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FINANCE ACT, 1976
66 of 1976
27th May 1976
An Act to give effect to the financial proposals of the Central Government for the financial year 1976-77. Be it enacted by Parliament in the Twenty-seventh Year of the Republic of India as follows:--
SECTION 01: SHORT TITLE AND COMMENCEMENT
(1) This act may be called The Finance Act, 1976.
(2) Save as otherwise provided in this Act, sections 2-to30-and section43shall be deemed to have come into force on the 1st day of April, 1976.
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 1976, 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, C and D of that Part apply, by a surcharge for purposes of the Union; and
(b) in the cases to whic-h Paragraphs E and F of that Party 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 'here the assessee has in the previous year, any net agricultural income, in addition to total income, and the total income exceeds eight thousand rupees, then,-
(a) the net agricultural income shall be taken into account, in the manner provided in case (b) (that is to say, as if the net agricultural income were comprised in the total income after the First eight 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-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 sun of eight 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 lthe 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;
(3) Where in the case of a company, other than the Life Insurance Corporation of India established underthe Life Insurance Corporation Act, 1956-, the total income includes any profits and gains and 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 Corpora..on 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 the provisions of Chapter XII orsection 164 of the Income-tax Act, 1961-(hereinafter referred to as the Income-tax Act) apply, 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-,194A-,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 152 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 underChapter XVII-C of the said Acthas 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 cases to which the provisions of Chapter XII orsection 164 of the Income- tax Act-apply, "advance tax" shall be computed with reference to the rates imposed by this sub-section or the rates as specified in that Chapter or section, as the case may be: Provided further that an assessee, being a company, may in lieu of payment of surcharge on income-tax at the rate specified in Paragraph E of Part III of the First Schedule, make a deposit under the scheme framed under sub-section (8) before the last instalment of advance tax is due in its case, and where it does so,-
(i) in a case where the amount of the deposit so made is equal to or exceeds the amount of surcharge on income-tax payable by it. the amount of surcharge on income-tax payable by it shall be nil;
(ii) in a case where the amount of the deposit so made falls short of the amount of surcharge on income-tax payable by it, the amount of surcharge on income-tax payable by it shall stand reduced by the amount of the deposit: and
(iii)any order made by the Income-tax Officer under section 210 of the Income-tax Act-and the notice of demand issued in pursuance thereof shall have effect as if the amount of surcharge on income-tax specified therein had been reduced to nil or, as the case may be, by the amount of the deposit.
(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 eight thousand rupees, then, in calculating income-tax under the first proviso to sub-section (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 section 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 clause (b) (that is to say, as if the net agricultural income were comprised in the total income after the first eight 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 eight 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) Where an assessee. being a company, makes, during the financial year commencing on the 1st day of April, 1976 any deposit with the Industrial Development Bank of India established underthe Industrial Development Bank of India Act, 1964-under any such scheme as the Central Government may. by notification in the Official Gazette, frame in this behalf then, the surcharge on income-tax payable by the company for the assessment year commencing on the 1st day of April, 1977,-
(i) in case where the amount of deposit so made is equal to or exceeds the amount of surcharge on income-tax payable by it, shall be nil; and
(ii) in a case where the amount of the deposit so made falls short of the amount of surcharge on income-tax payable by it, shall be reduced by the amount of the deposit.
(9) 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 insection 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, 1976, 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 of 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 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: 3 TO 26
amended section 2, 9, 10, 13. 80A, 80C, 80G, 80M, 115, 155 & 195; & Sch. I, Sch. VIII, Sch. IX; S. 54C has been omitted & new sections 32A, 44C, 44D, & 115B inserted. S. 26 made certain consequential amendment. All these have been incorporated in the Income-tax Act.
SECTION 27: AMENDMENT OF ACT 27 OF 1957
[Incorporated in the Act.]
SECTION 28: AMENDMENT OF ACT 18 OF 1958
[Incorporated in the Act.]
SECTION 29: AMENDMENT OF ACT 7 OF 1964
- [Amendments made have been incorporated in the Act printed in Vol. 7 of this set.]
SECTION 30: AMENDMENT OF ACT 45 OF 1974
- [Incorporated in the Act.]
SECTION 31: AMENDMENT OF ACT 32 OF 1934
[Repealed by the Customs Tariff Act (51 of 1976 S. 12 (2-8-1976)]
SECTION 32: AUXILIARY DUTIES OF CUSTOMS
(1) In the case of goods mentioned inthe First Schedule of the Tariff Act, or 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): Provided that on and from the date on whichthe Customs Tariff Act, 1975-comes in force, this sub-section shall have effect subject to the modification that for the words "First Schedule to the Tariff Act", the words and figures "First Schedule tothe Customs Tariff Act 1975-" shall be substituted.
(2) Sub-section (1) shall cease to have effect after the 30th day of June, 1977, except as respects things done or omitted to be done before such cesser, andsection 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 auxiliary duties of customs referred to in sub-section (1) shall be in addition to any duties of customs chargeable on such goods under the Customs Act, or any other law for the time being in force.
(4) The provisions of the Customs Act, and the rules and regulations made thereunder, including those relating to refunds and exemptions from duties, shall, as far as may be, apply in relation to the levy and collection of the auxiliary duties 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, as the case may be.
SECTION 33: AMENDMENT OF ACT 1 OF 1949
[Act repealed and replaced by Act 51 of 1975.]
SECTION 34: AMENDMENT OF ACT 51 OF 1975
[Incorporated in the Act. ]
SECTION 35: AMENDMENT OF ACT 1 OF 1944
[Incorporated in the Act.]
SECTION 36: 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 of section 4 of the Central Excises Act-.
(2) Sub-section (1) shall cease to have effect after the 30th day of June, 1977, except as respects things done or omitted to be done before such cesser, andsection 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 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 inforce.
(4) The auxiliary duties of excise leviable under sub-section (1) in the financial year 1975- 1976 shall be 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 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 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 37: AMENDMENT OF ACT 58 OF 1957
[Incorporated in the Act.]
SECTION 38: DISCONTINUANCE OF SALT DUTY
For the year beginning on the 1st day of April, 1976, no dut underthe Central Excises Act-orthe Tariff Actorthe Customs Tariff Act-shall be levied in respect of salt manufactured in, or imported into. India.
SECTION 39: AMENDMENT OF ACT 16 OF 1955
- [Incorporated in the Act.]
SECTION 40: AMENDMENT OF ACT 2 OF 1899
- [Incorporated in the Act.]
SECTION 41: AMENDMENT OF ACT 31 OF 1956
- [Incorporated in the Act.]
SECTION 42: AMENDMENT OF ACT 52 OF 1963
[Incorporated in the Act.]
SCHEDULE 01: THE SCHEDULE
(Seesection 2-) PART 1 INCOME-TAX AND SURCHARGE ON INCOME-TAXParagraph A Sub-Paragraph 1 In the case of every individual or Hindu undivided family or unregistered firmi or other association of persons or body of individuals, whether incorporated or not. or every artificial juridical person titeind to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act-. not being a case to whith 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. 5.000 (2) where the total income exceeds Rs. 8,000 17 percent of the amount by which the total income hut does not exceed Rs. 15.000 exceeds Rs. 8.000 (3) where the total income exceeds Rs. 15,000 Rs. 1190 plus 20 percent of the amount by which hut does not exceed Rs. 20.000 the total income exceeds Rupees 15.000. (4) where the total income exceeds Rs. 20.000 Rs. 2.190 plus 30 percent of the amount by which hill does not exceed Rs. 20,000 the total income exceeds Rupees 20.000: (5) where the total income exceeds Rs 25.000 Rs. 3.690 plus 40 percent of the amount by which hut does not exceed Rs. 30.000 the total income exceeds Rupees 25.000: (6) where the total income exceeds Rs. 30.000 Rs. 5.690 plus 50 percent of the amount by which but does not exceed Rs. 50.000 the total income exceeds Rupees 30,000 (7) where the total income exceeds Rs. 50.000 Rs. 15.690 plus 60 percent of the amount hy which but does not exceed Rs. 70.000 the total income exceeds Rupees 50.000: (8) where the total income exceeds Rs. 70.000 Rs. 27.690 plus 70 percent of the amount by whith 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 often percentt. of such income-tax. Sub-Paragraph 2 In the case of every Ilindu undivided family which at any time during the previous year has at ICMI one member whose total income of the previous year relevant to the assessment year commencing in the 1st day of April. 1976 exceeds Rs. 8,000 ________________________________________________________________________________________________________________ Rates of incomc-tax ________________________________________________________________________________________________________________ (1) where the total income does not exceeed Nil. Rs. 8.000 (2) where the total income exceeds Rs. 8.000 20 percent of the amount by which the total income hill does not exceed Rs. 15.000 exceeds Rs, 8.000. (3) where the total income exceeds Rs. 15.000 Rs. 1.400 plus 30 percent of the amount by which but does not exceed Rs. 20.000 the total income exceeds Rupees 15.000. (4) where the total income exceeds Rs. 20.000 Rs. 2.900 plus 40 percent of the amount by which but does not exceed Rs. 25,000 the total income exceeds Rupees 20.000; (5) where the total income exceeds Rs. 25.000 Rs. 4.900 plus 50 percent of the amount by which but does not exceed Rs. 30.000 the total income exceeds Rupees 25.000: (6) where the total income exceeds Rs. 30.000 Rs. 7.400 plus 60 percent of the amount by which but does not exceed Rs. 50.000 the total income exceeds Rupees 30,000; (7) where the total income exceeds Rs. 50.000 Rs. 19,400 plus 70 percent of the amount by which the total income exceeds Rupees 50.000: ________________________________________________________________________________________________________________ Surcharge on income-tax The amount of income-lax computed in accordance with the preceding provisions of this Sub-paragraph shall. be increased by a surcharge tor purposes of the Union calculated at the rule of ten percent of such income-tax" Sub-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 he increased by a surcharge lor purposes of lhe Union calculated at the rate of ten percent of such income-tax. Paragraph C Sub-paragraph 1 In the case of every registered firm. not being :a case to which suh-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 whice 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 docs 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 percentof the amount by which the total income exceeds Rs. 1.00.000 ________________________________________________________________________________________________________________ Surcarge on Income-tax The amount of income-tax computed in accordance with lhc preceding provisions of' this Sub-paragraph shall he increased by a surcharge for purposes of the Union calculated at the rate of ten percent of such income-tax. Sub-Paragraph-2 In the case of every registered firm whose total income includes income derived from profession carried on by it and the income so included is not less than fifly-one percent of such total income. - ________________________________________________________________________________________________________________ Rates of income-tax ________________________________________________________________________________________________________________ (1) where the total income docs nol 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 does not exceed Rs. 25.000 exceeds Rs. 10000 (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. 2350 plus. 13 percentof the amount by which but does not exceed Rs. 1,00000 the total income exceeds Rs.50000: (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 he increased hy a surcharge for purposes of the Union calculated at the rateof ten percent of such income-tax. Paragraph D In the case of every local authority - ________________________________________________________________________________________________________________ Rates 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 here in before Specified shall be increased by a surcharge tor 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 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 arc 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 oflfive percent of such income-tax. Paragraph F In the case of a company, other than the Liife 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 its 1,00.000 (ii) in a case where the total income 55 pet cent of the total income. exceeds Rs.1.00.000 (2) where the company is not a company in which the public lire substantially: interested.-- (i) in the case of an industrial company. - (a) where the total income does 55 percent of the total income: not exceed Rs 2.00.000 (b) where the total income' 60 per-cent of the total income exceeds R.S. 2.00.000 (ii) in any other ease 65 percent of the total income: ________________________________________________________________________________________________________________ Provided that- (i) 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-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 inconic 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) the income-tax payable by a domestic company, not being a company in which the public are substantially interested, which is an industrial company and the total income of which exceeds Rs. 2.00,000 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. 2.00.000 (the income of Rs. 2.00.000 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. 2,00.000. 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 either case 50 percent been approved hy the Central Government (ii) on the balance, if any. of the total income 70 percent 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. PART II Rates for deduction of tax at source in certain cases In every case in which under the provisions of section 193-.194194A-.194B194-and195 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 in India - (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 cross-word 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 interest payable on a tax free security) percent of the amount of the income or income-tax and surcharge on income-tax in respect of the income at the rates prescribed in sub- paragraph I of Paragraph A of Part. Ill of this Schedule, if such income had been the total income. which is higher: (ii) on income by way of interest payable on 15 percent 1.5 percent 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 inter- 22 percent 1 percent: est payable on a tax free security) (b) where the company is not a domestic company -- (i) on income by way of dividends 25 percent Nil: payable by any domestic company (ii) on income by way of royalties payable by an Indian concern in pursuance of an agreement made by it with the Indian concern and which has been approved by the Central Government.- - (A) where the agreement is made alter 50 percent 2.5 percent the 31st day of March. 1961 but before the 1st day of April. 1976. (B) where the agreement is made after the 31st day of March. 1976. (1) on so much of the amount of 20 percent Nil: such income as consists of lump sum consideration to the transfer outside India of. or the imparting of information outside India in respect of any data documentation drawing or specification relating to any patent invention, model, design secret formula or process, or trade mark or similar property. (2) On the balance, if any of 40 percent Nil: such income (iii) on income by way of fees lor technical services payable by an Indian concern in pursuance of an agreement made by it with the Indian concern and which has been approved by the Central Government.-- (A) where the agreement is made 50 percent 2.5 percent after the 29th day of february. 1964 but before the 1st day of April. 1976 (B) where the agreement is made 40 percent Nil: after the 31st day of March. 1976 (iv) on income by way of interest 44 percent 2.2 percent- payable on a tax-free security (v) on any other income 70 percent 3.5 percent _________________________________________________________________________________________________________ PART II 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 S. 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 lhe said Act has to he computed, at the rate or rates in force, slid income-tax or. as the case may he. "advance tax" (not being "advance tax" in respect of any income chargeable to tax under Chapter XII orsection 164 of the Income-tax Act-at the rates as specified in that Chapter or section), 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 Sul paragraph II of this Paragraph or any other .paragraph of this part applies. -- Rates of income-tax (1) where the total income does not exceeeed Nil: Rs. 8.000 (2) where the total income exceeds Rs. 8.OOO 15 percent of the amount by which the total income but does not exceed Rs. 15.000 total income exceeds Rs. 8.OOO: (3) where the total income exceeds Rs. 15.000 Rs. 1.050 plus 18 percent of the amount by which but does not exceed Rs. 20.000 the total income exceeds Rupees 15.000: (4) where the total income exceeds Rs. 20000 Rs. 1950 plus 25 percent of the amount by which but does not exceed Rs. 25.000 the total income exceeds Rupees 20.000 (5) where the total income exceeds Rs. 25.000 Rs. 3.200 plus 30 percent of the amount by wichh but does not exceed Rs. 30.000 the total income exceeds Rupees 25000: (A) where the total income exceeds Rs. 30.000 Rs. 4.700 plus. 40 percent of the amount by which but does not exceed Rs. 50.000 the total income exceeds Rupees. 30.000: (7) where the total income exceeds Rs. 50.000 Rs. 12.700 plus 50 percent of the amount by which but docs not exceed Rs. 70.000 the total income exceeds Rupees 50.000: (8) where the lotal income exceeds Rs. 70.000 Rs. 20.700 plus 55 percent of the amount by which but does not exceed Rs. 1.00.000 the total income exceeds Rupees 70.000: (9) where the total income exceeds Rs. 1.00.000 Rs. 39.200 plus 60 percent of the amount by which the total income exceeds Rupees 1.00.000. Surcharge on income-tax The amount of income-lax computed in accordance with the preceding provisions of this Sub-Paragraph shall be increased hv a surcharge lor 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. 1977 exceeds Rs. 8.OOO.- Rates of income-tax (1) where the total income does not exceed Nil: Rs. 8.OOO (2) where the total income exceeds Rs. 11.000 18 percent of the amount by which the total income but does not exceed Rs. 15.000 exceeds Rs. 8.000 (3) where the total income exceeds Rs. 15.000 Rs. 1.260 plus 25 per cenl. of the amount by which but does not exceed Rs. 20.000 the total income exceeds Rupees 15.000: (4) where the lotal income exceeds Rs. 20.000 Rs. 2.510 plus 30 percent of the amount by which but does not exceed Rs. 25.000 the total income exceeds Rupees 20.000: (5) where the total income exceeds Rs. 25.000 Rs. 4.010 plus 40 percent of the amount by which but does not exceed Rs. 30.000 the total income exceeds Rupees 25.000: (6) where the total income exceeds Rs 30.000 Rs. 6.010 plus 50 percent of the amount by which but does not exceed Rs. 50.000 the tolal income exceeds Rupees 30.000: (7) where the total income exceeds Rs. 50.000 Rs. 16.010 plus 55 percent of the amount by which bill dues not exceed Rs. 70.000 the total income exceeds Rupees 50,000 (8) where the total income exceeds Rs. 70.000 Rs. 27.010 plus 60 percent of the amount by which the lotal 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 lor 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 tor purposes of the Union calculated at the rate of ten percent of such income-lax. 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 docs not exceed Nil, Rs. 10.000 (2) where the total income exceeds Rs. 10.000 5 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 750 plus 7 percent of the amount hy which but does not exceed Rs. 50.000 the total income exceeds Rs. 25000: (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 lor purposes of the Union calculated at the rate of ten percent ol' 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 not less than fifty-one percent of such total income.- 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 does not exceeds Rs. 25.000 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 tolal 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. 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 he increased by a surcharge for purposes of the Union calculated at the rate of ten percent of such income-lax. Paragraph E In the case of a company.--- 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 55 percent of the total income.: income exceeds Rs. 1.00.000 (2) where the company is not a company in which the public are substantially interested.- (i) in the ease of an industrial company.- (a) where lhe tolal income does 55 percent of the total income: not exceed Rs. 2,00.000 (b) where the total income 60 percent of the total income; exceeds Rs. 2.00.000 (ii) in any other case 65 percent of the total income: Provided that - (i) 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 incomd had been Rs 1.00.000 (the income of Rs. 1.00.000 tor this purpose being computed as il' 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) the income-tax payable by a domestic company, not being a company in which the public arc substantially interested, which is an industrial company and the total income of which exceeds Rs. 2.00.000. 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. 2.00.000 (the income of Rs. 2.00.000for 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) eight percent of the amount by which is total income exceeds Rs 2.00.000; II. In the case of 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 alter the 31st day of March, 1961 hut before the ,, 1st day of April. 1976. 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 hut before the 1st day of April. 1976. and where such agreement has. in 50 percent: either case been approved by the Central Government (ii) on the balance, if any 70 percent of the 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 IV [See section 2-(9) (e)] RULES FOR COMPUTATION OF NET AGRICULTURAL INCOME Rule 1. - Agricultural income of the nature referred to in sub-clause (a) of clause (1) of section 2 of the Income-tax Act shall he computed as if it were income chargeable to income-lax under that Act under the head "Income from other sources" and the provisions of sections 57-58-59 of that Act-shall. so tar as may be. apply accordingly; Provided that sub-section (2) of section 58 shall apply subject to the modification that the reference to sec 40A therein shall be construed as not including a reference to sub-sections (3) and (4) of section 40A. Rule 2.- Agricultural income of the nature referred to in sub-clause (b) or sub-clause (c) of clause (1) 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
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