86540
Lawyers Network
103860
Users
630
Cities Serving
114
Law Schools Network
59824
FINANCE ACT, 2000
10 of 2000
May 12, 2000
An Act to give effect to the financial proposals of the Central Government for the Financial Year 2000-2001 Be it enacted by Parliament in the Fifty-first Year of the Republic of India as follows :-
SECTION 01: SHORT TITLE AND COMMENCEMENT
(1) This Act may be called the Finance Act, 2000.
(2) Save as otherwise provided in this Act, Sections 2 to 77 shall be deemed to have come into force on the 1st day of April, 2000.
SECTION 02: INCOME TAX
(1) Subject to the provisions of sub-sections (2) and (3), for the assessment year commencing on the 1st day of April, 2000, income-tax shall be charged at the rates specified in Part I of the First Schedule and such tax as reduced by the rebate of income-tax calculated under Chapter VIII-A of the Income Tax Act, 1961 (43 of 1961) (hereinafter referred to as the Income Tax Act) 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 which Paragraph E of that Part applies, by a surcharge, calculated in each case in the manner manner provided therein.
(2) In the cases to which Paragraph A of Part I of the First Schedule applies, where the assessee has, in the previous year, any net agricultural income exceeding six hundred rupees, in addition to total income, and the total income exceeds fifty thousand rupees, then,-
(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 fifty 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 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 fifty 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 the said Paragraph A, as if the net agricultural income as so increased were the total income;
(iii) the amount of income-tax determined in accordance with sub-clause (i) shall be reduced by the amount of income -tax determined in accordance with sub-clause (ii) and the sum so arrived at shall be the income-tax in respect of the total income:
Provided that the amount of income-tax so arrived at, as reduced by the amount of rebate of income-tax calculated under Chapter VIII-A, shall be increased by a surcharge for purposes of the Union calculated in each case in the manner provided in that Paragraph and the sum so arrived at shall be the income-tax in respect of the total income.
(3) In cases to which the provisions of Chapter XII or Chapter XII-A or sub-section (1-A) of Section 161 – or Section 164-or Section 164-A-or Section 167-B of 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: Provided that the amount of income-tax computed in accordance with the provisions of Sections 112 and 113, shall be increased by a surcharge for purposes of the Union or surcharge as provided in Paragraph A, B, C, D or E, as the case may be, of Pan I of the First Schedule: Provided further that in respect of any income chargeable to tax under Section 115-ACA-or Section 115-B-orSection 115-BB of the Income Tax Act-, the amount of income-tax computed under this sub -section shall be increased,-
(i) in the case of a person other than a company being resident in India, by a surcharge, for purposes of the Union, calculated at the rate of ten per cent of such income-tax, and
(ii) in the case of a domestic company, by a surcharge calculated at the rate of ten per cent of such income- tax.
(4) In cases in which tax has to be charged and paid under Section 115-O-orSection 115-R-orSection 115-U of the Income Tax Act , the tax shall be charged and paid at the rate as specified in those sections and shall be increased,-
(a) in the case of a person other than a company, by a surcharge for purposes of the Union, calculated at the rate of ten per cent of such tax;
(b) in the case of a domestic company, by a surcharge calculated at the rate of1[eleven per cent] of such tax.
(5) In cases in which tax has to be deducted under Sections 193, 194, 194-A, 194-B, 194-BB, 194-D and 195 of the Income Tax Act, at the rates in force, the deduction shall be made at the rates specified in Part 11 of the First Schedule and shall be increased,-
(a) in the cases to which the provisions of Item 1 of that Part apply, by a surcharge for purposes of the Union; and
(b) in the cases to which the provisions of sub-item (a) of Item 2 of that Part apply, by a surcharge, calculated in each case in the manner provided therein.
(6) In cases in which tax has to be deducted under Sections 194-C, 194-E, 194-EE, 194-F, 194-G, 194-1, 194-J, 194 - K, 194-L, 196-A, 196-B, 196-C and 196-D of the Income Tax Act, the deduction shall be made at the rates specified in those sections and shall be increased,-
(a) in the case of a person other than a company being resident in India, by a surcharge for purposes of the Union, calculated at the rate of ten per cent of such tax;
(b) in the case of a domestic company, by a surcharge calculated at the rate of1[eleven per cent] of such tax.
(7) In cases in which tax has to be collected under the proviso to Section 194-B-or under Section 206-C-of the Income Tax Act, the collection shall be made at the rates specified in that section or at the rates specified in Part II of the First Schedule, as the case may be, and shall be increased,-
(a) in the case of a person other than a company being resident in India, by a surcharge for purposes of the Union, calculated at the rate of ten per cent of such tax;
(b) in the case of a domestic company, by a surcharge calculated at the rate of1[eleven per cent] of such tax.
(8) Subject to the provisions of sub-section (9), in cases in which income-tax has to be 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 Income Tax Act or deducted under Section 192 -of the said Act from income chargeable under the head "Salaries" 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 charged, deducted or computed at the rate or rates specified in Part III of the First Schedule and such tax as reduced by the rebate of income-tax calculated under Chapter VIII-A of the said Act 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 which Paragraph E of that Part applies, by a surcharge, calculated in each case in the manner provided therein: Provided that in cases to which the provisions of Chapter XII or Chapter XII-A or Section 115-JBor sub -section (1-A) of Section 161-orSection 164-orSection 164-A-orSection 167-B of the Income Tax Act-apply, "advance tax" shall be computed with reference to the rates imposed by this subsection or the rates as specified in that Chapter or section, as the case may be: Provided further that the amount of income-tax computed in accordance with the provisions of Sections 112 and 113 of the Income Tax Act shall be increased by a surcharge for purposes of the Union or surcharge as provided in Paragraph A, B, C, D or E, as the case may be, of Part III of the First Schedule: Provided also that in respect of any income chargeable to tax under Sections 115 -A, 115-AB, 115-AC, 115-ACA, 115-AD, 115-B, 115-BB, 115-BBA, 115-E and 115-JB of the Income Tax Act, "advance tax" computed under the first proviso shall be increased,-
(a) by a surcharge, for purposes of the Union, calculated,- (i) in the case of a co-operative society, a firm and a local authority, at the rate of2[eleven per cent] of such "advance tax"; (ii) in the case of a person other than a company, a co-operative society, a firm and a local authority- (A) at the rate of2[eleven per cent] of such "advance tax" where the total income exceeds sixty thousand rupees but does not exceed one lakh fifty
thousand rupees; or (B) at the rate of fifteen per cent of such "advance tax" where the total income exceeds one lakh fifty thousand rupees; and (b) by a surcharge calculated at the rate of2[eleven per cent] of such "advance tax" in the case of a domestic company.
(9) In the cases to which 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 exceeding six hundred rupees, in addition to total income and the total income exceeds fifty thousand rupees, then, in charging income-tax under subsection
(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 fifty thousand rupees of the total income but without being liable to tax], only for the purpose of 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 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 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 fifty 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 the said Paragraph A, as if the net agricultural income were the total income;
(iii) the amount of income-tax or "advance tax" determined in accordance with sub -clause (0 shall be reduced by the amount of income-tax or, as the case may be, "advance tax" determined in accordance with sub-clause
(ii) and the sum so arrived at shall be the income-tax or, as the case may be, "advance tax" in respect of the total income: Provided that the amount of income-tax or "advance tax" so arrived at, as reduced by the rebate of income-tax calculated under Chapter VII-A of the said Act, shall, -
(a) in the case of every individual or Hindu undivided family or association of persons or body of individuals, whether incorporated or not, referred to in Paragraph A of Part III, having a total income exceeding sixty thousand rupees, be increased by a surcharge for purposes of the Union-
(i) at the rate of ten per cent of such income -tax or, as the case may be, "advance tax" where the total income exceeds sixty thousand rupees but does not exceed one lakh fifty thousand rupees; or
(ii) at the rate of fifteen per cent of such income-tax or, as the case may be, "advance tax" where the total income exceeds one lakh fifty thousand rupees; and
(b) in the case of every artificial juridical person, referred to in Paragraph A of Part III, be increased by a surcharge for purposes of the Union, calculated at the rate of ten per cent of such income-tax or, as the case may be, "advance tax", and the sum so arrived at shall be the income-tax or, as the case may be, "advance tax" in respect of the total income.
(10) For the purposes of this section and the First Schedule, -
(a) "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, 2000, 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;
(b) "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);
(c) "net agricultural income", in relation to a person, means tile 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;
(d) 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: AMENDMENT OF SECTION 2
InSection 2 of the Income Tax Act-,-
(a) in clause (1-A), the Explanation shall be numbered as Explanation 1 thereof, and after Explanation 1 as so numbered, the following Explanation shall be inserted with effect from the 1st day of April, 2001, namely :-
"Explanation 2.-For the removal of doubts, it is hereby declared that income derived from any building or land referred to in sub-clause (c) arising from the use of such building or land for any purpose (including letting for residential purpose or for the purpose of any business or profession) other than agriculture falling under sub - clause (a) or sub-clause (b) shall not be agricultural income;";
(b) in clause (19-AA), in Explanation 4, for the words, brackets and figures "the conditions specified in sub-clauses (i) to (vii) of this clause, to the extent applicable", the words "such conditions as may be notified in the Official Gazette, by the Central Government" shall be substituted.
SECTION 04: AMENDMENT OF SECTION 9
InSection 9 of the Income Tax Act-, in sub-section (1), in clause (vi), for Explanation 3, the following Explanation shall be substituted with effect from the 1st day of April, 2001, namely :-
Explanation 3.-For the purposes of this clause, "computer software" means any computer programme recorded on any disc, tape, perforated media or other information storage device and includes any such programme or any customized electronic data;'.
SECTION 05: AMENDMENT OF SECTION 10
InSection 10 of the Income Tax Act-,-
(a) in clause (10-C), with effect from the 1st day of April, 2001,-
(i) for the words "voluntary retirement, in accordance with any scheme or schemes of voluntary retirement, to the extent such amount does not exceed five lakh rupees", occurring after sub-clause (viii), the words
"voluntary retirement or termination of his service, in accordance with any scheme or schemes of voluntary retirement or in the case of a public sector company referred to in sub-clause (i), a scheme of voluntary separation, to the extent such amount does not exceed five lakh rupees" shall be substituted;
(ii) in the first proviso, the words, brackets and figures "and such schemes in relation to companies referred to in sub-clause (ii) or co-operative societies referred to in sub-clause (v) are approved by the Chief
Commissioner or, as the case may be, Director-General in this behalf shall be omitted;
(b) in clause (15),-
(i) in sub-clause (iv),-
(A) in item (g), for the words, brackets and figures "being a company approved by the Central Government for the purposes of clause
(viii) of sub-section (1) of Section 36", the words, brackets and figures "being a company eligible for deduction under clause (viii) of subsection (1) of Section 36" shall be substituted;
(B) after Explanation 1, the following Explanation shall be inserted with effect from the 1st day of April, 2001, namely :-
Explanation 1-A.-For the purposes of this sub-clause, the expression "interest" shall not include interest paid on delayed payment of loan or on default.';
(ii) after sub-clause (vi), the following sub-clause shall be inserted with effect from the 1st day of April, 2001, namely :-
"(vii) interest on bonds -
(a) issued by a local authority; and
(b) specified by the Central Government, by notification in the Official Gazette;";
(c) in clause (23), in the third proviso, after item (c), the following item shall be inserted with effect from the 1st day of April, 2001, namely :-
"(d) applies the amount received by way of donations referred to in clause (c) of sub-section (2) of Section 80- G-for purposes of development of infrastructure for games or sports in India or for sponsoring of games and sports in India.";
(d) after clause (23-E), the following shall be inserted with effect from the 1st day of April, 2001, namely :-
"(23-EA) any income of such Investor Protection Fund set up by recognised stock exchanges in India, either jointly or separately, as the Central Government may, by notification in the Official Gazette, specify in this behalf: Provided that where any amount standing to the credit of the Fund and not charged to income-tax during any previous year is shared, either wholly or in part, with a recognised stock exchange, the whole of the amount so shared shall be deemed to be the income of the previous year in which such amount is so shared and shall accordingly be chargeable to income-tax;";
(e) in clause (23 -FA), after the second proviso, the following proviso shall be inserted with effect from the 1st day of April, 2001, namely :-
"Provided also that nothing contained in this clause shall apply in respect of any investment made after the 31st day of March, 2000;";
(f) after clause (23 -FA), the following shall be inserted with effect from the 1st day of April, 2001, namely :- (23-FB) any income of a venture capital company or venture capital fund set up to raise funds for investment in a venture capital undertaking.
Explanation.-For the purposes of this clause,-
(a) "venture capital company" means such company-
(i) which has been granted a certificate of registration under the Securities and Exchange Board of India Act, 1992 (15 of 1992), and regulations made thereunder;
(ii) which fulfils the conditions as may be specified, with the approval of the Central Government, by the Securities and Exchange Board of India, by notification in the Official Gazette, in this behalf;
(b) "venture capital fund" means such fund-
(i) operating under a trust deed registered under the provisions of the Registration Act, 1908 (16 of 1908);
(ii) which has been granted a certificate of registration under the Securities and Exchange Board of India Act, 1992 (15 of 1992), and regulations made thereunder;
(iii) which fulfils the conditions as may be specified, with the approval of the Central Government, by the Securities and Exchange Board of India, by notification in the Official Gazette, in this behalf; and
(c) "venture capital undertaking" means a domestic company -
(i) whose shares are not listed in a recognised stock exchange in India;
(ii) which is engaged in the business for providing services, production or manufacture of an article or thing but does not include such activities or sectors which are specified, with the approval of the Central Government, by the Securities and Exchange Board of India, by notification in the Official Gazette, in this behalf;';
(g) in clause (23-G), in Explanation 1,-
(i) in clause (a), for the words "in the business of developing, maintaining and operating infrastructure facility;", the following shall be substituted, namely : - "in the business of-
(i) developing; or
(ii) maintaining and operating; or
(iii) developing, maintaining and operating, any infrastructure facility;";
(ii) in clause (b), for the words "in the business of developing, maintaining and operating infrastructure facility;", the following shall be substituted, namely:- "in the business of-
(i) developing; or
(ii) maintaining and operating; or
(iii) developing, maintaining and operating, any infrastructure facility;";
(iii) in clause (c), in sub-clause (i), for the words "irrigation project, sanitation and sewerage system", the words "irrigation project, water treatment system, solid waste management system, sanitation and sewerage system" shall be substituted with effect from the 1st day of April, 2001.
SECTION 06: SUBSTITUTION OF NEW SECTION FOR SECTION 10-A
ForSection 10-A of the Income Tax Act-, the following section shall be substituted with effect from the 1st day of April, 2001 namely :- '10-A. Special provision in respect of newly established undertakings in free trade zone, etc.-
(1) Subject to the provisions of this section, a deduction of such profits and gains as are derived by an undertaking from the export of articles or things or computer software for a period of ten consecutive assessment years beginning with the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce such articles or things or computer software, as the case may be, shall be allowed from the total income of the assessee: Provided that where in computing the total income of the undertaking for any assessment year, its profits and gains had not been included by application of the provisions of this section as it stood immediately before its substitution by the Finance Act, 2000, the undertaking shall be entitled to deduction referred to in this sub-section only for the unexpired period of the aforesaid ten consecutive assessment years: Provided further that where an undertaking initially located in any free trade zone or export processing zone is subsequently located in a special economic zone by reason of conversion of such free trade zone or export processing zone into a special economic zone, the period of ten consecutive assessment years referred to in this sub-section shall be reckoned from the assessment year relevant to the previous year in which the undertaking was first set up in such free trade zone or export processing zone: Provided also that the profits and gains derived from such domestic sales of articles or things or computer software as do not exceed twenty-five per cent of the total sales shall be deemed to be the profits and gains derived from the export of articles or things or computer software: Provided also that no deduction under this section shall be allowed to any undertaking for the assessment year beginning on the 1st day of April, 2010 and subsequent years.
(2) This section applies to any undertaking which fulfils all the following conditions, namely :-
(i) it has begun or begins to manufacture or produce articles or things or computer software during the previous year relevant to the assessment year-
(a) commencing on or after the 1st day of April, 1981, in any free trade zone; or
(b) commencing on or after the 1st day of April, 1994, in any electronic hardware technology park or, as the case may be, software
technology park;
(c) commencing on or after the 1st day of April, 2001 in any special economic zone;
(ii) it is not formed by the splitting up, or the reconstruction, of a business already in existence; Provided that this condition shall not apply in respect of any undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such undertakings as is referred to inSection 33-B-, in the circumstances and within the period specified in that section;
(iii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose.
Explanation.-The provisions of Explanation 1 and Explanation 2 to sub-section (2) of Section 80-I-shall apply for the purposes of clause
(iii) of this sub -section as they apply for the purposes of clause (ii) of that sub -section.
(3) This section applies to the undertaking, if the sale proceeds of articles or things or computer software exported out of India are received in, or brought into, India by the assessee in convertible foreign exchange, within a period of six months from the end of the previous year or, within such further period as the competent authority may allow in this behalf.
Explanation 1.-For the purposes of this sub -section, the expression "competent authority" means the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange.
Explanation 2.-The sale proceeds referred to in this sub-section shall be deemed to have been received in India where such sale proceeds are credited to a separate account maintained for the purpose by the assessee with any bank outside India with the approval of the Reserve Bank of India.
(4) For the purposes of sub-section (1), the profits derived from export of articles or things or computer software shall be the amount which bears to the profits of the business, the same proportion as the export turnover in respect of such articles or things or computer software bears to the total turnover of the business carried on by the assessee.
(5) The deduction under sub-section (1) shall not be admissible for any assessment year beginning on or after the 1st day of April, 2001, unless the assessee furnishes in the prescribed form, along with the return of income, the report of an accountant, as defined in the Explanation below sub-section (2) of Section 288, certifying that the deduction has been correctly claimed in accordance with the provisions of this section.
(6) Notwithstanding anything contained in any other provision of this Act, in computing the total income of the assessee of the previous year relevant to the assessment year immediately succeeding the last of the relevant assessment years, or of any previous year, relevant to any subsequent assessment year,-
(i)Section 32-,Section 32-A-,Section 33-,Section 35-and clause (ix) of subsection (1) of Section 36-shall apply as if every allowance or deduction referred to therein and relating to or allowable for any of the relevant assessment years, in relation to any building, machinery, plant or furniture used for the purposes of the business of the undertaking in the previous year relevant to such assessment year or any expenditure incurred for the purposes of such business in such previous year had been given full effect to for that assessment year itself and accordingly sub-section (2) of Section 32, clause (ii) of sub -section (3) of Section 32-A-, clause (ii) of sub-section (2) of Section 33-, sub-section (4) of Section 35-or the second proviso to clause (ix) of subsection (1) of Section 36 -, as the case may be, shall not apply in relation to any such allowance or deduction;
(ii) no -loss referred to in sub-section (1) of Section 72-or sub-section (1) or sub-section (3) of Section 74-in so far as such loss relates to the business of the undertaking, shall be carried forward or set off where such loss relates to any of the relevant assessment years;
(iii) no deduction shall be allowed under Section 80-H-orSection 80-HHA-orSection 80-I-orSection 80-Ia or Section 80 -IB -in relation to the profits and gains of the undertaking; and
(iv) in computing the depreciation allowance under Section 32 -, the written down value of any asset used for the purposes of the business of the undertaking shall be computed as if the assessee had claimed and been actually allowed the deduction in respect of depreciation for each of the relevant assessment year.
(7) The provisions of sub -section (8) and sub-section (10) of Section 80-IA-shall, so far as may be, apply in relation to the undertaking referred to in this section as they apply for the purposes of the undertaking referred to inSection 80 - IA-.
(8) Notwithstanding anything contained in the foregoing provisions of this section, where the assessee, before the due date for furnishing the return of income under sub- section (1) of Section 139, furnishes to the Assessing Officer a declaration in writing that the provisions of this section may not be made applicable to him, the provisions of this section shall not apply to him for any of the relevant assessment years.
(9) Where during any previous year, the ownership or the beneficial interest in the undertaking is transferred by any means, the deduction under sub-section (1) shall not be allowed to the assessee for the assessment year relevant to such previous year and the subsequent years.
Explanation 1.-For the purposes of this section, in the case of a company, where on the last day of any previous year, the shares of the company carrying not less than fifty -one per cent, of the voting power are not beneficially held by persons who held the shares of the company carrying not less than fifty-one per cent of the voting power on the last day of the year in which the undertaking was set up, the company shall be presumed to have transferred its ownership or the beneficial interest in the undertaking.
Explanation 2.-For the purposes of this section,-
(i) "computer software" means,-
(a) any computer programme recorded on any disc, tape, perforated media or other information storage device; or
(b) any customized electronic data or any product or service of similar nature, as may be notified by the Board, which is transmitted or exported from India to any place outside India by any means;
(ii) "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 Foreign Exchange Regulation Act, 1973 (46 of 1973), and any rules made thereunder or any other corresponding law for the time being in force;
(iii) "electronic hardware technology park" means any park set up in accordance with the Electronic Hardware Technology Park (EHTP) Scheme notified by the Government of India in the Ministry of Commerce and Industry;
(iv) "export turnover" means the consideration in respect of export of articles or things or computer software received in, or brought into India by the assessee in convertible foreign exchange in accordance with sub - section (3), but does not include freight, telecommunication charges or insurance attributable to the delivery of the articles or things or computer software outside India or expenses, if any, incurred in foreign exchange in providing the technical services outside India;
(v) "free trade zone" means the Kandla Free Trade Zone and the Santacruz Electronics Export Processing Zone and includes any other free trade zone which the Central Government may, by notification in the Official Gazette, specify for the purposes of this section;
(vi) "relevant assessment year" means any assessment year falling within a period of ten consecutive assessment years referred to in this section;
(vii) "software technology park" means any park set up in accordance with the Software Technology Park Scheme notified by the Government of India in the Ministry of Commerce and Industry;
(viii) "special economic zone" means a zone which the Central Government may, by notification in the Official Gazette, specify as a special economic zone for the purposes of this section.'.
SECTION 07: SUBSTITUTION OF NEW SECTION FOR SECTION 10-B
ForSection 10-B of the Income Tax Act-, the following section shall be substituted with effect from the 1st day of April, 2001, namely :- '10-B. Special provisions in respect of newly established hundred per cent export- oriented undertakings.-
(1) Subject to the provisions of this section, a deduction of such profits and gains as are derived by a hundred per cent export-oriented undertaking from the export of articles or things or computer software for a period of ten consecutive assessment years beginning with the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce articles or things or computer software, as the case may be, shall be allowed from the total income of the assessee: Provided that where in computing the total income of the undertaking for any assessment year, its profits and gains had not been included by application of the provisions of this section as it stood immediately before its substitution by the Finance Act, 2000, the undertaking shall be entitled to the deduction referred to in this subsection only for the unexpired period of aforesaid ten consecutive assessment years: Provided further that the profits and gains derived from such domestic sales of articles or things or computer software as do not exceed twenty-five per cent of total sales shall be deemed to be the profits and gains derived from the export of articles or things or computer software: Provided also that no deduction under this section shall be allowed to any undertaking for the assessment year beginning on the 1st day of April, 2010 and subsequent years.
(2) This section applies to any undertaking which fulfils all the following conditions, namely:-
(i) it manufactures or produces any articles or things or computer software;
86540
103860
630
114
59824