Back

FINANCE ACT, 1966

FINANCE ACT, 1966

13 of 1966

13th May, 1966

An Act to give effect to the financial proposals of the Central Government for the financial year 1966-67. Be it enacted by Parliament in the Seventeenth Year of the Republic of India as follows :-

SECTION 01: SHORT TITLE AND COMMENCEMENT

(1) This Act may be called The Finance Act, 1966.

(2) Save as other wise provided in this Act, Sections 2-to43-,Section 52-andSection 53-shall be deemed to have come into force on the 1st day of April, 1966.

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, 1966, 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 and a special' 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, 1966 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 payable according to the rates applicable under the operation of the Finance Act, 1965, 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, 1966; 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 in the case of the Life Insurance Corporation of India, in accordance with paragraph E of Part I of the First Schedule, to that part of its total income which consists of profits and gains from life insurance business; 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, 1922(here in after 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, 1966, in the case of an assessee being a domestic company or an assesee other than a company,-

(i) where his total income includes any profits and gains derived from the export of any goods or merchandise out of India, he shall be entitled to the 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 his total income;

(ii) where he is engaged in the manufacture of any articles in an industry specified in the First Schedule to the Industries (Development and Regulation) Act, 1951-, and 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-cl, (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.

Explanation.- In this sub-clause, the expression "sale proceeds" does not include freight or insurance attributable to the transport of the articles beyond the customs station as defined in the Customs Act, 1962.

(iii) where he is engaged in the manufacture of any articles in an industry specified in the said First Schedule and 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 aggregate amount of the deductions under this sub-section shall in no case exceed the amount of income-tax otherwise payable by the assessee.

(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,

(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 ofthe First Schedule to the Industries (Development and Regulation) Act, 1951-.

(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 Board in this behalf.

(6) In cases in which tax has to be deducted under Section 193-,Section 194-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 the First Schedule,-

(a) "company in which the public are substantially interested" includes a subsidiary company of such company referred to in clause (b) of Section 108 of the Income-tax Act-;

(b) "domestic company" means an Indian company or any other company which, in respect of its income liable to income-tax under the Income-tax Act for the assessment year commencing on the 1st day of April, 1966 has made the prescribed arrangements for the declaration and payment within India of the dividends payable out of such income in accordance with the provisions of Section 194-of that Act;

(c) "earned income" means any income of an assessee who is an individual, or a Hindu undivided family, or an unregistered firm [not being an unregistered firm assessed under clause (b) ofSection 183 of the Income-tax Act-] or an association of persons or body of individuals, whether incorporated or not, not being,-

(A) a company, or

(B) a local authority, or

(D) an unregistered firm assessed under clause (b) of the said Section 183--

(i) which is chargeable under the head "Salaries"; or

(ii) 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

(iii) 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 total 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-orSection 60A 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 -;

(d) "industrial company" means a company which is mainly engaged in the business of generation or distribution of electricity or any other form of power or in the construction of ships or in the manufacture or processing of goods or in nining.

Explanation.- For the purposes of this clause, a company shall be deemed to be mainly engaged in the business of generation or distribution of electricity or any other form of power or in the construction of ships or in the manufacture or processing of goods or in

mining- if the income attributable to any of the aforesaid activities included in its total income for the previous year is not less than fifty- one per cent of such total Income:

(e) "unearned income" means income which is not "earned income":

(f) "tax free security" means any security of the Central Government issued or declared to be income-tax free or any security of a State Government issued income-tax free, the income-tax whereon is payable by the State Government;

(g) all other words and expressions used in this section and the First Schedule but not defined in this sub - section and defined in the Income-tax Act, shall have the meanings respectively assigned to them in that Act.

SECTION 03: ANNUITY DEPOSIT

(1) Save as otherwise provided in Chapter XXIIA of the Income- tax Act, annuity deopsit for the assessment year commencing on the 1st day of April, 1966 and annuity deposit to be made during the financial year commencing on the 1st day of April, 1966, shall be made by every person to whom the provisions of that Chapter apply, at the rate or 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 280B of the Income-tax Act-.

SECTION 04: 04-37 AMENDMENTS OF ACT 43 OF 1961

- [Note.- These sections amend various sections of the Income-tax Act, 1961-, which were then incorporated in that Act.]

SECTION 38: AMENDMENT OF ACT 34 OF 1953

- [Note.- This section amends Estate Duty Act, 1953. These amendments are incorporated in that Act.]

SECTION 39: TRANSITIONAL PROVISIONS

- In the case of persons dying on or after the 1st day of April, 1966, but before the 1st day of April, 1967,section 9-,section 10-,section 11-,section 12-,section 22-,section 23-andsection 46 of the Estate Duty Act, 1953-, as amended, respectively, by clause (a), (b), (c), (d) and (e), sub-clause (i) of clause (f) and clause (h) of section 38-, shall have effect as if references therein to the two years before the death of the deceased were references therein to the two years before the death of the deceased were reference to the said two years less so much thereof as fell before the 1st day of April, 1965.

SECTION 40: REPEAL OF ACT 29 OF 1957

-The Expenditure-tax Act, 1957, is hereby repealed

SECTION 41: AMENDMENT OF ACT 18 OF 1958

- [Note.- This section amended the Gift-tax Act. 1958-, which were then incorporated in that Act.]

SECTION 42: REPEAL OF ACT 14 OF 1963

-The Super Profits Tax Act, 1963, is hereby repealed.

SECTION 43: AMENDMENT OF ACT 7 OF 1964

- [Note.- This section amended Companies (Profits) Surtax Act, 1964, which were then incorporated in that Act.]

SECTION 44: SPECIAL DUTIES OF CUSTOMS

(1)" In the case of goods chargeable with a duty of customs which is specified in the first Schedule to the Indian Tariff Act, 1934(hereinafter referred to as the Tariff Act), or in that Schedule as amended by a subsequent Central Act, if any, 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 special duty of customs 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 Actorsection 45-of this Act shall not be included.

(2) Sub-section (1) shall cease to have effect after the 31st day of May, 1967 except as respects things done or omitte. 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 been repealed by a Central Act.

SECTION 45: REGULATORY DUTIES 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 or in that Schedule as amended by a subsequent Central Act, if any, a regulatory duty of customs not exceeding (a) 25 per cent. of the rate, if any, specified in the said First Schedule read with any notification issued under section 3Aor sub-section (1) ofsection 4 of the Tariff Act; or

(b) 10 per cent. of she value of the goods as determined in accordance with the provisions of section 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 July, 1967, 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 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 underthe Customs Act, 1962.

(4) The provisions-- ofthe Customs Act, 1962and the rules and regulations made thereunder, including those legating 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. '

SECTION 46 Amendment of Act 1 of 1949

- This Act now stands repealed and replaced bythe Customs Tariff Act 1975 (51 of 1975)

SECTION 47: AMENDMENT OF ACT 1 OF 1944

- [Note.- This section amendedCentral Excises and Salt Act, 1944, which amendments were then incorporated in that Act.]

SECTION 48: SPECIAL DUTIES OF EXCISE ON CERTAIN GOODS

(1) When goods of the description mentioned in this section chargeable with a duty of excise under the Central Excises Act (as amended by this Act or any subsequent Central Act) 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, 14D, 22A, 23A, except sub-item (1) thereof, 23B, 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, Items Nos. 13, 14, 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 II (1), 18, 18A (1), 18B, 20, 29A, 33A, sub-items (2) and (3) of Item No. 34 and Radiograms concised in item No. 37A of that Schedule, a special duty of excise equal to 33 1/3 percent, of the total amount so chargeable on such goods.

(2) Sub-section (1) shall cease to have effect after the 31st day of May, 1967, except as respects things done or omitted to be done before such cesser; and section 6 of the General Clauses Act. 1897(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 duties 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 49 Regulatory duties 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 Central Act, 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 ofsection 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 July, 1967, 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 duties 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 the 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.

SECTION 50 Discontinuance of salt duty

- For the year beginning on the 1st day of April. 1966, on duty under the Central Excises Act, or the Tariff Act shall be levied on respect of salt manufactured in, or imported into, India.

SECTION 51: AMENDMENT OF ACT 74 OF 1956

- [Note.- This section amends Ss. 8-and15 of Central Sales Tax Act, 1956- These amendments were then incorporated in that Act.]

SECTION 52: AMENDMENT OF ACT 63 OF 1960

- [Note.- This section amended section 4A of Preference Shares (Regulation of Dividends) Act, 1960 These amendments have been incorporated in that Act.]

SECTION 53: AMENDMENT OF ACT 52 OF 1963

- [Note.- This section amend ssec. 32 of Unit Trust of India Act 1963, which amendments were then incorporated in that Act.]

SCHEDULE 01: THE FIRST SCHEDULE

(See section 2-) PART I Income-tax and surcharge on income-tax Paragraph A In the case of every individual or Hindu undivided family or unregistered firm or other association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-el, (vii) of cl. ( 31 ) ofsection 2 of the Income-tax Act-, not being a case to which any other Paragraph of this Part applies., Rates of income-tax (1) where the total income does not exceed Rs. 5,000 5 per cent. of the total income; (2) where the total income exceeds Rs. 5,000 but does not Rs. 250 plus 10 per cent. of the amount by which the total exceed Rs. 10,000 income exceeds Rs. 5,000; (3) where the total income exceeds Rs. 10,000 but does Rs.750 plus 15 percent.of the amount by which the total not exceed Rs. 15,000 income exceeds Rs. 10,000; (4) where the total income exceeds Rs. 15,000 but does Rs. 1,500 plus 20 per cent. of the amount by which the not exceed Rs. 20,000 total income exceeds Rs. 15,000; (5) where the total income exceeds Rs. 20,000 but does Rs. 2,500 plus 30 per cent. of the amount by which the not exceed Rs. 25,000 total income exceeds Rs, 20,000; (6) where the total income exceeds Rs. 25,000 but does Rs. 4,000 plus 40 per cent. of the amount by which the not exceed Rs. 30,000 total income exceeds Rs. 25,000; (7) where the total income exceeds Rs. 30,000 but does Rs. 6,000 plus 50 per cent. of the amount by which the not exceed Rs. 50,000 total income exceeds Rs. 30,000; (8) where the total income exceeds Rs. 50,000 but does Rs. 16,000 plus 60 per cent. of the amount by which the not exceed Rs. 70,000 total income exceeds Rs. 50,000; (9) where the total income exceeds Rs. 70,000 Rs. 28,000 plus 65 per cent. of the amount by which the total income exceeds Rs. 70,000: Provided that for the purposes of this Paragraph, in the case of a person not being a non-resident - (i) no income-tax shall be payable on a total income not exceeding the following limit, namely : - (a) Rs. 7,000 in the case of every Hindu undivided family which as at the end of the previous year satisfies either of the following two conditions, namely :- (1) that it has at least two members entitled to claim partition who are not less than eighteen years of age; or (2) that it has at least two members entitled to claim partition who are not lineally descended one from the other and who are not lienally descended from any other living member of the family (b) Rs. 4,000 in every other case; (ii) where such person is an individual or a Hindu undivided family, the income tax computed at the rate hereinbefore specified shall be reduced by so much of the amount specified hereunder, as does not exceed the amount of income-tax so computed :- (a) Rs. 125 in the case of an unmarried individual; (b) Rs. 200 in the case of a married individual who has no child mainly dependent on him or a Hindu un- divided family which has no minor coparcener. (c) Rs. 220 in the case of a married individual who has one child mainly dependent on him or a Hindu undivided family which has one minor coparcener mainly supported from the income of such family: (d) Rs. 240 in the case of a married individual who has more than one child mainly dependent on him or a Hindu undivided family which has one minor coparcener mainly supported from the income of such family; (iii) where the total income is twenty thousand rupees or less, the income-tax payable shall not exceed forty per cent. of the amount by which the total income exceeds the limit specified in sub-clause (a) or, as the case may be, sub-clause (b) of clause (i) of this proviso. Surcharge on income-tax The amount of income-tax computed in accordance with the preceding provision of this Paragraph shall be increased by the aggregate of surcharges for purposes of the Union calculated as specified hereunder :- (a) where - (i) in the case of an individual or a Hindu undivided family, the amount of unearned income, not being income by way of interest on any security of the Central or State Government or income received in respect of units from the Unit Trust of India, established under the Unit Trust of India Act, 1963, included in the total income, or (ii) in any other case, the amount of unearned income included in the total income, exceeds Rs. 15,000, a surcharge calculated on the difference between the amount of income-tax computed in respect of the income referred to in sub-clause (i) or, as the case may be, sub-clause (ii), if such income had been the total income and the amount of income-tax computed in respect of an income of Rs. 15,000 if it had been the total income, at the following rate, namely :- (1) where the amount of the difference does not exceed 20 per cent. of the amount of such difference. Rs. 14.500 (2) where the amount of the difference exceeds Rs, 2,900 plus 25 per cent. of the amount by which the Rs. 14,500. difference aforesaid exceeds Rs. 14.500 (b) where - (i) in the case of an individual or a Hindu undivided family, the earned income and income by way of interest on any security of the Central or Slate Government and income received in respect of units from the Unit Trust of India established underthe Unit Trust of India Act, 1963, included in the total income, or (ii) in any other case, the earned income included in the total income, exceeds Rs. 1 lakh, a surcharge calculated on the amount of the difference between the income-tax computed in respect of the income referred to in sub-clause (i) or, as the case may be, sub-clause (ii), if such income had been the total income and the income-tax computed in respect of a total income of Rs. I lakh, at the following rate, namely:- (1) where the amount of the difference does not exceed 5 per cent. of the amount of such difference. Rs. 65,000. (2) where the amount of the difference exceeds Rs. 3,250 plus 10 per cent. of the amount by which the Rs. 65,000 but does not exceed Rs. 1,30,000. difference aforesaid exceeds Rs. 65.000: (3) where the amount of the difference exceeds Rs. 9,750 plus 15 per cent. of the amount by which the Rs. 1.30.000. difference aforesaid exceeds Rs. 1.30,000, and (c) a special surcharge calculated at the rate of ten per cent. on the aggregate of the following amounts. namely: - (i) the amount of income-tax computed in accordance with the preceding provisions of this Paragraph-, and (ii) the aggregate of the amounts of the surcharges calculated in accordance with clause (a) and clause (h) of this sub-paragraph Paragraph B In the case of every co-operative society '.- Rates of income-tax (1) where the total income does not exceed Rs. 5,000 5 per cent. of the total income; (2) where the total income exceeds Rs. 5.000 but does not Rs. 250 plus 10 per cent. of the amount by which the total exceed Rs. 10.000 income exceeds Rs. 5,000: (3) where the total income exceeds Rs. 10,000 but does Rs. 750 plus 15 per cent. of the amount by which the total not exceed Rs. 15.000 income exceeds Rs. 10.000: (4) where the total income exceeds Rs. 15,000 but does Rs. 1.500 plus 20 per cent. of the amount by which the not exceed Rs 20000 total income exceed-Rs 45000 (5) where the total income exceeds Rs. 20,000 but does Rs. 2,500 plus 25 per cent. of the amount by which the not exceed Rs. 25,000 total income exceeds Rs. 20,000; (6) where the total income exceeds Rs. 25,000. Rs. 3,750 plus 41 per cent. of the amount by which the total income exceeds Rs. 25,000; Provided that (i) no income-tax shall be payable on a total income and exceeding Rs. 4,000, and (ii) where the total income is twenty thousand rupees or less, the income-tax payable shall not exceed forty per cent. of the amount by which the total income exceeds Rs. 4,000. Surcharges on income -tax. The amount of income-tax computed at the rate hereinbefore specified shall be increased by the aggregate of surcharge for purposes of the Union calculated as specified hereunder :- (a) where the total income exceeds Rs. 25,000, a surcharge calculated at the rate of 6 1/4 per cent. of the amount of the difference between the income-tax computed at the rates hereinbefore specified and the income-tax computed in respect of a total income of Rs. 25,000; and (b) a special surcharge calculated at the rate of ten per cent. on the aggregate of the following amounts, namely:- (i) the amount of income-tax computed at the rate hereinbefore specified; and (ii) the amount of the surcharge calculated in accordance with clause (a) of this sub-paragraph. Paragraph C In the case of every registered firm,- Rates of income-tax (1) where the total income does not exceed Rs. 25,000 Nil; (2) where the total income exceeds Rs. 25,000 but does 6 per cent. of. the amount by which the total income not exceed Rs. 50,000 exceeds Rs. 25,000; (3) where the total income exceeds Rs. 50,000 but does Rs. 1,500 plus 8 per cent. of the amount by which the total not exceed Rs. 1.00,000 income exceeds Rs. 50,000; (4) where the total income exceeds Rs. 1,00.000 Rs. 5,500 plus 12 per cent. of the amount by which the total income exceeds Rs. 1,00,000; Surcharges on Income-tax The amount of income-tax computed at the rate hereinbefore specified shall be increased by the aggregate of surcharges for purposes of the Union calculated as specified hereunder :- (a) in the case of a registered firm whose total income includes income derived from a profession carried on by it and the income so included is not less than fifty-one per cent. of such total Income, a surcharge calculated at the rate of ten per cent. of the amount of income-tax computed at the rate hereinbefore specified; (b) in the case of any other registered firm a surcharge calculated at the rate of twenty per cent. of the amount of income-tax computed at the rate hereinbefore specified; and (c) a special surcharge calculated at the rate of ten per cent. on the aggregate of the following amounts, namely :- (i) the amount of income-tax computed at the rate hereinbefore specified; and (ii) the amount of the surcharge calculated in accordance with clause (a), or, as the case may be, clause (b) of this sub-paragraph. Paragraph D In the case of every local authority,- Rate of income-tax Per cent. On the whole of the total income ... ... ... 45 ... ... 45 Surcharges on Income-tax The amount of income-tax computed at the rate hereinbefore specified shall be increased by the aggregate of surcharges for purposes of the Union calculated as specified hereunder :- (a) a surcharge calculated at the rate of ten per cent. of the amount of income-tax computed at the rate hereinbefore specified: and (b) a special surcharge calculated at the rate of ten per cent. on the aggregate of the following amounts, namely :- (i) the amount of income-tax computed at the rate hereinbefore specified; and (ii) the amount of the surcharge calculated in accordance with clause (a), of the sub-paragraph. Paragraph E In the case of the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956-- Rates of income-tax (i) on that part of its total income which consists of 52.5 per cent; profits and gains from life insurance business. (ii) on the balance, if any, of the total income, the rate of income-tax applicable in accordance with Paragraph F of this Part to the total income of a domestic company which is a company in which public are substantially interested. Paragraph F In the case of a company, other than the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956-,- Rates of income-tax 1. In the case of a domestic company - (A) (1) where the company is a company in which the public are substantially interested,- (i) in a case where the total income does not 45 per cent. of the total income; exceed Rs. 25,000 (ii) in a case where the total income exceeds 55 per cent. of the total income; Rs. 25,000 (2) where the company is not a company in which the public are substantially interested - (i) in the case of an industrial company - (1) on so much of the total income as 55 percent. does not exceed Rs. 10,00,000 (2) on the balance, if any, of the total 60 per cent. income (ii) in any other case 65 per cent. of the total income; and (B) in addition, where the company is (i) a company in which the public are sub- stantially interested., or (ii) a company as is referred to in clause (in) of sub-section (2) or clause (a) or '. clause (b) of sub-section (4) ofsec- tion 104 of the Income-tax .Act-, or (iii) such a company as is exempt from the operation ofsection 104-of the said Act by a notification issued under the provisions of sub-section (3) of that section on so much of the total income as does not 7.5 per cent. exceed the relevant amount of distribution of dividends by the company Provided that the Income-tax payable by a domestic company, being a company in which the public are substantially interested, the total income of which exceeds Rs, 25,000, shall not exceed the aggregate of - (a) the income-tax which would have been payable by the company if its total income had been Rs. 25,000 (the income of Rs. 25,000 for this purpose being computed as if such income included income from various sources in the same proportion as the total income of the company); and (b) 80 per cent. of the amount by which its total income exceeds Rs. 25000. Explanation 1.- In clause (B), the expression "the relevant amount of distribution of dividends" means the aggregate of the following amounts, namely:- (a) the amount of dividends, other than dividends on preference shares, declared or distributed by the company during the previous year relevant to the assessment year commencing on the 1st day of April, 1964,or the 1st day of April, 1965, with reference to which the amount of the rebate arrived at under the first proviso to Paragraph D of Part II of the First Schedule to the Finance Act, 1964. or, as the case may be, the first proviso to Paragraph F of Part I of the First Schedule to the Finance Act, 1965, is required to be reduced under the second proviso to the said Paragraph D or, as the case may be, the second proviso to the said Paragraph F as diminished by so much of the amount of dividends aforesaid with reference to which the rebate referred to hereinabove is reduced under the second proviso to the said Paragraph D or the second proviso to the said Paragraph F; and (b) so much of the amount of the dividends other than dividends on preference shares, declared or distributed by the company during the previous year as exceeds ten per cent of its paid up equity share capital as on the 1st day of the previous year. . Explanation 2.-For the purposes of clause (B), where a part of the income of a company is not included in its total income because it is agricultural income, the amount declared or distributed as dividends (bther than dividend on preference shares) shall be deemed to be such proportion thereof as the sum Specified in clause (a) bears to the sum specified in clause (b), such sums being- (a) the average amount of the total income of the company of the five previous years in which it has been receipt of taxable income immediately preceding the relevant previous year;' and (b) the average amount of the total profits and gains (excluding capital receipts) of the company of the five previous years referred to in clause (a) reduced by such allowances as may be admissible under the Income-tax Act but which have not been taken into account by the company in its profits and loss account for the said five previous years. Explanation 3.- For the removal of doubts, it is hereby declared that where any dividends were declared by the company before the commencement of the previous year and are distributed by it during that year, the amount of such dividends shall not be included in the amount of dividends referred to in clause (b) of Explanation 1. 11. In the case of a company other than a domestic company,- (i) on so much of the total income as consists of- (a) royalties received from an Indian concern in pursuance of an agree- ment made by it with the Indian concern after the 31st day of March, 1961,or (b) fees for rendering technical services received from an Indian con- cern in pursuance of an agreement made by it with the Indian con- cern after the 29th day of February, 1964, and where such agreement has in either case, been approved by the Central Gov- 50 per cent eminent. (ii) on the balance, if any, of the total income 70 per cent PART II Rates for deduction of tax it source in certain cases In every case in which under the provisions of sections 193-,section 194 section 195 of the Income-tax Act-. tax is to be deducted at the rates in force, deduction shall be made from the income subject to deduction, at the following rates:- _____________________________________________________________________________________________________________________________ Income- tax Rate of Rate of income-tax surcharge _____________________________________________________________________________________________________________________________ 1. In the case of a person other than a company- (a) where the person is resident, on the whole income (excluding in- 18 per cent 4 per cent; terest payable on a tax free security) (b) where the person is not resident in India- (i) on the whole income (excluding interest payable on a tax free income-tax at 25 per cent and surcharge security.) at 8 percent of the amount of the income or income-tax and surcharges on income- tax in respect of the income at the rates prescribed in Paragraph A of Part I of this Schedule, if such in one had been the total income, whichever is higher; (ii) on the income by way of interest payable on a tax free secu- 12.5 per cent 4 per cent rity 2. In the case of a company- (a) where the company is a domestic company, on the whole income 22 per cent Nil (excluding interest payable on a tax free security) (b) where the company is not a domestic company- (i)on the income by way of dividends payable by an Indian com- 15 percent Nil any as is referred to in the proviso tosection 85A of the Income-tax Act-(ii) on the income by way of dividends payable by any domestic 25 per cent Nil company other than a company referred to in (i) hereinabove (iii) on the income by way of royalties payable by an Indian con- 50 per cent Nil cern in pursuance of an agreement made by it with the lndian concern after the31st day of March, 1961,and which has been approved by the Central Government (iv)on the income by way of fees payable by an Indian con- 50 per cent Nil cern for rendering technical services in pursuance of an agreement made by it with the Indian concern after the 29th day of February, 1964, and which has been approved by the Central Government (v) on the income by way of interest payable on a tax free secu- 44 per cent Nil rity (vi) on any other income 70 per cent Nil

SCHEDULE 02: THE SECOND SCHEDULE

(See section 3-) Rates of annuity deposits (i) In the case of any depositor whose total income does not Nil exceed Rs. 15,000 (ii) In the case of any deposit whose total income exceeds 5 per cent of the adjusted total income Rs. 15,000 but does not exceed Rs. 20,000 Provided that the annuity deposit to be made shall in no case exceed half the amount by which the total

+Clients Back

+Lawyers

+Law Students

+Law Schools

Central Act

FINANCE ACT, 1966

Lawyers Network

Users

Cities Serving

Law Schools Network

Law Students Network