Income Tax Act

1961 · IN

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Sections

Chapter XXIII — MISCELLANEOUS

Section 1

1. Fruit and Vegetable Processing industries manufacturing or producing—

- (i) Canned or bottled products;

- (ii) Aseptic packaged products;

- (iii) Frozen products;

- (iv) De-hydrated products;

- (v) Oleoresins.

11. Processing of essential oils and fragrances industry.

|11. Processing of essential oils and fragrances industry.|11. Processing of essential oils and fragrances industry.| |---|---| |12. Processing and raising of plantation crops—tea, rubber, coffee, coconuts, etc.|| |13. Gas based Intermediate Products Industry manufacturing or producing—|| ||(i) Gas exploration and production;| ||(ii) Gas distribution and bottling;| ||(iii) Power generation;| ||(iv) Plastics;| ||(v) Yarn raw materials;| ||(vi) Fertilizers;| ||(vii) Methanol;| ||(viii) Formaldehyde and FR resin melamine and MF resin;| ||(ix) Methylamine, Hexamethylenetetramine, Ammonium bi-carbonate;| ||(x) Nitric Acid and Ammonium Nitrate;| ||(xi) Carbon black;| ||(xii) Polymer chips.| |14. Agro forestry based industry.|| |15. Horticulture industry.|| |16. Mineral based industry.|| |17. Floriculture industry.|| |18. Agro-based industry.|| ||PART B| ||FOR THE STATE OF SIKKIM| |S. No.|Activity or article or thing or operation| |1.|Eco-Tourism includingHotels,Resorts, Spa,Amusement Parks and Ropeways.| |2.|Handicrafts and handlooms.| |3.|Wool and silk reeling, weavingandprocessing, printing,etc.| |4.|Floriculture.| |5.|Precision Engineeringincluding watch making.| |6.|Electronics including computronics hardware and software and Information Technology (IT) related| ||industries.| |7.|Food processing including Agro-based industries. Processing, preservation and packaging of fruits and| ||vegetables(excludingconventionalgrinding/extraction units).| |8.|Medicinal and aromatic Herbs—Plantation and Processing.| |9.|Raisingandprocessingofplantation crops, i.e., tea,oranges and cardamom.| |10.|Mineral based industry.| |11.|Pharmaproducts.| |12.|Honey.| |13.|Biotechnology.|

PART C

FOR THE STATE OF HIMACHAL PRADESH AND THE STATE OF UTTARANCHAL

|S.|Activity or article or|Activity or article or|4/6|digit|Sub-class under NIC|ITC(HS) classification 4/6| |---|---|---|---|---|---|---| |||thing or|excise||classification on 1998|digit| |||operation|classificatio|||| |||||n||| |||||||| |1.|Floriculture|||-|-|0603 or 060120 or 06029020| |||||||or 06024000| |2.|Medicinal herbs and|||-|-|| |||aromatic herbs,||||| |||etc., processing||||| |3.|Honey|||-|-|-040900| |4.|Horticulture and|||||| |||agro-based||||| |||industries such||||| ||(a)|as Sauces, ketchup,|21.03||15135 to 15137 and 15139|| |||etc.||||| ||(b)|Fruit juices and|2202.40|||| |||fruit pulp||||| ||(c)|Jams, jellies,|20.01|||| |||vegetable juices,||||| |||puree, pickles,||||| |||etc.||||| ||(d)|Preserved fruits||||| |||and vegetables||||| ||(e)|Processing of||||| |||fresh fruits and||||| |||vegetables||||| |||including||||| |||packaging||||| ||(f)|Processing,||||| |||preservation,||||| |||packaging of||||| |||mushrooms||||| |5.|Food|Processing||||| ||Industry excluding those||19.01 to|||| ||included in the||19.04|||| ||Thirteenth Schedule|||||| |6.|Sugar|and its by-|-||-|17019100| ||products|||||| |7.|Silk and silk products||50.04||17116|| ||||50.05|||| |8.|Wool|and wool|51.01 to||17117|| ||products||51.12||||

|S. No.|Activity or article or thing or operation|4/6 digit excise classification|4/6 digit excise classification||Sub-class under NIC classification on 1998|ITC(HS) classification 4/6 digit| |---|---|---|---|---|---|---| |9.|Woven fabrics (Excisable|-||-||6101 to 6117| ||garments)|||||| |10.|Sports goods and articles|9506.00||||| ||and equipment for|||||| ||general physical|||||| ||exercise and equipment|||||| ||for adventure|||||| ||sports/activities, tourism|||||| ||(to be specified, by|||||| ||notification, by the|||||| ||Central Government)|||||| |11.|Paper and paper products|||||| ||excluding those in the|||||| ||Thirteenth Schedule (as|||||| ||per excise classification)|||||| |12.|Pharma products 30.03 to 30.05|||||| |13.|Information and|84.71|||30006/7|| ||Communication|||||| ||Technology Industry,|||||| ||Computer hardware,|||||| ||Call Centres|||||| |14.|Bottling of mineral water|2201||||| |15.|Eco-tourism including|-|||55101|| ||hotels, resorts, spa,|||||| ||entertainment/|||||| ||amusement parks and|||||| ||rope-ways|||||| |16.|Industrial gases (based on|||||| ||atmospheric fraction)|||||| |17.|Handicrafts|||||| |18.|Non-timber forest|||||| ||product-based|||||| ||industries.]||||||

1. Restored by Act 3 of 1989, s. 95 (w.e.f.1-4-1989). Earlier it was substituted by Act 4 of 1988, s. 122 (w.e.f. 1-4-1989).

2. Subs. by Act 41 of 1975, s. 80, for "section 296" (w.e.f. 1-4-1976).

3. Ins. by Act 32 of 1994, s. 49 (w.e.f. 1-6-1994).

4. Subs. by Act 22 of 2007, s. 80, for "every notification issued under sub-clause (iv) of clause (23C) of section 10"

(w.e.f. 1-6-2007).

5. Ins. by Act 8 of 2011, s. 33 (w.e.f. 1-6-2011).

6. Ins. by Act 23 of 2012, s. 113 (w.e.f. 1-7-2012).

7. Ins. by Act 13 of 1963, s. 19 (w.e.f. 1-4-1962).

(f) any proceeding for the imposition of a penalty in respect of any assessment completed before the first day of April, 1962, may be initiated and any such penalty may be imposed as if this Act had not been passed;

(g) any proceeding for the imposition of a penalty in respect of any assessment for the year ending on the 31st day of March, 1962, or any earlier year, which is completed on or after the 1st day of April, 1962, may be initiated and any such penalty may be imposed under this Act;

(h) any election or declaration made or option exercised by an assessee under any provision of the repealed Act and in force immediately before the commencement of this Act shall be deemed to have been an election or declaration made or option exercised under the corresponding provision of this Act;

1. Profits of life insurance business to be compu ted separately. — In the case of a person who carries on or at any time in the previous year carried on life insurance business, the profits and gains of such person from that business shall be computed separately from his profits and gains from any other business.

1. Application of Part. —This Part shall not apply to any provident fund to which the Provident Funds Act, 1925 (19 of 1925), applies.

1. Apatite, Beryl, Cassiterite, Columbite, Emerald, Felspar, Lepidolite, Mica, Pitchblende, Quartz, Samarskite, Scheelite, Topaz, Tantalite, Tourmaline.

2. Iron, Manganese, Titanium, Vanadium and Nickel minerals.

3[Provided that the Central Government may rescind any such notification or amend it so as to rescind any exemption, reduction in rate or other modification made thereunder;]

(m) where the period prescribed for any application, appeal, reference or revision under the repealed Act had expired on or before the commencement of this Act, nothing in this Act shall be construed as enabling any such application, appeal, reference or revision to be made under this Act by reason only of the fact that a longer period therefor is prescribed or provision is made for extension of time in suitable cases by the appropriate authority.

PART I

____

GENERAL PROVISIONS

1. Definitions. —In this Schedule, unless the context otherwise requires,—

2[(a) "certificate", except in rules 7, 44, 65 and sub-rule (2) of rule 66, means the certificate drawn up by the Tax Recovery Officer under section 222 in respect of any assessee referred to in that section;]

(b) "defaulter" means the assessee mentioned in the certificate;

(d) "movable property" includes growing crops;

(e) "officer" means a person authorised to make an attachment or sale under this Schedule;

(f) "rule" means a rule contained in this Schedule; and

(g) "share in a corporation" includes stock, debenture-stock, debentures or bonds.

(i) where, in respect of any assessment completed before the commencement of this Act, a refund falls due after such commencement or default is made after such commencement in the payment of any sum due under such completed assessment, the provisions of this Act relating to interest payable by the Central Government on refunds and interest payable by the assessee for default shall apply;

(j) any sum payable by way of income-tax, super-tax, interest, penalty or otherwise under the repealed Act may be recovered under this Act, but without prejudice to any action already taken for the recovery of such sum under the repealed Act;

(k) any agreement entered into, appointment made, approval given, recognition granted, direction, instruction, notification, order or rule issued under any provision of the repealed Act shall, so far as it is not inconsistent with the corresponding provision of this Act, be deemed to have been entered into, made, granted, given or issued under the corresponding provision aforesaid and shall continue in force accordingly;

(l) any notification issued under sub-section (1) of section 60[1] [ or section 60A] of the repealed Act and in force immediately before the commencement of this Act shall, to the extent to which provision has not been made under this Act, continue in force[2] ***:

PART C

APPROVED GRATUITY FUND

4[ See sections 2(5), 10(25)(iv), 17(1)(iii), 36(1)(v)]

1. Definitions. —In this Part, unless the context otherwise requires "employer", "employee", "contribution" and "salary" have, in relation to gratuity funds, the meanings assigned to those expressions in rule 2 of Part A in relation to provident funds.

1. Subs. by Act 4 of 1988, s. 2, for "Income-tax" (w.e.f. 1-4-1988).

2. Ins. by Act 42 of 1970, s. 57 (w.e.f. 1-4-1971).

3. Subs by Act 10 of 1965, s. 66 for "income-tax and super-tax" (w.e.f. 1-4-1965).

4. Subs. by Act 16 of 1972, s. 42 for " See sections 2(5), 17(1)(iii), 36 (1)(v)" (w.e.f. 1-4-1973).

1. Restored by Act 3 of 1989, s. 95 as "Income-tax Officer" (w.e.f. 1-4-1989) and Subs. by s. 54, ibid (w.e.f. 1-4-1988).

2. Subs. by Act 25 of 2014, s. 4, for "Chief Commissioner" (w.r.e.f. 1-6-2013).

3. Subs. by s. 4, ibid ., for "Commissioner" (w.r.e.f. 1-6-2013).

4. Ins. by Act 4 of 1988, s. 124 (w.e.f. 1-4-1989).

5. Subs. by Act 3 of 1989, s. 54, for "Income-tax Officer" (w.e.f. 1-4-1988).

THE THIRD SCHEDULE

PROCEDURE FOR DISTRAINT BY[1] [ASSESSING OFFICER] 2 [OR TAX RECOVERY OFFICER]

[ See section 226(5)]

Distraint and sale. —Where any distraint and sale of movable property are to be effected by any 1[Assessing Officer] 2[or Tax Recovery Officer] authorised for the purpose, such distraint and sale shall be made, as far as may be, in the same manner as attachment and sale of any movable property attachable by actual seizure, and the provisions of the Second Schedule relating to attachment and sale shall, so far as may be, apply in respect of such distraint and sale.

1. Subs. by Act 3 of 1989, s. 55, for "Income-tax Officer" (w.e.f. 1-4-1988).

2. Ins. by s. 55, ibid (w.e.f. 1-4-1989).

THE FOURTH SCHEDULE

PART A

RECOGNISED PROVIDENT FUNDS

[ See sections 2(38), 10(12), 10(25), 36(1)(iv), 88(2)(vi), 111, 192(4)]

1. Fruit and Vegetable Processing industries manufacturing or producing—

- (i) Canned or bottled products;

- (ii) Aseptic packaged products;

- (iii) Frozen products;

- (iv) De-hydrated products;

- (v) Oleoresins.

1. The word "and" omitted by Act 41 of 1975, s. 81 (w.e.f. 1-10-1975).

2. Ins. by s. 81, ibid , (w.e.f. 1-10-1975).

(2) Where the Tax Recovery Officer so directs, such proclamation shall also be published in the Official Gazette or in a local newspaper, or in both; and the cost of such publication shall be deemed to be costs of the sale.

(3) Where the property is divided into lots for the purpose of being sold separately, it shall not be necessary to make a separate proclamation for each lot, unless proper notice of the sale cannot, in the opinion of the Tax Recovery Officer, otherwise be given.

1. Definitions. —In this Part, unless the context otherwise requires, "employer", "employee", "contribution" and "salary" have, in relation to superannuation funds, the meanings assigned to those expressions in rule 2 of Part A in relation to provident funds.

Section 2

2. Meat and Poultry Product industries manufacturing or producing—

- (i) Meat Products (buffalo, sheep, goat and pork);

- (ii) Poultry production;

- (iii) Egg Powder Plant.

2. Definitions. —In this Part, unless the context otherwise requires,—

(a) "employer" means any person who maintains a provident fund for the benefit of his or its employees, being—

(i) a Hindu undivided family, company, firm or other association of persons, or

(ii) an individual engaged in a business or profession the profits and gains whereof are assessable to income-tax under the head "Profits and gains of business or profession";

(b) "employee" means an employee participating in a provident fund, but does not include a personal or domestic servant;

(c) "contribution" means any sum credited by or on behalf of any employee out of his salary, or by an employer out of his own moneys, to the individual account of an employee, but does not include any sum credited as interest;

(d) "balance to the credit of an employee" means the total amount to the credit of his individual account in a provident fund at any time;

(e) "annual accretion", in relation to the balance to the credit of an employee, means the increase to such balance in any year, arising from contributions and interest;

(f) "accumulated balance due to an employee" means the balance to his credit, or such portion thereof as may be claimable by him under the regulations of the fund, on the day he ceases to be an employee of the employer maintaining the fund;

(g) "regulations of a fund" means the special body of regulations governing the constitution and administration of a particular provident fund; and

(h) "salary" includes dearness allowance, if the terms of employment so provide, but excludes all other allowances and perquisites.

and an assessment based on such estimate or proportion shall be deemed to be duly made in accordance with the provisions of this Act.

6[(4) The power to make rules conferred by this section shall include the power to give retrospective effect, from a date not earlier than the date of commencement of this Act, to the rules or any of them and, unless the contrary is permitted (whether expressly or by necessary implication), no retrospective effect shall be given to any rule so as to prejudicially affect the interests of assessees.]

1. Ins. by Act 42 of 1970, s. 55 (w.e.f. 1-4-1971).

2. Ins. by Act 16 of 1972, s. 41 (w.e.f. 1-4-1972).

3. The words "Deputy Commissioner (Appeals) or the" omitted by Act 21 of 1998, s. 65 (w.e.f. 1-10-1998). Earlier the words "Deputy Commissioner (Appeals)" were substituted by Act 4 of 1988, s. 2, for "Appellate Assistant Commissioner" (w.e.f. 1-4-1988) and the words "or the Commissioner (Appeals)" were inserted by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978).

4. Subs. by Act 4 of 1988, s. 2, for "Income-tax Officer" (w.e.f. 1-4-1988).

5. Ins. by Act 41 of 1975, s. 79 (w.e.f. 1-4-1976).

6. Ins. by Act 26 of 1974, s. 14 (w.e.f. 18-8-1974).

1[2[ 296. Rules and certain notifications to be placed before Parliament. —The Central Government shall cause every rule made under this Act ,[3] [the rules of procedure framed by the Settlement Commission under sub-section (7) of section 245F, the Authority for Advance Rulings under section 245V and the Appellate Tribunal under sub-section (5) of section 255] and[4] [every notification issued before the 1st day of June, 2007 under sub-clause (iv) of clause (23C section 10][5] [and every notification issued under sub-section ( 1C) of section 139][6] [or third proviso to sub-section (1) of section 153A or second proviso to sub-section (1) of section 153C] to be laid as soon as may be after the rule is made or the notification is issued before each House of Parliament while it is in session, for a total period of thirty days, which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or notification or both Houses agree that the rule or notification should not be made or issued, that rule or notification shall thereafter have effect, only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule or notification.]]

notification issued before the 1st day of June, 2007 under sub-clause (iv) of clause (23C) of

2 [(mm) the circumstances in which, the conditions subject to which and the manner in which, the 3[*** or the Commissioner (Appeals)] may permit an appellant to produce evidence which he did not produce or which he was not allowed to produce before the[4] [Assessing Officer];]

5 4 [(mma) the form in which the statement under section 285B shall be delivered to the [Assessing Officer];]

(n) the maintenance of a register of persons other than legal practitioners or accountants as defined in sub-section (2) of section 288 practising before income-tax authorities and for the constitution of and the procedure to be followed by the authority referred to in sub-section (5) of that section;

(o) the issue of certificate verifying the payment of tax by assessees;

(p) any other matter which by this Act is to be, or may be, prescribed.

(3) In cases coming under clause (b) of sub-section (2), where the income liable to tax cannot be definitely ascertained, or can be ascertained only with an amount of trouble and expense to the assessee which in the opinion of the Board is unreasonable, the rules made under this section may—

(a) prescribe methods by which an estimate of such income may be made; and

(b) in cases coming under sub-clause (i) of clause (b) of sub-section (2) specify the proportion of the income which shall be deemed to be income liable to tax,

2. Meat and Poultry Product industries manufacturing or producing—

- (i) Meat Products (buffalo, sheep, goat and pork);

- (ii) Poultry production;

- (iii) Egg Powder Plant.

(g) "regulations of a fund" means the special body of regulations governing the constitution and administration of a particular provident fund; and

(h) "salary" includes dearness allowance, if the terms of employment so provide, but excludes all other allowances and perquisites.

2. Issue of notice. —[3] [When a certificate has been received by the Tax Recovery Officer from the 4[Assessing Officer]] for the recovery of arrears under this Schedule, the Tax Recovery Officer shall cause to be served upon the defaulter a notice requiring the defaulter to pay the amount specified in the certificate within fifteen days from the date of service of the notice and intimating that in default steps would be taken to realise the amount under this Schedule.

THE SECOND SCHEDULE

PROCEDURE FOR RECOVERY OF TAX

1[[ See sections 222 and 276]]

2. Tobacco and tobacco preparations, such as, cigars and cheroots, cigarettes, biris, smoking mixtures for pipes and cigarettes, chewing tobacco and snuff.

3. Cosmetics and toilet preparations.

4. Tooth paste, dental cream, tooth powder and soap.

2. Approval and withdrawal of approval. —(1) The[1] [[2] [Principal Chief Commissioner or Chief Commissioner] or[3] [Principal Commissioner or Commissioner]] may accord approval to any gratuity fund which, in his opinion, complies with the requirements of rule 3 and may at any time withdraw such approval if, in his opinion, the circumstances of the fund cease to warrant the continuance of the approval.

(2) The[1] [[2] [Principal Chief Commissioner or Chief Commissioner] or[3] [Principal Commissioner or Commissioner]] shall communicate in writing to the trustees of the fund the grant of approval with the date on which the approval is to take effect and where the approval is granted subject to conditions, those conditions.

(3) The[1] [[2] [Principal Chief Commissioner or Chief Commissioner] or[3] [Principal Commissioner or Commissioner]] shall communicate in writing to the trustees of the fund any withdrawal of approval with the reasons for such withdrawal and the date on which the withdrawal is to take effect.

(4) The[1] [[2] [Principal Chief Commissioner or Chief Commissioner] or[3] [Principal Commissioner or Commissioner]] shall neither refuse nor withdraw approval to any gratuity fund unless he has given the trustees of that fund a reasonable opportunity of being heard in the matter.

and an assessment based on such estimate or proportion shall be deemed to be duly made in accordance with the provisions of this Act.

1. Ins. by Act 42 of 1970, s. 55 (w.e.f. 1-4-1971).

2. Ins. by Act 16 of 1972, s. 41 (w.e.f. 1-4-1972).

4. Subs. by Act 4 of 1988, s. 2, for "Income-tax Officer" (w.e.f. 1-4-1988).

5. Ins. by Act 41 of 1975, s. 79 (w.e.f. 1-4-1976).

6. Ins. by Act 26 of 1974, s. 14 (w.e.f. 18-8-1974).

1[ 2. Computation of profits of life insurance business. — The profits and gains of life insurance business shall be taken to be the annual average of the surplus arrived at by adjusting the surplus or deficit disclosed by the actuarial valuation made in accordance with the Insurance Act, 1938 (4 of 1938), in respect of the last inter-valuation period ending before the commencement of the assessment year, so as to exclude from it any surplus or deficit included therein which was made in any earlier inter-valuation period.]

3. [ Deductions.] Omitted by the Finance Act, 1976 (66 of 1976), s. 23 ( w.e.f. 1-4-1977) . Earlier, the rule was first amended by the Finance Act, 1966 (13 of 1966), s. 36 ( w.e.f . 1-4-1966) and by the Finance Act , 1965 (10 of 1965), s . 65 ( w.e.f . 1-4-1965).]

2. Approval and withdrawal of approval. —(1) The[2] [[3] [Principal Chief Commissioner or Chief Commissioner] or 4[Principal Commissioner or Commissioner]] may accord approval to any superannuation fund or any part of a superannuation fund which, in his opinion, complies with the requirements of rule 3, and may at any time withdraw such approval, if, in his opinion, the circumstances of the fund or part cease to warrant the continuance of the approval.

(2) The[2] [[3] [Principal Chief Commissioner or Chief Commissioner] or[4] [Principal Commissioner or Commissioner]] shall communicate in writing to the trustees of the fund the grant of approval with the date on which the approval is to take effect, and, where the approval is granted subject to conditions, those conditions.

(3) The[2] [[3] [Principal Chief Commissioner or Chief Commissioner or[4] [Principal Commissioner or Commissioner]] shall communicate in writing to the trustees of the fund any withdrawal of approval with the reasons for such withdrawal and the date on which the withdrawal is to take effect.

(4) The[2] [[3] [Principal Chief Commissioner or Chief Commissioner or[4] [Principal Commissioner or Commissioner]] shall neither refuse nor withdraw approval to any superannuation fund or any part of a superannuation fund unless he has given the trustees of that fund a reasonable opportunity of being heard in the matter.

2. Definitions. —In this Part, unless the context otherwise requires,—

(a) "employer" means any person who maintains a provident fund for the benefit of his or its employees, being—

(i) a Hindu undivided family, company, firm or other association of persons, or

(ii) an individual engaged in a business or profession the profits and gains whereof are assessable to income-tax under the head "Profits and gains of business or profession";

(b) "employee" means an employee participating in a provident fund, but does not include a personal or domestic servant;

(d) "balance to the credit of an employee" means the total amount to the credit of his individual account in a provident fund at any time;

(e) "annual accretion", in relation to the balance to the credit of an employee, means the increase to such balance in any year, arising from contributions and interest;

2. Clasue (ee) renumbered as clause (e) thereof by Act 17 of 2013, s. 59 (w.e.f. 1-4-2016). Earlier clause (e) omitted by Act 18 of 2005, s. 64 (w.e.f. 1-4-2006) which was amended by Act 20 of 1967, s. 33 and the Third Schedule (w.e.f. 1-41968).

3. Ins. by s. 59, ibid. (w.e.f. 1-4-2016).

4. Ins. by Act 22 of 2007, s. 79 (w.r.e.f. 1-6-2006).

5. Ins. by Act 18 of 2008, s. 58 (w.e.f. 1-4-2008).

6. Ins. by Act 20 of 2015, s. 80 (w.e.f. 1-6-2015).

(j) the manner in which any document required to be filed under this Act may be verified;

(k) the procedure to be followed on applications for refunds;

1[(kk) the procedure to be followed in calculating interest payable by assessees or interest payable by Government to assessees under any provision of this Act, including the rounding off of the period for which such interest is to be calculated in cases where such period includes a fraction of a month, and specifying the circumstances in which and the extent to which petty amounts of interest payable by assessees may be ignored;]

(l) the regulation of any matter for which provision is made in section 230;

(m) the form and manner in which any appeal or cross-objection may be filed under this Act, the fee payable in respect thereof and the manner in which intimation of any such order as is referred to in clause (c) of sub-section (2) of section 249 may be served;

Section 3

3. Cereal Based Product industries manufacturing or producing—

- (i) Maize Milling including starch and its derivatives;

- (ii) Bread, Biscuits, Breakfast Cereal.

3. Cereal Based Product industries manufacturing or producing—

- (i) Maize Milling including starch and its derivatives;

- (ii) Bread, Biscuits, Breakfast Cereal.

(2) An order according recognition shall take effect on such date as the[5] [[6] [Principal Chief Commissioner or Chief Commissioner] or[7] [Principal Commissioner or Commissioner]] may fix in accordance with any rules the Board may make in this behalf, such date not being later than the last day of the financial year in which the order is made.

(3) An order withdrawing recognition shall take effect from the date on which it is made.

(4) An order according recognition to a provident fund shall not, unless the[5] [[6] [Principal Chief Commissioner or Chief Commissioner] or[7] [Principal Commissioner or Commissioner]] otherwise directs, be affected by the fact that the fund is subsequently amalgamated with another provident fund on the occurrence of an amalgamation of the undertakings in connection with which the two funds are maintained, or that it subsequently absorbs the whole or a part of another provident fund belonging to an undertaking which is wholly or in part transferred to or merged in the undertaking of the employer maintaining the first-mentioned fund.

3. Conditions for approval. —In order that a gratuity fund may receive and retain approval, it shall satisfy the conditions set out below and any other conditions which the Board may, by rules, prescribe—

(a) the fund shall be a fund established under an irrevocable trust in connection with a trade or undertaking carried on in India, and not less than ninety per cent of the employees shall be employed in India ;

(b) the fund shall have for its sole purpose the provision of a gratuity to employees in the trade or undertaking on their retirement at or after a specified age or on their becoming incapacitated prior to such retirement or on termination of their employment after a minimum period of service specified in the rules of the fund or to the widows, children or dependants of such employees on their death ;

- (c) the employer in the trade or undertaking shall be a contributor to the fund ; and

- (d) all benefits granted by the fund shall be payable only in India.

3. When certificate may be executed. —No step in execution of a certificate shall be taken until the period of fifteen days has elapsed since the date of the service of the notice required by the preceding rule:

Provided that, if the Tax Recovery Officer is satisfied that the defaulter is likely to conceal, remove or dispose of the whole or any part of such of his movable property as would be liable to attachment in execution of a decree of a civil court and that the realisation of the amount of the certificate would in consequence be delayed or obstructed, he may at any time direct, for reasons to be recorded in writing, an attachment of the whole or any part of such property:

Provided further that if the defaulter whose property has been so attached furnishes security to the satisfaction of the Tax Recovery Officer, such attachment shall be cancelled from the date on which such security is accepted by the Tax Recovery Officer.

1. Subs. by Act 4 of 1988, s. 124, for " See section 222" (w.e.f. 1-4-1989).

2. Subs. by s. 124, ibid ., for clause (a) (w.e.f. 1-4-1989).

3. According and withdrawal of recognition. —(1) The[1] [[2] [Principal Chief Commissioner or Chief Commissioner] or[3] [Principal Commissioner or Commissioner]] may accord recognition to any provident fund which, in his opinion, satisfies the conditions prescribed in rule 4 and the rules made by the Board in this behalf, and may, at any time, withdraw such recognition if, in his opinion, the provident fund contravenes any of those conditions:

1. Subs. by Act 4 of 1988, s. 2, for "Commissioner" (w.e.f. 1-4-1988).

2. Subs. by Act 25 of 2014, s. 4, for "Chief Commissioner" (w.e.f. 1-6-2013).

3. Subs. by s. 4, ibid ., for "Commissioner" (w.e.f. 1-6-2013).

1[Provided that in a case where recognition has been accorded to any provident fund on or before the 31st day of March, 2006 and such provident fund does not satisfy the conditions set out in clause (ea) of rule 4, the recognition to such fund shall be withdrawn, if such fund does not satisfy, on or before the[2] [[3] [31st day of March, 2014]], the conditions set out in the said clause and any other condition which the Board may, by rules specify, in this behalf:]

4[Provided further that nothing contained in the first proviso shall apply to the provident fund of an establishment in respect of which a notification has been issued by the Central Government under sub-section (2) of section 16 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952).]

3. Conditions for approval. — In order that a superannuation fund may receive and retain approval, it shall satisfy the conditions set out below and any other conditions which the Board may, by rules, prescribe—

(b) the fund shall have for its sole purpose the provision of annuities for employees in the trade or undertaking on their retirement at or after a specified age or on their becoming incapacitated prior to such retirement, or for the widows, children or dependants of persons who are or have been such employees on the death of those persons ;

(d) all annuities, pensions and other benefits granted from the fund shall be payable only in India.

1. Subs. by Act 11 of 1987, s. 74, for "206(2)" (w.e.f. 1-6-1987).

2. Subs. by Act 4 of 1988, s. 2, for "Commissioner" (w.e.f. 1-4-1988).

3. Subs. by Act 25 of 2014, s. 4 for "Chief Commissioner" (w.r.e.f. 1-6-2013).

4. Subs. by s. 4, ibid ., for "Commissioner" (w.r.e.f. 1-6-2013).

3. The proviso added by s. 7, ibid ., (w.e.f. 9-9-1972).

4. Sub-section (3) added by Act 4 of 1988, s. 123 (w.e.f. 1-4-1988).

THE FIRST SCHEDULE

INSURANCE BUSINESS

[ See section 44]

A.—Life insurance business

3. Lead, Zinc, Copper, Cadmium, Arsenic, Antimony, Bismuth, Cobalt, Nickel, Molybdenum, and Uranium minerals, and Gold and Silver, Arsinopyrite, Chalcopyrite, Pyrite, Pyphrotite and Pentalandite.

4. Chromium, Osmiridium, Platinum and Nickel minerals.

5. Kyanite, Sillimanite, Corrundum, Dumortierite and Topaz.

6. Gold, Silver, Tellurium, Selenium and Pyrite.

3. Restored by Act 3 of 1989, s. 95 (1-4-1989).

4. Subs. by s. 54, ibid ., for "Income-tax Officer" (w.e.f. 1-4-1988).

Section 4

4. Food and Beverage industries manufacturing or producing—

- (i) Snacks;

- (ii) Non-alcoholic beverages;

- (iii) Confectionery including chocolate;

- (iv) Pasta products;

- (v) Processed spices, etc.;

- (vi) Processed pulses;

- (vii) Tapioca products.

4. Application for approval. —(1) An application for approval of a gratuity fund shall be made in writing by the trustees of the fund to the[4] [Assessing Officer], by whom the employer is assessable and shall be accompanied by a copy of the instrument under which the fund is established and by two copies of the rules[5] [and, where the fund has been in existence during any year or years prior to the financial year in which the application for approval is made, also two copies of the accounts of the fund relating to such prior year or years (not being more than three years immediately preceding the year in which the said application is made) for which such accounts have been made up], but the[1] [[2] [Principal Chief Commissioner or Chief Commissioner] or[3] [Principal Commissioner or Commissioner]] may require such further information to be supplied as he thinks proper.

(2) If any alteration in the rules, constitution, objects or conditions of the fund is made at any time after the date of the application for approval, the trustees of the fund shall forthwith communicate such alterations to the[4] [Assessing Officer] mentioned in sub-rule (1), and in default of such communication, any approval given shall, unless the[1] [[2] [Principal Chief Commissioner or Chief Commissioner] or 3[Principal Commissioner or Commissioner]] otherwise orders, be deemed to have been withdrawn from the date on which the alteration took effect.

1. Subs. by Act 4 of 1988, s. 2, for "Commissioner" (w.e.f. 1-4-1988).

2. Subs. by Act 25 of 2014, s. 4 for "Chief Commissioner" (w.e.f. 1-6-2013).

3. Subs. by s. 4, ibid ., for "Commissioner" (w.e.f. 1-6-2013).

4. Subs. by Act 4 of 1988, s. 2, for "Income-tax Officer" (w.e.f. 1-4-1988).

5. Subs by Act 42 of 1970, s. 57, for "and of the accounts of the fund for the last year for which such accounts have been made up" (w.e.f. 1-4-1971).

1[(ea) the fund shall be a fund of an establishment to which the provisions of sub-section (3) of section 1 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952) apply or of an establishment which has been notified by the Central Provident Fund Commissioner under sub-section (4) of section 1 of the said Act, and such establishment shall obtain exemption under section 17 of the said Act from the operation of all or any of the provisions of any scheme referred to in that section;]

(f) the employer shall not be entitled to recover any sum whatsoever from the fund, save in cases where the employee is dismissed for misconduct or voluntarily leaves his employment otherwise than on account of ill-health or other unavoidable cause before the expiration of the term of service specified in this behalf in the regulations of the fund:

Provided that in such cases the recoveries made by the employer shall be limited to the contributions made by him to the individual account of the employee, and to interest credited in respect of such contributions in accordance with the regulations of the fund and the accumulations thereof;

(g) the accumulated balance due to an employee shall be payable on the day he ceases to be an employee of the employer maintaining the fund;

(h) save as provided in clause (g) or in accordance with such conditions and restrictions as the Board may, by rules, specify, no portion of the balance to the credit of an employee shall be payable to him.

(e) the fund shall consist of contributions as above specified, received by the trustees, of accumulations thereof, and of interest credited in respect of such contributions and accumulations, and of securities purchased therewith and of any capital gains arising from the transfer of capital assets of the fund, and of no other sums;

1. Ins. by Act 21 of 2006, s. 56 (w.e.f. 1-4-2007).

2. Subs. by Act 8 of 2011, s. 34, for "31st day of December, 2010" (w.e.f. 1-1-2011).

3. Subs. by Act 17 of 2013, s. 60, for "31st day of March, 2013" (w.e.f. 1-4-2013). Earlier "the 31st day of March, 2012" was substituted for "the 31st day of March, 2013" by Act 23 of 2012, s. 114 (w.e.f. 1-4-2012).

4. Ins. by Act 22 of 2007, s. 82 (w.e.f. 1-4-2007).

5. Subs. by Act 4 of 1988, s. 2, for "Commissioner" (w.e.f. 1-4-1988).

6. Subs. by Act 25 of 2014, s. 4, for "Chief Commissioner" (w.e.f. 1-6-2013).

7. Subs. by s. 4, ibid ., for "Commissioner" (w.e.f. 1-6-2013).

4. Mode of recovery. —If the amount mentioned in the notice is not paid within the time specified therein or within such further time as the Tax Recovery Officer may grant in his discretion, the Tax Recovery Officer shall proceed to realise the amount by one or more of the following modes:—

(a) by attachment and sale of the defaulter's movable property;

(b) by attachment and sale of the defaulter's immovable property;

(d) by appointing a receiver for the management of the defaulter's movable and immovable properties.

4. Application for approval. —(1) An application for approval of a superannuation fund or part of a superannuation fund shall be made in writing by the trustees of the fund to the[1] [Assessing Officer] by whom the employer is assessable, and shall be accompanied by a copy of the instrument under which the fund is established and by two copies of the rules[2] [and, where the fund has been in existence during any year or years prior to the financial year in which the application for approval is made, also two copies of the accounts of the fund relating to such prior year or years (not being more than three years immediately preceding the year in which the said application is made)] for which such accounts have been made up, but the[3] [[4] [Principal Chief Commissioner or Chief Commissioner] or[5] [Principal Commissioner or Commissioner]] may require such further information to be supplied as he thinks proper.

(g) the accumulated balance due to an employee shall be payable on the day he ceases to be an employee of the employer maintaining the fund;

4. Conditions to be satisfied by recognised provident funds. —In order that a provident fund may receive and retain recognition, it shall, subject to the provisions of rule 5, satisfy the conditions set out below and any other conditions which the Board may, by rules, specify—

(a) all employees shall be employed in India, or shall be employed by an employer whose principal place of business is in India;

(b) the contributions of an employee in any year shall be a definite proportion of his salary for that year, and shall be deducted by the employer from the employee's salary in that proportion, at each periodical payment of such salary in that year, and credited to the employee's individual account in the fund;

(c) the contributions of an employer to the individual account of an employee in any year shall not exceed the amount of the contributions of the employee in that year, and shall be credited to the employee's individual account at intervals not exceeding one year;

(d) the fund shall be vested in two or more trustees or in the Official Trustee under a trust which shall not be revocable, save with the consent of all the beneficiaries;

4. Food and Beverage industries manufacturing or producing—

- (i) Snacks;

- (ii) Non-alcoholic beverages;

- (iii) Confectionery including chocolate;

- (iv) Pasta products;

- (v) Processed spices, etc.;

- (vi) Processed pulses;

- (vii) Tapioca products.

1. Subs. by Act 4 of 1988, s. 2, for "Commissioner" (w.e.f. 1-4-1988).

2. Subs. by Act 25 of 2014, s. 4 for "Chief Commissioner" (w.e.f. 1-6-2013).

3. Subs. by s. 4, ibid ., for "Commissioner" (w.e.f. 1-6-2013).

4. Subs. by Act 4 of 1988, s. 2, for "Income-tax Officer" (w.e.f. 1-4-1988).

5. Subs by Act 42 of 1970, s. 57, for "and of the accounts of the fund for the last year for which such accounts have been made up" (w.e.f. 1-4-1971).

4. Restored by Act 3 of 1989, s. 95 (w.e.f. 1-4-1989).

5. Subs. by Act 4 of 1988, s. 124, for sub-rule (1) (w.e.f. 1-4-1989).

6. Subs. by s. 124, ibid ., for sub-rule (4) (w.e.f. 1-4-1989).

(2) If any alteration in the rules, constitution, objects or conditions of the fund is made at any time after the date of the application for approval, the trustees of the fund shall forthwith communicate such alteration to the[1] [Assessing Officer] mentioned in sub-rule (1), and in default of such communication any approval given shall, unless the[3] [[4] [Principal Chief Commissioner or Chief Commissioner] or[5] [Principal Commissioner or Commissioner]] otherwise orders, be deemed to have been withdrawn from the date on which the alteration took effect.

4. Adjustment of tax paid by deduction at source. — Where for any year an assessment of the profits of life insurance business is made in accordance with the annual average of a surplus disclosed by a valuation for an inter-valuation period exceeding twelve months, then, in computing the income-tax payable for that year, credit shall not be given in accordance with section 199 for the income-tax paid in the previous year, but credit shall be given for the annual average of the income-tax paid by deduction at source from interest on securities or otherwise during such period.

B.—Other insurance business

4. Restored by Act 3 of 1989, s. 95 (w.e.f. 1-4-1989).

5. Subs. by s. 54, ibid ., for "Income-tax Officer" (w.e.f. 1-4-1988).

6. Subs. by Act 4 of 1988, s. 124, for clause (ii) (w.e.f. 1-4-1989). Earlier amended by Act 3 of 1989, s. 55 (w.e.f. 1-4-1988).

(2) A defaulter released from detention under this rule shall not, merely by reason of his release, be discharged from his liability for the arrears; but he shall not be liable to be rearrested under the certificate in execution of which he was detained in the civil prison.

Section 5

5. Milk and milk based product industries manufacturing or producing—

- (i) Milk powder;

- (ii) Cheese;

- (iii) Butter/ghee;

- (iv) Infant food;

- (v) Weaning food;

- (vi) Malted milk food.

6. Food packaging industry.

7. Paper products industry.

8. Jute and mesta products industry.

9. Cattle or poultry or fishery feed products industry.

10. Edible Oil processing or vanaspati industry.

5. Relaxation of conditions. —(1) Notwithstanding anything contained in clause (a) of rule 4, the 2[3[Principal Chief Commissioner or Chief Commissioner] or 4[Principal Commissioner or Commissioner]] may, if he thinks fit and subject to such conditions, if any, as he thinks proper to attach to the recognition, accord recognition to a fund maintained by an employer whose principal place of business is not in India, provided the proportion of employees employed outside India does not exceed ten per cent.

(2) Notwithstanding anything contained in clause (b) of rule 4, an employee who retains his employment while serving in the armed forces of the Union or when taken into or employed in the national service under any law for the time being in force, may, whether he receives from the employer any salary or not, contribute to the fund during his service in the armed forces of the Union or while so taken into or employed in the national service a sum not exceeding the amount he would have contributed had he continued to serve the employer.

(3) Notwithstanding anything contained in clause (e) or clause (g) of rule 4,—

(a) at the request made in writing by the employee who ceases to be an employee of the employer maintaining the fund, the trustees of the fund may consent to retain the whole or any part of the accumulated balance due to the employee to be drawn by him at any time on demand;

(b) where the accumulated balance due to an employee who has ceased to be an employee is retained in the fund in accordance with the preceding clause, the fund may consist also of interest in respect of such accumulated balance;

1. Subs. by Act 22 of 2007, s. 82, for clause (ea) (w.e.f. 1-4-2007).

2. Subs. by Act 4 of 1988, s. 2, for "Commissioner" (w.e.f. 1-4-1988).

3. Subs. by Act 25 of 2014, s. 4, for "Chief Commissioner" (w.e.f. 1-6-2013).

4. Subs. by s. 4, ibid ., for "Commissioner" (w.e.f. 1-6-2013).

1 [(c) the fund may also consist of any amount transferred from the individual account of an employee in any recognised provident fund maintained by his former employer and the interest in respect thereof.]

(4) Subject to any rules which the Board may make in this behalf, the[2] [[3] [Principal Chief Commissioner or Chief Commissioner] or[4] [Principal Commissioner or Commissioner]] may, in respect of any particular fund, relax the provisions of clause (c) of rule 4,—

(a) so as to permit the payment of larger contributions by an employer to the individual accounts of employees whose salaries do not in each case exceed five hundred rupees per mensem; and

(b) so as to permit the crediting by employers to the individual accounts of employees of periodical bonuses or other contributions of a contingent nature, where the calculation and payment of such bonuses or other contributions is provided for on definite principles by the regulations of the fund.

(5) Notwithstanding anything contained in clause (h) of rule 4, in order to enable an employee to pay the amount of tax assessed on his total income as determined under sub-rule (4) of rule 11, he shall be entitled to withdraw from the balance to his credit in the recognised provident fund a sum not exceeding the difference between such amount and the amount to which he would have been assessed if the transferred balance referred to in sub-rule (2) of rule 11 had not been included in his total income.

5. Computation of profits and gains of other insurance business. — The profits and gains of any business of insurance other than life insurance shall be taken to be the[2] [profit before tax and appropriations as disclosed in the profit and loss account prepared in accordance with the provisions of the Insurance Act, 1938 (4 of 1938) or the rules made thereunder or the provisions of the Insurance Regulatory and Development Authority Act, 1999 (4 of 1999) or the regulations made thereunder,] subject to the following adjustments:—

(a) subject to the other provisions of this rule,[3] [any expenditure or allowance including any amount debited to the profit and loss account either by way of a provision for any tax, dividend, reserve or any other provision as may be prescribed] which is not admissible under the provisions of[4] [sections 30 to 43B] in computing the profits and gains of a business shall be added back;

1. Subs. by Act 66 of 1976, s. 23 (w.e.f. 1-4-1977).

2. Subs. by Act 33 of 2009, s. 80, for certain words (w.e.f. 1-4-2011).

3. Subs. by Act 21 of 1998, s. 64, for "any expenditure or allowance" (w.r.e.f. 1-4-1989).

4. Subs. by Act 4 of 1988, s. 126, for "section 30 to 43A" (w.e.f. 1-4-1989).

1[(b) (i) any gain or loss on realisation of investments shall be added or deducted, as the case may be, if such gain or loss is not credited or debited to the profit and loss account;

5. Milk and milk based product industries manufacturing or producing—

- (i) Milk powder;

- (ii) Cheese;

- (iii) Butter/ghee;

- (iv) Infant food;

- (v) Weaning food;

- (vi) Malted milk food.

6. Food packaging industry.

7. Paper products industry.

8. Jute and mesta products industry.

9. Cattle or poultry or fishery feed products industry.

10. Edible Oil processing or vanaspati industry.

(3) Notwithstanding anything contained in clause (e) or clause (g) of rule 4,—

5. Contributions by employer when deemed to be income of employer. —Where any contributions by an employer (including the interest thereon, if any) are repaid to the employer, the amount so repaid shall be deemed for the purpose of income-tax[6] *** to be the income of the employer of the previous year in which it is so repaid.

5. Gratuity deemed to be salary. —Where any gratuity is paid to an employee during his lifetime, the gratuity shall be treated as salary paid to the employee for the purposes of this Act.

5. Interest, costs and charges recoverable. —There shall be recoverable, in the proceedings in execution of every certificate,—

(a) such interest upon the amount of tax or penalty or other sum to which the certificate relates as is payable in accordance with sub-section (2) of section 220, and

(b) all charges incurred in respect of—

(i) the service of notice upon the defaulter to pay the arrears, and of warrants and other processes, and

(ii) all other proceedings taken for realising the arrears.

1. Subs. by Act 22 of 2007, s. 82, for clause (ea) (w.e.f. 1-4-2007).

2. Subs. by Act 4 of 1988, s. 2, for "Commissioner" (w.e.f. 1-4-1988).

3. Subs. by Act 25 of 2014, s. 4, for "Chief Commissioner" (w.e.f. 1-6-2013).

4. Subs. by s. 4, ibid ., for "Commissioner" (w.e.f. 1-6-2013).

(a) so as to permit the payment of larger contributions by an employer to the individual accounts of employees whose salaries do not in each case exceed five hundred rupees per mensem; and

(ii) any provision for diminution in the value of investment debited to the profit and loss account, shall be added back;]

(c) such amount carried over to a reserve for unexpired risks as may be prescribed in this behalf shall be allowed as a deduction.

C.—Other provisions

5. Aerated waters in the manufacture of which blended flavouring concentrates in any form are used. 5[ Explanation .—"Blended flavouring concentrates" shall include, and shall be deemed always to have included, synthetic essences in any form.]

Section 6

6. Item 8 omitted by Act 16 of 1981, s. 24 (w.e.f. 1-4-1982). 7. Subs. by Act 26 of 1988, s. 53, for item 9 (w.e.f. 1-4-1989). 8. Items 11 to 21 (both inclusive) omitted by Act 16 of 1981, s. 24 (w.e.f. 1-4-1982). 9. Subs. by Act 11 of 1987, s. 73, for "for data processing and for transmission and reception of messages" (w.e.f. 1-41988).

10. Item 26 omitted by Act 16 of 1981, s. 24 (w.e.f. 1-4-1982).

6. Liability of trustees on cessation of approval. —If a gratuity fund for any reason ceases to be an approved gratuity fund, the trustees of the fund shall nevertheless remain liable to tax on any gratuity paid to any employee.

6. Purchaser's title. —(1) Where property is sold in execution of a certificate, there shall vest in the purchaser merely the right, title and interest of the defaulter at the time of the sale, even though the property itself be specified.

(2) Where immovable property is sold in execution of a certificate, and such sale has become absolute, the purchaser's right, title and interest shall be deemed to have vested in him from the time when the property is sold, and not from the time when the sale becomes absolute.

6. Profits and gains of non-resident person. — (1) The profits and gains of the branches in India of a person not resident in India and carrying on any business of insurance, may, in the absence of more reliable data, be deemed to be that proportion of the world income of such person which corresponds to the proportion which his premium income derived from India bears to his total premium income.

(2) For the purposes of this rule, the world income in relation to life insurance business of a person not resident in India shall be computed in the manner laid down in this Act for the computation of the profits and gains of life insurance business carried on in India.

6. Confectionery and chocolates. 7. Gramophones, including record-players and gramophone records. 6* * * * * 7[9. Projectors.] 10. Photographic apparatus and goods. 8* * * * *

6. Employer's annual contributions, when deemed to be income received by employee. —That portion of the annual accretion in any previous year to the balance at the credit of an employee participating in a recognised provident fund as consists of—

(a) contributions made by the employer in excess of[5] [twelve] per cent. of the salary of the employee, and

(b) interest credited on the balance to the credit of the employee in so far as it[6] *** is allowed at a rate exceeding such rate as may be fixed by the Central Government in this behalf by notification in the Official Gazette,

shall be deemed to have been received by the employee in that previous year and shall be included in his total income for that previous year, and shall be liable to income-tax[7] ***.

6. Deduction of tax on contributions paid to an employee. — Where any contributions made by an employer, including interest on contributions, if any, are paid to an employee during his lifetime[7] [in circumstances other than those referred to in clause (13) of section 10],[8] [tax] on the amounts so paid shall be deducted at the average rate of[8] [tax] at which the employee was liable to[8] [tax] during the preceding three years or during the period, if less than three years, when he was a member of the fund, and shall be paid by the trustees to the credit of the Central Government within the prescribed time and in such manner as the Board may direct.

Chapter VI — AGGREGATION OF INCOME AND SET OFF OR CARRY FORWARD OF LOSS

Section 7

(8) Where any[3] [goods or services] held for the purposes of the eligible business are transferred to any other business carried on by the assessee, or where any[3] [goods or services] held for the purposes of any other business carried on by the assessee are transferred to the eligible business and, in either case, the consideration, if any, for such transfer as recorded in the accounts of the eligible business does not correspond to the market value of such[3] [goods or services] as on the date of the transfer, then, for the purposes of the deduction under this section, the profits and gains of such eligible business shall be computed as if the transfer, in either case, had been made at the market value of such[3] [goods or services] as on that date:

Provided that where, in the opinion of the Assessing Officer, the computation of the profits and gains of the eligible business in the manner hereinbefore specified presents exceptional difficulties, the Assessing Officer may compute such profits and gains on such reasonable basis as he may deem fit.

4[ Explanation .—For the purposes of this sub-section, "market value", in relation to any goods or services, means—

(i) the price that such goods or services would ordinarily fetch in the open market; or

(ii) the arm's length price as defined in clause (ii) of section 92F, where the transfer of such goods or services is a specified domestic transaction referred to in section 92BA.]

(9) Where any amount of profits and gains of an[2] [undertaking] or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading" C.—Deductions in respect of certain incomes ", and shall in no case exceed the profits and gains of such eligible business of[2] [undertaking] or enterprise, as the case may be.

1. Subs. by Act 20 of 2002, s. 33, for "Where the assessee is a person other than a company or a co-operative society, the deduction" (w.e.f. 1-4-2003).

2. Subs. by Act 14 of 2001, s. 44, for "industrial undertaking" (w.e.f. 1-4-2002).

3. Subs. by s. 44, ibid., for "goods" (w.e.f. 1-4-2002).

4. Subs. by Act 23 of 2012, s. 30, for the Explanation (w.e.f. 1-4-2013).

(10) Where it appears to the Assessing Officer that, owing to the close connection between the assessee carrying on the eligible business to which this section applies and any other person, or for any other reason, the course of business between them is so arranged that the business transacted between them produces to the assessee more than the ordinary profits which might be expected to arise in such eligible business, the Assessing Officer shall, in computing the profits and gains of such eligible business for the purposes of the deduction under this section, take the amount of profits as may be reasonably deemed to have been derived therefrom:

1[Provided that in case the aforesaid arrangement involves a specified domestic transaction referred to in section 92BA, the amount of profits from such transaction shall be determined having regard to arm's length price as defined in clause (ii) of section 92F.]

(11) The Central Government may, after making such inquiry as it may think fit, direct, by notification in the Official Gazette, that the exemption conferred by this section shall not apply to any class of industrial undertaking or enterprise with effect from such date as it may specify in the notification.

(12) Where any undertaking of an Indian company which is entitled to the deduction under this section is transferred, before the expiry of the period specified in this section, to another Indian company in a scheme of amalgamation or demerger—

(a) no deduction shall be admissible under this section to the amalgamating or the demerged company for the previous year in which the amalgamation or the demerger takes place; and

(b) the provisions of this section shall, as far as may be, apply to the amalgamated or the resulting company as they would have applied to the amalgamating or the demerged company if the amalgamation or demerger had not taken place.

2[(12A) Nothing contained in sub-section (12) shall apply to any enterprise or undertaking which is transferred in a scheme of amalgamation or demerger on or after the 1st day of April, 2007.]

3[(13) Nothing contained in this section shall apply to any Special Economic Zones notified on or after the 1st day of April, 2005 in accordance with the scheme referred to in sub-clause (iii) of clause (c) of sub-section (4).]

4[ Explanation .—For the removal of doubts, it is hereby declared that nothing contained in this section shall apply in relation to a business referred to in sub-section (4) which is in the nature of a works contract awarded by any person (including the Central or State Government) and executed by the undertaking or enterprise referred to in sub-section (1).]

1. Ins. by Act 23 of 2012, s. 30 (w.e.f. 1-4-2013).

2. Ins. by Act 22 of 2007, s. 28 (w.e.f. 1-4-2008).

3. Ins. by Act 28 of 2005, s. 27 and the Second Schedule (w.e.f. 10-2-2006).

4. Ins. by Act 33 of 2009, s. 36 (w.e.f. 1-4-2000).

1[ 80-IAB. Deductions in respect of profits and gains by an undertaking or enterprise engaged in development of Special Economic Zone. —(1) Where the gross total income of an assessee, being a Developer, includes any profits and gains derived by an undertaking or an enterprise from any business of developing a Special Economic Zone, notified on or after the 1st day of April, 2005 under the Special Economic Zones Act, 2005, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction of an amount equal to one hundred per cent of the profits and gains derived from such business for ten consecutive assessment years.

2[Provided that the provisions of this section shall not apply to an assessee, being a developer, where the development of Special Economic Zone begins on or after the 1st day of April, 2017.]

(2) The deduction specified in sub-section (1) may, at the option of the assessee, be claimed by him for any ten consecutive assessment years out of fifteen years beginning from the year in which a Special Economic Zone has been notified by the Central Government:

Provided that where in computing the total income of any undertaking, being a Developer for any assessment year, its profits and gains had not been included by application of the provisions of sub-section (13) of sectopm 80-IA, the undertaking being the Developer shall be entitled to deduction referred to in this section only for the unexpired period of ten consecutive assessment years and thereafter it shall be eligible for deduction from income as provided in sub-section (1) or sub-section (2), as the case may be:

assessment year, its profits and gains had not been included by application of the provisions of

Provided further that in a case where an undertaking, being a Developer who develops a Special Economic Zone on or after the 1st day of April, 2005 and transfers the operation and maintenance of such Special Economic Zone to another Developer (hereafter in this section referred to as the transferee Developer), the deduction under sub-section (1) shall be allowed to such transferee Developer for the remaining period in the ten consecutive assessment years as if the operation and maintenance were not so transferred to the transferee Developer.

(3) The provisions of sub-section (5) and sub-sections (7) to (12) of section 80-JIA shall apply to the Special Economic Zones for the purpose of allowing deductions under sub-section (1).

Explanation.— For the purposes of this section, "Developer" and "Special Economic Zone" shall have the same meanings respectively as assigned to them in clauses (g) and (za) of section 2 of the Special Economic Zones Act, 2005.]

3[ 80-IAC. Special provision in respect of specified business. —(1) Where the gross total income of an assessee, being an eligible start-up, includes any profits and gains derived from eligible business, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction of an amount equal to one hundred per cent of the profits and gains derived from such business for three consecutive assessment years.

(2) The deduction specified in sub-section (1) may, at the option of the assessee, be claimed by him for any three consecutive assessment years out of[4] [seven years] beginning from the year in which the eligible start-up is incorporated.

- (3) This section applies to a start-up which fulfils the following conditions, namely:—

(i) it is not formed by splitting up, or the reconstruction, of a business already in existence:

1. Ins. by Act 28 of 2005, s. 27 and the Second Schedule (w.e.f. l0-2-2006).

2. Ins. by Act 28 of 2016, s. 41 (w.e.f. 1-4-2017).

3. Ins. by s. 42, ibid . (w.e.f. 1-4-2017).

4. Subs. by Act 7 of 2017, s. 36, for "five years" (w.e.f. 1-4-2018).

Provided that this condition shall not apply in respect of a start-up which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such undertaking as referred to in section 33B, in the circumstances and within the period specified in that section;

(ii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose.

Explanation 1.—For the purposes of this clause, any machinery or plant which was used outside India by any person other than the assessee shall not be regarded as machinery or plant previously used for any purpose, if all the following conditions are fulfilled, namely:—

(a) such machinery or plant was not, at any time previous to the date of the installation by the assessee, used in India;

(b) such machinery or plant is imported into India;

(c) no deduction on account of depreciation in respect of such machinery or plant has been allowed or is allowable under the provisions of this Act in computing the total income of any person for any period prior to the date of the installation of the machinery or plant by the assessee.

Explanation 2.—Where in the case of a start-up, any machinery or plant or any part thereof previously used for any purpose is transferred to a new business and the total value of the machinery or plant or part so transferred does not exceed twenty per cent of the total value of the machinery or plant used in the business, then, for the purposes of clause (ii) of this sub-section, the condition specified therein shall be deemed to have been complied with.

(4) The provisions of sub-section (5) and sub-sections (7) to (11) of section 80-IA shall apply to the start-ups for the purpose of allowing deductions under sub-section (1).

Explanation .—For the purposes of this section,—

1[(i) "eligible business" means a business carried out by an eligible start up engaged in innovation, development or improvement of products or processes or services or a scalable business model with a high potential of employment generation or wealth creation;]

(ii) "eligible start-up" means a company or a limited liability partnership engaged in eligible business which fulfils the following conditions, namely:—

(a) it is incorporated on or after the 1st day of April, 2016 but before the 1st day of April,[2] [2021];

(b) the total turnover of its business does not exceed twenty-five crore rupees[3] [in the previous year relevant to the assessment year for which deduction under sub-section (1) is claimed]; and

(c) it holds a certificate of eligible business from the Inter-Ministerial Board of Certification as notified in the Official Gazette by the Central Government;

(iii) "limited liability partnership" means a partnership referred to in clause (n) of sub-section (1) of section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009).]

1. Subs. by Act 13 of 2018, s. 28, for clause (i) (w.e.f. 1-4-2018).

2. Subs. by s. 28, ibid ., for "2019" (w.e.f. 1-4-2018).

3. Subs. by s. 28, ibid ., for "in any of the previous years beginning on or after the 1st day of April, 2016 and ending on the 31st day of March, 2021" (w.e.f. 1-4-2018).

80-IB. Deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development undertakings. —(1) Where the gross total income of an assessee includes any profits and gains derived from any business referred to in sub-sections (3) to[1] [(11), (11A) and (11B)] (such business being hereinafter referred to as the eligible business), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to such percentage and for such number of assessment years as specified in this section.

(2) This section applies to any industrial undertaking which fulfils all the following conditions, namely:—

(i) it is not formed by splitting up, or the reconstruction, of a business already in existence:

Provided that this condition shall not apply in respect of an industrial undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such industrial undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section;

(ii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose;

(iii) it manufactures or produces any article or thing, not being any article or thing specified in the list in the Eleventh Schedule, or operates one or more cold storage plant or plants, in any part of India:

Provided that the condition in this clause shall, in relation to a small scale industrial undertaking or an industrial undertaking referred to in sub-section (4) shall apply as if the words "not being any article or thing specified in the list in the Eleventh Schedule" had been omitted.

Explanation 1.— For the purposes of clause (ii), any machinery or plant which was used outside India by any person other than the assessee shall not be regarded as machinery or plant previously used for any purpose, if the following conditions are fulfilled, namely:—

(a) such machinery or plant was not, at any time previous to the date of the installation by the assessee, used in India;

(b) such machinery or plant is imported into India from any country outside India; and

Explanation 2.— Where in the case of an industrial undertaking, any machinery or plant or any part thereof previously used for any purpose is transferred to a new business and the total value of the machinery or plant or part so transferred does not exceed twenty per cent. of the total value of the machinery or plant used in the business, then, for the purposes of clause (ii) of this sub-section, the condition specified therein shall be deemed to have been complied with;

(iv) in a case where the industrial undertaking manufactures or produces articles or things, the undertaking employs ten or more workers in a manufacturing process carried on with the aid of power, or employs twenty or more workers in a manufacturing process carried on without the aid of power.

1. Subs. by Act 23 of 2004, s. 18, for "(11) and (11A)" (w.e.f. 1-4-2005). Earlier "(3) to (11) and (11A)" subs. by Act 14 of 2001, s. 45 (w.e.f. 1-4-2002).

(3) The amount of deduction in the case of an industrial undertaking shall be twenty-five per cent. (or thirty per cent. where the assessee is a company), of the profits and gains derived from such industrial undertaking for a period of ten consecutive assessment years (or twelve consecutive assessment years where the assessee is a co-operative society) beginning with the initial assessment year subject to the fulfilment of the following conditions, namely:—

(i) it begins to manufacture or produce, articles or things or to operate such plant or plants at any time during the period beginning from the 1st day of April, 1991 and ending on the 31st day of March, 1995 or such further period as the Central Government may, by notification in the Official Gazette, specify with reference to any particular undertaking;

(ii) where it is an industrial undertaking being a small scale industrial undertaking, it begins to manufacture or produce articles or things or to operate its cold storage plant [not specified in sub-section (4) or sub-section (5)] at any time during the period beginning on the 1st day of April, 1995 and ending on the[1] [31st day of March, 2002].

manufacture or produce articles or things or to operate its cold storage plant [not specified in

(4) The amount of deduction in the case of an industrial undertaking in an industrially backward State specified in the Eighth Schedule shall be hundred per cent of the profits and gains derived from such industrial undertaking for five assessment years beginning with the initial assessment year and thereafter twenty-five per cent. (or thirty per cent. where the assessee is a company) of the profits and gains derived from such industrial undertaking:

Provided that the total period of deduction does not exceed ten consecutive assessment years (or twelve consecutive assessment years where the assessee is a co-operative society) subject to fulfilment of the condition that it begins to manufacture or produce articles or things or to operate its cold storage plant or plants during the period beginning on the 1st day of April, 1993 and ending on the[2] [31st day of March, 2004]:

Provided further that in the case of such industries in the North-Eastern Region, as may be notified by the Central Government, the amount of deduction shall be hundred per cent. of profits and gains for a period of ten assessment years, and the total period of deduction shall in such a case not exceed ten assessment years:

3[Provided also that no deduction under this sub-section shall be allowed for the assessment year beginning on the 1st day of April, 2004 or any subsequent year to any undertaking or enterprise referred to in sub-section (2) of section 80-IC:]

4[Provided also that in the case of an industrial undertaking in the State of Jammu and Kashmir, the provisions of the first proviso shall have effect as if for the figures, letters and words "31st day of March, 2004", the figures, letters and words[5] [31st day of March, 2012] had been substituted:

Provided also that no deduction under this sub-section shall be allowed to an industrial undertaking in the State of Jammu and Kashmir which is engaged in the manufacture or production of any article or thing specified in Part C of the Thirteenth Schedule.]

1. Subs. by Act 10 of 2000, s. 39, for "31st day of March, 2000" (w.e.f. 1-4-2001).

2. Subs. by Act 20 of 2002, s. 34, for "31st day of March, 2002" (w.e.f. 1-4-2003).

3. Ins. by Act 32 of 2003, s. 39 (w.e.f. 1-4-2004).

4. Subs. by Act 23 of 2004, s. 18, for the proviso (w.e.f. 1-4-2005).

5. Subs. by Act 22 of 2007, s. 29, for "31st day of March, 2007" (w.e.f. 1-4-2008).

(5) The amount of deduction in the case of an industrial undertaking located in such industrially backward districts as the Central Government may, having regard to the prescribed guidelines, by notification in the Official Gazette, specify in this behalf as industrially backward district of category 'A' or an industrially backward district of category 'B' shall be,—

(i) hundred per cent of the profits and gains derived from an industrial undertaking located in a backward district of category 'A' for five assessment years beginning with the initial assessment year and thereafter, twenty-five per cent. (or thirty per cent. where the assessee is a company) of the profits and gains of an industrial undertaking :

Provided that the total period of deduction shall not exceed ten consecutive assessment years or where the assessee is a co-operative society, twelve consecutive assessment years:

Provided further that the industrial undertaking begins to manufacture or produce articles or things or to operate its cold storage plant or plants at any time during the period beginning on the 1st day of October, 1994 and ending on the[1] [31st day of March, 2004];

(ii) hundred per cent. of the profits and gains derived from an industrial undertaking located in a backward district of category 'B' for three assessment years beginning with the initial assessment year and thereafter, twenty-five per cent (or thirty per cent where the assessee is a company) of the profits and gains of an industrial undertaking:

Provided that the total period of deduction does not exceed eight consecutive assessment years (or where the assessee is a co-operative society, twelve consecutive assessment years):

(6) The amount of deduction in the case of the business of a ship shall be thirty per cent. of the profits and gains derived from such ship for a period of ten consecutive assessment years including the initial assessment year provided that the ship—

(i) is owned by an Indian company and is wholly used for the purposes of the business carried on by it;

(ii) was not, previous to the date of its acquisition by the Indian company, owned or used in Indian territorial waters by a person resident in India; and

(iii) is brought into use by the Indian company at any time during the period beginning on the 1st day of April, 1991 and ending on the 31st day of March, 1995.

(7) The amount of deduction in the case of any hotel shall be—

(a) fifty per cent. of the profits and gains derived from the business of such hotel for a period of ten consecutive years beginning from the initial assessment year as is located in a hilly area or a rural area or a place of pilgrimage or such other place as the Central Government may, having regard to the need for development of infrastructure for tourism in any place and other relevant considerations, specify by notification in the Official Gazette and such hotel starts functioning at any time during the period beginning on the 1st day of April, 1990 and ending on the 31st day of March, 1994 or beginning on the 1st day of April, 1997 and ending on the 31st day of March, 2001:

1. Subs. by Act 20 of 2002, s. 34, for "31st day of March, 2002" (w.e.f. 1-4-2003).

Provided that nothing contained in this clause shall apply to a hotel located at a place within the municipal jurisdiction (whether known as a municipality, municipal corporation, notified area committee or a cantonment board or by any other name) of Calcutta, Chennai, Delhi or Mumbai, which has started or starts functioning on or after the 1st day of April, 1997 and before the 31st day of March, 2001:

Provided further that the said hotel is approved by the prescribed authority for the purpose of this clause in accordance with the rules made under this Act and where the said hotel is approved by the prescribed authority before the 31st day of March, 1992, shall be deemed to have been approved by the prescribed authority for the purpose of this section in relation to the assessment year commencing on the 1st day of April, 1991;

(b) thirty per cent. of the profits and gains derived from the business of such hotel as is located in any place other than those mentioned in sub-clause (a) for a period of ten consecutive years beginning from the initial assessment year if such hotel has started or starts functioning at any time during the period beginning on the 1st day of April, 1991 and ending on the 31st day of March, 1995 or beginning on the 1st day of April, 1997 and ending on the 31st day of March, 2001:

Provided that nothing contained in this clause shall apply to a hotel located at a place within the municipal jurisdiction (whether known as a municipality, municipal corporation, notified area committee, town area committee or a cantonment board or by any other name) of Calcutta, Chennai, Delhi or Mumbai, which has started or starts functioning on or after the 1st day of April, 1997 and before the 31st day of March, 2001;

(i) the business of the hotel is not formed by the splitting up, or the reconstruction, of a business already in existence or by the transfer to a new business of a building previously used as a hotel or of any machinery or plant previously used for any purpose;

(ii) the business of the hotel is owned and carried on by a company registered in India with a paid-up capital of not less than five hundred thousand rupees;

(iii) the hotel is for the time being approved by the prescribed authority:

Provided that any hotel approved by the prescribed authority before the 1st day of April, 1999 shall be deemed to have been approved under this sub-section.

1[(7A) The amount of deduction in the case of any multiplex theatre shall be—

(a) fifty per cent of the profits and gains derived, from the business of building, owning and operating a multiplex theatre, for a period of five consecutive years beginning from the initial assessment year in any place:

Provided that nothing contained in this clause shall apply to a multiplex theatre located at a place within the municipal jurisdiction (whether known as a municipality, municipal corporation, notified area committee or a cantonment board or by any other name) of Chennai, Delhi, Mumbai or Kolkata;

1. Ins. by Act 20 of 2002, s. 34 (w.e.f. 1-4-2003).

(b) the deduction under clause (a) shall be allowable only if—

(i) such multiplex theatre is constructed at any time during the period beginning on the 1st day of April, 2002 and ending on the 31st day of March, 2005;

(ii) the business of the multiplex theatre is not formed by the splitting up, or the reconstruction, of a business already in existence or by the transfer to a new business of any building or of any machinery or of plant previously used for any purpose;

(iii) the assessee furnishes alongwith the return of income, the report of an audit in such form and containing such particulars as may be prescribed and duly signed and verified by an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed.

(7B) The amount of deduction in the case of any convention centre shall be—

(a) fifty per cent of the profits and gains derived, by the assessee from the business of building, owning and operating a convention centre, for a period of five consecutive years beginning from the initial assessment year;

(b) the deduction under clause (a) shall be allowable only if—

(i) such convention centre is constructed at any time during the period beginning on the 1st day of April, 2002 and ending on the 31st day of March, 2005;

(ii) the business of the convention centre is not formed by the splitting up, or the reconstruction, of a business already in existence or by the transfer to a new business of any building or of any machinery or plant previously used for any purpose;

(iii) the assessee furnishes alongwith the return of income, the report of an audit in such form and containing such particulars as may be prescribed, and duly signed and verified by an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed.]

(8) The amount of deduction in the case of any company carrying on scientific research and development shall be hundred per cent of the profits and gains of such business for a period of five assessment years beginning from the initial assessment year if such company—

(a) is registered in India;

(b) has the main object of scientific and industrial research and development;

1[(8A) The amount of deduction in the case of any company carrying on scientific research and development shall be hundred per cent of the profits and gains of such business for a period of ten consecutive assessment years, beginning from the initial assessment year, if such company—

1. Ins. by Act 10 of 2000, s. 39 (w.e.f. 1-4-2001).

(i) is registered in India;

(ii) has its main object the scientific and industrial research and development;

(iii) is for the time being approved by the prescribed authority at any time after the 31st day of March, 2000 but before the[1] [1st day of April, 2007];

(iv) fulfils such other conditions as may be prescribed.]

2[(9) The amount of deduction to an undertaking shall be hundred per cent of the profits for a period of seven consecutive assessment years, including the initial assessment year, if such undertaking fulfils any of the following, namely:—

(i) is located in North-Eastern Region and has begun or begins commercial production of mineral oil before the 1st day of April, 1997;

(ii) is located in any part of India and has begun or begins commercial production of mineral oil on or after the 1st day of April, 1997[3] [but not later than the 31st day of March, 2017]:

4[Provided that the provisions of this clause shall not apply to blocks licensed under a contract awarded after the 31st day of March, 2011 under the New Exploration Licencing Policy announced by the Government of India vide Resolution No. O-19018/22/95-ONG.DO.VL, dated the 10th February, 1999 or in pursuance of any law for the time being in force or by the Central or a State Government in any other manner;]

(iii) is engaged in refining of mineral oil and begins such refining on or after the 1st day of October, 1998[5] [but not later than the 31st day of March, 2012];

6[(iv) is engaged in commercial production of natural gas in blocks licensed under the VIII Round

of bidding for award of exploration contracts (hereafter referred to as "NELP-VIII") under

the New Exploration Licencing Policy announced by the Government of India vide

Resolution No. O-19018/22/95-ONG.DO.VL, dated 10th February, 1999 and begins commercial production of natural gas on or after the 1st day of April, 2009[5] [but not later than the 31st day of March, 2017];

(v) is engaged in commercial production of natural gas in blocks licensed under the IV Round of bidding for award of exploration contracts for Coal Bed Methane blocks and begins commercial production of natural gas on or after the 1st day of April, 2009[5] [but not later than the 31st day of March, 2017].]

Explanation. —For the purposes of claiming deduction under this sub-section, all blocks licensed under a single contract, which has been awarded under the New Exploration Licencing Policy announced by the Government of India vide Resolution No. O-19018/22/95-ONG.DO.VL, dated 10th February, 1999 or has been awarded in pursuance of any law for the time being in force or has been awarded by the Central or a State Government in any other manner, shall be treated as a single "undertaking" . ]

1. Subs. by Act 18 of 2005, s. 27, for "1st day of April, 2005" (w.e.f. 1-4-2006). Earlier substituted by Act 23 of 2004, s. 18

(w.e.f. 1-4-2005), which was substituted by 32 of 2003, s. 39 (w.e.f. 1-4-2004).

2. Subs. by Act 33 of 2009, s. 37, for sub-section (9) (w.e.f. 1-4-2000).

3. Ins. by Act 28 of 2016, s. 43 (w.e.f. 1-4-2017).

4. Ins. by Act 8 of 2011, s. 12 (w.e.f. 1-4-2012).

5. Ins. by Act 33 of 2009, s. 37 (w.e.f. 1-4-2009).

6. Ins. by s. 37 ibid. (w.e.f. 1-4-2010).

1[(10) The amount of deduction in the case of an undertaking developing and building housing projects approved before the[2] [31st day of March, 2008] by a local authority shall be hundred per cent of the profits derived in the previous year relevant to any assessment year from such housing project if,—

(a) such undertaking has commenced or commences development and construction of the housing project on or after the 1st day of October, 1998 and completes such construction,—

(i) in a case where a housing project has been approved by the local authority before the 1st day of April, 2004, on or before the 31st day of March, 2008;

(ii) in a case where a housing project has been, or, is approved by the local authority on or after the 1st day of April, 2004[3] [but not later than the 31st day of March, 2005], within four years from the end of the financial year in which the housing project is approved by the local authority;

3[(iii) in a case where a housing project has been approved by the local authority on or after the 1st day of April, 2005, within five years from the end of the financial year in which the housing project is approved by the local authority.]

Explanation. —For the purposes of this clause,—

(i) in a case where the approval in respect of the housing project is obtained more than once, such housing project shall be deemed to have been approved on the date on which the building plan of such housing project is first approved by the local authority;

(ii) the date of completion of construction of the housing project shall be taken to be the date on which the completion certificate in respect of such housing project is issued by the local authority;

(b) the project is on the size of a plot of land which has a minimum area of one acre:

Provided that nothing contained in clause (a) or clause (b) shall apply to a housing project carried out in accordance with a scheme framed by the Central Government or a State Government for reconstruction or redevelopment of existing buildings in areas declared to be slum areas under any law for the time being in force and such scheme is notified by the Board in this behalf;

(c) the residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the city of Delhi or Mumbai or within twenty-five kilometres from the municipal limits of these cities and one thousand and five hundred square feet at[4] [any other place;]

(d) the built-up area of the shops and other commercial establishments included in the housing project does not exceed[5] [three per cent.] of the aggregate built-up area of the housing project or[6] [five thousand square feet], whichever is higher;

1. Subs. by Act 23 of 2004, s. 18, for sub-section (10) (w.e.f. 1-4-2005). As later on amended by Act 10 of 2000, s. 29 (w.e.f. 1-4-2001).

2. Subs. by Act 33 of 2009, s. 37, for "31st day of March, 2007" (w.e.f. 1-4-2009).

3. Ins. by Act 14 of 2010, s. 27 (w.e.f. 1-4-2010).

4. Subs. by Act 33 of 2009, s. 37, for "any other place; and" (w.e.f. 1-4-2010).

5. Subs. by Act 14 of 2010, s. 27, for "five per cent." (w.e.f. 1-4-2010).

6. Subs. by s. 27, ibid ., for "two thousand square feet, whichever is less" (w.e.f. 1-4-2010).

1 [(e) not more than one residential unit in the housing project is allotted to any person not being an individual; and

(f) in a case where a residential unit in the housing project is allotted to a person being an individual, no other residential unit in such housing project is allotted to any of the following persons, namely:—

(i) the individual or the spouse or the minor children of such individual,

(ii) the Hindu undivided family in which such individual is the karta,

(iii) any person representing such individual, the spouse or the minor children of such individual or the Hindu undivided family in which such individual is the karta.]

2[ Explanation. —For the removal of doubts, it is hereby declared that nothing contained in this subsection shall apply to any undertaking which executes the housing project as a works contract awarded by any person (including the Central or State Government).]

(11) Notwithstanding anything contained in clause (iii) of sub-section (2) and sub-sections (3), (4) and (5), the amount of deduction in a case of industrial undertaking deriving profit from the business of setting up and operating a cold chain facility for agricultural produce, shall be hundred per cent of the profits and gains derived from such industrial undertaking for five assessment years beginning with the initial assessment year and thereafter, twenty-five per cent. (or thirty per cent where the assessee is a company) of the profits and gains derived from the operation of such facility in a manner that the total period of deduction does not exceed ten consecutive assessment years (or twelve consecutive assessment years where the assessee is a co-operative society) and subject to fulfilment of the condition that it begins to operate such facility on or after the 1st day of April, 1999 but before the[3] [1st day of April, 2004].

4[(11A) The amount of deduction in a case of 5[an undertaking deriving profit from the business of processing, preservation and packaging of fruits or vegetables or[1] [meat and meat products or poultry or marine or dairy products or from] the integrated business of handling, storage and transportation of foodgrains, shall be hundred per cent of the profits and gains derived from such undertaking for five assessment years beginning with the initial assessment year and thereafter, twenty-five per cent. (or thirty per cent. where the assessee is a company) of the profits and gains derived from the operation of such business in a manner that the total period of deduction does not exceed ten consecutive assessment years and subject to fulfilment of the condition that it begins to operate such business on or after the 1st day of April, 2001]:

1[Provided that the provisions of this section shall not apply to an undertaking engaged in the business of processing, preservation and packaging of meat or meat products or poultry or marine or dairy products if it begins to operate such business before the 1st day of April, 2009.]

6[(11B) The amount of deduction in the case of an undertaking deriving profits from the business of operating and maintaining a hospital in a rural area shall be hundred per cent. of the profits and gains of such business for a period of five consecutive assessment years, beginning with the initial assessment year, if—

(i) such hospital is constructed at any time during the period beginning on the 1st day of October, 2004 and ending on the 31st day of March, 2008;

1. Ins. by Act 33 of 2009, s. 37 (w.e.f. 1-4-2010).

2. Ins. by s. 37, ibid . (w.e.f. 1-4-2001).

3. Subs. by Act 32 of 2003, s. 39, for "31st day of March, 2004" (w.e.f. 1-4-2004).

4. Ins. by Act 14 of 2001, s. 45 (w.e.f. 1-4-2002).

5. Subs. by Act 23 of 2004, s. 18, for "an undertaking deriving profit from" (w.e.f. 1-4-2005).

6. Ins. by s. 18, ibid. (w.e.f. 1-4-2005).

(ii) the hospital has at least one hundred beds for patients;

(iii) the construction of the hospital is in accordance with the regulations, for the time being in force, of the local authority; and

(iv) the assessee furnishes along with the return of income, the report of audit in such form and containing such particulars as may be prescribed, and duly signed and verified by an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed.

Explanation. —For the purposes of this sub-section, a hospital shall be deemed to have been constructed on the date on which a completion certificate in respect of such construction is issued by the concerned local authority.]

1[(11C) The amount of deduction in the case of an undertaking deriving profits from the business of operating and maintaining a hospital located anywhere in India, other than the excluded area, shall be hundred per cent of the profits and gains derived from such business for a period of five consecutive assessment years, beginning with the initial assessment year, if—

(i) the hospital is constructed and has started or starts functioning at any time during the period beginning on the 1st day of April, 2008 and ending on the 31st day of March, 2013;

(ii) the hospital has at least one hundred beds for patients;

(iii) the construction of the hospital is in accordance with the regulations or bye-laws of the local authority; and

(iv) the assessee furnishes along with the return of income, a report of audit in such form and containing such particulars, as may be prescribed, and duly signed and verified by an accountant, as defined in the Explanation to sub-section (2) of section 288, certifying that the deduction has been correctly claimed.

Explanation. —For the purposes of this sub-section—

(a) a hospital shall be deemed to have been constructed on the date on which a completion certificate in respect of such construction is issued by the local authority concerned;

(b) "initial assessment year" means the assessment year relevant to the previous year in which the business of the hospital starts functioning;

(i) Greater Mumbai urban agglomeration;

(ii) Delhi urban agglomeration;

(iii) Kolkata urban agglomeration;

(iv) Chennai urban agglomeration;

(v) Hyderabad urban agglomeration;

(vi) Bangalore urban agglomeration;

1. Ins. by Act 18 of 2008, s. 18 (w.e.f. 1-4-2009).

(vii) Ahmedabad urban agglomeration;

(viii) District of Faridabad;

(ix) District of Gurgaon;

(x) District of Gautam Budh Nagar;

(xi) District of Ghaziabad;

(xii) District of Gandhinagar; and

(xiii) City of Secunderabad;

(d) the area comprising an urban agglomeration shall be the area included in such urban agglomeration on the basis of the 2001 census.]

(a) no deduction shall be admissible under this section to the amalgamating or the demerged company for the previous year in which the amalgamation or the demerger takes place; and

(13) The provisions contained in sub-section (5) and sub-sections (7) to (12) of section 80-IA shall, so far as may be, apply to the eligible business under this section.

(14) For the purposes of this section,—

1 [(a) "built-up area" means the inner measurements of the residential unit at the floor level, including the projections and balconies, as increased by the thickness of the walls but does not include the common areas shared with other residential units;]

2 [(aa)]"cold chain facility" means a chain of facilities for storage or transportation of agricultural produce under scientifically controlled conditions including refrigeration and other facilities necessary for the preservation of such produce;

3[4[(ab)]"convention centre" means a building of a prescribed area comprising of convention halls to be used for the purpose of holding conferences and seminars, being of such size and number and having such other facilities and amenities, as may be prescribed;]

(b) "hilly area" means any area located at a height of one thousand metres or more above the sea level;

(i) in the case of an industrial undertaking or cold storage plant or ship or hotel, means the assessment year relevant to the previous year in which the industrial undertaking begins to manufacture or produce articles or things, or to operate its cold storage plant or plants or the cold chain facility or the ship is first brought into use or the business of the hotel starts functioning;

1. Ins. by Act 23 of 2004, s. 18 (w.e.f. 1-4-2005).

2. Clause (a) re-lettered as clause (aa) thereof by s. 18, ibid . (w.e.f. 1-4-2005).

3. Ins. by Act 20 of 2002, s. 34 (w.e.f. 1-4-2003).

4. Clause (aa) re-lettered as clause (ab) thereof by Act 23 of 2004, s. 18 (w.e.f. 1-4-2005).

(ii) in the case of a company carrying on scientific and industrial research and development, means the assessment year relevant to the previous year in which the company is approved by the prescribed authority for the purposes of sub-section (8);

(iii) in the case of an undertaking engaged in the business of commercial production or refining of mineral oil referred to in sub-section (9), means the assessment year relevant to the previous year in which the undertaking commences the commercial production or refining of mineral oil;

1[(iv) in the case of an undertaking engaged 2[in the business of processing, preservation and packaging of fruits or vegetables or] in the integrated business of handling, storage and transportation of foodgrains, means the assessment year relevant to the previous year in which the undertaking begins such business;]

3 [(v) in the case of a multiplex theatre, means the assessment year relevant to the previous year in which a cinema hall, being a part of the said multiplex theatre, starts operating on a commercial basis;

(vi) in the case of a convention centre, means the assessment year relevant to the previous year in which the convention centre starts operating on a commercial basis;]

2[(vii) in the case of an undertaking engaged in operating and maintaining a hospital in a rural area, means the assessment year relevant to the previous year in which the undertaking begins to provide medical services;]

(d) "North-Eastern Region" means the region comprising the States of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura;

3[(da) "multiplex theatre" means a building of a prescribed area, comprising of two or more cinema theatres and commercial shops of such size and number and having such other facilities and amenities as may be prescribed;]

(e) "place of pilgrimage" means a place where any temple, mosque, gurdwara, church or other place of public worship of renown throughout any State or States is situated;

- (f) "rural area" means any area other than—

(i) an area which is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee or by any other name) or a cantonment board and which has a population of not less than ten thousand according to the preceding census of which relevant figures have been published before the first day of the previous year; or

(ii) an area within such distance not being more than fifteen kilometres from the local limits of any municipality or cantonment board referred to in sub-clause (i), as the Central Government may, having regard to the stage of development of such area including the extent of, and scope for, urbanisation of such area and other relevant considerations specify in this behalf by notification in the Official Gazette;

(g) "small-scale industrial undertaking" means an industrial undertaking which is, as on the last day of the previous year, regarded as a small-scale industrial undertaking under section 11B of the Industries (Development and Regulation) Act, 1951 (65 of 1951).

1. Ins. by Act 14 of 2001, s. 45 (w.e.f. 1-4-2002).

2. Ins. by Act 23 of 2004, s. 18 (w.e.f. 1-4-2005).

3. Ins. by Act 20 of 2002, s. 34 (w.e.f. 1-4-2003).

1[ 80-IBA. Deductions in respect of profits and gains from housing projects. —(1) Where the gross total income of an assessee includes any profits and gains derived from the business of developing and building housing projects, there shall, subject to the provisions of this section, be allowed, a deduction of an amount equal to hundred per cent of the profits and gains derived from such business.

(2) For the purposes of sub-section (1), a housing project shall be a project which fulfils the following conditions, namely:—

(a) the project is approved by the competent authority after the 1st day of June, 2016, but on or before the 31st day of March,[2] [2020];

(b) the project is completed within a period of[3] [ five years] from the date of approval by the competent authority:

Provided that,—

(i) where the approval in respect of a housing project is obtained more than once, the project shall be deemed to have been approved on the date on which the building plan of such housing project was first approved by the competent authority; and

(ii) the project shall be deemed to have been completed when a certificate of completion of project as a whole is obtained in writing from the competent authority;

(c) the[4] [carpet area] of the shops and other commercial establishments included in the housing project does not exceed three per cent. of the aggregate[4] [carpet area];

(d) the project is on a plot of land measuring not less than—

(i) one thousand square metres, where the project is located within the cities of Chennai, Delhi, Kolkata or Mumbai[5] *** ; or

(ii) two thousand square metres, where the project is located in any other place;

(e) the project is the only housing project on the plot of land as specified in clause (d);

(f) the[4] [carpet area] of the residential unit comprised in the housing project does not exceed—

(i) thirty square metres, where the project is located within the cities of Chennai, Delhi, Kolkata or Mumbai[5] ***; or

(ii) sixty square metres, where the project is located in any other place;

1. Ins. by Act 28 of 2016, s. 44 (w.e.f. 1-4-2017).

2. Subs. by Act 7 of 2019, s. 7, for "2019" (w.e.f. 1-4-2020).

3. Subs. by Act 7 of 2017, s. 37, for "three years" (w.e.f. 1-4-2018).

4. Subs. by 37, ibid., for "built-up area" (w.e.f. 1-4-2018).

5. The words "or within the distance, measured aerially, of twenty-five kilometres from the municipal limits of these cities" omitted by s. 37, ibid., (w.e.f. 1-4-2018).

(g) where a residential unit in the housing project is allotted to an individual, no other residential unit in the housing project shall be allotted to the individual or the spouse or the minor children of such individual;

(h) the project utilises—

(i) not less than ninety per cent of the floor area ratio permissible in respect of the plot of land under the rules to be made by the Central Government or the State Government or the local authority, as the case may be, where the project is located within the cities of Chennai, Delhi, Kolkata or Mumbai[1] *** , or

(ii) not less than eighty per cent of such floor area ratio where such project is located in any place other than the place referred to in sub-clause (i); and

(i) the assessee maintains separate books of account in respect of the housing project.

(3) Nothing contained in this section shall apply to any assessee who executes the housing project as a works-contract awarded by any person (including the Central Government or the State Government).

(4) Where the housing project is not completed within the period specified under clause (b) of sub-section (2) and in respect of which a deduction has been claimed and allowed under this section, the total amount of deduction so claimed and allowed in one or more previous years, shall be deemed to be the income of the assessee chargeable under the head "Profits and gains of business or profession" of the previous year in which the period for completion so expires.

(5) Where any amount of profits and gains derived from the business of developing and building housing projects is claimed and allowed under this section for any assessment year, deduction to the extent of such profit and gains shall not be allowed under any other provisions of this Act.

(6) For the purposes of this section,—

2 [(a) "carpet area" shall have the same meaning as assigned to it in clause (k) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016).]

(b) "competent authority" means the authority empowered to approve the building plan by or under any law for the time being in force;

(c) "floor area ratio" means the quotient obtained by dividing the total covered area of plinth area on all the floors by the area of the plot of land;

(d) "housing project" means a project consisting predominantly of residential units with such other facilities and amenities as the competent authority may approve subject to the provisions of this section;

(e) "residential unit" means an independent housing unit with separate facilities for living, cooking and sanitary requirements, distinctly separated from other residential units within the building, which is directly accessible from an outer door or through an interior door in a shared hallway and not by walking through the living space of another household.]

1. The words "or within the distance, measured aerially, of twenty-five kilometres from the municipal limits of these cities" omitted by Act 7 of 2017, s. 37 (w.e.f. 1-4-2018).

2. Subs. by s. 37, ibid ., for clause (a) (w.e.f. 1-4-2018).

1[ 80-IC. Special provisions in respect of certain undertakings or enterprises in certain special category States. —(1) Where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to in sub-section (2), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains, as specified in sub-section (3).

(2) This section applies to any undertaking or enterprise,—

(a) which has begun or begins to manufacture or produce any article or thing, not being any article or thing specified in the Thirteenth Schedule, or which manufactures or produces any article or thing, not being any article or thing specified in the Thirteenth Schedule and undertakes substantial expansion during the period beginning—

(i) on the 23rd day of December, 2002 and ending before the[2] [1st day of April, 2007], in any Export Processing Zone or Integrated Infrastructure Development Centre or Industrial Growth Centre or Industrial Estate or Industrial Park or Software Technology Park or Industrial Area or Theme Park, as notified by the Board in accordance with the scheme framed and notified by the Central Government in this regard, in the State of Sikkim; or

(ii) on the 7th day of January, 2003 and ending before the 1st day of April, 2012, in any Export Processing Zone or Integrated Infrastructure Development Centre or Industrial Growth Centre or Industrial Estate or Industrial Park or Software Technology Park or Industrial Area or Theme Park, as notified by the Board in accordance with the scheme framed and notified by the Central Government in this regard, in the State of Himachal Pradesh or the State of Uttaranchal; or

(iii) on the 24th day of December, 1997 and ending before the 1st day of April, 2007, in any Export Processing Zone or Integrated Infrastructure Development Centre or Industrial Growth Centre or Industrial Estate or Industrial Park or Software Technology Park or Industrial Area or Theme Park, as notified by the Board in accordance with the scheme framed and notified by the Central Government in this regard, in any of the North-Eastern States;

(b) which has begun or begins to manufacture or produce any article or thing, specified in the Fourteenth Schedule or commences any operation specified in that Schedule, or which manufactures or produces any article or thing, specified in the Fourteenth Schedule or commences any operation specified in that Schedule and undertakes substantial expansion during the period beginning—

(i) on the 23rd day of December, 2002 and ending before the[2] [1st day of April, 2007], in the State of Sikkim; or

(ii) on the 7th day of January, 2003 and ending before the 1st day of April, 2012, in the State of Himachal Pradesh or the State of Uttaranchal; or

(iii) on the 24th day of December, 1997 and ending before the 1st day of April, 2007, in any of the North-Eastern States.

(3) The deduction referred to in sub-section (1) shall be—

(i) in the case of any undertaking or enterprise referred to in sub-clauses (i) and (iii) of clause (a) or sub-clauses (i) and (iii) of clause (b), of sub-section (2), one hundred per cent. of such profits and gains for ten assessment years commencing with the initial assessment year;

(ii) in the case of any undertaking or enterprise referred to in sub-clause (ii) of clause (a) or sub-clause (ii) of clause (b), of sub-section (2), one hundred per cent of such profits and gains for five assessment years commencing with the initial assessment year and thereafter, twenty-five per cent. (or thirty per cent. where the assessee is a company) of the profits and gains.

1. Ins. by Act 32 of 2003, s. 40 (w.e.f. 1-4-2004).

2. Subs. by Act 22 of 2007, s. 30, for "1st day of April, 2012" (w.e.f. 1-4-2008).

(4) This section applies to any undertaking or enterprise which fulfils all the following conditions, namely:—

(i) it is not formed by splitting up, or the reconstruction, of a business already in existence :

Provided that this condition shall not apply in respect of an undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section;

(ii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose.

Explanation .—The provisions of Explanations 1 and 2 to sub-section (3) of sectopm 80-IA shall apply for the purposes of clause (ii) of this sub-section as they apply for the purposes of clause (ii) of that sub-section.

(5) Notwithstanding anything contained in any other provision of this Act, in computing the total income of the assessee, no deduction shall be allowed under any other section contained in Chapter VIA or in section 10A or section 10B, in relation to the profits and gains of the undertaking or enterprise.

(6) Notwithstanding anything contained in this Act, no deduction shall be allowed to any undertaking or enterprise under this section, where the total period of deduction inclusive of the period of deduction under this section, or under the second proviso to sub-section (4) of section 80-IB or under section 10C, as the case may be, exceeds ten assessment years.

(7) The provisions contained in sub-section (5) and sub-sections (7) to (12) of section 80-IA shall, so far as may be, apply to the eligible undertaking or enterprise under this section.

(8) For the purposes of this section,—

(i) "Industrial Area" means such areas, which the Board, may, by notification in the Official Gazette, specify in accordance with the scheme framed and notified by the Central Government;

(ii) "Industrial Estate" means such estates, which the Board, may, by notification in the Official Gazette, specify in accordance with the scheme framed and notified by the Central Government;

(iii) "Industrial Growth Centre" means such centres, which the Board, may, by notification in the Official Gazette, specify in accordance with the scheme framed and notified by the Central Government;

(iv) "Industrial Park" means such parks, which the Board, may, by notification in the Official Gazette, specify in accordance with the scheme framed and notified by the Central Government;

(v) "Initial assessment year" means the assessment year relevant to the previous year in which the undertaking or the enterprise begins to manufacture or produce articles or things, or commences operation or completes substantial expansion;

(vi) "Integrated Infrastructure Development Centre" means such centres, which the Board, may, by notification in the Official Gazette, specify in accordance with the scheme framed and notified by the Central Government;

(vii) "North-Eastern States" means the States of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura;

(viii) "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;

(ix) "Substantial expansion" means increase in the investment in the plant and machinery by at least fifty per cent of the book value of plant and machinery (before taking depreciation in any year), as on the first day of the previous year in which the substantial expansion is undertaken;

(x) "Theme Park" means such parks, which the Board, may, by notification in the Official Gazette, specify in accordance with the scheme framed and notified by the Central Government.]

1[ 80-ID. Deduction in respect of profits and gains from business of hotels and convention centres in specified area. —(1) Where the gross total income of an assessee includes any profits and gains derived by an undertaking from any business referred to in sub-section (2) (such business being hereinafter referred to as the eligible business), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction of an amount equal to hundred per cent of the profits and gains derived from such business for five consecutive assessment years beginning from the initial assessment year.

(2) This section applies to any undertaking,—

(i) engaged in the business of hotel located in the specified area, if such hotel is constructed and has started or starts functioning at any time during the period beginning on the 1st day of April, 2007 and ending on[2] [the 31st day of July, 2010]; or

(ii) engaged in the business of building, owning and operating a convention centre, located in the specified area, if such convention centre is constructed at any time during the period beginning on the 1st day of April, 2007 and ending on[2] [the 31st day of July, 2010];

3[(iii) engaged in the business of hotel located in the specified district having a World Heritage Site, if such hotel is constructed and has started or starts functioning at any time during the period beginning on the 1st day of April, 2008 and ending on the 31st day of March, 2013.]

(3) The deduction under sub-section (1) shall be available only if—

(i) the eligible business is not formed by the splitting up, or the reconstruction, of a business already in existence;

(ii) the eligible business is not formed by the transfer to a new business of a building previously used as a hotel or a convention centre, as the case may be;

(iii) the eligible business is not formed by the transfer to a new business of machinery or plant previously used for any purpose.

Explanation .—The provisions of Explanations 1 and 2 to sub-section (3) of section 80-IA 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;

(iv) the assessee furnishes along with the return of income, the report of an audit in such form and containing such particulars as may be prescribed, and duly signed and verified by an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed.

(4) Notwithstanding anything contained in any other provision of this Act, in computing the total income of the assessee, no deduction shall be allowed under any other section contained in Chapter VIA or section 10AA, in relation to the profits and gains of the undertaking.

(5) The provisions contained in sub-section (5) and sub-sections (8) to (11) of section 80-IA shall, so far as may be, apply to the eligible business under this section.

(6) For the purposes of this section,—

(a) "convention centre" means a building of a prescribed area comprising of convention halls to be used for the purpose of holding conferences and seminars, being of such size and number and having such other facilities and amenities, as may be prescribed;

(b) "hotel" means a hotel of two-star, three-star or four-star category as classified by the Central Government;

1. Ins. by Act 22 of 2007, s. 31 (w.e.f. 1-4-2008).

2. Subs. by Act 14 of 2010, s. 28, for "the 31st day of March, 2010" (w.e.f. 1-4-2011).

3. Ins. by Act 18 of 2008, s. 19 (w.e.f. 1-4-2009).

(i) in the case of a hotel, means the assessment year relevant to the previous year in which the business of the hotel starts functioning;

(ii) in the case of a convention centre, means the assessment year relevant to the previous year in which the convention centre starts operating on a commercial basis;

(d) "specified area" means the National Capital Territory of Delhi and the districts of Faridabad, Gurgaon, Gautam Budh Nagar and Ghaziabad;]

1 [(e) "specified district having a World Heritage Site" means districts, specified in column (2) of the Table below, of the States, specified in the corresponding entry in column (3) of the said Table:

||1[(e) "specified district having a World Heritage Site" means districts, specified in column (2) of the Table below, of the States, specified in the corresponding entry in column (3) of the said Table:| |---|---| ||TABLE| ||S.No. Name of district Name of State (1) (2) (3) 1. Agra Uttar Pradesh 2. Jalgaon Maharashtra 3. Aurangabad Maharashtra 4. Kancheepuram Tamil Nadu 5. Puri Orissa 6. Bharatpur Rajasthan 7. Chhatarpur Madhya Pradesh 8. Thanjavur Tamil Nadu 9. Bellary Karnataka 10. South 24 Parganas West Bengal (excluding areas falling within the Kolkata urban agglomeration on the basis of the 2001 census) 11. Chamoli Uttarakhand 12. Raisen Madhya Pradesh 13. Gaya Bihar 14. Bhopal Madhya Pradesh 15. Panchmahal Gujarat 16. Kamrup Assam 17. Goalpara Assam 18. Nagaon Assam 19. North Goa Goa 20. South Goa Goa 21. Darjeeling West Bengal 22. Nilgiri Tamil Nadu.]| ||| ||| ||| ||| ||| ||| ||| ||| ||| ||| ||| ||| ||| ||| ||| ||| ||| ||| ||| ||| ||| ||| ||| |||

1. Ins. by Act 18 of 2008, s. 19 (w.e.f. 1-4-2009).

1[ 80-IE. Special provisions in respect of certain undertakings in North-Eastern States. —(1) Where the gross total income of an assessee includes any profits and gains derived by an undertaking, to which this section applies, from any business referred to in sub-section (2), there shall be allowed, in computing the total income of the assessee, a deduction of an amount equal to hundred per cent of the profits and gains derived from such business for ten consecutive assessment years commencing with the initial assessment year.

(2) This section applies to any undertaking which has, during the period beginning on the 1st day of April, 2007 and ending before the 1st day of April, 2017, begun or begins, in any of the North-Eastern States,—

(i) to manufacture or produce any eligible article or thing;

(ii) to undertake substantial expansion to manufacture or produce any eligible article or thing;

(iii) to carry on any eligible business.

(3) This section applies to any undertaking which fulfils all the following conditions, namely:—

(i) it is not formed by splitting up, or the reconstruction, of a business already in existence:

Provided that this condition shall not apply in respect of an undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such undertaking as referred to in section 33B, in the circumstances and within the period specified in the said section;

(ii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose.

Explanation .—The provisions of Explanations 1 and 2 to sub-section (3) of section 80-IA shall apply for the purposes of clause (ii) of this sub-section as they apply for the purposes of clause ( ii sub-section.

for the purposes of clause (ii) of this sub-section as they apply for the purposes of clause (ii) of that

(4) Notwithstanding anything contained in any other provision of this Act, in computing the total income of the assessee, no deduction shall be allowed under any other section contained in Chapter VIA or in section 10A or section 10AA or section 10B or section 10BA, in relation to the profits and gains of the undertaking.

(5) Notwithstanding anything contained in this Act, no deduction shall be allowed to any undertaking under this section, where the total period of deduction inclusive of the period of deduction under this section, or under section 80-IC or under the second proviso to sub-section (4) of section 80-IB or under section 10C, as the case may be, exceeds ten assessment years.

(6) The provisions contained in sub-section (5) and sub-sections (7) to (12) of section 80-IA shall, so far as may be, apply to the eligible undertaking under this section.

1. Ins. by Act 22 of 2007, s. 32 (w.e.f. 1-4-2008).

(7) For the purposes of this section,—

(i) "initial assessment year" means the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce articles or things, or completes substantial expansion;

(ii) "North-Eastern States" means the States of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura;

(iii) "substantial expansion" means increase in the investment in the plant and machinery by at least twenty-five per cent of the book value of plant and machinery (before taking depreciation in any year), as on the first day of the previous year in which the substantial expansion is undertaken;

(iv) "eligible article or thing" means the article or thing other than the following :—

(a) goods falling under Chapter 24 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), which pertains to tobacco and manufactured tobacco substitutes;

(b) pan masala as covered under Chapter 21 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986);

(c) plastic carry bags of less than 20 microns as specified by the Ministry of Environment and Forests vide Notification No. S.O. 705(E), dated the 2nd September, 1999 and S.O. 698(E), dated the 17th June, 2003; and

(d) goods falling under Chapter 27 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), produced by petroleum oil or gas refineries;

- (v) "eligible business" means the business of,—

(a) hotel (not below two star category);

(b) adventure and leisure sports including ropeways;

(d) running an old-age home;

(e) operating vocational training institute for hotel management, catering and food craft, entrepreneurship development, nursing and para-medical, civil aviation related training, fashion designing and industrial training;

(f) running information technology related training centre;

(g) manufacturing of information technology hardware; and

(h) bio-technology.]

80J. [ Deduction in respect of profits and gains from newly established industrial undertakings or ships or hotel business in certain cases ] . — Omitted by the Finance ( No. 2) Act, 1996 (33 of s. 29 ( w.r.e.f . 1-4-1989).

or ships or hotel business in certain cases ] . — Omitted by the Finance ( No. 2) Act, 1996 (33 of 1996),

80JJ. [ Deduction in respect of profits and gains from business of poultry farming ] . — Omitted by the Finance Act, 1997 (26 of 1997), s. 26 ( w.e.f. 1-4-1998).

1[ 80JJA. Deduction in respect of profits and gains from business of collecting and processing of bio-degradable waste. —Where the gross total income of an assessee includes any profits and gains derived from the business of collecting and processing or treating of bio-degradable waste for generating power[2] [or producing bio-fertilizers, bio-pesticides or other biological agents or for producing bio-gas or] making pellets or briquettes for fuel or organic manure, there shall be allowed, in computing the total income of the assessee,[3] [a deduction of an amount equal to the whole of such profits and gains for a period of five consecutive assessment years beginning with the assessment year relevant to the previous year in which such business commences].

4[ 80JJAA. Deduction in respect of employment of new employees. —(1) Where the gross total income of an assessee to whom section 44AB applies, includes any profits and gains derived from business, there shall, subject to the conditions specified in sub-section (2), be allowed a deduction of an amount equal to thirty per cent. of additional employee cost incurred in the course of such business in the previous year, for three assessment years including the assessment year relevant to the previous year in which such employment is provided.

(2) No deduction under sub-section (1) shall be allowed,—

(a) if the business is formed by splitting up, or the reconstruction, of an existing business:

Provided that nothing contained in this clause shall apply in respect of a business which is formed as a result of re-establishment, reconstruction or revival by the assessee of the business in the circumstances and within the period specified in section 33B;

(b) if the business is acquired by the assessee by way of transfer from any other person or as a result of any business reorganisation;

(c) unless the assessee furnishes alongwith the return of income the report of the accountant, as defined in the Explanation to section 288 giving such particulars in the report as may be prescribed.

Explanation .—For the purposes of this section,—

(i) "additional employee cost" means total emoluments paid or payable to additional employees employed during the previous year:

Provided that in the case of an existing business, the additional employee cost shall be nil, if—

(a) there is no increase in the number of employees from the total number of employees employed as on the last day of the preceding year;

1. Ins. by Act 21 of 1998, s. 35 (w.e.f. 1-4-1999). Earlier section 80JJA was inserted by Act 21 of 1979, s. 13 (w.e.f. 1-41980) and later omitted by Act 11 of 1983, s. 27 (w.e.f. 1-4-1984).

2. Subs. by Act 27 of 1999, s. 51, for ", producing bio-gas" (w.e.f. 1-4-2000).

3. Subs. by s. 51, ibid ., for "a deduction from such profits and gains of an amount equal to the whole of such income, or five lakh rupees, whichever is less" (w.e.f. 1-4-2000).

4. Subs. by Act 28 of 2016, s. 45, for section 80JJAA (w.e.f. 1-4-2017). Earlier section 80JJAA was inserted by Act 21 of 1998, s. 36 (w.e.f. 1-4-1999).

(b) emoluments are paid otherwise than by an account payee cheque or account payee bank draft or by use of electronic clearing system through a bank account:

Provided further that in the first year of a new business, emoluments paid or payable to employees employed during that previous year shall be deemed to be the additional employee cost;

(ii) "additional employee" means an employee who has been employed during the previous year and whose employment has the effect of increasing the total number of employees employed by the employer as on the last day of the preceding year, but does not include,—

(a) an employee whose total emoluments are more than twenty-five thousand rupees per month; or

(b) an employee for whom the entire contribution is paid by the Government under the Employees' Pension Scheme notified in accordance with the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952); or

(d) an employee who does not participate in the recognised provident fund:

1[Provided that in the case of an assessee who is engaged in the business of manufacturing of apparel,[2] [or footwear or leather products] the provisions of sub-clause (c) shall have effect as if for the words "two hundred and forty days", the words "one hundred and fifty days" had been substituted:]

1[Provided further that where an employee is employed during the previous year for a period of less than two hundred and forty days or one hundred and fifty days, as the case may be, but is employed for a period of two hundred and forty days or one hundred and fifty days, as the case may be, in the immediately succeeding year, he shall be deemed to have been employed in the succeeding year and the provisions of this section shall apply accordingly;]

(iii) "emoluments" means any sum paid or payable to an employee in lieu of his employment by whatever name called, but does not include—

(a) any contribution paid or payable by the employer to any pension fund or provident fund or any other fund for the benefit of the employee under any law for the time being in force; and

(b) any lump-sum payment paid or payable to an employee at the time of termination of his service or superannuation or voluntary retirement, such as gratuity, severance pay, leave encashment, voluntary retrenchment benefits, commutation of pension and the like.

(3) The provisions of this section, as they stood immediately prior to their amendment by the Finance Act, 2016, shall apply to an assessee eligible to claim any deduction for any assessment year commencing on or before the 1st day of April, 2016.]

80K. [ Deduction in respect of dividends attributable to profits and gains from new industrial undertakings or ships or hotel business ] . — Omitted by the Finance Act , 1986 (23 of 1986), s ( w.e.f. 1-4-1987).

undertakings or ships or hotel business ] . — Omitted by the Finance Act , 1986 (23 of 1986), s . 19

1. Ins. by Act 47 of 2016, s. 3 (w.e.f. 1-4-2017).

2. Ins. by Act 13 of 2018, s. 29 (w.e.f. 1-4-2019).

80L. [ Deductions in respect of interest on certain securities, dividends, etc ] . — Omitted by the Finance Act , 2005 (18 of 2005), s . 28 ( w.e.f . 1-4-2006).

7. The proviso substituted by Act 14 of 2001, s. 44 (w.e.f. 1-4-2002).

8. Ins. by s. 44, ibid. (w.e.f. 1-4-2001).

9. Subs. by Act 10 of 2000, s. 38, for "any industrial undertaking " (w.e.f. 1-4-2000).

10. Subs. by Act 14 of 2001, s. 44, for "industrial undertaking" (w.e.f. 1-4-2002).

11. Subs. by Act 23 of 2004, s. 17, for "undertaking referred to in clause (iv)" (w.e.f. 1-4-2005).

12. Subs. by Act 22 of 2007, s. 28, for "clause (iv)" (w.e.f. 1-4-2008).

13. The words, brackets and figures "or clause (vi)" omitted by Act 33 of 2009, s. 36 (w.e.f. 1-4-2010).

(ii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose:

1[Provided that nothing contained in this sub-section shall apply in the case of transfer, either in whole or in part, of machinery or plant previously used by a State Electricity Board referred to in clause (7) of section 2 of the Electricity Act, 2003 (36 of 2003), whether or not such transfer is in pursuance of the splitting up or reconstruction or reorganisation of the Board under Part XIII of that Act.]

Explanation 1.—For the purposes of clause (ii), any machinery or plant which was used outside India by any person other than the assessee shall not be regarded as machinery or plant previously used for any purpose, if the following conditions are fulfilled, namely :—

(a) such machinery or plant was not, at any time previous to the date of the installation by the assessee, used in India;

(b) such machinery or plant is imported into India from any country outside India; and

Explanation 2.—Where in the case of an[2] [undertaking], any machinery or plant or any part thereof previously used for any purpose is transferred to a new business and the total value of the machinery or plant or part so transferred does not exceed twenty per cent of the total value of the machinery or plant used in the business, then, for the purposes of clause (ii) of this sub-section, the condition specified therein shall be deemed to have been complied with.

(4) This section applies to—

(i) any enterprise carrying on the business[3] [of (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining] any infrastructure facility which fulfils all the following conditions, namely :—

(a) it is owned by a company registered in India or by a consortium of such companies[4] [or by an authority or a board or a corporation or any other body established or constituted under any Central or State Act]:

5[(b) it has entered into an agreement with the Central Government or a State Government or a local authority or any other statutory body for (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining a new infrastructure facility;]

(c) it has started or starts operating and maintaining the infrastructure facility on or after the 1st day of April, 1995:

Provided that where an infrastructure facility is transferred on or after the 1st day

of April, 1999 by an enterprise which developed such infrastructure facility (hereafter

referred to in this section as the transferor enterprise) to another enterprise (hereafter in this section referred to as the transferee enterprise) for the purpose of operating and maintaining the infrastructure facility on its behalf in accordance with the agreement with the Central

1. Ins. by Act 23 of 2004, s. 17 (w.e.f. 1-4-2005).

2. Subs. by Act 14 of 2001, s. 44, for "industrial undertaking" (w.e.f. 1-4-2002).

3. Subs. by s. 44, ibid ., for "of (i) developing, (ii) maintaining and operating or (iii) developing, maintaining and operating"

(w.e.f. 1-4-2002).

4. Ins. by Act 18 of 2005, s. 26 (w.e.f. 1-4-2006).

5. Subs. by Act 14 of 2001, s. 44, for clause (b) (w.e.f. 1-4-2002).

7. Restored by Act 3 of 1989, s. 95 (h) (w.e.f. 1-4-1989). Earlier subs. by Act 4 of 1988, s. 25 (w.e.f. 1-4-1989).

8. Subs. by Act 16 of 1972, s. 17, for "section 11" (w.e.f. 1-4-1973).

9. Subs. by s. 17, for "section 11" (w.e.f. 1-4-1973).

10. Subs. by Act 20 of 2002, s. 30, for the Explanation 4 (w.e.f. 1-4-2003).

11. Ins. by Act 66 of 1976, s. 17 (w.e.f. 1-4-1976).

12. Sub-section (6) omitted by Act 19 of 1968, s. 30 and the Third Schedule (w.e.f. 1-4-1969).

Chapter XXIII — MISCELLANEOUS

Section 8

28. Pilfer-proof caps for packaging or other fittings of cork, rubber, polyethylene or any other material.

11* * * * *]

8. Exclusion from total income of accumulated balance. —The accumulated balance due and becoming payable to an employee participating in a recognised provident fund shall be excluded from the computation of his total income—

(i) if he has rendered continuous service with his employer for a period of five years or more, or

1. Ins. by Act 20 of 1974, s. 12 (w.e.f. 1-4-1974).

2. Subs. by Act 4 of 1988, s. 2, for "Commissioner" (w.e.f. 1-4-1988).

3. Subs. by Act 25 of 2014, s. 4, for "Chief Commissioner" (w.e.f. 1-6-2013).

4. Subs. by s. 4, ibid ., for "Commissioner" (w.e.f. 1-6-2013).

5. Subs. by Act 26 of 1997, s. 58, for "ten" (w.e.f. 1-4-1998).

6. The words "exceeds one-third of the salary of the employee or" omitted by Act 44 of 1980, s. 34 (w.e.f. 1-4-1981).

7. The words "and super-tax" omitted by Act 10 of 1965, s. 66 (w.e.f. 1-4-1965).

8. Subs. by s. 66, ibid , for rule 7 (w.e.f. 1-4-1965).

9. Subs. by Act 20 of 1967, s. 20, for "section 80A or, as the case may be, to a deduction from the amount of income-tax with which he is chargeable on his total income of an amount of income-tax determined in accordance with section 87" (w.e.f. 1-4-1968).

(ii) if, though he has not rendered such continuous service, the service has been terminated by reason of the employee's ill-health, or by the contraction or discontinuance of the employer's business or other cause beyond the control of the employee,[1] [or]

[1] [(iii) if, on the cessation of his employment, the employee obtains employment with any other employer, to the extent the accumulated balance due and becoming payable to him is transferred to his individual account in any recognised provident fund maintained by[2] [such other employer; or]

[3] [(iv) if the entire balance standing to the credit of the employee is transferred to his account under a pension scheme referred to in section 80CCD and notified by the Central Government.]

Explanation. —Where the accumulated balance due and becoming payable to an employee participating in a recognised provident fund maintained by his employer includes any amount transferred from his individual account in any other recognised provident fund or funds maintained by his former employer or employers, then, in computing the period of continuous service for the purposes of clause (i) or clause (ii) the period or periods for which such employee rendered continuous service under his former employer or employers aforesaid shall be included.]

1[ 8. Disposal of proceeds of execution. —(1) Whenever assets are realised by sale or otherwise in execution of a certificate, the proceeds shall be disposed of in the following manner, namely:—

(a) they shall first be adjusted towards the amount due under the certificate in execution of which the assets were realised and the costs incurred in the course of such execution;

(b) if there remains a balance after the adjustment referred to in clause (a), the same shall be utilised for satisfaction of any other amount recoverable from the assessee under this Act which may be due on the date on which the assets were realised; and

1. Subs. by Act 4 of 1988, s. 124, for rule 8 (w.e.f. 1-4-1989).

(2) If the defaulter disputes any adjustment under clause (b) of sub-rule (1), the Tax Recovery Officer shall determine the dispute.]

8. Appeals. —(1) An employer objecting to an order of the[2] [[3] [Principal Chief Commissioner or Chief Commissioner] or[4] [Principal Commissioner or Commissioner]] refusing to accord approval to a gratuity fund or an order withdrawing such approval may appeal, within sixty days of such order, to the Board.

(2) The appeal shall be in such form and shall be verified in such manner and shall be subject to the payment of such fee as may be prescribed.

[3] [(iv) if the entire balance standing to the credit of the employee is transferred to his account under a pension scheme referred to in section 80CCD and notified by the Central Government.]

(i) if he has rendered continuous service with his employer for a period of five years or more, or

1. Ins. by Act 20 of 1974, s. 12 (w.e.f. 1-4-1974).

2. Subs. by Act 4 of 1988, s. 2, for "Commissioner" (w.e.f. 1-4-1988).

3. Subs. by Act 25 of 2014, s. 4, for "Chief Commissioner" (w.e.f. 1-6-2013).

4. Subs. by s. 4, ibid ., for "Commissioner" (w.e.f. 1-6-2013).

5. Subs. by Act 26 of 1997, s. 58, for "ten" (w.e.f. 1-4-1998).

6. The words "exceeds one-third of the salary of the employee or" omitted by Act 44 of 1980, s. 34 (w.e.f. 1-4-1981).

7. The words "and super-tax" omitted by Act 10 of 1965, s. 66 (w.e.f. 1-4-1965).

8. Subs. by s. 66, ibid , for rule 7 (w.e.f. 1-4-1965).

8. Appeals. —(1) An employer objecting to an order of the[3] [[4] [Principal Chief Commissioner or Chief Commissioner] or[5] [Principal Commissioner or Commissioner]] refusing to accord approval to a superannuation fund or an order withdrawing such approval may appeal, within sixty days of such order, to the Board.

(2) The appeal shall be in such form and shall be verified in such manner and shall be subject to the payment of such fee as may be prescribed.

Section 8A — Particulars to be furnished in respect of gratuity funds.

5[ 8A. Particulars to be furnished in respect of gratuity funds. —The trustees of an approved gratuity fund and any employer who contributes to an approved gratuity fund shall, when required by notice from the[6] [Assessing Officer], furnish within such period, not being less than twenty-one days from the date of the notice, as may be specified in the notice, such return, statement, particulars or information, as the[6] [Assessing Officer] may require.]

Section 9 — Liability of trustees on cessation of approval.

9. Liability of trustees on cessation of approval. —If a fund or a part of a fund for any reason ceases to be an approved superannuation fund, the trustees of the fund shall nevertheless remain liable to tax on any sum paid on account of returned contributions (including interest on contributions, if any), in so far as the sum so paid is in respect of contributions made before the fund or part of the fund ceased to be an approved superannuation fund under the provisions of this Part.

1. Subs. by Act 4 of 1988, s. 2, for "Income-tax" (w.e.f. 1-4-1988).

2. Subs. by Act 42 of 1970, s. 57, for "and of the accounts of the fund for the last three years for which such accounts have been made up" (w.e.f. 1-4-1971).

3. Subs. by Act 4 of 1988, s. 2, for "Commissioner" (w.e.f. 1-4-1988).

4. Subs. by Act 25 of 2014, s. 4 for "Chief Commissioner" (w.r.e.f. 1-6-2013).

5. Subs. by s. 4, ibid ., for "Commissioner" (w.r.e.f. 1-6-2013).

6. The words "and super-tax" omitted by Act 10 of 1965, s. 66 (w.e.f. 1-4-1965).

7. Ins. by s. 66, ibid , (w.e.f. 1-4-1965).

8. Subs. by s. 66, ibid ., for "income-tax and super-tax" (w.e.f. 1-4-1965).

9. The words, brackets and figure "sub-section (1) of" omitted by Act 11 of 1987 s. 74 (w.e.f. 1-6-1987).

9. Provisions relating to rules. —(1) In addition to any power conferred in this Part, the Board may make rules—

(a) prescribing the statements and other information to be submitted along with an application for approval;

(b) limiting the ordinary annual and other contributions of an employer to the fund;

7[(bb) regulating the investment or deposit of the moneys of an approved gratuity fund:

Provided that no rule made under this clause shall require the investment of more than fifty per cent of the moneys of such fund in Government securities as defined in section 2 of the Public Debt Act, 1944 (18 of 1944);]

(c) providing for the assessment by way of penalty of any consideration received by an employee for an assignment of, or the creation of a charge upon, his beneficial interest in an approved gratuity fund;

(d) providing for the withdrawal of the approval in the case of a fund which ceases to satisfy the requirements of this Part or the rules made thereunder; and

(e) generally, to carry out the purposes of this Part and to secure such further control over the approval of gratuity funds and the administration of gratuity funds as it may deem requisite.

(2) All rules made under this Part shall be subject to the provisions of section 296.

1. The words "and super-tax" omitted by Act 10 of 1965, s. 66 (w.e.f. 1-4-1965).

2. Subs. by Act 4 of 1988, s. 2, for "Commissioner" (w.e.f. 1-4-1988).

3. Subs. by Act 25 of 2014, s. 4 for "Chief Commissioner" (w.r.e.f. 1-6-2013).

4. Subs. by s. 4, ibid ., for "Commissioner" (w.r.e.f. 1-6-2013).

5. Ins. by Act 42 of 1970, s. 57 (w.e.f. 1-4-1971).

6. Subs. by Act 4 of 1988, s. 2, for "Income-tax" (w.e.f. 1-4-1988).

7. Ins. by Act 42 of 1970, s. 57 (w.e.f. 1-4-1971).

1[THE FIFTH SCHEDULE

2[ See section 33(1)(b)(B)(i)]] LIST OF ARTICLES AND THINGS

(1) Iron and steel (metal), ferro-alloys and special steels.

(2) Aluminium, copper, lead and zinc (metals).

(3)[3] [Coal, lignite, iron ore], bauxite, manganese ore, dolomite, limestone, magnesite and mineral oil.

(4) Industrial machinery specified under the heading "8. Industrial machinery", sub-heading "A. Major items of specialised equipment used in specific industries", of the First Schedule to the Industries (Development and Regulation) Act, 1951 (65 of 1951).

(5) Boilers and steam generating plants, steam engines and turbines and internal combustion engines.

(6) Flame and drip proof motors.

(7) Equipment for the generation and transmission of electricity including transformers, cables and transmission towers.

(8) Machine tools and precision tools (including their attachments and accessories, cutting tools and small tools), dies and jigs.

(9) Tractors, earth-moving machinery and agricultural implements.

(10) Motor trucks and buses.

(11) Steel castings and forgings and malleable iron and steel castings.

(12) Cement and refractories.

(13) Fertilisers, namely, ammonium sulphate, ammonium sulphate nitrate (double salt), ammonium nitrate, calcium ammonium nitrate (nitrolime stone), ammonium chloride, superphosphate, urea and complex fertilisers of synthetic origin containing both nitrogen and phosphorus, such as ammonium phosphates, ammonium sulphate phosphate and ammo-nium nitro phosphate.

(14) Soda ash.

(15) Pesticides.

(16) Paper and pulp including newsprint.

(17) Electronic equipment, namely, radar equipment, computers, electronic accounting and business machines, electronic communication equipment, electronic control instruments and basic components, such as valves, transistors, resistors, condensers, coils, magnetic materials and microwave components.

(18) Petrochemicals including corresponding products manufactured from other basic raw materials like calcium carbide, ethyl alcohol or hydrocarbons from other sources.

(19) Ships.

(20) Automobile ancillaries.

1. Ins. by Act 10 of 1965, s. 67 (w.e.f. 1-4-1965).

2. Subs. by Act 19 of 1968, s. 30 and the Third Schedule, for "[ See sections 33(1)(b)(B)(i) and 80B(7)" (w.e.f. 1-4-1969). Earlier substituted by Act 20 of 1967, s. 33 and the Third Schedule, for"[ See sections 33(1)(b)(B)(i) and 83B(7)" (w.e.f.

1-4-1968). Prior substituted by Act 13 of 1966, s. 37, for "[ See section 33 (1) (iii) (c) I" (w.e.f. 1-4-1966).

3. Subs. by Act 15 of 1965, s. 18, for "Iron ore" (w.e.f. 1-4-1965).

- (21) Seamless tubes.

- (22) Gears.

(23) Ball, roller and tapered bearings.

(24) Component parts of the articles mentioned in item Nos. (4), (5), (7) and (9), that is to say, such parts as are essential for the working of the machinery referred to in the items aforesaid and have been given for that purpose some special shape or quality which would not be essential for their use for any other purpose and are in complete finished form and ready for fitment.

- (25) Cotton seed oil.

- 1[(26) Tea.

- (27) Printing machinery.]

- 2[(28) Processed seeds.

- (29) Processed concentrates for cattle and poultry feed.

- (30) Processed (including frozen) fish and fish products.

- (31) Vegetable oils and oil-cakes manufactured by the solvent extraction process from seeds other than cotton seed.]

- 3[(32) Textiles (including those dyed, printed or otherwise processed) made wholly or mainly of cotton, including cotton yarn, hosiery and rope.

- (33) Textiles (including those dyed, printed or otherwise processed) made wholly or mainly of jute, including jute twine and jute rope.]]

1. Ins. by Act 13 of 1966, s. 37 (w.e.f. 1-4-1966).

2. Ins. by Act 19 of 1968, s. 30 and the Third Schedule (w.e.f. 1-4-1969).

3. Ins. by Act 14 of 1969, s. 23 (w.e.f. 1-4-1970).

THE SIXTH SCHEDULE

Omitted by the Finance Act, 1972 (16 of 1972), s. 43 ( w.e.f. 1-4-1973) . Originally, the Schedule was inserted by the Finance Act, 1968 (19 of 1968), s. 30 and the Third Schedule ( w.e.f . 1-4-1969) and was later amended by the Finance ( No . 2) Act, 1971 (32 of 1971), s. 30 ( w.e.f. 1-41972).

1[THE SEVENTH SCHEDULE

[ See section 35E]

PART A

___

MINERALS

1. Aluminium ores.

2. Apatite and phosphatic ores.

3. Beryl.

4. Chrome ore.

5. Coal and lignite.

6. Columbite, Samarskite and other minerals of the "rare earths" group.

7. Copper.

8. Gold.

9. Gypsum.

10. Iron ore.

11. Lead.

12. Manganese ore.

13. Molybdenum.

14. Nickel ores.

15. Platinum and other precious metals and their ores.

16. Pitchblende and other uranium ores.

17. Precious stones.

18. Rutile.

19. Silver.

20. Sulphur and its ores.

21. Tin.

22. Tungsten ores.

23. Uraniferousallanite, monazite and other thorium minerals.