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FINANCE ACT, 1974
20 of 1974
[11th May, 1974]
An Act to give effect to the financial proposals of the Central Government for the financial year 1974-75. Be it enacted by Parliament in the Twenty-Fifth Year of the Republic of India as follows:-
SECTION 01: SHORT TITLE AND COMMENCEMENT
(1) This Act may be called The Finance Act, 1974.
(2) Save as otherwise provided in this Act, sections 2-to17-shall be deemed to have come into force on the 1st day of April 1974
SECTION 02: INCOME-TAX
(1) Subject to the provisions of sub-sections (2), (3) and (4) for the assessment year commencing on the 1st day of April, 1974, income-tax shall be charged at the rates specified in Part I of the First Schedule and shall be increased-
(a) in the cases to which Paragraphs A, B and D of that Part apply by a surcharge for purposes of the Union;
(b) in the cases to which Paragraph C of that Part applies,, by a surcharge for purposes of the Union and a special surcharge for purposes of the Union. and
(c) in the cases to which Paragraphs E and F of that Part apply, by a surcharge, calculated in each case in the manner provided therein.
(2) In the cases to which Sub-Paragraph I or Sub-Paragraph II of Paragraph A of Part I of the First Schedule applies, where the assessee has, in the previous year, any net agricultural income in addition to total income, and the total income exceeds five thousand rupees, then.-
(a) the net agricultural income shall be taken into account, in the manner provided in cl. (b) (that is to say, as if the net agricultural income were comprised in the total income after the First five thousand rupees of the total income but without being liable to tax), only for the purpose of charging income-tax in respect of the total income:. and
(b) the income-tax chargeable shall be calculated as follows :-
(i) the total income and the net agricultural income shall be aggregated and the amount of income-tax shall be determined in respect of the aggregate income at the rates specified in Sub-Para. I or, as the case may be, Sub-Paragraph II of the said Paragraph A, as if such aggregate income were the total income;
(ii) the net agricultural income shall be increased by a sum of five thousand rupees and the amount of income-tax shall be determined in respect of the net agricultural income as so increased at the rates specified in Sub-Paragraph I or, as the case may be, Sub-Paragraph II of the said Paragraph A, as if the net agricultural income as so increased were the total income;
(iii) the amount by which income-tax determined in accordance with sub-clause (i) exceeds the amount of income-tax determined in accordance with sub- clause (ii) shall be the income-tax chargeable in respect of the total income: Provided that in cases where Sub-Paragraph I of the said Paragraph A applies.
(A) Where the aggregate income referred to in sub-cl, (i) exceeds fifteen thousand rupees but does not exceed fifteen thousand one hundred and eighty rupees, the provisions of that Sub-Paragraph relating to surcharge on income-tax shall. For the purposes of determining the amount of income-tax under sub-clause (ii), apply subject to the modifications that such surcharge shall be calculated at the rate arrived at by dividing the amount of surcharge on income-tax calculated in respect of the aggregate income by the amount of income-tax (excluding surcharge) calculated in respect of the aggregate income and that the provisions of the proviso at the end of that Sub- Paragraph shall not apply;
(B) where the aggregate income referred to in sub-section (i) exceeds fifteen thousand one hundred and eighty rupees, the provisions of that Sub-Paragraph relating to surcharge on income-tax shall, for the purposes of determining the amount of income tax under sub-clause (ii), apply subject to the modifications that such surcharge shall be calculated at the rate of fifteen percent and that the provisions of the proviso at the end of that Sub-Paragraph shall not apply.
(3) Where in the case of a company, other than the Life Insurance Corporation of Ind established under the Life Insurance Corporation Act, 1956, the total income 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 XII orsec. 164 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 or that section, and with reference to the rates imposed by sub-section (1) or the rates as specified in that Chapter or section, as the case may be,
(5) In cases in which tax has to be deducted under sections 193-,194-,194-A-,194B-,194D-and195 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.
(6) Subject to the provisions of sub-section (7), 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-s. (4) of section 172-or sub-s. (2) of section 174-orsection 175-or sub-section (2) of section 176-of the said Act or deducted under section 192-of the said Act from income chargeable under the head "Salaries" or deducted under sub-section (9) of section 80E-of 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 rate or rates specified in Part III of the First Schedule: Provided that in respect of any income chargeable to tax under sec. 164 of the Income tax Act-at the rate of sixty-five percent, "advance tax" shall be computed at that rate.
(7) In the cases to which Sub-Paragraph I or Sub-Paragraph II of Paragraph A of Part III of the First Schedule applies, where the assessee has, in the previous year or, if by virtue of any provision of the Income-tax Act income-tax is to be charged in respect of the income of a period other than the previous year, in such other period, any net agricultural income, in addition to total income, and the total income exceeds six thousand rupees then, in calculating income-tax under the first proviso to sub-s. (5) of section 132 of the Income-tax Act-or in charging income-tax under sub-section (2) of section 174-orsection 175-or sub-section (2) of S. 176 of the said Act or in computing the "advance tax" payable under Chapter XVII- C of the said Act, at the rate or rates in force -
(a) the net agricultural income shall be taken into account, in the manner provided in cl. (b) (that is to say, as if the net agricultural income were comprised in the total income after the first six thousand rupees of the total income but without being liable to tax), only for the purpose of calculating, charging or computing such income-tax or, as the case may be, "advance tax" in respect of the total income; and
(b) such income-tax or, as the case may be, "advance tax" shall be so calculated, charged or computed as follows :--
(i) the total income and the net agricultural income shall be aggregated and the amount of income-tax or "advance tax" shall be determined in respect of the aggregate income at the rates specified in Sub-Paragraph I or, as the case may be, Sub-Paragraph II of the said Paragraph A, as if such aggregate income were the total income;
(ii) the net agricultural income shall be increased by a sum of six thousand rupees and the amount of income-tax or "advance tax" shall be determined in respect of the net agricultural income as so increased at the rates specified in Sub-Paragraph I or, as the case may be. Sub- Paragraph II of the said Paragraph A, as if the net agricultural income as so increased were the total income;
(iii) the amount by which income-tax or, as the case may be, "advance tax" determined in accordance with sub-clause (i) exceeds the amount of income-tax or "advance tax" determined in accordance with sub-clause (ii) shall be the income-tax or "advance tax" in respect of the total income.
(8) 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 in sec. 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, 1974, 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 for section 194-of that Act;
(c) "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.
(d) "insurance commission" means any remuneration or reward, whether by way of commission or otherwise, for soliciting or procuring insurance business (including business relating to the continuance, renewal or revival of policies of insurance);
(e) "net agricultural income", in relation to a person, means the total amount of agricultural income, from whatever source derived, of that person computed in accordance with the rules contained in Part IV of the First Schedule;
(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 or in sec. 16-or in 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: 03-13 THE AMENDMENTS MADE BY THESE SECTIONS IN THE I-T. ACT SS.10SECTION 14: AMENDMENTS INCORPORATED IN WEALTH-TAX ACT, 1957.
SECTION 15: AMENDMENT OF ACT 7 OF 1964
- (Companies (Profits) Surtax Act, 1964) have b incorporated in the Act printed in Vol. 7.
SECTION 16: CONTINUANCE OF DEVELOPMENT REBATE IN CERTAIN CASES
-- The notification of the Government of India in the Ministry of Finance (Department of Revenue and Insurance) No. S. O. 2167, dated the 28th day of May, 1971, issued under sub-section (5) of section 33 of the Income-tax Act-shall not apply in respect of
(a) any ship acquired after the 31st day of May, 1974, but before1[the 1st day of January 77], by any assessee, if the assessee furnishes evidence to the satisfaction of the Income-tax Officer that he had, before the 1st day of December, 1973, entered into a contract for the purchase of such ship with the builder or owner thereof;
(b) any machinery or plant, being coal-fired equipment, or .any machinery or plant for converting oil-fired equipment into coal-fired equipment installed by any assessee after the 31st day of May, 1974, but before the 1st day of June, 1977.
(c) any machinery or plant1[not being machinery or plant referred to in clause (b) ] installed by any assessee after the 31st day of May, 1974, but before the 1st day of June, 1975, if the assessee furnishes evidence to the satisfaction of the Income-tax Officer that before the 1st day of December, 1973, he had purchased such machinery or plant or had entered into a contract for the purchase of such machinery or plant with the manufacturer or owner of, or a dealer in, such machinery' or plant, or had, where such machinery or plant has been manufactured in an undertaking owned by the assessee, taken steps for the manufacture of such machinery or plant, and accordingly the provisions of the Income-tax Act shall have effect in relation to such ship, machinery or plant, subject to the conditions specified in clauses (a), (b) and (c).
SECTION 17: AMENDMENT OF SECTIONS 80-N AND 80-0 OF THE INCOME-TAX ACT AS THEY STOOD DURING CERTAIN PERIODS
- The provisions of section 80N of the Income-tax Act-, as they stood immediately before the 1st day of April, 1969, and the provisions of section 80-O-of that Act, as they stood from time to time before the 1st day of April, 1972. shall have and shall be deemed to have had effect subject to the modification that the deduction under the said provisions shall be allowed only with reference to the income referred to therein which is received in convertible foreign exchange in India, or having been received in convertible foreign exchange outside India, or having been converted into convertible foreign exchange outside India, is brought into India, by or on behalf of the assessee in accordance with any law for the time being in force for regulating payments and dealings in foreign exchange.
Explanation.-- For the purposes of this section, --
(i) "Convertible foreign. exchange" means foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purposes of the law for the time being in force for regulating payments and dealings in foreign exchange,
(ii) any income used by the assessee outside India in the manner permitted by the Reserve Bank of India shall be deemed to have been brought into India in accordance with the law for the time being in force for regulating payments and dealings in foreign exchange, on the date on which such permission is given.
SECTION 18: AMENDMENT OF' ACT 32 OF 1934
- This Act has been repealed and replaced by the Customs Tariff Act 1975 (51 of 1975) which has been printed in Vol. 15 of this series.
SECTION 19: AUXILIARY DUTIES OF CUSTOMS
(1) In the case of goods mentioned in the First Schedule to the Tariff Actaor in that Schedule as amended from time to time, there shall be levied and collected as an auxiliary duty of customs an amount equal to twenty percent of the value of the goods as determined in accordance with the provisions of section 14 of the Customs Act, 1962-(hereinafter referred to as the Customs- Act).
(2) Sub-section (1) shall cease to have effect after the 31st day of March 1975, 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 the such cesser as if the said sub-section had then been. repeated by a central Act
(3) The auxiliary duties of customs referred to in sub-section (1) shall be in addition any duties of customs chargeable on such goods under the Customs Act, or any other law . for the time being, in force.
(4) The provision of the customs Act, and rules and regulations made there under, 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 auxiliary duties of customs leviable under this section 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, as the case may be.
SECTION 20: AMENDMENT OF ACT 1 OF 1949
- This Act is repealed by Act 51 of 1975.
SECTION 21: AMENDMENT OF ACT 1 OF 1944
- These amendments have been incorporated in the Act printed in vol. 5 of this series.
SECTION 22: AUXILIARY DUTIES OF EXCISE
(1) In the case of goods mentioned in the First Schedule. to the Central Excises Act, or in that Schedule as amended from time to time, there shall. be levied and collected as an auxiliary duty of excise an amount equal to twenty percent: of the value of the goods as-determined in accordance with the provisions- if section 4 of the Central Excises Act-.
(2) Sub-section (1) shall cease to have effect after 31st day of March, 1975, 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 the Central Act.
(3) The auxiliary duties of excise referred to in sub-section (1) shall be in addition to any duties of excise chargeable on such goods under the Central Excises Act. or any other law for the time being in force.
(4) The auxiliary duties of excise referred to in sub-section (1) shall be levied for the purposes of the Union and the proceeds thereof shall not be distributed among the States,
(5) The provisions of the Central Excises Act and the rules made there-under, 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 auxiliary 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, as the case may be.
SECTION 23: AMENDMENT OF ACT 27 OF 1958
- The amendments incorporated in the Mineral Products (Additional Duties of Excise and Customs) Act, 1958.
SECTION 24: DISCONTINUANCE OF SALT DUTY
- For the year beginning on the 1st day of April, 1974, no duty under the Central Excises Act or the Tariff Act shall be levied in respect of salt manufactured in, or imported into, India.
SECTION 25: AMENDMENTS TO THE POST OFFICE ACT, 1898 INCORPORATED IN THE ACT.
SCHEDULE 01:
(See section 2-)PART 1 INCOME-TAX AND SURCHARGES ON INCOME-TAX Paragraph A Sub-Paragraph I 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 Sub-Paragraph II of this Paragraph or any other Paragraph of this Pan applies, - Rates of income-tax (1) where the total income does not exceeds exceed Nil, Rs 5000 (2) where the total income exceeds Rs. 5000 10 percent of the amount by which the total income but does not exceed Rs. 10.000 exceeds Rs. 5,000: (3) where the total income exceeds Rs. 10,000 Rs. 500 plus 17 percent of the amount by which but does not exceed Rs. 15.000 the total income exceeds Rs. 10,000; (4) where the total income exceeds Rs. 15,000 Rs. 1,350 plus 23 percent of the amount by which but does not exceed Rs 20,000 the total income; exceeds Rs. 15.000: (5) where the total income exceeds Rs. 20,000 Rs. 2,500 plus 30 percent ofthe amount by which but does not exceed Rs. 25.000 the total income exceeds Rs. 20,000: (6) where the total income exceeds Rs. 25,000 Rs. 4,000 plus 40 percent of the amount by which but does not exceed Rs. 30,000 the total income exceeds Rs. 25,000; (7) where the total income income exceeds Rs. 30,000 Rs. 6,000 plus 50 percent Of the amount by which but does not exceed Rs. 40,000 the total income exceeds Rs. 30.000; (8) where the total income exceeds Rs. 40,000 Rs. 11,000 plus 60 percent of the amount by which but does not exceed Rs. 60,000 the total income exceeds Rs. 40,000. (9) where the total income exceeds Rs. 60,000 Rs. 23,070 plus 23 percent of the amount by which but does not exceed Rs. 80,000 the total income exceeds Rs. 60,000. (10) where the total income exceeds Rs. 80,000 Rs. 37,000 plus 75 percent of the amount by which but does not exceed Rs. 1,00,000 the total income exceeds Rs. 80.000. (11) where the total income exceeds Rs. 1,00,000 Rs. 52,000 plus 80 percent of the amount by which but does not exceed Rs. 2,00,000 the total income exceeds Rs. 1,00.000-. (12) where the total income exceeds Rs. 2.00,000 Rs. 1,32.000 plus 85 percent of the amount by which the total income exceeds Rs. 2,00,000 Surcharge on income-tax The amount of income-tax computed in accordance with the preceding provisions of this Sub-Paragraph shall be increased by a surcharge for purposes of the Union calculated at the following rates, namely (a) in a case where the total income does not exceed Rs. 15,000 10 percent (b) in any other case 15 percent Provided that the amount of surcharge payable shall, in no case, exceed the aggregate of the follow sums, namely:- (i) an amount calculated at the rate of 10 percent on the amount of income-tax on an income Rs. 15.000, if such income had been the total income (the income of Rs. 15,000 for this purpose being computed as if such income included income from various sources in the same proper as the total income of the person concerned); and (ii) 40 percent of the amount by which the total income exceeds Rs. 15,000. Sub-Paragraph II In the case of every Hindu undivided family which at any time during the previous year has at one member whose total income of the previous year relevant to the assessment year commencing or 1st day of April. 1974, exceeds Rs. 5.000- Rates of income-tax (1) where the total income does not exceed Nil; Rs. 5.000 (2) where the total income exceeds Rs. 5,000 17 percent of the amount by which the total income but does not exceed Rs. 10.000 exceeds Rs, 5,000 (3) where the total income exceeds Rs. 10,000 Rs. 850 plus 23 percent of the amount by which but does not exceed Rs. 15.000 the total income exceeds Rupees 10000 (4) where the total income exceeds Rs. 15.000 Rs. 2.000 plus 30 percent of the amount by which but does not exceed Rs. 20.000 the total income exceeds Rupees 15000 (5) where the total income exceeds Rs. 20,000 Rs. 3.500 plus 40 percent of the amount by which but does not exceed Rs. 25.000 the total income exceeds Rupees 20000 (6) where the total income exceeds Rs. 25.000 Rs. 5.500 plus 50 percent of the amount by which but does not exceed Rs. 30.000 the total income exceeds Rupees 25000 (7) where the total income exceeds Rs. 30.000 Rs. 8,000 plus 60 percent of the amount by which but does not exceed Rs. 40,000 the total income exceeds Rupees 30000 (8) where the total income exceeds Rs. 40.000 Rs. 14,000 plus 70 percent of the amount by which but does not exceed Rs. 60,000 the total income exceeds Rupees 40000 (9) where the total income exceeds Rs. 60,000 Rs. 28,000 plus 75 percent of the amount by which but does not exceed Rs. 80.000 the total income exceeds Rupees 60000. (10)where the total income exceeds Rs. 80.000 Rs. 43,000 plus 80 percent of the amount by which but does not exceed Rs. 1,00,000 the total income exceeds Rupees 80000 (11)where the total income exceeds Rs. 1,00.000 Rs. 59,000 plus 85 percent of the amount by which the total income exceeds Rupees 100000 Surcharge on income-tax The amount of income-tax computed in accordance with the preceding provisions of this Sub-Paragraph shall be increased by a surcharge for purposes of the union calculated at the rate of fifteen percent 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 15 percent of the total income Rs. 10,000 (2) where the total income exceeds Rs. 10.000 Rs. 1,500 plus 25 percent of the amount by which but does not exceed Rs. 20.000 the total income exceeds Rs. 10,000: (3) where the total income exceeds Rs. 20,000 Rs. 4.000 plus 40 percent of the amount by which the total income exceeds Rs. 20.000 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 fifteen percent 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 . Nil. Rs. 10.000 (2) where the total income exceeds Rs. 10,000 4 percent of the amount by which the total income but docs not exceed Rs. 25,000 exceeds Rs. 10,000: (3) where the total income exceeds Rs. 25,000 Rs. 600 plus 6 percent of the amount by which but does not exceed Rs. 50,000 the total income exceeds Rs. 25.000: (4) where the total income exceeds Rs. 50,000 Rs. 2,100 plus 12 percent of the amount by which but does not exceed Rs. 1,00,000 the total income exceeds Rs. 50,000: (5) where the total income exceeds Rs. 1,00.000 Rs. 8,100 plus 20 percent 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 lotal income includes income derived from a profession carried on by it and the income so included is not less than fifty one percent of such total income. a surcharge calculated at the rate of ten percent 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 percent of the amount of income-tax computed at the rate hereinbefore specified: and (c) a special surcharge calculated at the rate of fifteen percent 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 he, clause (b). Explanation. -- For the purposes of this Paragraph, "registered firm" includes an unregistered firm assessed as a registered firm under cl. (b) of section 183 of the Income-tax Act-. Paragraph D In the case of every local authority, - Rate of income-tax on the whole of the total income 50 percent Surcharge on income-tax The amount of income-lax computed at the rate hereinbefore specified shall be increased by a surcharge for purposes of the Union calculated at the rate of fifteen percent of such income tax Paragraph E In the case of Life Insurance Corporation of India established under the Life Insurance Corporation Act. 1956- Rate of income-tax (i) on that part of its total income 52.5 percent: which consists of profits and gains from life insurance business (ii) on the balance, if any, of the the rate of income-tax applicable, in accordance total income with Paragraph F of this Part. to the total income of a domestic company which is a company in which the public arc substantially interested. Surcharge on income-tax The amount of income-tax computed in accordance with the preceding provisions of this Paragraph shall he increased by a surcharge calculated at the rate of five percent of such income-tax. 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.--- (1) where the company is a company in which the public are substantially interested.- (i) in a case where the total income 45 percent of the total income, does not exceed Rs. 1.00.000 (ii) in a case where the total income 55 percent of the total income, exceeds Rs. 1,00.000 (2) where the company is not a company in which the public are substantially interested. --- (i) in the case of an industrial company-- (a) on so much of the total income 55 percent; as does not exceed Rs. 2,00.000 (b) on the balance, if any, of the 60 percent of the total income; total income (ii) in any other case 65 percent of the total income; Provided that the income-tax payable by a domestic company, being a company in which the public arc substantially interested the total income of which exceeds Rs. 1.00.000. shall not exceed the aggregate of -- (a) the income-lax which would have been payable by the company if its total income had been I 1,00.000 (the income of Rs. 1.00,000 for this purpose being computed as if such income includ income from various sources in the same proportion as the total income of the company); (b) eighty percent of the amount by which its total Income exceeds Rs. 1.00.000. 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 pursuance 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 50 percent: either case. been approved by the Central Government (ii) on the balance, if any of the 70 percent: total income 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 calculated at the rate of five percent of such income-tax. PART 2Rates of deduction of tax at source in certain cases In every case in which under the provisions of sections 193-.194194A-.194B194D-and195 of the Income-tax Act-, tax is to he deducted at the rates in force, deduction shall be made from the income subject to deduction, at the following rates ;" - _____________________________________________________________________________________________________________________ Income-lax _______________________________________________________________________ Rate of Rate of income-tax Surcharge _____________________________________________________________________________________________________________________ I. In the case of a person other than a company---- (a) Where the person is resident- (i) on income by way of interest 10 percent Nil. other than "Interest on securities" (ii) on income by way of winning 30 percent 3 percent: from lotteries and crossword puzzles (iii) on income by way of insurance 10 percent Nil: commission (iv) on any other income (excluding 21 percent 2 percent: interest payable on a tax-free security) (b) where the person is not resident in India - (i) on the whole income (excluding income-tax at 30 percent and surcharge at 3 per interest payable on a tax-free cent. of the amount of income. security) or income-tax and surcharge on income-tax in respect of the income at the rates prescribed in sub- (ii) on income by way of interest 15 percent 1.5 percent: payable on a tax-free security 2. In the case of a company (a) where the company is a domestic company- (i) on income by way of interest 20 percent 1 percent, other than "interest on securities" (ii) on any other income (excluding interest payable on a tax-free security (b) where the company is not a 22 percent 1 percent, domestic company - (i) on income by way of dividends 24.5 percent 1.225 percent. payable by any domestic company (ii) on income by way of royalties 50 percent 2.5 percent: 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 approved by the Central Government (iii) on income by way of fees payable 50 percent. 2.5 percent: 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. (iv) on income by way of interest payable 44 percent 2.2 percent: on a tax-free security (v) on any other income 70 percent 3.5 percent _____________________________________________________________________________________________________________________PART 3Rates 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 he 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-orsection 175-or sub-section (2) of section 176-of the said Act or deducted under section 192-of the said Act from income chargeable under the head "Salaries" or deducted under sub-section (9) of section 80E-of 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. Income-tax or. as the case may be. "advance tax" (not being "advance tax" in respect of any income chargeable to tax under section 164 of the Income-tax Act-at the rate of sixty-five percent) shall be so calculated charged, deducted or computed at the following rate or rates:-- Paragraph A Sub-Paragraph I 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 Sub-Paragraph II of this Paragraph or any other Paragraph of this Part applies; -- Rates of income-tax (1) where the total income does not exceed Nil: Rs. 6.000, (2) where the total income exceeds Rs. 6,000 12 percent of the amount by which the total income but does not exceed Rs. 10,000 exceeds Rs, 6,000 (3) where the total income exceeds Rs. 10,000 Rs. 480 plus 15 percent of the amount by which but does not exceed Rs. 15,000 the total income exceeds Rupees 10,000; (4) where the total income exceeds Rs. 15,000 Rs. 1,230 plus 20 percent of the amount by which but does not exceed Rs. 20,000 the total income exceeds Rupees 15,000; (5) where the total income exceeds Rs. 20.000 Rs. 2,230 plus 30 percent of the amount by which but does not exceed Rs. 25,000 the total income exceeds Rupees 20,000; (6) where the total income exceeds Rs. 25,000 Rs. 3,730 plus 40 percent of the amount by which but does not exceed Rs. 30.000 the total income exceeds Rupees 25,000; (7) where the total income exceeds Rs. 30,000 Rs. 5,730 plus 50 percent of the amount by which but does not exceed Rs. 50,000 the total income exceeds Rupees 30.000: (8) where the total income exceeds Rs. 50,000 Rs. 15.730 plus 60 percent, of the amount by which but does not exceed Rs. 70,000 the total income exceeds Rupees 50,000: (9) where the total income exceeds Rs. 70.000 Rs. 27,730 plus 70 percent of the amount by which the total income exceeds Rupees 70,000; Surcharge on income-tax The amount of income-tax computed in accordance with the preceding provisions of this Sub-Paragraph shall be increased by a surcharge for purposes of the Union calculated at the rate of ten percent of such income-tax. Sub-Paragraph II In the case of every Hindu undivided family which at any time during the previous year has at least one member whose total income of the previous year relevant to the assessment year commencing on the 1st day of April. 1975, exceeds Rs. 6.000- Rates of income-tax (1) where the total income does not exceed Nil; Rs. 6.000 (2) where the total income exceeds Rs. 6.000 15 percent of the amount by which the total income but does not exceed Rs. 10,000 exceeds Rs. 6.000 (3) where the total income exceeds Rs. 10,000 Rs. 600 plus 20 percent of the amount by which but does not exceed Rs. 15,000 the total income exceeds Rupees 10,000; (4) where the total income exceeds Rs. 15,000 Rs. 1,600 plus 30 percent of the amount by which but does not exceed Rs. 20,000 the total income exceeds Rupees 15,000: (5) where the total income exceeds Rs. 20.000 Rs. 3.100 plus 40 percent of the amount by which but does not exceed Rs. 25.000 the total income exceeds Rupees 20.000: (6) where the total income exceeds Rs. 25,000 Rs. 5.100 plus 50 percent of the amount by which but does not exceed Rs. 30,000 the total income exceeds Rupees 25,000: (7) where the total income exceeds Rs. 30,000 Rs. 7,600 plus 60 percent of the amount by which but does not exceed Rs. 50.000 the total income exceeds rupees 30.000: (8) where the total income exceeds Rs. 50.000 Rs. 19.600 plus 70 percent of the amount by which the total income exceeds Rupees 50.000: Surcharge on income-tax The amount of income-tax computed in accordance with the preceding provisions of this Sub-Paragraph shall be increased by a surcharge for purposes of the Union calculated at-the rate of ten percent 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 15 percent of the total income., Rs. 10.000 (2) where the total income exceeds Rs. 10.000 Rs. 1.500 plus 25 percent of the amount by but does not exceed Rs. 20,000--, which the total income exceeds Rs. 10.000: (3) where the total income exceeds Rs. 20,000 Rs. 4.000 plus 40 percent of the amount by which the total income exceeds Rs. 20.000. 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 percent of such income-tax. Paragraph C Sub-Paragraph I In the case of every registered firm. not being a case to which Sub-Paragraph II of this Paragraph applies,- Rates of income-tax (1) where the total income does not exceed Nil, Rs. 10,000 . (2) where the total income exceeds Rs. 10.000 5 percent of the amount by which the total income but does not exceed Rs. 25.000 exceeds Rs. 10,000; (3) where the total income exceeds Rs. 25,000 Rs, 750 plus 7 percent of the amount by which but does not exceed Rs. 50,000 the .total income exceeds Rs. 25.000: (4) where the total income exceeds Rs. 50.000 Rs. 2.500 plus 15 percent of the amount by which but does not exceed Rs. 1.00.000 the total income exceeds Rs. 50.000: (5) where the total income exceeds Rs. 1,00,000 Rs. 10,000 plus 24 percent of the amount by which the total income exceeds Rs. 1.00.000. Surcharge on Income-tax The amount of income-tax computed in accordance with the preceding provisions of this Sub-Paragraph shall be increased by a surcharge for purposes of the Union calculated at the rate of ten percent of such income-tax. Sub-Paragraph II In the case of every registered firm whose total income includes income derived from a profession carried on by it and the income so included is hot less than fifty-one percent of such total income,- Rates of income-tax (1) where the total income does not Nil; exceed Rs. 10,000 (2) where the total income exceeds Rs 10.000 4 percent of the amount by which the total but does not exceeds Rs. 25,000 income exceeds Rs. 10,000, (3) where the total income exceeds Rs. 25.000 Rs. 600 plus 7 percent of the amount by which but does not exceed Rs. 50.000 the total income exceeds Rs. 25.000. (4) where the total income exceeds Rs. 50.000 Rs. 2.350 plus 13 percent of the amount by which but does not exceed Rs. 1.00.000 the total income- exceeds Rs. 50.000. (5) where the total income exceeds Rs. 1,00.000 Rs. 8,850 plus 22 percent of' the amount by which the total income exceeds Rs. 1.00.000. Surcharge on income-tax The amount of income-tax computed in accordance with the preceding provisions of this Sub-Paragraph shall be increased by a surcharge for purposes of the Union calculated at the rate of ten percent of such income-tax. Explanation.- For the purposes of this Paragraph, "registered firm" includes an unregistered firm assessed as a registered firm under Cl. (b) ofSec. 183 of the Income-tax Act-. Paragraph D In the case of every local authority - Rate of income-tax On the whole of the total income 50 percent 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 percent of such income tax. 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 52.5 percent consists of profits and gains from life insurance business (ii) on the balance, if. any. of the the rate of income-tax applicable, in accordance total income 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. 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 calculated at the rate of five percent of such income-tax. 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.-- (1) where the company is a company in which the public are substantially interested.- (i) in a case where the total income 45 percent of the total income; does not exceed Rs. 1.00.000 (ii) in a case where the total income 55 percent of the total income exceeds Rs. 1,00.000 (2) where the company is not a company in which the public are substantially interested.- (i) in the case of an industrial company--- , (a) on so much of the total income; 55 percent as does not exceed Rs. 2,00,000 (b) on the balance, if any, of 60 percent: the total income (ii) in any other case 65 percent of the total income; 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. 1,00,000 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. 1,00,000 (the income of Rs. 1,00,000 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) eighty percent of the amount by which its total income exceeds Rs. 1,00,000. II. In the case of a company other than a domestic company- (i) on so much of the total income as consists of- (a) royalities received from an Indian concern in pursuance 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 lias, 50 percent. in either case, been approved by the Central Government (ii) on the balance, if any, of the total 70 percent; income 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 calculated at the rate of five percent of such income-tax
PART IV [Seesection 2 (8)(e)-] RULES FOR COMPUTATION OF NET AGRICULTURAL INCOME
RULE 01:
- Agricultural income of the nature referred to in sub-clause (a) of clause (1) of section 2 of the Income-tax Act-shall be computed as if it were income chargeable to income-tax under that Act under the head "Income from other sources" and the provisions of sections 57-to59-of that Act shall. so far as may be, apply accordingly: Provided 'that sub-section (2) for section 58-shall apply subject to the modification that the reference to section 40A-therein shall be construed as not including a reference to sub-section (3) and (4) for section 40A-
RULE 02:
- Agricultural income of the nature referred to in sub-clause (b) or sub-clause (c) of clause (1) of section 2 of the Income-tax Act-[other than income derived from any building required as a dwelling house by the receiver of the rent or revenue or the cultivator or the receiver of rent-in-kind referred to in the said sub-clause (c)l shall be computed as if it were income chargeable to income-tax under that Act under the head "Profits and gains of business or profession" and the provisions of sections 30-,31-32-34-,36-37-40-40A-[other than sub-sections (3) and (4) thereof],41-43-and43A of the Income- tax Act-shall, so far as may be apply accordingly.
RULE 03:
- Agricultural income of the nature referred to in sub-clause (c) of clause (1) of section 2 of the Income-tax Act- being income derived from any building requir
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