Taxmann's Income Tax Act | POCKET Edition

SECTION

PAGE

CONTENTS PAGE

1

DIVISION ONE Income-tax Act, 1961 ◆ Arrangement of Sections

I-3

◆ Text of the Income-tax Act, 1961 as amended by

the Finance Act, 2022 and Taxation and Other Laws (Amendment) Act, 2021

◆ Validation Provisions

1.1 1.1092

2

DIVISION TWO Finance Act, 2022 ◆ Relevant text of the Finance Act, 2022

v

2.3

SECTION

PAGE

DIVISION ONE

Income-tax Act, 1961

SECTION

PAGE

INCOME-TAX ACT, 1961

Arrangement of Sections SECTION

PAGE CHAPTER I PRELIMINARY

1. Short title, extent and commencement

1.1 1.1

2. Definitions

1.29

3. “Previous year” defined CHAPTER II BASIS OF CHARGE

4. Charge of income-tax

1.29

5. Scope of total income

1.29

5A. Apportionment of income between spouses governed

by Portuguese Civil Code

1.30

6. Residence in India

1.30

7. Income deemed to be received

1.32

8. Dividend income

1.33

9. Income deemed to accrue or arise in India

1.33

9A. Certain activities not to constitute business connection in India

1.44

9B. Income on receipt of capital asset or stock in trade by specified person from specified entity

1.47

CHAPTER III INCOMES WHICH DO NOT FORM PART OF TOTAL INCOME

10. Incomes not included in total income

1.48

10A. Special provision in respect of newly established undertakings in free trade zone, etc.

1.120

10AA. Special provisions in respect of newly established units in Special Economic Zones

1.126

10B. Special provisions in respect of newly established hundred per cent export-oriented undertakings

1.129

10BA. Special provisions in respect of export of certain articles or things

1.133

I-3

I.T. ACT, 1961 SECTION

I-4 PAGE

1.135

10BB. Meaning of computer programmes in certain cases 10C. Special provision in respect of certain industrial undertakings in North-Eastern Region

1.135

11. Income from property held for charitable or religious purposes

1.137

12. Income of trusts or institutions from contributions

1.146

12A. Conditions for applicability of sections 11 and 12

1.147

12AA. Procedure for registration

1.150

12AB. Procedure for fresh registration

1.151

13. Section 11 not to apply in certain cases

1.154

13A. Special provision relating to incomes of political parties

1.160

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

1.161

CHAPTER IV COMPUTATION OF TOTAL INCOME

Heads of income

14. Heads of income 14A. Expenditure incurred in relation to income not includible in total income

1.161 1.162

A.—Salaries

15. Salaries 16. Deductions from salaries 17. “Salary”, “perquisite” and “profits in lieu of salary” defined

1.162 1.163 1.163

B.—[Omitted]

1.170 1.170 1.170 1.170

18.

19.

20.

21.

[OMITTED BY THE FINANCE ACT, 1988, W.E.F. 1-4-1989]

22.

23.

24.

25.

Income from house property Annual value how determined Deductions from income from house property Amounts not deductible from income from house property

1.172

25A. Special provision for arrears of rent and unrealised rent received subsequently

1.172

[OMITTED BY THE FINANCE ACT, 1988, W.E.F. 1-4-1989] [OMITTED BY THE FINANCE ACT, 1988, W.E.F. 1-4-1989] [OMITTED BY THE FINANCE ACT, 1988, W.E.F. 1-4-1989]

C.—Income from house property

1.170 1.170 1.171

26. Property owned by co-owners

1.173

27. “Owner of house property”, “annual charge”, etc., defined

1.173

I-5

ARRANGEMENT OF SECTIONS

SECTION

PAGE

D.—Profits and gains of business or profession

28. Profits and gains of business or profession

1.174

29. Income from profits and gains of business or profession, how computed

1.176

30. Rent, rates, taxes, repairs and insurance for buildings

1.176

31. Repairs and insurance of machinery, plant and furniture

1.177

32. Depreciation

1.177

32A. Investment allowance

1.181

32AB. Investment deposit account

1.189

32AC. Investment in new plant or machinery

1.193

32AD. Investment in new plant or machinery in notified backward areas in certain States

1.195

33. Development rebate 33A. Development allowance 33AB. Tea development account, coffee development account and rubber development account 33ABA. Site Restoration Fund 33AC. Reserves for shipping business 33B. Rehabilitation allowance

1.196 1.199 1.203 1.206 1.209 1.211

34. Conditions for depreciation allowance and development rebate

1.212

34A. Restriction on unabsorbed depreciation and unabsorbed investment allowance for limited period in case of certain domestic companies

1.213

35. Expenditure on scientific research 35A. Expenditure on acquisition of patent rights or copyrights 35AB. Expenditure on know-how

1.213 1.221 1.222

35ABA. Expenditure for obtaining right to use spectrum for telecommunication services

1.223

35ABB. Expenditure for obtaining licence to operate telecommunication services

1.224

35AC. Expenditure on eligible projects or schemes

1.226

35AD. Deduction in respect of expenditure on specified business

1.228

35B. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987, W.E.F. 1-4-1989]

1.234

35C. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987, W.E.F. 1-4-1989]

1.234

35CC. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987, W.E.F. 1-4-1989]

35CCA. Expenditure by way of payment to associations and institutions for carrying out rural development programmes

1.234 1.234

I.T. ACT, 1961 SECTION

I-6 PAGE

35CCB. Expenditure by way of payment to associations and institutions for carrying out programmes of conservation of natural resources

1.236

35CCC. Expenditure on agricultural extension project

1.237

35CCD. Expenditure on skill development project

1.237

35D. Amortisation of certain preliminary expenses 35DD. Amortisation of expenditure in case of amalgamation or demerger 35DDA. Amortisation of expenditure incurred under voluntary retirement scheme 35E. Deduction for expenditure on prospecting, etc., for certain minerals

1.237 1.241 1.241 1.242

36. Other deductions

1.244

37. General

1.254

38. Building, etc., partly used for business, etc., or not exclusively so used

1.255

39. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987, W.E.F. 1-4-1989]

1.256

40. Amounts not deductible

1.256

40A. Expenses or payments not deductible in certain circumstances

1.262

41. Profits chargeable to tax

1.266

42. Special provision for deductions in the case of business for prospecting, etc., for mineral oil

1.268

43. Definitions of certain terms relevant to income from profits and gains of business or profession

1.270

43A. Special provisions consequential to changes in rate of exchange of currency

1.280

43AA. Taxation of foreign exchange fluctuation

1.281

43B. Certain deductions to be only on actual payment

1.281

43C. Special provision for computation of cost of acquisition of certain assets

1.285

43CA. Special provision for full value of consideration for transfer of assets other than capital assets in certain cases

1.285

43CB. Computation of income from construction and service contracts

1.286

43D. Special provision in case of income of public financial institutions, public companies, etc.

44. Insurance business 44A. Special provision for deduction in the case of trade, professional or similar association

1.287 1.288 1.288

I-7

ARRANGEMENT OF SECTIONS

SECTION

PAGE

44AA. Maintenance of accounts by certain persons carrying on profession or business

1.289

44AB. Audit of accounts of certain persons carrying on business or profession

1.290

44AC. [OMITTED BY THE FINANCE ACT, 1992, W.E.F. 1-4-1993]

1.292

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

1.292

44ADA. Special provision for computing profits and gains of profession on presumptive basis

1.293

44AE. Special provision for computing profits and gains of business of plying, hiring or leasing goods carriages

1.294

44AF. Special provisions for computing profits and gains of retail business

1.295

44B. Special provision for computing profits and gains of shipping business in the case of non-residents

1.296

44BB. Special provision for computing profits and gains in connection with the business of exploration, etc., of mineral oils

1.296

44BBA. Special provision for computing profits and gains of the business of operation of aircraft in the case of non-residents

1.297

44BBB. Special provision for computing profits and gains of foreign companies engaged in the business of civil construction, etc., in certain turnkey power projects

1.298

44C. Deduction of head office expenditure in the case of nonresidents

1.298

44D. Special provisions for computing income by way of royalties, etc., in the case of foreign companies

1.299

44DA. Special provision for computing income by way of royalties, etc., in case of non-residents

1.300

44DB. Special provision for computing deductions in the case of business reorganization of co-operative banks

1.301

E.—Capital gains

45. Capital gains

1.304

46. Capital gains on distribution of assets by companies in liquidation

1.308

46A. Capital gains on purchase by company of its own shares or other specified securities

1.309

47. Transactions not regarded as transfer 47A. Withdrawal of exemption in certain cases 48. Mode of computation

1.309 1.318 1.319

I.T. ACT, 1961 SECTION

I-8 PAGE

49. Cost with reference to certain modes of acquisition

1.321

50. Special provision for computation of capital gains in case of depreciable assets

1.324

50A. Special provision for cost of acquisition in case of depreciable asset

1.325

50B. Special provision for computation of capital gains in case of slump sale

1.326

50C. Special provision for full value of consideration in certain cases

1.327

50CA. Special provision for full value of consideration for transfer of share other than quoted share

1.328

50D. Fair market value deemed to be full value of consideration in certain cases

1.328

51. Advance money received

1.329

52. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988]

1.329

53. [OMITTED BY THE FINANCE ACT, 1992, W.E.F. 1-4-1993]

1.329

54. Profit on sale of property used for residence

1.329

54A. [OMITTED BY THE FINANCE (NO. 2) ACT, 1971, W.E.F. 1-4-1972]

1.330

54B. Capital gain on transfer of land used for agricultural purposes not to be charged in certain cases

1.331

54C. [OMITTED BY THE FINANCE ACT, 1976, W.E.F. 1-4-1976]

1.332

54D. Capital gain on compulsory acquisition of lands and buildings not to be charged in certain cases

1.332

54E. Capital gain on transfer of capital assets not to be charged in certain cases

1.333

54EA. Capital gain on transfer of long-term capital assets not to be charged in the case of investment in specified securities

1.337

54EB. Capital gain on transfer of long-term capital assets not to be charged in certain cases

1.338

54EC. Capital gain not to be charged on investment in certain bonds

1.338

54ED. Capital gain on transfer of certain listed securities or unit not to be charged in certain cases

1.341

54EE. Capital gain not to be charged on investment in units of a specified fund

1.342

54F. Capital gain on transfer of certain capital assets not to be charged in case of investment in residential house

1.343

54G. Exemption of capital gains on transfer of assets in cases of shifting of industrial undertaking from urban area

1.345

I-9

ARRANGEMENT OF SECTIONS

SECTION

PAGE

54GA. Exemption of capital gains on transfer of assets in cases of shifting of industrial undertaking from urban area to any Special Economic Zone

1.346

54GB. Capital gain on transfer of residential property not to be charged in certain cases

1.348

54H. Extension of time for acquiring new asset or depositing or investing amount of capital gain

1.350

55. Meaning of “adjusted”, “cost of improvement” and “cost of acquisition”

1.350

55A. Reference to Valuation Officer

1.355

F.—Income from other sources

56. Income from other sources

1.356

57. Deductions

1.365

58. Amounts not deductible

1.366

59. Profits chargeable to tax

1.367

CHAPTER V INCOME OF OTHER PERSONS, INCLUDED IN ASSESSEE’S TOTAL INCOME

60. Transfer of income where there is no transfer of assets

1.367

61. Revocable transfer of assets

1.367

62. Transfer irrevocable for a specified period

1.368

63. “Transfer” and “revocable transfer” defined

1.368

64. Income of individual to include income of spouse, minor child, etc.

1.368

65. Liability of person in respect of income included in the income of another person

1.371

CHAPTER VI AGGREGATION OF INCOME AND SET OFF OR CARRY FORWARD OF LOSS

Aggregation of income

66. Total income

1.371

67. [OMITTED BY THE FINANCE ACT, 1992, W.E.F. 1-4-1993]

1.371

67A. Method of computing a member’s share in income of association of persons or body of individuals

1.371

68. Cash credits

1.372

69. Unexplained investments

1.373

69A. Unexplained money, etc.

1.373

69B. Amount of investments, etc., not fully disclosed in books of account

1.373

I.T. ACT, 1961 SECTION

I-10 PAGE

69C. Unexplained expenditure, etc.

69D. Amount borrowed or repaid on hundi

1.374 1.374

Set off, or carry forward and set off

70. Set off of loss from one source against income from another source under the same head of income

1.374

71. Set off of loss from one head against income from another

1.374

71A. Transitional provisions for set off of loss under the head “Income from house property”

1.375

71B. Carry forward and set off of loss from house property

1.375

72. Carry forward and set off of business losses

1.376

72A. Provisions relating to carry forward and set-off of accumulated loss and unabsorbed depreciation allowance in amalgamation or demerger, etc.

1.377

72AA. Carry forward and set off of accumulated loss and unabsorbed depreciation allowance in scheme of amalgamation in certain cases

1.380

72AB. Provisions relating to carry forward and set-off of accumulated loss and unabsorbed depreciation allowance in business reorganisation of co-operative banks

1.382

73. Losses in speculation business 73A. Carry forward and set off of losses by specified business 74. Losses under the head “Capital gains” 74A. Losses from certain specified sources falling under the head “Income from other sources”

1.383 1.384 1.384 1.385

75. Losses of firms

1.385

76. [OMITTED BY THE FINANCE ACT, 1992, W.E.F. 1-4-1993]

1.386

77. [OMITTED BY THE FINANCE ACT, 1992, W.E.F. 1-4-1993]

1.386

78. Carry forward and set off of losses in case of change in constitution of firm or on succession 79. Carry forward and set off of losses in case of certain companies 79A. No set off of losses consequent to search, requisition and survey 80. Submission of return for losses

1.386 1.386 1.388 1.388

CHAPTER VI-A DEDUCTIONS TO BE MADE IN COMPUTING TOTAL INCOME

A.—General

80A. Deductions to be made in computing total income

1.389

80AA. [OMITTED BY THE FINANCE ACT, 1997, W.E.F. 1-4-1998]

1.390

80AB. Deductions to be made with reference to the income included in the gross total income

1.390

I-11

ARRANGEMENT OF SECTIONS

SECTION

PAGE

80AC. Deduction not to be allowed unless return furnished 80B. Definitions

1.390 1.391

B.—Deductions in respect of certain payments

80C. Deduction in respect of life insurance premia, deferred annuity, contributions to provident fund, subscription to certain equity shares or debentures, etc.

1.391

80CC. [OMITTED BY THE FINANCE (NO. 2) ACT, 1996, W.R.E.F. 1-4-1993]

1.399

80CCA. Deduction in respect of deposits under National Savings Scheme or payment to a deferred annuity plan

1.399

80CCB. Deduction in respect of investment made under Equity Linked Savings Scheme

1.401

80CCC. Deduction in respect of contribution to certain pension funds

1.401

80CCD. Deduction in respect of contribution to pension scheme of Central Government

1.402

80CCE. Limit on deductions under sections 80C, 80CCC and 80CCD

1.404

80CCF. Deduction in respect of subscription to long-term infrastructure bonds

1.404

80CCG. Deduction in respect of investment made under an equity savings scheme

1.404

80D. Deduction in respect of health insurance premia 80DD. Deduction in respect of maintenance including medical treatment of a dependant who is a person with disability 80DDB. Deduction in respect of medical treatment, etc.

80E. Deduction in respect of interest on loan taken for higher education 80EE. Deduction in respect of interest on loan taken for residential house property 80EEA. Deduction in respect of interest on loan taken for certain house property 80EEB. Deduction in respect of purchase of electric vehicle 80F. [OMITTED BY THE FINANCE ACT, 1985, W.E.F. 1-4-1986]

1.405 1.407 1.410 1.411 1.411 1.412 1.413 1.413

80FF. [OMITTED BY THE FINANCE (NO. 2) ACT, 1980, W.E.F. 1-4-1981]

1.414

80G. Deduction in respect of donations to certain funds, charitable institutions, etc.

1.414

80GG. Deductions in respect of rents paid 80GGA. Deduction in respect of certain donations for scientific research or rural development

1.422 1.423

I.T. ACT, 1961 SECTION

I-12 PAGE

80GGB. Deduction in respect of contributions given by companies to political parties

1.425

80GGC. Deduction in respect of contributions given by any person to political parties

1.425

C.—Deductions in respect of certain incomes

80H. [OMITTED BY THE TAXATION LAWS (AMENDMENT) ACT, 1975, W.E.F. 1-4-1976]

1.426

80HH. Deduction in respect of profits and gains from newly established industrial undertakings or hotel business in backward areas

1.426

80HHA. Deduction in respect of profits and gains from newly established small-scale industrial undertakings in certain areas

1.428

80HHB. Deduction in respect of profits and gains from projects outside India 80HHBA. Deduction in respect of profits and gains from housing projects in certain cases

1.430 1.432

80HHC. Deduction in respect of profits retained for export business

1.434

80HHD. Deduction in respect of earnings in convertible foreign exchange

1.439

80HHE. Deduction in respect of profits from export of computer software, etc.

1.443

80HHF. Deduction in respect of profits and gains from export or transfer of film software, etc.

1.446

80-I. Deduction in respect of profits and gains from industrial undertakings after a certain date, etc.

1.448

80-IA. Deductions in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development, etc.

1.453

80-IAB. Deductions in respect of profits and gains by an undertaking or enterprise engaged in development of Special Economic Zone

1.459

80-IAC. Special provision in respect of specified business

1.460

80-IB. Deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development undertakings

1.461

80-IBA. Deductions in respect of profits and gains from housing projects

1.473

80-IC. Special provisions in respect of certain undertakings or enterprises in certain special category States

1.477

80-ID. Deduction in respect of profits and gains from business of hotels and convention centres in specified area

1.479

I-13

ARRANGEMENT OF SECTIONS

SECTION

PAGE

80-IE. Special provisions in respect of certain undertakings in North-Eastern States 80J. [OMITTED BY THE FINANCE (NO. 2) ACT, 1996, W.R.E.F. 1-4-1989] 80JJ. [OMITTED BY THE FINANCE ACT, 1997, W.E.F. 1-4-1998] 80JJA. Deduction in respect of profits and gains from business of collecting and processing of bio-degradable waste

1.482 1.484 1.484 1.484

80JJAA. Deduction in respect of employment of new employees

1.484

80K. [OMITTED BY THE FINANCE ACT, 1986, W.E.F. 1-4-1987]

1.486

80L. [OMITTED BY THE FINANCE ACT, 2005, W.E.F. 1-4-2006]

1.486

80LA. Deductions in respect of certain incomes of Offshore Banking Units and International Financial Services Centre

1.486

80M. Deduction in respect of certain inter-corporate dividends

1.488

80MM. [OMITTED BY THE FINANCE ACT, 1983, W.E.F. 1-4-1984]

1.488

80N. [OMITTED BY THE FINANCE ACT, 1985, W.E.F. 1-4-1986]

1.488

80-O. Deduction in respect of royalties, etc., from certain foreign enterprises

1.488

80P. Deduction in respect of income of co-operative societies

1.489

80PA. Deduction in respect of certain income of Producer Companies

1.492

80Q. Deduction in respect of profits and gains from the business of publication of books

1.492

80QQ. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987, W.E.F. 1-4-1989]

1.493

80QQA. Deduction in respect of professional income of authors of text books in Indian languages

1.493

80QQB. Deduction in respect of royalty income, etc., of authors of certain books other than text-books

1.494

80R. Deduction in respect of remuneration from certain foreign sources in the case of professors, teachers, etc.

1.495

80RR. Deduction in respect of professional income from foreign sources in certain cases

1.496

80RRA. Deduction in respect of remuneration received for services rendered outside India

1.496

80RRB. Deduction in respect of royalty on patents

1.498

80S. [OMITTED BY THE FINANCE ACT, 1986, W.E.F. 1-4-1987]

1.500

80T. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988]

1.500

80TT. [OMITTED BY THE FINANCE ACT, 1986, W.E.F. 1-4-1987]

1.500

CA.—Deductions in respect of other incomes

80TTA. Deduction in respect of interest on deposits in savings account

1.500

80TTB. Deduction in respect of interest on deposits in case of senior citizens

1.501

I.T. ACT, 1961 SECTION

I-14 PAGE

D.—Other deductions

80U. Deduction in case of a person with disability

1.501

80V. [OMITTED BY THE FINANCE ACT, 1994, W.E.F. 1-4-1995]

1.502

80VV. [OMITTED BY THE FINANCE ACT, 1985, W.E.F. 1-4-1986]

1.502

CHAPTER VI-B RESTRICTION ON CERTAIN DEDUCTIONS IN THE CASE OF COMPANIES

80VVA. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988]

1.503

CHAPTER VII INCOMES FORMING PART OF TOTAL INCOME ON WHICH NO INCOME-TAX IS PAYABLE

81. to [OMITTED BY THE FINANCE (NO. 2) ACT, 1967, W.E.F. 85C. 1-4-1968]

1.503

86. Share of member of an association of persons or body of individuals in the income of the association or body

1.503

86A. [OMITTED BY THE FINANCE ACT, 1988, W.E.F. 1-4-1989]

1.503

CHAPTER VIII REBATES AND RELIEFS

A.—Rebate of income-tax

87. Rebate to be allowed in computing income-tax 87A. Rebate of income-tax in case of certain individuals 88. Rebate on life insurance premia, contribution to provident fund, etc.

1.504 1.504 1.504

88A. [OMITTED BY THE FINANCE (NO. 2) ACT, 1996, W.R.E.F. 1.512

1-4-1994]

88B. [OMITTED BY THE FINANCE ACT, 2005, W.E.F. 1-4-2006]

1.512

88C. [OMITTED BY THE FINANCE ACT, 2005, W.E.F. 1-4-2006]

1.512

88D. [OMITTED BY THE FINANCE ACT, 2005, W.E.F. 1-4-2006]

1.512

88E. Rebate in respect of securities transaction tax

1.512

B.—Relief for income-tax

89. Relief when salary, etc., is paid in arrears or in advance 89A. Relief from taxation in income from retirement benefit account maintained in a notified country

1.512 1.513

CHAPTER IX DOUBLE TAXATION RELIEF

90. Agreement with foreign countries or specified territories

1.513

I-15

ARRANGEMENT OF SECTIONS

SECTION

PAGE

90A. Adoption by Central Government of agreement between specified associations for double taxation relief 91. Countries with which no agreement exists

1.515 1.517

CHAPTER X SPECIAL PROVISIONS RELATING TO AVOIDANCE OF TAX

92. Computation of income from international transaction having regard to arm’s length price

1.518

92A. Meaning of associated enterprise

1.519

92B. Meaning of international transaction

1.520

92BA. Meaning of specified domestic transaction 92C. Computation of arm’s length price

1.522 1.522

92CA. Reference to Transfer Pricing Officer

1.524

92CB. Power of Board to make safe harbour rules

1.526

92CC. Advance pricing agreement

1.527

92CD. Effect to advance pricing agreement

1.528

92CE. Secondary adjustment in certain cases

1.529

92D. Maintenance, keeping and furnishing of information and document by certain persons

1.531

92E. Report from an accountant to be furnished by persons entering into international transaction or specified domestic transaction

1.531

92F. Definitions of certain terms relevant to computation of arm’s length price, etc.

1.532

93. Avoidance of income-tax by transactions resulting in transfer of income to non-residents

1.532

94. Avoidance of tax by certain transactions in securities

1.534

94A. Special measures in respect of transactions with persons located in notified jurisdictional area

1.537

94B. Limitation on interest deduction in certain cases

1.539

CHAPTER X-A GENERAL ANTI-AVOIDANCE RULE

95. Applicability of General Anti-Avoidance Rule

1.540

96. Impermissible avoidance arrangement

1.540

97. Arrangement to lack commercial substance

1.541

98. Consequences of impermissible avoidance arrangement

1.542

99. Treatment of connected person and accommodating party

1.543

100. Application of this Chapter

1.543

I.T. ACT, 1961 SECTION

I-16 PAGE

101. Framing of guidelines

1.543

102. Definitions

1.543 CHAPTER XI ADDITIONAL INCOME-TAX ON UNDISTRIBUTED PROFITS

95. to [OMITTED BY THE FINANCE ACT, 1965, W.E.F. 1-4-1965] 103.

1.545

104. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988]

1.545

105. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988]

1.545

106. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988]

1.545

107. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988]

1.545

107A. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988]

1.545

108. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988]

1.545

109. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988]

1.546

CHAPTER XII DETERMINATION OF TAX IN CERTAIN SPECIAL CASES

110. Determination of tax where total income includes income on which no tax is payable

1.546

111. Tax on accumulated balance of recognised provident fund

1.546

111A. Tax on short-term capital gains in certain cases 112. Tax on long-term capital gains 112A. Tax on long-term capital gains in certain cases

1.546 1.547 1.549

113. Tax in the case of block assessment of search cases

1.551

114. [OMITTED BY THE FINANCE (NO. 2) ACT, 1967, W.E.F. 1-4-1968]

1.551

115. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988]

1.551

115A. Tax on dividends, royalty and technical service fees in the case of foreign companies

1.551

115AB. Tax on income from units purchased in foreign currency or capital gains arising from their transfer

1.554

115AC. Tax on income from bonds or Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer

1.555

115ACA. Tax on income from Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer

1.557

115AD. Tax on income of Foreign Institutional Investors from securities or capital gains arising from their transfer 115B. Tax on profits and gains of life insurance business

1.559 1.561

I-17

ARRANGEMENT OF SECTIONS

SECTION

PAGE

115BA. Tax on income of certain manufacturing domestic companies

1.563 1.564

115BAC. Tax on income of individuals and Hindu undivided family 115BAD. Tax on income of certain resident co-operative societies

1.568 1.570

115BB. Tax on winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or gambling or betting of any form or nature whatsoever 115BBA. Tax on non-resident sportsmen or sports associations 115BBB. Tax on income from units of an open-ended equity oriented fund of the Unit Trust of India or of Mutual Funds 115BBC. Anonymous donations to be taxed in certain cases 115BBD. Tax on certain dividends received from foreign companies 115BBDA. Tax on certain dividends received from domestic companies

1

1.562

115BAA. Tax on income of certain domestic companies 115BAB. Tax on income of new manufacturing domestic companies

1.571 1.571 1.572 1.573 1.573 1.574

115BBE. Tax on income referred to in section 68 or section 69 or section 69A or section 69B or section 69C or section 69D

1.575

115BBF. Tax on income from patent 115BBG. Tax on income from transfer of carbon credits

1.575 1.577

115BBH. Tax on income from virtual digital assets

1.577

1

1.577

115BBI. Specified income of certain institutions CHAPTER XII-A SPECIAL PROVISIONS RELATING TO CERTAIN INCOMES OF NON-RESIDENTS

115C. Definitions

1.578

115D. Special provision for computation of total income of nonresidents

1.579

115E. Tax on investment income and long-term capital gains 115F. Capital gains on transfer of foreign exchange assets not to

1.580

be charged in certain cases 115G. Return of income not to be filed in certain cases

1.580 1.581

115H. Benefit under Chapter to be available in certain cases even after the assessee becomes resident

1.581

115-I. Chapter not to apply if the assessee so chooses

1.581

CHAPTER XII-B SPECIAL PROVISIONS RELATING TO CERTAIN COMPANIES

115J. Special provisions relating to certain companies

1. Shall be inserted by the Finance Act, 2022, w.e.f. 1-4-2023.

1.582

I.T. ACT, 1961 SECTION

I-18 PAGE

115JA. Deemed income relating to certain companies 115JAA. Tax credit in respect of tax paid on deemed income relating to certain companies 115JB. Special provision for payment of tax by certain companies

1.583 1.585 1.587

CHAPTER XII-BA SPECIAL PROVISIONS RELATING TO CERTAIN PERSONS OTHER THAN A COMPANY

115JC. Special provisions for payment of tax by certain persons other than a company

1.595

115JD. Tax credit for alternate minimum tax

1.597

115JE. Application of other provisions of this Act

1.597

115JEE. Application of this Chapter to certain persons 115JF. Interpretation in this Chapter

1.597 1.598

CHAPTER XII-BB SPECIAL PROVISIONS RELATING TO CONVERSION OF INDIAN BRANCH OF A FOREIGN BANK INTO A SUBSIDIARY COMPANY

115JG. Conversion of an Indian branch of foreign company into subsidiary Indian company

1.599

CHAPTER XII-BC SPECIAL PROVISIONS RELATING TO FOREIGN COMPANY SAID TO BE RESIDENT IN INDIA

115JH. Foreign company said to be resident in India

1.600

CHAPTER XII-C SPECIAL PROVISIONS RELATING TO RETAIL TRADE, ETC.

115K. [OMITTED BY THE FINANCE ACT, 1997, W.E.F. 1-4-1998]

1.601

115L. [OMITTED BY THE FINANCE ACT, 1997, W.E.F. 1-4-1998]

1.601

115M. [OMITTED BY THE FINANCE ACT, 1997, W.E.F. 1-4-1998]

1.601

115N. [OMITTED BY THE FINANCE ACT, 1997, W.E.F. 1-4-1998]

1.601

CHAPTER XII-D SPECIAL PROVISIONS RELATING TO TAX ON DISTRIBUTED PROFITS OF DOMESTIC COMPANIES

115-O. Tax on distributed profits of domestic companies

1.601

115P. Interest payable for non-payment of tax by domestic companies

1.603

115Q. When company is deemed to be in default

1.603

I-19

ARRANGEMENT OF SECTIONS

SECTION

PAGE CHAPTER XII-DA SPECIAL PROVISIONS RELATING TO TAX ON DISTRIBUTED INCOME OF DOMESTIC COMPANY FOR BUY-BACK OF SHARES

115QA. Tax on distributed income to shareholders 115QB. Interest payable for non-payment of tax by company 115QC. When company is deemed to be assessee in default

1.604 1.605 1.605

CHAPTER XII-E SPECIAL PROVISIONS RELATING TO TAX ON DISTRIBUTED INCOME

115R. Tax on distributed income to unit holders

1.605

115S. Interest payable for non-payment of tax

1.607

115T. Unit Trust of India or mutual fund to be an assessee in default

1.607

CHAPTER XII-EA SPECIAL PROVISIONS RELATING TO TAX ON DISTRIBUTED INCOME BY SECURITISATION TRUSTS

115TA. Tax on distributed income to investors

1.608

115TB. Interest payable for non-payment of tax

1.608

115TC. Securitisation trust to be assessee in default

1.609

115TCA. Tax on income from securitisation trusts

1.609

CHAPTER XII-EB SPECIAL PROVISIONS RELATING TO TAX ON ACCRETED INCOME OF CERTAIN TRUSTS AND INSTITUTIONS

115TD. Tax on accreted income

1.610

115TE. Interest payable for non-payment of tax by trust or institution

1.615

115TF. When trust or institution is deemed to be assessee in default

1.616

CHAPTER XII-F SPECIAL PROVISIONS RELATING TO TAX ON INCOME RECEIVED FROM VENTURE CAPITAL COMPANIES AND VENTURE CAPITAL FUNDS

115U. Tax on income in certain cases

1.616

CHAPTER XII-FA SPECIAL PROVISIONS RELATING TO BUSINESS TRUSTS

115UA. Tax on income of unit holder and business trust

1.617

CHAPTER XII-FB SPECIAL PROVISIONS RELATING TO TAX ON INCOME OF INVESTMENT FUNDS AND INCOME RECEIVED FROM SUCH FUNDS

115UB. Tax on income of investment fund and its unit holders

1.618

I.T. ACT, 1961 SECTION

I-20 PAGE

CHAPTER XII-G SPECIAL PROVISIONS RELATING TO INCOME OF SHIPPING COMPANIES

A.—Meaning of certain expressions

115V. Definitions

1.620

B.—Computation of tonnage income from business of operating qualifying ships

115VA. Computation of profits and gains from the business of operating qualifying ships

1.621

115VB. Operating ships

1.621

115VC. Qualifying company

1.621

115VD. Qualifying ship

1.622

115VE. Manner of computation of income under tonnage tax scheme

1.622

115VF. Tonnage income

1.623

115VG. Computation of tonnage income

1.623

115VH. Calculation in case of joint operation, etc.

1.624

115V-I. Relevant shipping income

1.624

115VJ. Treatment of common costs

1.626

115VK. Depreciation

1.626

115VL. General exclusion of deduction and set off, etc.

1.627

115VM. Exclusion of loss

1.628

115VN. Chargeable gains from transfer of tonnage tax assets

1.628

115V-O. Exclusion from provisions of section 115JB

1.628

C.—Procedure for option of tonnage tax scheme

115VP. Method and time of opting for tonnage tax scheme

1.629

115VQ. Period for which tonnage tax option to remain in force

1.629

115VR. Renewal of tonnage tax scheme

1.630

115VS. Prohibition to opt for tonnage tax scheme in certain cases

1.630

D.—Conditions for applicability of tonnage tax scheme

115VT. Transfer of profits to Tonnage Tax Reserve Account

1.630

115VU. Minimum training requirement for tonnage tax company

1.632

115VV. Limit for charter in of tonnage

1.632

115VW. Maintenance and audit of accounts

1.633

115VX. Determination of tonnage

1.633

E.—Amalgamation and demerger of shipping companies

115VY. Amalgamation

1.634

115VZ. Demerger

1.634

I-21

ARRANGEMENT OF SECTIONS

SECTION

PAGE

F.—Miscellaneous

115VZA. Effect of temporarily ceasing to operate qualifying ships

1.635

G.—Provisions of this Chapter not to apply in certain cases

115VZB. Avoidance of tax

1.635

115VZC. Exclusion from tonnage tax scheme

1.635

CHAPTER XII-H INCOME-TAX ON FRINGE BENEFITS

A.—Meaning of certain expressions

1.636

115W. Definitions B.—Basis of charge

115WA. Charge of fringe benefit tax

1.636

115WB. Fringe benefits

1.637

115WC. Value of fringe benefits

1.639

C.—Procedure for filing of return in respect of fringe benefits, assessment and payment of tax in respect thereof

115WD. Return of fringe benefits

1.641

115WE. Assessment

1.642

115WF. Best judgment assessment

1.644

115WG. Fringe benefits escaping assessment

1.644

115WH. Issue of notice where fringe benefits have escaped assessment

1.645

115WI. Payment of fringe benefit tax

1.645

115WJ. Advance tax in respect of fringe benefits

1.645

115WK. Interest for default in furnishing return of fringe benefits

1.647

115WKA. Recovery of fringe benefit tax by the employer from the employee

1.648

115WKB. Deemed payment of tax by employee

1.648

115WL. Application of other provisions of this Act

1.648

115WM. Chapter XII-H not to apply after a certain date

1.648

CHAPTER XIII INCOME-TAX AUTHORITIES

A.—Appointment and control

116. Income-tax authorities

1.649

117. Appointment of income-tax authorities

1.649

118. Control of income-tax authorities

1.650

119. Instructions to subordinate authorities

1.650

119A. Taxpayer’s Charter

1.651

I.T. ACT, 1961 SECTION

I-22 PAGE

B.—Jurisdiction

120. Jurisdiction of income-tax authorities 121. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987, W.E.F. 1-4-1988] 121A. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,

1.651 1.652 1.652

1987, W.E.F. 1-4-1988]

122. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1.653

1987, W.E.F. 1-4-1988]

123. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1.653

1987, W.E.F. 1-4-1988]

124. Jurisdiction of Assessing Officers

1.653

125. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1.654

1987, W.E.F. 1-4-1988]

125A. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1.654

1987, W.E.F. 1-4-1988]

126. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1.654

1987, W.E.F. 1-4-1988]

1.654

127. Power to transfer cases 128. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,

1.655

1987, W.E.F. 1-4-1988]

129. Change of incumbent of an office

1.655

130. Faceless jurisdiction of income-tax authorities

1.655

130A. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1.656

1987, W.E.F. 1-4-1988]

C.—Powers

131. Power regarding discovery, production of evidence, etc.

1.656

132. Search and seizure

1.657

132A. Powers to requisition books of account, etc.

1.663

132B. Application of seized or requisitioned assets

1.664

133. Power to call for information

1.666

133A. Power of survey

1.667

133B. Power to collect certain information

1.670

133C. Power to call for information by prescribed income-tax authority

1.670

134. Power to inspect registers of companies

1.671

135. Power of Principal Director General or Director General or Principal Director or Director, Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner and Joint Commissioner

1.671

135A. Faceless collection of information

1.671

I-23

ARRANGEMENT OF SECTIONS

SECTION

PAGE

136. Proceedings before income-tax authorities to be judicial proceedings

1.672

D.—Disclosure of information

137. [OMITTED BY THE FINANCE ACT, 1964, W.E.F. 1-4-1964] 138. Disclosure of information respecting assessees

1.672 1.672

CHAPTER XIV PROCEDURE FOR ASSESSMENT

139. Return of income

1.673

139A. Permanent account number

1.684

139AA. Quoting of Aadhaar number

1.689

139B. Scheme for submission of returns through Tax Return Preparers

1.689

139C. Power of Board to dispense with furnishing documents, etc., with return

1.690

139D. Filing of return in electronic form

1.691

140. Return by whom to be verified

1.691

140A. Self-assessment

1.693

140B. Tax on updated return

1.695

141. [OMITTED BY THE TAXATION LAWS (AMENDMENT) ACT, 1970, W.E.F. 1-4-1971]

1.697

141A. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987, W.E.F. 1-4-1989]

142. Inquiry before assessment 142A. Estimation of value of assets by Valuation Officer 142B. Faceless inquiry or Valuation

1.697 1.697 1.700 1.700

143. Assessment

1.701

144. Best judgment assessment

1.706

144A. Power of Joint Commissioner to issue directions in certain cases

1.707

144B. Faceless Assessment

1.707

144BA. Reference to Principal Commissioner or Commissioner in certain cases 144C. Reference to dispute resolution panel 145. Method of accounting

1.724 1.727 1.730

145A. Method of accounting in certain cases

1.730

145B. Taxability of certain income

1.731

146. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987, W.E.F. 1-4-1989]

1.731

147. Income escaping assessment

1.731

148. Issue of notice where income has escaped assessment

1.732

I.T. ACT, 1961 SECTION

I-24 PAGE

148A. Conducting inquiry, providing opportunity before issue of notice under section 148

1.733

148B. Prior approval for assessment, reassessment or recomputation in certain cases

1.734

149. Time limit for notice

1.735

150. Provision for cases where assessment is in pursuance of an order on appeal, etc.

1.736

151. Sanction for issue of notice 151A. Faceless assessment of income escaping assessment 152. Other provisions 153. Time limit for completion of assessment, reassessment and recomputation

1.736 1.737 1.737 1.737

153A. Assessment in case of search or requisition

1.743

153B. Time-limit for completion of assessment under section 153A

1.745

153C. Assessment of income of any other person

1.749

153D. Prior approval necessary for assessment in cases of search or requisition

1.751

154. Rectification of mistake

1.751

155. Other amendments

1.752

156. Notice of demand 156A. Modification and revision of notice in certain cases 157. Intimation of loss 157A. Faceless rectification, amendments and issuance of notice or intimation 158. Intimation of assessment of firm

1.761 1.762 1.762 1.762 1.763

CHAPTER XIV-A SPECIAL PROVISION FOR AVOIDING REPETITIVE APPEALS

158A. Procedure when assessee claims identical question of law is pending before High Court or Supreme Court

1.763

158AA. Procedure when in an appeal by revenue an identical question of law is pending before Supreme Court

1.764

158AB. Procedure where an identical question of law is pending before High Courts or Supreme Court

1.765

CHAPTER XIV-B SPECIAL PROCEDURE FOR ASSESSMENT OF SEARCH CASES

158B. Definitions 158BA. Assessment of undisclosed income as a result of search

1.766 1.767

I-25

ARRANGEMENT OF SECTIONS

SECTION

PAGE

158BB. Computation of undisclosed income of the block period

1.768

158BC. Procedure for block assessment

1.769

158BD. Undisclosed income of any other person

1.770

158BE. Time limit for completion of block assessment

1.770

158BF. Certain interests and penalties not to be levied or imposed

1.772

158BFA. Levy of interest and penalty in certain cases 158BG. Authority competent to make the block assessment 158BH. Application of other provisions of this Act 158BI. Chapter not to apply after certain date

1.772 1.773 1.774 1.774

CHAPTER XV LIABILITY IN SPECIAL CASES

A.—Legal representatives

1.774

159. Legal representatives B.—Representative assessees - General provisions

160. Representative assessee

1.775

161. Liability of representative assessee

1.776

162. Right of representative assessee to recover tax paid

1.776

C.—Representative assessees - Special cases

163. Who may be regarded as agent

1.777

164. Charge of tax where share of beneficiaries unknown

1.777

164A. Charge of tax in case of oral trust 165. Case where part of trust income is chargeable

1.780 1.780

D.—Representative assessees - Miscellaneous provisions

166. Direct assessment or recovery not barred

1.780

167. Remedies against property in cases of representative assessees

1.780

DD.—Firms, association of persons and body of individuals

167A. Charge of tax in the case of a firm

1.781

167B. Charge of tax where shares of members in association of persons or body of individuals unknown, etc.

1.781

167C. Liability of partners of limited liability partnership in liquidation

1.781

E.—Executors

168. Executors

1.782

169. Right of executor to recover tax paid

1.782

I.T. ACT, 1961 SECTION

I-26 PAGE

F.—Succession to business or profession

170. Succession to business otherwise than on death 170A. Effect of order of tribunal or court in respect of business reorganisation

1.782 1.784

G.—Partition

171. Assessment after partition of a Hindu undivided family

1.784

H.—Profits of non-residents from occasional shipping business

172. Shipping business of non-residents

1.786

I.—Recovery of tax in respect of non-residents

173. Recovery of tax in respect of non-resident from his assets

1.787

J.—Persons leaving India

174. Assessment of persons leaving India

1.787

JA.—Association of persons or body of individuals or artificial juridical person formed for a particular event or purpose

174A. Assessment of association of persons or body of individuals or artificial juridical person formed for a particular event or purpose

1.788

K.—Persons trying to alienate their assets

175. Assessment of persons likely to transfer property to avoid tax

1.788

L.—Discontinuance of business, or dissolution

176. Discontinued business

1.789

177. Association dissolved or business discontinued

1.790

178. Company in liquidation

1.790

M.—Private companies

179. Liability of directors of private company

1.791

N.—Special provisions for certain kinds of income

180. Royalties or copyright fees for literary or artistic work 180A. Consideration for know-how

1.792 1.792

O.—[Omitted]

181. [OMITTED BY THE FINANCE ACT, 1988, W.E.F. 1-4-1989]

1.792

I-27

ARRANGEMENT OF SECTIONS

SECTION

PAGE CHAPTER XVI SPECIAL PROVISIONS APPLICABLE TO FIRMS

A.—Assessment of firms

182. [OMITTED BY THE FINANCE ACT, 1992, W.E.F. 1-4-1993]

1.793

183. [OMITTED BY THE FINANCE ACT, 1992, W.E.F. 1-4-1993]

1.793

184. Assessment as a firm

1.793

185. Assessment when section 184 not complied with

1.794

186. [***]

1.794

C.—Changes in constitution, succession and dissolution

187. Change in constitution of a firm

1.794

188. Succession of one firm by another firm

1.794

188A. Joint and several liability of partners for tax payable by firm 189. Firm dissolved or business discontinued 189A. Provisions applicable to past assessments of firms

1.794 1.794 1.795

CHAPTER XVII COLLECTION AND RECOVERY OF TAX

A.—General

190. Deduction at source and advance payment

1.795

191. Direct payment

1.795 B.—Deduction at source

192. Salary 192A. Payment of accumulated balance due to an employee

1.796 1.799

193. Interest on securities

1.799

194. Dividends

1.801

194A. Interest other than “Interest on securities”

1.802

194B. Winnings from lottery or crossword puzzle

1.806

194BB. Winnings from horse race

1.806

194C. Payments to contractors

1.806

194D. Insurance commission

1.808

194DA. Payment in respect of life insurance policy

1.809

194E. Payments to non-resident sportsmen or sports associations

1.809

194EE. Payments in respect of deposits under National Savings Scheme, etc.

1.809

194F. Payments on account of repurchase of units by Mutual Fund or Unit Trust of India

1.809

I.T. ACT, 1961 SECTION

I-28 PAGE

194G. Commission, etc., on the sale of lottery tickets

1.810

194H. Commission or brokerage

1.810

194-I. Rent

1.811

194-IA. Payment on transfer of certain immovable property other than agricultural land

1.812

194-IB. Payment of rent by certain individuals or Hindu undivided family

1.813

194-IC. Payment under specified agreement

1.813

194J. Fees for professional or technical services

1.814

194K. Income in respect of units

1.815

194L. [OMITTED BY THE FINANCE ACT, 2016, W.E.F. 1-6-2016]

1.816

194LA. Payment of compensation on acquisition of certain immovable property

1.816

194LB. Income by way of interest from infrastructure debt fund

1.817

194LBA. Certain income from units of a business trust

1.817

194LBB. Income in respect of units of investment fund

1.818

194LBC. Income in respect of investment in securitization trust

1.818

194LC. Income by way of interest from Indian company

1.819

194LD. Income by way of interest on certain bonds and Government securities

1.820

194M. Payment of certain sums by certain individuals or Hindu undivided family

1.821

194N. Payment of certain amounts in cash

1.822

194-O. Payment of certain sums by e-commerce operator to e-commerce participant

1.823

194P. Deduction of tax in case of specified senior citizen

1.824

194Q. Deduction of tax at source on payment of certain sum for purchase of goods

1.825

194R. Deduction of tax on benefit or perquisite in respect of business or profession

1.825

194S. Payment on transfer of virtual digital asset

1.826

195. Other sums 195A. Income payable “net of tax” 196. Interest or dividend or other sums payable to Government, Reserve Bank or certain corporations

1.827 1.829 1.829

196A. Income in respect of units of non-residents

1.829

196B. Income from units

1.830

196C. Income from foreign currency bonds or shares of Indian company

1.830

I-29

ARRANGEMENT OF SECTIONS

SECTION

PAGE

196D. Income of Foreign Institutional Investors from securities 197. Certificate for deduction at lower rate

1.831 1.831

197A. No deduction to be made in certain cases

1.832

197B. Lower deduction in certain cases for a limited period

1.833

198. Tax deducted is income received

1.834

199. Credit for tax deducted

1.834

200. Duty of person deducting tax

1.834

200A. Processing of statements of tax deducted at source

1.835

201. Consequences of failure to deduct or pay

1.836

202. Deduction only one mode of recovery

1.837

203. Certificate for tax deducted

1.837

203A. Tax deduction and collection account number 203AA. [OMITTED BY THE FINANCE ACT, 2020, W.E.F. 1-6-2020]

1.838 1.838

204. Meaning of “person responsible for paying”

1.838

205. Bar against direct demand on assessee

1.839

206. Persons deducting tax to furnish prescribed returns

1.839

206A. Furnishing of statement in respect of payment of any income to residents without deduction of tax

1.840

206AA. Requirement to furnish Permanent Account Number

1.841

206AB. Special provision for deduction of tax at source for nonfilers of income-tax return

1.842

206B. [OMITTED BY THE FINANCE (NO. 2) ACT, 1996, W.E.F. 1.843

1-10-1996]

BB.—Collection at source

206C. Profits and gains from the business of trading in alcoholic liquor, forest produce, scrap, etc.

1.843

206CA. Tax collection account number

1.851

206CB. Processing of statements of tax collected at source

1.852

206CC. Requirement to furnish Permanent Account number by collectee

1.853

206CCA. Special provision for collection of tax at source for nonfilers of income-tax return

1.853

C.—Advance payment of tax

207. Liability for payment of advance tax

1.854

208. Conditions of liability to pay advance tax

1.854

209. Computation of advance tax

1.854

I.T. ACT, 1961 SECTION

I-30 PAGE

209A. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987, W.E.F. 1-4-1988]

1.856

210. Payment of advance tax by the assessee of his own accord or in pursuance of order of Assessing Officer

1.856

211. Instalments of advance tax and due dates

1.857

212. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987, W.E.F. 1-4-1988]

1.858

213. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987, W.E.F. 1-4-1988]

214. Interest payable by Government

1.858 1.858

215. Interest payable by assessee

1.859

216. Interest payable by assessee in case of under-estimate, etc.

1.860

217. Interest payable by assessee when no estimate made

1.861

218. When assessee deemed to be in default

1.861

219. Credit for advance tax

1.862

D.—Collection and recovery

220. When tax payable and when assessee deemed in default

1.862

221. Penalty payable when tax in default

1.864

222. Certificate to Tax Recovery Officer

1.864

223. Tax Recovery Officer by whom recovery is to be effected

1.865

224. Validity of certificate and cancellation or amendment thereof

1.866

225. Stay of proceedings in pursuance of certificate and amendment or cancellation thereof

1.866

226. Other modes of recovery

1.866

227. Recovery through State Government

1.868

228. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987, W.E.F. 1-4-1989]

228A. Recovery of tax in pursuance of agreements with foreign countries

1.868 1.868

229. Recovery of penalties, fine, interest and other sums

1.869

230. Tax clearance certificate

1.869

230A. [OMITTED BY THE FINANCE ACT, 2001, W.E.F. 1-6-2001]

1.871

231. Faceless collection and recovery of tax

1.871

232. Recovery by suit or under other law not affected

1.872

E.—Tax payable under provisional assessment

233. [OMITTED BY THE TAXATION LAWS (AMENDMENT) ACT, 1970, W.E.F. 1-4-1971]

1.872

I-31

ARRANGEMENT OF SECTIONS

SECTION

PAGE

234. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1.872

1987, W.E.F. 1-4-1989]

F.—Interest chargeable in certain cases

234A. Interest for defaults in furnishing return of income

1.872

234B. Interest for defaults in payment of advance tax

1.874

234C. Interest for deferment of advance tax

1.876

234D. Interest on excess refund

1.878

G.—Levy of fee in certain cases

234E. Fee for default in furnishing statements

1.879

234F. Fee for default in furnishing return of income

1.879

234G. Fee for default relating to statement or certificate

1.879

234H. Fee for default relating to intimation of Aadhaar number

1.880

CHAPTER XVIII RELIEF RESPECTING TAX ON DIVIDENDS IN CERTAIN CASES

235. [OMITTED BY THE FINANCE (NO. 2) ACT, 1971, W.E.F. 1-4-1972]

1.880

236. Relief to company in respect of dividend paid out of past taxed profits

1.880

236A. Relief to certain charitable institutions or funds in respect of certain dividends

1.881

CHAPTER XIX REFUNDS

237. Refunds

1.882

238. Person entitled to claim refund in certain special cases

1.882

239. Form of claim for refund and limitation 239A. Refund for denying liability to deduct tax in certain cases

1.882 1.883

240. Refund on appeal, etc.

1.883

241. [OMITTED BY THE FINANCE ACT, 2001, W.E.F. 1-6-2001]

1.883

241A. Withholding of refund in certain cases

1.883

242. Correctness of assessment not to be questioned

1.883

243. Interest on delayed refunds

1.884

244. Interest on refund where no claim is needed 244A. Interest on refunds 245. Set off of refunds against tax remaining payable

1.884 1.885 1.887

CHAPTER XIX-A SETTLEMENT OF CASES

245A. Definitions

1.887

I.T. ACT, 1961 SECTION

I-32 PAGE

245AA. Interim Boards for Settlement 245B. Income-tax Settlement Commission

1.888 1.889

245BA. Jurisdiction and powers of Settlement Commission

1.889

245BB. Vice-Chairman to act as Chairman or to discharge his functions in certain circumstances

1.890

245BC. Power of Chairman to transfer cases from one Bench to another

1.890

245BD. Decision to be by majority

1.890

245C. Application for settlement of cases

1.891

245D. Procedure on receipt of an application under section 245C

1.894

245DD. Power of Settlement Commission to order provisional attachment to protect revenue

1.898

245E. Power of Settlement Commission to reopen completed proceedings

1.899

245F. Powers and procedure of Settlement Commission

1.899

245G. Inspection, etc., of reports

1.900

245H. Power of Settlement Commission to grant immunity from prosecution and penalty

1.900

245HA. Abatement of proceeding before Settlement Commission

1.901

245HAA. Credit for tax paid in case of abatement of proceedings

1.902

245-I. Order of settlement to be conclusive

1.903

245J. Recovery of sums due under order of settlement

1.903

245K. Bar on subsequent application for settlement

1.903

245L. Proceedings before Settlement Commission to be judicial proceedings

1.904

245M. Option to withdraw pending application

1.904

CHAPTER XIX-AA DISPUTE RESOLUTION COMMITTEE IN CERTAIN CASES

245MA. Dispute Resolution Committee

1.905

CHAPTER XIX-B ADVANCE RULINGS

245N. Definitions 245-O. Authority for advance rulings

1.907 1.909

245-OA. Qualifications, terms and conditions of service of Chairman, Vice-Chairman and Member

1.910

245-OB. Board for Advance Rulings

1.911

245P. Vacancies, etc., not to invalidate proceedings

1.911

245Q. Application for advance ruling

1.911

I-33

ARRANGEMENT OF SECTIONS

SECTION

PAGE

245R. Procedure on receipt of application 245RR. Appellate authority not to proceed in certain cases 245S. Applicability of advance ruling

1.912 1.913 1.913

245T. Advance ruling to be void in certain circumstances

1.914

245U. Powers of the Authority

1.914

245V. Procedure of Authority

1.915

245W. Appeal

1.915 CHAPTER XX APPEALS AND REVISION

A.—Appeals to the Deputy Commissioner (Appeals) and Commissioner (Appeals)

246. Appealable orders 246A. Appealable orders before Commissioner (Appeals)

1.916 1.918

247. [OMITTED BY THE FINANCE ACT, 1992, W.E.F. 1-4-1993]

1.920

248. Appeal by a person denying liability to deduct tax in certain cases

1.921

249. Form of appeal and limitation

1.921

250. Procedure in appeal

1.922

251. Powers of the Commissioner (Appeals)

1.923

B.—Appeals to the Appellate Tribunal

252. Appellate Tribunal 252A. Qualifications, terms and conditions of service of President, Vice-President and Member

1.924 1.925

253. Appeals to the Appellate Tribunal

1.925

254. Orders of Appellate Tribunal

1.927

255. Procedure of Appellate Tribunal

1.928

C.—[Omitted by the National Tax Tribunal Act, 2005, with effect from a date yet to be notified]

256. [OMITTED BY THE NATIONAL TAX TRIBUNAL ACT, 2005, WITH EFFECT FROM A DATE YET TO BE NOTIFIED]

257. Statement of case to Supreme Court in certain cases

1.930 1.930

258. [OMITTED BY THE NATIONAL TAX TRIBUNAL ACT, 2005, WITH EFFECT FROM A DATE YET TO BE NOTIFIED]

1.931

259. [OMITTED BY THE NATIONAL TAX TRIBUNAL ACT, 2005, WITH EFFECT FROM A DATE YET TO BE NOTIFIED]

260. Decision of High Court or Supreme Court on the case stated

1.931 1.931

I.T. ACT, 1961 SECTION

I-34 PAGE

CC.—Appeals to High Court

260A. Appeal to High Court

1.931

260B. Case before High Court to be heard by not less than two Judges

1.932

D.—Appeals to the Supreme Court

261. Appeal to Supreme Court

1.932

262. Hearing before Supreme Court

1.933

E.—Revision by the Principal Commissioner or Commissioner

263. Revision of orders prejudicial to revenue

1.933

264. Revision of other orders

1.935

264A. Faceless revision of orders

1.936

264B. Faceless effect of orders

1.937

F.—General

265. Tax to be paid notwithstanding reference, etc.

1.937

266. Execution for costs awarded by Supreme Court

1.937

267. Amendment of assessment on appeal

1.937

268. Exclusion of time taken for copy

1.938

268A. Filing of appeal or application for reference by income-tax authority 269. Definition of “High Court”

1.938 1.938

CHAPTER XX-A ACQUISITION OF IMMOVABLE PROPERTIES IN CERTAIN CASES OF TRANSFER TO COUNTERACT EVASION OF TAX

269A. Definitions 269AB. Registration of certain transactions

1.939 1.942

269B. Competent authority

1.943

269C. Immovable property in respect of which proceedings for acquisition may be taken

1.943

269D. Preliminary notice

1.944

269E. Objections

1.945

269F. Hearing of objections

1.946

269G. Appeal against order for acquisition

1.947

269H. Appeal to High Court

1.948

269-I. Vesting of property in Central Government

1.948

269J. Compensation

1.950

269K. Payment or deposit of compensation

1.951

269L. Assistance by Valuation Officers

1.952

I-35

ARRANGEMENT OF SECTIONS

SECTION

PAGE

269M. Powers of competent authority

1.953

269N. Rectification of mistakes

1.953

269-O. Appearance by authorised representative or registered valuer

1.953

269P. Statement to be furnished in respect of transfers of immovable property

1.954

269Q. Chapter not to apply to transfers to relatives

1.954

269R. Properties liable for acquisition under this chapter not to be acquired under other laws

1.954

269RR. Chapter not to apply where transfer of immovable property made after a certain date

1.955

269S. [OMITTED BY THE JAMMU AND KASHMIR REORGANISATION (ADAPTATION OF CENTRAL LAWS) ORDER, 2020, W.E.F. 18-3-2020]

1.955

CHAPTER XX-B REQUIREMENT AS TO MODE OF ACCEPTANCE, PAYMENT OR REPAYMENT IN CERTAIN CASES TO COUNTERACT EVASION OF TAX

269SS. Mode of taking or accepting certain loans, deposits and specified sum

1.955

269ST. Mode of undertaking transactions

1.956

269SU. Acceptance of payment through prescribed electronic modes 269T. Mode of repayment of certain loans or deposits 269TT. Mode of repayment of Special Bearer Bonds, 1991

1.957 1.957 1.958

CHAPTER XX-C PURCHASE BY CENTRAL GOVERNMENT OF IMMOVABLE PROPERTIES IN CERTAIN CASES OF TRANSFER

269U. Commencement of Chapter

1.958

269UA. Definitions

1.958

269UB. Appropriate authority

1.961

269UC. Restrictions on transfer of immovable property

1.962

269UD. Order by appropriate authority for purchase by Central Government of immovable property

1.962

269UE. Vesting of property in Central Government

1.963

269UF. Consideration for purchase of immovable property by Central Government

1.965

269UG. Payment or deposit of consideration

1.965

269UH. Re-vesting of property in the transferor on failure of payment or deposit of consideration

1.966

I.T. ACT, 1961 SECTION

I-36 PAGE

269UI. Powers of the appropriate authority

1.966

269UJ. Rectification of mistakes

1.966

269UK. Restrictions on revocation or alteration of certain agreements for the transfer of immovable property or on transfer of certain immovable property

1.967

269UL. Restrictions on registration, etc., of documents in respect of transfer of immovable property

1.967

269UM. Immunity to transferor against claims of transferee for transfer

1.968

269UN. Order of appropriate authority to be final and conclusive

1.968

269UO. Chapter not to apply to certain transfers

1.968

269UP. Chapter not to apply where transfer of immovable property effected after certain date

1.968

CHAPTER XXI PENALTIES IMPOSABLE

270. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987, W.E.F. 1-4-1989]

270A. Penalty for under-reporting and misreporting of income 270AA. Immunity from imposition of penalty, etc.

1.968 1.972

271. Failure to furnish returns, comply with notices, concealment of income, etc.

1.973

271A. Failure to keep, maintain or retain books of account, documents, etc.

1.978

271AA. Penalty for failure to keep and maintain information and document, etc., in respect of certain transactions

1

1.968

1.978

271AAA. Penalty where search has been initiated

1.978

271AAB. Penalty where search has been initiated

1.980

271AAC. Penalty in respect of certain income

1.982

271AAD. Penalty for false entry, etc., in books of account

1.982

271AAE. Benefits to related persons

1.983

271B. Failure to get accounts audited

1.983

271BA. Penalty for failure to furnish report under section 92E

1.983

271BB. Failure to subscribe to the eligible issue of capital

1.984

271C. Penalty for failure to deduct tax at source

1.984

271CA. Penalty for failure to collect tax at source

1.984

271D. Penalty for failure to comply with the provisions of section 269SS 1. Shall be inserted by the Finance Act, 2022, w.e.f. 1-4-2023.

1.984

I-37

ARRANGEMENT OF SECTIONS

SECTION

PAGE

271DA. Penalty for failure to comply with provisions of section 269ST

1.984

271DB. Penalty for failure to comply with provisions of section 269SU

1.985

271E. Penalty for failure to comply with the provisions of section 269T

1.985

271F. Penalty for failure to furnish return of income

1.985

271FA. Penalty for failure to furnish statement of financial transaction or reportable account

1.985

271FAA. Penalty for furnishing inaccurate statement of financial transaction or reportable account

1.985

271FAB. Penalty for failure to furnish statement or information or document by an eligible investment fund

1.986

271FB. Penalty for failure to furnish return of fringe benefits

1.986

271G. Penalty for failure to furnish information or document under section 92D 271GA. Penalty for failure to furnish information or document under section 285A 271GB. Penalty for failure to furnish report or for furnishing inaccurate report under section 286

1.986 1.986 1.987

271H. Penalty for failure to furnish statements, etc.

1.987

271-I. Penalty for failure to furnish information or furnishing inaccurate information under section 195

1.988

271J. Penalty for furnishing incorrect information in reports or certificates 271K. Penalty for failure to furnish statements, etc.

1.988 1.989

272. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987, W.E.F. 1-4-1989]

1.989

272A. Penalty for failure to answer questions, sign statements, furnish information, returns or statements, allow inspections, etc.

1.989

272AA. Penalty for failure to comply with the provisions of section 133B

1.991

272B. Penalty for failure to comply with the provisions of section 139A

1.991

272BB. Penalty for failure to comply with the provisions of section 203A

1.992

272BBB. Penalty for failure to comply with the provisions of section 206CA

1.992

273. False estimate of, or failure to pay, advance tax 273A. Power to reduce or waive penalty, etc., in certain cases

1.992 1.995

I.T. ACT, 1961 SECTION

I-38 PAGE

273AA. Power of Principal Commissioner or Commissioner to grant immunity from penalty 273B. Penalty not to be imposed in certain cases

1.997 1.998

274. Procedure

1.998

275. Bar of limitation for imposing penalties

1.999

CHAPTER XXII OFFENCES AND PROSECUTIONS

275A. Contravention of order made under sub-section (3) of section 132

1.1000

275B. Failure to comply with the provisions of clause (iib) of sub-section (1) of section 132

1.1001

276. Removal, concealment, transfer or delivery of property to thwart tax recovery

1.1001

276A. Failure to comply with the provisions of sub-sections (1) and (3) of section 178

1.1001

276AA. [OMITTED BY THE FINANCE ACT, 1986, W.E.F. 1-10-1986]

1.1001

276AB. Failure to comply with the provisions of sections 269UC, 269UE and 269UL

1.1001

276B. Failure to pay tax to the credit of Central Government under Chapter XII-D or XVII-B 276BB. Failure to pay the tax collected at source 276C. Wilful attempt to evade tax, etc.

276CC. Failure to furnish returns of income 276CCC. Failure to furnish return of income in search cases 276D. Failure to produce accounts and documents

1.1002 1.1002 1.1002 1.1003 1.1003 1.1004

276DD. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987, W.E.F. 1-4-1989]

1.1004

276E. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987, W.E.F. 1-4-1989]

277. False statement in verification, etc.

277A. Falsification of books of account or document, etc.

278. Abetment of false return, etc.

278A. Punishment for second and subsequent offences

1.1004 1.1004 1.1004 1.1004 1.1005

278AA. Punishment not to be imposed in certain cases

1.1005

278AB. Power of Principal Commissioner or Commissioner to grant immunity from prosecution

1.1005

278B. Offences by companies

1.1006

I-39

ARRANGEMENT OF SECTIONS

SECTION

PAGE

278C. Offences by Hindu undivided families

1.1007

278D. Presumption as to assets, books of account, etc., in certain cases

1.1007

278E. Presumption as to culpable mental state

1.1007

279. Prosecution to be at instance of Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner

1.1008

279A. Certain offences to be non-cognizable

1.1009

279B. Proof of entries in records or documents

1.1009

280. Disclosure of particulars by public servants

1.1009

280A. Special Courts

1.1009

280B. Offences triable by Special Court

1.1010

280C. Trial of offences as summons case

1.1010

280D. Application of Code of Criminal Procedure, 1973 to proceedings before Special Court

1.1010

CHAPTER XXII-A ANNUITY DEPOSITS

280A. [OMITTED BY THE FINANCE ACT, 1988, W.E.F. 1-4-1988] to 280X.

1.1011

CHAPTER XXII-B TAX CREDIT CERTIFICATES

280Y. [OMITTED BY THE FINANCE ACT, 1990, W.E.F. 1-4-1990]

1.1011

280Z. [OMITTED BY THE FINANCE ACT, 1990, W.E.F. 1-4-1990]

1.1011

280ZA. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988]

1.1011

280ZB. [OMITTED BY THE FINANCE ACT, 1990, W.E.F. 1-4-1990]

1.1011

280ZC. [OMITTED BY THE FINANCE ACT, 1990, W.E.F. 1-4-1990]

1.1011

280ZD. [OMITTED BY THE FINANCE ACT, 1990, W.E.F. 1-4-1990]

1.1011

280ZE. [OMITTED BY THE FINANCE ACT, 1990, W.E.F. 1-4-1990]

1.1011

CHAPTER XXIII MISCELLANEOUS

281. Certain transfers to be void

1.1011

281A. [REPEALED BY THE BENAMI

TRANSACTIONS (PROHIBITION) ACT, 1988, W.E.F. 19-5-1988]

281B. Provisional attachment to protect revenue in certain cases 282. Service of notice generally 282A. Authentication of notices and other documents

1.1012 1.1012 1.1014 1.1014

I.T. ACT, 1961 SECTION

282B. [OMITTED BY THE FINANCE ACT, 2011, W.E.F. 1-4-2011]

I-40 PAGE

1.1014

283. Service of notice when family is disrupted or firm, etc., is dissolved

1.1014

284. Service of notice in the case of discontinued business

1.1015

285. Submission of statement by a non-resident having liaison office

1.1015

285A. Furnishing of information or documents by an Indian concern in certain cases

1.1015

285B. Submission of statements by producers of cinematograph films or persons engaged in specified activity

1.1015

285BA. Obligation to furnish statement of financial transaction or reportable account

1.1016

285BB. Annual information statement

1.1018

286. Furnishing of report in respect of international group 287. Publication of information respecting assessees in certain cases 287A. Appearance by registered valuer in certain matters 288. Appearance by authorised representative

1.1018 1.1022 1.1022 1.1022

288A. Rounding off of income

1.1026

288B. Rounding off amount payable and refund due

1.1026

289. Receipt to be given

1.1026

290. Indemnity

1.1026

291. Power to tender immunity from prosecution

1.1026

292. Cognizance of offences

1.1027

292A. Section 360 of the Code of Criminal Procedure, 1973, and the Probation of Offenders Act, 1958, not to apply

1.1027

292B. Return of income, etc., not to be invalid on certain grounds

1.1027

292BB. Notice deemed to be valid in certain circumstances 292C. Presumption as to assets, books of account, etc.

292CC. Authorisation and assessment in case of search or requisition 293. Bar of suits in civil courts

1.1027 1.1028 1.1028 1.1029

293A. Power to make exemption, etc., in relation to participation in the business of prospecting for, extraction, etc., of mineral oils

1.1029

293B. Power of Central Government or Board to condone delays in obtaining approval

1.1029

293C. Power to withdraw approval

1.1029

293D. Faceless approval or registration

1.1030

I-41

ARRANGEMENT OF SECTIONS

SECTION

PAGE

294. Act to have effect pending legislative provision for charge of tax

1.1030

294A. Power to make exemption, etc., in relation to certain Union territories

1.1030

295. Power to make rules

1.1031

296. Rules and certain notifications to be placed before Parliament

1.1033

297. Repeals and savings

1.1034

298. Power to remove difficulties

1.1036

ARRANGEMENT OF SCHEDULES

The First Schedule

INSURANCE BUSINESS

1.1036

The Second Schedule

PROCEDURE FOR RECOVERY OF TAX

1.1038

The Third Schedule

PROCEDURE FOR DISTRAINT BY ASSESSING OFFICER OR TAX RECOVERY OFFICER

1.1062

The Fourth Schedule

PART A - RECOGNISED PROVIDENT FUNDS

1.1062

PART B - APPROVED SUPERANNUATION FUNDS

1.1070

PART C - APPROVED GRATUITY FUND

1.1073

The Fifth Schedule

LIST OF ARTICLES AND THINGS

1.1076

The Sixth Schedule

[OMITTED BY THE FINANCE ACT, 1972, W.E.F. 1-4-1973]

1.1078

The Seventh Schedule

PART A - MINERALS

1.1078

PART B - GROUPS OF ASSOCIATED MINERALS

1.1079

The Eighth Schedule

LIST OF INDUSTRIALLY BACKWARD STATES AND UNION TERRITORIES

1.1080

The Ninth Schedule

[OMITTED BY THE TAXATION LAWS (AMENDMENT AND MISCELLANEOUS PROVISIONS) ACT, 1986, W.E.F. 1-4-1988]

1.1080

The Tenth Schedule

[OMITTED BY THE FINANCE ACT, 1999, W.E.F. 1-4-2000]

1.1080

The Eleventh Schedule

LIST OF ARTICLES OR THINGS

1.1081

The Twelfth Schedule

PROCESSED MINERALS AND ORES

1.1082

The Thirteenth Schedule

LIST OF ARTICLES OR THINGS

1.1083

The Fourteenth Schedule

LIST OF ARTICLES OR THINGS OR OPERATIONS

1.1087

VALIDATION PROVISIONS

1.1092

S. 10(4)

I.T. ACT, 1961

1.48

(ii) “specified entity” means a firm or other association of persons or body of individuals (not being a company or a co-operative society); (iii) “specified person” means a person, who is a partner of a firm or member of other association of persons or body of individuals (not being a company or a co-operative society) in any previous year.]

CHAPTER III INCOMES WHICH DO NOT FORM PART OF TOTAL INCOME Incomes not included in total income.

10.

In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included— (1) agricultural income ; (2) subject to the provisions of sub-section (2) of section 64, any sum received by an individual as a member of a Hindu undivided family, where such sum has been paid out of the income of the family, or, in the case of any impartible estate, where such sum has been paid out of the income of the estate belonging to the family ; (2A) in the case of a person being a partner of a firm which is separately assessed as such, his share in the total income of the firm.

Explanation.—For the purposes of this clause, the share of a partner in the total income of a firm separately assessed as such shall, notwithstanding anything contained in any other law, be an amount which bears to the total income of the firm the same proportion as the amount of his share in the profits of the firm in accordance with the partnership deed bears to such profits ; (3) [***] (4) (i) in the case of a non-resident, any income by way of interest on such securities or bonds as the Central Government may, by notification in the Official Gazette, specify in this behalf, including income by way of premium on the redemption of such bonds : Provided that the Central Government shall not specify, for the purposes of this sub-clause, such securities or bonds on or after the 1st day of June, 2002; (ii) in the case of an individual, any income by way of interest on moneys standing to his credit in a Non-Resident (External) Account in any bank in India in accordance with the Foreign Exchange Management Act, 1999 (42 of 1999), and the rules made thereunder : Provided that such individual is a person resident outside India as defined in clause (w) of section 2 of the said Act or is a person who has been permitted by the Reserve Bank of India to maintain the aforesaid Account ;

1.49

CH. III - INCOMES NOT PART OF TOTAL INCOME

S. 10(4D)

(4B) in the case of an individual, being a citizen of India or a person of Indian origin, who is a non-resident, any income from interest on such savings certificates issued before the 1st day of June, 2002 by the Central Government as that Government may, by notification in the Official Gazette, specify in this behalf : Provided that the individual has subscribed to such certificates in convertible foreign exchange remitted from a country outside India in accordance with the provisions of the Foreign Exchange Management Act, 1999 (42 of 1999), and any rules made thereunder.

Explanation.—For the purposes of this clause,— (a) a person shall be deemed to be of Indian origin if he, or either of his parents or any of his grandparents, was born in undivided India ; (b) “convertible foreign exchange” means foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purposes of the Foreign Exchange Management Act, 1999 (42 of 1999), and any rules made thereunder ; (4C) any income by way of interest payable to a non-resident, not being a company, or to a foreign company, by any Indian company or business trust in respect of monies borrowed from a source outside India by way of issue of rupee denominated bond, as referred to in clause (ia) of subsection (2) of section 194LC, during the period beginning from the 17th day of September, 2018 and ending on the 31st day of March, 2019; (4D)54 any income accrued or arisen to, or received by a specified fund as a result of transfer of capital asset referred to in clause (viiab) of section 47, on a recognised stock exchange located in any International Financial Services Centre and where the consideration for such transaction is paid or payable in 55[convertible foreign exchange or as a result of transfer of securities (other than shares in a company resident in India) or any income from securities issued by a non-resident (not being a permanent establishment of a non-resident in India) and where such income otherwise does not accrue or arise in India or any income from a securitisation trust which is chargeable under the head “Profits and gains of business or profession”, to the extent such income accrued or arisen to, or is received, is attributable to units held by non-resident (not being the permanent establishment of a non-resident in India) 56[or is attributable to the investment division of offshore banking unit, as the case may be,] computed in the prescribed manner].

54. See rules 21AI and 21AJA and Form Nos. 10-IG, 10-IK and 10-IL. 55. Substituted for “convertible foreign exchange, to the extent such income accrued or arisen to, or is received in respect of units held by a non-resident” by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, w.e.f. 1-4-2021.

56. Inserted by the Finance Act, 2021, w.e.f. 1-4-2022.

S. 10(4D)

I.T. ACT, 1961

1.50

Explanation.—For the purposes of this clause, the expression— (a) “convertible foreign exchange” means foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purposes of the Foreign Exchange Management Act, 1999 (42 of 1999) and the rules made thereunder; 57

[(aa) “investment division of offshore banking unit” means an investment division of a banking unit of a non-resident located in an International Financial Services Centre, as referred to in subsection (1A) of section 80LA and which has commenced its operations on or before the 31st day of March, 2024;] (b) “manager” shall have the meaning assigned to it in clause (q) of subregulation (1) of regulation 2 of the Securities and Exchange Board of India (Alternative Investment Fund) Regulations, 2012, made under the Securities and Exchange Board of India Act, 1992 (15 of 1992);

58

[(ba) “permanent establishment” shall have the same meaning assigned to it in clause (iiia) of section 92F; (bb) “securities” shall have the same meaning as assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and shall also include such other securities or instruments as may be notified by the Central Government in the Official Gazette in this behalf; (bc) “securitisation trust” shall have the same meaning assigned to it in clause (d) of the Explanation to section 115TCA;] [(c) “specified fund” means,—

59

(i) a fund established or incorporated in India in the form of a trust or a company or a limited liability partnership or a body corporate,— (I) which has been granted a certificate of registration as a Category III Alternative Investment Fund and is regulated under the Securities and Exchange Board of India (Alternative Investment Fund) Regulations, 2012, made under the Securities and Exchange Board of India Act, 1992 (15 of 1992) or International Financial Services Centres Authority Act, 2019 (50 of 2019); (II) which is located in any International Financial Services Centre; and

57. Inserted by the Finance Act, 2021, w.e.f. 1-4-2022.

58. Inserted by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, w.e.f. 1-4-2021.

59. Substituted by the Finance Act, 2021, w.e.f. 1-4-2022.

1.51

CH. III - INCOMES NOT PART OF TOTAL INCOME

S. 10(4F)

(III) of which all the units other than unit held by a sponsor or manager are held by 60[non-residents; or] (ii) investment division of an offshore banking unit, which has been— (I) granted a certificate of registration as a Category-I foreign portfolio investor under the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019 made under the Securities and Exchange Board of India Act, 1992 (15 of 1992) and which has commenced its operations on or before the 31st day of March, 2024; and (II) fulfils such conditions including maintenance of separate accounts for its investment division, as may be prescribed;] (d) “sponsor” shall have the meaning assigned to it in clause (w) of subregulation (1) of regulation 2 of the Securities and Exchange Board of India (Alternative Investment Fund) Regulations, 2012, made under the Securities and Exchange Board of India Act, 1992 (15 of 1992); (e) “trust” means a trust established under the Indian Trusts Act, 1882 (2 of 1882) or under any other law for the time being in force; (f) “unit” means beneficial interest of an investor in the fund and shall include shares or partnership interests; 61

[(4E) any income accrued or arisen to, or received by a non-resident as a result of transfer of non-deliverable forward contracts 62[or offshore derivative instruments or over-the-counter derivatives,] entered into with an offshore banking unit of an International Financial Services Centre as referred to in sub-section (1A) of section 80LA, which fulfils such conditions as may be prescribed 63; (4F) any income of a non-resident by way of royalty or interest , on account of lease of an aircraft 64[or a ship] in a previous year, paid by a unit of an International Financial Services Centre as referred to in sub-section (1A)

60. Following shall be substituted for the words “non-residents; or” by the Finance Act, 2022, w.e.f. 1-4-2023 : “non-residents : Provided that the condition specified in this item shall not apply where any unit holder or holders, being non-resident during the previous year when such unit or units were issued, becomes resident under clause (1) or clause (1A) of section 6 in any previous year subsequent to that year, if the aggregate value and number of the units held by such resident unit holder or holders do not exceed five per cent of the total units issued and fulfil such other conditions as may be prescribed; or” 61. Clauses (4E) and (4F) inserted by the Finance Act, 2021, w.e.f. 1-4-2022.

62. Italicised words shall be inserted by the Finance Act, 2022, w.e.f. 1-4-2023.

63. See rule 21AK. 64. Italicised words shall be inserted by the Finance Act, 2022, w.e.f. 1-4-2023.

S. 10(5)

I.T. ACT, 1961

1.52

of section 80LA, if the unit has commenced its operations on or before the 31st day of March, 2024.

Explanation.—For the purposes of this clause, “aircraft” means an aircraft or a helicopter, or an engine of an aircraft or a helicopter, or any part thereof;] Following Explanation shall be substituted for the existing Explanation to clause (4F) of section 10 by the Finance Act, 2022, w.e.f. 1-4-2023: Explanation.—For the purposes of this clause,— (i) “aircraft” means an aircraft or a helicopter, or an engine of an aircraft or a helicopter, or any part thereof; (ii) “ship” means a ship or an ocean vessel, engine of a ship or ocean vessel, or any part thereof; Following clause (4G) shall be inserted after clause (4F) of section 10 by the Finance Act, 2022, w.e.f. 1-4-2023: (4G) any income received by a non-resident from portfolio of securities or financial products or funds, managed or administered by any portfolio manager on behalf of such non-resident, in an account maintained with an Offshore Banking Unit in any International Financial Services Centre, as referred to in sub-section (1A) of section 80LA, to the extent such income accrues or arises outside India and is not deemed to accrue or arise in India.

Explanation.—For the purposes of this clause, “portfolio manager” shall have the same meaning as assigned to it in clause (z) of sub-regulation (1) of regulation 2 of the International Financial Services Centres Authority (Capital Market Intermediaries) Regulations, 2021, made under the International Financial Services Centres Authority Act, 2019 (50 of 2019); (5) in the case of an individual, the value of any travel concession or assistance received by, or due to, him,— (a) from his employer for himself and his family, in connection with his proceeding on leave to any place in India ; (b) from his employer or former employer for himself and his family, in connection with his proceeding to any place in India after retirement from service or after the termination of his service, subject to such conditions as may be prescribed65 (including conditions as to number of journeys and the amount which shall be exempt per head) having regard to the travel concession or assistance granted to the employees of the Central Government : 65. See rule 2B. See also rule 26C and Form No. 12BB. (Furnishing of evidence of claims by employee for deduction of tax u/s 192)

1.53

CH. III - INCOMES NOT PART OF TOTAL INCOME

S. 10(6)

Provided that the amount exempt under this clause shall in no case exceed the amount of expenses actually incurred for the purpose of such travel: 66 [Provided further that for the assessment year beginning on the 1st day of April, 2021, the value in lieu of any travel concession or assistance received by, or due to, such individual shall also be exempt under this clause subject to the fulfilment of such conditions (including the condition of incurring such amount of such expenditure within such period), as may be prescribed.]

67 [Explanation 1].—For the purposes of this clause, “family”, in relation to an individual, means—

(i) the spouse and children of the individual ; and (ii) the parents, brothers and sisters of the individual or any of them, wholly or mainly dependent on the individual.

68 [Explanation 2.—For the removal of doubts, it is hereby clarified that where an individual claims exemption and the exemption is allowed under the second proviso in connection with the prescribed expenditure, no exemption shall be allowed under this clause in respect of such prescribed expenditure to any other individual;]

(5A) [Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;] (5B) [Omitted by the Finance Act, 2002, w.e.f. 1-4-2003;] (6) in the case of an individual who is not a citizen of India,— (i) [***] (ii) the remuneration received by him as an official, by whatever name called, of an embassy, high commission, legation, commission, consulate or the trade representation of a foreign State, or as a member of the staff of any of these officials, for service in such capacity : Provided that the remuneration received by him as a trade commissioner or other official representative in India of the Government of a foreign State (not holding office as such in an honorary capacity), or as a member of the staff of any of those officials, shall be exempt only if the remuneration of the corresponding officials or, as the case may be, members of the staff, if any, of the Government resident for similar purposes in the country concerned enjoys a similar exemption in that country : Provided further that such members of the staff are subjects of the country represented and are not engaged in any business or profession or employment in India otherwise than as members of such staff ; 66. Inserted by the Finance Act, 2021, w.e.f. 1-4-2021.

67. Explanation renumbered as Explanation 1, ibid.

68. Inserted, ibid.

S. 10(6A)

I.T. ACT, 1961

1.54

(iii) to (v) Sub-clause (ii) substituted for sub-clauses (ii) to (v) by the Finance Act, 1988, w.e.f. 1-4-1989; (vi) the remuneration received by him as an employee of a foreign enterprise for services rendered by him during his stay in India, provided the following conditions are fulfilled— (a) the foreign enterprise is not engaged in any trade or business in India ; (b) his stay in India does not exceed in the aggregate a period of ninety days in such previous year ; and (c) such remuneration is not liable to be deducted from the income of the employer chargeable under this Act ; (via) [Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;] (vii) [Omitted by the Finance Act, 1993, w.e.f. 1-4-1993;] (viia) [Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;] (viii) any income chargeable under the head “Salaries” received by or due to any such individual being a non-resident as remuneration for services rendered in connection with his employment on a foreign ship where his total stay in India does not exceed in the aggregate a period of ninety days in the previous year ; (ix) [Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999; ] (x) [Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999; ] (xi) the remuneration received by him as an employee of the Government of a foreign State during his stay in India in connection with his training in any establishment or office of, or in any undertaking owned by,— (i) the Government ; or (ii) any company in which the entire paid-up share capital is held by the Central Government, or any State Government or Governments, or partly by the Central Government and partly by one or more State Governments ; or (iii) any company which is a subsidiary of a company referred to in item (ii) ; or (iv) any corporation established by or under a Central, State or Provincial Act ; or (v) any society registered under the Societies Registration Act, 1860 (14 of 1860), or under any other corresponding law for the time being in force and wholly financed by the Central Government, or any State Government or State Governments, or partly by the Central Government and partly by one or more State Governments ; (6A) where in the case of a foreign company deriving income by way of royalty or fees for technical services received from Government or an

1.55

CH. III - INCOMES NOT PART OF TOTAL INCOME

S. 10(6C)

Indian concern in pursuance of an agreement made by the foreign company with Government or the Indian concern after the 31st day of March, 1976 but before the 1st day of June, 2002 and,— (a) where the agreement relates to a matter included in the industrial policy, for the time being in force, of the Government of India, such agreement is in accordance with that policy ; and (b) in any other case, the agreement is approved by the Central Government, the tax on such income is payable, under the terms of the agreement, by Government or the Indian concern to the Central Government, the tax so paid.

Explanation.—For the purposes of this clause and clause (6B),— (a) “fees for technical services” shall have the same meaning as in Explanation 2 to clause (vii) of sub-section (1) of section 9 ; (b) “foreign company” shall have the same meaning as in section 80B ; (c) “royalty” shall have the same meaning as in Explanation 2 to clause (vi) of sub-section (1) of section 9; (6B) where in the case of a non-resident (not being a company) or of a foreign company deriving income (not being salary, royalty or fees for technical services) from Government or an Indian concern in pursuance of an agreement entered into before the 1st day of June, 2002 by the Central Government with the Government of a foreign State or an international organisation, the tax on such income is payable by Government or the Indian concern to the Central Government under the terms of that agreement or any other related agreement approved before that date by the Central Government, the tax so paid; (6BB) where in the case of the Government of a foreign State or a foreign enterprise deriving income from an Indian company engaged in the business of operation of aircraft, as a consideration of acquiring an aircraft or an aircraft engine (other than payment for providing spares, facilities or services in connection with the operation of leased aircraft) on lease under an agreement entered into after the 31st day of March, 1997 but before the 1st day of April, 1999, or entered into after the 31st day of March, 2007 and approved by the Central Government in this behalf and the tax on such income is payable by such Indian company under the terms of that agreement to the Central Government, the tax so paid.

Explanation.—For the purposes of this clause, the expression “foreign enterprise” means a person who is a non-resident; (6C) any income arising to such foreign company, as the Central Government may, by notification in the Official Gazette, specify in this behalf, by way of royalty or fees for technical services received in pursuance of an agreement entered into with that Government for providing services in or outside India in projects connected with security of India ;

S. 10(8A)

I.T. ACT, 1961

1.56

(6D) any income arising to a non-resident, not being a company, or a foreign company, by way of royalty from, or fees for technical services rendered in or outside India to, the National Technical Research Organisation; (7) any allowances or perquisites paid or allowed as such outside India by the Government to a citizen of India for rendering service outside India ; (8) in the case of an individual who is assigned to duties in India in connection with any co-operative technical assistance programmes and projects in accordance with an agreement entered into by the Central Government and the Government of a foreign State (the terms whereof provide for the exemption given by this clause)— (a) the remuneration received by him directly or indirectly from the Government of that foreign State for such duties, and (b) any other income of such individual which accrues or arises outside India, and is not deemed to accrue or arise in India, in respect of which such individual is required to pay any income or social security tax to the Government of that foreign State ; Following proviso shall be inserted in clause (8) of section 10 by the Finance Act, 2022, w.e.f. 1-4-2023 : Provided that nothing contained in this clause shall apply to such remuneration and income of the previous year relevant to the assessment year beginning on or after the 1st day of April, 2023; (8A) in the case of a consultant— (a) any remuneration or fee received by him or it, directly or indirectly, out of the funds made available to an international organisation hereafter referred to in this clause and clause (8B) as the agency under a technical assistance grant agreement between the agency and the Government of a foreign State ; and (b) any other income which accrues or arises to him or it outside India, and is not deemed to accrue or arise in India, in respect of which such consultant is required to pay any income or social security tax to the Government of the country of his or its origin.

Following proviso shall be inserted in clause (8A) of section 10 by the Finance Act, 2022, w.e.f. 1-4-2023 : Provided that nothing contained in this clause shall apply to such remuneration, fee and income of the previous year relevant to the assessment year beginning on or after the 1st day of April, 2023.

Explanation.—In this clause, “consultant” means— (i) any individual, who is either not a citizen of India or, being a citizen of India, is not ordinarily resident in India ; or (ii) any other person, being a non-resident,

1.57

CH. III - INCOMES NOT PART OF TOTAL INCOME

S. 10(9)

engaged by the agency for rendering technical services in India in connection with any technical assistance programme or project, provided the following conditions are fulfilled, namely :— (1) the technical assistance is in accordance with an agreement entered into by the Central Government and the agency ; and (2) the agreement relating to the engagement of the consultant is approved by the prescribed authority69 for the purposes of this clause ; (8B) in the case of an individual who is assigned to duties in India in connection with any technical assistance programme and project in accordance with an agreement entered into by the Central Government and the agency— (a) the remuneration received by him, directly or indirectly, for such duties from any consultant referred to in clause (8A) ; and (b) any other income of such individual which accrues or arises outside India, and is not deemed to accrue or arise in India, in respect of which such individual is required to pay any income or social security tax to the country of his origin, provided the following conditions are fulfilled, namely :— (i) the individual is an employee of the consultant referred to in clause (8A) and is either not a citizen of India or, being a citizen of India, is not ordinarily resident in India ; and (ii) the contract of service of such individual is approved by the prescribed authority69 before the commencement of his service ;] Following proviso shall be inserted in clause (8B) of section 10 by the Finance Act, 2022, w.e.f. 1-4-2023 : Provided that nothing contained in this clause shall apply to such remuneration and income of the previous year relevant to the assessment year beginning on or after the 1st day of April, 2023; (9) the income of any member of the family of any such individual as is referred to in clause (8) or clause (8A) or, as the case may be, clause (8B) accompanying him to India, which accrues or arises outside India, and is not deemed to accrue or arise in India, in respect of which such member is required to pay any income or social security tax to the Government of that foreign State or, as the case may be, country of origin of such member;

69. The prescribed authority under rule 16B is Additional Secretary, Department of Economic Affairs in Ministry of Finance, Government of India in concurrence with Member (Income-tax), CBDT.

S. 10(10)

I.T. ACT, 1961

1.58

Following proviso shall be inserted in clause (9) of section 10 by the Finance Act, 2022, w.e.f. 1-4-2023: Provided that nothing contained in this clause shall apply to such income of the previous year relevant to the assessment year beginning on or after the 1st day of April, 2023; (10) (i) any death-cum-retirement gratuity received under the revised Pension Rules of the Central Government or, as the case may be, the Central Civil Services (Pension) Rules, 1972, or under any similar scheme applicable to the members of the civil services of the Union or holders of posts connected with defence or of civil posts under the Union (such members or holders being persons not governed by the said Rules) or to the members of the all-India services or to the members of the civil services of a State or holders of civil posts under a State or to the employees of a local authority or any payment of retiring gratuity received under the Pension Code or Regulations applicable to the members of the defence services ; (ii) any gratuity received under the Payment of Gratuity Act, 1972 (39 of 1972), to the extent it does not exceed an amount calculated in accordance with the provisions of sub-sections (2) and (3) of section 4 of that Act ; (iii) any other gratuity received by an employee on his retirement or on his becoming incapacitated prior to such retirement or on termination of his employment, or any gratuity received by his widow, children or dependants on his death, to the extent it does not, in either case, exceed one-half month’s salary for each year of completed service, calculated on the basis of the average salary for the ten months immediately preceding the month in which any such event occurs, subject to such limit70 as the Central Government may, by notification in the Official Gazette, specify in this behalf having regard to the limit applicable in this behalf to the employees of that Government : Provided that where any gratuities referred to in this clause are received by an employee from more than one employer in the same previous year, the aggregate amount exempt from income-tax under this clause shall not exceed the limit so specified : Provided further that where any such gratuity or gratuities was or were received in any one or more earlier previous years also and the whole or any part of the amount of such gratuity or gratuities was not included in the total income of the assessee of such previous year or years, the amount exempt from income-tax under this clause shall not exceed the

70. Rs. 20,00,000 is the limit specified in case of retirement, etc., on or after 29-3-2018 vide Notification No. SO 1213(E), dated 8-3-2019.

1.59

CH. III - INCOMES NOT PART OF TOTAL INCOME

S. 10(10AA)

limit so specified as reduced by the amount or, as the case may be, the aggregate amount not included in the total income of any such previous year or years.

Explanation.—In this clause, and in clause (10AA), “salary” shall have the meaning assigned to it in clause (h) of rule 2 of Part A of the Fourth Schedule ; (10A) (i) any payment in commutation of pension received under the Civil Pensions (Commutation) Rules of the Central Government or under any similar scheme applicable to the members of the civil services of the Union or holders of posts connected with defence or of civil posts under the Union (such members or holders being persons not governed by the said Rules) or to the members of the all-India services or to the members of the defence services or to the members of the civil services of a State or holders of civil posts under a State or to the employees of a local authority or a corporation established by a Central, State or Provincial Act ; (ii) any payment in commutation of pension received under any scheme of any other employer, to the extent it does not exceed— (a) in a case where the employee receives any gratuity, the commuted value of one-third of the pension which he is normally entitled to receive, and (b) in any other case, the commuted value of one-half of such pension, such commuted value being determined having regard to the age of the recipient, the state of his health, the rate of interest and officially recognised tables of mortality ; (iii) any payment in commutation of pension received from a fund under clause (23AAB) ; (10AA) (i) any payment received by an employee of the Central Government or a State Government as the cash equivalent of the leave salary in respect of the period of earned leave at his credit at the time of his retirement whether on superannuation or otherwise ; (ii) any payment of the nature referred to in sub-clause (i) received by an employee, other than an employee of the Central Government or a State Government, in respect of so much of the period of earned leave at his credit at the time of his retirement whether on superannuation or otherwise as does not exceed ten months, calculated on the basis of the average salary drawn by the employee during the period of ten months immediately preceding his retirement whether on superannuation or otherwise, subject to such limit as the Central Government may, by notification in the Official Gazette, specify in this behalf having regard

S. 10(10B)

I.T. ACT, 1961

1.60

to the limit71 applicable in this behalf to the employees of that Government : Provided that where any such payments are received by an employee from more than one employer in the same previous year, the aggregate amount exempt from income-tax under this sub-clause shall not exceed the limit so specified : Provided further that where any such payment or payments was or were received in any one or more earlier previous years also and the whole or any part of the amount of such payment or payments was or were not included in the total income of the assessee of such previous year or years, the amount exempt from income-tax under this sub-clause shall not exceed the limit so specified, as reduced by the amount or, as the case may be, the aggregate amount not included in the total income of any such previous year or years.

Explanation.—For the purposes of sub-clause (ii),— the entitlement to earned leave of an employee shall not exceed thirty days for every year of actual service rendered by him as an employee of the employer from whose service he has retired ; (10B) any compensation received by a workman under the Industrial Disputes Act, 1947 (14 of 1947), or under any other Act or Rules, orders or notifications issued thereunder or under any standing orders or under any award, contract of service or otherwise, at the time of his retrenchment : Provided that the amount exempt under this clause shall not exceed— (i) an amount calculated in accordance with the provisions of clause (b) of section 25F of the Industrial Disputes Act, 1947 (14 of 1947) ; or (ii) such amount, not being less than fifty thousand rupees, as the Central Government may, by notification72 in the Official Gazette, specify in this behalf, whichever is less : Provided further that the preceding proviso shall not apply in respect of any compensation received by a workman in accordance with any scheme which the Central Government may, having regard to the need for extending special protection to the workmen in the undertaking to which such scheme applies and other relevant circumstances, approve in this behalf.

71. Specified exemption limit applicable in relation to employees who retire, whether on superannuation or otherwise, after 1-4-1998 : Rs. 3,00,000 - Notification No. SO 588(E), dated 31-5-2002.

72. Maximum limit is Rs. 5,00,000 where retrenchment is on or after 1-1-1997 - Notification No. 10969, dated 25-6-1999.

1.61

CH. III - INCOMES NOT PART OF TOTAL INCOME

S. 10(10BC)

Explanation.—For the purposes of this clause— (a) compensation received by a workman at the time of the closing down of the undertaking in which he is employed shall be deemed to be compensation received at the time of his retrenchment ; (b) compensation received by a workman, at the time of the transfer (whether by agreement or by operation of law) of the ownership or management of the undertaking in which he is employed from the employer in relation to that undertaking to a new employer, shall be deemed to be compensation received at the time of his retrenchment if— (i) the service of the workman has been interrupted by such transfer ; or (ii) the terms and conditions of service applicable to the workman after such transfer are in any way less favourable to the workman than those applicable to him immediately before the transfer ; or (iii) the new employer is, under the terms of such transfer or otherwise, legally not liable to pay to the workman, in the event of his retrenchment, compensation on the basis that his service has been continuous and has not been interrupted by the transfer ; (c) the expressions “employer” and “workman” shall have the same meanings as in the Industrial Disputes Act, 1947 (14 of 1947); (10BB) any payments made under the Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985 (21 of 1985), and any scheme framed thereunder except payment made to any assessee in connection with the Bhopal Gas Leak Disaster to the extent such assessee has been allowed a deduction under this Act on account of any loss or damage caused to him by such disaster ; (10BC) any amount received or receivable from the Central Government or a State Government or a local authority by an individual or his legal heir by way of compensation on account of any disaster, except the amount received or receivable to the extent such individual or his legal heir has been allowed a deduction under this Act on account of any loss or damage caused by such disaster.

Explanation.—For the purposes of this clause, the expression “disaster” shall have the meaning assigned to it under clause (d) of section 2 of the Disaster Management Act, 2005 (53 of 2005);

S. 10(10CC)

I.T. ACT, 1961

1.62

(10C) any amount received or receivable by an employee of— (i) a public sector company ; or (ii) any other company ; or (iii) an authority established under a Central, State or Provincial Act ; or (iv) a local authority ; or (v) a co-operative society ; or (vi) a University established or incorporated by or under a Central, State or Provincial Act and an institution declared to be a University under section 3 of the University Grants Commission Act, 1956 (3 of 1956) ; or (vii) an Indian Institute of Technology within the meaning of clause (g) of section 3 of the Institutes of Technology Act, 1961 (59 of 1961) ; or (viia) any State Government; or (viib) the Central Government; or (viic) an institution, having importance throughout India or in any State or States, as the Central Government may, by notification in the Official Gazette, specify in this behalf; or (viii) such institute of management as the Central Government may, by notification in the Official Gazette, specify in this behalf, 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), a scheme of voluntary separation, to the extent such amount does not exceed five lakh rupees : Provided that the schemes of the said companies or authorities or societies or Universities or the Institutes referred to in sub-clauses (vii) and (viii), as the case may be, governing the payment of such amount are framed in accordance with such guidelines (including inter alia criteria of economic viability) as may be prescribed73 : Provided further that where exemption has been allowed to an employee under this clause for any assessment year, no exemption thereunder shall be allowed to him in relation to any other assessment year : 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; (10CC) in the case of an employee, being an individual deriving income in the nature of a perquisite, not provided for by way of monetary payment, 73. See rule 2BA.

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CH. III - INCOMES NOT PART OF TOTAL INCOME

S. 10(10D)

within the meaning of clause (2) of section 17, the tax on such income actually paid by his employer, at the option of the employer, on behalf of such employee, notwithstanding anything contained in section 200 of the Companies Act, 1956 (1 of 1956); (10D) any sum received under a life insurance policy, including the sum allocated by way of bonus on such policy, other than— (a) any sum received under sub-section (3) of section 80DD or subsection (3) of section 80DDA*; or (b) any sum received under a Keyman insurance policy; or (c) any sum received under an insurance policy issued on or after the 1st day of April, 2003 but on or before the 31st day of March, 2012 in respect of which the premium payable for any of the years during the term of the policy exceeds twenty per cent of the actual capital sum assured ; or (d) any sum received under an insurance policy issued on or after the 1st day of April, 2012 in respect of which the premium payable for any of the years during the term of the policy exceeds ten per cent of the actual capital sum assured: Provided that the provisions of sub-clauses (c) and (d) shall not apply to any sum received on the death of a person: Provided further that for the purpose of calculating the actual capital sum assured under sub-clause (c), effect shall be given to the Explanation to sub-section (3) of section 80C or the Explanation to sub-section (2A) of section 88, as the case may be : Provided also that where the policy, issued on or after the 1st day of April, 2013, is for insurance on life of any person, who is— (i) a person with disability or a person with severe disability as referred to in section 80U; or (ii) suffering from disease or ailment as specified in the rules made under section 80DDB, the provisions of this sub-clause shall have effect as if for the words “ten per cent”, the words “fifteen per cent” had been substituted: 74 [Provided also that nothing contained in this clause shall apply with respect to any unit linked insurance policy, issued on or after the 1st day of February, 2021, if the amount of premium payable for any of the previous year during the term of such policy exceeds two lakh and fifty thousand rupees:

Provided also that if the premium is payable, by a person, for more than one unit linked insurance policies, issued on or after the 1st day of February, 2021, the provisions of this clause shall apply only with respect to those unit linked insurance policies, where the aggregate amount of *With effect from 1-4-2004, section 80DD has been substituted for sections 80DD & 80DDA. 74. Inserted by the Finance Act, 2021, w.e.f. 1-4-2021.

S. 10(11)

I.T. ACT, 1961

1.64

premium does not exceed the amount referred to in fourth proviso in any of the previous year during the term of any of those policies: Provided also that the provisions of the fourth and fifth provisos shall not apply to any sum received on the death of a person: Provided also that if any difficulty arises in giving effect to the provisions of this clause, the Board may, with the previous approval of the Central Government, issue guidelines for the purpose of removing the difficulty and every guideline issued by the Board under this proviso shall be laid before each House of Parliament, and shall be binding on the income-tax authorities and the assessee.]

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

Explanation 2.—For the purposes of sub-clause (d), the expression “actual capital sum assured” shall have the meaning assigned to it in the Explanation to sub-section (3A) of section 80C. 75 [Explanation 3.— For the purposes of this clause, “unit linked insurance policy” means a life insurance policy which has components of both investment and insurance and is linked to a unit as defined in clause (ee) of regulation 3 of the Insurance Regulatory and Development Authority of India (Unit Linked Insurance Products) Regulations, 2019 issued by the Insurance Regulatory and Development Authority under the Insurance Act, 1938 (4 of 1938) and the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999);]

(11) any payment from a provident fund to which the Provident Funds Act, 1925 (19 of 1925), applies or from any other provident fund set up by the Central Government and notified by it in this behalf in the Official Gazette: 76

[Provided that the provisions of this clause shall not apply to the income by way of interest accrued during the previous year in the account of a person to the extent it relates to the amount or the aggregate of amounts of contribution made by that person exceeding two lakh and fifty thousand rupees in any previous year in that fund, on or after the 1st day of April, 2021 and computed in such manner as may be prescribed77 : Provided further that if the contribution by such person is in a fund in which there is no contribution by the employer of such person, the

75. Inserted by the Finance Act, 2021, w.e.f. 1-4-2021.

76. Provisos inserted by the Finance Act, 2021, w.e.f. 1-4-2022.

77. See rule 9D.

Income Tax Act POCKET

AUTHOR PUBLISHER DATE OF PUBLICATION EDITION ISBN NO NO. OF PAGES BINDING TYPE

: : : : : : :

TAXMANN TAXMANN APRIL 2022 28TH EDITION 9789356220966 1184 PAPERBACK

Rs. : 895 | USD : 45

Description This book covers the Amended, Updated & Annotated text of the Income-tax Act, 1961 & relevant text of the Finance Act, 2022 in a Pocket/Handy format.

The Present Publication is the 28th Edition, authored by Taxmann’s Editorial Board. It is amended by the following: u

Finance Act 2022

u

Taxation Laws (Amendment) Act, 2021

The coverage of the book is as follows: u

u

Division One – Income-tax Act, 1961 n

Arrangement of Sections

n

Text of the Income-tax Act, 1961 as amended by the Finance Act, 2022 and Taxation Laws (Amendment) Act, 2021

n

Validation Provisions

Division Two – Relevant text of the Finance Act, 2022

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