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FINANCE ACT, 1965
10 of 1965
11th May, 1965
An Act to give effect to the financial proposals of the Central Government for the financial year 1965-66. Be it enacted by Parliament in the Sixteenth Year of the Republic of India as follows :-
SECTION 01: SHORT TITLE AND COMMENCEMENT
(1) This Act may be called the Finance Act, 1965.
(2) Save as otherwise provided in this Act, section 3 to section 67 and section 69 to section 74 shall be deemed to have come into force on the 1st day of April, 1965, and section 68 shall be deemed to have come into force on the 1st day of March, 1965.
SECTION 02: INCOME TAX
(1) Subject to the provisions of sub-sections (2), (3), (4) and (5), for the assessment year
commencing on the 1st day of April, 1965, Income-tax shall be charged at the rates specified in Part I of the First Schedule and, in the cases to which Paragraphs A, B, C and D of that part apply, shall be increased by a surcharge for purposes of the Union calculated in either case in the manner provided therein.
(2) In making any assessment for the assessment year commencing on the 1st day of April, 1965, where the total income of an assessee, not being a company, includes any income chargeable under the head "Salaries", the income-tax payable by the assessee on that part of his total income which consists of such inclusion shall be an amount bearing to the total amount of income-tax and super-tax payable according to the rates applicable under the operation of the Finance Act, 1964-, on his total income the same proportion as the amount of such inclusion bears to his total income.
(3) In making any assessment for the assessment year commencing on the 1st day of April, 1965, where the total income of a company, other than the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956, includes any profits and gains from life insurance business, the income-tax payable by it shall be the aggregate of the income-tax calculated-
(i) on the amount of profits and gains from life insurance business so included, at the rate applicable to the Life Insurance Corporation of India in accordance with Paragraph E of Part I of the First Schedule; and
(ii) on the remaining part of its total income, at the rate applicable to the company on its total income.
(4) In cases to which Chapter 12 of the Income-tax Act, 1961-(hereinafter referred to as the Income-tax Act) applies, the tax chargeable shall be determined as provided in that Chapter, and with reference to the rates imposed by sub-section (1) or the rates as specified in that Chapter, as the case may be.
(5)
(a) In respect of any assessment for the assessment year-commencing on the 1st day of April, 1965-
(i) an assessee being an Indian company or any other company which has made the prescribed arrangements for the declaration and payment of dividends within India or an assessee (other than a company) whose total income includes any profits and gains derived from the export of any goods or merchandise out of India, shall be entitled to a deduction, from the amount of income-tax with which he is chargeable, of an amount equal to the income-tax calculated at one -tenth of the average rate of income-tax on the amount of such profits and gains included in the total income;
(ii) where an assessee of the type referred to in sub -section (i) engaged in the manufacture of any articles in an industry specified in the First Schedule to the Industries (Development and Regulation) Act, 1951, has during the previous year exported such articles out of India, he shall be entitled, in addition to the deduction of income-tax referred to in sub-clause (i), to a further deduction, from the amount of income-tax with which he is chargeable for the assessment year, of an amount equal to the income-tax calculated at the average rate of income-tax on an amount equal to two per cent of the sale proceeds receivable by him in respect of such export;
(iii) where an assessee of the type referred to in sub -clause (i) engaged in the manufacture of any articles in an industry specified in the said First Schedule has, during the previous year, sold such articles to any other person in India who himself has exported them out of India and evidence is produced before the Income-tax Officer of such articles having been so exported, the assessee shall be entitled to a deduction, from the amount of income-tax with which he is chargeable for the assessment year, of an amount equal to the income-tax calculated at the average rate of income-tax on a sum equal to two per cent of the sale proceeds receivable by him in respect of such articles from the exporter.
(b) The total of the deductions under this sub -section shall in no case exceed the amount of income-tax otherwise payable by the assessee.
(c) Nothing contained in sub -clause (ii) and sub-clause (iii) of clause (a) shall apply,-
(i) in relation to-
(1) fuels,
(2) fertilisers,
(3) photographic raw film and paper,
(4) textiles (including those dyed, printed or otherwise processed) made wholly or in part of jute. including jute twine and rope.
(5) newsprint,
(6) pulp-wood pulp, mechanical, chemical, including dissolving pulp,
(7) Sugar,
(8) vegetable oils and vanaspathi,
(9) cement and gypsum products,
(10) arms and ammunition, and
(11) cigarettes,
respectively specified in items 2, 18, 20,23(2), 24(2), 24(5), 25, 28, 35, 37 and 38 of the First Schedule to the Industries (Development and Regulation) Act, 1951; or
(ii) in relation to textiles specified in items 23(1), 23(3), 23(4) and 23(5) of that Schedule where such textiles have been exported before the 1st day of March, 1964,
(d) The amount of any profits and gains derived from the export of any goods or merchandise out of India in respect of which deduction of income-tax is admissible under sub -clause (i) of clause (a) shall be computed in accordance with the rules made by the Central Board of Direct Taxes in this behalf.
(6) In cases in which tax has to be deducted under section 193-,section 194 -to section 195 of the Income-tax Act-at the rates in force, the deduction shall be made at the rates specified in Part II of the First Schedule.
(7) For the purposes of this section, and of the rates of income-tax imposed thereby, and ofsection 3--
(i) the expressions "assessment year," "average rate of income-tax," "non-resident," "partner," and "total income" have, unless the context otherwise requires, the meanings respectively assigned to them under clauses (9), (10), (30), (23) and (45) of section 2 of the Income-tax Act-;
(ii) the expression "earned income" means any income of an assessee who is an individual, Hindu undivided family, unregistered firm or other association of persons or body of individuals, whether incorporated or not, not being a company, a local authority, a registered firm or a firm assessed under clause (b) of section 183-of the said Act-
(a) which is chargeable under the head "Salaries"; or
(b) which is chargeable under the head "Profits and gains of business or profession" where the business or profession is carried on by the assessee or in the case of a firm, where the assessee is a partner actively engaged in the conduct of the business or profession; or
(c) which is chargeable under the head "Income from other sources" if it is immediately derived from personal exertion or represents a pension or superannuation or other allowance given to the assessee in respect of the past services of any deceased person, or which is chargeable under that head under clause (ia) of sub-section (2) of section 56 of the Income-tax Act-; and includes any such income which, though it is the income of another person, is included in the assessee's income under the provisions of the Income-tax Act, but does not include any such income on which income-tax is not payable under clause (iii) or clause (v) of section 86-of that Act or which is exempted from tax under a Notification issued under section 60 of the Indian Income-tax Act, 1922-, as continued in force by clause (1) of sub -section (2) of section 297 of the Income-tax Act -; (iii) the expression "unearned income" means income which is not "earned income."
SECTION 03: ANNUITY DEPOSIT
(1) Save as otherwise provided inChapter 22-A of the Income-tax Act annuity deposit for the assessment year commencing on the 1st day of April, 1965, shall be made by every person to whom the provisions of that Chapter apply at the rates specified in the Second Schedule.
(2) For the purposes of this section and the Second Schedule, the expressions "adjusted total income", "annuity deposit" and "depositor" have the meanings respectively assigned to them under clauses (1), (5) and (6) of section 280-B of the Income-tax Act 43 OF 1961
SECTION 04: 04-67 AMENDMENTS OF ACT 43 OF 1961
[Note.- These sections amend various sections of Income-tax Act, 1961 These will be found incorporated in that Act.]
SECTION 68: VOLUNTARY DISCLOSURE OF INCOME
(1) Where any person makes a declaration in accordance with sub-section (2) in respect of the amount representing income-
(a) which he has failed to disclose in a return of income for any assessment year filed by him before the 1st day of March, 1965,under the Indian Income-tax Act, 1922,or the Income-tax Act, 1961-, or
(b) which has escaped assessment for any assessment year for which an assessment has been made before the 1st day of March, 1965, under either of the said Acts, or
(c) for the assessment of which no proceeding under either of the said Acts has been taken before the 1st day of March, 1965, he shall, notwithstanding anything contained in the said Acts, be charged income-tax at the rate specified in sub-section (3) in respect of the amount so declared if he. -
(i) pays the amount of income-tax as computed at the said rate, or
(ii) furnishes adequate security for the payment thereof in accordance with sub -section (4) and undertakes to pay such income-tax within a period, not exceeding six months, from the date of the declaration as may be specified by him therein, or
(iii) on or before the 31st day of May, 1965, pays such amount as is not less than one -half of the amount of income-tax as computed at the said rate or furnishes adequate security for the payment thereof in accordance with sub-section (4) and in either case assigns any shares in, or debentures of, a joint stock company or mortgages any immovable property, in favour of the President of India by way of security for the payment of the balance, and undertakes to pay such balance within the period referred to in clause (ii).
(2) The declaration shall be made to the Commissioner, and shall specify the period required to be specified under clause (ii) of sub -section (1), contain the name address and signature of the person making the declaration and also full information in respect of the following matters, namely :-
(a) Whether he was assessed to income-tax or not and, if assessed, the name of the Income-tax Circle in which he was assessed.
(b) The amount of income declared, giving where available, details of the financial year or years in which the income was earned and the amount pertaining to each such year.
(c) Whether the amount declared is represented by cash (including bank deposits), bullion, investments in shares, debts due from other persons, commodities, or any other assets, and the name in which it is held and location thereof: Provided that the declaration shall be of no effect unless it is made after the 28th day of February, 1965 and before the 1st day of June, 1965.
(3) The rate of income-tax chargeable in respect of the amount referred to in sub - section (1) shall be sixty per cent of such amount: Provided that if before the 1st day of April, 1965, the tax on the amount declared is paid by the declarant at the rate of fifty -seven per cent of such amount he shall not be liable to pay any further tax on such amount.
(4) A person shall not be considered to have furnished adequate security for the payment of the tax for the purposes of sub -section (1) unless the payment is guaranteed by a Scheduled Bank or the person makes an assignment, in favour of the President of India, of any security of the Central or State Government.
Explanation.- For the purposes of this sub-section, where an assignment of Government securities is made in favour of the President, the amount covered by such assignment shall be the market value of the securities on the date of the assignment.
(5) Any amount of income-tax paid in pursuance of a declaration made under this section shall not be refundable in any circumstances, and no person who has made the declaration shall be entitled, in respect of any amount so declared or any amount of tax so paid, to reopen any assessment or reassessment made under the Indian Income-tax Act, 1922, or the Income-tax Act, 1961-, or the Excess Profits Tax Act, 1940, or the Business Profits Tax Act, 1947, or the Super Profits Tax Act, 1963, or the Companies (Profits) Surtax Act, 1964, or claim any set off or relief in any appeal, reference, revision or other proceeding in relation to any such assessment or reassessment.
(6)
(a) Any amount declared by any person under this section in respect of which the tax referred to in sub-section (3) is paid shall not be included in his total income for any assessment under any of the Acts mentioned in sub -section (5) if the credits in the books of account, if any, maintained by him for any source of income or in any other record, the amount declared as reduced by the tax paid thereon under this section. (b) A credit made under clause (a) shall be intimated to the Income-tax Officer.
(7)
(a) The Commissioner shall grant a certificate to every person who has made a declaration under this section and paid the income-tax under this section.
(b) The certificate shall set forth the particulars of the amount stated in the declaration the amount of incometax paid in respect of the same and the date of payment.
(8)
(a) All particulars contained in any declaration made under this section or record of any proceeding under this section shall be treated as confidential and, notwithstanding anything contained in any law for the time being in force, no Court shall be entitled to require any public servant to produce before it any such declaration or record or any part thereof or to give evidence before it in respect thereof.
(b) No public servant shall disclose any particulars contained in any such declaration or record except to any officer employed in the execution of any of the Acts mentioned in sub -section (5) or to any officer appointed by the Comptroller and Auditor-General of India or the Board to audit income-tax receipts or refunds.
(9) Any payment of income-tax under this section shall be made by depositing the amount to the credit of the Central Government at a Government treasury or sub -treasury, or at any branch of the Reserve Bank of India, or at any branch of the State Bank of India or at any of its agencies conducting Government treasury business.
(10) In this section,-
(i) "Board" means the Central Board of Direct Taxes constituted under the Central Boards of Revenue Act, 1963;
(ii) "Commissioner" means the Commissioner of Income-tax appointed under the Income-tax Act, 1961-, having for the time being jurisdiction for the purposes of that Act over the person who makes a declaration under this section.
SECTION 69: AMENDMENT OF ACT 4 OF 13
-[Note.-This section amends sections 9, 10, 11, 12, 22 and inserts section 29A after section 29 ofEstate Duty Act, 1953 These amendments will be found incorporated in that Act.]
SECTION 70: AMENDMENT OF ACT 27 OF 1957
- [Note.- This section amends Wealth-tax Act, 1957 These amendments will be found incorporated in that Act.]
SECTION 71: AMENDMENT OF ACT 18 OF 1958
- [Note.- This section amends Gift-tax Act, 1958 These amendments will be found incorporated in that Act.]
SECTION 72: AMENDMENT OF ACT 63 OF 1960
- [Note.- This section amends Preference Shares (Regulation of Dividends) Act, 1960 These amendments will be found incorporated in that Act.]
SECTION 73: AMENDMENT OF ACT 52 OF 1963
- [Note.- This section amends Unit Trust of India Act, 1963 These amendments will be found incorporated in 'that Act.]
SECTION 74: AMENDMENT OF ACT 7 OF 1964
- [Note.- This section amends Companies (Profits) Sur-tax Act, 1964 These amendments will be found incorporated in that Act.]
SECTION 75: AMENDMENT OF ACT 32 OF 1934
- [Note.- This section amends Indian Tariff Act, 1934 These amendments will be found incorporated in that Act.]
SECTION 76: SURCHARGE ON DUTIES OF CUSTOMS
(1) In the case of goods chargeable with a duty of customs which is specified in the First Schedule to the Tariff Act as amended by this Act or any subsequent Act of Parliament, or in that Schedule read with any Notification of the Central Government for the time being in force, there shall be levied and collected as an addition to, and in the same manner as, the total amount so chargeable, a sum equal to 10 per cent of such amount: Provided that in computing the total amount so chargeable, any duty chargeable under section 2A of the Tariff Act or section 77 of this Act shall not be included.
(2) Sub-section (1) shall cease to have effect after the 31stday of March, 1966 except as respects things done or omitted to be done before such cesser; and section 6 of the General Clauses Act, 1897, shall apply upon such cesser as if the said sub-section had then been repealed by a Central Act.
SECTION 77: REGULATORY DUTY OF CUSTOMS
(1) With a view to regulating, or bringing greater economy in imports, there shall be levied and collected, with effect from such date, and at such rate, as may be specified in this behalf by the Central Government by Notification in the Official Gazette, on all or any of the goods mentioned in the First Schedule to the Tariff Act as amended by this Act or any subsequent Act of Parliament, a regulatory duty of customs not exceeding-
(a) 25 per cent of the rate, if any, specified in the First Schedule read with any notifications issued under section 3A or sub-section (1) of section 4 of the Tariff Act; or
(b) 10 per cent of the value of the goods as determined in accordance with the provisions ofsection 14 of the Customs Act, 1962, whichever is higher: Provided that different dates and different rates may be specified by the Central Government for different kinds of goods.
(2) Sub-section (1) shall cease to have effect after the 15th day of May, 1966 except as respects things done or omitted to be done before such cesser and section 6 of the General Clauses Act, 1897shall apply upon such cesser as if the said sub-section had then been repealed by a Central Act.
(3) The regulatory duty of customs leviable under this section in respect of any goods referred to in sub-section (1) shall be in addition to any other duty of customs chargeable on such goods under the Customs Act, 1962.
(4) The provisions of the Customs Act, 1962and the rules and regulations made thereunder, including those relating to refunds and exemptions from duties, shall, as far as may be, apply in relation to the levy and collection of the regulatory duty of customs leviable under this section in respect of any goods as they apply in relation to the levy and collection of the duties of customs on such goods under that Act or those rules and regulations.
(5) Every Notification issued under sub-section (1) shall, as soon as may be after it is issued, be placed before each House of Parliament.
(6) All regulatory duties of customs levied under sub-section (1) of section 59 of the Finance Act, 1964, shall, subject to any Notification issued under section 25 of the Customs Act, 1962read with sub-section (4) of the said section 58, continue to have effect until the other provisions of this section come into force.
SECTION 78: AMENDMENT OF ACT 1 OF 1949
- In the Indian Tariff (Amendment) Act, 1949, in sections 4 and 5, for the figures "1965", the figures "1966" shall be substituted.
SECTION 79: AMENDMENT OF ACT 1 OF 1944
- [Note.- This section amends Central Excises and Salt Act, 1944 These amendments will be found incorporated in that Act.]
SECTION 80: SPECIAL DUTY OF EXCISE ON CERTAIN GOODS
(1) When goods of the description mentioned in this section chargeable with a duly of excise under the Central Excises Act (as amended by this Act or any subsequent Act of Parliament) read with any notification for the time being in force issued by the Central Government in relation to the duty so chargeable, are assessed to duty, there shall be levied and collected-
(a) as respects goods comprised in Items Nos. 6,8,9, 14-D,22-A,23-A except sub-item (1) thereof, 23-B, 28,29, sub -items (2) and (3) of Item No. 31 and Item No. 32 of the First Schedule to the Central Excises Act, a special duty of excise equal to 10 per cent of the total amount so chargeable on such goods;
(b) as respects goods comprised in Items Nos. 2, 3(1), sub-items 1, 11(2) and 11(3) of Item No.4,ltemsNos. 14F, 15, 15A, 15B, 16, 16A, 17, 18A(2),21,22,23, 23A(1), 27, 30, 31(1), 33, sub-items (1), (3a) and (4) of Item No. 34 and Item No. 37 of that Schedule, a special duty of excise equal to 20 per cent of the total amount so chargeable on such goods; and
(c) as respects goods comprised in Items Nos. 4-11(1), 18, 18A(1), 18B, 20, 29A, 33A, sub-items (2) and (3) of Item No. 34 and radiograms comprised in Item No. 37A of that Schedule, a special duty of excise equal to 33 1/3 per cent of the total amount so chargeable on such goods.
(2) Sub-section (1) shall cease to have effect after the 31st day of March, 1966, except as respects things done or omitted to be done before such cesser; and section 6 of the General Clauses Act, 1897shall apply upon such cesser as if the said sub-section had then been repealed by a Central Act.
(3) The duties of excise referred to in sub-section (1) in respect of the goods specified therein shall be in addition to the duties of excise chargeable on such goods under the Central Excises Act or any other law for the time being in force and such special duties shall be levied for purposes of the Union and the proceeds thereof shall not be distributed among the States.
(4) The provisions of the Central Excises Act and the rules made thereunder, including those relating to refunds and exemptions from duties, shall, as far as may be, apply in relation to the levy and collection of the duty of excise leviable under this section in respect of any goods as they apply in relation to the levy and collection of the duties of excise on such goods under that Act or those rules.
SECTION 81: REGULATORY DUTY OF EXCISE
(1) With a view to regulating or bringing greater economy in consumption, there shall be levied and collected, with effect from such date, and at such rate, as may be specified in this behalf by the Central Government by Notification in the Official Gazette, on all or any of the goods mentioned in the First Schedule to the Central Excises Act as amended by this Act or any subsequent Act of Parliament, a regulatory duty of excise which shall not exceed 15 per cent of the value of the goods as determined in accordance with the provisions of section 4 of the Central Excises Act: Provided that different dates and different rates may be specified by the Central Government for different kinds of goods.
(2) Sub-section (1) shall cease to have effect after the 15th day of May, 1966, except as respects things done or omitted to be done before such cesser; and section 6 of the General Clauses Act, 1897, shall apply upon such cesser as if the said sub-section had then been repealed by a Central Act.
(3) The duties of excise referred to in sub-section (1) in respect of the goods specified therein shall be in addition to the duties of excise chargeable on such goods under the Central Excises Act or any other law for the time being in force and such regulatory duties shall be levied for purposes of the Union and the proceeds thereof shall not be distributed among the States.
(4) The provisions of the Central Excises Act and the rules made thereunder, including those relating to refunds and exemptions from duties, shall, as far as may be, apply in relation to the levy and collection of the regulatory duty of excise leviable under this section in respect of any goods as they apply in relation to the levy and collection of the duties of excise on such goods under that Act or those rules.
(5) Every notification issued under sub-section (1) shall, as soon as may be after it is issued, be placed before each House of Parliament.
(6) All regulatory duties of excise levied under sub-section (1) of section 62 of the Finance Act, 1964-, shall, subject to any Notification issued under rule 8 of the Central Excise Rules, 1944, read with sub-section (4) of the said section, continue to have effect until the other provisions of this section come into force.
SECTION 82: DISCONTINUANCE OF SALT DUTY
- For the year beginning on the 1st day of April, 1965, no duty under the Central Excises Act, or the Tariff Actshall be levied in respect of salt manufactured in, or imported into, India.
SECTION 83: AMENDMENT OF ACT 58 OF 1957
- [Note.-This section amends Additional Duties of Excise (Goods of Special Importance) Act, 1957 These amendments will be found incorporated in that Act.]
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