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INCOME-TAX ACT

2011

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INITIAL

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CONTENTS

DIVISION ONE 11111Income-tax Act, 1961Income-tax Act, 1961Income-tax Act, 1961Income-tax Act, 1961Income-tax Act, 1961

PAGE

u Arrangement of Sections I-3

u Text of the Income-tax Act, 1961 as amendedby the Finance Act, 2011 1.1

u Appendix : Text of remaining provisions of AlliedActs referred to in Income-tax Act 1.1025

u Subject Index 1.1091

DIVISION TWO 22222Finance Act, 2011Finance Act, 2011Finance Act, 2011Finance Act, 2011Finance Act, 2011

u Arrangement of Sections 2.3

u Text of the Finance Act, 2011 2.5

DIVISION THREE 33333National Tax Tribunal Act, 2005National Tax Tribunal Act, 2005National Tax Tribunal Act, 2005National Tax Tribunal Act, 2005National Tax Tribunal Act, 2005

u Arrangement of Sections 3.3

u Text of the National Tax Tribunal Act, 2005 as amendedup to date 3.5

DIVISION FOUR 44444Securities Transaction TaxSecurities Transaction TaxSecurities Transaction TaxSecurities Transaction TaxSecurities Transaction Tax

u Arrangement of Sections 4.3u Text of the Securities Transaction Tax as amended

up to date 4.5

v

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DIVISION ONE

Income-taxAct, 1961

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I-3

INCOME-TAX ACT, 1961

Arrangement of Sections

SECTION CHAPTER I PAGE

PRELIMINARY

1. Short title, extent and commencement 1.1

2. Definitions 1.1

3. Previous year defined 1.30

CHAPTER IIBASIS OF CHARGE

4. Charge of income-tax 1.30

5. Scope of total income 1.31

5A. Apportionment of income between spouses governedby Portuguese Civil Code 1.32

6. Residence in India 1.32

7. Income deemed to be received 1.34

8. Dividend income 1.34

9. Income deemed to accrue or arise in India 1.35

CHAPTER IIIINCOMES WHICH DO NOT FORM PART OF

TOTAL INCOME

10. Incomes not included in total income 1.40

10A. Special provision in respect of newly established under-takings in free trade zone, etc. 1.103

10AA. Special provisions in respect of newly established units inSpecial Economic Zones 1.110

10B. Special provisions in respect of newly established hundredper cent export-oriented undertakings 1.114

10BA. Special provisions in respect of export of certain articles orthings 1.120

10BB. Meaning of computer programmes in certain cases 1.12210C. Special provision in respect of certain industrial undertak-

ings in North-Eastern Region 1.122

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I.T. ACT, 1961 I-4

11. Income from property held for charitable or religiouspurposes 1.124

12. Income of trusts or institutions from contributions 1.132

12A. Conditions for applicability of sections 11 and 12 1.133

12AA. Procedure for registration 1.135

13. Section 11 not to apply in certain cases 1.136

13A. Special provision relating to incomes of political parties 1.141

13B. Special provisions relating to voluntary contributionsreceived by electoral trust 1.142

CHAPTER IVCOMPUTATION OF TOTAL INCOME

Heads of income

14. Heads of income 1.143

14A. Expenditure incurred in relation to income not includiblein total income 1.143

A.Salaries

15. Salaries 1.144

16. Deductions from salaries 1.144

17. Salary, perquisite and profits in lieu of salary defined 1.145

B.[Omitted]

18. [OMITTED BY THE FINANCE ACT, 1988, W.E.F. 1-4-1989] 1.154




C.Income from house property

22. Income from house property 1.154

23. Annual value how determined 1.154

24. Deductions from income from house property 1.157

25. Amounts not deductible from income from houseproperty 1.159

25A. Special provision for cases where unrealised rent allowedas deduction is realised subsequently 1.159

25AA. Unrealised rent received subsequently to be charged toincome-tax 1.160

25B. Special provision for arrears of rent received 1.160

26. Property owned by co-owners 1.160

27. Owner of house property, annual charge, etc., defined 1.160

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I-5 ARRANGEMENT OF SECTIONS

D.Profits and gains of business or profession

28. Profits and gains of business or profession 1.16129. Income from profits and gains of business or profession,

how computed 1.16430. Rent, rates, taxes, repairs and insurance for buildings 1.16431. Repairs and insurance of machinery, plant and furniture 1.16532. Depreciation 1.165

32A. Investment allowance 1.17232AB. Investment deposit account 1.181

33. Development rebate 1.18633A. Development allowance 1.191

33AB. Tea development account, coffee development accountand rubber development account 1.195

33ABA. Site Restoration Fund 1.19933AC. Reserves for shipping business 1.202

33B. Rehabilitation allowance 1.20434. Conditions for depreciation allowance and development

rebate 1.20534A. Restriction on unabsorbed depreciation and unabsorbed

investment allowance for limited period in case of certaindomestic companies 1.206

35. Expenditure on scientific research 1.20735A. Expenditure on acquisition of patent rights or copyrights 1.215

35AB. Expenditure on know-how 1.21735ABB. Expenditure for obtaining licence to operate telecommuni-

cation services 1.21835AC. Expenditure on eligible projects or schemes 1.22035AD. Deduction in respect of expenditure on specified business 1.223

35B. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,1987, W.E.F. 1-4-1989] 1.227

35C. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,1987, W.E.F. 1-4-1989] 1.227

35CC. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,1987, W.E.F. 1-4-1989] 1.228

35CCA. Expenditure by way of payment to associations and insti-tutions for carrying out rural development programmes 1.228

35CCB. Expenditure by way of payment to associations and insti-tutions for carrying out programmes of conservationof natural resources 1.230

35D. Amortisation of certain preliminary expenses 1.23135DD. Amortisation of expenditure in case of amalgamation or

demerger 1.23435DDA. Amortisation of expenditure incurred under voluntary

retirement scheme 1.23435E. Deduction for expenditure on prospecting, etc., for

certain minerals 1.235

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I.T. ACT, 1961 I-6

36. Other deductions 1.23737. General 1.25038. Building, etc., partly used for business, etc., or not exclu-

sively so used 1.25339. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,

1987, W.E.F. 1-4-1989] 1.25340. Amounts not deductible 1.253

40A. Expenses or payments not deductible in certain circum-stances 1.260

41. Profits chargeable to tax 1.26442. Special provision for deductions in the case of business

for prospecting, etc., for mineral oil 1.26743. Definitions of certain terms relevant to income from

profits and gains of business or profession 1.26943A. Special provisions consequential to changes in rate of

exchange of currency 1.27943B. Certain deductions to be only on actual payment 1.28143C. Special provision for computation of cost of acquisition

of certain assets 1.28443D. Special provision in case of income of public financial

institutions, public companies, etc. 1.28544. Insurance business 1.286

44A. Special provision for deduction in the case of trade,professional or similar association 1.286

44AA. Maintenance of accounts by certain persons carrying onprofession or business 1.287

44AB. Audit of accounts of certain persons carrying on businessor profession 1.289

44AC. [OMITTED BY THE FINANCE ACT, 1992, W.E.F. 1-4-1993] 1.29044AD. Special provision for computing profits and gains of busi-

ness on presumptive basis 1.29044AE. Special provision for computing profits and gains of busi-

ness of plying, hiring or leasing goods carriages 1.29244AF. Special provisions for computing profits and gains of retail

business 1.29444B. Special provision for computing profits and gains of ship-

ping business in the case of non-residents 1.29544BB. Special provision for computing profits and gains in con-

nection with the business of exploration, etc., of mineraloils 1.295

44BBA. Special provision for computing profits and gains of thebusiness of operation of aircraft in the case of non-resi-dents 1.296

44BBB. Special provision for computing profits and gains offoreign companies engaged in the business of civil cons-truction, etc., in certain turnkey power projects 1.297

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44C. Deduction of head office expenditure in the case of non-residents 1.297

44D. Special provisions for computing income by way of royal-ties, etc., in the case of foreign companies 1.299

44DA. Special provision for computing income by way of royal-ties, etc., in case of non-residents 1.300

44DB. Special provision for computing deductions in the case ofbusiness reorganization of co-operative banks 1.301

E.Capital gains45. Capital gains 1.30346. Capital gains on distribution of assets by companies in

liquidation 1.30746A. Capital gains on purchase by company of its own shares or

other specified securities 1.30747. Transactions not regarded as transfer 1.307

47A. Withdrawal of exemption in certain cases 1.31448. Mode of computation 1.31549. Cost with reference to certain modes of acquisition 1.31750. Special provision for computation of capital gains in case

of depreciable assets 1.31950A. Special provision for cost of acquisition in case of depre-

ciable asset 1.32050B. Special provision for computation of capital gains in case

of slump sale 1.32050C. Special provision for full value of consideration in certain

cases 1.32151. Advance money received 1.32252. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988] 1.32253. [OMITTED BY THE FINANCE ACT, 1992, W.E.F. 1-4-1993] 1.32254. Profit on sale of property used for residence 1.323

54A. [OMITTED BY THE FINANCE (NO. 2) ACT, 1971, W.E.F. 1-4-1972] 1.32454B. Capital gain on transfer of land used for agricultural

purposes not to be charged in certain cases 1.32554C. [OMITTED BY THE FINANCE ACT, 1976, W.E.F. 1-4-1976] 1.32654D. Capital gain on compulsory acquisition of lands and buil-

dings not to be charged in certain cases 1.32654E. Capital gain on transfer of capital assets not to be charged

in certain cases 1.32754EA. Capital gain on transfer of long-term capital assets not to

be charged in the case of investment in specifiedsecurities 1.333

54EB. Capital gain on transfer of long-term capital assets not tobe charged in certain cases 1.334

54EC. Capital gain not to be charged on investment in certainbonds 1.335

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I.T. ACT, 1961 I-8

54ED. Capital gain on transfer of certain listed securities or unitnot to be charged in certain cases 1.338

54F. Capital gain on transfer of certain capital assets not to becharged in case of investment in residential house 1.339

54G. Exemption of capital gains on transfer of assets in cases ofshifting of industrial undertaking from urban area 1.341

54GA. Exemption of capital gains on transfer of assets in cases ofshifting of industrial undertaking from urban area to anySpecial Economic Zone 1.343

54H. Extension of time for acquiring new asset or depositing orinvesting amount of capital gain 1.345

55. Meaning of adjusted, cost of improvement and cost ofacquisition 1.345

55A. Reference to Valuation Officer 1.349

F.Income from other sources

56. Income from other sources 1.35057. Deductions 1.35458. Amounts not deductible 1.35559. Profits chargeable to tax 1.357

CHAPTER VINCOME OF OTHER PERSONS, INCLUDED IN

ASSESSEES TOTAL INCOME

60. Transfer of income where there is no transfer of assets 1.35761. Revocable transfer of assets 1.35762. Transfer irrevocable for a specified period 1.35763. Transfer and revocable transfer defined 1.35864. Income of individual to include income of spouse,

minor child, etc. 1.35865. Liability of person in respect of income included in the

income of another person 1.362

CHAPTER VIAGGREGATION OF INCOME AND SET OFF OR

CARRY FORWARD OF LOSS

Aggregation of income

66. Total income 1.36367. [OMITTED BY THE FINANCE ACT, 1992, W.E.F. 1-4-1993] 1.363

67A. Method of computing a members share in income ofassociation of persons or body of individuals 1.363

68. Cash credits 1.36469. Unexplained investments 1.364

69A. Unexplained money, etc. 1.36569B. Amount of investments, etc., not fully disclosed in books of

account 1.365

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69C. Unexplained expenditure, etc. 1.36569D. Amount borrowed or repaid on hundi 1.366

Set off, or carry forward and set off70. Set off of loss from one source against income from

another source under the same head of income 1.36671. Set off of loss from one head against income from another 1.367

71A. Transitional provisions for set off of loss under the headIncome from house property 1.367

71B. Carry forward and set off of loss from house property 1.36872. Carry forward and set off of business losses 1.368

72A. Provisions relating to carry forward and set off of accumu-lated loss and unabsorbed depreciation allowance inamalgamation or demerger, etc. 1.369

72AA. Provisions relating to carry forward and set off of accumu-lated loss and unabsorbed depreciation allowance in schemeof amalgamation of banking company in certain cases 1.373

72AB. Provisions relating to carry forward and set off of accumu-lated loss and unabsorbed depreciation allowance in busi-ness reorganisation of co-operative banks 1.374

73. Losses in speculation business 1.37673A. Carry forward and set off of losses by specified business 1.377

74. Losses under the head Capital gains 1.37774A. Losses from certain specified sources falling under the

head Income from other sources 1.37875. Losses of firms 1.37976. [OMITTED BY THE FINANCE ACT, 1992, W.E.F. 1-4-1993] 1.37977. [OMITTED BY THE FINANCE ACT, 1992, W.E.F. 1-4-1993] 1.37978. Carry forward and set off of losses in case of change in

constitution of firm or on succession 1.37979. Carry forward and set off of losses in the case of certain

companies 1.38080. Submission of return for losses 1.380

CHAPTER VI-ADEDUCTIONS TO BE MADE IN COMPUTING

TOTAL INCOMEA.General

80A. Deductions to be made in computing total income 1.38180AA. [OMITTED BY THE FINANCE ACT, 1997, W.E.F. 1-4-1998] 1.38380AB. Deductions to be made with reference to the income

included in the gross total income 1.38380AC. Deduction not to be allowed unless return furnished 1.383

80B. Definitions 1.383

B.Deductions in respect of certain payments

80C. Deduction in respect of life insurance premia, deferredannuity, contributions to provident fund, subscription tocertain equity shares or debentures, etc. 1.384

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I.T. ACT, 1961 I-10

80CC. [OMITTED BY THE FINANCE (NO. 2) ACT, 1996, W.R.E.F.1-4-1993] 1.392

80CCA. Deduction in respect of deposits under National SavingsScheme or payment to a deferred annuity plan 1.392

80CCB. Deduction in respect of investment made under EquityLinked Savings Scheme 1.394

80CCC. Deduction in respect of contribution to certain pensionfunds 1.394

80CCD. Deduction in respect of contribution to pension schemeof Central Government 1.395

80CCE. Limit on deductions under sections 80C, 80CCC and 80CCD 1.39780CCF. Deduction in respect of subscription to long-term infrastruc-

ture bonds 1.39780D. Deduction in respect of health insurance premia 1.397

80DD. Deduction in respect of maintenance including medicaltreatment of a dependant who is a person with disability 1.399

80DDB. Deduction in respect of medical treatment, etc. 1.40280E. Deduction in respect of interest on loan taken for higher

education 1.40380F. [OMITTED BY THE FINANCE ACT, 1985, W.E.F. 1-4-1986] 1.405

80FF. [OMITTED BY THE FINANCE (NO. 2) ACT, 1980, W.E.F. 1-4-1981] 1.40580G. Deduction in respect of donations to certain funds, chari-

table institutions, etc. 1.40580GG. Deductions in respect of rents paid 1.414

80GGA. Deduction in respect of certain donations for scientificresearch or rural development 1.414

80GGB. Deduction in respect of contributions given by companiesto political parties 1.417

80GGC. Deduction in respect of contributions given by any personto political parties 1.417

C.Deductions in respect of certain incomes

80H. [OMITTED BY THE TAXATION LAWS (AMENDMENT) ACT,1975, W.E.F. 1-4-1976] 1.417

80HH. Deduction in respect of profits and gains from newlyestablished industrial undertakings or hotel business inbackward areas 1.417

80HHA. Deduction in respect of profits and gains from newlyestablished small-scale industrial undertakings in certainareas 1.420

80HHB. Deduction in respect of profits and gains from projectsoutside India 1.422

80HHBA. Deduction in respect of profits and gains from housingprojects in certain cases 1.425

80HHC. Deduction in respect of profits retained for export business 1.427

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80HHD. Deduction in respect of earnings in convertible foreignexchange 1.434

80HHE. Deduction in respect of profits from export of computersoftware, etc. 1.440

80HHF. Deduction in respect of profits and gains from export ortransfer of film software, etc. 1.443

80-I. Deduction in respect of profits and gains from industrialundertakings after a certain date, etc. 1.446

80-IA. Deductions in respect of profits and gains from industrialundertakings or enterprises engaged in infrastructuredevelopment, etc. 1.451

80-IAB. Deductions in respect of profits and gains by an undertak-ing or enterprise engaged in development of SpecialEconomic Zone 1.467

80-IB. Deduction in respect of profits and gains from certainindustrial undertakings other than infrastructure develop-ment undertakings 1.467

80-IC. Special provisions in respect of certain undertakings orenterprises in certain special category States 1.481

80-ID. Deduction in respect of profits and gains from business ofhotels and convention centres in specified area 1.484

80-IE. Special provisions in respect of certain undertakings inNorth-Eastern States 1.486

80J. [OMITTED BY THE FINANCE (NO. 2) ACT, 1996, W.R.E.F. 1-4-1989] 1.48880JJ. [OMITTED BY THE FINANCE ACT, 1997, W.E.F. 1-4-1998] 1.489

80JJA. Deduction in respect of profits and gains from businessof collecting and processing of bio-degradable waste 1.489

80JJAA. Deduction in respect of employment of new workmen 1.48980K. [OMITTED BY THE FINANCE ACT, 1986, W.E.F. 1-4-1987] 1.49080L. [OMITTED BY THE FINANCE ACT, 2005, W.E.F. 1-4-2006] 1.490

80LA. Deductions in respect of certain incomes of OffshoreBanking Units and International Financial Services Centre 1.492

80M. [OMITTED BY THE FINANCE ACT, 2003, W.E.F. 1-4-2004] 1.49480MM. [OMITTED BY THE FINANCE ACT, 1983, W.E.F. 1-4-1984] 1.495

80N. [OMITTED BY THE FINANCE ACT, 1985, W.E.F. 1-4-1986] 1.49580-O. Deduction in respect of royalties, etc., from certain foreign

enterprises 1.49580P. Deduction in respect of income of co-operative societies 1.49780Q. Deduction in respect of profits and gains from the business

of publication of books 1.50180QQ. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,

1987, W.E.F. 1-4-1989] 1.50180QQA. Deduction in respect of professional income of authors of

text books in Indian languages 1.50280QQB. Deduction in respect of royalty income, etc., of authors of

certain books other than text books 1.502

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I.T. ACT, 1961 I-12

80R. Deduction in respect of remuneration from certainforeign sources in the case of professors, teachers, etc. 1.504

80RR. Deduction in respect of professional income from foreignsources in certain cases 1.505

80RRA. Deduction in respect of remuneration received forservices rendered outside India 1.506

80RRB. Deduction in respect of royalty on patents 1.50880S. [OMITTED BY THE FINANCE ACT, 1986, W.E.F. 1-4-1987] 1.51080T. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988] 1.510

80TT. [OMITTED BY THE FINANCE ACT, 1986, W.E.F. 1-4-1987] 1.510

D.Other deductions80U. Deduction in case of a person with disability 1.51080V. [OMITTED BY THE FINANCE ACT, 1994, W.E.F. 1-4-1995] 1.512

80VV. [OMITTED BY THE FINANCE ACT, 1985, W.E.F. 1-4-1986] 1.513

CHAPTER VI-BRESTRICTION ON CERTAIN DEDUCTIONS

IN THE CASE OF COMPANIES

80VVA. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988] 1.513

CHAPTER VIIINCOMES FORMING PART OF TOTAL INCOME

ON WHICH NO INCOME-TAX IS PAYABLE

81. to [OMITTED BY THE FINANCE (NO. 2) ACT, 1967, W.E.F.85C. 1-4-1968] 1.513

86. Share of member of an association of persons or body ofindividuals in the income of the association or body 1.513

86A. [OMITTED BY THE FINANCE ACT, 1988, W.E.F. 1-4-1989] 1.514

CHAPTER VIIIREBATES AND RELIEFS

A.Rebate of income-tax

87. Rebate to be allowed in computing income-tax 1.51487A. [OMITTED BY THE FINANCE (NO. 2) ACT, 1967, W.E.F. 1-4-1968] 1.514

88. Rebate on life insurance premia, contribution to providentfund, etc. 1.514

88A. [OMITTED BY THE FINANCE (NO. 2) ACT, 1996, W.R.E.F.1-4-1994] 1.524

88B. [OMITTED BY THE FINANCE ACT, 2005, W.E.F. 1-4-2006] 1.52488C. [OMITTED BY THE FINANCE ACT, 2005, W.E.F. 1-4-2006] 1.52488D. [OMITTED BY THE FINANCE ACT, 2005, W.E.F. 1-4-2006] 1.52588E. Rebate in respect of securities transaction tax 1.525

B.Relief for income-tax

89. Relief when salary, etc., is paid in arrears or in advance 1.52689A. [OMITTED BY THE FINANCE ACT, 1983, W.E.F. 1-4-1983] 1.526

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CHAPTER IXDOUBLE TAXATION RELIEF

90. Agreement with foreign countries or specified territories 1.52790A. Adoption by Central Government of agreement between

specified associations for double taxation relief 1.52891. Countries with which no agreement exists 1.530

CHAPTER XSPECIAL PROVISIONS RELATING TO AVOIDANCE

OF TAX

92. Computation of income from international transactionhaving regard to arms length price 1.531

92A. Meaning of associated enterprise 1.53292B. Meaning of international transaction 1.53392C. Computation of arms length price 1.533

92CA. Reference to Transfer Pricing Officer 1.53592CB. Power of Board to make safe harbour rules 1.536

92D. Maintenance and keeping of information and document by persons entering into an international transaction 1.536

92E. Report from an accountant to be furnished by personsentering into international transaction 1.537

92F. Definitions of certain terms relevant to computation ofarms length price, etc. 1.537

93. Avoidance of income-tax by transactions resulting intransfer of income to non-residents 1.538

94. Avoidance of tax by certain transactions in securities 1.54094A. Special measures in respect of transactions with persons

located in notified jurisdictional area 1.543

CHAPTER XIADDITIONAL INCOME-TAX ON

UNDISTRIBUTED PROFITS

95. to [OMITTED BY THE FINANCE ACT, 1965, W.E.F. 1-4-1965] 1.544103.104. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988] 1.544105. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988] 1.545106. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988] 1.545107. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988] 1.545

107A. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988] 1.545108. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988] 1.545109. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988] 1.545

CHAPTER XIIDETERMINATION OF TAX IN CERTAIN

SPECIAL CASES

110. Determination of tax where total income includes incomeon which no tax is payable 1.545

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I.T. ACT, 1961 I-14

111. Tax on accumulated balance of recognised provident fund 1.545111A. Tax on short term capital gains in certain cases 1.546

112. Tax on long-term capital gains 1.546112A. [OMITTED BY THE FINANCE ACT, 1988, W.E.F. 1-4-1989] 1.548

113. Tax in the case of block assessment of search cases 1.549114. [OMITTED BY THE FINANCE (NO. 2) ACT, 1967, W.E.F. 1-4-1968] 1.549115. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988] 1.549

115A. Tax on dividends, royalty and technical service fees in thecase of foreign companies 1.549

115AB. Tax on income from units purchased in foreign currencyor capital gains arising from their transfer 1.552

115AC. Tax on income from bonds or Global Depository Receiptspurchased in foreign currency or capital gains arisingfrom their transfer 1.554

115ACA. Tax on income from Global Depository Receiptspurchased in foreign currency or capital gains arisingfrom their transfer 1.557

115AD. Tax on income of Foreign Institutional Investors fromsecurities or capital gains arising from their transfer 1.559

115B. Tax on profits and gains of life insurance business 1.560115BB. Tax on winnings from lotteries, crossword puzzles, races

including horse races, card games and other games of anysort or gambling or betting of any form or nature what-soever 1.561

115BBA. Tax on non-resident sportsmen or sports associations 1.561115BBB. Tax on income from units of an open-ended equity

oriented fund of the Unit Trust of India or of MutualFunds 1.562

115BBC. Anonymous donations to be taxed in certain cases 1.5621115BBD. Tax on certain dividends received from foreign

companies 1.563

CHAPTER XII-ASPECIAL PROVISIONS RELATING TO CERTAIN

INCOMES OF NON-RESIDENTS

115C. Definitions 1.563115D. Special provision for computation of total income of non-

residents 1.564115E. Tax on investment income and long-term capital gains 1.565115F. Capital gains on transfer of foreign exchange assets not to

be charged in certain cases 1.565115G. Return of income not to be filed in certain cases 1.566115H. Benefit under Chapter to be available in certain cases even

after the assessee becomes resident 1.566115-I. Chapter not to apply if the assessee so chooses 1.566

1. Shall be inserted by the Finance Act, 2011, w.e.f. 1-4-2012.

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SPECIAL PROVISIONS RELATING TOCERTAIN COMPANIES

115J. Special provisions relating to certain companies 1.567115JA. Deemed income relating to certain companies 1.569

115JAA. Tax credit in respect of tax paid on deemed income relatingto certain companies 1.571

115JB. Special provision for payment of tax by certain companies 1.573

1CHAPTER XII-BASPECIAL PROVISIONS RELATING TO CERTAIN LIMITED

LIABILITY PARTNERSHIPS

1115JC. Special provisions for payment of tax by certain limitedliability partnerships 1.578

1115JD. Tax credit for alternate minimum tax 1.5781115JE. Application of other provisions of this Act 1.5791115JF. Interpretation in this Chapter 1.579

CHAPTER XII-CSPECIAL PROVISIONS RELATING TO

RETAIL TRADE, ETC.

115K. [OMITTED BY THE FINANCE ACT, 1997, W.E.F. 1-4-1998] 1.579

115L. [OMITTED BY THE FINANCE ACT, 1997, W.E.F. 1-4-1998] 1.579

115M. [OMITTED BY THE FINANCE ACT, 1997, W.E.F. 1-4-1998] 1.579

115N. [OMITTED BY THE FINANCE ACT, 1997, W.E.F. 1-4-1998] 1.579

CHAPTER XII-DSPECIAL PROVISIONS RELATING TO TAX ON

DISTRIBUTED PROFITS OF DOMESTIC COMPANIES

115-O. Tax on distributed profits of domestic companies 1.580

115P. Interest payable for non-payment of tax by domesticcompanies 1.581

115Q. When company is deemed to be in default 1.582

CHAPTER XII-ESPECIAL PROVISIONS RELATING TO TAX ON

DISTRIBUTED INCOME

115R. Tax on distributed income to unit holders 1.582

115S. Interest payable for non-payment of tax 1.584

115T. Unit Trust of India or mutual fund to be an assessee indefault 1.584


1. Chapter XII-BA consisting of sections 115JC, 115JD, 115JE and 115JF shall be inserted bythe Finance Act, 2011, w.e.f. 1-4-2012.

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I.T. ACT, 1961 I-16

CHAPTER XII-FSPECIAL PROVISIONS RELATING TO TAX ON INCOME

RECEIVED FROM VENTURE CAPITAL COMPANIESAND VENTURE CAPITAL FUNDS

115U. Tax on income in certain cases 1.585

CHAPTER XII-GSPECIAL PROVISIONS RELATING TO INCOME OF

SHIPPING COMPANIES

A.Meaning of certain expressions

115V. Definitions 1.586

B.Computation of tonnage income from businessof operating qualifying ships

115VA. Computation of profits and gains from the business ofoperating qualifying ships 1.586

115VB. Operating ships 1.587115VC. Qualifying company 1.587115VD. Qualifying ship 1.587115VE. Manner of computation of income under tonnage tax

scheme 1.588115VF. Tonnage income 1.588115VG. Computation of tonnage income 1.588115VH. Calculation in case of joint operation, etc. 1.589115V-I. Relevant shipping income 1.589115VJ. Treatment of common costs 1.591

115VK. Depreciation 1.591115VL. General exclusion of deduction and set off, etc. 1.593

115VM. Exclusion of loss 1.593115VN. Chargeable gains from transfer of tonnage tax assets 1.594

115V-O. Exclusion from provisions of section 115JB 1.594

C.Procedure for option of tonnage tax scheme

115VP. Method and time of opting for tonnage tax scheme 1.594115VQ. Period for which tonnage tax option to remain in force 1.595115VR. Renewal of tonnage tax scheme 1.595115VS. Prohibition to opt for tonnage tax scheme in certain cases 1.595

D.Conditions for applicability of tonnage tax scheme

115VT. Transfer of profits to Tonnage Tax Reserve Account 1.596115VU. Minimum training requirement for tonnage tax company 1.597115VV. Limit for charter in of tonnage 1.598

115VW. Maintenance and audit of accounts 1.598115VX. Determination of tonnage 1.599

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E.Amalgamation and demerger of shipping companies115VY. Amalgamation 1.599115VZ. Demerger 1.600

F.Miscellaneous115VZA. Effect of temporarily ceasing to operate qualifying ships 1.600

G.Provisions of this Chapter not to apply in certain cases

115VZB. Avoidance of tax 1.600115VZC. Exclusion from tonnage tax scheme 1.601

CHAPTER XII-HINCOME-TAX ON FRINGE BENEFITS

A.Meaning of certain expressions

115W. Definitions 1.601B.Basis of charge

115WA. Charge of fringe benefit tax 1.602115WB. Fringe benefits 1.602115WC. Value of fringe benefits 1.605

C.Procedure for filing of return in respect of fringe benefits,assessment and payment of tax in respect thereof

115WD. Return of fringe benefits 1.607115WE. Assessment 1.608115WF. Best judgment assessment 1.610115WG. Fringe benefits escaping assessment 1.611115WH. Issue of notice where fringe benefits have escaped

assessment 1.611115WI. Payment of fringe benefit tax 1.611115WJ. Advance tax in respect of fringe benefits 1.612

115WK. Interest for default in furnishing return of fringe benefits 1.614115WKA. Recovery of fringe benefit tax by the employer from the

employee 1.614115WKB. Deemed payment of tax by employee 1.614

115WL. Application of other provisions of this Act 1.615115WM. Chapter XII-H not to apply after a certain date 1.615

CHAPTER XIIIINCOME-TAX AUTHORITIES

A.Appointment and control

116. Income-tax authorities 1.615117. Appointment of income-tax authorities 1.616118. Control of income-tax authorities 1.616119. Instructions to subordinate authorities 1.616

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I.T. ACT, 1961 I-18

B.Jurisdiction

120. Jurisdiction of income-tax authorities 1.618121. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,

1987, W.E.F. 1-4-1988] 1.619121A. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,

1987, W.E.F. 1-4-1988] 1.619122. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,


1987, W.E.F. 1-4-1988] 1.620124. Jurisdiction of Assessing Officers 1.620125. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,



1987, W.E.F. 1-4-1988] 1.621127. Power to transfer cases 1.621128. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,

1987, W.E.F. 1-4-1988] 1.622129. Change of incumbent of an office 1.622130. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,


1987, W.E.F. 1-4-1988] 1.623

C.Powers

131. Power regarding discovery, production of evidence, etc. 1.623

132. Search and seizure 1.624

132A. Powers to requisition books of account, etc. 1.633

132B. Application of seized or requisitioned assets 1.634

133. Power to call for information 1.637

133A. Power of survey 1.638

133B. Power to collect certain information 1.641

134. Power to inspect registers of companies 1.642

135. Power of Director General or Director, Chief Commis-sioner or Commissioner and Joint Commissioner 1.642

136. Proceedings before income-tax authorities to be judicialproceedings 1.642

D.Disclosure of information


138. Disclosure of information respecting assessees 1.643

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CHAPTER XIVPROCEDURE FOR ASSESSMENT

139. Return of income 1.644

139A. Permanent account number 1.656

139B. Scheme for submission of returns through Tax ReturnPreparers 1.660

139C. Power of Board to dispense with furnishing documents,etc., with return 1.661

139D. Filing of return in electronic form 1.661

140. Return by whom to be signed 1.662

140A. Self-assessment 1.663

141. [OMITTED BY THE TAXATION LAWS (AMENDMENT) ACT,1970, W.E.F. 1-4-1971] 1.665

141A. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,1987, W.E.F. 1-4-1989] 1.666

142. Inquiry before assessment 1.666

142A. Estimate by Valuation Officer in certain cases 1.669

143. Assessment 1.669

144. Best judgment assessment 1.674

144A. Power of Joint Commissioner to issue directions incertain cases 1.675

144B. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,1987, W.E.F. 1-4-1989] 1.675

144C. Reference to dispute resolution panel 1.676

145. Method of accounting 1.677

145A. Method of accounting in certain cases 1.678

146. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,1987, W.E.F. 1-4-1989] 1.679

147. Income escaping assessment 1.679

148. Issue of notice where income has escaped assessment 1.680

149. Time limit for notice 1.681

150. Provision for cases where assessment is in pursuance of anorder on appeal, etc. 1.682

151. Sanction for issue of notice 1.683

152. Other provisions 1.683

153. Time limit for completion of assessments and reassess-ments 1.684

153A. Assessment in case of search or requisition 1.689

153B. Time-limit for completion of assessment under section 153A 1.690153C. Assessment of income of any other person 1.693

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I.T. ACT, 1961 I-20

153D. Prior approval necessary for assessment in cases of search orrequisition 1.693

154. Rectification of mistake 1.694

155. Other amendments 1.695

156. Notice of demand 1.706

157. Intimation of loss 1.706

158. Intimation of assessment of firm 1.706

CHAPTER XIV-ASPECIAL PROVISION FOR AVOIDING

REPETITIVE APPEALS

158A. Procedure when assessee claims identical question of lawis pending before High Court or Supreme Court 1.707

CHAPTER XIV-BSPECIAL PROCEDURE FOR ASSESSMENT

OF SEARCH CASES

158B. Definitions 1.708

158BA. Assessment of undisclosed income as a result of search 1.709

158BB. Computation of undisclosed income of the block period 1.710

158BC. Procedure for block assessment 1.712

158BD. Undisclosed income of any other person 1.713

158BE. Time limit for completion of block assessment 1.713

158BF. Certain interests and penalties not to be levied or imposed 1.715

158BFA. Levy of interest and penalty in certain cases 1.715

158BG. Authority competent to make the block assessment 1.717

158BH. Application of other provisions of this Act 1.717

158BI. Chapter not to apply after certain date 1.717

CHAPTER XVLIABILITY IN SPECIAL CASES

A.Legal representatives

159. Legal representatives 1.717

B.Representative assessees - General provisions

160. Representative assessee 1.718

161. Liability of representative assessee 1.719

162. Right of representative assessee to recover tax paid 1.720

C.Representative assessees - Special cases

163. Who may be regarded as agent 1.720

164. Charge of tax where share of beneficiaries unknown 1.721

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164A. Charge of tax in case of oral trust 1.725

165. Case where part of trust income is chargeable 1.725

D.Representative assessees - Miscellaneous provisions

166. Direct assessment or recovery not barred 1.725

167. Remedies against property in cases of representativeassessees 1.725

DD.Firms, association of persons andbody of individuals

167A. Charge of tax in the case of a firm 1.725

167B. Charge of tax where shares of members in association ofpersons or body of individuals unknown, etc. 1.726

167C. Liability of partners of limited liability partnership inliquidation 1.726

E.Executors

168. Executors 1.727

169. Right of executor to recover tax paid 1.727

F.Succession to business or profession

170. Succession to business otherwise than on death 1.727

G.Partition

171. Assessment after partition of a Hindu undivided family 1.728

H.Profits of non-residents from occasionalshipping business

172. Shipping business of non-residents 1.730

I.Recovery of tax in respect of non-residents

173. Recovery of tax in respect of non-resident from his assets 1.732

J.Persons leaving India

174. Assessment of persons leaving India 1.732

JA.Association of persons or body of individuals or artificialjuridical person formed for a particular

event or purpose

174A. Assessment of association of persons or body of indi-viduals or artificial juridical person formed for a particularevent or purpose 1.733

K.Persons trying to alienate their assets

175. Assessment of persons likely to transfer property to avoidtax 1.734

L.Discontinuance of business, or dissolution

176. Discontinued business 1.734

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I.T. ACT, 1961 I-22

177. Association dissolved or business discontinued 1.735

178. Company in liquidation 1.736

M.Private companies

179. Liability of directors of private company in liquidation 1.737

N.Special provisions for certain kinds of income

180. Royalties or copyright fees for literary or artistic work 1.738

180A. Consideration for know-how 1.738

O.[Omitted]


CHAPTER XVISPECIAL PROVISIONS APPLICABLE TO FIRMS

A.Assessment of firms



184. Assessment as a firm 1.739

185. Assessment when section 184 not complied with 1.740

186. [***] 1.740

C.Changes in constitution, succession and dissolution

187. Change in constitution of a firm 1.740188. Succession of one firm by another firm 1.741

188A. Joint and several liability of partners for tax payable byfirm 1.741

189. Firm dissolved or business discontinued 1.741189A. Provisions applicable to past assessments of firms 1.742

CHAPTER XVIICOLLECTION AND RECOVERY OF TAX

A.General

190. Deduction at source and advance payment 1.742191. Direct payment 1.743

B.Deduction at source

192. Salary 1.743

193. Interest on securities 1.746

194. Dividends 1.749

194A. Interest other than Interest on securities 1.750

194B. Winnings from lottery or crossword puzzle 1.754

194BB. Winnings from horse race 1.755

194C. Payments to contractors 1.755

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194D. Insurance commission 1.759

194E. Payments to non-resident sportsmen or sports associa-tions 1.760

194EE. Payments in respect of deposits under National SavingsScheme, etc. 1.760

194F. Payments on account of repurchase of units by MutualFund or Unit Trust of India 1.760

194G. Commission, etc., on the sale of lottery tickets 1.761

194H. Commission or brokerage 1.761

194-I. Rent 1.762

194J. Fees for professional or technical services 1.764

194K. Income in respect of units 1.766

194L. Payment of compensation on acquisition of capital asset 1.767194LA. Payment of compensation on acquisition of certain

immovable property 1.768

194LB. Income by way of interest from infrastructure debt fund 1.768195. Other sums 1.768

195A. Income payable net of tax 1.770

196. Interest or dividend or other sums payable to Govern-ment, Reserve Bank or certain corporations 1.770

196A. Income in respect of units of non-residents 1.771196B. Income from units 1.772

196C. Income from foreign currency bonds or shares of Indiancompany 1.772

196D. Income of Foreign Institutional Investors from securities 1.772

197. Certificate for deduction at lower rate 1.773

197A. No deduction to be made in certain cases 1.774

198. Tax deducted is income received 1.776

199. Credit for tax deducted 1.776

200. Duty of person deducting tax 1.777

200A. Processing of statements of tax deducted at source 1.778

201. Consequences of failure to deduct or pay 1.779

202. Deduction only one mode of recovery 1.780

203. Certificate for tax deducted 1.781

203A. Tax deduction and collection account number 1.782

203AA. Furnishing of statement of tax deducted 1.783

204. Meaning of person responsible for paying 1.783

205. Bar against direct demand on assessee 1.784

206. Persons deducting tax to furnish prescribed returns 1.784

206A. Furnishing of quarterly return in respect of payment ofinterest to residents without deduction of tax 1.786

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I.T. ACT, 1961 I-24

206AA. Requirement to furnish Permanent Account Number 1.787

206B. [OMITTED BY THE FINANCE (NO. 2) ACT, 1996, W.E.F.1-10-1996] 1.788

BB.Collection at source

206C. Profits and gains from the business of trading in alcoholicliquor, forest produce, scrap, etc. 1.788

206CA. Tax collection account number 1.795

C.Advance payment of tax

207. Liability for payment of advance tax 1.795

208. Conditions of liability to pay advance tax 1.796

209. Computation of advance tax 1.796

209A. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,1987, W.E.F. 1-4-1988] 1.798

210. Payment of advance tax by the assessee of his ownaccord or in pursuance of order of Assessing Officer 1.798

211. Instalments of advance tax and due dates 1.799



214. Interest payable by Government 1.801

215. Interest payable by assessee 1.802

216. Interest payable by assessee in case of under-estimate, etc. 1.804

217. Interest payable by assessee when no estimate made 1.804

218. When assessee deemed to be in default 1.805

219. Credit for advance tax 1.805

D.Collection and recovery

220. When tax payable and when assessee deemed in default 1.806

221. Penalty payable when tax in default 1.808

222. Certificate to Tax Recovery Officer 1.809

223. Tax Recovery Officer by whom recovery is to be effected 1.810

224. Validity of certificate and cancellation or amendmentthereof 1.811

225. Stay of proceedings in pursuance of certificate andamendment or cancellation thereof 1.811

226. Other modes of recovery 1.811

227. Recovery through State Government 1.814


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228A. Recovery of tax in pursuance of agreements with foreigncountries 1.814

229. Recovery of penalties, fine, interest and other sums 1.814

230. Tax clearance certificate 1.815

230A. [OMITTED BY THE FINANCE ACT, 2001, W.E.F. 1-6-2001] 1.817


232. Recovery by suit or under other law not affected 1.817

E.Tax payable under provisional assessment

233. [OMITTED BY THE TAXATION LAWS (AMENDMENT) ACT,1970, W.E.F. 1-4-1971] 1.817


F.Interest chargeable in certain cases

234A. Interest for defaults in furnishing return of income 1.818

234B. Interest for defaults in payment of advance tax 1.820

234C. Interest for deferment of advance tax 1.822

234D. Interest on excess refund 1.825

CHAPTER XVIIIRELIEF RESPECTING TAX ON DIVIDENDS

IN CERTAIN CASES

235. [OMITTED BY THE FINANCE (NO. 2) ACT, 1971, W.E.F. 1-4-1972] 1.825236. Relief to company in respect of dividend paid out of past

taxed profits 1.825236A. Relief to certain charitable institutions or funds in respect

of certain dividends 1.827

CHAPTER XIXREFUNDS

237. Refunds 1.827238. Person entitled to claim refund in certain special cases 1.828239. Form of claim for refund and limitation 1.828240. Refund on appeal, etc. 1.829241. [OMITTED BY THE FINANCE ACT, 2001, W.E.F. 1-6-2001] 1.829242. Correctness of assessment not to be questioned 1.829243. Interest on delayed refunds 1.829244. Interest on refund where no claim is needed 1.830

244A. Interest on refunds 1.831245. Set off of refunds against tax remaining payable 1.833

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I.T. ACT, 1961 I-26

CHAPTER XIX-ASETTLEMENT OF CASES

245A. Definitions 1.833245B. Income-tax Settlement Commission 1.835

245BA. Jurisdiction and powers of Settlement Commission 1.835245BB. Vice-Chairman to act as Chairman or to discharge his

functions in certain circumstances 1.836245BC. Power of Chairman to transfer cases from one Bench to

another 1.837245BD. Decision to be by majority 1.837

245C. Application for settlement of cases 1.837245D. Procedure on receipt of an application under section 245C 1.841

245DD. Power of Settlement Commission to order provisionalattachment to protect revenue 1.846

245E. Power of Settlement Commission to reopen completedproceedings 1.846

245F. Powers and procedure of Settlement Commission 1.847245G. Inspection, etc., of reports 1.848245H. Power of Settlement Commission to grant immunity from

prosecution and penalty 1.848245HA. Abatement of proceeding before Settlement Commission 1.849

245HAA. Credit for tax paid in case of abatement of proceedings 1.850245-I. Order of settlement to be conclusive 1.850245J. Recovery of sums due under order of settlement 1.850

245K. Bar on subsequent application for settlement 1.851245L. Proceedings before Settlement Commission to be judicial

proceedings 1.851

245M. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-6-1987] 1.851

CHAPTER XIX-BADVANCE RULINGS

245N. Definitions 1.852

245-O. Authority for advance rulings 1.853

245P. Vacancies, etc., not to invalidate proceedings 1.853

245Q. Application for advance ruling 1.853

245R. Procedure on receipt of application 1.853

245RR. Appellate authority not to proceed in certain cases 1.854

245S. Applicability of advance ruling 1.854

245T. Advance ruling to be void in certain circumstances 1.855

245U. Powers of the Authority 1.855

245V. Procedure of Authority 1.855

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CHAPTER XXAPPEALS AND REVISION

A.Appeals to the Deputy Commissioner (Appeals)and Commissioner (Appeals)

246. Appealable orders 1.855246A. Appealable orders before Commissioner (Appeals) 1.859

247. [OMITTED BY THE FINANCE ACT, 1992, W.E.F. 1-4-1993] 1.861248. Appeal by a person denying liability to deduct tax in certain

cases 1.861249. Form of appeal and limitation 1.861250. Procedure in appeal 1.863

251. Powers of the Commissioner (Appeals) 1.864

B.Appeals to the Appellate Tribunal

252. Appellate Tribunal 1.865253. Appeals to the Appellate Tribunal 1.866254. Orders of Appellate Tribunal 1.869255. Procedure of Appellate Tribunal 1.870

C.[Omitted by the National Tax Tribunal Act, 2005,with effect from a date yet to be notified]

256. [OMITTED BY THE NATIONAL TAX TRIBUNAL ACT, 2005,WITH EFFECT FROM A DATE YET TO BE NOTIFIED] 1.871

257. Statement of case to Supreme Court in certain cases 1.872258. [OMITTED BY THE NATIONAL TAX TRIBUNAL ACT, 2005,

WITH EFFECT FROM A DATE YET TO BE NOTIFIED] 1.872259. [OMITTED BY THE NATIONAL TAX TRIBUNAL ACT, 2005,

WITH EFFECT FROM A DATE YET TO BE NOTIFIED] 1.872260. Decision of High Court or Supreme Court on the case

stated 1.873

CC.Appeals to High Court

260A. Appeal to High Court 1.873260B. Case before High Court to be heard by not less than two

Judges 1.874D.Appeals to the Supreme Court

261. Appeal to Supreme Court 1.875262. Hearing before Supreme Court 1.875

E.Revision by the Commissioner263. Revision of orders prejudicial to revenue 1.875264. Revision of other orders 1.876

F.General265. Tax to be paid notwithstanding reference, etc. 1.878266. Execution for costs awarded by Supreme Court 1.878

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I.T. ACT, 1961 I-28

267. Amendment of assessment on appeal 1.878268. Exclusion of time taken for copy 1.878

268A. Filing of appeal or application for reference by income-taxauthority 1.879

269. Definition of High Court 1.879

CHAPTER XX-AACQUISITION OF IMMOVABLE PROPERTIES IN CERTAINCASES OF TRANSFER TO COUNTERACT EVASION OF TAX

269A. Definitions 1.880269AB. Registration of certain transactions 1.883

269B. Competent authority 1.884269C. Immovable property in respect of which proceedings for

acquisition may be taken 1.885269D. Preliminary notice 1.886269E. Objections 1.887269F. Hearing of objections 1.887269G. Appeal against order for acquisition 1.888269H. Appeal to High Court 1.889269-I. Vesting of property in Central Government 1.890269J. Compensation 1.891

269K. Payment or deposit of compensation 1.893269L. Assistance by Valuation Officers 1.894269M. Powers of competent authority 1.895269N. Rectification of mistakes 1.895

269-O. Appearance by authorised representative or registeredvaluer 1.895

269P. Statement to be furnished in respect of transfers ofimmovable property 1.895

269Q. Chapter not to apply to transfers to relatives 1.896269R. Properties liable for acquisition under this chapter not to

be acquired under other laws 1.896269RR. Chapter not to apply where transfer of immovable pro-

perty made after a certain date 1.896269S. Chapter not to extend to State of Jammu and Kashmir 1.896

CHAPTER XX-BREQUIREMENT AS TO MODE OF ACCEPTANCE, PAYMENT

OR REPAYMENT IN CERTAIN CASES TO COUNTERACTEVASION OF TAX

269SS. Mode of taking or accepting certain loans and deposits 1.897269T. Mode of repayment of certain loans or deposits 1.898

269TT. Mode of repayment of Special Bearer Bonds, 1991 1.899

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SECTION PAGECHAPTER XX-C

PURCHASE BY CENTRAL GOVERNMENT OF IMMOVABLEPROPERTIES IN CERTAIN CASES OF TRANSFER

269U. Commencement of Chapter 1.899269UA. Definitions 1.899269UB. Appropriate authority 1.902269UC. Restrictions on transfer of immovable property 1.903269UD. Order by appropriate authority for purchase by Central

Government of immovable property 1.904269UE. Vesting of property in Central Government 1.905269UF. Consideration for purchase of immovable property by

Central Government 1.906269UG. Payment or deposit of consideration 1.906269UH. Re-vesting of property in the transferor on failure of

payment or deposit of consideration 1.907269UI. Powers of the appropriate authority 1.908269UJ. Rectification of mistakes 1.908

269UK. Restrictions on revocation or alteration of certain agree-ments for the transfer of immovable property or on trans-fer of certain immovable property 1.908

269UL. Restrictions on registration, etc., of documents inrespect of transfer of immovable property 1.909

269UM. Immunity to transferor against claims of transferee fortransfer 1.909

269UN. Order of appropriate authority to be final and conclusive 1.909269UO. Chapter not to apply to certain transfers 1.910269UP. Chapter not to apply where transfer of immovable

property effected after certain date 1.910

CHAPTER XXIPENALTIES IMPOSABLE


271. Failure to furnish returns, comply with notices, conceal-ment of income, etc. 1.910

271A. Failure to keep, maintain or retain books of account,documents, etc. 1.917

271AA. Penalty for failure to keep and maintain information anddocument in respect of international transaction 1.917

271AAA. Penalty where search has been initiated 1.917271B. Failure to get accounts audited 1.919

271BA. Penalty for failure to furnish report under section 92E 1.919271BB. Failure to subscribe to the eligible issue of capital 1.919

271C. Penalty for failure to deduct tax at source 1.919271CA. Penalty for failure to collect tax at source 1.920

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I.T. ACT, 1961 I-30

271D. Penalty for failure to comply with the provisions of section269SS 1.920

271E. Penalty for failure to comply with the provisions ofsection 269T 1.920

271F. Penalty for failure to furnish return of income 1.921271FA. Penalty for failure to furnish annual information return 1.921271FB. Penalty for failure to furnish return of fringe benefits 1.921

271G. Penalty for failure to furnish information or documentunder section 92D 1.921


272A. Penalty for failure to answer questions, sign statements,furnish information, returns or statements, allow inspec-tions, etc. 1.922

272AA. Penalty for failure to comply with the provisions of section133B 1.924

272B. Penalty for failure to comply with the provisions ofsection 139A 1.924

272BB. Penalty for failure to comply with the provisions ofsection 203A 1.925

272BBB. Penalty for failure to comply with the provisions of section206CA 1.925

273. False estimate of, or failure to pay, advance tax 1.925273A. Power to reduce or waive penalty, etc., in certain cases 1.928

273AA. Power of Commissioner to grant immunity from penalty 1.931273B. Penalty not to be imposed in certain cases 1.932

274. Procedure 1.932275. Bar of limitation for imposing penalties 1.933

CHAPTER XXIIOFFENCES AND PROSECUTIONS

275A. Contravention of order made under sub-section (3) ofsection 132 1.935

275B. Failure to comply with the provisions of clause (iib) ofsub-section (1) of section 132 1.935

276. Removal, concealment, transfer or delivery of property tothwart tax recovery 1.935

276A. Failure to comply with the provisions of sub-sections (1)and (3) of section 178 1.935

276AA. [OMITTED BY THE FINANCE ACT, 1986, W.E.F. 1-10-1986] 1.936276AB. Failure to comply with the provisions of sections 269UC,

269UE and 269UL 1.936276B. Failure to pay tax to the credit of Central Government

under Chapter XII-D or XVII-B 1.936276BB. Failure to pay the tax collected at source 1.936

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276C. Wilful attempt to evade tax, etc. 1.937276CC. Failure to furnish returns of income 1.937

276CCC. Failure to furnish return of income in search cases 1.938276D. Failure to produce accounts and documents 1.938

276DD. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,1987, W.E.F. 1-4-1989] 1.939

276E. [OMITTED BY THE DIRECT TAX LAWS (AMENDMENT) ACT,1987, W.E.F. 1-4-1989] 1.939

277. False statement in verification, etc. 1.939277A. Falsification of books of account or document, etc. 1.939

278. Abetment of false return, etc. 1.940278A. Punishment for second and subsequent offences 1.940

278AA. Punishment not to be imposed in certain cases 1.940278AB. Power of Commissioner to grant immunity from prosecution 1.940

278B. Offences by companies 1.941278C. Offences by Hindu undivided families 1.942278D. Presumption as to assets, books of account, etc., in certain

cases 1.942278E. Presumption as to culpable mental state 1.943

279. Prosecution to be at instance of Chief Commissioner orCommissioner 1.943

279A. Certain offences to be non-cognizable 1.944

279B. Proof of entries in records or documents 1.944280. Disclosure of particulars by public servants 1.944

CHAPTER XXII-AANNUITY DEPOSITS

280A.to [OMITTED BY THE FINANCE ACT, 1988, W.E.F. 1-4-1988] 1.945

280X.

CHAPTER XXII-BTAX CREDIT CERTIFICATES

280Y. [OMITTED BY THE FINANCE ACT, 1990, W.E.F. 1-4-1990] 1.945280Z. [OMITTED BY THE FINANCE ACT, 1990, W.E.F. 1-4-1990] 1.945

280ZA. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-4-1988] 1.945280ZB. [OMITTED BY THE FINANCE ACT, 1990, W.E.F. 1-4-1990] 1.945280ZC. [OMITTED BY THE FINANCE ACT, 1990, W.E.F. 1-4-1990] 1.945280ZD. [OMITTED BY THE FINANCE ACT, 1990, W.E.F. 1-4-1990] 1.945280ZE. [OMITTED BY THE FINANCE ACT, 1990, W.E.F. 1-4-1990] 1.946

CHAPTER XXIIIMISCELLANEOUS

281. Certain transfers to be void 1.946281A. [REPEALED BY THE BENAMI TRANSACTIONS (PROHIBITION)

ACT, 1988, W.E.F. 19-5-1988] 1.946


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I.T. ACT, 1961 I-32

281B. Provisional attachment to protect revenue in certain cases 1.946282. Service of notice generally 1.947

282A. Authentication of notices and other documents 1.948282B. [OMITTED BY THE FINANCE ACT, 2011, W.E.F. 1-4-2011] 1.948

283. Service of notice when family is disrupted or firm, etc., isdissolved 1.949

284. Service of notice in the case of discontinued business 1.949285. Submission of statement by a non-resident having liaison

office 1.949285A. [OMITTED BY THE FINANCE ACT, 1988, W.E.F. 1-4-1988] 1.949285B. Submission of statements by producers of cinematograph

films 1.949285BA. Obligation to furnish annual information return 1.950

286. [OMITTED BY THE FINANCE ACT, 1987, W.E.F. 1-6-1987] 1.952287. Publication of information respecting assessees in certain

cases 1.952287A. Appearance by registered valuer in certain matters 1.952

288. Appearance by authorised representative 1.952288A. Rounding off of income 1.955288B. Rounding off amount payable and refund due 1.955

289. Receipt to be given 1.955290. Indemnity 1.955291. Power to tender immunity from prosecution 1.955292. Cognizance of offences 1.956

292A. Section 360 of the Code of Criminal Procedure, 1973, andthe Probation of Offenders Act, 1958, not to apply 1.956

292B. Return of income, etc., not to be invalid on certain grounds 1.956292BB. Notice deemed to be valid in certain circumstances 1.957

292C. Presumption as to assets, books of account, etc. 1.957293. Bar of suits in civil courts 1.958

293A. Power to make exemption, etc., in relation to participationin the business of prospecting for, extraction, etc., ofmineral oils 1.958

293B. Power of Central Government or Board to condone delaysin obtaining approval 1.959

293C. Power to withdraw approval 1.959294. Act to have effect pending legislative provision for charge

of tax 1.959294A. Power to make exemption, etc., in relation to certain Union

territories 1.959295. Power to make rules 1.960296. Rules and certain notifications to be placed before

Parliament 1.962

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297. Repeals and savings 1.963298. Power to remove difficulties 1.965

ARRANGEMENT OF SCHEDULESSCHEDULE

The First Schedule INSURANCE BUSINESS 1.966The Second Schedule PROCEDURE FOR RECOVERY OF TAX 1.968The Third Schedule PROCEDURE FOR DISTRAINT BY ASSESS-

ING OFFICER OR TAX RECOVERYOFFICER 1.993

The Fourth Schedule PART A - RECOGNISED PROVIDENTFUNDS 1.994

PART B - APPROVED SUPERANNUATIONFUNDS 1.1002

PART C - APPROVED GRATUITY FUNDS 1.1006

The Fifth Schedule LIST OF ARTICLES AND THINGS 1.1009

The Sixth Schedule [OMITTED BY THE FINANCE ACT, 1972,W.E.F. 1-4-1973] 1.1010

The Seventh Schedule PART A - MINERALS 1.1011

PART B - GROUPS OF ASSOCIATED MINERALS 1.1011The Eighth Schedule LIST OF INDUSTRIALLY BACKWARD

STATES AND UNION TERRITORIES 1.1012

The Ninth Schedule [OMITTED BY THE TAXATION LAWS(AMENDMENT AND MISCELLANEOUSPROVISIONS) ACT, 1986, W.E.F. 1-4-1988] 1.1013

The Tenth Schedule [OMITTED BY THE FINANCE ACT, 1999,W.E.F. 1-4-2000] 1.1013

The Eleventh Schedule LIST OF ARTICLES OR THINGS 1.1013The Twelfth Schedule PROCESSED MINERALS AND ORES 1.1014The Thirteenth Schedule LIST OF ARTICLES OR THINGS 1.1015The Fourteenth Schedule LIST OF ARTICLES OR THINGS OR OPERATIONS 1.1019APPENDIX TEXT OF REMAINING PROVISIONS OF

ALLIED ACTS REFERRED TO IN INCOME-TAX ACT 1.1025

SUBJECT INDEX 1.1091


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I-34

BLANK

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INCOME-TAX ACT, 1961*[43 OF 1961]

[AS AMENDED BY FINANCE ACT, 2011]

An Act to consolidate and amend the law relating toincome-tax and super-tax

BE it enacted by Parliament in the Twelfth Year of the Republic ofIndia as follows :

CHAPTER I

PRELIMINARY

Short title, extent and commencement.11. 2(1) This Act may be called the Income-tax Act, 1961.(2) It extends to the whole of India.(3) Save as otherwise provided in this Act, it shall come into force on the 1st dayof April, 1962.

Definitions.2. In this Act, unless the context otherwise requires,

3[(1) advance tax means the advance tax payable in accordance with theprovisions of Chapter XVII-C;]

1.1

1. For applicability of the Act to State of Sikkim, see section 26 of the Finance Act, 1989.For extension of Act to Continental Shelf of India, see Notification No. GSR 304(E), dated31-3-1983. For details, see Taxmanns Master Guide to Income-tax Act.

2. For effective date for the applicability of the Act in the State of Sikkim, see NotificationNo. SO 148(E), dated 23-2-1989. For details, see Taxmanns Master Guide to Income-taxAct.

3. Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.*Amendments made by the Finance Act, 2011 notwithstanding the dates from which theycome into effect have been printed in italics enclosed with bold square brackets.Amendments made by the Finance Act, 2010 coming into force from 1-4-2011 have also beenprinted in italics but enclosed within medium square brackets.

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4[5(1A)] 6agricultural income7 means89[(a) any rent10 or revenue10 derived10 from land10 which is situated in

India and is used for agricultural purposes;](b) any income derived from such land10 by

(i) agriculture10; or(ii) the performance by a cultivator or receiver of rent-in-kind of

any process ordinarily employed by a cultivator or receiverof rent-in-kind to render the produce raised or received byhim fit to be taken to market10; or

(iii) the sale by a cultivator or receiver of rent-in-kind of theproduce raised or received by him, in respect of which noprocess has been performed other than a process of thenature described in paragraph (ii) of this sub-clause ;

(c) any income derived from any building owned and occupied bythe receiver of the rent or revenue of any such land, or occupiedby the cultivator or the receiver of rent-in-kind, of any land withrespect to which, or the produce of which, any process mentionedin paragraphs (ii) and (iii) of sub-clause (b) is carried on :9[Provided that(i) the building is on or in the immediate vicinity of the land, and

is a building which the receiver of the rent or revenue or thecultivator, or the receiver of rent-in-kind, by reason of hisconnection with the land, requires as a dwelling house, or asa store-house, or other out-building, and

(ii) the land is either assessed to land revenue in India or issubject to a local rate assessed and collected by officers of theGovernment as such or where the land is not so assessed toland revenue or subject to a local rate, it is not situated(A) in any area which is comprised within the jurisdiction

of a municipality (whether known as a municipality,municipal corporation, notified area committee, townarea committee, town committee or by any other name)

S. 2(1A) I.T. ACT, 1961 1.2

4. Renumbered as clause (1A) by the Direct Tax Laws (Amendment) Act, 1987, w.e.f.1-4-1989.

5. For relevant case laws, see Taxmanns Master Guide to Income-tax Act.6. See rules 7 and 8 for manner of computation of income which is partially agricultural and

partially from business. See also rules 7A & 7B.7. The Finance Act, 1973 introduced for the first time a scheme of partially integrated

taxation of non-agricultural income with incomes derived from agriculture for thepurposes of determining the rate of income-tax that will apply to certain non-corporateassessees. The scheme is since continued by the Annual Finance Acts. The provisionsapplicable for the assessment year 2011-12 are contained in section 2(2)/2(13)(c) and PartIV of the First Schedule to the Finance Act, 2011.

8. See also Circular No. 310, dated 29-7-1981 and Circular No. 5/2003, dated 22-5-2003. Fordetails, see Taxmanns Master Guide to Income-tax Act.

9. Substituted by the Taxation Laws (Amendment) Act, 1970, w.r.e.f. 1-4-1962.10. For meaning of the terms/expressions rent, revenue, derived, revenue derived from

land, such land, agriculture and market, see Taxmanns Direct Taxes Manual, Vol. 3.

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or a cantonment board and which has a population ofnot less than ten thousand according to the last preced-ing census of which the relevant figures have beenpublished before the first day of the previous year ; or

(B) in any area within such distance, not being more thaneight kilometres, from the local limits of any municipal-ity or cantonment board referred to in item (A), as theCentral Government may, having regard to the extentof, and scope for, urbanisation of that area and otherrelevant considerations, specify in this behalf by notifi-cation in the Official Gazette11.]

12[13[Explanation 1.]For the removal of doubts, it is hereby declaredthat revenue derived from land shall not include and shall be deemednever to have included any income arising from the transfer of anyland referred to in item (a) or item (b) of sub-clause (iii) of clause (14)of this section.]14[Explanation 2.For the removal of doubts, it is hereby declaredthat income derived from any building or land referred to in sub-clause (c) arising from the use of such building or land for any purpose(including letting for residential purpose or for the purpose of anybusiness or profession) other than agriculture falling under sub-clause (a) or sub-clause (b) shall not be agricultural income.]15[Explanation 3.For the purposes of this clause, any income de-rived from saplings or seedlings grown in a nursery shall be deemedto be agricultural income;]

16[17[(1B)] amalgamation, in relation to companies, means the merger of oneor more companies with another company or the merger of two ormore companies to form one company (the company or companieswhich so merge being referred to as the amalgamating company orcompanies and the company with which they merge or which isformed as a result of the merger, as the amalgamated company) insuch a manner that(i) all the property of the amalgamating company or companies

immediately before the amalgamation becomes the property ofthe amalgamated company by virtue of the amalgamation ;

(ii) all the liabilities of the amalgamating company or companiesimmediately before the amalgamation become the liabilities ofthe amalgamated company by virtue of the amalgamation ;

1.3 CH. I - PRELIMINARY S. 2(1B)

11. For specified urban areas, refer Taxmanns Direct Taxes Circulars.12. Inserted by the Finance Act, 1989, w.r.e.f. 1-4-1970.13. Explanation renumbered as Explanation 1 by the Finance Act, 2000, w.e.f. 1-4-2001.14. Inserted, ibid.15. Inserted by the Finance Act, 2008, w.e.f. 1-4-2009.16. Inserted by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1967.17. Renumbered as clause (1B) by the Direct Tax Laws (Amendment) Act, 1987, w.e.f.

1-4-1989.

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(iii) shareholders holding not less than 18[three-fourths] in value of theshares in the amalgamating company or companies (other thanshares already held therein immediately before the amalga-mation by, or by a nominee for, the amalgamated company or itssubsidiary) become shareholders of the amalgamated companyby virtue of the amalgamation,

otherwise than as a result of the acquisition of the property of onecompany by another company pursuant to the purchase of suchproperty by the other company or as a result of the distribution ofsuch property to the other company after the winding up of the first-mentioned company ;]

19[(1C) Additional Commissioner means a person appointed to be an Addi-tional Commissioner of Income-tax under sub-section (1) of section117;

(1D) Additional Director means a person appointed to be an AdditionalDirector of Income-tax under sub-section (1) of section 117 ;]

(2) annual value, in relation to any property, means its annual value asdetermined under section 23 ;

(3) 20[* * *](4) Appellate Tribunal means the Appellate Tribunal constituted under

section 252 ;(5) approved gratuity fund means a gratuity fund which has been and

continues to be approved by the 21[Chief Commissioner or Commis-sioner] in accordance with the rules contained in Part C of the FourthSchedule ;

(6) approved superannuation fund means a superannuation fund orany part of a superannuation fund which has been and continues tobe approved by the 21[Chief Commissioner or Commissioner] inaccordance with the rules contained in Part B of the Fourth Sche-dule ;

22(7) assessee23 means a person by whom 24[any tax] or any other sum ofmoney is payable under this Act, and includes(a) every person in respect of whom any proceeding under this Act

has been taken for the assessment of his income 25[or assessmentof fringe benefits] or of the income of any other person in respectof which he is assessable, or of the loss sustained by him or bysuch other person, or of the amount of refund due to him or tosuch other person ;

S. 2(7) I.T. ACT, 1961 1.4

18. Substituted for nine-tenths by the Finance Act, 1999, w.e.f. 1-4-2000.19. Clauses (1C) and (1D) inserted by the Finance Act, 2007, w.r.e.f. 1-6-1994.20. Clause (3) omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.21. Substituted for Commissioner, ibid.22. For relevant case laws, see Taxmanns Master Guide to Income-tax Act.23. For meaning of the term assessee, see Taxmanns Direct Taxes Manual, Vol. 3.24. Substituted for income-tax or super-tax by the Finance Act, 1965, w.e.f. 1-4-1965.25. Inserted by the Finance Act, 2005, w.e.f. 1-4-2006.

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(b) every person who is deemed to be an assessee under any provi-sion of this Act ;

(c) every person who is deemed to be an assessee in default underany provision of this Act ;

26[(7A) Assessing Officer means the Assistant Commissioner 27[or DeputyCommissioner] 28[or Assistant Director] 27[or Deputy Director] or theIncome-tax Officer who is vested with the relevant jurisdiction byvirtue of directions or orders issued under sub-section (1) or sub-section (2) of section 120 or any other provision of this Act, and the29[Additional Commissioner or] 30[Additional Director or] 31[JointCommissioner or Joint Director] who is directed under clause (b) ofsub-section (4) of that section to exercise or perform all or any of thepowers and functions conferred on, or assigned to, an AssessingOfficer under this Act ;]

(8) assessment32 includes reassessment ;(9) assessment year means the period of twelve months commencing

on the 1st day of April every year ;33[(9A) Assistant Commissioner means a person appointed to be an Assistant

Commissioner of Income-tax 34[or a Deputy Commissioner ofIncome-tax] under sub-section (1) of section 117 ;]

35[(9B) Assistant Director means a person appointed to be an AssistantDirector of Income-tax under sub-section (1) of section 117;]

(10) average rate of income-tax means the rate arrived at by dividing theamount of income-tax calculated on the total income, by such totalincome ;

36[(11) block of assets means a group of assets falling within a class of assetscomprising(a) tangible assets, being buildings, machinery, plant or furniture;

1.5 CH. I - PRELIMINARY S. 2(11)

26. Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.27. Inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.28. Inserted by the Finance (No. 2) Act, 1996, w.e.f. 1-10-1996.29. Inserted by the Finance Act, 2007, w.r.e.f. 1-6-1994.30. Inserted, ibid., w.r.e.f. 1-10-1996.31. Substituted for Deputy Commissioner or Deputy Director by the Finance (No. 2) Act,

1998, w.e.f. 1-10-1998. Earlier or Deputy Director was inserted by the Finance (No. 2) Act,1996, w.e.f. 1-10-1996.

32. For the meaning of the term assessment, see Taxmanns Direct Taxes Manual, Vol. 3.33. Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.34. Inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998.35. Inserted by the Finance Act, 2007, w.r.e.f. 1-4-1988.36. Substituted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999. Prior to its substitution, clause

(11), as inserted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986,w.e.f. 1-4-1988, read as under :(11) block of assets means a group of assets falling within a class of assets, being

buildings, machinery, plant or furniture, in respect of which the same percentageof depreciation is prescribed ;

Original clause was earlier omitted by the Finance Act, 1965, w.e.f. 1-4-1965.

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(b) intangible assets, being know-how, patents, copyrights, trade-marks, licences, franchises or any other business or commercialrights of similar nature,

in respect of which the same percentage of depreciation is pre-scribed ;]

(12) Board means the 37[Central Board of Direct Taxes constitutedunder the Central Boards of Revenue Act, 1963 (54 of 1963)] ;

38[(12A) books or books of account includes ledgers, day-books, cash books,account-books and other books, whether kept in the written form oras print-outs of data stored in a floppy, disc, tape or any other form ofelectro-magnetic data storage device;]

39(13) business40 includes any trade40, commerce or manufacture or anyadventure40 or concern in the nature of trade40, commerce or manu-facture ;

41(14) capital asset means property42 of any kind held by an assessee,whether or not connected with his business or profession, but doesnot include(i) any stock-in-trade, consumable stores or raw materials held for

the purposes of his business or profession ;43[(ii) personal effects44, that is to say, movable property (including

wearing apparel and furniture) held for personal use 44 by theassessee or any member of his family dependent on him, butexcludes(a) jewellery;(b) archaeological collections;(c) drawings;

S. 2(14) I.T. ACT, 1961 1.6

37. Substituted for Central Board of Revenue constituted under the Central Board ofRevenue Act, 1924 (4 of 1924) by the Central Boards of Revenue Act, 1963, w.e.f. 1-1-1964.

38. Inserted by the Finance Act, 2001, w.e.f. 1-6-2001.39. For relevant case laws, see Taxmanns Master Guide to Income-tax Act.40. For the meaning of the terms/expressions business, trade, adventure and in the

nature of trade, see Taxmanns Direct Taxes Manual, Vol. 3.41. For relevant case laws, see Taxmanns Master Guide to Income-tax Act.42. For the meaning of the term property, see Taxmanns Direct Taxes Manual, Vol. 3.43. Substituted by the Finance Act, 2007, w.e.f. 1-4-2008. Prior to its substitution, sub-clause

(ii), as substituted by the Finance Act, 1972, w.e.f. 1-4-1973, read as under :(ii) personal effects, that is to say, movable property (including wearing apparel and

furniture, but excluding jewellery) held for personal use by the assessee or anymember of his family dependent on him.Explanation.For the purposes of this sub-clause, jewellery includes

(a) ornaments made of gold, silver, platinum or any other precious metal or anyalloy containing one or more of such precious metals, whether or notcontaining any precious or semi-precious stone, and whether or not workedor sewn into any wearing apparel;

(b) precious or semi-precious stones, whether or not set in any furniture, utensilor other article or worked or sewn into any wearing apparel;

44. For the meaning of the expressions personal effects and personal use, see TaxmannsDirect Taxes Manual, Vol. 3.

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(d) paintings;(e) sculptures; or(f) any work of art.Explanation.For the purposes of this sub-clause, jewelleryincludes(a) ornaments made of gold, silver, platinum or any other

precious metal or any alloy containing one or more of suchprecious metals, whether or not containing any precious orsemi-precious stone, and whether or not worked or sewn intoany wearing apparel;

(b) precious or semi-precious stones, whether or not set in anyfurniture, utensil or other article or worked or sewn into anywearing apparel ;]

45[(iii) agricultural land46 in India, not being land situate(a) in any area which is comprised within the jurisdiction of a

municipality46 (whether known as a municipality, municipalcorporation, notified area committee, town area committee,town committee, or by any other name) or a cantonmentboard and which has a population46 of not less than tenthousand according to the last preceding census of which therelevant figures have been published before the first day ofthe previous year ; or

(b) in any area within such distance, not being more than eightkilometres, from the local limits of any municipality orcantonment board referred to in item (a), as the CentralGovernment may, having regard to the extent of, and scopefor, urbanisation of that area and other relevant consider-ations, specify in this behalf by notification in the OfficialGazette47;]

48[(iv) 6 per cent Gold Bonds, 1977,49[or 7 per cent Gold Bonds, 1980,]50[or National Defence Gold Bonds, 1980,] issued by the CentralGovernment ;]

51[(v) Special Bearer Bonds, 1991, issued by the Central Government ;]52[(vi) Gold Deposit Bonds issued under the Gold Deposit Scheme, 1999

notified by the Central Government ; ]


45. Substituted for (iii) agricultural land in India by the Finance Act, 1970, w.e.f. 1-4-1970.46. For the meaning of the terms/expressions agricultural land, municipality and popu-

lation, see Taxmanns Direct Taxes Manual, Vol. 3.47. For specified urban areas, refer Taxmanns Direct Taxes Circulars.48. Inserted by the Taxation Laws (Amendment) Act, 1962, w.e.f. 13-12-1962.49. Inserted by the Finance (No. 2) Act, 1965, w.e.f. 1-4-1965.50. Inserted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1965, w.e.f.

4-12-1965.51. Inserted by the Special Bearer Bonds (Immunities and Exemptions) Act, 1981, w.e.f.

12-1-1981.52. Inserted by the Finance Act, 1999, w.e.f. 1-4-2000.

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53[54(15) 55charitable purpose56 includes relief of the poor, education56, medi-cal relief, 57[preservation of environment (including watersheds, for-ests and wildlife) and preservation of monuments or places or objectsof artistic or historic interest,] and the advancement of any other56object of general public utility:Provided that the advancement of any other object of general publicutility shall not be a charitable purpose, if it involves the carrying onof any activity in the nature of trade, commerce or business, or anyactivity of rendering any service in relation to any trade, commerceor business56, for a cess or fee or any other consideration, irrespectiveof the nature of use or application, or retention, of the income fromsuch activity:]58[Provided further that the first proviso shall not apply if the aggre-gate value of the receipts from the activities referred to therein is58a[ten lakh rupees] or less in the previous year;]

59[(15A) Chief Commissioner means a person appointed to be a ChiefCommissioner of Income-tax under sub-section (1) of section 117 ;]

60[61[(15B)] child, in relation to an individual, includes a step-child and anadopted child of that individual ;]

62[(16) Commissioner means a person appointed to be a Commissioner ofIncome-tax under sub-section (1) of section 117 63[* * *] ;]

64[(16A) Commissioner (Appeals) means a person appointed to be a Commis-sioner of Income-tax (Appeals) under sub-section (1) of section 117 ;]

65[(17) company means(i) any Indian company, or

(ii) any body corporate incorporated by or under the laws of acountry outside India, or

S. 2(17) I.T. ACT, 1961 1.8

53. Substituted by the Finance Act, 2008, w.e.f. 1-4-2009. Prior to its substitution, clause (15),as amended by the Finance Act, 1983, w.e.f. 1-4-1984, read as under :(15) charitable purpose includes relief of the poor, education, medical relief, and the

advancement of any other object of general public utility;54. See also Circular No. 395, dated 24-9-1984 and No. 11/2008, dated 19-12-2008. For details,

see Taxmanns Master Guide to Income-tax Act.55. For relevant case laws, see Taxmanns Master Guide to Income-tax Act.56. For the meaning of terms/expressions charitable purpose, education, object of

general public utility and any trade, commerce or business, see Taxmanns DirectTaxes Manual, Vol. 3.

57. Inserted by the Finance (No. 2) Act, 2009, w.r.e.f. 1-4-2009.58. Inserted by the Finance Act, 2010, w.r.e.f. 1-4-2009.

58a. Words twenty-five lakh rupees shall be substituted for ten lakh rupees by the FinanceAct, 2011, w.e.f. 1-4-2012.

59. Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.60. Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976.61. Renumbered by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.62. Substituted by the Finance Act, 1970, w.e.f. 1-4-1970.63. Words , and includes a person appointed to be an Additional Commissioner of Income-

tax under that sub-section omitted by the Direct Tax Laws (Amendment) Act, 1987,w.e.f. 1-4-1988.

64. Inserted by the Finance (No. 2) Act, 1977, w.e.f. 10-7-1978.65. Substituted by the Finance (No. 2) Act, 1971, w.e.f. 1-4-1971.

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(iii) any institution, association or body which is or was assessable orwas assessed as a company for any assessment year under theIndian Income-tax Act, 1922 (11 of 1922), or which is or wasassessable or was assessed under this Act as a company for anyassessment year commencing on or before the 1st day of April,1970, or

(iv) any institution, association or body, whether incorporated or notand whether Indian or non-Indian, which is declared by generalor special order of the Board to be a company :Provided that such institution, association or body shall be deemedto be a company only for such assessment year or assessmentyears (whether commencing before the 1st day of April, 1971, oron or after that date) as may be specified in the declaration ;]

(18) company in which the public are substantially interesteda com-pany is said to be a company in which the public66 are substantiallyinterested

67[(a) if it is a company owned by the Government or the Reserve Bankof India or in which not less than forty per cent of the shares areheld (whether singly or taken together) by the Government or theReserve Bank of India or a corporation owned by that bank ; or]

68[(aa) if it is a company which is registered under section 25 of theCompanies Act, 1956 (1 of 1956)69 ; or

(ab) if it is a company having no share capital and if, having regard toits objects, the nature and composition of its membership andother relevant considerations, it is declared by order of the Boardto be a company in which the public are substantially interested :Provided that such company shall be deemed to be a company inwhich the public are substantially interested only for such assess-ment year or assessment years (whether commencing before the1st day of April, 1971, or on or after that date) as may be specifiedin the declaration ; or]

70[(ac) if it is a mutual benefit finance company, that is to say, a companywhich carries on, as its principal business, the business ofacceptance of deposits from its members and which is declaredby the Central Government under section 620A71 of the Com-panies Act, 1956 (1 of 1956), to be a Nidhi or Mutual BenefitSociety ; or]

72[(ad) if it is a company, wherein shares (not being shares entitled to afixed rate of dividend whether with or without a further rightto participate in profits) carrying not less than fifty per cent of


66. For the meaning of the term public, see Taxmanns Direct Taxes Manual, Vol. 3.67. Substituted by the Finance Act, 1964, w.e.f. 1-4-1964.68. Inserted by the Finance (No. 2) Act, 1971, w.e.f. 1-4-1971.69. For text of section 25 of the Companies Act, 1956, see Appendix.70. Inserted by the Finance Act, 1985, w.r.e.f. 1-4-1984.71. For text of section 620A of the Companies Act, 1956, and notified Nidhi(s) thereunder, see

Appendix.72. Inserted by the Finance Act, 1992, w.e.f. 1-4-1993.

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the voting power have been allotted unconditionally to, oracquired unconditionally by, and were throughout the relevantprevious year beneficially held by, one or more co-operativesocieties ;]

73[(b) if it is a company which is not a 74private company as defined inthe Companies Act, 1956 (1 of 1956), and the conditions specifiedeither in item (A) or in item (B) are fulfilled, namely :(A) shares in the company (not being shares entitled to a

fixed rate of dividend whether with or without a furtherright to participate in profits) were, as on the last day of therelevant previous year, listed in a recognised stock exchangein India in accordance with the Securities Contracts(Regulation) Act, 1956 (42 of

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