For the purposes of sub-section (I), the profits and gains from each goods carriage,-

(i) being a heavy goods vehicle, shall be an amount equal to five thousand rupees for every month

or part of a month during which the heavy goods vehicle is owned by the assessee in the previous year or

an amount claimed to have been actually earned from such vehicle, whichever is higher:

(ii) other than a heavy goods vehicle, shall be an amount equal to four thousand five hundred

rupees for every month or part of a month during which the goods carriage is owned by the assessee in

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the previous year or an amount claimed to have been actually earned from such vehicle, whichever is

higher”

22. Amendment of section 44AF: In section 44AF of the Income-tax Act, after sub-section (5),

the following sub-section shall be inserted, namely:-

“(6) Nothing contained in this section shall apply to any assessment year beginning on or after the

1^st day of April, 2011”.

23. Amendment of section 49: In section 49 of the Income-tax Act-

(a) for sub-section (2AA), the following sub-section shall be substituted with effect from the 1^st day

of April, 2010, namely:

“(2AA) Where the capital gain arises from the transfer of specified security or sweat equity shares

referred to in sub-clause (vi) of clause (2) of section 17, the cost of acquisition of such security or shares

shall be the fair market value which has been taken into account for the purposes of the said sub-clause’”,

(b) after sub-section (3) the following sub-section shall be inserted with effect from the 1^st day of

October, 2009 namely:

“(4) Where the capital gain arises from the transfer of a property, the value of which has been

subject to income-tax under clause (vii) of sub-section (2) of section 56 the cost of acquisition of such

property shall be deemed to be the value which has been taken into account for the purposes of the said

clause (vii)”,

24. Amendment of section 50B: In section 50B of the Income-tax Act, in Explanation 2 with effect

from the 1^st day of April, 2010-

(i) in clause (a), the word “and” occurring at the end, shall be omitted;

(ii) for clause (b), the following clauses shall be substituted, namely:

“(b) in the case of capital assets in respect of which the whole of the expenditure has been allowed

or is allowable as a deduction under section 35AD, nil; and

25. Amendment of section 50C: In section 50C of the Income-tax Act, with effect from the 1^st day

of October, 2009-

(a) for the words “or assessed” wherever they occur, the words “or assessed or assessable” shall

be substituted;

(b) in sub-section (2), the Explanation shall be numbered as Explanation 1 thereof and after

Explanation 1 as so numbered, the following Explanation shall be inserted, namely:-

Explanation 2- For the purposes of this section, the expression “assessable” means the price

which the stamp valuation authority would have, notwithstanding anything to the contrary contained in any

other law for the time being in force, adopted or assessed, if it were referred to such authority for the

purposes of the payment of stamp duty;

26. Amendment of section 56: In section 56 of the Income-tax Act, in sub-section (2),-

(a) with effect from the 1^st day of October, 2009-

(i) in clause (vi), after the words, figures and letters “on or after the 1^st day of April, 2006” the

words, figures and letters “but before the 1^st day of October, 2009” shall be inserted;

(ii) after clause (vi), the following clause shall be inserted, namely:-

(vii) where an individual or a Hindu undivided family receives, in any previous year, from any person or

persons on or after the 1^st day of October, 2009-

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(a) any sum of money, without consideration, the aggregate value of which exceeds fifty thousand

rupees, the whole of the aggregate value of such sum;

(b) any immovable property,

(i) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp

duty value of such property;

(ii) for a consideration which is less than the stamp duty value of the property by an amount

exceeding fifty thousand rupees, the stamp duty value of such property as exceeds such consideration;

(i) without consideration, the aggregate fair market value of which exceeds fifty thousand rupees,

the whole of the aggregate fair market value of such property;

(ii) for a consideration which is less than the aggregate fair market value of the property by an

amount exceeding fifty thousand rupees, the aggregate fair market value of such property as exceeds

such consideration:

Provided that where the stamp duty value of immovable property as referred to in sub-clause (b) is

disputed by the assessee on grounds mentioned in sub-section (2) of section 50C, the Assessing Officer

may refer the valuation of such property to a Valuation Officer, and the provisions of section 50C and sub-

section (15) of section 155 shall, as far as may be, apply in relation to the stamp duty value of such

property for the purposes of sub-clause

(b) as they apply for valuation of capital asset under those sections:

Provided further that this clause shall not apply to any sum of money or any property received-

(a) from any relative; or

(b) on the occasion of the marriage of the individual ;or

(d) in contemplation of death of the payer or donor, as the case may be; or

(e) from any local authority as defined in the Explanation to clause (20) of section 10 :or

(f) from any fund or foundation or university or other educational institution or hospital or other

medical institution or any trust or institution referred to in clause (23C) of section 10:or

(g) from any trust or institution registered under section 12AA.

Explanation:- For the purposes of this clause,-

(a) “assessable” shall have the meaning assigned to it in Explanation 2 to sub-section (2) of

section 50C;

(b) “fair market value” of a property other than an immovable property means the value determined

in accordance with the method as may be prescribed;

(14) of section 2;

(d) “property” means-

(i) immovable property being land or building or both;

(ii) shares and securities;

(iii) jewellery;

(iv) archaeological collections;

(v) drawings;

(vi) paintings;

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(vii) sculptures; or

(viii) any work of art;

(e) “relative” shall have the meaning assigned to it in the Explanation to clause (vi) of sub-section

(2) of this section;

(f) “stamp duty value” means the value adopted or assessed or assessable by any authority of the

Central Government or a State Government for the purpose of payment of stamp duty in respect of an

immovable property;

(b) after clause (vii) as so inserted, the following clause shall be inserted with effect from the 1^st

day of April, 2010, namely;

“(viii) income by way of interest received on compensation or on enhanced compensation referred

to in clause (b) of section 145A”,

27. Amendment of section 57: In section 57 of the Income-tax Act, offter clause (iii)the following

clause shall be inserted at the end with effect from the 1^st day of April, 2010 namely:

“(iv) in the case of income of the nature referred to in clause (viii) of sub-section (2) of section 56, a

deduction of a sum equal to fifty percent of such income and no deduction shall be allowed under any

other clause of this section”,

28. Insertion of new section 73A : After section 73 of the Income-tax Act, the following section

shall be inserted with effect from the 1^st day of April, 2010, namely:-

“73A. Carry forward and set off of losses by specified business: (1) Any loss, computed in

respect of any specified business referred to in section 35AD shall not be set off except against profits

and gains, if any, of any other specified business.

(2) Where for any assessment year any loss computed in respect of the specified business

referred to in sub-section (1) has not been wholly set off under sub-section (1), so much of the loss as is

not so set off or the whole loss where the assessee has no income from any other specified business,

shall subject to the other provisions of this Chapter, be carried forward to the following assessment year,

and-

(i) it shall be set off against the profits and gains, if any, of any specified business carried on by

him assessable for that assessment year; and

(ii) if the loss can not be wholly so set off, the amount of loss not so set off shall be carried forward

to the following assessment year and so on”,

29. Amendment of section 80A: In section 80A of the Income-tax Act,

(a) after sub-section (3), the following sub-sections shall be inserted and shall be deemed to have

been inserted with effect from the 1^st day of April, 2003, namely:-

“(4) Notwithstanding anything to the contrary contained in section 10A or section 10AA or section

10B or section 10BA or in any provisions of this Chapter under the heading “C-Deductions in respect of

certain incomes, where in the case of an assessee, any amount of profits and gains of an undertaking or

unit or enter prise or eligible business is claimed and allowed as a deduction under any of those

provisions for any assessment year, deduction in respect of, and to the extent of such profits and gains

shall not be allowed under any other provisions of this Act for such assessment year and shall in no case

exceed the profits and gains of such undertaking or unit or enterprise or eligible business, as the case

may be.

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(5) Where the assessee fails to make a claim in his return of income for any deduction under

section 10A or section 10AA or section 10B or section 10BA or under any provision of this Chapter under

the heading “C-Deductions in respect of certain incomes” no deduction, shall be allowed to him there

under “,

(b) after sub-section (5) as so inserted, the following sub-section shall be inserted, namely:

(6) Notwithstanding anything to the contrary contained in section 10A or section 10AA or section

10B or section 10BA or in any provisions of this Chapter under the heading “C-Deductions in respect of

certain incomes” where any goods or services held for the purposes of the undertaking or unit or

enterprise or eligible business are transferred to any other business carried on by the assessee or where

any goods or services held for the purposes of any other business carried on by the assessee are

transferred to the undertaking or unit or enterprise or eligible business and, the consideration, if any, for

such transfer as recorded in the accounts of the undertaking or unit or enterprise or eligible business does

not correspond to the market value of such goods or services as on the date of the transfer, then, for the

purposes of any deduction under this chapter, the profits and gains of such undertaking or unit or

enterprise or eligible business shall be computed as if the transfer, in either case, had been made at the

market value of such goods or services as on that date.

Explanation : For the purposes of this sub-section ,the expression “market value”-

(i) in relation to any goods or services sold or supplied, means the price that such goods or

services would fetch if these were sold by the undertaking or unit or enterprise or eligible business in the

open market, subject to statutory or regulatory restrictions, if any;

(ii) in relation to any goods or services acquired, means the price that such goods or services

would cost if these were acquired by the undertaking or unit or enterprise or eligible business from the

open market subject to statutory or regulatory restrictions, if any;

30. Amendment of section 80CCD: In section 80CCD of the Income-tax Act,

(a) in sub-section (1),

(i) in the opening portion, after the words, figures and letters “where an assessee, being an

individual employed by the Central Government or any other employer on or after the 1^st day of January,

2004,’ the words “or any other assessee, being an individual” shall be inserted;

(ii) for the words “as does not exceed ten per cent, of his salary in the previous year”, the following

words shall be substituted, namely:-

“as does not exceed,

(a) in the case of an employee, ten per cent, of his salary in the previous year; and

(b) in any other case, ten per cent of his gross total income in the previous year;

(b) after sub-section (4), the following sub-section shall be inserted, namely:

“(5) For the purposes of this section ,the assessee shall be deemed not to have received any

amount in the previous year if such amount is used for purchasing an annuity plan in the same previous

year”

31. Amendment of section 80DD: In section 80DDof the Income-tax Act, in sub-section (1) in the

proviso, for the words “seventy-five thousand rupees” the words “one hundred thousand rupees” shall be

substituted with effect from the 1^st day of April, 2010.

32. Amendment of section 80E: In section 80E of the Income –tax Act, in sub-section (3), with

effect from the 1^st day of April, 2010-

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(i) for clause (c) the following clause shall be substituted, namely:

‘(c) “higher education” means any course of study pursued after passing the Senior Secondary

Examination or its equivalent from any school, board or university recognised by the Central Government

or State Government or local authority or by any other authority authorised by the Central Government or

State Government or local authority to do so’’

(ii) for clause (e), the following clause shall be substituted, namely:-

“(e) “relative” in relation to an individual, means the spouse and children of that individual or the

student for whom the individual is the legal guardian;

33. Amendment of section 80G: In section 80G of the Income-tax, Act, in sub-section (5)

(a) in clause (v) the word “and” occurring at the end shall be omitted;

(b) in clause (vi), for the words “made in this behalf” the words “made in this behalf and “shall be

substituted;

(d) after clause (vi),the following clause shall be inserted, namely:-

“(vii) where any institution or fund had been approved under clause (vi) for the previous year

beginning on the 1^st day of April, 2007 and ending on the 31^st day of March, 2008 such institution or fund

shall, for the purposes of this section and notwithstanding anything contained in the proviso to clause (15)

of section 2, be deemed to have been,-

(a) established for charitable purposes for the previous year beginning on the 1^st day of April, 2008

and ending on the 31^st day of March, 2009; and

(b) approved under the said clause (vi) for the previous year beginning on the 1^st day of April, 2008

and ending on the 31^st day of March, 2009’’,

34. Amendment of section 80GGB: In section 80GGB of the Income-tax Act, after the words

“political party” the words “or an electoral trust” shall be inserted with effect from the 1^st day of April,2010.

35. Amendment of section 80GGC: In section 80GGC of the Income-tax Act, for the words “to a

political party” the words “to a political party or an electoral trust” shall be substituted with effect from the

1^st day of April, 2010.

36. Amendment of section 80-1A: In section 80-1A of the Income-tax, Act,-

(a) in sub-section (2), the words “or lays and begins to operate a cross-country natural gas

distribution network” shall be omitted with effect from the 1^st day of April, 2010;

(b) in sub-section (3), the words, brackets and letters “or clause (vi)” shall be omitted with effect

from the 1^st day of April, 2010;

(A) in clause (iii), in the second proviso, for the words, figures and letters “the 31^st day of March,

2009” the words, figures and letters “the 31^st day of March, 2011” shall be substituted;

(B) in clause (iv), for the words, figures and letters “the 31^st day of March, 2010” wherever they

occur, the words, figures and letters “the 31^st day of march 2011” shall be substituted;

figures, letters and words “31^st day of March, 2011” shall be substituted and shall be deemed to have

been substituted with effect from the 1^st day of April, 2008;

(D) clause (vi) shall be omitted with effect from the 1^st day of April, 2010;

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(d) after sub-section (13), for the Explanation, the following Explanation shall be substituted and

shall be deemed to have been substituted with effect from the 1^st day of April 2000, namely:

“Explanation: For the removal of doubts, it is hereby declared that nothing contained in this

section shall apply in relation to a business referred to in sub-section (4) which is in the nature of a works

contract awarded by any person (including the Central or State Government) and executed by the

undertaking or enterprise referred to in sub-section (1)”

37. Amendment of section 80-IB: In section 80-IB of the Income-tax Act,-

(a) for sub-section (9), the following sub-section shall be substituted and shall be deemed to have

been substituted with effect from the 1^st day of April, 2000, namely:-

‘(9) The amount of deduction to an undertaking shall be hundred per cent of the profits for a period

of seven consecutive assessment years, including the initial assessment year, if such undertaking fulfils

any of the following namely:

(i) is located in North-Eastern Region and has begun or begins commercial production of mineral

oil before the 1^st day of April, 1997;

(ii) is located in any part of India and has begun or begins commercial production of mineral oil on

or after the 1^st day of April, 1997;

(iii) is engaged in refining of mineral oil and begins such refining on or after the 1^st day of October,

1998.

Explanation: For the purposes of claiming deduction under this sub-section, all blocks licensed

under a single contract, which has been awarded under the New Exploration Licensing Policy announced

by the Government of India vide Resolution No. O-19018/22/95-ONGDO.VL dated 10^th February, 1999 or

has been awarded in pursuance of any law for the time being in force or has been awarded by the Central

or a State Government in any other manner, shall be treated as a single “undertaking”’

(b) in sub-section (9), as so substituted,-

(A) in clause (iii), after the words, figures and letters “the 1^st day of October, 1998” the words,

figures and letters “but not later than the 31^st day of March, 2012” shall be inserted;

(B) after clause (iii), the following clauses shall be inserted with effect from the 1^st day of April,

2010, namely:-

(iv) is engaged in commercial production of natural gas in blocks licensed under the VIII Round of

bidding for award of exploration contracts (hereafter referred to as “NELP-VIII”) under the New

Exploration Licensing Policy announced by the Government of India vide Resolution No-O-19018/22/95-

ONG. DO. VL, dated 10^th February, 1999 and begins commercial production of natural gas on or after the

1^st day of April, 2009;

(v) is engaged in commercial production of natural gas in blocks licensed under the IV Round of

bidding for award of exploration contracts for Coal Bed Methane blocks and begins commercial

production of natural gas on or after the 1^st day of April, 2009”;

(i) in the opening portion, for the figures, letters and words “31^st day of March, 2007”, the figures,

letters and words “31^st day of March , 2008 shall be substituted;

(ii) in clause (c), for the words “any other place; and the words “any other place” shall be

substituted with effect from the 1^st day of April, 2010;

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(iii) after clause (d), the following clauses shall be inserted with effect from the 1^st day of April,

2010, namely:-

“(e) not more than one residential unit in the housing project is allotted to any person not being an

individual; and

(f) in a case where a residential unit in the housing project is allotted to a person being an

individual, no other residential unit in such housing project is allotted to any of the following persons,

namely:-

(i) the individual or the spouse or the minor children of such individual,

(ii) the Hindu undivided family in which such individual is the karta,

(iii) any person representing such individual, the spouse or the minor children of such individual or

the Hindu undivided family in which such individual is the karta”

(iv) the following Explanation shall be inserted and shall be deemed to have been inserted with

effect from the 1^st day of April, 2001, namely:-

“Explanation.- For the removal of doubts, it is hereby declared that nothing contained in this sub-

section shall apply to any undertaking which executes the housing project as a works contract awarded by

any person (including the Central or State Government)”

(d) in sub-section (11A), with effect from the 1^st day of April, 2010,-

(i) after the words “vegetables or” the following words shall be inserted, namely:-

“meat and meat products or poultry or marine or dairy products or”;

(ii) the following proviso shall be inserted namely:

“Provided that the provisions of this section shall not apply to an undertaking engaged in the

business of processing, preservation and packaging of meat or meat products or poultry or marini or dairy

products, if it begins to operate such business before the 1^st day of April, 2009’’

38. Amendment of section 80U: In section 80U of the Income-tax Act, in sub-section (1), after

the proviso, the following proviso shall be inserted with effect from the 1^st day of April, 2010, namely:

“Provided further that for the assessment years beginning on or after the 1^st day of April, 2010, the

provisions of the first proviso shall have effect as if for the words “seventy-five thousand rupees” the

words “one lakh rupees” had been substituted,

39. Amendment of section 89: In section 89 of the Income-tax Act, the following proviso shall be

inserted with effect from the 1^st day of April, 2010, namely:-

“Provided that no such relief shall be granted in respect of any amount received or receivable by

an assessee on his voluntary retirement or termination of his service, in accordance with any scheme or

schemes of voluntary retirement or in the case of a public sector company referred to in sub-clause(i) of

clause (10C) of section 10, a scheme of voluntary separation, if an exemption in respect of any amount

received or receivable on such voluntary retirement or termination of his service or voluntary separation

has been claimed by the assessee under clause (10C) of section 10 in respect of such, or any other

assessment year”,

40. Substitution of new section 90 : For section 90 of the Income-tax Act, the following section

shall be substituted with effect from the 1^st day of October, 2009, namely:-

“90. Agreement with foreign countries or specified territories: (1) The Central Government

may enter into an agreement with the Government of any country outside India or specified territory

outside India,

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(a) for the granting of relief in respect of-

(i) income on which have been paid both income-tax under this Act and income-tax in that country

or specified territory, as the case may be, or

(ii) income-tax chargeable under this Act and under the corresponding law in force in that country

or specified territory, as the case may be, to promote mutual economic relations, trade and investment, or

(b) for the avoidance of double taxation of income under this Act and under the corresponding law

in force in that country or specified territory, as the case may be, or

chargeable under this Act or under the corresponding law in force in that country or specified territory, as

the case may be, or investigation of cases of such evasion or avoidance, or

(d) for recovery of income-tax under this Act and under the corresponding law in force in that

country or specified territory, as the case may be, and may, by notification in the Official Gazette, make

such provisions as may be necessary for implementing the agreement.

(2) Where the Central Government has entered into an agreement with the Government of any

country outside India or specified territory outside India, as the case may be under sub-section (1) for

granting relief of tax, or as the case may be, avoidance of double taxation, then, in relation to the

assessee to whom such agreement applies, the provisions of this Act shall apply to the extent they are

more beneficial to that assessee.

(3) Any term used but not defined in this Act or in the agreement referred to in sub-section (1)

shall, unless the context otherwise requires, and is not inconsistent with the provisions of this Act or the

agreement, have the same meaning as assigned to it in the notification issued by the Central Government

in the Official Gazette in this behalf.

Explanation1: For the removal of doubts, it is hereby declared that the charge of tax in respect of

a foreign company at a rate higher than the rate at which a domestic company is chargeable, shall not be

regarded as less favourable charge or levy of tax in respect of such foreign company.

Explanation 2: For the purposes of this section, “specified territory” means any area outside India

which may be notified as such by the Central Government’

41. Amendment of section 92C: In section 92C of the Income-tax Act, in sub-section (2), for the

proviso, the following provisos shall be substituted with effect from the 1^st day of October, 2009, namely:

“Provided, that where more than one price is determined by the most appropriate method, the

arm’s length price shall be taken to be the arithmetical mean of such prices:

Provided further that if the variation between that arm’s length price so determined and price at

which the international transaction has actually been undertaken does not exceed five per cent of the

latter, the price at which the international transaction has actually been undertaken shall be deemed to be

the arm’s length price”,

42. Insertion of new section 92CB: After section 92CA of the Income-tax Act, the following

section shall be inserted, namely:

“92CB. Power of Board to make safe harbour rules: (1) The determination of arm’s length price

under section 92 C or section 92CA shall be subject to safe harbour rules.

(2) The Board may, for the purposes of sub-section (1), make rules for safe harbour.

Explanation: For the purposes of this section, “safe harbour” means circumstances in which the

income-tax authorities shall accept the transfer price declared by the assessee’,

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43. Amendment of section 115BBC: In section 115BBC of the Income-tax Act, in sub-section (1),

with effect from the 1^st day of April, 2010:-

(a) for clause (i), the following clause shall be substituted, namely:

“(i) the amount of income-tax calculated at the rate of thirty per cent on the aggregate of

anonymous donations received in excess of the higher of the following, namely:

(A) five per cent, of the total donations received by the assessee; or

(B) one lakh rupees; and

(b) for clause (ii), the following clause shall be substituted, namely:-

(ii) the amount of income-tax with which the assessee would have been chargeable had his total

income been reduced by the aggregate of anonymous donations received’’,

44. Amendment of section 115JA: In section 115JA of the Income-tax Act, in sub-section (2),

after the second proviso, in the Explanation, after clause (f), for the words, brackets and letters “if any

amount referred to in clauses (a) to (f) is debited to the profit and loss account, and as reduced by, -“ the

following shall be substituted and shall be deemed to have been substituted with effect from the 1^st day of

April, 1998, namely:

“(g) the amount or amounts set aside as provision for diminution in the value of any asset,

if any amount referred to in clauses (a) to (g) is debited to the profit and loss account, and as

reduced by-

45. Amendment of section 115JAA: In section 115JAA of the Income-tax Act, in sub-section

(3A), for the words “seventh assessment year” the words “tenth assessment year” shall be substituted

with effect from the 1^st day of April, 2010.

46. Amendment of section 115JB: In section 115JB of the Income-tax Act,-

(a) in sub-section (I), with effect from the 1^st day of April ,2010-

(i) for the words, figures and letters “the 1^st day of April, 2007” the words, figures and letters” the 1^st

day of April, 2010” shall be substituted;

(ii) for the words “ten per cent” at both the places where they occur, the words “fifteen per cent”

shall be substituted;

(b) in sub-section (2), after the second proviso, in Explanation 1, after clause (h), for the words,

brackets and letters “if any amount referred to in clauses (a) to (h) is debited to the profit and loss

account, and as reduced by-“ the following shall be substituted and shall be deemed to have been

substituted with effect from the 1^st day of April, 2001, namely:-

“(1) the amount or amounts set aside as provision for diminution in the value of any asset,

if any amount referred to in clauses (a) to (i) is debited to the profit and loss account, and as

reduced by-,

47. Amendment of section 115-O: In section 115-O of the Income-tax Act, for sub-section (1A),

the following shall be substituted, namely:-

“(1A) The amount referred to in sub-section (1) shall be reduced by-,

(i) the amount of dividend, if any, received by the domestic company during the financial year, if-

(a) such dividend is received from its subsidiary;

(b) the subsidiary has paid tax under this section on such dividend; and

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Provided that the same amount of dividend shall not be taken into account for reduction more than

once;

(ii) the amount of dividend, if any, paid to any person for, or on behalf of the New Pension System

Trust referred to in clause (44) of section 10.

Explanation:- For the purposes of this sub-section, a company shall be a subsidiary of another

company, if such other company, holds more than half in nominal value of the equity share capital of the

company’’,

48. Amendment of section 115WE: In section 115WE of the Income-tax, Act, in sub-section (IB),

for the words, figures and letters” after the 31^st day of March, 2009” the words, figures and letters” after

the 31^st day of March, 2010” shall be substituted.

49. Insertion of new section 115WM: After section 115WL of the Income-tax Act, the following

section shall be inserted, namely:

“115WM: Chapter XII-H not to apply after a certain date: Nothing contained in this Chapter

shall apply, in respect of any assessment for the assessment year commencing on the 1^st day of April,

2010 or any subsequent assessment year”,

50. Amendment of section 131: In section 131 of the Income-tax Act, in sub-section (1), for the

words “and Chief Commissioner or Commissioner” the words “Chief Commissioner or Commissioner and

the Dispute Resolution Panel referred to in clause (a) of sub-section (15) of section 144C” shall be

substituted with effect from the 1^st day of October, 2009.

51. Amendment of section 132: In section 132 of the Income-tax Act,

(a) in sub-section (1),-

(i) for the words “Where the Director General or Director or the Chief Commissioner or

Commissioner or any such Joint Director or Joint Commissioner as may be empowered in this behalf by

the Board” the words “Where the Director General or Director or the Chief Commissioner or

Commissioner or Additional Director or Additional Commissioner “shall be substituted and shall be

deemed to have been substituted with effect from the 1^st day of June, 1994;

(ii) after the words “Where the Director General or Director or the Chief Commissioner or

Commissioner or Additional Director or Additional Commissioner” as so substituted, the words “or Joint

Director or Joint Commissioner” shall be inserted and shall be deemed to have been inserted with effect

from the 1^st day of October, 1998;

(iii) in clause (A), after the words “,may authorise any” the words “Additional Director or Additional

Commissioner or” shall be inserted and shall be deemed to have been inserted with effect from the 1^st day

of June 1994;

(iv) in clause (B), after the word “such” the words “Additional Director or Additional Commissioner

or “ shall be inserted and shall be deemed to have been inserted with effect from the 1^st day of June,

1994;

(v) after the third proviso, the following proviso shall be inserted, namely:

“Provided also that no authorisation shall be issued by the Additional Director or Additional

Commissioner or Joint Director or Joint Commissioner on or after the 1^st day of October, 2009 unless he

has been empowered by the Board to do so”,

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(b) in sub-section (1A);

(i) for the words “Commissioner or any such Joint Director or Joint Commissioner as may be

empowered in this behalf by the Board” the words “Commissioner or Additional Director or Additional

Commissioner” shall be substituted and shall be deemed to have been substituted with effect from the 1^st

day of June, 1994;

(ii) after the words “Commissioner or Additional Director or Additional Commissioner” as so

substituted the words “or Joint Director or Joint Commissioner” shall be inserted and shall be deemed to

have been inserted with effect from the 1^st day of October, 1998.

52. Amendment of section 132A: In section 132A of the Income-tax Act, in sub-section (I), after

clause (c), after the words “Chief Commissioner or Commissioner may authorise any” the words

“Additional Director, Additional Commissioner”, shall be inserted and shall be deemed to have been

inserted with effect from the 1^st day of June, 1994.

53. Amendment of section 139A: In section 139A of Income-tax Act, with effect from the 1^st day

of October, 2009-

(a) in sub-section (5B), in clause (iv), the word “quarterly” shall be omitted;

(b) in sub-section (5D), in clause (iii) the word “quarterly” shall be omitted;

54. Amendment of section 140: In section 140 of the Income –tax Act, after clause (cc), the

following clause shall be inserted with effect from the 1^st day of April, 2010 namely:-

“(cd) in the case of a limited liability partnership, by the designated partner thereof, or where for

any unavoidable reason such designated partner is not able to sign and verify the return, or where there is

no designated partner as such, by any partner thereof”.

55. Amendment of section 143: In section 143 of the Income-tax Act, in sub-section (1B), for the

words, figures and letters : after the 31^st day of March, 2009” the words, figures and letters “after the 31^st

day of March, 2010” shall be substituted.

56. Insertion of new section 144C: After section 144B of the Income-tax Act, the following

section shall be inserted, namely:-

“144C. Reference to Dispute Resolution Panel: (1) The Assessing Officer shall, notwithstanding

anything to the contrary contained in this Act, in the first, instance, forward a draft of the proposed order of

assessment (hereafter in this section referred to as the draft order) to the eligible assessee if he proposes

to make, on or after the 1^st day of October, 2009, any variation in the income or loss returned which is

prejudicial to the interest of such assessee.

(2) On receipt of the draft order, the eligible assessee shall within thirty days of the receipt by him

of the draft order,-

(a) file his acceptance of the variations to the Assessing Officer; or

(b) file his objections, if any, to such variation with,-

(i) the Dispute Resolution Panel’ and

(ii) the Assessing Officer,

(3) The Assessing Officer shall complete the assessment on the basis of the draft order, if-

(a) the assessee intimates to the Assessing Officer the acceptance of the variation; or

(b) no objections are received within the period specified in sub-section (2).

(4) The Assessing Officer shall, notwithstanding anything contained in section 153, pass the

assessment order under sub-section (3) within one month from the end of the month in which-

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(a) the acceptance is received; or

(b) the period of filing of objections under sub-section (2) expires.

(5) The Dispute Resolution Panel shall, in a case where any objection is received under sub-

section (2), issue such directions, as it thinks fit, for the guidance of the Assessing Officer to enable him to

complete the assessment.

(6) The Dispute Resolution Panel shall issue the directions referred to in sub-section (5), after

considering the following, namely-

(a) draft order;

(b) objections filed by the assessee;

(d) report, if any, of the Assessing Officer, Valuation Officer or Transfer Pricing Officer or any other

authority;

(e) records relating to the draft order;

(f) evidence collected by, or caused to be collected by, it; and

(g) result of any enquiry made by, or caused to be made by, it.

(7) The Dispute Resolution Panel may, before issuing any directions referred to in sub-section (5)-

(a) make such further enquiry, as it thinks fit ;or

(b) cause any further enquiry to be made by any income-tax authority and report the result of the

same to it.

(8) The Dispute Resolution Panel may confirm, reduce or enhance the variations proposed in the

draft order so, however that it shall not set aside any proposed variation or issue any direction under sub-

section (5) for further enquiry and passing of the assessment order.

(9) If the members of the Dispute Resolution Panel differ in opinion on any point, the point shall be

decided according to the opinion of the majority of the members.

(10) Every direction issued by the Dispute Resolution Panel shall be binding on the Assessing

Officer.

(11) No direction under sub-section (5) shall be issued unless an opportunity of being heard is

given to the assessee and the Assessing Officer on such directions which are prejudicial to the interest of

the assessee or the interest of the revenue, respectively.

(12) No direction under sub-section (5) shall be issued after nine months from the end of the

month in which the draft order is forwarded to the eligible assessee.

(13) Upon receipt of the directions issued under sub-section (5), the Assessing Officer shall, in

conformity with the directions, complete, notwithstanding anything to the contrary contained in section

`153, the assessment without providing any further opportunity of being heard to the assessee, within one

month from the end of the month in which such direction is received.

(14) The Board may make rules for the purposes of the efficient functioning of the Dispute

Resolution Panel and expeditions disposal of the objections filed under sub-section (2) by the eligible

assessee.

(15) For the purposes of this section,-

(a) “Dispute Resolution Panel” means a collegium comprising of three Commissioners of

Income-tax constituted by the Board for this purpose;

(b) “eligible assessee” means-

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(i) any person in whose case the variation referred to in sub-section (1) arises as a

consequence of the order of the Transfer Pricing Officer passed under sub-section (3) of section 92CA;

and

(ii) any foreign company’,

57. Substitution of new section for section 145A: For section 145A of the Income-tax Act, the

following section shall be substituted with effect from the 1^st day of April, 2010, namely:

‘145A. Method of accounting in certain cases: Notwithstanding anything to the contrary

contained in section 145,-

(a) the valuation of purchase and sale of goods and inventory for the purposes of determining the

income chargeable under the head “Profits and gains of business or profession” shall be-

(i) in accordance with the method of accounting regularly employed by the assessee; and

(ii) further adjusted to include the amount of any tax, duty cases or fee (by whatever name

called) actually paid or incurred by the assessee to bring the goods to the place of its location and

conditions as on the date of valuation.

Explanation:- For the purposes of this section , any tax, duty cess or fee (by whatever name

called) under any law for the time being in force, shall include all such payment notwithstanding any right

arising as a consequence to such payment.

(b) interest received by an assessee on compensation or on enhanced compensation, as the case

may be, shall be deemed to be the income of the year in which it is received;

58. Amendment of section 147: In section 147 of the Income-tax Act, after Explanation 2, the

following Explanation shall be inserted and shall be deemed to have been inserted with effect from the 1^st

day of April, 1989, namely:-

“Explanation 3- For the purposes of assessment or reassessment under this section, the

Assessing Officer may assess or reassess the income in respect of any issue, which has escaped

assessment, and such issue comes to his notice subsequently in the course of the proceedings under this

section ,notwithstanding that the reasons for such issue have not been included in the reasons recorded

under sub-section (2) of section 148”,

59. Insertion of new section 167C: After section 167B of the Income-tax Act, the following

section shall be inserted with effect from the 1^st day of April, 2010, namely:-

“167C. Liability of partners of limited liability partnership in liquidation: Notwithstanding

anything contained in the Limited Liability partnership Act, 2008, where any tax due from a limited liability

partnership in respect of any income of any previous year or from any other person in respect of any

income of any previous year during which such other person was a limited liability partnership cannot be

recovered, in such case, every person who was a partner of the limited liability partnership at any time

during the relevant previous year, shall be jointly and severally liable for the payment of such tax unless

he proves that the non-recovery cannot be attributed to any gross neglect, misfeasance or breach of duty

on his part in relation to the affairs of the limited liability partnership”.

60. Amendment of section 194A: In section 194A of the Income-tax Act, in sub-section (3), in

clause (x), after the words “public sector company” at both the places where they occur, the words “or

scheduled bank” shall be inserted.

61. Substitution of new section for section 194C: For section 194C of the Income-tax Act, the

following section shall be substituted with effect from the 1^st day of October, 2009 namely:-

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“194C. Payments to contractors: (1) Any person responsible for paying any sum to any resident

(hereafter in this section referred to as the contractor) for carrying out any work (including supply of labour

for carrying out any work) in pursuance of a contract between the contractor and a specified person shall,

at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash

or by issue or a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to-

(i) one per cent where the payment is being made or credit is being given to an individual or a

Hindu undivided family:

(ii) two per cent where the payment is being made or credit is being given to a person other than

an individual or a Hindu undivided family,

of such sum as income-tax on income comprised therein.

(2) Where any sum referred to in sub-section (1) is credited to any account, whether called

“Suspense account” or by any other name, in the books of account of the person liable to pay such

income, such crediting shall be deemed to be credit of such income to the account of the payee and the

provisions of this section shall apply accordingly.

(3) Where any sum is paid or credited for carrying out any work mentioned in sub-clause (e) of

clause (iv) of the Explanation, tax shall be deducted at source-

(i) on the invoice value excluding the value of material, if such value is mentioned separately in the

invoice; or

(ii) on the whole of the invoice value, if the value of material is not mentioned separately in the

invoice.

(4) No individual or Hindu undivided family shall be liable to deduct income-tax on the sum credited

or paid to the account of the contractor where such sum is credited or paid exclusively for personal

purposes of such individual or any member of Hindu undivided family;

(5) No deduction shall be made from the amount of any sum credited or paid or likely to be

credited or paid to the account of, or to the contractor, if such sum does not exceed twenty thousand

rupees:

Provided that where the aggregate of the amounts of such sums credited or paid or likely to be

credited or paid during the financial year exceeds fifty thousand rupees, the person responsible for paying

such sums referred to in sub-section (1) shall be liable to deduct income-tax under this section.

(6) No deduction shall be made from any sum credited or paid or likely to be credited or paid

during the previous year to the account of a contractor during the course of business of plying, hiring or

leasing goods carriages, on furnishing of his Permanent Account Number, to the person paying or

crediting such sum.

(7) The person responsible for paying or crediting any sum to the person referred to in sub-section

(6) shall furnish, to the prescribed income-tax authority or the person authorized by it, such particulars, in

such from and within such time as may be prescribed.

Explanation: For the purposes of this section,

(i) “specified person” shall mean,-

(a) the Central Government or any State Government; or

(b) any local authority; or

(d) any company; or

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(e) any co-operative society; or

(f) any authority, constituted in India by or under any law, engaged either for the purpose of

dealing with and satisfying the need for housing accommodation or for the purpose of planning,

development or improvement of cities, towns and villages, or for both ;or

(g) any society registered under the Societies Registration Act 1860 (21 of 1860) or under any

law corresponding to that Act in force in any part of India; or

(h) any trust; or

(i) any university established or incorporated by or under a Central State or provincial Act and an

institution declared to be a university under section 3 of the University Grants Commission Act, 1956 ;

(3 of 1956) or;

(j) any Government of a foreign State or a foreign enterprise or any association or body

established outside India; or

(k) any firm ;or

(l) any person, being an individual or a Hindu undivided family or an association of persons or a

body of individuals, if such person,-

(A) does not fall under any of the preceding sub-clauses; and

(B) is liable to audit of accounts under clause (a) or clause (b) of section 44AB during the financial

year immediately preceding the financial year in which such sum is credited or paid to the account of the

contractor;

(ii) “goods carriage” shall have the meaning assigned to it in the Explanation to sub-section (7) of

section 44AE;

(iii) “contract” shall include sub-contract;

(iv) “work” shall include-

(a) advertising;

(b) broadcasting and telecasting including production of programmes for such broadcasting or

telecasting;

(d) catering;

(e) manufacturing or supplying a product according to the requirement or specification of a

customer by using material purchased from such customer.

but does not include manufacturing or supplying a product according to the requirement or

specification of a customer by using material purchased from a person, other than such customer’,

62. Amendment of section 194-I: In section 194-I of the Income-tax Act, for clauses (a), (b) and

“(a) two per cent, for the use of any machinery or plant or equipment; and

(b) ten per cent, for the use of any land or building (including factory building) or land appurtenant

to a building (including factory building) or furniture or fittings.”

63. Amendment of section 197A: In section 197A of the Income-tax Act, after sub-section (1D),

the following sub-section shall be inserted, namely:-

“(1E) Notwithstanding anything contained in this Chapter, no deduction of tax shall be made from

any payment to any person for, or on behalf of, the New Pension System Trust referred to in clause (44)

of section 10”

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64. Amendment of section 200: In section 200 of the Income-tax Act, in sub-section (3), for the

words, figures and letters “prepare quarterly statements for the period ending on the 30^th June, the 30^th

September the 31^st December and the 31^st March in each financial year” the words “prepare such

statements for such period as may be prescribed” shall be substituted with effect from the 1^st day of

October, 2009.

65. Insertion of new section 200A: After section 200 of the Income-tax Act, the following section

shall be inserted with effect from the 1^st day of April, 2010, namely:-

“200A. Processing of statements of tax deducted at source: (1) Where a statement of tax

deduction at source has been made by a person deducting any sum (hereafter referred to in this section

as deductor) under section 200, such statement shall be processed in the following manner, namely-

(a) the sums deductible under this Chapter shall be computed after making the following

adjustments, namely:-

(i) any arithmetical error in the statement ;or

(ii) an incorrect claim, apparent from any information in the statement;

(b) the interest, if any, shall be computed on the basis of the sums deductible as computed in the

statement;

adjustment of amount computed under clause (b) against any amount paid under section 200 and section

201, and any amount paid otherwise by way of tax or interest;

(d) an intimation shall be prepared or generated and sent to the deductor specifying the sum

determined to be payable by, or the amount of refund due to him under clause (c); and

(e) the amount of refund due to the deductor in pursuance of the determination under clause (c)

shall be granted to the deductor;

Provided that no intimation under this sub-section shall be sent after the expiry of one year from

the end of the financial year in which the statement is filed.

Explanation: For the purposes of this sub-section, “an incorrect claim apparent from any

information in the statement “shall mean a claim, on the basis of an entry, in the statement-

(i) of an item, which is inconsistent with another entry of the same or some other item in such

statement;

(ii) in respect of rate of deduction of tax at source, where such rate is not in accordance with the

provisions of this Act,

(2) For the purposes of processing of statements under sub-section (1), the Board may make a

scheme for centralised processing of statement of tax deducted at source to expeditiously determine the

tax payable by, or the refund due to, the deductor as required under the said sub-section’,

66. Amendment of section 201: In section 201 of the Income-tax Act,-

(a) in sub-section (1A), for the words “the quarterly statement for each quarter” the words “the

statement” shall be substituted with effect from the 1^st day of October, 2009,;

(b) after sub-section (2), the following sub-sections shall be inserted with effect from the 1^st day of

April, 2010, namely:-

“(3) No order shall be made under sub-section (1) deeming a person to be an assessee in default

for failure to deduct the whole or any part of the tax from a person resident in India, at any time after the

expiry of-

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(i) two years from the end of the financial year in which the statement is filed in a case where the

statement referred to in section 200 has been filed;

(ii) four years from the end of the financial year in which payment is made or credit is given, in any

other case;

Provided that such order for a financial year commencing on or before the 1^st day of April, 2007

may be passed at any time on or before the 31^st day of March, 2011.

(4) The provisions of sub-clause (ii) of sub-section (3) of section 153 and of Explanation 1 to

section 153 shall, so far as may, apply to the time limit prescribed in sub-section (3)”,

67. Amendment of section 203A: In section 203A of the Income-tax, Act, in sub-section (2), in

clause (ba), the word “quarterly” shall be omitted with effect from the 1^st day of October, 2009.

68. Amendment of section 206A: In section 206A of the Income-tax Act, with effect from the 1^st

day of October, 2009-

(a) in sub-section (1), for the words, figures and letters “quarterly returns for the period ending on

the 30^th June, the 30^th September, the 31^st December and the 31^st March in each financial year” the words

“such statements for such period as may be prescribed” shall be substituted;

(b) in sub-section (2), for the words “quarterly returns”, the words “such statements” shall be

substituted.

69. Insertion of new section 206AA: After section 206A of the Income-tax Act, the following

section shall be inserted with effect from the 1^st day of April, 2010, namely:-

“206AA. Requirement to furnish Permanent Account Number: (1) Notwithstanding anything

contained in any other provisions of this Act, any person entitled to receive any sum or income or amount,

on which tax is deductible under Chapter XVIIB (hereafter referred to as deductee) shall furnish his

Permanent Account Number to the person responsible for deducting such tax (hereafter referred to as

deductor), failing which tax shall be deducted at the higher of the following rates, namely:-

(i) at the rate specified in the relevant provision of this Act; or

(ii) at the rate or rates in force;or

(iii) at the rate of twenty per cent.

(2) No declaration under sub-section (1) or sub-section (1A) of sub-section (1C) of section 197A

shall be valid unless the person furnishes his Permanent Account Number in such declaration.

(3) In case any declaration becomes invalid under sub-section (2), the deductor shall deduct the

tax at source in accordance with the provisions of sub-section (1).

(4) No certificate under section 197 shall be granted unless the application made under that

section contains the permanent Account Number of the applicant.

(5) The deductee shall furnish his Permanent Account Number to the deductor and both shall

indicate the same in all the correspondence, bills, vouchers and other documents which are sent to each

other.

(6) Where the Permanent Account Number provided to the deductee is invalid or does not belong

to the deductee, it shall be deemed that the deductee has not furnished his Permanent Account Number

to the deductor and the provisions of sub-section (1) shall apply accordingly:-

70. Amendment of section 206C: in section 206C of the Income-tax Act, in sub-section (3), in

the proviso, for the words figures and letters “prepare quarterly statements for the period ending on the

30^th June, the 30^th September, the 31^st December and the 31^st March in each financial year” the words

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“prepare such statements for such statements for such period as may be prescribed” shall be substituted

with effect from the 1^st day of October, 2009.

71. Amendment of section 208: In section 208 of the Income-tax Act, for the words “five

thousand rupees” the words “ten thousand rupees” shall be substituted.

72. Amendment of section 246A: In section 246A of the Income-tax Act, in sub-section (I), with

effect from the 1^st day of October, 2009-

(i) in clause (a) for the words, brackets and figures “under sub-section (3) of section 143”, the

words, brackets and figures “under sub-section (3) of section 143 except an order passed in pursuance of

directions of the Dispute Resolution Panel” shall be substituted;

(ii) in clause (b), after the words and figures “under section 147”, the words “except an order

passed in pursuance of directions of the Dispute Resolution Panel” shall be inserted.

73. Amendment of section 253: In section 253 of the Income-tax Act, in sub-section (1), with

effect from the 1^st day of October, 2009-

(a) in clause (c), for the words, figures and letter “Director under section 272A”, the words, figures

and letter “Director under section 272A; or “ shall be substituted;

(b) after clause (c), the following clause shall be inserted, namely:-

“(d) an order passed by an Assessing Officer under sub-section (3), of section 143 or section 147

in pursuance of the directions of the Dispute Resolution Panel or an order passed under section 154 in

respect of such order’’,

74. Amendment of section 271: In section 271 of the Income-tax Act, in sub-section (1), for

Explanation 5A, the following Explanation shall be substituted and shall be deemed to have been

substituted with effect from the 1^st day of June, 2007, namely:-

“Explanation 5A:- Where, in the course of a search initiated under section 132 on or after the 1^st

day of June, 2007, the assessee is found to be the owner of-

(i) any money, bullion, jewellery or other valuable article or thing (hereafter in this Explanation

referred to as assets) and the assessee claims that such assets have been acquired by him by utilizing

(Wholly or in part) his income for any previous year; or

(ii) any income based on any entry in any books of account or other documents or transactions

and he claims that such entry in the books of account or other documents or transactions represents his

income (wholly or in part) for any previous year,

which has ended before the date of search and,-

(a) where the return of income for such previous year has been furnished before the said date but

such income has not been declared therein; or

(b) the due date for filling the return of income for such previous year has expired but the assessee

has not filed the return,

then, notwithstanding that such income is declared by him in any return of income furnished on or

after the date of search, he shall, for the purposes of imposition of a penalty under clause (c) of sub-

section (1) of this section, be deemed to have concealed the particulars of his income or furnished

inaccurate particulars of such income”,

75. Amendment of section 272A: In section 272A of the Income-tax Act, in sub-section (2), in

clause (1), for the words “quarterly return” ,the word “statements” shall be substituted with effect from the

1^st day of October, 2009.

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76. Amendment of section 281B: In section 281B of the Income-tax Act, in sub-section (2)_, after

the second proviso, the following proviso shall be inserted and shall be deemed to have been inserted

with effect from the 1^st day of April, 1988, namely:-

“Provided also that the period during which the proceedings for assessment or reassessment are

stayed by an order or injunction of any court shall be excluded from the period specified in the first

proviso’’

77. Substitution of new section for section 282: For section 282 of the Income-tax Act, the

following section shall be substituted with effect from the 1^st day of October, 2009, namely:

“282. Service of notice generally: (1) The service of a notice or summon or requisition or order or

any other communication under this Act (hereafter in this section referred to as” communication”) may be

made by delivering or transmitting a copy thereof, to the person therein named,-

(a) by post or by such courier services as may be approved by the Board; or

(b) in such manner as provided under the Code of Civil Procedure, 1908 (5 of 1908) for the

purposes of service of summons; or

2000; (21 of 2000) or

(d) by any other means of transmission of documents as provided by rules made by the Board in

this behalf.

(2) The Board may make rules providing for the addresses (including the address for electronic mail

or electronic mail message) to which the communication referred to in sub-section (1) may be delivered or

transmitted to the person therein named.

Explanation: For the purposes of this section, the expressions “electronic mail” and “electronic mail

message” shall have the meanings as assigned to them in Explanation to section 66A of the Information

Technology Act, 2000 (21 of 2000).

78. Insertion of new section 282B : After section 282A of the Income-tax, Act, the following

section shall be inserted with effect from the 1^st day of October, 2010, namely:-

“282B. Allotment of Document Identification Number: (1) Every income-tax authority shall allot

a computer generated Document Identification Number in respect of every notice, order letter or any

correspondence issued by him to any other income-tax authority or assessee or any other person and

such number shall be quoted thereon.

(2) Where the notice, order, letter or any correspondence, issued by any income-tax authority, does

not bear a Document Identification Number referred to in sub-section (1), such notice, order, letter or any

correspondence shall be treated as invalid and shall be deemed never to have been issued.

(3) Every document, letter or any correspondence, received by an income-tax authority or on behalf

of such authority, shall be accepted only after allotting and quoting of a computer generated Document

Identification Number.

(4) Where the document letter or any correspondence received by any income-tax authority or on

behalf of such authority does not bear the Document Identification Number referred to in sub-section (3),

such document, letter or any correspondence shall be treated as invalid and shall be deemed never to

have been received”,

79. Insertion of new section 293C: After section 293B of the Income-tax Act, the following section

shall be inserted with effect from the 1^st day of October, 2009, namely:-

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“293C. Power to withdraw approval: Where the Central Government or the Board or an income-

tax authority, who has been conferred upon the power under any provision of this Act to grant any

approval to any assessee, the Central Government or the Board or such authority may, notwithstanding

that a provision to withdraw such approval has not been specifically provided for in such provision,

withdraw such approval at any time;

Provided that the Central Government or Board or income-tax authority shall, after giving a

reasonable opportunity of showing cause against the proposed withdrawal to the assessee concerned, at

any time, withdraw the approval after recording the reasons for doing so”,

80. Amendment of First Schedule: In the First Schedule to the Income-tax Act, in rule 5-

(i) for the portion beginning with the words “balance of the profits” and ending with the words

“Controller of Insurance”, the following shall be substituted with effect from the 1^st day of April, 2011,

namely:-

“profit before tax and appropriations as disclosed in the profit and loss account prepared in

accordance with the provisions of the Insurance Act, 1938 (4 of 1938) or the rules made there under or

the provisions of the Insurance Regulatory and Development Authority Act, 1999 (4 of 1999) or the

regulations made thereunder;,

(ii) after clause (a), the following clause shall be inserted with effect from the 1^st day of April, 2011

namely:-

“(b) (i) deduction in respect of any amount either written off or provided in the accounts to meet

diminution in or loss on realization of investments in accordance with the regulations made by the

Insurance Regulatory and Development Authority;

(ii) increase in respect of any amount taken credit for in the accounts on account of appreciation of

or gains on realization of investments in accordance with the regulations made by the Insurance

Regulatory and Development Authority;’’

81. Amendment of Fourth Schedule: In the Fourth Schedule to the Income-tax Act, in Part A, in

rule 3, in sub-rule (1), in the first proviso, for the figures, letters and words “31^st day of March 2009”, the

figures, letters and words “31^st day of December, 2010” shall be substituted.

82. Amendment of Thirteenth Schedule: In the Thirteenth Schedule to the Income-tax Act, under

part B, for S.No. 19 and the entries relating thereto, the following S.NO. and the entries shall be

substituted with effect from the 1^st day of April, 2010, namely:-

Sl.

No.

Activity or article or thing

Excise

classification

Sub-class under

National Industrial

Classification

(NIC), 1998

“19

Manufacture of pulp-wood pulp, mechanical or Chemical

(including dissolving pulp)

4701.00

Newsprint in rolls or sheets

4801.00

Writing or printing paper for printing of educational

textbooks

4802.10

Paper or paperboard, in the manufacture of which

4802.20

(a) the principal process of lifting the pulp is done by

hand; and

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Sl.

No.

Activity or article or thing

Excise

classification

Sub-class under

National Industrial

Classification

(NIC), 1998

(b) if power driven sheet forming equipment is used, the

Cylinder Mould Vat does not exceeds 40 inches

Maplitho paper supplied to a Braille press against an

indent placed by the National Institute for Visually

Handicapped, Dehradun

4802.30

Others

4802.90

Toilet or facial tissue stock, towel or napkin stock and

4803.00

similar paper of a kind used for household or sanitary

purposes, cellulose wadding and webs of cellulose

fibres, whether or not creped, crinkled, embossed

perforated,

surfact-coloured, surface decorated or printed, in rolls of

a width exceeding 36 cms. or in rectangular

(including square) sheets with at least one side

exceeding 36 cms. in unfolded state

Kraft paper supplied to a Braille press against an indent

placed

the

National

Institute

for

Visually

Handicapped, Dehradun

4804.10

Kraft paper and paperboard used in the manufacture of

4804.20

cartons for packing of horticultural produce

Others

4804.90

Other uncoated paper and paperboard, in roll or sheets

4805.00

not further worked or processed than as specified in

Note 2 to this Chapter

Grease –proof paper

4806.10

Glassine and other glazed transparent or translucent

paper

4806.20

others

4806.90

Straw Board, in the manufacture of which sub-drying

4807.91

process has been employed

Straw paper and other straw board, whether or not

4807.92

covered with paper other than straw paper

Other

4807.99

Carbon or similar copying papers

4809.10

Self-copy paper

4809.20

Others

4809.90

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603

Sl.

No.

Activity or article or thing

Excise

classification

Sub-class under

National Industrial

Classification

(NIC), 1998

Paper and paperboard of a kind used for writing, printing

4810.10

or other graphic purposes

Kraft paper and paperboard other than that of a kind

used for writing, printing or other graphic purposes

4810.20

Other paper and paperboard

4810.90

Tarred, bituminized or asphalted paper and paperboard

4811.10

Gummed or adhesive paper and paperboard

4811.20

Paper and paperboard coated, impregnated or covered

with plastic (excluding adhesives)

Products consisting of sheets of paper or paperboard,

4811.31

impregnated, coated or covered with plastics (including

thermoset resins or mixtures thereof or chemical

formulations

containing

melamine,

phenol,

urea

formaldehyde with or without curing agents or catalysts),

compressed together in one or more operations,

Products known commercially as decorative laminates

Others

4811.39

Paper and paperboard, coated , impregnated or covered

4811.40

with wax, paraffin wax, stearin, oil, or glycerol

Other

4811.90

Cigarette paper, whether or not cut to size or in the form

of booklets or tubes

4813.00

Wealth-tax

83. Amendment of section 3: In section 3 of the Wealth-tax Act, 1957 (27 of 1957)(hereinafter

referred to as the Wealth-tax Act), after sub-section (2), the following proviso shall be inserted with effect

from the 1^st day of April, 2010, namely:-

“Provided that in the case of every assessment year commencing on and from the 1^st day of April,

2010, the provisions of this section shall have effect as if for the words “fifteen lakh rupees”, the words

“thirty lakh rupees”, had been substituted.’

84. Amendment of section 44A: In section 44A of the Wealth-tax Act, in the Explanation, for the

words “any country”, the words “any country outside India or any territory outside India” shall be

substituted with effect from the 1^st day of October, 2009.

CHAPTER IV

INDIRECT TAXES

Customs

85. Insertion of new section 26A: After section 26 of the Customs Act, 1962 (52 of 1962)

(hereinafter referred to as the Customs Act) ,the following section shall be inserted, namely:-

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“26A. Refund of import duty in certain cases: (1) where on the importation of any goods capable

of being easily identified as such imported goods, any duty has been paid on clearance of such goods for

home consumption, such duty shall be refunded to the person by whom or on whose behalf it was paid, if-

(a) the goods are found to be defective or otherwise not in conformity with the specifications agreed

upon between the importer and the supplier of goods;

Provided that the goods have not been worked, repaired or used after importation except where

such use was indispensable to discover the defects or non-conformity with the specifications;

(b) the goods are identified to the satisfaction of the Assistant Commissioner of Customs or Deputy

Commissioner of Customs as the goods which were imported;

(d) (i) the goods are exported ;or

(ii) the importer relinquishes his title to the goods and abandons them to customs; or

(iii) such goods are destroyed or rendered commercially valueless in the presence of the proper

officer.

in such manner as may be prescribed and with period not exceeding thirty days from the date on

which the proper officer makes an order for the clearance of imported goods for home consumption under

section 47;

Provided that the period of thirty days may, on sufficient cause being shown, be extended by the

Commissioner of customs for a period not exceeding three months:

Provided further that nothing contained in this section shall apply to the goods regarding which an

offence appears to have been committed under this Act or any other law for the time being in force.

(2) An application for refund of duty shall be made before the expiry of six months from the relevant

date in such form and in such manner as may be prescribed.

Explanation- For the purposes of this sub-section “relevant date” means-

(a) in cases where the goods are exported out of India, the date on which the proper officer makes

an order permitting clearance and loading of goods for exportation under section 51;

(b) in case where the title to the goods is relinquished, the date of such relinquishment;

destruction or rendering of goods commercially valueless.

(3) No refund under sub-section (1) shall be allowed in respect of perishable goods and goods

which have exceeded their shelf life or their recommended storage- before –use period.

(4) The Board may, by notification in the Official Gazette,specify any other condition subject to

which the refund under sub-section (1) may be allowed;

86. Amendment of section 28F: In section 28F of the Customs Act, after sub-section (2), the

following sub-sections shall be inserted with effect from such date as the Central Government may, by

notification in the Official Gazette, appoint namely:-

(2A) Notwithstanding anything contained in sub-sections (1) and (2), or any other law for the time

being in force, the Central Government may, by notification in the Official Gazette authorize an Authority

constituted under section 245-O of the Income –tax Act, 1961, (43 of 1961) to act as an Authority under

this Chapter.

(2B) On and from the date of publication of notification under sub-section (2A) the Authority

constituted under sub-section (1) shall not exercise jurisdiction under this Chapter.

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(2C) For the purposes of sub-section (2A), the reference to “an officer of the Indian Revenue

Service who is qualified to be a Member of Central Board of Direct Taxes” in clause (b)_ of sub-section

(2) of section 245-O of the Income-tax Act, 1961 (43 of 1961) shall be construed as reference to “an

officer of the Indian Customs and Central Excise Service who is qualified to be a Member of the Board”,

(2D) On and from the date of the authorization of Authority under sub-section (2A), every

application and proceeding pending before the Authority constituted under sub-section (1) shall stand

transferred to the Authority so authorized from the stage at which such proceedings stood before the date

of such authorization;’

87. Amendment of section 130: In section 130 of the Customs Act, after sub-section (2) the

following sub-section shall be inserted and shall be deemed to have been inserted with effect from the 1^st

day of July, 2003, namely:-

“(2A) The High Court may admit an appeal after the expiry of the period of one hundred and eighty

days referred to in clause (a) of sub-section (2) if it is satisfied that there was sufficient cause for not filing

the same within that period”,

88. Amendment of section 130A: In section 130A of the Customs Act, after sub-section (3), the

following sub-section shall be inserted and shall be deemed to have been inserted with effect from the 1^st

day of July, 1999 namely-

“(3A) The High Court may admit an application or permit the filing of a memorandum of cross-

objections after the expiry of the relevant period referred to in sub-section (I) or sub-section (3), if it is

satisfied that there was sufficient cause for not filing the same within that period.’’

89. Amendment of section 137: In section 137 of the Customs Act, in sub-section (3),-

(i) for the words “such compounding amount: the words “such compounding amount and in such

manner of compounding” shall be substituted;

(ii) the following proviso shall be inserted, namely:-

“Provided that nothing contained in this sub-section shall apply to-

(a) a person who has been allowed to compound once in respect of any offence under sections

135 and 135A:

(b) a person who has been accused of committing an offence under this Act which is also an

offence under any of the following Acts, namely-

(i) the Narcotic Drugs and Psychotripic Substances Act, 1985 (61 of 1985);

(ii) the Chemical Weapons Convention Act,2000; (34 of 2000)

(iii) the Arms Act, 1959; (54 of 1959)

(iv) the Wild Life (Protection) Act, 1972 (53 of 1972)

(i) goods specified in the list of Special Chemicals, Organisms, Materials, Equipment and

Technology in Appendix 3 to Schedule 2 (Export Policy )of ITC (HS) Classification of Export and Import

Items of the Foreign Trade Policy, as amended from time to time, issued under section 5 of the Foreign

Trade (Development and Regulation) Act, 1992 (22 of 1992);

(ii) goods which are specified as prohibited items for import and export in the ITC (HS)

Classification of Export and Import Items of the Foreign Trade Policy, as amended from time to time,

issued under section 5 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992);

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(iii) any other goods or documents, which are likely to affect friendly relations with a foreign state or

are derogatory to national honour;

(d) a person who has been allowed to compound once in respect of any offence under this Chapter

for goods of value exceeding rupees one crore;

(e) a person who has been convicted under this Act on or after the 30^th day December, 2005”,

90. Amendment of section 156: In section 156 of the Customs Act, in sub-section (2) in clause

(h), for the words “for compounding” the words “for compounding and the manner of compounding” shall

be substituted.

91. Amendment of section 157: In section 157 of the Customs Act, in sub-section (2), after clause

(a), the following clauses shall be inserted, namely:-

“(ai) the manner of export of goods, relinquishment of title to the goods and abandoning them to

customs and destruction or rendering of goods commercially valueless in the presence of the proper

officer under clause (d) of sub-section (1) of section 26A;

(aii) the form and manner of making application for refund of duty under sub-section (2) of section

26A’’,

92. Validation of certain actions taken by officers of customs appointed under section 4: (1)

The notification of the Government of India, in the Ministry of Finance (Department of Revenue )No.

27/2009 –CUSTOMS (N.T) published in the Official Gazette, vide, number G.S.R. 173 (E), dated the 17^th

March 2009, issued for the purpose of appointment of officers of customs under sub-section (I) of section

4 read with sub-section (I) of section 5 of the Customs Act, shall be deemed to be, and to have always

been, for all purposes, in force retrospectively on and from the 9^th day of May, 2000 and accordingly,

notwithstanding anything contained in any judgment, decree or order of any court, tribunal or other

authority,-

(a) any action taken or anything done by officers of customs appointed by the said notification to

discharge duties as an officer of customs on and from the 9^th day of May, 2000 to the 16^th day of March,

2009, shall for all purposes, be deemed to be, and to have always been, validly taken or done as if the

appointment so made with respect to the area of jurisdiction specified in the said notification was in force

at all material times;

(b) no suit or other proceedings shall be instituted, maintained or continued in any court, tribunal or

other authority against the Central Government or officers of customs appointed by the said notification

for any action taken or anything done in good faith during the discharge of his duties as an officer of

customs during the period on and from the 9^th day of May, 2000 to the 16^th day of March, 2009, as if the

appointment made with respect to the area of jurisdiction specified in the said notification was in force at

all material times;

the order or direction of officers of customs appointed by the said notification during the period on and

from the 9^th day of May, 2000 to the 16^th day of March, 2009 shall be deemed to be valid, and to have

always, been for all purposes, as validly and effectively made as if the appointment made with respect to

area of jurisdiction specified in the said notification was in force at all material times.

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(2) For the purposes of sub-section (1) the Central Board of Excise and Customs shall have and

shall be deemed to have always had the power to bring into force the said notification with retrospective

effect as if the Central Board of Excise and Customs had the power to bring into force the said notification

under sub-section (1) of section 4 read with sub-section (1) of section 5 of the Customs Act,

retrospectively, at all material times.

Explanation:- For the removal of doubts, it is hereby declared that no act or omission on the part of

any person shall be punishable as an offence which would not have been so punishable if the said

notification had not come into force retrospectively.

93. Amendment of notification issued under section 25 of the Customs Act: (1) The

notification of the Government of India, in the Ministry of Finance (Department of Revenue) number

G.S.R. 260 (E), dated the 1^st May, 2006, issued under sub-section (1) of section 25 of the Customs Act

shall stand amended and shall be deemed to have been amended in the manner as specified in

column(3) of the Second Schedule, on and from the corresponding date mentioned in column (4) of that

Schedule, retrospectively, and accordingly, notwithstanding anything contained in any judgment, decree

or order of any court, tribunal or other authority, any action taken or anything done or purported to have

been taken or done under the said notification, shall be deemed to be, and to have always, been for all

purposes, as validly and effectively taken or done as if the notification as amended by this sub-section

had been in force at all material times.

(2) For the purposes of sub-section (1), the Central Government shall have and shall be deemed to

have the power to amend the notification referred to in the said sub-section with retrospective effect as if

the Central Government had the power to amend the said notification under sub-section (1) of section 25

of the Customs Act, retrospectively, at all material times.

(3) Recovery, shall be made of the amount which has not been paid but which would have been

paid as if the amendment made by sub-section (I) had been in force at all material times from the day on

which the Finance (No. 2) Bill, 2009 receives the assent of the President.

Explanation: For the removal of doubts, it is hereby declared that no act or omission on the part of

any person shall be punishable as an offence which would not have been so punishable if this section had

not come into force.

Customs tariff

94. Amendment of section 3: In section 3 of the Customs Tariff Act, 1975 (51 of 1975)

(hereinafter referred to as the Customs Tariff Act), in sub-section (2), after the proviso, the following

proviso shall be inserted, namely:-

“Provided further that in the case of an article imported into India, where the Central Government

has fixed a tariff value for the like article produced or manufactured in India under sub-section (2) of

section 3 of the Central Excise Act, 1944, (1 of 1944) the value of the imported article shall be deemed to

be such tariff value” ,

95. Amendment of section 8B: in section 8B of the Customs Tariff Act, after sub-section (4), the

following sub-section shall be inserted and shall be deemed to have been inserted on and from the 14^th

day of May, 1997, namely:-

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“(4A) The provisions of the Customs Act, 1962 (52 of 1962) and the rules and regulations made

there under, including those relating to the date for determination of rate of duty, assessment, non-levy,

short, levy, refunds, interest, appeals, offences and penalties shall, as far as may be, apply to the duty

chargeable under this section as they apply in relation to duties leviable under that Act”,

96. Validation of certain actions taken under section 8B of Act 51 of 1975:Any action taken or

anything done or omitted to be done or purported to have been taken or done or omitted to be done under

any rule, regulation, notification or order made or issued under the Customs Act, or any notification or

order issued under such rule or regulation at any time during the period commencing on and from the

14^th day of May, 1997 and ending with the day, the Finance (No. 2) Bill, 2009 receives the assent of the

President shall be deemed to be, and to have always been, for all purposes, as validly and effectively

taken or done or omitted to be done as if the amendment made in section 8B of the Customs Tariff Act, by

section 95 of Finance (No. 2) Act, 2009 had been in force at all material times and accordingly,

notwithstanding anything contained in any judgment, decree or order of any court, tribunal or other

authority,-

(a) any action taken or anything done or omitted to be done, during the said period in respect of any

goods, under any such rule, regulation, notification or order, shall be deemed to be and shall be deemed

always to have been, as validly taken or done or omitted to be done as if the amendment made by the

said section had been in force at all material times;

(b) no suit or other proceedings shall be maintained or continued in any court, tribunal or other

authority for any action taken or anything done or omitted to be done, in respect of any goods, under any

such rule, regulation, notification or order, and no enforcement shall be made by any court, of any decree

or order relating to such action taken or anything done or omitted to be done as if the amendment made

by the said section had been in force at all material times;

which have not been collected or, as the case may be which have been, refunded, as if the amendment

made by the said section had been in force at all material times.

Explanation: For the removal of doubts, it is hereby declared that no act or omission on the part of

any person shall be punishable as an offence which would not have been so punishable if this section had

not come into force.

97. Amendment of section 8C: In section 8C of the Customs Tariff Act, after sub-section (5), the

following sub-section shall be inserted and shall be deemed to have been inserted on and from the 11^th

day of May, 2002, namely:-

“(5A) The provisions of the Customs Act, 1962 (52 of 1962) and the rules and regulations made

thereunder, including those relating to the date for determination of rate of duty, assessment, non-levy,

short levy, refunds, interest, appeals, offences and penalties shall, as far as may be, apply to the duty

chargeable under this section as they apply in relation to duties leviable under that Act”,

98. Validation of certain actions taken under section 8C of Act 51 of 1975:Any action taken or

anything done or omitted to be done or purported to have been taken or done or omitted to be done under

any rule, regulation, notification or order made or issued under the Customs Act, or any notification or

order issued under such rule or regulation at any time during the period commencing on and from the 11^th

day of May, 2002 and ending with the day, the Finance (No. 2) Bill, 2009 receives the assent of the

President shall be deemed to be, and to have always been, for all purposes, as validly and effectively

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taken or done or omitted to be done as if the amendment made in section 8C of the Customs Tariff Act by

section 97 of the Finance (No. 2) Act,. 2009 had been in force at all material times and accordingly,

notwithstanding anything contained in any judgment, decree or order of any court, tribunal or other

authority-,

(a) any action taken or anything done or omitted to be done, during the said period in respect of any

goods, under any such rule, regulation, notification or order, shall be deemed to be and shall be deemed

always to have been, as validly taken or done or omitted to be done as if the amendment made by the

said section had been in force at all material times;

(b) no suit or other proceedings shall be maintained or continued in any court, tribunal or other

authority for any action taken or anything done or omitted to be done, in respect of any goods, under any

such rule, regulation, notification or order, and no enforcement shall be made by any court, of any decree

or order relating to such action taken or anything done or amitted to be done as if the amendment made

by the said section had been in force at all material times;

which have not been collected or, as the case may be, which have been refunded as, if the amendment

made by the said section had been in force at all material times.

Explanation:- For the removal of doubts, it is hereby declared that no act or omission on the part of

any person shall be punishable as an offence which would not have been so punishable if this section had

not come into force.

99. Amendment of section 9: In section 9 of the Customs Tariff Act, for sub-section (7A), the

following sub-section shall be substituted and shall be deemed to have been substituted on and from the

1^st day of January, 1995, namely:-

“(7A) The provisions of the Customs Act, 1962 and the rules and regulations made there under,

including those relating to the date for determination of rate of duty, assessment, non-levy, short levy,

refunds, interest, appeals, offences and penalties shall, as far as may be, apply to the duty chargeable

under this section as they apply in relation to duties leviable under that Act”,

100. Validation of certain actions taken under section 9 of Act 51 of 1975: Any action taken or

anything done or omitted to be done or purported to have been taken or done or omitted to be done

under any rule, regulation, notification or order made or issued under the Customs Act, or any notification

or order issued under such rule or regulation at any time during the period commencing on and from the

1^st day of January, 1995 and ending with the day, the Finance (No. 2 )Bill, 2009 receives the assent of the

President shall be deemed to be, and to have always been, for all purposes, as validly and effectively

taken or done or omitted to be done as if the amendment made in section 9 of the Customs Tariff Act by

section 99 of the Finance (No.2) Act, 2009 had been in force at all material times and accordingly,

notwithstanding anything contained in any judgment, decree or order of any court, tribunal or other

authority-

(a) any action taken or anything done or omitted to be done, during the said period in respect of any

goods, under any such rule, regulation, notification or order, shall be deemed to be and shall be deemed

always to have been, as validly taken or done or omitted to be done as if the amendment made by the

said section had been in force at all material times;

(b) no suit or other proceedings shall be maintained or continued in any court tribunal or other

authority for any action taken or anything done or omitted to be done, in respect of any goods, under any

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such rule, regulation notification or order, and no enforcement shall be made by any court, of any decree

or order relating to such action taken or anything done or omitted to be done as if the amendment made

by the said section had been in force at all material times;

which have not been collected or, as the case may be, which have been refunded, as if the amendment

made by the said section had been in force at all material times.

Explanation:- For the removal of doubts, it is hereby declared that no act or omission on the part of

any person shall be punishable as an offence which would not have been so punishable if this section had

not come into force.

101. Amendment of section 9A: In section 9A of the Customs Tariff Act-,

(i) in sub-section (1), for the words “any article is exported” the words “any article is exported by an

exporter or producer” shall be substituted;

(ii) after sub-section (6), the following sub-section shall be inserted, namely:-

“(6A) The margin of dumping in relation to an article, exported by an exporter or producer, under

inquiry under sub-section (6) shall be determined on the basis of records concerning normal value and

export price maintained, and information provided, by such exporter or producer;

Provided that where an exporter or producer fails to provide such records or information, the margin

of dumping for such exporter or producer shall be determined on the basis if facts available”,

(iii) for sub-section (8), the following sub-section shall be substituted and shall always be deemed to

have been substituted on and from the 1^st day of January, 1995, namely:-

“(8) The provisions of the Customs Act, 1962 (52 of 1962) and the rules and regulations made

thereunder, including those relating to the date for determination of rate of duty, assessment, non-levy,

short levy, refunds, interest, appeals, offences and penalties shall, as far as may be, apply to the duty

chargeable under this section as they apply in relation to duties leviable under that Act”,

102. Validation of certain actions taken under section 9A of Act 51 of 1975: Any action taken

or anything done or omitted to be done or purported to have been taken or done or omitted to be done

under any rule, regulation, notification or order made or issued under the Customs Act, or any notification

or order issued under such rule or regulation at any time during the period commencing on and from the

1^st day of January, 1995 and ending with the day, the Finance (No. 2) Bill, 2009 receives the assent of the

President shall be deemed to be, and to have always been, for all purposes, as validly and effectively

taken or done or omitted to be done as if the amendment made in section 9A of the Customs Trariff Act

by clause (iii) of section 101 of the Finance (No. 2) Act, 2009 had been in force at all material times and

accordingly, notwithstanding anything contained in any judgment, decree or order of any court, tribunal or

other authority,-

(a) any action taken or anything done or omitted to be done, during the said period in respect of any

goods, under any such rule, regulation, notification or order, shall be deemed to be and shall be deemed

always to have been, as validly taken or done or omitted to be done as if the amendment made by the

said section had been in force at all material times;

(b) no suit or other proceedings shall be maintained or continued in any court, tribunal or other

authority for any action taken or anything done or omitted to be done, in respect of any goods, under any

such rule, regulation, notification or order, and no enforcement shall be made by any court, of any decree

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or order relating to such action taken or anything done or omitted to be done as if the amendment made

by the said section had been in force at all material times;

which have not been collected or, as the case may be, which have been refunded, as if the amendment

made by the said section had been in force at all material times;

Explanation: For the removal of doubts, it is hereby declated that no act or omission on the part of

any person shall be punishable as an offence which would not have been so punishable if this section had

not come into force.

103. Amendment of First Schedule: The First Schedule to the Customs Tariff Act shall be

amended in the manner as specified in the Third Schedule.

Excise

104. Amendment of section 9A: In section 9A of the Central Excise Act, 1944, (1of 1994)

(hereinafter referred to as the Central Excise Act), in sub-section (2),-

(i) for the words “such compounding amount” the words “such compounding amount and in such

manner of compounding” shall be substituted;

(ii) the following proviso shall be inserted, namely:-

“Provided that nothing contained in this sub-section shall apply to-

(a) a person who has been allowed to compound once in respect of any of the offences under the

provisions of clause (a), (b), (bb), (bbb), (bbbb) or (c) of sub-section (1) of section 9;

(b) a person who has been accused of committing an offence under this Act which is also an

offence under the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985);

for goods of value exceeding rupees one crore;

(d) a person who has been convicted by the court under this Act on or after the 30^th day of

December, 2005”,

105. Amendment of section 14A: In section 14A of the Central Excise Act-,

(i) in sub-sections (1) and, (2), for the words “cost accountant”, the words “cost accountant or

chartered accountant” shall be substituted;

(ii) the Explanation shall be renumbered as Explanation 1 thereof, and after Explanation 1 as so

renumbered, the following explanation shall be inserted, namely:-

Explanation 2- For the purposes of this section, “chartered accountant” shall have the meaning

assigned to it in clause (b) of sub-section (I) of section 2 of the Chartered Accountants Act, 1949’(38 of

1949)’’

106. Amendment of section 14AA: In section 14AA of the Central Excise Act,-

(i) in sub-sections (1) and (2) for the words “cost accountant”, the words “cost accountant or

chartered accountant” shall be substituted;

(ii) the Explanation shall be renumbered as Explanation 1 thereof, and after Explanation 1 as so

renumbered ,the following Explanation shall be inserted, namely:-

Explanation 2: For the purposes of this section “chartered accountant” shall have the meaning

assigned to it in clause (b) of sub-section (1) of section 2 of the Chartered Accountants Act, 1949

(38 of 1949)”.

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107. Amendment of section 23A: In section 23A of the Central Excise Act, for clause (e), the

following clause shall be substituted, namely:-

(e) “Authority” means the Authority for Advance Rulings, constituted under sub-section (1), or

authorized by the Central Government under sub-section (2A), of section 28F of the Customs Act, 1962

(52 of 1962)”,

108. Amendment of section 35G: In section 35G of the Central Excise Act, after sub-section (2),

the following sub-section shall be inserted and shall be deemed to have been inserted with effect from the

1^st day of July, 2003 namely:-

“(2A) The High Court may admit an appeal after the expiry of the period of one hundred and eighty

days referred to in clause (a) of sub-section (2), if it is satisfied that there was sufficient cause for not filing

the same within that period”,

109. Amendment of section 35H: In section 35H of the Central Excise Act, after sub-section (3)

the following sub-section shall be inserted and shall be deemed to have been inserted with effect from the

1^st day of July, 1999, namely:-

“(3A) The High Court may admit an application or permit the filing of a memorandum of cross-

objections after the expiry of the relevant period referred to in sub-section(1) or sub-section (3), if it is

satisfied that there was sufficient cause for not filing the same within that period”,

110. Amendment of section 37: In section 37 of the Central Excise Act, in sub-section (2), in

clause (id), for the words “for compounding” the words “for compounding and the manner of compounding

shall be substituted.

111. Amendment of notifications issued under section 37 of Central Excise Act and

validation of certain actions taken: (1) The notifications of the Government of India, in the Ministry of

Finance (Department of Revenue) numbers G.S.R 448 (E), dated the 1^st August, 1997, G.S.R. 503 (E),

dated the 30^th August 1997 and G.S.R. 130 (E), dated the 10^th March, 1998, issued under section 37 of

the Central Excise Act, shall stand amended and shall be deemed to have been amended retrospectively

in the manner as specified against each of them in column (3) of the Fourth Schedule, on and from the

corresponding date mentioned in column (4) of that Schedule and accordingly, notwithstanding anything

contained in any judgment, decree or order of any court, tribunal or other authority, any action taken or

anything done or purported to have been taken or done under the said notifications, shall be deemed to

be, and to have always been, for all purposes, as validly and effectively taken or done as if the notification

as amended by this sub-section had been in force at all material times.

(2) Notwithstanding the omission of section 3A of the Central Excise Act by section 121of the

Finance Act, 2001 (14 of 2001) and the expiration of the notifications referred to in sub-section (1), for the

purposes of sub-section (I), the Central Government shall have and shall be deemed to have the power to

make rules and issue or amend notifications under section 3A read with section 37 of the Central Excise,

Act, retrospectively, at all material times.

(3) Any action taken or anything done or omitted to be done or purported to have been taken or

done or omitted to be done under the notifications referred to in sub-section (1) at any time during the

period commencing on or from the 1^st day of August, 1997 and ending with the day, the Finance (No 2)

Bill, 2009 receives the assent of the President shall be deemed to be, and to have always been, for all

purposes, as validly and effectively taken or done or omitted to be done as if the amendments made by

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sub-section (1) had been in force at all material times and accordingly notwithstanding anything contained

in any judgment, decree or order of any court, tribunal or other authority,

(a) any action taken or anything done or omitted to be done, during the said period in respect of any

goods under the said notifications, shall be deemed to be and shall be deemed always to have been, as

validly taken or done or omitted to be done as if the amendments made by sub-section (1) had been in

force at all material times;

(b) no suit or other proceedings shall be maintained or continued in any court tribunal or other

authority for any action taken or anything done or omitted to be done, in respect of any goods under the

said notifications, and no enforcement shall be made by any court, of any decree or order relating to such

action take or anything done or omitted to be done as if the amendments made by sub-section (1) had

been in force at all material times;

which have not been collected or, as the case may be, which have been refunded, as if the amendments

made by sub-section (1) had been in force at all material times.

Explanation: For the removal of doubts, it is hereby declared that no act or omission on the part of

any person shall be punishable as an offence which would not have been so punishable if this section had

not come into force.

Excise tariff

112. Amendment of First Schedule to Act 5 of 1986: The First Schedule to the Central Excise

Tariff Act, 1985 shall be amended in the manner as specified in the Fifth Schedule.

CHAPTER V

Service tax

113. Amendment of Act 32 of 1994: In the Finance Act, 1994

(A) in section 65, save as otherwise provided with effect from such date as the Central Government

may, by notification in the Official Gazette, appoint-

(1) in clause (19)-

(a) for the portion beginning with the words “but does not include” and ending with the words and

figures” Central Excise Act, 1944 (1 of 1944)” the words “but does not include any activity that amounts to

manufacture of excisable goods” shall be substituted;

(b) in the Explanation, after clause(a), the following clauses shall be inserted, namely:-

(b) “excisable goods” has the meaning assigned to it in clause (d) of section 2 of the Central Excise

Act, 1944 (1 of 1944);

1944; (1 of 1944);

(2) in clause (101) the words “or sub-broker, as the case may be “shall be omitted;

(3) in clause (105)-,

(a) for sub-clause (zzzp), the following sub-clause shall be substituted, namely:-

“(zzzp) to any person, by any other person, in relation to transport of goods by rail, in any manner”,

(b) in sub-clause (zzzze) in items (v) and (vi) for the word “acquiring” the word “providing” shall be

substituted and shall be deemed to have been substituted with effect from the 16^th day of May 2008;

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“(zzzzk) to any person, by any other person, in relation to cosmetic surgery or plastic surgery, but

does not include any surgery under taken to restore or reconstruct anatomy or functions of body affected

due to congenital defects, developmental abnormalities, degenerative diseases, injury or trauma;

(zzzzl) to any person, by any other person, in relation to transport of –

(i) coastal goods;

(ii) goods through national waterway;or

(iii) goods through inland water;

Explanation: For the purposes of this sub-clause,

(a) “coastal goods” has the meaning assigned to it in clause (7) of section 2 of the Customs Act

1962; (52 of 1962);

(b) “national waterway” has the meaning assigned to it in clause (h) of section 2 of the Inland

Waterways Authority of India Act, 1985; (82 of 1985)

1917 (1 of 1917);

(zzzzm) to a business entity by any other business entity, in relation to advice, consultancy or

assistance in any branch of law, in any manner;

Provided that any service provided by way of appearance before any court, tribunal or authority

shall not amount to taxable service.

Explanation: For the purposes of this sub-clause, “business entity” includes an association of

person, body of individuals, company or firm but does not include an individual”,

(B) in section 66, with effect from such date as the Central Government may, by notification in the

Official Gazette, appoint for the word, brackets and letters “and (zzzzj)” the brackets, letters and word”

(zzzzj), (zzzzk), (zzzzl), and (zzzzm)” shall be substituted;

“84. Appeals to Commissioner of Central Excise (Appeals): (1) The Commissioner of Central

Excise may, of his own motion call for and examine the record of any proceedings in which an

adjudicating authority subordinate to him has passed any decision or order under this Chapter for the

purpose of satisfying himself as to the legality or propriety of any such decision or order and may, by

order, direct such authority or any Central Excise Officer subordinate to him to apply to the Commissioner

of Central Excise (appeals) for the determination of such points arising out of the decision or order as may

be specified by the Commissioner of Central Excise in his order.

(2) Every order under sub-section (1) shall be made within a period of three months from the date of

communication of the decision or order of the adjudicating authority.

(3) Where in pursuance of an order under sub-section (1) the adjudicating authority or any other

officer authorized in this behalf makes an application to the Commissioner of Central Excise (Appeals)

within a period of one month from the date of communication of the order under sub-section (1) to the

adjudicating authority, such application shall be heard by the Commissioner of Central Excise (appeals),

as if such application were an appeal made against the decision or order of the adjudicating authority and

the provisions of this Chapter regarding appeals shall apply to such application.

Explanation:- For the removal of doubts, it is hereby declared that any order passed by an

adjudicating officer subordinate to the Commissioner of Central Excise immediately before the

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commencement of clause (C) of section 113 of the Finance (No. 2 )Act, 2009 shall continue to be dealt

with by the Commissioner of Central Excise as if this section had not been substituted;

(D) in section 86, in sub-sections (1) and (2), the words and figures “or section 84” shall be omitted;

(E) in section 94, in sub-section (2), after clause (hh), the following clause shall be inserted,

namely:-

“(hhh) the date for determination of rate of service tax and the place of provision of taxable service”,

(F) in section 95, after sub-section (1E), the following sub-section shall be inserted, namely:-

“(1F) If any difficulty arises in respect of implementing classifying or assessing the value of any

taxable service incorporated in this Chapter by the Finance (No 2) Act, 2009 the Central Government

may, by order published in the Official Gazette, not inconsistent with the provisions of this Chapter,

remove the difficulty;

Provided that no such order shall be made after the expiry of a period of one year from the date on

which the Finance (No. 2 )Bill, 2009 receives the assent of the President”,

Validation of action taken under sub-clause (zzzze) of clause (105) of section 65: (G)Any

action taken or anything done or omitted to be done or purported to have been taken or done or omitted to

be done under items (V) and (vi) of sub-clause (zzzze) of clause (105) of section 65 at any time during the

period commencing on and from the 16^th day of May, 2008 and ending with the day, the Finance (No 2)

Bill, 2009 receives the assent of the President, shall be deemed to be, and to have always been, for all

purposes as validly and effectively taken or done or omitted to be done as if the amendment made by

item (b) of sub-clause (3) of clause (A) of section 113 of the Finance (No. 2) Act, 2009 had been in force

at all material times and, accordingly, notwithstanding anything contained in any judgment, decree or

order of any court, tribunal or other authority-,

(a) any action taken or anything done or omitted to be done for the imposition of service tax during

the said period for providing the right to use information technology software for commercial exploitation

and also for providing the right to use information technology software supplied electronically shall be

deemed to be, and shall be deemed to always have been as validly taken or done or omitted to be done

as if the said amendment had been in force at all material times;

(b) no suit or other proceedings shall be maintained or continued in any court, tribunal or other

authority for the imposition of such service tax and no enforcement shall be made by any court of any

decree or order relating to such action taken or anything done or omitted to be done as if the said

amendment had been in force at all material times;

charges which may not have been collected or, as the case may be, which have been refunded but which

would have been collected or as the case may be, would not have been refunded, as if the said

amendment had been in force at all material times.

Explanation:- For the removal of doubts, it is hereby declared that no act or omission on the part of

any person shall be punishable as an offence which would not have been so punishable if this section had

not come into force.

(H) Validation of exemption given to a person providing specified taxable services to goods

transport agency with retrospective effect:- (1) The notification of the Government of India in the

Ministry of Finance (Department of Revenue) No.G.S.R. 10(E), dated the 5^th January, 2009, issued in

exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994, (32 of 1994)

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granting exemption from the whole of service tax leviable under section 66 to any person providing

specified taxable services to goods transport agency, shall be deemed to have, and to always have, for all

purposes, validly come into force on and from the 1^st day of January, 2005, at all material times.

(2) Refund shall be made of all such service tax which has been collected but which not have been

so collected as if the notification referred to in subsection (1) had been in force at all material times.

(3) Notwithstanding anything contained in the Finance Act, 1994,(32 of 1994) an application for the

claim of refund of service tax shall be made within six months from the date on which the Finance (No. 2)

Bill, 2009 receives the assent of the President.

Explanation: For the removal of doubts, it is hereby declared that the provisions of section 11B of

the Central Excise Act 1944 (1 of 1944), shall be applicable in case of refunds under this section.

(I) in section 96A, for clause (d), the following clause shall be substituted, namely:-

(d)”Authority” means the Authority for Advance Rulings, constituted under sub-section (1), or

authorised by the Central Government under sub-section (2A), of section 28F of the Customs Act, 1962

(52 of 1962)’,

CHAPTER VI

MISCELLANEOUS

114. Amendment of section 13 of Act 58 of 2002: In the Unit Trust of India (Transfer of

Undertaking and Repeal) Act, 2002, in section 13, in sub-section (1) for the words, figures and letters “the

31^st day of March 2009”, the words, figures and letters “the 31^st day of March, 2014” shall be substituted.

115. Amendment of Chapter VII of Finance (No. 2) Act, 2004: In chapter VII of the Finance (No.

2) Act, 2004 (23 of 2004), after section 113, the following section shall be inserted with effect from the 1^st

day of October, 2009, namely:-

“113A. Chapter VII not to apply in certain cases: Notwithstanding anything contained in this

Chapter, the provisions of this Chapter shall not apply to taxable securities transactions entered into by

any person for, or on behalf of the New Pension System Trust referred to in clause (44) of section in 10

of the Income –tax, Act, 1961’’,(43 of 1961)”,

116. Amendment of Act 18 of 2008: After section 121 of the Finance, Act, 2008, the following

section shall be inserted namely:-

“121A. Provisions of Chapter VII not to apply to taxable commodities transaction: Nothing

contained in this Chapter shall apply to, or in relation to the taxable commodities transaction entered on or

after the 1^st day of April, 2009”,

117. Repeal: The Finance Act, 2009 (26 of 2009) is hereby repealed and shall be deemed never to

have been enacted.

THE FIRST SCHEDULE

(See section 2)

PART I

INCOME-TAX

Paragraph A

(I) In the case of every individual other than the individual referred to in items (II) and (III) of this

Paragraph or Hindu undivided family or association of persons or body of individuals, whether

incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of

section 2 of the Income-tax Act, not being a case to which any other Paragraph of this Part applies,

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Rates of income-tax

(1)

where the total income does not exceed Rs

1,50,000

Nil

(2)

where the total income exceed Rs .1,50,000 but

does not exceed Rs. 3,00,000

10 per cent of the amount by which the total

income exceeds Rs. 1,50,000;

(3)

where the total income exceeds Rs. 3,00,000 but

does not exceed Rs., 5,00, 000

Rs. 15,000 plus 20 per cent of the amount by

which the total income exceeds Rs. 3,00,000

(4)

where the total income exceeds Rs .5,00,000

Rs. 55,000 plus 30 per cent of the amount by

which the total income exceeds Rs. 5,00,000

(II) In the case of every individual, being a woman resident in India, and below the age of sixty-five

years at any time during the previous year,-

Rates of income-tax

(1)

where the total income does not exceed Rs

1,80,000

Nil

(2)

where the total income exceed Rs .1,80,000 but

does not exceed Rs. 3,00,000

10 per cent of the amount by which the total

income exceeds Rs. 1,80,000;

(3)

where the total income exceeds Rs. 3,00,000 but

does not exceed Rs., 5,00, 000

Rs. 12,000 plus 20 per cent of the amount by

which the total income exceeds Rs. 3,00,000

(4)

where the total income exceeds Rs .5,00,000

Rs. 52,000 plus 30 per cent of the amount by

which the total income exceeds Rs. 5,00,000

(III) In the case of every individual, being a resident in India, who is of the age of sixty-five years or

more at any time during the previous year-

Rates of income-tax

(1)

where the total income does not exceed Rs 2,25, 000

Nil

(2)

where the total in come exceeds Rs .2,25,000 but does

not exceed Rs. 3,00,000

10 per cent of the amount by which

the

total

income

exceeds

Rs.

2,25,000

(3)

where the total income exceeds Rs. 3,00,000 but does

not exceed Rs., 5,00, 000

Rs. 7,500 plus 20 per cent of the

amount by which the total income

exceeds Rs. 3,00,000

(4)

where the total income exceeds Rs .5,00,000

Rs. 47,500 plus 30 per cent of the

amount by which the total income

exceeds Rs. 5,00,000

Surcharge on income-tax

The amount of income-tax computed in accordance with the preceding provisions of this Paragraph,

or in section 111A or section 112, shall

(i) in the case of every individual or Hindu undivided family or association of persons or body of

individuals having a total income exceeding ten lakh rupees, be increased by a surcharge for purposes of

the Union calculated at the rate of ten per cent of such income-tax;

(ii) in the case of every person, other than those mentioned in item (i), be increased by a surcharge,

for purposes of the Union, calculated at the rate of ten per cent of such income-tax;

Provided that in case of persons mentioned in item (i) above having a total income exceeding ten

lakh rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the

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total amount payable as income –tax on a total income of ten lakh rupees by more than the amount of

income that exceeds ten lakh rupees.

Paragraph B

In the case of every co-operative society-

Rates of income-tax

(1)

where the total income does not exceed Rs

10,000

10 per cent of the total income;

(2)

where the total income exceed Rs .10,000 but

does not exceed Rs 20,000

Rs, 1000 plus 20 per cent of the amount by

which the total income exceeds Rs. 10,000;

(3)

where the total income exceeds Rs. 20,000

Rs. 3,000 plus 30 per cent of the amount by

which the total income exceeds Rs. 20,000;

Paragraph C

In the case of every firm-,

Rate of income-tax

On the whole of the total income

30 percent.

Surcharge on income-tax

The amount of income-tax computed at the rate hereinbefore specified, or in section 111A or

section 112, shall, in the case of every firm having a total income exceeding one crore rupee, be

increased by a surcharge for purposes of the Union calculated at the rate of ten per cent of such income-

tax;

Provided that in the case of every firm having a total income exceeding one crore rupees, the total

amount payable as income-tax and surcharge on such income shall not exceed the total amount payable

as income-tax on a total income of one crore rupees by more that the amount of income than exceeds

one crore rupees.

Paragraph D

In the case of every local authority,

Rate of income-tax

on the whole of the total income

30 per cent

Paragraph E

In the case of a company,

Rates of income-tax

(I)

In the case of a domestic company

30 per cent of the total income;

(II)

In the case of a company other than a domestic

company-

(i)

on so much of the total income as consists of,

(a)

royalties received from Government or an Indian

concern in pursuance of an agreement made by it

with the Government or the Indian concern after

the 31^st day of March, 1961 but before the 1^st day

of April, 1976; or

(b)

fees for rendering technical services received

from Government or an Indian concern in

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pursuance of an agreement made by it with the

Government or the Indian concern after the 29^th

day of February, 1964 but before the 1^st day of

April, 1976,

and where such agreement has, in either case,

been approved by the Central Government

50 percent;

(ii)

on the balance, if any, of the total income

40 percent

Surcharge on income-tax

The amount of income-tax computed in accordance with the preceding provisions of this Paragraph,

or in section 111A or section 112, shall in the case of every company, be increased by a surcharge for

purposes of the Union calculated,

(i) in the case of every domestic company having a total income exceeding one crore rupees, at the

rate of ten per cent of such income-tax;

(ii) in the case of every company other than a domestic company having a total income exceeding

one crore rupees, at the rate of two and one-half per cent;

Provided that in the case of every company having a total income exceeding one crore rupees, the

total amount payable as income-tax and surcharge on such income shall not exceed the total amount

payable as income-tax on a total income of one crore rupees by more that the amount of income that

exceeds one crore rupees.

PART II

RATES FOR DEDUCTION OF TAX AT SOURCE IN CERTAIN CASES

In every case in which under the provisions of sections 193, 194, 194A, 194B, 194BB, 194D and

195 of the Income tax Act, tax is to be deducted at the rates in force, deduction shall be made from the

income subject to the deduction at the following rates:-

Rate of income-tax

In the case of a person other than a company

(a) where the person is resident in India

(i) on income by way of interest other than “Interest on securities”

10 percent;

(ii) on income by way of winnings from lotteries, crossword puzzles, card

games and other games of any sort

30 per cent;

(iii) on income by way of winnings from horse races

30 percent

(iv) on income by way of insurance commission

10 per cent

(v) on income by way of interest payable on-

10 per cent

(A) any debentures or securities for money issued by or on behalf of any

local authority or a corporation established by a Central, state or provincial

Act;

(B) any debentures issued by a company where such debentures are

listed on a recognized stock exchange in India in accordance with the

Securities Contracts (Regulation) Act, 1956 (42 of 1956) and any rules

made thereunder;

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Rate of income-tax

(vi) on any other income

10 per cent;

(b)

where the person is not resident in India-

(i) in the case of a non-resident Indian

(A) on any investment income

20 per cent ;

(B) on income by way of long-term capital gains referred to in section 115E

10 per cent ;

(C)on income by way of short-term capital gains referred to in section

111A

15 per cent ;

(D) on other income by way of long-term capital gains [not being long-term

capital gains referred to in clauses (33), (36) and (38) of section 10]

20 per cent ;

(E) on income by way of interest payable by Government or an Indian

concern on moneys borrowed or debt incurred by Government or the

Indian concern in foreign currency.

20 percent ;

(F) on income by way of royalty payable by Government or an Indian

Concern in pursuance of an agreement made by it with the Government or

the Indian concern where such royalty is in consideration for the transfer of

all or any rights (including the granting of a licence) in respect of copyright

in any book on a subject referred to in the first proviso to sub-section (1A)

of section 115A of the Income-tax Act, to the Indian concern, or in respect

of any computer software referred to in the second proviso to sub-section

(1A) of section 115A of the Income-tax Act, to a person resident in India-

(I) where the agreement is made on or after the 1^st day of June, 1997 but

before the 1^st day of June, 2005

20 percent

(II) where the agreement is made on or after the 1^st day of June, 2005

10 per cent

(G) on income by way of royalty [not being royalty of the nature referred to

in sub-item (b) (i) (F)] payable by Government or an Indian concern in

pursuance of an agreement made by it with the Government or the Indian

concern and where such agreement is with an Indian concern, the

agreement is approved by the Central Government or where it relates to a

matter included in the industrial policy, for the time being in force, of the

Government, of India the agreement is in accordance with that policy-

(I) where the agreement is made on or after the 1^st day of June, 1997 but

before the 1^st day of June, 2005

20 percent

(II) where the agreement is made on or after the 1^st day of June, 2005

10 percent;

(H) on income by way of fees for technical services payable by

Government or an Indian concern in pursuance of an agreement made by

it with the Government or the Indian concern and where such agreement

is with an Indian concern, the agreement is approved by the Central

Government or where it relates to a matter included in the industrial policy,

for the time being in force, of the Government of India the agreement is in

accordance with that policy

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Rate of income-tax

(I) where the agreement is made on or after the 1^st day of June,1997 but

before the 1^st day of June, 2005

20 per cent

(II) where the agreement is made on or after the 1^st day of June, 2005

10 per cent

(I) on income by way of winnings from lotteries, crossword puzzles, card

games and other games of any sort

30 percent;

(J) on income by way of winnings from horse races

30 percent;

(K) on the whole of the other income

30- percent;

(ii) in the case of any other person

(A) on income by way of interest payable by Government or an Indian

concern on moneys borrowed or debt incurred by Government or the

Indian concern in foreign currency

20 percent;

(B) on income by way of royalty payable by Government or an Indian

concern in pursuance of an agreement made by it with the Government or

the Indian concern where such royalty is in consideration for the transfer of

all or any rights (including the granting of a licence) in respect of copyright

in any book on a subject referred to in the first proviso to sub-section (1A)

of section 115A of the Income-tax Act, to the Indian concern, or in respect

of any computer software referred to in the second proviso to sub-section

(1A) of section 115A of the Income-tax Act, to a person resident in India-

(I) where the agreement is made on or after the 1^st day of June, 1997 but

before the 1^st day of June, 2005

20 percent;

(II) where the agreement is made on or after the 1^st day of June, 2005

10 percent;

in sub-item (b)(ii) (B)] payable by Government or an Indian concern in

pursuance of an agreement made by it with the Government or the Indian

concern and where such agreement is with an Indian concern, the

agreement is approved by the Central Government or where it relates to a

matter included in the industrial policy, for the time being in force, of the

Government of India, the agreement is in accordance with that policy-

(I) where the agreement is made on or after the 1^st day of June, 1997 but

before the 1^st day of June, 2005

20 percent

(II) where the agreement is made on or after the 1^st day of June, 2005

10 percent

(D) on income by way of fees for technical services payable by

Government or an Indian Concern in pursuance of an agreement made by

it with the Government or the Indian concern and where such agreement

is with an Indian concern, the agreement is approved by the Central

Government or where it relates to a matter included in the industrial policy,

for the time being in force, of the Government of India, the agreement is in

accordance with that policy-

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622

Rate of income-tax

(I) where the agreement is made on or after the 1^st day of June, 1997 but

before the 1^st day of June, 2005

20 percent

(II) where the agreement is made on or after the 1^st day of June, 2005

10 percent

(E) on income by way of winnings from lotteries, crossword puzzles, card

games and other games of any sort

30 percent ;

(F) on income by way of winnings from horse races

30 percent;

(G) on income by way of short-term capital gains referred to in section

111A

15 percent;

(H) on income by way of long-term capital gains [not being long-term

capital gains referred to in clauses (33), (36) and (38) of section 10]

20 percent;

(I) on the whole of the other income

30 percent;

In the case of a company-

(a) where the company is a domestic company

(i) on income by way of interest other than “Interest on securities”

10 percent;

(ii) on income by way of winnings from lotteries, crossword puzzles, card

games and other games of any sort

30 percent

(iii) on income by way of winnings from horse races

30 percent;

(iv) on any other income

10 percent;

(b) where the company is not a domestic company

(i) on income by way of winnings from lotteries, crossword puzzles, card

games and other games of any sort

30 percent

(ii) on income by way of winnings from horse races

30 percent;

(iii) on income by way of interest payable by Government or an Indian

concern on moneys borrowed or debt incurred by Government or the

Indian concern in foreign currency

20 percent;

(iv) on income by way of royalty payable by Government or an Indian

concern in pursuance of an agreement made by it with the Government or

the Indian concern after the 31^st day of March,. 1976 where such royalty is

in consideration for the transfer of all or any rights (including the granting

of a licence) in respect of copyright in any book on a subject referred to in

the first proviso to sub-section (1A) of section 115A of the Income-tax Act,

to the Indian concern, or in respect of any computer software referred to in

the second proviso to sub-section (1A) of section 115A of the Income-tax

Act, to a person resident in India-

(A) where the agreement is made on the 1^st day of June, 1997

30 percent;

(B) where the agreement is made on or after the 1^st day of June, 1997 but

before the 1^st day of June, 2005

20 percent;

10 percent;

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Rate of income-tax

(v) on income by way of royalty [not being royalty of the nature referred to

in sub-item (b) (iv)] payable by Government or an Indian concern in

pursuance of an agreement made by it with the Government or the Indian

concern and where such agreement is with an Indian concern, the

agreement is approved by the Central Government or where it relates to a

matter included in the industrial policy, for the time being in force, of the

Government of Indian the agreement is in accordance with that policy-

(A) where the agreement is made after 31^st day of March, 1961 but before

the 1^st day of April, 1976;

50 percent;

(B) where the agreement is made after the 31^st day of March, 1976 but

before the 1^st day of June 1997,

30 percent;

before the 1^st day of June, 2005

20 percent;

(D) where the agreement is made on or after the 1^st day of June, 2005

10 percent;

(vi) on income by way of fees for technical services payable by

Government or an Indian Concern in pursuance of an agreement made by

it with the Government or the Indian concern and where such agreement

is with an Indian concern, the agreement is approved by the Central

Government or where it relates to a matter included in the industrial policy,

for the time being in force, of the Government of India, the agreement is in

accordance with that policy-

(A) where the agreement is made after the 29^th day of February, 1964 but

before the 1^st day of April, 1976;

50 percent;

(B) where the agreement is made after the 31^st day of March, 1976 but

before the 1^st day of June, 1997;

30 percent;

but before the 1^st day of June, 2005

20 percent;

(D) where the agreement is made on or after the 1^st day of June, 2005

10 percent;

(vii) on income by way short-term capital gains referred to in section 111A

15 percent;

(viii) on income by way of long-term capital gains[ not being long-term

capital gains referred to in clauses (33), (36) and (38) of section 10]

20 percent;

(ix) on any other income

40 percent;

Explanation:- For the purpose of item 1 (b) (i) of this Part, “investment income” and “non-resident

Indian” shall have the meanings assigned to them in Chapter XII-A of the Income-tax Act.

Surcharge on income-tax

The amount of income-tax deducted in accordance with the provisions of item 2 (b) of this, Part,

shall be increased by a surcharge, for purposes of the Union, in the case of every company other than a

domestic company, calculated at the rate of two and one-half percent of such income-tax where the

income or the aggregate of such incomes paid or likey to be paid and subject to the deduction exceeds

one crore rupees.

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PART III

RATES FOR CHARGING INCOME-TAX IN CERTAIN CASES, DEDUCTING INCOME-TAX FROM

INCOME CHARGEABLE UNDER THE HEAD “SALARIES” AND COMPUTING” “ADVANCE TAX”

In cases in which income-tax has to be charged under sub-section (4) of section 172 of the Income-

tax Act or sub-section (2) of section 174 or section 174A or section 175 or sub-section (2) of section 176

of the said Act or deducted from or paid on, from income chargeable under the head “Salaries” under

section 192 of the said Act or in which the “advance tax” payable under Chapter XVII-C of the said Act

has to be computed at the rate or rates in force, such income-tax or, as the case may be, :advance tax”

[not being “advance tax” in respect of any income chargeable to tax under Chapter XII or Chapter XII-A or

income chargeable to tax under section 115JB or sub-section (1A) of section 161 or section 164 or

section 164A or section 167B of the Income-tax Act at the rates as specified in that Chapter or section or

surcharge, wherever applicable, on such “advance tax” in respect of any income chargeable to tax under

section 115A or section 115AB or section 115AC or section 115ACA or section 115AD or section 115 B

or section 115BB or section 115BBA or section 115BBC or section 115E or section 115JB] shall be

charged, deducted or computed at the following rate or rates;

Paragraph A

(I) In the case of every individual other than the individual referred to in items (II) and (III) of this

Paragraph or Hindu undivided family or association of persons or body of individuals, whether

incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of

section 2 of the Income-tax Act, not being a case to which any other Paragraph of this Part applies,

Rates of income-tax

(1)

where the total income does not exceed Rs

1,60,000

Nil

(2)

where the total income exceed Rs .1,60,000 but

does not exceed Rs. 3,00,000

10 per cent of the amount by which the total

income exceeds Rs. 1,60,000;

(3)

where the total income exceeds Rs. 3,00,000 but

does not exceed Rs., 5,00, 000

Rs. 14,000 plus 20 per cent of the amount by

which the total income exceeds Rs. 3,00,000

(4)

where the total income exceeds Rs .5,00,000

Rs. 54,000 plus 30 per cent of the amount by

which the total income exceeds Rs. 5,00,000

(II) In the case of every individual, being a woman resident in India, and below the age of sixty-five

years at any time during the previous year-

Rates of income-tax

(1)

where the total income does not exceed Rs

1.90,000

Nil

(2)

where the total income exceed Rs .1,90,000 but

does not exceed Rs. 3,00,000

10 per cent of the amount by which the

total income exceeds Rs1,90,000

(3)

where the total income exceeds Rs. 3,00,000 but

does not exceed Rs., 5,00, 000

Rs. 11,000 plus 20 per cent of the amount

by which the total income exceeds Rs.

3,00,000

(4)

where the total income exceeds Rs .5,00,000

Rs. 51,000 plus 30 per cent of the amount

by which the total income exceeds Rs.

5,00,000

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(III) In the case of every individual, being a resident in India, who is of the age of sixty-five years or

more at any time during the previous year-

Rates of income-tax

(1)

where the total income does not exceed Rs

2,40,000

Nil

(2)

where the total income exceed Rs .2,40,000 but

does not exceed Rs. 3,00,000

10 per cent of the amount by which the

total income exceeds Rs 2,40,000;

(3)

where the total income exceeds Rs. 3,00,000 but

does not exceed Rs., 5,00, 000

Rs. 6,000 plus 20 per cent of the amount

by which the total income exceeds Rs.

3,00,000

(4)

where the total income exceeds Rs .5,00,000

Rs. 46,000 plus 30 per cent of the amount

by which the total income exceeds Rs.

5,00,000

Paragraph B

In the case of every co-operative society-

Rates of income-tax

(1)

where the total income does not exceed Rs

10,000

10 per cent of the total income;

(2)

where the total income exceed Rs .10,000 but

does not exceed Rs 20,000

Rs, 1,000 plus 20 per cent of the amount by

which the total income exceeds Rs. 10,000;

(3)

where the total income exceeds Rs. 20,000

Rs. 3,000 plus 30 per cent of the amount by

which the total income exceeds Rs. 20,000;

Paragraph C

In the case of every firm-,

Rate of income-tax

On the whole of the total income

30 percent.

Paragraph D

In the case of every local authority,

Rate of income-tax

on the whole of the total income

30 per cent

Paragraph E

In the case of a company,

Rates of income-tax

In the case of a domestic company

30 per cent of the total income;

In the case of a company other than a domestic

company

(i) on so much of the total income as consists of,

(a)

royalties received from Government or an Indian

concern in pursuance of an agreement made by it

with the Government or the Indian concern after

the 31^st day of March, 1961 but before the 1^st day

of April, 1976; or

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626

(b)

fees for rendering technical services received

from Government or an Indian concern in

pursuance of an agreement made by it with the

Government or the Indian concern after the 29^th

day of February, 1964 but before the 1^st day of

April, 1976,

and where such agreement has, in either case,

been approved by the Central Government

50 percent;

(ii)

on the balance, if any, of the total income

40 percent

Surcharge on income-tax

The amount of income-tax computed in accordance with the preceding provisions of this Paragraph,

or in section 111A or section 112, shall in the case of every company, be increased by a surcharge for

purposes of the Union calculated,

(i) in the case of every domestic company having a total income exceeding one crore rupees, at the

rate of ten per cent of such income-tax;

(ii) in the case of every company other than a domestic company having a total income exceeding

one crore rupees, at the rate of two and one-half per cent;

Provided that in the case of every company having a total income exceeding one crore rupees, the

total amount payable as income-tax and surcharge on such income shall not exceed the total amount

payable as income-tax on a total income of one crore rupees by more that the amount of income that

exceeds one crore rupees.

PART IV

[See section 2(12)(c)]

RULES FOR COMPUTATION OF NET AGRICULTURAL INCOME

Rule 1:- Agricultural income of the nature referred to in sub-clause (a) of clause (1A) of section 2 of

the Income-tax Act 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 sections 57 to 59 of that Act shall, so far as

may be, apply accordingly:

Provided that sub-section (2) of section 58 shall apply subject to the modification that the reference

to section 40A therein shall be 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-clause (c) of clause

(1A) of section 2 of the Income-tax Act [other than income derived from any building required as a

dwelling-house by the receiver of the rent or revenue of the cultivator or the receiver of rent-in-kind

referred to in the said sub-clause (c) ] shall be computed as if it were income chargeable to income-tax

under that Act under the head “Profits and gains of business or profession” and the provisions of sections

30,31,32,36,37,38, 40, 40A [other than sub-sections (3) and (4) there of], 41, 43, 43A, 43B and 43C of the

Income-tax Act shall, so far as may be, apply accordingly.

Rule 3:- Agricultural income of the nature referred to in sub-clause (c) of clause (1A) of section 2 of

the Income tax Act being income derived 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 said sub-clause (c)

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627

shall be computed as if it were income chargeable to income-tax under that Act under the head “Income

from house property” and the provisions of sections 23 to 27 of that Act Shall, so far as may be, apply

accordingly.

Rule 4:- Notwithstanding anything contained in any other provisions of these rules, in a case-

(a) where the assessee derives income from sale of tea grown and manufactured by him in India,

such income shall be computed in accordance with rule 8 of the income-tax Rules, 1962 and sixty per

cent of such income shall be regarded as the agricultural income of the assessee;

(b) where the assessee derives income from sale of centrifuged latex or cenex or latex based

crepes (such as pale latex crepe) or brown crepes (such as estate brown crepe, re-milled crepe, smoked

blanket crepe or flrt bark crepe) or technically specified block rubbers manufactured or processed by him

from rubber plants grown by him in India, such income shall be computed in accordance with rule 7A of

the Income-tax Rules, 1962 and sixty-five percent of such income shall be regarded as the agricultural

income of the assessee;

India, such income shall be computed in accordance with rule 7B of the Income-tax Rules, 1962 and sixty

percent or seventy –five percent, as the case may be, of such income shall be regarded as the

agricultural income of the assessee.

Rule 5:- Where the assess is a member of an association of persons or a body of individuals (other

than a Hindu undivided family, a company or a firm) which in the previous year has either no income

chargeable 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 association of persons or a body individuals (other than a Hindu

undivided family, a company or a firm) but has any agricultural income then the Agriculture income or loss

of the association or body shall be computed 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 6: Where the result of the computation for the previous 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 agricultural income;

Provided that where the assessee is a member of an association of persons or a body of individuals

and the share of the assessee in the agricultural income of the association or body, as the case may be,

is a loss, such loss shall not be set off against any income of the assessee from any other source of

agricultural income.

Rule 7:- Any sum payable by the assessee on account of any tax levied by the State Government

on the agricultural income shall be deducted in computing the agricultural income.

Rule 8:- (1) where the assesee has, in the previous year relevant to the assessment year

commencing on the 1^st day of April, 2009, any agricultural income and the net result of the computation of

the agricultural income of the assessee for any one or more of the previous years relevant to the

assessment years commencing on the 1^st day of April, 2001 or the 1^st day of April, 2002 or the 1^st day of

April ,2003 or the 1^st day of April, 2004 or the 1^st day of April, 2005 or the day of April, 2006 or the 1^st day

of April, 2007 or the 1^st day of April, 2008, is a loss, then, for the purposes of sub-section (2) of section, 2

of this Act,-

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(i) the loss so computed for the previous year relevant to the assessment year commencing on the

1^st day of April, 2001 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 1^st day of April, 2002 or the 1^st

day of April, 2003 or the 1^st day of April, 2004 or the 1^st day of April, 2005 or the 1^st day of April, 2006 or

the 1^st day of April, 2007 or the 1^st day of April, 2008.

(ii) the loss so computed for the previous year relevant to the assessment year commencing on the

1^st day of April, 2002, 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 1^st day of April, 2003 or the 1^st

day of April, 2004 or the 1^st day of April, 2005 or the 1^st day of April, 2006 or the 1^st day of April, 2007 or

the 1^st day of April, 2008.

(iii) the loss so computed for the previous year relevant to the assessment year commencing on the

1^st day of April, 2003, 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 1^st day of April, 2004 or the 1^st

day of April 2005 or the 1^st day of April, 2006 or the 1^st day of April, 2007 or the 1^st day of April, 2008.

(iv) the loss so computed for the previous year relevant to the assessment year commencing on the

1^st day of April, 2004, 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 1^st day of April, 2005 or the 1^st

day of April, 2006 or the 1^st day of April, 2007 or the 1^st day of April, 2008.

(v) the loss so computed for the previous year relevant to the assessment year commencing on the

1^st day of April, 2005, 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 1^st day of April, 2006 or the 1^st

day of April, 2007 or the 1^st day of April, 2008

(vi) the loss so computed for the previous year relevant to the assessment year commencing on the

1^st day of April, 2006, 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 1^st day of April, 2007 or the 1^st

day of April, 2008.

(vii) the loss so computed for the previous year relevant to the assessment year commencing on

the 1^st day of April, 2007, 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 1^st day of April, 2008.

(viii) the loss so computed for the previous year relevant to the assessment year commencing on

the 1^st day of April, 2008,

shall be set off against the agricultural income of the assessee for the previous year relevant to the

assessment year commencing on the 1^st day of April, 2009.

(2) Where the assessee has, in the previous year relevant to the assessment year commencing on

the 1^st day of April, 2010, 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 the previous year, in such other period, any

agricultural income and the net result of the computation of the agricultural income of the assessee for

any one or more of the previous years relevant to the assessment years commencing on the 1^st day of

April, 2002 or the 1^st day of April, 2003 or the 1^st day of April, 2004 or the 1^st day of April, 2005 or the 1^st

day of April, 2006 or the 1^st day of April, 2007 or the 1^st day of April, 2008 or the 1^st day of April, 2009 is a

loss, then, for the purposes of sub-section (10 ) of section 2 of this Act-,

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(i) the loss so computed for the previous year relevant to the assessment year commencing on the

1^st day of April, 2002 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 1^st day of April, 2003 or the 1^st

day of April, 2004 or the 1^st day of April, 2005 or the 1^st day of April, 2006 or the 1^st day of April, 2007 or

the 1^st day of April, 2008 or the 1^st day of April, 2009.

(ii) the loss so computed for the previous year relevant to the assessment year commencing on the

1^st day of April, 2003 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 1^st day of April, 2004 or the 1^st

day of April, 2005 or the 1^st day of April, 2006 or the 1^st day of April, 2007or the 1^st day of April, 2008 or

the 1^st day of April, 2009.

(iii) the loss so computed for the previous year relevant to the assessment year commencing on the

1^st day of April, 2004, 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 1^st day of April, 2005 or the 1^st

day of April 2006 or the 1^st day of April, 2007 or the 1^st day of April, 2008 or the 1^st day of April, 2009

(iv) the loss so computed for the previous year relevant to the assessment year commencing on the

1^st day of April, 2005, 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 1^st day of April, 2006 or the 1^st

day of April, 2007 or the 1^st day of April, 2008 or the 1^st day of April, 2009.

(v) the loss so computed for the previous year relevant to the assessment year commencing on the

1^st day of April, 2006, 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 1^st day of April, 2007 or the 1^st

day of April, 2008 or the 1^st day of April, 2009.

(vi) the loss so computed for the previous year relevant to the assessment year commencing on the

1^st day of April, 2007, 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 1^st day of April, 2008 or the 1^st

day of April, 2009.

(vii) the loss so computed for the previous year relevant to the assessment year commencing on

the 1^st day of April, 2008, 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 1^st day of April, 2009.

(viii) the loss so computed for the previous year relevant to the assessment year commencing on

the 1^st day of April, 2009,

shall be set off against the agricultural income of the assessee for the previous year relevant to the

assessment year commencing on the 1^st day of April, 2010.

(3) 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 sub-rule (1) or sub-rule (2)

shall entitle any person, other than the person incurring the loss, to have it set off under sub-rule (1) or, as

the case may be, sub-rule (2)

(4) Notwithstanding anything contained in this rule, no loss which has not been determined by the

Assessing Officer under the provisions of these rules or the rules contained in Part –IV of the First

Schedule to the Finance Act, 2001 (14 of 2001), or of the First Schedule to the Finance Act 2002

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630

(20 of 2002), or of the First Schedule to the Finance Act, 2003 (32 of 2003), or of the First Schedule to the

Finance (No. 2) Act, 2004 (23 of 2004) or of the First Schedule to the Finance Act, 2005 (18 of 2005), or

of the First Schedule to the Finance Act, 2006 (21 of 2006) or of the First Schedule to the Finance Act,

2007 (22 of 2007) or of the First Schedule to the Finance Act, 2008 (18 of 2008) shall be set off under

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

Rule 9:- Where the result of the computation 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 10:- The provisions of the Income-tax Act relating to procedure for assessment (including the

provisions of section 288 A relating to rounding off of income). Shall, with the necessary modifications,

apply in relation to the computation of the net agricultural income of the assessee as they apply in relation

to the assessment of the total income.

Rule 11:- For the purposes of computing the net agricultural income of the assessee, the Assessing

Officer shall have the same power as he has under the Income-tax Act for the purposes of assessment of

the total income.

THE SECOND SCHEDULE

(See section 93)

Sl.

Notification number

and date

Amendment

Date of effect

of amendment

G.S.R. 260(E), dated the

1^st May 2006, 40/2006-

Customs, dated the 1^st May

2006

In the said notification, in the opening paragraph,

(i) after condition (iii), the following condition shall be

inserted, namely:

“(iiia) that in respect of imports made after the

discharge of export obligation in full, if facility under

rule 18 (rebate of duty paid on materials used in the

manufacture of resultant product) or sub-rule (2) of

rule 19 of the Central Excise Rules, 2002 or CENVAT

Credit under CENVAT Credit Rules, 2004 has been

availed, than the importer shall use the imported

materials for the manufacture of dutiable goods in his

factory or in the factory of his supporting manufactured

and shall submit a certificate from the jurisdictional

Central Excise Officer that the imported materials have

been so used.

1^st May, 2006

Provided that, in case,-

(a) materials are imported against an authorization

transferred by the Regional Authority, or

(b) the imported materials are transferred with the

permission of Regional Authority.

then the importer shall pay an amount equal to the

additional duty of customs leviable on the materials so

imported or transferred, but for the exemption

contained herein, together with interest at the rate of

fifteen per cent per annum from the date of clearance

of the said materials;

Provided further that no such amount shall be payable

in respect of authorization issued from the 1^st day of

May, 2006 to the 31^st day of March, 2007;’’

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631

(ii) in conditions (iiia), after the second proviso, the

following proviso shall be inserted, namely:-

“Provided also that if the importer pays additional duty

of customs leviable on the imported materials but for

the exemption contained herein, then the imported

materials may be cleared without furnishing a bond

specified in this condition and the additional duty of

customs so paid shall be eligible for availing CENVAT

Credit under the CENVAT Credit Rules, 2004”,

19 the

February, 2009

(iii) for condition (v), the following condition shall be

substituted, namely:-

“(v) that the export obligation as specified in the said

authorization (both in value and quantity terms) is

discharged within the period specified in the said

authorization or within such extended period as may

be granted by the Regional Authority by exporting

resultant products, manufactured in India which are

specified in the said authorization:

1 st May, 2006

to 18^th

February, 2009

Provided that an Advance Intermediate authorization

holder shall discharge export obligation by supplyng

the resultant products to the exporter in terms of

paragraph 4.1.3. (ii) of the Foreign Trade Policy”.

(iv) in the Explanation after clause (iv), the following

clause shall be inserted, namely

(v) “dutiable goods” means excisable goods which are

not exempt from central excise duty and which are not

chargeable to “nil” rate of central excise duty”,

1^st May, 2006

to 18^th

February 2009.

THE THIRD SCHEDULE

(See section 103)

In the First Schedule to the Customs Tariff Act, in SECTION XI, in Note, 2 for para (A), the following

shall be substituted, namely:-

“ (A) Goods classifiable in Chapters 50 to 55 or in heading 5809 or 5902 and of a mixture of two or

more textile materials are to be classified as if consisting wholly of that one textile material which

predominates by weight over any other single textile material.

When no one textile material predominates by weight, the goods are to be classified as if consisting

wholly of that one textile material which is covered by the heading which occurs last in numerical order

among those which equally merit consideration”,

THE FOURTH SCHEDULE

(See section 111)

Sl.

Notification number and date

Amendment

Date of effect of

amendment

G.S.R. 448 (E) dated the 1^st

August, 1997 [33/1997-Central

Excise

(N.T.)

dated

the

1^st

August, 1997]

In the said notification ,in the preamble,

for the words and figures “powers

conferred by section 37”, the words,

figures and letter” powers conferred by

section 3A read with section 37” shall

be substituted.

1^st August, 1997

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632

G.S.R. 503 (E) dated the 30^th

August, 1997 [44/1997-Central

Excise (N.T.) dated the 30^th

August, 1998]

In the said notification ,in the preamble,

for the words and figures “powers

conferred by section 37”, the words,

figures and letter” powers conferred by

section 3A read with section 37” shall

be substituted.

30^th August, 1997

G.S.R. 130 (E) dated the 10^th

March, 1998 [7/1998-Central

Excise (N.T.) dated the 10^th

March, 1998]

In the said notification ,in the preamble,

for the words and figures “powers

conferred by section 37”, the words,

figures and letter” powers conferred by

section 3A read with section 37” shall

be substituted.

10^th March, 1998

THE FIFTH SCHEDULE

(See section 112)

In the First Schedule to the Central Excise Tariff Act-

(1) in chapter 8, for NOTE 1, the following NOTE shall be substituted, namely:-

1. This chapter does not cover;

(a) inedible nuts or fruits ;or

(b) betel nut product known as “Supari” of tariff item 2106 90 30;

(2) in Chapter 21, after NOTES, 5, the following NOTE shall be inserted namely:-

“6 In relation to product of tariff item 2106 90 30, the process of adding or mixing cardamom copra,

menthol spices, sweetening agents or any such ingredients other than lime, katha (catechu) or tobacco to

betel nut, in any form, shall amount to “manufacture”,

(3) in Chapter 58, against tariff item 5801 22 10,

(i) in column (3), the entry “m” shall be inserted;

(ii) in column (4), the entry “8% “shall be inserted.

T.K. VISWANATHAN,

Secretary to the Govt of India

MINISTRY OF FINANCE

(Department of Revenue)

NOTIFICATION

New Delhi, the 14^th September 2009

No. 142/2009-Customs (NT)

G.S.R. 676 (E)- In exercise of the powers conferred by section 86 of the Finance (No. 2)_ Act, 2009

(33 of 2009), the Central Government hereby appoints the 15^th day of September, 2009, as the date on

which sub-sections (2A), (2B), (2C), and (2D) shall be inserted in Section 28F of the Customs Act, 1962

(52 of 1962).

[F.NO. 29/02/2009-Ad IC]

PRASHANT KUMAR, Under Secy.

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