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FINANCE ACT, 1968
19 of 1968
11th May, 1968
An Act to give effect to the financial proposals of the Central Government for the financial year 1968-69. Be it enacted by Parliament in the nineteenth Year of the Republic of India as follows :-
SECTION 01: SHORT TITLE AND COMMENCEMENT
(1) This Act may be called The Finance Act, 1968.
(2) Save as otherwise provided in this Act, sections 2-to33-shall be deemed to have come into force on the 1st day of April, 1968.
SECTION 02: INCOME TAX
(1) Subject to the provisions of sub-sees. (2) and (3), for the assessment year commencing on the 1st day of April. 1968, 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 purpose 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 1968,
where the total income of a company other than the Life Insurance Corporation of India
established under theLife 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.
(3) In cases to whichChapter XII 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.
(4) In cases in which tax has to be deducted undersections 193-,194-,194A-and195 of the Incometax Act-at the rates in force, the deduction shall be made at the rates specified in Part II of the First Schedule.
(5) In cases in which income-tax has to be calculated under the first proviso to sub-section (5) ofsection 132 of the Income-tax Act-or charged under sub-section (4) ofsection 172-or sub-section (2) ofsection 174-orsection 175-or sub-section (2) ofsection 176-of the said act or deducted undersection 192-of the said Act from income chargeable under the head "Salaries" or deducted under sub-section (9) ofsection 80E-of the said Act from any payment referred to in the said subsection (9) or in which the "advance tax" payable under Chapter XVII-C of the said Act has to be computed at the rate or rates in force, such income-tax or, as the case may be, "advance tax" shall be so calculated, charged, deducted or computed at the rate or rates specified in Part III of the First
Schedule.
(6) For the purposes of this section and the First Schedule,-
(a) "company in which the public are substantially interested" means a company which is such a company as is referred to insec. 108 of the Income-tax Act-;
(b) "domestic company" 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, 1968, has made the prescribed arrangements for the declaration and payment within India of the dividends (including dividends on preference shares) payable out of such income in accordance with the provisions ofsection 194-
of that Act;
(c) "earned income" and "unearned income" shall have the meanings respectively assigned to them in clause (c) and clause (f) of sub-section (7) ofsection 2 of the Finance (No. 2) Act, 1967.
(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 mining.
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 one or more of the aforesaid activities included in its total income of the previous year (as computed before making any deduction under Chapter Vl-A of the Income-tax Act) is not less than fifty -one per cent. of such total
income.
(e) "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;
(f) 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 XXII-A of the Income- tax Act, annuity deposit for the assessment year commencing on the 1st day of April, 1968 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) ofsection 280B of the Income-tax Act-.
SECTION 04: 04-29 AMENDMENT OF ACT 43 OF 1961
- [Note.- These sections amended various sections of the Income-tax Act, 1961, which amendments only were incorporated in that Act.]
SECTION 30: CERTAIN ADDITIONAL AMENDMENTS TO THE INCOME-TAX ACT
- The amendments directed in the Third Schedule shall be made in the Income-tax Act with effect from the 1st day of April, 1969, except the amendments in items 3 and 23 of the said Schedule relating, respectively, tosections 16-and139-of the said act, which shall be deemed to have come into effect on the 1st day of April, 1968.
SECTION 31: SPECIAL PROVISIONS IN REGARD TO CERTAIN ASSESSMENTS UNDER THE INCOME-TAX ACT
(1) Notwithstanding the omission ofsection 85 of the Income-tax Act-bysection 33 of the Finance (No. 2) Act, 1967-, the provisions of the saidsection 85-shall have, and bedeemed. always to have, in relation to any assessment for the assessment year commencing on or after the 1st day of April, 1962, and before the 1st day of April, 1968, effect subject to the modification that for the words "by a shareholder in respect of so much of any dividend paid or deemed to be paid to him", the words "by an owner of the share in respect of so much of any dividend paid or deemed to be paid" were substituted.
(2) Notwithstanding the omission ofsection 85-A of the Income-tax Act-bysection 33 of the Finance (No. 2) Act, 1967, the provisions of the saidsection 85-A-shall have, and be deemed always to have, in relation to any assessment for the assessment year commencing or or after the 1st day of April, 1965, and before the 1st day of April, 1968, effect subject to the modification the words "received by it", wherever they occur, were omitted.
(3) Notwithstanding the omission ofsection 29 of the Income-tax Act-bysection 29 of the Finance Act, 1965, the provisions of clause (iv) of sub-section (1) of the saidsection 99-shall have, and be deemed always to have, in relation to any assessment for the assessment year commencing on or after the 1st day of April, 1962, and before the 1st day of April, 1965, effect subject to the modification that the words "received by it" were omitted.
SECTION 32: AMENDMENT OF ACT 27 OF F957
- [Note.- This section amended the Wealth-tax Act, 1957-the amendments were incorporated in that Act then.]
SECTION 33: AMENDMENT OF ACT 7 OF 1964
- [Note.- "This section amended the Companies (Profits) Sill-tax Act, 1964, which amendments were incorporated in that Act.]
SECTION 34: AMENDMENT OF ACT 32 OF 1934
- [This Act is now repealed and replaced by the Customs Tariff Act, 1975-]
SECTION 35: SPECIAL DUTIES OF CUSTOMS
- [This section related to levy of special duties of custom under the Indian Tariff, Act which has not been repealed and replaced by the Customs Tariff Actl975(51 of l975).]
SECTION 36: REGULATORY DUTIES OF CUSTOMS
- [This section provided for the levy of regulatory duties of custom under the Indian Tariff Act, which now stands repealed and replaced by the Customs Tariff Act 1975 (51 of 1975).]
SECTION 37: AMENDMENT OF ACT I OF 1949
- [This Act has been repealed and replaced by the Customs Tariff Act '1975 (51 of 1975).]
SECTION 38: AMENDMENT OF ACT I OF 1944
- [Note.- This section amended the Central Excises and Salt Act, 1944- These amendments were then incorporated in that Act.]
SECTION 39: SPECIAL DUTIES,OF EXCUSE ON CERTAIN GOODS
(1) When goods of the description mentioned in this section chargeable with 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 I, II (2) and II (3) of Item No. 4, Items Nos. 13, .14..14F, 15^ 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)ofltemNo.34andradiogramscomprisedinltemNo.37Aof that Schedule, a special duty of excise equal to 33 1/3 per cent of the total amount so chargable on such goods
(2) Sub-section (l) shall cease to have effect after the 31 st day of March, 1969,exfcept as respects things done or omitted to bedone 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 changeable 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 duties of excise on such goods under that Act or those rules.
SECTION 40: 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 Excise 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 May, 1969, 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 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.
SECTION 41: AMENDMENT OF ACT 27 OF 1958
- [Note.- this section amended the Mineral Products (Additional Duties of Excise and Customs) Act, 1958- These amendments were incorporated in that Act.]
SECTION 42: DISCONTINUANCE OF SALT DUTY
- For the year beginning on the 1st day of April, 1968, no duty under the Central Excises Act or the Tariff Act shall be levied in respect of the salt manufactured in, or imported into, India.
SECTION 43: AMENDMENT OF ACT 74 OF 1956
In the Central Sales Tax Act, 1956-, in section 14-, Item (xi) shall be omitted.
SECTION 44: AMENDMENT OF ACT 6 OF 1898
[Note. This section substituted existing First Schedule of Indian Post Office Act, 1898which was then incorporated in the Act.]
SCHEDULE 01:
(See section 2-) PART Income-tax and surcharges 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-clause (vii) of clause (31) of section 2 of the Income-tax Act, not being a case to which any other Paragraph of this Part applies. - Rates of income-tax (1) where the total income does not exceed Rs. 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 Rupees 10,000 income exceeds Rupees 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. 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 Paragrah, 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 limits, 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 lineally descended from any other living member of the family; (b) Rs. 4,000 in every other case: (ii) where such person is an individual whose total income does not exceed Rs. 10,000 and who has, during the previous year, incurred any expenditure for the maintenance of any one or more of his parents or grand-parents mainly dependent on him, 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-lax so computed:- (a) Rs. 145 in the case of an unmarried individual: (b) Rs. 220 in the case of a married individual who has no child mainly dependent on him; (c) Rs. 240 in the case of a married individual who has one child mainly dependent on him; (d) Rs. 260 in the case of a married individual who has more than one child mainly dependent on him; (iii) where such person is an individual not falling under clause (ii) 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. 250 in the case of a married individual who has no child mainly dependent on him or a Hindu undivided family which has no minor co-parcener; (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 more than one minor coparcener mainly supported from the income of such family; (iv) (A) where such person is an individual whose total income exceeds Rs. 10,000 but does not exceed Rs 20,000 and who has, during the previous year, incurred any expenditure for the maintenance of any one or more of his parents or grand-parents mainly dependent on him, the income-tax payable by him in respect of such total income shall not exceed the aggregate of- (1) the income-tax which would have been payable by the individual if his total income had been Rs. 10,000. and (2) 40 per cent. of the amount by which the total income of the individual exceeds Rs. 10,000; (B) where such person is not an individual whose case falls under sub-clause (A) and the total income of such person does not exceed Rs. 20,000, the income-tax payable thereon .shall not exceed 40 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 the proviso. Explanation.- For the purposes of clause (ii) and sub-clause (A) of clauseUnit 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. 30,000, 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. 30.000 if it had been the total income, at the following rate, namely:- (1) where the amount of the difference does not exceed 20 percent, of the amount of such difference: Rs. 10,000 (2) where the amount of the difference exceeds Rs. 2,000 plus 25 per cent. of the amount by which the dil- Rs. 10,000 ference aforesaid exceeds Rs. 10.000: (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 State Government and 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 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 lo 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) when amount of the difference exceeds Rs. 1,30,000 Rs. 9.750 plus 15 per cent. of the amount by which the dif- ference 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 (b) 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 Rs. 250 plus 10 per cent. of the amount by which the not exceed Rs. 10,000 total 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 not exceed Rs. 15,000 total 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 25 per cent. of the amount by which the not exceed Rs. 25,000 total income exceeds Rs. 20,000; (6)where the total inome 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 not exceeding Rs. 4,000: and (ii) where the total income is twenty thousand rupees or less, the income-lax payable shall noi exceed tony 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 surcharges for the purposes of the Union calculated as specified hereunder:- (a) where the total income exceeds Rs. 25,000, a surcharge calculated at the rate of 614 per cent. of the amount of the difference between the income-tax computed at the rate 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 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 hereinabefore 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 Surcharges on income-tax The amount of income-tax computed at the rate 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 speaqial 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 Cl. (a) of this sub-paragraph. Paragraph E In the case of the Life Insurance Corporation of India established under the Life Insurance Corporation of India 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 the public are substantially interested. Paragraph F In the case of a Company, other than the Life Insurance Corporatioin 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 exceed 45 per cent. of the total income: Rs. 50,000 (ii) in a ease where the total income exceeds 55 per cent. of the total income; Rs. 50,000 (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 does not 55 per cent.; exceed Rs. 10,00.000 (2) on the balance, if any, of the total income 60 per cent.; (ii) in any other case 65 per cent of the total income and (B) in addition where the ompany is- (i) a company in which the public are substantially interested, or (ii) a company as is referred to in clause (iii) of sub- sec. (2) or Cl. (a) or Cl.(b) of sub-section (4) of of S. 104 of the Income-tax Act, or a notifica- tion issued under the provisions of sub-sec. (3) of that section. on so much of the total income as does not exceed the 7.5 per cent.; relevant amount of distributions of dividends by the com- pany 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. 50,000 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. 50,000 (the income of Rs. 50,000 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. 50,000 Explanation 1.- In clause (B), the expression "the relevant amount of distributions of dividends" means the aggregate of the following amounts, namely :- (a) the amount, if any, by which the relevant amount of distributions of dividends by the company as computed in accordance with Explanation l to item I of Paragraph F of the First Schedule to the Finance (No. 2). Act 1967 exceeds its total income (reduced by the amount of capital gains, if any, relating to capital assets other than short-term capital assets included therein) assessable for the assessmment year commencing on 1st day of April, 1967; 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 (other than dividends 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 in 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 profit and loss accounts for the said five previous years. Explanation 3.- For the removal or 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. II. In the case of a company other than a domestic company:- (i) On so much of the total income as consists of- (a) royalties received from an Indian concern in pur- suance of an agreement 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 concern in pursuance of an agreement made by it with the Indian concern after the 29th day of February, 1964. and where such agreement has, in either case, been 50.percent approved by the Central Government (ii) on the balance, if any of the total income. 70 per cent.PART II RATES FOR DEDUCTION OF TAX AT SOURCE IN CERTAIN CASES In every case in which under the provisions of sections 193, 194, 194-A and 195of the lncome-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- (i) on income by way of interest other than "interest on securities" 10 per cent. Nil (ii) on any other income (excluding interest payable oil a lax free security) 20 per cent. 2 per cent. (b) where the person isnot resident in India- (i) on the whole income (excluding interest payable Income-tax at 30 per cent and surcharge at .1 per cent on a tax free security) of the amount of the income or Income-tax and surcharge on income-lax in respect of the income at the rates prescribed in Paragraph A of Part III of this Schedule, if such income had been the total income. whichever is higher: (ii) on the income by way of interest payable on a tax free security 15 per cent. 1.5 per cent. 2. In the case of a company- (a) where the company is a domestic company- (i) on income by way of interest other than "Interest on security" ... ... ... ... ... ... ... ... 20 per cent. Nil (ii) on any other income (excluding interest payable on a tax free security) ... ... ... ... ... 2 per cent. Nil (b) where the company is not a domestic company- (i) on the income by way of dividends payable by an Indian company as is referred to in clause (a)(i) of sub-section (1) of Section 80M of the Income- tax Act ... ... ... ... ... ... ... ... ... 14 per cent. Nil (ii) on the income by way of dividends payable by any domestic company other than a company referred to in (i) hereinabove ... 24.5 per cent. Nil (iii) on the income by way of royalties payable by an Indian concern in pursuance of an agreement made by it with the Indian concern after the 31st day of March 1961 and which has been ap- roved by the Central Government ... ... ... 50 per cent. Nil (iv) on the income by way of fees payable by an Indian concern 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 ... ... ... 50 per cent. Nil (v) on the income by way of interest payable on a tax free security ... ... ... ... ... ... 44 per cent. Nil (vi) on any other income ... ... ... ... ... 70 per cent. Nil ___________________________________________________________________________________________________________________________PART III Rates for calculating or charging income-tax in certain cases, deducting income-tax from income chargeable under the head "Salaries" or any payment referred to in sub-section (9) of Section 80E and computing "advance tax". In cases in which income-tax has to be calculated under the first proviso to sub-section (5) of Section 132 of the Income-tax Act or charged under sub-section (4) of Section 172 or sub-section (2) of Section 174 or Section 175 or sub-section (2) of Section 176 of the said Act or deducted under Section 192ofthesaid Act from income chargeable under the head "Salaries" or deducted under sub-section (9) of Section 80E or the said Act from any payment referred to in the said sub-section (9) or in which the "advance tax" payable under Chapter XVII-C of the said Act has to be computed, at the rate or rates in force, such income-tax, or, as the case may be "advance tax" shall be so calculated. charged, deducted or computed at the following rate or rates:- 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-clause (vii) of clause (31) of Section 2 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 doesRs. 250 plus 10 per cent. of the amount by which the not exceed Rs. 10,000 total 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 not exceed Rs. 15,000 total 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 but does Rs. 28,000 plus 65 per cent. of the amount by which the not exceed Rs. 1,00,000 total income exceeds Rs. 70,000; (10)where the total income exceeds Rs. 1,00,000 but Rs. 47,500 plus 70 per cent. of the amount by which the does not exceed Rs. 2,50,000 total income exceeds Rs. 1,00,000; (11)where the total income exceeds Rs. 2,50,000 Rs. 1,52,500 plus 75 per cent. of the amount by which the total income exceeds Rs. 2,50,000; 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 at any time during the previous year relevant to the assessment year commencing on the 1st day of April. 1969 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 lineally descended from any other living member of the family, (b) Rs. 4,000 in every other ease; (ii) where such person is an individual whose total income does not exceed Rs. 10,000 and who has. during the previous year relevant to the assessment year commencing on the 1st day of April, 1969, incurred any expenditure for the maintenance of any one or more of his parents or grand-parents mainly dependent on him 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. 145 in the case of an unmarried individual; (b) Rs. 220 in the case of a married individual who has no child mainly dependent on him; (c) Rs. 240 in the case of a married individual who has one child mainly dependent on him; (d) Rs. 260 in the case of a married individual who has more than one child mainly dependent on him so, however, that in the case of a married individual whose spouse has a total income exceeding Rs. 4,000 in respect of the previous year relevant to the assessment year commencing on the 1st day of April, 1969, this clause shall have effect as if for the amouts of Rs. 220, Rs. 240 and Rs. 260 the amounts of Rs. 145, Rs. 165, and Rs. 185 had respectively, been substituted; (iii) where such person is an individual not falling under clause (ii) 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 undivided 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 more than one minor coparcener mainly supported from the income of such family, so, however, that in the case of a married individual whose spouse has a total income exceeding Rs. 4,000 in respect of the previous year relevant to the assessment year commencing on the 1st day of April, 1969, this clause shall have effect as if for the amounts of Rs. 200, Rs. 220 and Rs. 240, the amounts of Rs. 125, Rs. 145 and Rs. 165 had, respectively, been substituted: (iv) (A) where such person is an individual whose total income exceeds Rs. 10,000 but does not exceed Rs. 20,000 and who has, during the previous year relevant to the assessment year commencing on the 1st day of April, 1969, incurred any expenditure for the maintenance of any one or more of his parents or grand-parents mainly dependent on him, the income-tax payable by him in respect of such total income shall not exceed the aggregate of- (1) the income-tax which would have been payable by the individual if his total income had been Rs. 10.000, and (2) 40 per cent. of the amount by which the total income of the individual exceeds Rs. 10,000; (B) where such person is not an individual whose case falls under sub-clause (A) and the total income of such person does not exceed Rs. 20,000 the income-tax payable thereon shall not exceed 40 per cent of the amount by which 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. Explanation.- For the purposes of clause (ii) and sub-clause (A) of clause (iv) of this proviso, a parent or grand-parent of an individual shall not be treated as being mainly dependent on such individual if the income of the parent or, as the case may be, the grand-parent from all sources in respect of the previous year relevant to the assessment year commencing on the 1st day of April, 1969 exceeds one thousand rupees. Surcharge on income-tax The amount of income-tax computed in accordance with the preceding provisions of this Paragraph shall be increased by a surcharge for purposes of the Union calculated at the rate of ten per cent of such income-tax. 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 Rs. 250 plus 10 per cent. of the amount by which the not exceed Rs. 10,000 total 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 not exceed Rs. 15,000 total 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 exeed Rs. 20,000 total income exceeds Rs. 15,000: (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 40 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 toal income not exceeding Rs. 4,000; and (ii) where the total income is Rs. 20,000 or less the income-tax payable shall not exceed 40 per cent. of the amount by which the total income exceeds Rs. 4,000. Surcharge on income-tax The amount of income-tax computed at the rate hereinbefore specified shall be increased by a surcharge for purposes of the Union calculated at the rate of ten per cent. of such income-tax. 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 12 per cent of the amount by which the not exceed Rs. 1.00,000 total income exceeds Rs. 50,000; (4) where the total income exceeds Rs. 1,00,000 Rs. 7, 500 plus 20 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 cl. (a), or, as the case may be, clause (b), of this sub-paragraph. Paragraph D ln the case of every local authority,- Rate of income-tax Per Cent. On the whole of the total income ... ... ... ... ... ... ... 50 Surcharge on income-tax The amount of income-tax computed at the rate hereinbefore specified shall be increased by a surcharge for purposes of the Union calculated at the rate of ten per cent. of such income-tax. Paragraph E In the case of the Life Insurance Corporation of India established under the Life Insurance Cor
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