The Income-tax Bill, 2025 |The LexSphere Library

SECTION Section 1

Untitled Section

•AS INTRODUCED IN LOK SABHA

•Bill No. 24 of 2025

•THE INCOME-TAX BILL, 2025

•_______

•ARRANGEMENT OF CLAUSES

•_______

SECTION Section 10

Untitled Section

6.Residence in India.

SECTION Section 100

Untitled Section

93.Deductions.

SECTION Section 1000

Untitled Section

169.(1) If a return of income for any tax year covered by an advance pricing

•agreement has been furnished by any person, before the date of entering into the

•said agreement, he shall, irrespective of anything to the contrary contained in

SECTION Section 1001

Untitled Section

•section 263, furnish a modified return, in accordance with and limited to the

•agreement, in respect of such tax years, within three months from the end of the

•month in which the agreement was entered into.

(2)Except as provided in this section, all other provisions of this Act shall apply

•accordingly as if the modified return is a return furnished under section 263.

(3)Where a modified return is furnished under sub-section (1), and assessment

•or reassessment proceedings, in respect of a tax year to which the agreement applies,

•were initiated before the filing of such return then,––

(a)if such proceedings have been completed, the Assessing Officer shall

•pass an order modifying the total income of the relevant tax year; or

(b)if such proceedings are pending on the date of filing of modified

•return, the Assessing Officer shall proceed to complete them,

•as per the agreement after taking into consideration the modified return so furnished.

(4)Irrespective of anything contained in section 275 or 286 or 296,—

(a)the order in respect of a case falling under sub-section (3)(a) shall be

•passed within one year from the end of the financial year in which the modified

•return under sub-section (1) is furnished;

(b)in respect of a case falling under sub-section (3)(b), the period of limitation

•as provided in section 275 or 286 or section 296 for completion of pending

•assessment or reassessment proceedings shall be extended by twelve months.

(5)In this section,—

(a)“agreement” means an agreement referred to in section 168(1);

(b)the assessment or reassessment proceedings for a tax year shall be

•deemed to have been completed where—

(i)an assessment or reassessment order has been passed; or

•(ii) no notice has been issued under section 270(8) till the expiry

•of the limitation period provided under the said section.

SECTION Section 1002

Untitled Section

170.(1) An assessee shall make a secondary adjustment in every case where

•primary adjustment of one crore rupees or more to transfer price—

(a)has been made on his own in his return of income;

(b)made by the Assessing Officer has been accepted by him;

•Effect to

•advance pricing

agreement.

•Secondary

•adjustment in

•certain cases.

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•Maintenance,

•keeping and

•furnishing of

•information and

•document by

•certain persons.

(c)is determined by an advance pricing agreement entered into by him

•under section 168;

(d)is made as per the safe harbour rules made under section 167; or

(e)is arising as a result of resolution of an assessment by way of the

•mutual agreement procedure under an agreement entered into under

SECTION Section 1003

Untitled Section

•section 159 for avoidance of double taxation.

(2)The excess money or part thereof available with its associated enterprise shall

•be deemed to be an advance made by the assessee to such associated enterprise if––

(a)as a result of primary adjustment to the transfer price, there is an

•increase in the total income or reduction in the loss, as the case may be, of the

•assessee; and

(b)such excess money or part thereof is not repat riated to India within

•the time as prescribed.

(3)The excess money or part thereof referred to in sub -section (2) may be

•repatriated from any of the associated enterprises of the assessee which is not a

•resident in India.

(4)The interest on advance as referred to in sub-section (2) shall be computed

•in such manner as prescribed.

(5)Without prejudice to the provisions of sub -section (2), where the excess

•money or part thereof has not been repatriated within the prescribed time, the

•assessee may, at his option, pay additional income -tax at the rate of 18% on such

•excess money or part thereof, as the case may be.

(6)The tax on the excess money or part thereof so paid by the assessee under

•sub-section (5) shall be treated as the final payment of tax in respect of the excess

•money or part thereof not repatriated and no further credit thereof shall be claimed

•by the assessee or by any other person in respect of tax so paid.

(7)Deduction under any other provision of this Act shall not be allowed to the

•assessee in respect of the amount on which tax has been paid as per sub-section (5).

(8)In a case where the additional income-tax referred to in sub-section (5) is paid by

•the assessee, he shall not be required to make secondary adjustment under sub-section (1)

•and compute interest under sub-section (4) from the date of payment of such tax.

(9)In this section,—

(a)“arm’s length price ” shall have the meaning assigned to it in

SECTION Section 1004

Untitled Section

•section 173(a);

(b)“excess money” means the difference between the arm’s length price

•determined in primary adjustment and the price at which the international

•transaction has actually been undertaken;

(c)“primary adjustment” to a transfer price, means the determination of

•transfer price as per the arm’s length principle resulting in an increase in the total

•income or reduction in the loss, as the case may be, of the assessee;

(d)“secondary adjustment” means an adjustment in the books of account of

•the assessee and its associated enterprise to reflect that the actual allocation of

•profits between the assessee and its associated enterprise are consistent with the

•transfer price determined as a result of primary adjustment, thereby removing the

•imbalance between cash account and actual profit of the assessee.

SECTION Section 1005

Untitled Section

171.(1) Every person,––

(a)who has entered into an international transaction or specified

•domestic transaction; or

(b)is a constituent entity of an international group,

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•shall keep and maintain such information and document in respect thereof and for

•such period and in such manner, as prescribed.

(2)The Assessing Officer or the Commissioner (Appeals) may, during any

•proceeding under this Act, require any person referred to in sub -section (1)(a) to

•furnish any information or document referred therein within ten days from the date

•of receipt of a notice issued in this regard.

(3)The Assessing Officer or the Commissioner (Appeals) may, on an

•application made by such person, extend the period of ten da ys by a further period

•not exceeding thirty days.

(4)Every person referred to in sub-section (1)(b) shall furnish the information

•and document referred to in sub -section ( 1) to the authority prescribed under

SECTION Section 1006

Untitled Section

•section 511(1), in such manner, on or before such date, as prescribed.

(5)In this section,—

(a)“constituent entity” shall have the meaning assigned to it in

SECTION Section 1007

Untitled Section

•section 511 (10)(d);

(b)“international group” shall have the meaning assigned to it in

SECTION Section 1008

Untitled Section

•section 511 (10)(g).

SECTION Section 1009

Untitled Section

172.Every person who has entered into an international transaction or

•specified domestic transaction during a tax year shall obtain a report from an

•accountant and furnish such report on or before the specified date in the prescribed

•form duly signed and verified in the manner as prescribed by such accountant and

•setting forth such particulars as prescribed.

•173 In this section and sections 161, 162, 163, 165, 171 and 172, unless the

•context otherwise requires,—

(a)“arm’s length price” means a price which is applied or proposed to

•be applied in a transaction between persons other than associated enterprises,

•in uncontrolled conditions;

(b)“enterprise” means a person (including a permanent establishment of such

•person) who is, or has been, or is proposed to be, engaged in any activity relating to––

(i)the production, storage, supply, distribution, acquisition or

•control of articles or goods; or

•(ii) know-how, patents, copyrights, trade-marks, licences, franchises

•or any other business or commercial rights of similar nature; or

•(iii) any data, documentation, drawing or specification relating to

•any patent, invention, model, design, secret formula or process of which

•the other enterprise is the owner or in respect of which the other

•enterprise has exclusive rights; or

•(iv) provision of services of any kind; or

(v)carrying out any work in pursuance of a contract; or

•(vi) investment or providing loan; or

•(vii) business of acquiring, holding, underwriting or dealing with

•shares, debentures or other securities of any other body corporate,

•whether such activity or business is carried on, directly or through one or more of

•its units or divisions or subsidiaries, or whether such unit or division or subsidiary

•is located at the same place where the enterprise is located or at a different place

•or places;

(c)“permanent establishment”, referred to in clause (b), includes a fixed place

•of business through which the business of the enterprise is wholly or partly carried on;

•Report from an

•accountant to be

•furnished by

•persons entering

•into international

•transaction or

•specified

•domestic

transaction.

•Definitions of

•certain terms

•relevant to

•determination of

•arm’s length

•price, etc.

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•Avoidance of

•income-tax by

•transactions

•resulting in

•transfer of

•income to

•non-residents.

(d)“specified date” means the date one month before the due date for

•furnishing the return of income under section 263 (1) for the relevant tax year;

(e)“transaction” includes an arrangement, understanding or action in

•concert,—

(i)whether or not such arrangement, understanding or action is formal

•or in writing; or

•(ii) whether or not such arrangement, understanding or action is

•intended to be enforceable by legal proceeding.

SECTION Section 101

Untitled Section

94.Amounts not deductible.

SECTION Section 1010

Untitled Section

174.(1) Where there is a transfer of assets before and after the commencement

•of this Act, and by virtue or in consequence of it,––

(a)either alone; or

(b)in conjunction with associated operations,

•any income becomes payable to a non-resident, the provisions of this section shall apply.

(2)If any person (“first mentioned person”), by means of any transfer referred

•to in sub-section ( 1), either alone or in conjunction with associated operations,

•acquires any rights,––

(a)by virtue of which he has, within the meaning of this section, power

•to enjoy, whether forthwith or in the future, any income of a non-resident; and

(b)such income would have been chargeable to income -tax if it were

•such first mentioned person’s income,

•then, that income shall, whether or not it would have been chargeable to income-tax

•under any other provisions of this Act, be deemed to be the income of such first

•mentioned person for all the purposes of this Act.

(3)If any such first mentioned person receives or is entitled to receive any

•capital sum,––

(a)the payment of which is in any way connected with the transfer or

•any associated operations; and

(b)whether before or after any such transfer,

•then any income, which has become the income of a non -resident by virtue or in

•consequence of such transfer, either alone or in conjunction with associated

•operations, shall be deemed to be the income of such first mentioned person for all

•the purposes of this Act, whether or not it would have been chargeable to

•income-tax under any other provisions of this Act.

(4)Where any person has been charged to income-tax on any income deemed

•to be his under t he provisions of this section and that income is subsequently

•received by him, whether as income or in any other form, it shall not again be

•deemed to form part of his income for the purposes of this Act.

(5)The provisions of this section shall not apply if the first mentioned person in

•sub-section (2) or (3) shows to the satisfaction of the Assessing Officer that—

(a)neither the transfer nor any associated operation had for its purpose

•or for one of its purposes the avoidance of liability to taxation; or

(b)the transfer and all associated operations were bona fide commercial

•transactions and were not designed for the purpose of avoiding liability to taxation.

(6)In this section,—

(a)references to assets representing any assets, income or accumulations

•of income include references to shares in or obligation of any company to

•which, or obligation of any other person to whom, those assets, that income or

•those accumulations are or have been transferred;

(b)any body corporate incorporated outside India shall be treated as if it

•were a non-resident;

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(c)a person shall be deemed to have power to enjoy the income of a non-

•resident if—

(i)the income is in fact so dealt with by any person as to be

•calculated at some point of time and, whether in the form of income or

•not, to ensure for the benefit of the first mentioned person in

•sub-section (2) or (3); or

•(ii) the receipt or accrual of the income operates to increase the

•value to such first mentioned person of any assets held by him or for his

•benefit; or

•(iii) such first mentioned person receives or is entitled to receive at

•any time any benefit provided or to be provided out of that income or

•out of moneys which are or shall be available for the purpose by reason

•of the effect or successive effects of the associated operations on that

•income and assets which represent that income; or

•(iv) such first mentioned person has power by means of the

•exercise of any power of appointment or power of revocation or

•otherwise to obtain for himself, whether with or without the consent of

•any other person, the beneficial enjoyment of the income; or

(v)such first mentioned person is able, in any manner whatsoever and

•whether directly or indirectly, to control the application of the income;

(d)in determining whether a person has power to enjoy income, regard

•shall be had to the s ubstantial result and effect of the transfer and any

•associated operations, and all benefits which may at any time accrue to such

•person as a result of the transfer and any associated operations shall be taken

•into account irrespective of the nature or form of the benefits.

(7)In this section,—

(a)“assets” includes property or rights of any kind and “transfer” in

•relation to rights includes the creation of those rights;

(b)“associated operation” in relation to any transfer, means an operation

•of any kind effected by any person in relation to—

(i)any of the assets transferred; or

•(ii) any assets representing, whether directly or indirectly, any of

•the assets transferred; or

•(iii) the income arising from any such assets; or

•(iv) any assets representing, whether directly or indirectly, the

•accumulations of income arising from any such assets;

(c)“benefit” includes a payment of any kind;

(d)“capital sum” means—

(i)any sum paid or payable by way of a loan or repayment of a

•loan; and

•(ii) any other sum paid or payable otherwise than as income, being

•a sum, which is not paid or payable for full consideration in money or

•money’s worth.

•175 (1) Where the owner of any securities (hereinafter referred t o as “the

•owner”) sells or transfers such securities and buys back or reacquires them or buys

•or acquires any similar securities, any interest that becomes payable in respect of

•such securities,––

(a)is receivable by a person other than the owner, shall be deemed, for

•all purposes of this Act, to be the income of the owner; and

•Avoidance of

•tax by certain

•transactions in

securities.

•204

(b)shall not be the income of the other person,

•irrespective of whether it would have been chargeable to income-tax under any other

•provision of this Act.

(2)Where similar securities as referred to in sub -section (1) are bought or

•acquired, the owner shall not be under greater liability to income-tax than he would

•if the original securities had been bought back or reacquired.

(3)If any person has had a beneficial interest in any securities at any time

•during a tax year, and the result of any transaction relating to such securities or the

•income from it is that, in respect of such securities within such year,––

(a)either no income is received by him; or

(b)the income received by him is less than what would have been if the

•income from such securities had accrued from day to day and been

•apportioned accordingly,

•the income from such securities for such year shall be deemed to be the income of

•such person.

(4)The provisions of sub-sections (1), (2) and (3) shall not apply if the owner,

•or the person who has had a beneficial interest in the securities, p roves to the

•satisfaction of the Assessing Officer that—

(a)there has been no avoidance of income-tax; or

(b)the avoidance of income-tax was exceptional and not systematic and

•also that in any of the three preceding years any avoidance of income-tax by a

•transaction of the nature referred to in sub-sections (1), (2) or (3) was not there

•in his case.

(5)If a person carrying on a business which consists wholly or partly in

•dealing in securities, buys or acquires any securities and sells back or retransfers the

•securities, then, if the result of the transaction is that interest in respect of the

•securities receivable by him is not deemed to be his income by reason of the

•provisions contained in sub-section (1), no account shall be taken of the transaction

•in computing the profits arising from or loss sustained in the business for any of the

•purposes of this Act.

(6)The provisions of sub-section (5) shall have effect, subject to any necessary

•modifications, as if references to selling back or retransferring t he securities

•included references to selling or transferring similar securities.

(7)The Assessing Officer may, by notice in writing, require any person to

•provide within specified time, which shall not be less than twenty-eight days, details

•in respect of all securities of which such person was the owner or in which he had a

•beneficial interest at any time during the period specified in the notice, for the

•purposes of this section and for the purpose of discovering whether income-tax has

•been borne in respect of the interest on all those securities.

(8)If—

(a)any person buys or acquires any securities or unit within three

•months before the record date;

(b)such person sells or transfers—

(i)such securities within three months after such date; or

•(ii) such unit within nine months after such date;

(c)the dividend or income on such securities or unit received or

•receivable by such person is exempt,

•then, the loss, if any, arising to him on account of such purchase and sale of

•securities or unit, to the e xtent such loss does not exceed dividend or income

•received or receivable on such securities or unit, shall be ignored for the purposes

•of computing his income chargeable to tax.

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•43 of 1961.

•15 of 1992.

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(9)If—

(a)any person buys or acquires any securities or unit within three

•months before the record date;

(b)such person is allotted additional securities or unit without any

•payment on the basis of holding of such securities or unit on such date;

(c)such person sells or transfers all or any of the securities or unit

•referred to in clause (a) within nine months after such date, while continuing

•to hold all or any of the additional securities or unit referred to in clause (b),

•then, the loss, if any, arising to him on account of such purchase and sale of all or

•any of such securities or unit shall be ignored for the purposes of computing his

•income chargeable to tax.

(10)Irrespective of any other provision of this Act, loss ig nored as per

•sub-section (9) shall be deemed to be the cost of purchase or acquisition of such

•additional securities or unit referred to in sub -section (9)(b) as are held by him on

•the date of such sale or transfer.

(11)In this section,—

(a)“interest” includes a dividend;

(b)“record date” means such date as may be fixed by—

(i)a company;

•(ii) a Mutual Fund or the Administrator of the specified

•undertaking or the specified company referred to in the Explanation to

SECTION Section 1011

Untitled Section

•section 10(35) of the Income-tax Act, 1961; or

•(iii) a business trust defined in section 2(21); or

•(iv) an Alternative Investment Fund defined in regulation 2( 1)(b)

•of the Securities and Exchange Board of India (Alternative Investment

•Funds) Regulations, 2012, made under the Securities and Exchange

•Board of India Act, 1992,

•for the purposes of entitlement of the holder of the securities or unit to receive

•dividend, income, or additional securities or unit without any consideration;

(c)“securities” includes stocks and shares;

(d)securities shall be deemed to be similar if they entitle their holders to

•the same rights against the same persons as to capital and interest and the same

•remedies for the enforcement of those rights, irrespective of any difference in

•the total nominal amounts of the respective securities or in the form in which

•they are held or in the manner in which they can be transferred;

(e)“unit” shall mean,—

(i)a unit of a business trust defined in section 2(21);

•(ii) a unit defined in section 208(3)(c); or

•(iii) beneficial interest of an investor in an Alternative Investment

•Fund, referred to in clause (b)(iv), and shall include shares or partnership

interests.

SECTION Section 1012

Untitled Section

176.(1) The Central Government may, by notification specify any country or

•territory outside India, as a notified jurisdictional area, having regard to the lack of

•effective exchange of information with such jurisdiction.

(2)Irrespective of anything contrary in this Act, if an assessee enters into a

•transaction where one of the parties to the transaction is a person located in a notified

•jurisdictional area, then,—

(a)all the parties to the transaction shall be deemed to be associated

•enterprises within the meaning of section 162;

•Special

•measures in

•respect of

•transactions with

•persons located

•in notified

•jurisdictional

area.

•206

•Limitation on

•interest

•deduction in

•certain cases.

(b)any transaction of the nature described in section 16 3(1) and ( 2)

•shall be deemed to be an international transaction within the meaning of

SECTION Section 1013

Untitled Section

•section 16 3,

•and the provisions of sections16 1, 162, 163, 165 except the benefit of variation

•specified in sections 16 5(3)(a)(ii), 16 6, 16 7, 1 71, 1 72 and 17 3 shall apply

accordingly.

(3)Irrespective of anything to the contrary in this Act, no deduction shall

•be allowed—

(a)for any payment made to any financial institution located in a notified

•jurisdictional area, unless the assessee furnishes an authorisation in the

•prescribed form authorising the Board or any other income -tax authority

•acting on its behalf to seek relevant information from the said financial

•institution on behalf of such assessee; and

(b)for any other expenditure or allowance (including depreciation)

•arising from the transaction with a person located in a notified jurisdictional

•area, unless the assessee maintains such other documents and furnishes such

•information as prescribed, in this behalf.

(4)Irrespective of anything to the contrary in this Act, if, in any tax year, the

•assessee has received or credited any sum from any person located in a notified

•jurisdictional area and—

(a)the assessee does not provide any explanation about the source of the

•said sum in the hands of such person or in the hands of the beneficial owner

•(if such person is not the beneficial owner of the said sum); or

(b)the explanation provided by the assessee, in the opinion of the

•Assessing Officer, is not satisfactory,

•then such sum shall be deemed to be the income of the assessee for that tax year.

(5)Irrespective of anything to the contrary in this Act, if any per son located

•in a notified jurisdictional area is entitled to receive any sum or income or amount

•on which tax is deductible under Chapter XIX -B, the tax shall be deducted at the

•highest of the following rates––

(a)at the rate or rates in force;

(b)at the rate specified in the relevant provisions of this Act;

(c)at the rate of 30%.

(6)In this section,—

(a)“person located in a notified jurisdictional area” shall include,—

(i)a person who is resident of the notified jurisdictional area;

•(ii) a person, not being an individual, which is established in the

•notified jurisdictional area; or

•(iii) a permanent establishment of a person not falling in sub-clause (i)

•or (ii), in the notified jurisdictional area;

(b)“permanent establishment” shall have the meaning assigned to it in

SECTION Section 1014

Untitled Section

•section 173(c);

(c)“transaction” shall have meaning assigned to it in section 173(e).

SECTION Section 1015

Untitled Section

177.(1) Irrespective of anything contrary in this Act, any expenditure by way

•of interest or similar payment in respect of exc ess interest, as specified in

•sub-section (4), shall not be deductible in computation of income chargeable under

•the head “Profits and gains of business or profession”, if,—

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(a)it is paid or payable by an Indian company or a permanent

•establishment of a foreign company in India, in respect of any debt issued by

•an associated enterprise which is a non-resident; and

(b)the sum of such expenditure in a tax year exceeds one crore rupees.

(2)Where a lender, not being an associat ed enterprise, has issued a debt

•referred to in sub-section (1), such debt shall be deemed to have been issued by an

•associated enterprise if an associated enterprise has—

(a)provided an implicit or explicit guarantee to the lender in respect of

•such debt; or

(b)deposited a corresponding and matching funds with such lender.

(3)The provisions of this section shall not apply to—

(a)interest paid in respect of a debt issued by a lender which is a permanent

•establishment in India of a non-resident engaged in the business of banking;

(b)an Indian company or a permanent establishment of a foreign

•company which is engaged in the business of banking or insurance or a

•Finance Company located in any International Financial Services Centre, o r

•such class of non -banking financial companies as notified by the Central

•Government in this behalf.

(4)In sub-section (1), the “excess interest” means––

(a)In total interest paid or payable in excess of 30% of earnings before

•interest, taxes, depreciation and amortisation of the borrower in the tax year; or

(b)interest paid or payable to associated enterprises for that tax year,

•whichever is less.

(5)Interest expenditure not wholly deducted against income under the head

•“Profits and gains of business or profession” for any tax year shall be—

(a)carried forward to the following tax year or years; and

(b)allowed as a deduction against the profits and gains, if any, of any

•business or profession carried on by it and assessable for such tax year, to the

•extent of maximum allowable interest expenditure as per sub-section (4).

(6)The interest expenditure referred to in sub-section (5) shall not be carried

•forward for more than eight tax years immediately succeeding the tax year for which

•the excess interest expenditure was first computed.

(7)In this section,—

(a)“debt” means any loan, financial instrument, finance lease, financial

•derivative, or any arrangement that gives rise to interest, discounts or other

•finance charges that are deductible in the computation of income chargeable

•under the head “Profits and gains of business or profession”;

(b)“Finance Company” means a finance company as defined in

•regulation 2(1)(e) of the International Financial Services Centres Authority

•(Finance Company) Regulations, 2021 made under the International Financial

•Services Centres Authority Act, 2019 and which satisfies such conditions and

•carries on such activities, as prescribed;

(c)“permanent establishment” shall have the meaning assigned to it in

SECTION Section 1016

Untitled Section

•section 173(c).

•208

•Applicability of

•General

•Anti-Avoidance

Rule.

•Impermissible

•avoidance

arrangement.

•Arrangement to

•lack commercial

substance.

•CHAPTER XI

•GENERAL ANTI-AVOIDANCE RULE

SECTION Section 1017

Untitled Section

178.(1) Irrespective of anything contained in this Act, an arrangement entered

•into by an assessee may be declared to be an impermissible avoidance arrangement

•and the consequence in relation to tax arising from it may be determined subject to

•the provisions of this Chapter.

(2)The provisions of this Chapter may be applied to any step in, or a part of,

•the arrangement as they are applicable to the arrangement.

SECTION Section 1018

Untitled Section

179.(1) An impermissible avoidance arrangement means an arrangement, the

•main purpose of which is to obtain a tax benefit, and it—

(a)creates rig hts, or obligations, which are not ordinarily created

•between persons dealing at arm’s length;

(b)results, directly or indirectly, in the misuse, or abuse, of the

•provisions of this Act;

(c)lacks commercial substance or is deemed to lack commercial

•substance under section 180, in whole or in part; or

(d)is entered into, or carried out, by means, or in a manner, which are

•not ordinarily employed for bona fide purposes.

(2)An arrangement shall be presumed, unless it is proved to the contrary by

•the assess ee, to have been entered into, or carried out, for the main purpose of

•obtaining a tax benefit, if the main purpose of a step in, or a part of, the arrangement

•is to obtain a tax benefit, irrespective of the fact that the main purpose of the whole

•arrangement is not to obtain a tax benefit.

SECTION Section 1019

Untitled Section

180.( 1) An arrangement shall be deemed to lack commercial

•substance, if ––

(a)the substance or effect of the arrangement as a whole, is inconsistent

•with, or differs significantly from, the form of its individual steps or a part; or

(b)it involves or includes—

(i)round trip financing; or

•(ii) an accommodating party; or

•(iii) elements that have effect of offsetting or cancelling each other; or

•(iv) a transaction which is conducted through one or more persons

•and disguises the value, location, source, ownership or control of funds

•which is the subject matter of such transaction; or

(c)it involves the location of an asset or of a transaction or of the place

•of residence of any party which is without any substantial commercial purpose

•other than obtaining a tax benefit (but for the provisions of this Chapter) for a

•party; or

(d)it does not have a significant effect upon the business risks or net

•cash flows of any party to the arrangement apart from any effect attributable

•to the tax benefit that would be obtained (but for the provisions of this

SECTION Section 102

Untitled Section

95.Profits chargeable to tax.

SECTION Section 1020

Untitled Section

•Chapter).

(2)In sub-section (1), round trip financing includes any arrangement in which,

•through a series of transactions—

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(a)funds are transferred among the parties to the arrangement; and

(b)such transactions do not have any substantial commercial purpose

•other than obtaining the tax benefit (but for the provisions of this Chapter),

•without having any regard to—

(A)whether or not the funds involved in the round trip financing can be

•traced to any funds transferred to, or received by, any party in connection with

•the arrangement;

(B)the time, or sequence, in which the funds involved in the round trip

•financing are transferred or received; or

(C)the means by, or manner in, or mode through, which funds involved

•in the round trip financing are transferred or received.

(3)The following may be relevant but shall not be sufficient for determining

•whether an arrangement lacks commercial substance or not:—

(a)the period of time for which the arrangement (including operations

•therein) exists;

(b)the fact of payment of taxes, directly or indirectly, under the

•arrangement;

(c)the fact that an exit route (including transfer of any activity or

•business or operations) is provided by the arrangement.

SECTION Section 1021

Untitled Section

181.(1) If an arrangement is declared to be an impermissible avoidance

•arrangement, then, the consequences, in relation to tax, of the arrangement,

•including denial of tax benefit or a benefit under a tax treaty, shall be determined,

•in the manner as deemed appropriate.

(2)The consequences of an arrangement declared to be an impermis sible

•avoidance arrangement as referred to in sub -section (1) shall include but shall not

•be limited to the following:—

(a)disregarding, combining or recharacterising any step in, or a part or

•whole of, the impermissible avoidance arrangement;

(b)treating the impermissible avoidance arrangement as if it had not

•been entered into or carried out;

(c)disregarding any accommodating party or treating any

•accommodating party and any other party as one and the same person;

(d)deeming persons who are connected persons in relation to each other

•to be one and the same person for the purposes of determining tax treatment

•of any amount;

(e)reallocating amongst the parties to the arrangement—

(i)any accrual, or receipt, of a capital nature or revenue nature; or

•(ii) any expenditure, deduction, relief or rebate;

(f)treating—

(i)the place of residence of any party to the arrangement; or

•(ii) the situs of an asset or of a transaction,

•at a place other than the place of residence, location of the asset or location of the

•transaction as provided under the arrangement; or

(g)considering or looking through any arrangement by disregarding any

•corporate structure.

•Consequences

•of

•impermissible

•avoidance

arrangement.

•210

•Treatment of

•connected

•person and

•accommodating

party.

•Application of

•this Chapter.

Interpretation.

(3)In this section,—

(a)any equity may be treated as debt or vice versa;

(b)any accrual, or receipt, of a capital nature may be treated as of

•revenue nature or vice versa; or

(c)any expenditure, deduction, relief or rebate may be recharacterised.

SECTION Section 1022

Untitled Section

182.In this Chapter, in determining whether a tax benefit exists,—

(a)the parties who are connected persons in relation to each other may

•be treated as one and the same person;

(b)any accommodating party may be disregarded;

(c)the accommodating party and any other party may be treated as one

•and the same person;

(d)the arrangement may be considered or looked through by

•disregarding any corporate structure.

SECTION Section 1023

Untitled Section

183.The provisions of this Chapter––

(a)in addition to, or in lieu of, any other basis for determination of tax

•liability;

(b)as per such guidelines and subject to such conditions, as prescribed.

SECTION Section 1024

Untitled Section

184.In this Chapter, unless the context otherwise requires,—

(1)“accommodating party” means a party to an arrangment, if the main

•purpose of the direct or indirect participation of that party in the arrangement,

•in whole or in part, is to obtain, directly or indirectly, a tax benefit (but for the

•provisions of this Chapter) for the assessee whether or not the party is a

•connected person in relation to any party to the arrangement;

(2)“arrangement” means any step in, or a part or whole of, any

•transaction, operation, scheme, agreement or understanding, whether

•enforceable or not, and includes the alienation of any proper ty in such

•transaction, operation, scheme, agreement or understanding;

(3)“asset” includes property, or right, of any kind;

(4)“benefit” includes a payment of any kind whether in tangible or

•intangible form;

(5)“connected person” means any person who is connected directly or

•indirectly to another person and includes,—

(a)any relative of the person, if such person is an individual;

(b)any director of the company or any relative of such director, if

•the person is a company;

(c)any partner or member of a firm or association of persons or

•body of individuals or any relative of such partner or member, if the

•person is a firm or association of persons or body of individuals;

(d)any member of the Hindu undivided family or any relative of

•such member, if the person is a Hindu undivided family;

(e)any individual who has a substantial interest in the business of

•the person or any relative of such individual;

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(f)a company, firm or an association of persons or a body of

•individuals, whether incorporated or not, or a Hindu undivided family

•having a substantial interest in the business of the person or any director,

•partner, or member of the company, firm or association of persons or

•body of individuals or family, or any relative of such director, partner or

•member;

(g)a company, firm or association of persons or body of individuals,

•whether incorporated or not, or a Hindu undivided family, whose director,

•partner, or member has a substantial interest in the business of the person,

•or family or any relative of such director, partner or member;

(h)any other person who carries on a business, if—

(i)the person being an individual, or any relative of such

•person, has a substantial interest in the business of that other

•person; or

•(ii) the person being a company, firm, association of persons,

•body of individuals, whe ther incorporated or not, or a Hindu

•undivided family, or any director, partner or member of such

•company, firm or association of persons or body of individuals or

•family, or any relative of such director, partner or member, has a

•substantial interest in the business of that other person;

(6)“fund” includes—

(a)any cash;

(b)cash equivalents; and

(c)any right, or obligation, to receive or pay, the cash or cash equivalent;

(7)“party” includes a person or a permanent establishment which participates

•or takes part in an arrangement;

(8)“relative” shall have the meaning assigned to it in section 92(5)(g);

(9)a person shall be deemed to have a substantial interest in the business, if,—

(a)in a case where the business is carried on by a company, such person

•is, at any time during the financial year, the beneficial owner of equity shares

•carrying at least 20% of the voting power; or

(b)in any other case, such person is, at any time duri ng the financial

•year, beneficially entitled to at least 20% of the profits of such business;

(10)“step” includes a measure or an action, particularly one of a series taken

•in order to deal with or achieve a particular thing or object in the arrangement;

(11)“tax benefit” includes,—

(a)a reduction or avoidance or deferral of tax or other amount payable

•under this Act; or

(b)an increase in a refund of tax or other amount under this Act; or

(c)a reduction or avoidance or deferral of tax or other amount that would

•be payable under this Act, as a result of a tax treaty; or

(d)an increase in a refund of tax or other amount under this Act as a

•result of a tax treaty; or

(e)a reduction in total income; or

(f)an increase in loss,

•in the relevant tax year or any other tax year;

•212

•Mode of taking

•or accepting

•certain loans,

•deposits and

•specified sum.

(12)“tax treaty” means an agreement referred to in section 159(1) or (2).

SECTION Section 1025

Untitled Section

•CHAPTER XII

•MODE OF PAYMENT IN CERTAIN CASES ETC.

185.(1) No person shall take or accept from another person any loan or deposit

•or specified sum, except through—

(a)an account payee cheque;

(b)account payee bank draft;

(c)electronic clearing system through a bank account; or

(d)any other prescribed electronic mode,

•if,––

(i)the amount or the aggregate amount of such loan, deposit, or specified

•sum; or

•(ii) the amount or the aggregate amount of any previously taken or

•accepted loan or deposit or specified sum by such person from such

•another person, which is remaining unpaid, whether due for repayment

•or not, as on the date of taking or accepting such amount as referred to in

SECTION Section 1026

Untitled Section

•clause ( i); or

•(iii) the aggregate of the amounts referred to in of clauses (i) and (ii),

•is twenty thousand rupees or more.

(2)Sub-section (1) shall not apply to loans or deposits or specified sums taken

•or accepted from or by,––

(a)the Government;

(b)any banking company, post office savings bank, or co -operative

•bank;

(c)any corporation established by a Central, State or Provincial Act;

(d)any Government company as defined under section 2( 45) of the

•Companies Act, 2013;

(e)any institution, association, or body or class of institutions,

•associations or bodies notified by the Central Government.

(3)The provisions of sub-section (1) shall not apply to any loan or deposit or

•specified sum where, the person taking or accepting such loan or deposit or specified

•sum and person from whom such loan or deposit or specified sum is taken or

•accepted, both, have agricultural income and neither has any income chargeable to

•tax under this Act.

(4)In sub -section ( 1), “two lakh rupees” shall be substituted for “twenty

•thousand rupees” in the case of any deposit or loan, where—

(a)such deposit is accepted by a primary agricultural credit society or a

•primary co -operative agricultural and rural development bank from its

•member; or

(b)such loan is taken from a primary agricultural credit society or

•primary co-operative agricultural and development bank by its member.

(5)In this section, “loan or deposit” means loan or deposit of money.

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SECTION Section 1027

Untitled Section

186.(1) No person shall receive two lakh rupees or more––

(a)in aggregate from a person in a day; or

(b)in respect of a single transaction; or

(c)in respect of transactions relating to one event or occasion from a person,

•except through—

(i)an account payee cheque;

•(ii) account payee bank draft;

•(iii) electronic clearing system through a bank account; or

•(iv) any other electronic mode, as prescribed.

(2)Sub-section (1) shall not apply to—

(a)any receipt by Government, any banking company, post office

•savings bank, or co-operative bank;

(b)transactions of the nature referred to in section 185;

(c)such other persons or class of persons or receipts, as notified by the

•Central Government.

187.Every person shall provide facility for accepting payment, through

•electronic modes as prescribed, in addition to other electronic modes, if any, being

•provided by him, where––

(a)such person is carrying on business; and

(b)total sales, turnover, or gross receipts in such business exceeds

•fifty crore rupees during the immediately preceding tax year.

SECTION Section 1028

Untitled Section

188.(1) No branch of a banking company or co -operative bank and no other

•company or co-operative society and no firm or other person shall repay—

(a)any loan or deposit made with it; or

(b)any specified advance received by it,

•except through––

(i)an account payee cheque; or

•(ii) account payee bank draft drawn in the name of the person who has

•made the loan or deposit or paid the specified advance; or

•(iii) by use of electronic clearing system through a bank account, or any

•other prescribed electronic mode,

•if,––

(A)loan or deposit or specified advance, together with the interest, if

•any, payable thereon; or

(B)the aggregate amount of the loans or deposits held by such person

•with the branch of the banking company or co-operative bank or, as the case

•may be, the other company or co-operative society or the firm or other person

•(either individually or jointly) on the date of such repayment together with

•interest, if any, payable thereon; or

(C)the aggregate amount of the specified advances r eceived by such

•person (either individually or jointly) on the date of such repayment together

•with the interest, if any, payable thereon,

•is twenty thousand rupees or more.

•Mode of

•undertaking

transactions.

•Acceptance of

•payment through

•prescribed

•electronic

modes.

•Mode of

•repayment of

•certain loans or

deposits.

•214

Interpretation.

•Determination

•of tax where

•total income

•includes

•income on

•which no tax is

payable.

•Tax on

•accumulated

•balance of

•recognised

•provident fund.

(2)Irrespective of the provision in sub -section ( 1), a branch of a banking

•company or co-operative bank, may also make the repayment by crediting such loan

•or deposit to the savings bank account or current account, if any, with such branch

•of the person to whom such loan or deposit has to be repaid.

(3)Sub -section ( 1) shall not apply to repayment of any loan, deposit, or

•specified advance taken or accepted from—

(a)Government;

(b)any banking company, post office savings bank, or co-operative bank;

(c)any corporation established by a Central, State, or Provincial Act;

(d)any Government company as defined in section 2 ( 45) of the

•Companies Act, 2013;

(e)any institution, association, or body or class of institutions,

•associations or bodies notified by the Central Government.

(4)In sub-section ( 1), “two lakh rupees” shall be substituted for “twenty

•thousand rupees” in the case of any deposit or loan where—

(a)such deposit is paid to a member by a primary agricultural credit

•society or a primary co-operative agricultural and rural development bank; or

(b)such loan is repaid by a member to a primary agricultural credit

•society or a primary co-operative agricultural and rural development bank.

(5)In this section, “loan or deposit” means any loan or deposit of money which

•is repayable after notice or repayable after a period and, in the case of a person other

•than a company, includes loan or deposit of any nature.

SECTION Section 1029

Untitled Section

189.In this Chapter, unless the context otherwise requires,—

(a)“banking company” means a company to which the provisions of the

•Banking Regulation Act, 1949 applies and includes any bank or banking

•institution referred to in section 51 of that Act;

(b)“primary agricultural credit society ”, and “primary co -operative

•agricultural and rural development bank” shall have the meanings respectively

•assigned to them in section 149(6);

(c)“specified sum” means any sum of money receivable, whether as

•advance or otherwise, in relation to transfer of an immovable property,

•whether or not the transfer takes place;

(d)“specified advance” means any sum of money in the nature of

•advance, by whatever name called , in relation to transfer of an immovable

•property, whether or not the transfer takes place.

SECTION Section 103

Untitled Section

•CHAPTER V

•INCOME OF OTHER PERSONS, INCLUDED IN TOTAL INCOME OF ASSESSEE

SECTION Section 1030

Untitled Section

•CHAPTER XIII

•DETERMINATION OF TAX IN SPECIAL CASES

A.—Determination of tax in certain special cases

SECTION Section 1031

Untitled Section

190.Where there is included in the total income of an assessee any income on

•which no income-tax is payable under the provisions of this Act, the assessee shall

•be entitled to a deduction, from income-tax with which he is chargeable on his total

•income, of an amount equal to the income -tax calculated at the average rate of

•income-tax on the amount on which no income-tax is payable.

SECTION Section 1032

Untitled Section

191.Where the accumulated balance due to an employee participating in a

•recognised provident fund is included in his total income, owing to the provisions

•of paragraph 8 of Part A of Schedule XI not being applicable, the Assessing Officer

•shall calculate the total of the various sums of tax as per the provisions of

•paragraph 9 thereof.

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•10 of 1949.

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SECTION Section 1033

Untitled Section

192.(1) The total income of the block period, determined under section 294

•shall be chargeable to tax at the rate of 60%.

(2)The tax chargeable under sub-section (1) shall be increased by a surcharge,

•if any, levied by any Central Act.

SECTION Section 1034

Untitled Section

193.(1) Where the total income of an assessee, being an individual, who is a

•resident and an employee of an Indian company engaged in specified knowledge

•based industry or service, or an employee of its subsidiary engaged in specified

•knowledge based industry or service (hereafte r in this section referred to as the

•resident employee), includes income specified in column B of the Table below, the

•income-tax payable shall be the aggregate of income-tax specified in the column C

thereof.

•Table

Sl.

No.

•Income Income-tax payable

•A B C

SECTION Section 1035

Untitled Section

1.Dividend on Global Depository Receipts of an

•Indian company engaged in specified knowledge

•based industry or service, issued as per such

•Employees’ Stock Option Scheme as the Central

•Government may, by notification, specify in this

•behalf and purchased by him in foreign currency.

•10%

SECTION Section 1036

Untitled Section

2.Income from long -term capital gains arising

•from the transfer of Global Depository Receipts

•referred to in serial number 1.

12.5%

SECTION Section 1037

Untitled Section

3.Total income as reduced by income referred to

•in serial numbers 1 and 2.

•Income-tax

•chargeable on such

•income

(2)Where the gross total income of the resident employee—

(a)consists only of income by way of dividends in respect of Global

•Depository Receipts referred to in sub-section ( 1)(Table: Sl. No. 1) , no

•deduction shall be allowed to him under any other provision of this Act;

(b)includes any income referred to in sub -section (1)(Table: Sl. No. 1)

•and (Table: Sl. No. 2),––

(i)the gross total income shall be reduced by such income; and

•(ii) the deduction under any provision of this Act shall be allowed

•as if the gross total income as so reduced were the gross total income of

•the assessee.

(3)The section 72(6) shall not apply for computation of long -term capital

•gains arising out of the transfer of long-term capital asset, being Global Depository

•Receipts referred to in sub-section (1)(Table: Sl. No. 2).

(4)In this section,—

(a)“Global Depository Receipts” means any instrument in the form of a

•depository receipt or certificate (by whatever name called) created by the

•Overseas Depository Bank outside India or in an International Financial

•Services Centre and issued to investors against the issue of,—

•Tax in case of

•block

•assessment of

•search cases.

•Tax on income

•from Global

•Depository

•Receipts

•purchased in

•foreign currency

•or capital gains

•arising from

•their transfer.

•216

•Tax on certain

incomes.

(i)ordinary shares of issuing company, being a company listed on

•a recognised stock exchange in India; or

•(ii) foreign currency convertible bonds of issuing company;

•(iii) ordinary shares of issuing company, being a company

•incorporated outside India, if such depository receipt or certificate is

•listed and traded on any International Financial Services Centre;

(b)“information technology service” means any service which results

•from the use of any information technology software over a system of

•information technology products for realising value addition;

(c)“information technology software ” means any representation of

•instructions, data, sound or image, including source code and object code,

•recorded in a machine readable form and capable of being manipulated or

•providing inter-activity to a user, by means of an automatic data processing

•machine falling under heading information technology products but does not

•include non-information technology products;

(d)“Overseas Depository Bank” means a bank authorised by the

•issuing company to issue Global Depository Receipts against issue of

•Foreign Currency Convertible Bonds or ordinary shares of the is suing

•company;

(e)“specified knowledge based industry or service” means—

(i)information technology software;

•(ii) information technology service;

•(iii) entertainment service;

•(iv) pharmaceutical industry;

(v)bio-technology industry; and

•(vi) any other industry or service, as specified by the Central

•Government, by notification; and

(f)“subsidiary ” shall have the same meaning as assigned to it in

SECTION Section 1038

Untitled Section

•section 2(87) of the Companies Act, 2013 and includes subsidiary

•incorporated outside India.

SECTION Section 1039

Untitled Section

194.(1) Irrespective of anything contained in any other provision of this

•Act, where the total income of an assessee as mentioned in column B of the

•Table below, includes income of the nature specified in column C of the said

•Table, the income -tax payable by suc h assessee, for a tax year, shall be the

•aggregate of––

(a)income-tax calculated on income mentioned in column C, at the rate

•mentioned in column D, subject to the conditions specified in the Notes

•relating to the respective serial number; and

(b)income -tax with which the assessee would have been chargeable

•had his total income been reduced by income mentioned in column C

thereof.

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•50

•Table

Sl.No. Assessee Income Rate

•of tax

•Conditions

•A B C D E

SECTION Section 104

Untitled Section

96.Transfer of income without transfer of assets.

SECTION Section 1040

Untitled Section

1.Any

person.

•Winnings (other

•than from any online

•game) from––

(a)lottery; or

(b)crossword

•puzzle; or

(c)race including

•horse race (not

•being income from

•the activity of

•owning and

•maintaining race

•horses); or

(d)card game

•and other game of

•any sort; or

(e)gambling or

•betting of any form

•or nature.

•30% Nil.

SECTION Section 1041

Untitled Section

2.A person,

•resident in

•India and

•who is a

•patentee

•(herein

•referred to as

•an eligible

•assessee).

•Royalty in respect

•of a patent developed

•and registered in India.

•10% (a) No deduction

•in respect of any

•expenditure or

•allowance shall be

•allowed to the

•eligible assessee

•under any provision

•of this Act in

•computing his

•income referred to in

•column C;

(b)an option for

•taxation of income

•by way of royalty in

•respect of a pate nt

•developed and

•registered in India is

•exercised in the

•prescribed manner,

•on or before the due

•date specified under

SECTION Section 1042

Untitled Section

•section 263(1) for

•furnishing the return

•of income for the

•relevant tax year;

(c)where an

•option is exercised

•under clause ( b) and

•the eligible assessee

•218

•A B C D E

•does not offer its

•income for taxation

•as per the provisions

•of columns C and D

•for any of the five tax

•years, succeeding

•such tax year, then

•such assessee shall

•not be eligible to

•claim the benefit of

•the provisions of

•columns C and D for

•five tax years

•subsequent to the tax

•year in which such

•income has not been

•offered to tax as per

•such provisions.

SECTION Section 1043

Untitled Section

3.Any

person.

•Income by way of

•transfer of carbon

credits.

•10% No deduction in

•respect of any

•expenditure or

•allowance shall be

•allowed to the

•assessee under any

•provision of this Act

•in computing his

•income referred to

•column C.

SECTION Section 1044

Untitled Section

4.Any

person.

•Any income from

•the transfer of any

•virtual digital asset.

•30% (a) No deduction

•in respect of any

•expenditure (other

•than cost of

•acquisition, if any) or

•allowance or set off

•of any loss shall be

•allowed to the

•assessee under any

•provision of this Act

•in computing the

•income referred to in

•column C; and

(b)no set off of

•loss from transfer

•of the virtual digital

•asset computed

•herein shall be

•allowed against

•income computed

•under any provision

•of this Act to the

•assessee and such

•loss shall not be

•allowed to be carried

•forward to

•succeeding tax years.

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•55

•219

•21 of 2000.

•39 of 1970.

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SECTION Section 1045

Untitled Section

5.Any person. Any income by way

•of net winnings from

•any online game,

•computed in the

•manner, as prescribed.

•30% Nil.

SECTION Section 1046

Untitled Section

6.Any person. Any profits and

•gains from life

•insurance business.

12.5% Nil.

(2)In this section,––

(a)“carbon credit”, in respect of one unit, means reduction of one tonne

•of carbon dioxide emissions or emission of its equivalent gases which is

•validated by the United Nations Framework on Climate Change and which

•can be traded in market at its prevailing market price;

(b)“computer resource” shall have the same meaning as assigned to it

•in section 2(1)(k) of the Information Technology Act, 2000;

(c)“developed” means at least 75% of the expenditure incurred in India

•by the eligible assessee for any invention in respect of which patent is granted

•under the Patents Act, 1970 (herein referred to as the Patents Act);

(d)“horse race” shall have the meaning assigned to it in section 115;

(e)“internet” means the combination of computer facilities and

•electromagnetic transmission media including related equipment and

•software, comprising the interconnected worldwide network of computer

•networks that transmits information based on a protocol for controlling such

•transmission;

(f)“invention” shall have the same me aning as assigned to it in

SECTION Section 1047

Untitled Section

•section 2(1)(j) of the Patents Act;

(g)“lump sum” includes an advance payment on account of such

•royalties which is not returnable;

(h)“online game” means a game that is offered on the internet and is

•accessible by a user through a computer resource including any

•telecommunication device;

(i)“patent” shall have the meaning assigned to it in section 2( 1)(m) of

•the Patents Act;

(j)“patented article” and “patented process” shall have the meanings as

•respectively assigned to them in section 2(1)(o) of the Patents Act;

(k)“patentee” means the person, being the true and first inventor of the

•invention, whose name is entered on the patent register as the patentee, as per

•the Patents Act, and includes every s uch person, being the true and first

•inventor of the invention, where more than one person is registered as patentee

•under that Act in respect of that patent;

(l)“royalty”, in respect of a patent, means consideration (including any

•lump sum consideration but excluding any consideration which would be the

•income of the recipient chargeable under the head “Capital gains” or

•consideration for sale of product manufactured with the use of patented

•process or the patented article for commercial use) for the—

•220

•Tax on income

•referred to in

SECTION Section 1048

Untitled Section

•section 102 or

•103 or 104 or

SECTION Section 1049

Untitled Section

105.

•Tax on short-

•term capital

•gains in certain

cases.

(i)transfer of all or any rights (including the granting of a licence)

•in respect of a patent; or

•(ii) imparting of any information concerning the working of, or the

•use of, a patent; or

•(iii) use of any patent; or

•(iv) rendering of any services in connection with the activities

•referred to in sub-clauses (i) to (iii);

(m)“true and first inventor” shall have the same meaning as assigned to

•it in section 2(1)(y) of the Patents Act; and

(n)for the purposes of sub -section ( 1)(Table: Sl. No. 4) , the term

•“transfer” as defined in section 2(109), shall apply to any virtual digital asset,

•whether capital asset or not.

SECTION Section 105

Untitled Section

97.Chargeability of income in transfer of assets.

SECTION Section 1050

Untitled Section

195.(1) Where the total income of an assessee—

(a)includes any income referred to in section 102 or 103 or 104 or

•105 or 106 and reflected in the return of income furnished under

SECTION Section 1051

Untitled Section

•section 263; or

(b)determined by the Assessing Officer includes any income

•referred to in any of the said sections, if such income is not covered

•under clause (a),

•the income-tax payable shall be the aggregate of—

(i)income-tax calculated on the income referred to in clauses ( a)

•and (b), at the rate of 60%; and

•(ii) income -tax with which the assessee would have been

•chargeable had his total income been reduced by income referred to in

SECTION Section 1052

Untitled Section

•clause (i).

(2)Irrespective of anything contained in this Ac t, no deduction in respect of

•any expenditure or allowance or set off of any loss shall be allowed to the assessee

•under any provision of this Act in computing his income referred to in

•sub-section (1)(a) and (b).

B.—Special provisions relating to tax on capital gains

SECTION Section 1053

Untitled Section

196.(1) Where the total income of an assessee includes any income chargeable

•under the head “Capital gains”, arising from the transfer of a short -term capital

•asset––

(a)being an equity share in a company or a unit of an equity oriented

•fund or a unit of a business trust; and

(b)the transaction of sale of such equity share or unit is chargeable

•to securities transaction tax under Chapter VII of the Finance (No. 2)

•Act, 2004, then,

•the tax payable by the assessee on the total income, subject to the provisions of

•sub-section (2), shall be the aggregate of—

(i)income -tax calculated on such short -term capital gains at the

•rate of 20%;

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•10

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•30

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•40

•45

•23 of 2004.

•221

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•10

•15

•20

•25

•30

•35

•40

•45

•(ii) income-tax payable on the balance amount of the total income as if

•such balance amount were the total income of the assessee.

(2)In the case of an individual or a Hindu undivided family, being a resident,

•where the total income, as reduced by short-term capital gains computed under

•sub-section (1), is below the maximum amount which is not chargeable to income-

•tax, then,—

(a)such short -term capital gains shall be reduced by the amount by

•which the total income as so reduced falls short of the m aximum amount

•which is not chargeable to income-tax; and

(b)the tax on the balance of such short -term capital gains shall be

•computed at the rate as applicable in sub-section (1)(i).

(3)The provisions of sub -section ( 1)(b) shall not apply to a transacti on

•undertaken on a recognised stock exchange located in any International Financial

•Services Centre and where the consideration for such transaction is paid or payable

•in foreign currency.

(4)Where the gross total income of an assessee includes any short-term capital

•gains referred to in sub -section ( 1), the deduction under Chapter VIII shall be

•allowed from the gross total income as reduced by such capital gains.

(5)In this section, “equity oriented fund” shall have the meaning assigned to

•it in section 198.

SECTION Section 1054

Untitled Section

197.(1) Where the total income of an assessee includes any income arising

•from the transfer of a long -term capital asset which is chargeable under the head

•“Capital gains”, the tax payable by the assessee on the total income, subject to

•sub-sections (2) and (3), shall be the aggregate of—

(a)income-tax payable on the total income as reduced by such long-term

•capital gains, had the total income, as so reduced, been his total income; and

(b)income -tax calculated on such long -term capital gains at the

•rate of 12.5%.

(2)In the case of an individual or a Hindu undivided family, being a resident,

•where the total income as reduced by long -term capital gains computed under

•sub-section (1) is below the maximum amount which is not chargeable to income-

•tax, then,—

(a)such long-term capital gains shall be reduced by the amount by which

•the total income as so reduced falls short of the maximum amount which is

•not chargeable to income-tax; and

(b)the tax on the balance of such long -term capital gains shall be

•computed at the rate as referred in sub-section (1).

(3)In the case of an individual or a Hindu undivided family, being a resident,

•in the case of transfer of a long -term capital asset, being land or building, or both,

•which is acquired before the 23rd July, 2024, the excess income-tax computed as

•per the following formula shall be ignored:––

•E = A – B

•where––

•E = excess income-tax to be ignored;

•A = income-tax computed under clause (b) of sub-section (1);

•Tax on long-term

•capital gains.

•222

•Tax on long-

•term capital

•gains in certain

cases.

•B = income-tax computed under clause (b) of sub-section (1) taking the

•rate as 20% and the capital gains is computed by taking the cost of acquisition

•as indexed cost of acquisition and the cost of improvement as indexed cost of

improvement.

(4)Where the gross total income of an assessee includes any income arising

•from the transfer of a long-term capital asset, the gross total income shall be reduced

•by such income and the deduction under Chapter VIII shall be allowed as if the gross

•total income as so reduced were the gross total income of the assessee.

(5)In this section,—

(a)“securities” shall have the same meaning as assigned to it in

SECTION Section 1055

Untitled Section

•section 2(h) of the Securities Contracts (Regulation) Act, 1956;

(b)“listed securities” means the securities which are listed on any

•recognised stock exchange in India;

(c)“unlisted securities” means securities other than listed securities;

(d)“indexed cost of acquisition” and “indexed cost of improvement”

•shall have the meanings respectively assigned to them in section 72.

SECTION Section 1056

Untitled Section

198.(1) Irrespective of anything contained in section 197, the tax payable by

•an assessee on his total income shall be determined as per the provisions of

•sub-section (2), if—

(a)the total income includes any income chargeable under the head

•“Capital gains”;

(b)the capital gains ar ise from the transfer of a long -term capital asset

•being an equity share in a company or a unit of an equity oriented fund or a

•unit of a business trust;

(c)securities transaction tax under Chapter VII of the Finance (No. 2)

•Act, 2004 has—

(i)in a case where the long-term capital asset is in the nature of an

•equity share in a company, been paid on acquisition and transfer of such

•capital asset; or

•(ii) in a case where the long-term capital asset is in the nature of a

•unit of an equity oriented fund or a unit of a business trust, been paid on

•transfer of such capital asset.

(2)The tax payable by the assessee on the total income referred to in

•sub-section (1) shall be the aggregate of—

(a)income-tax calculated on such long-term capital gains exceeding one

•lakh twenty five thousand rupees on long -term capital gains at the

•rate of 12.5%; and

(b)income -tax payable on the total income as reduced by long -term

•capital gains referred to in sub -section (1) as if the total i ncome so reduced

•were the total income of the assessee.

(3)In the case of an individual or a Hindu undivided family, being a resident,

•where the total income as reduced by long -term capital gains computed under

•sub-section ( 1) is below the maximum amount which is not chargeable to

•income-tax, then,—

•5

•10

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•30

•35

•40

•42 of 1956.

•23 of 2004.

•223

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•10

•15

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•40

(a)such long-term capital gains shall be reduced by the amount by which

•the total income as so reduced falls short of the maximum amount which is

•not chargeable to income-tax; and

(b)the tax on the balance of such long -term capital gains shall be

•computed at the rate as referred to in sub-section (2).

(4)The condition specified in sub -section (1)(c) shall not apply to a transfer

•undertaken on a recognised stock exchange located in any International Financial

•Services Centre and where the consideration for such transfer is received or

•receivable in foreign currency.

(5)The Central Government may, by notification, specify the nature of

•acquisition in respect of which the provisions of sub -section ( 1)(c)(i) shall not

apply.

(6)Where the gross total income of an assessee includes any long-term capital

•gains referred to in sub -section ( 1), the deduction under Chapter VIII shall be

•allowed from the gross total income as reduced by such capital gains.

(7)Where the total income of an assessee includes any long -term capital

•gains referred to in sub -section (1), the rebate under section 156 shall be allowed

•from the income -tax on the total income as reduced by tax payable on such capital

gains.

(8)In this section, “equity oriented f und” means a fund set up under a

•scheme of a mutual fund specified in Schedule VII (Table: Sl. No. 20 or 21) or

•under a scheme of an insurance company comprising unit linked insurance

•policies to which exemption in Schedule II (Table: Sl. No. 2) does not a pply

•and—

(i)in a case where the fund invests in the units of another fund which is

•traded on a recognised stock exchange,—

(A)a minimum of 90% of the total proceeds of such fund is

•invested in the units of such other fund; and

(B)such other fund also invests a minimum of 90% of its total

•proceeds in the equity shares of domestic companies listed on a

•recognised stock exchange; and

•(ii) in any other case, a minimum of 65% of the total proceeds of such

•fund is invested in the equity shares of domestic co mpanies listed on a

•recognised stock exchange,

•and, for the purposes of this clause,––

(I)the percentage of equity shareholding or unit held in respect of the

•fund, shall be computed with reference to the annual average of the monthly

•averages of the opening and closing figures;

•(II) in case of a scheme of an insurance company comprising unit linked

•insurance policies to which exemption in Schedule II (Table: Sl. No. 2) does

•not apply, the minimum requirement of 90% or 65%, as the case may be, is

•required to be satisfied throughout the term of such insurance policy.

•224

•Tax on income

•of certain

•manufacturing

•domestic

companies.

•Tax on income

•of certain

•domestic

companies.

C.—New tax regime

SECTION Section 1057

Untitled Section

199.( 1) Irrespective of anything contained in this Act, but subject to the

•provisions of Parts A, B and this Part other than sections 200 and 201, the

•income-tax payable in respect of the total income of a person, being a domestic

•company, for any tax year, shall, at the option of such person, be computed at the

•rate of 25% subject to the following conditions:––

(a)the company has been set -up and registered on or after the

•1st March, 2016;

(b)the company is not engaged in any business other than the business

•of manufacture or production of any article or thing and research in relation

•to, or distribution of, such article or thing manufactured or produced by it; and

(c)the total income of the company has been computed,—

(i)without any deduction under––

(A)sections 45(2)(c) and 47(1)(b);

(B)Chapter VIII-C, other than the provisions of section 146; or

(C)sections specified in section 205(1)(a) to (g);

•(ii) without set off of any loss carried forward from any earlier tax

•year, if such loss is attributable to any of the deductions referred to in

•sub-clause (i).

(2)The loss referred to in sub-section (1)(c)(ii) shall be deemed to have been

•given full effect to and no further deduction for such loss shall be allowed for any

•subsequent year.

(3)The provisions of this section shall not apply unless an option is exercised

•by the person in the manner as prescribed on or before the due date specified under

SECTION Section 1058

Untitled Section

•section 263(1) for furnishing the first of the returns of income which such person is

•required to furnish and such option once exercised, shall apply to subsequent

•tax years.

(4)Once the option under sub-section (3) has been exercised for any tax year,

•it cannot be subsequently withdrawn for the same or any other tax year, except

•where the person exercises option under section section 200.

SECTION Section 1059

Untitled Section

200.( 1) Irrespective of anything contained in this Act but subject to the

•provisions of Parts A, B and this Part , other than section s 199 and 201, the

•income-tax payable for a tax year shall be at the rate of 22%, at the option of a

•person being a domestic company, in respect of the total income of such person

•computed in the following manner:––

(a)without any deduction under––

(i)sections 45(2)(c) and 47(1)(b); or

•(ii) Chapter VIII other than the provisions of section 14 6; or

•(iii) sections specified in section 205(1)(a) to (g);

(b)without set off of any loss carried forward or depreciation from any

•earlier tax year, if such loss or depreciation is attributable to any of the

•deductions referred to in clause (a);

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•45

•50

(c)without set off of any loss or allowance for unabsorbed depreciation

•deemed so under section 116(1), if such loss or depreciation is attributable to

•any of the deductions referred to in clause (a).

(2)Where the person fails to satisfy the requirements c ontained in

•sub-section (1) in any tax year, the option shall become invalid in respect of the said

•tax year and subsequent years and other provisions of the Act shall apply, as if the

•option had not been exercised for such tax year and for subsequent years.

(3)The loss and depreciation referred to in sub-section (1)(b) and (c) shall be

•deemed to have been given full effect to and no further deduction for such loss or

•depreciation shall be allowed for any subsequent year.

(4)In case of a person, having a Unit in the International Financial Services

•Centre, which has exercised option under sub -section ( 5), the requirements

•contained in sub-section (1) shall be modified to the extent that the deduction under

•the said section shall be available to such Unit subject to fulfilment of the conditions

•contained in that section.

(5)The provisions of this section shall not apply unless the option is exercised

•by the person in the such manner as prescribed on or before the due date specified

•under section 263(1) for furnishing the return of income and such option once

•exercised, shall apply to subsequent tax years.

(6)Once the option under this section has been exercised for any tax year, it

•shall not be subsequently withdrawn for the same or any other tax year.

(7)In case of a person, being a domestic company, where the option exercised by it

•under section 201, has been rendered invalid due to violation of the conditions contained

•in section 205(2)(b) or (c) or (d), such person may exercise the option under this section.

SECTION Section 106

Untitled Section

98.“Transfer” and “revocable transfer” defined.

SECTION Section 1060

Untitled Section

201.( 1) Irrespective of anything contained in this Act, but subject to the

•provisions of Parts A, B and this Part other than section s 199 and 200, the

•income-tax payable in respect of the total income of an assessee, being a domestic

•company, specified in column B of the Table below, shall, at the option of such

•assessee, be computed at the rates specified in column C, if the conditions contained

•in column D thereof are fulfilled.

•Table

Sl.

No.

•Assessee Total income and rate of

•tax

•Conditions

•A B C D

SECTION Section 1061

Untitled Section

1.A

•domestic

•company

•engaged in

•business of

•manufacture

•or

•production

•of any article

•or thing.

(a)15% on the total

•income other than the

•income mentioned in

SECTION Section 1062

Untitled Section

•clauses (b), (c) and (d);

(b)22% (without any

•deduction or allowance in

•respect of any expenditure

•or allowance) on such

•income,––

(i)which has neither

•been derived from nor

•is incidental to

•manufacturing or

•production of an article

•or thing; and

•Such domestic company––

(a)exercises the option in

•the manner provided in sub -

•section (2);

(b)has been set -up and

•registered on or after the 1st

•October, 2019;

(c)has commenced

•manufacturing or production

•of an article or thing on or

•before the 31st March, 2024;

•Tax on income of

•new

•manufacturing

•domestic

companies.

•226

•New tax regime

•for individuals,

•Hindu undivided

•family and

others.

•A B C D

•(ii) in respect of

•which no specific rate

•of tax has been

•provided separately

•under this Part;

(c)22% on short -term

•capital gains derived from

•transfer of a capital asset on

•which no depreciation is

•allowable under this Act;

(d)30% on the income

•deemed so under

SECTION Section 1063

Untitled Section

•section 205(4).

(d)the total income of

•which is computed as per the

•provisions of

•sub-section (3); and

(e)fulfils all the

•conditions provided in

•sub-section ( 5) of this

•section and section 205(2).

(2)The option under this section shall be exercised by the assessee in the

•manner prescribed subject to the following conditions:––

(a)it shall be exercised on or before the due date specified under

SECTION Section 1064

Untitled Section

•section 263(1) for furnishing first of the returns of income for any tax year;

(b)such option, once exercised, shall apply to subsequent tax years;

(c)once the option has been exercised for any tax year, it shall not be

•subsequently withdrawn for the same or any other tax year; and

(d)where the assessee fails to fulfil the conditions contained in

•sub-section (1)(Table: Sl. No. 1.D) in any tax year,––

(i)the option shall become invalid in respect of such tax year and

•subsequent tax years; and

•(ii) the other provisions of this Act shall apply, as if the option had

•not been exercised for that tax year and subsequent tax years.

(3)For the purposes of sub-section (1), the total income of the assessee shall

•be computed,—

(a)without any deduction under—

(i)sections 45(2)(c) and 47(1)(b);

•(ii) Chapter VIII other than sections 146 and 148; or

•(iii) section 205(1)(a) to (g);

(b)without set off of any loss or allowance for unabsorbed depreciation

•deemed so under section 116(1), if such loss or depreciation is attributable to any

•of the deductions referred to in clause (a).

(4)While computing the income of the assessee, the loss and depreciation, or

•both, as specified in sub-section (3)(b) shall be deemed to have been given full effect

•to and no further deduction for such loss or depreciation, or both, shall be allowed

•for any subsequent year.

(5)In case of an amalgamation, option under this section shall remain valid in case

•of the amalgamated company only and if the conditions contained in sub-section (1)

•(Table: Sl. No. 1.D) are continued to be fulfilled by such company.

SECTION Section 1065

Untitled Section

202.( 1) Irrespective of anything contained in this Act but subject to the

•provisions of Parts A, B and this Part the income-tax payable by a person, being—

(a)an individual; or

(b)a Hindu undivided family; or

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•25

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•227

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•40

(c)an association of persons (other than a co-operative society); or

(d)a body of individuals, whether incorporated or not; or

(e)an artificial juridical person referred to in section 2(77)(g),

•in respect of the total income for a tax year, shall, unless the person exercises the

•option in the manner provided under sub-section (4), be computed at the rate of tax

•given in the following Table:—

•Table

Sl.No. Total income Rate of tax

•A B C

SECTION Section 1066

Untitled Section

1.Upto ₹4,00,000 Nil

SECTION Section 1067

Untitled Section

2.From ₹4,00,001 to ₹8,00,000 5%

SECTION Section 1068

Untitled Section

3.From ₹8,00,001 to ₹12,00,000 10%

SECTION Section 1069

Untitled Section

4.From ₹12,00,001 to ₹16,00,000 15%

SECTION Section 107

Untitled Section

99.Income of individual to include income of spouse, minor child, etc.

SECTION Section 1070

Untitled Section

5.From ₹16,00,001 to ₹20,00,000 20%

SECTION Section 1071

Untitled Section

6.From ₹20,00,001 to ₹24,00,000 25%.

SECTION Section 1072

Untitled Section

7.Above ₹24,00,000 30%

(2)For the purposes of sub-section (1), the total income of the assessee shall

•be computed—

(a)without any exemption or deduction under the provisions of or in––

(i)Schedule III (Table: Sl. No. 5 or 6 or 7 or 8 or 11 or 17);

•(ii) Schedule III (Table: Sl. No. 12 or 13) (other than those as

•prescribed for this purpose);

•(iii) section 144;

•(iv) section 19(1) (Table: Sl. No. 1);

(v)section 22( 1)(b), in respect of properties referred to in

SECTION Section 1073

Untitled Section

•section 21(6);

•(vi) section 33(8);

•(vii) section 48;

•(viii) section 49;

•(ix) section 45(3)(a) or (b) or (c);

(x)section 46;

•(xi) section 47(1)(a);

•(xii) of Chapter VIII other than the provisions of sections 124(1),

•125(3) and 146; and

(b)without set off of—

(i)any loss carried forward or depreciation from any earlier tax

•year, if such loss or depreciation is attributable to any of the

•deductions referred to in clause (a); or

•(ii) any loss under the head “Income from house property” with

•any other head of income; and

•228

•Tax on income

•of certain

•resident co-

•operative

societies.

(c)without any exemption or deduction for allowances or perquisite,

•called by any name, provided under any other law in force.

(3)The loss and depreciation referred to in sub-section (2)(b) shall be deemed

•to have been given full effect to and no further deduction for such loss or

•depreciation shall be allowed for any subsequent year.

(4)Nothing contained in sub -section (1) shall apply to a person, where an

•option is exercised by such person under this section, in such manner as prescribed,

•for any tax year, and such option is exercised,––

(a)in case of a person having income from business or profession,––

(i)on or before the due date specified under section 263(1) for

•furnishing the returns of income for such tax year;

•(ii) such option, once exercised, shall apply to subsequent tax

•years;

•(iii) such option, once exercised, may be withdrawn only once for

•a tax year other than the tax year for which it was exercised; and

•(iv) after such withdrawal, the per son shall never be eligible to

•exercise the option under this sub -section, except where such person

•ceases to have any income from business or profession, and in such a

•case the option under clause (b) shall be available;

(b)in case of a person not having income from business or profession,

•along with the return of income to be furnished under section 263(1) for the

•tax year.

(5)In case of a person, having a Unit in the International Financial Services

•Centre, who has exercised the option under sub-section (4) for any tax year from

•2020-21 to 2023-24, the provisions of sub-section (2) shall be modified to the extent

•that deduction under the said section shall be available to such Unit subject to

•fulfilment of the conditions contained in that section.

SECTION Section 1074

Untitled Section

203.( 1) Irrespective of anything contained in this Act but subject to the

•provisions of Part A, B and this Part, other than section 204, the income-tax payable

•for a tax year shall be at the rate of 22%, at the option of a person being a

•co-operative society resident in India, in respect of the total income of such person

•computed in the following manner:––

(a)without any deduction under—

(i)Chapter VIII other than the provisions of section 146; or

•(ii) sections specified in section 205(1)(a) to (g);

(b)without set off of any loss carried forward or depreciation from any

•earlier tax year, if such loss or depreciation is attributable to any of the

•deductions referred to in clause (a).

(2)Where a person fails to satisfy the requirements contained in sub-section (1)

•in any tax year, the option shall become invalid in respect of the said tax year and

•subsequent tax years and other provisions of the Act shall apply, as if the option had

•not been exercised for such tax year and for subsequent tax years.

(3)The loss and depreciation referred to in clause (b) of sub-section (1) shall

•be deemed to have been given full effect to and no further deduction for such loss

•or depreciation shall be allowed for any subsequent tax year.

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•229

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(4)In case of a person, having a Unit in the International Financial Services

•Centre, which has exercised option under this section, the requirements contained

•in sub -section ( 1) shall be modified to the extent that the deduction under

SECTION Section 1075

Untitled Section

•section 147 shall be available to such Unit subject to fulfilment of the conditions

•contained in the said section.

(5)The provisions of this section shall not apply unless the option is exercised

•by the person in the prescribed manner on or before the due date speci fied under

SECTION Section 1076

Untitled Section

•section 263(1) for furnishing the return of income and such option once exercised

•shall apply to subsequent tax years.

(6)Once the option under this section has been exercised for any tax year, it

•shall not be subsequently withdrawn for the same or any other tax year.

SECTION Section 1077

Untitled Section

204.( 1) Irrespective of anything contained in this Act but subject to the

•provisions of Part A, B and this Part other than section 203, the income-tax payable

•in respect of the total income of an assessee, being a co -operative society, resident

•in India, engaged in the business of manufacture or production of any article or

•thing, shall at the option of such assessee, be computed at the rates specified in

•column A of the said Table, if the conditions contained in column B thereof are

fulfilled.

•Table

•Total income and rate

•of tax

•Conditions

•A B

(a)15% on the total

•income other than the income

•mentioned in clauses ( b), ( c)

•and (d);

(b)22% (without any

•deduction or allowance in

•respect of any expenditure or

•allowance) on such income,—

(i)which has

•neither been derived

•from nor is incidental to

•manufacturing or

•production of an article

•or thing; and

•(ii) in respect of

•which no specific rate of

•tax has been provided

•separately under this

•Part;

(c)22% on short -term

•capital gains derived from

•transfer of a capital asset on

•which no depreciation is

•allowable under this Act;

(d)30% on the income

•deemed so under section 205 (4).

•Such co-operative society––

(a)exercises the option in the manner

•provided in sub-section (2);

(b)has been set -up and registered on or

•after the 1st April, 2023; and

(c)has commenced manufacturing or

•production of an article or thing on or before the

•31st March, 2024; and

(d)the total income of which is computed

•as per the provisions of sub-section (3); and

(e)fulfils all the conditions provided in

SECTION Section 1078

Untitled Section

•section 205(2).

•Tax on income

•of certain new

•manufacturing

•co-operative

societies.

•230

•Conditions for

•tax on income of

•certain

•companies and

•co-operative

societies.

(2)The option under this section shall be exercised by the assessee in the

•manner as prescribed subject to the following conditions:––

(a)it shall be exercised on or before the due date specified under

SECTION Section 1079

Untitled Section

•section 263(1) for furnishing the first of the returns of income for any tax year;

•and

(b)such option, once exercised, shall apply to subsequent tax years;

(c)once the option has been exercised for any tax year, it shall not be

•subsequently withdrawn for the same or any other tax year;

(d)where the assessee fails to fulfil the conditions contained in

•sub-section (1)(Table: Sl. No. 1. B) in any tax year,––

(i)the option shall become invalid in respect of the tax year and

•subsequent tax years; and

•(ii) the other provisions of this Act shall apply, as if the option had

•not been exercised for that tax year and subsequent tax years.

(3)For the purposes of sub-section (1), the total income of the assessee shall

•be computed,—

(a)without any deduction under––

(i)Chapter VIII other than the provisions of section 146; or

•(ii) sections specified in 205(1)(a) to (g);

(b)without set off of any loss carried forward or depreciation from

•earlier tax year, if such loss or depreciation is attributable to any of the

•deductions referred to in clause (a).

(4)While computing the income of the assessee, the loss and depreciation, or

•both, as specified in sub -section (3)(b) be shall be deemed to have been given full

•effect to and no further deduction for such loss or depreciation, or both, shall be

•allowed for any subsequent year.

SECTION Section 108

Untitled Section

100.Liability of person in respect of income included in income of another

person.

SECTION Section 1080

Untitled Section

205.( 1) For the purposes of sections 199(1)(c)(i)(C), 200(1)(a)(iii),

•201(3)(a)(iii), 203(1)(a)(ii) and 204(3)(a)(ii), the total income shall be computed

•without any deduction or exemption, under the following provisions:––

(a)section 33(8), determined in such manner, as prescribed;

(b)section 45(3)(a) or (b) or (c);

(c)section 46;

(d)section 47(1)(a).;

(e)section 48;

(f)section 49; and

(g)section 144.

(2)For the purposes of section 201 or 204, the following conditions shall apply

•to the assessee:—

(a)its business is not formed by splitting up, or the reconstruction, of a

•business already in existence, unless it is formed as a result of the

•re-establishment, reconstruction or revival of the business of any such

•undertaking as is referred to in section 140(4) in the circumstances and within

•the period specified in the said section;

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•43 of 1961.

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(b)it does not use any machinery or plant, previously used for any

•purpose, other than—

(i)permitted machinery or plant used outside India;

•(ii) machinery or plant or any part thereof previously used for any

•purpose and the total value of such machinery or plant or any part thereof

•put to use by the assessee does not exceed 20% of the total value of the

•machinery or plant used by such assessee;

(c)in case of a domestic company, it does not use any building previously

•used as a hotel or a convention centre, in respect of which deduction under section

•80-ID of the Income Tax Act, 1961 has been claimed and allowed;

(d)it is not engaged in any business other than the business of

•manufacture or production of any article or thing and research in relation to,

•or distribution of, such article or thing manufactured or produced by it,

•and, if any difficulty arises in fulfilling any of the conditions contained in clause (b)

•or (c) or (d), the Board may, with the previous approval of the Central Government,

•issue guidelines for the purpose of removing the difficulty and to promote

•manufacturing or production of article or thing using new plant and machinery.

(3)No guideline under sub-section (2) shall be issued after the expiration of

•two years from the 1st April, 2026.

(4)Every guideline issued by the Board under sub -section (2) shall be laid

•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 session aforesaid, both houses agree in making any modification in such

•guideline or both Houses agree that the guideline, should not be issued, the guideline

•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 guideline.

(5)For the purposes of section 201,––

(a)where it appears to the Assessing Officer that, owing to the close

•connection between the person to which the said 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

•business, then the Assessing Officer shall, in computing the profits and gains

•of such business for the purposes of this section, take profits as may be

•reasonably deemed to have been derived therefrom, and where the said

•arrangement involves a specified domestic trans action referred to in

SECTION Section 1081

Untitled Section

•section 164, profits from such transaction shall be determined having regard

•to the arm’s length price as defined in section 173(a); and

(b)the amount, being profits in excess of the profits determined by the

•Assessing Officer under clause ( a), shall be deemed to be the income of the

•person and shall be chargeable at the rates specified in section 201( 1)

•[Table: Sl. No. 1.B(d)] or 204 (1)[Table: Sl. No. 1.A(d)], as the case may be.

(6)For the purposes of this Part,––

(a)the business of manufacture or production of any article or thing shall

•include the business of generation of electricity but shall not include business of—

(i)development of computer software in any form or in any media; or

•232

•Special

•provision for

•minimum

•alternate tax and

•alternate

•minimum tax.

•(ii) mining; or

•(iii) conversion of marble blocks or similar items into slabs;

•or

•(iv) bottling of gas into cylinder; or

(v)printing of books or production of cinematograph film; or

•(vi) any other business as may be notified by the Central

•Government in this behalf; and

(b)the expressions,––

(i)“hotel” and “convention centre” shall have the meanings

•respectively assigned to them in clause (b) and clause (a) of section

•80-ID(6) of the Income Tax Act, 1961;

•(ii) “permitted machinery and plant used outside India”

•means the machinery or plant, which was previously used outside

•India by any other person, if the following conditions are

•fulfilled:—

(A)such machinery or plant was not, at any time

•previous to the date of the installation, used in India;

(B)such machinery or plant is imported into India from

•any country outside India; and

(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

•before the date of installation of machinery or plant by

•the person;

•(iii) “unabsorbed depreciation” shall have the meaning

•assigned to it in section 116(13)(e); and

•(iv) “Unit” shall have the same meaning as assigned to it in

SECTION Section 1082

Untitled Section

•section 2(zc) of the Special Economic Zones Act, 2005.

D.—Special provisions relating to minimum alternate tax and alternate

•minimum tax

SECTION Section 1083

Untitled Section

206.(1) Irrespective of anything contained in any other provision of

•this Act, where in the ca se of an assessee, referred to in column B of Table,

•the income -tax payable on the total income as computed under this Act in

•respect of a tax year is less than the percentage referred to in column C of

•the said Table of book profit in the case of a company or of adjusted total

•income in any other case, computed as per the provisions of Note to the said

•Table, then––

(a)such book profit in the case of a company or such adjusted total

•income in any other case shall be deemed to be the total income of that

•assessee for such tax year; and

(b)the tax payable on such total income shall be at the rate

•provided in column C of the said Table.

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•43 of 1961.

•28 of 2005.

•233

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•10

•15

•20

•25

•30

•35

•40

Sl.

No.

•Assessee Percentage of book profit or

•adjusted total income

•A B C

SECTION Section 1084

Untitled Section

1.A company, other than a unit

•as referred to against serial

•number 2.

•15% of book profit.

SECTION Section 1085

Untitled Section

2.A unit, being a company

•located in an International

•Financial Services Centre and

•derives its income solely in

•convertible foreign exchange.

•9% of book profit.

SECTION Section 1086

Untitled Section

3.A person, other than––

(a)a company;

(b)a co-operative society;

(c)a unit as referred to

•against serial number 4.

18.5% of adjusted total

income.

SECTION Section 1087

Untitled Section

4.A unit, being a person other

•than a company located in an

•International Financial Services

•Centre and derives its income

•solely in convertible foreign

exchange.

•9% of adjusted total

income.

SECTION Section 1088

Untitled Section

5.A co-operative society. 15% of adjusted total

income.

•Table

•Note 1:—Adjusted total income, for the purposes of Sl. Nos. 3, 4 and 5 shall

•be the total income before giving effect to this section, as increased by deductions

•claimed, if any, under—

(a)any section (other than section 149) included in Chapter VIII-C;

(b)section 144; and

(c)section 46 as reduced by depreciation allowable as per the provisions

•of section 33, as if no deduction was allowed in respect of the assets on which

•the deduction under that section is claimed.

(2)The book profit under this section shall be computed in the following

•manner:––

•B = P + (I-R)

•where,––

•B = book profit for the purposes of this section;

•P = profit, as shown in the statement of profit and loss for the

•relevant tax year prepared as per sub-section (3);

•I = amounts mentioned in column B of Table below;

•R = amounts mentioned in column C of said Table.

•234

•Table

Sl.

No.

•Amounts (to be increased) Amounts (to be reduced)

•A B C

SECTION Section 1089

Untitled Section

1.(a) Income-tax paid or payable

•and the provision therefor, if any

•such amount is debited to the

•statement of profit and loss, where

•income-tax shall include—

(i)any interest charged under

•this Act;

•(ii) surcharge, if any, as

•levied under the Central Acts;

•(iii) Education Cess on

•income-tax, if any, as levied

•under the Central Acts; and

•(iv) Secondary and Higher

•Education Cess on income -tax,

•if any, as levied under the

•Central Acts;

(b)the amounts carried to any

•reserves, called by any name, if

•any such amount is debited to the

•statement of profit and loss;

(c)the amount or amounts set

•aside for meeting liabilities, other

•than ascertained liabilities, if any

•such amount is debited to the

•statement of profit and loss;

(d)the amount by way of

•provision for losses of subsidiary

•companies, if any such amount is

•debited to the statement of profit

•and loss;

(e)dividends paid or proposed,

•if any such amount is debited to the

•statement of profit and loss;

(f)expenditure relatable to any

•income to which provisions of

SECTION Section 109

Untitled Section

•CHAPTER VI

•AGGREGATION OF INCOME

SECTION Section 1090

Untitled Section

•section 11 apply or any expenditure

•out of regular income of a registered

•non-profit organisation referred in

SECTION Section 1091

Untitled Section

•section 335, if any such amount is

•debited to the statement of profit and

•loss;

(g)depreciation, if any such

•amount is debited to the statement

•of profit and loss;

(h)deferred tax and the

•provision therefor, if any such

•amount is debited to the statement

•of profit and loss;

(a)The amount withdrawn from

•any reserve or provision, where,––

(i)any such amount is credited

•to the statement of profit and loss

•(excluding a reserve created

•before the 1st April, 1997

•otherwise than by way of a debit

•to the stateme nt of profit and

•loss); and

•(ii) the book profit of such

•year has been increased by those

•reserves or provisions out of

•which the said amount was

•withdrawn;

(b)income to which any of the

•provisions of section 11 apply or

•any regular income of a registered

•non-profit organisation referred in

SECTION Section 1092

Untitled Section

•section 335, if any such amount is

•credited to the statement of profit

•and loss;

(c)depreciation debited to the

•statement of profit and loss

•excluding the depreciation on

•account of revaluation of assets;

(d)the amo unt withdrawn from

•revaluation reserve and credited to

•the statement of profit and loss, to

•the extent it does not exceed

•depreciation on account of

•revaluation of assets referred to in

SECTION Section 1093

Untitled Section

•clause (c);

(e)deferred tax, if any such

•amount is credited to the s tatement

•of profit and loss;

(f)loss brought forward

•(excluding depreciation) or

•unabsorbed depreciation, whichever

•is less, as per books of account,

•except, where either of such amount

•is nil, in case of a company other

•than the company referred to in

•sub-section (4) (Table: Sl. No. 6 or

•7); and

(g)such amounts mentioned in

•column D of the Table in

•sub-section ( 4), in case of an

•assessee mentioned in column B of

•the said Table.

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•235

•18 of 2013.

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•A B C

(i)the amount or amounts set

•aside as provision for diminution in

•the value of any asset, if any such

•amount is debited to the statement

•of profit and loss;

(j)the amount standing in

•revaluation reserve relating to

•revalued asset on the retirement or

•disposal of such asset, if any such

•amount is not credited to the

•statement of profit and loss; and

(k)such amounts mentioned in

•column C of the Table under

•sub-section ( 4), in case of an

•assessee mentioned in column B of

•the said Table.

(3)For the purposes of this section, every company shall prepare its statement

•of profit and loss for the relevant tax year in the following manner:––

(a)if it is an insurance or banking company, or a company engaged in

•the generation or supply of electricity, or any other class of company for which

•a form of financial statement has been specified under the enactment

•governing such class of company, as per the provisions of such enactment;

(b)in all other cases, as per the provisions of Schedule III to the

•Companies Act, 2013.

(4)While computing the book profit under sub -section ( 2), the following

•amounts shall be further adjusted:––

•Table

S.No. Assessee Amounts

•(to be increased)

•Amount

•(to be decreased)

•A B C D

SECTION Section 1094

Untitled Section

1.A company

•being a member

•of association of

•persons or body

•of individuals

•The amount or

•amounts of

•expenditure relatable

•to income referred to in

•Note if any such

•amount is debited to

•the statement of profit

•and loss

•Income referred to in

•Note if any such amount

•is credited to the

•statement of profit and

loss.

•Note : Income, being share of the assessee in the income of an association of

•persons or body of individuals, on which no income -tax is payable as per the

•provisions of section 310.

SECTION Section 1095

Untitled Section

2.A foreign

•company

•The amount or

•amounts of expenditure

•relatable to income

•referred to in Note ,if

•any such amount is

•debited to the statement

•of profit and loss.

•Income referred to in

•Note , if such income is

•credited to the

•statement of profit and

loss.

•236

•A B C D

•Note: Income, accruing or arising to an assessee from—

(a)the capital gains arising on transactions in securities; or

(b)the interest, dividend, royalty or fees for technical services

•chargeable to tax at the rate or rates specified in Chapter XIII,

•if the income-tax payable thereon as per the provisions of this Act, other than the

•provisions of this Part, is at a rate less than the rate specified in sub-section (1).

SECTION Section 1096

Untitled Section

3.A company,

•which has

•transferred any

•capital asset,

•being share of a

•special purpose

•vehicle to a

•business trust

•Amount referred to in

•Note, if any such

•amount is debited to

•the statement of profit

•and loss.

•Amount referred to

•in Note,

•if any such amount is

•credited to the

•statement of profit and

loss.

•Note: The amount representing––

(a)the notional loss on transfer of such capital asset, to a business trust

•in exchange of units allotted by the trust referred to in section 70(1)(zi); or

(b)the notional loss resulting from any change in carrying amount of

•the said units; or

(c)the loss on transfer of units referred to in section 70(1)(zi).

SECTION Section 1097

Untitled Section

4.A company,

•which has

•transferred any

•capital asset, as

•referred to

•against serial

•number 3

•Gain on transfer of

•units referred to in

•Note

•Loss on transfer of

•units referred to in

Note.

•Note: Units referred to in section 70( 1)(zi), computed by taking into account

•the cost of the shares exchanged with units referred to in the said clause, or the

•carrying amount of the shares at the time of exchange, where such shares are

•carried at a value other than the cost through statement of profit and loss, as the

•case may be.

SECTION Section 1098

Untitled Section

5.Where total

•income

•includes

•income by way

•of royalty in

•respect of a

•patent which is

•chargeable to

•tax under

SECTION Section 1099

Untitled Section

•section

•194(1)(Table:

Sl.No. 2).

•The amount or

•amounts of

•expenditure relatable

•to such royalty income,

•if any such amount is

•debited to the

•statement of profit and

•loss

•Income by way of

•such royalty.

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•40

•237

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•10

•15

•20

•25

•30

•35

•40

•45

•50

•55

•A B C D

SECTION Section 11

Untitled Section

7.Income deemed to be received.

SECTION Section 110

Untitled Section

101.Total income.

SECTION Section 1100

Untitled Section

6.A company,

•and its

•subsidiary and

•the subsidiary of

•such subsidiary,

•where, the

•Tribunal, on an

•application

•moved by the

•Central

•Government

•under section

•241 of the

•Companies Act,

•2013 has after

•suspension of

•the Board of

•Directors of

•such company

•has nominated

•new directors

•under section

•242 of the said

•Act

•Nil The aggregate of

•unabsorbed

•depreciation and loss

•(excluding

•depreciation) brought

forward.

SECTION Section 1101

Untitled Section

7.A company

•against whom

•corporate

•insolvency

•resolution

•process has

•been admitted

•by the

•Adjudicating

•Authority under

SECTION Section 1102

Untitled Section

•section 7 or 9 or

•10 of the

•Insolvency and

•Bankruptcy

•Code, 2016

•Nil The aggregate of

•unabsorbed depreciation

•and loss (excluding

•depreciation) brought

forward.

SECTION Section 1103

Untitled Section

8.A sick

•industrial

•company under

SECTION Section 1104

Untitled Section

•section 17(1) of

•the Sick

•Industrial

•Companies

•(Special

•Provisions) Act,

•1985, as it stood

•immediately

•before its repeal

•by the Sick

•Industrial

•Companies

•(Special

•Provisions)

•Repeal Act, 2003

Nil.Profits for the tax year

•in which the such

•company has become a

•sick industrial company

•and ending with the tax

•year during which the

•entire net worth of such

•company becomes

•equal to or exceeds the

•accumulated losses.

•.

•238

•A B C D

SECTION Section 1105

Untitled Section

9.A company

•whose financial

•statements are

•drawn up in

•compliance

•with the Indian

•Accounting

•Standards,

•specified in

•Annexure to the

•Companies

•(Indian

•Accounting

•Standards)

•Rules, 2015

•made under the

•Companies Act,

SECTION Section 1106

Untitled Section

2013.

(a)All amounts

•credited to the

•statement of profit and

•loss as referred in Note

•1;

(c)the amounts or

•aggregate of the

•amounts debited to the

•statement of profit and

•loss on distribution as

•referred in Note 2;

(c)one -fifth of the

•transition amount, in

•the year of

•convergence and each

•of the following four

•tax years, if such

•amount is not

•decreased;

(d)the amount or

•the aggregate of the

•amounts referred to in

•Note 3, if such amount

•is not decreased;

(e)the amount or

•the aggregate of the

•amounts referred to in

•Note 4, if such amount

•is not decreased.

(a)All amounts

•debited to the statement

•of profit and loss as

•referred in Note 1;

(b)the amounts or

•aggregate of the

•amounts credited to the

•statement of profit and

•loss on distribution as

•referred in Note 2;

(c)one -fifth of the

•transition amount, in the

•year of convergence

•and each of the

•following four tax

•years, if such amount is

•not increased;

(d)the amount or the

•aggregate of the

•amounts referred to in

•Note 3, if such amount

•is not increased;

(f)the amount or

•the aggregate of the

•amounts referred to

•in Note 4, if such

•amount is not

increased.

•Note 1: Other comprehensive income in the statement of profit and loss under

•the head “Items that will not be re-classified to profit or loss”, excluding—

(i)revaluation surplus for assets as per the Indian Accounting Standards

•16 and Indian Accounting Standards 38; or

•(ii) gains or losses from investments in equity instruments designated at

•fair value through other comprehensive income as per the Indian Accounting

•Standards 109; and

•the amount or the aggregate of the amounts referred to in clause ( a) (i) and

•(ii) for the tax year or any of the preceding tax years, and relatable to such asset or

•investment, in the tax year in which the said asset or investment r eferred to in

SECTION Section 1107

Untitled Section

•clause (a) is retired, disposed, realised or otherwise transferred.

•Note 2: on distribution of non -cash assets to shareholders in a demerger as

•per Appendix A of the Indian Accounting Standards 10.

•Note 3: sub-section (19)(f)(ii) to (v) relatable to such asset or investment, in

•the tax year in which the asset or investment referred to in such sub -clauses is

•retired, disposed, realised or otherwise transferred.

•Note 4: sub -section (19)(f)(ii) to ( v) relatable to such foreign operat ions, in

•the tax year in which the foreign operation referred to in such sub-clause is disposed

•or otherwise transferred.

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(5)In case of a person, being a company, while preparing the annual accounts

•including statement of profit and loss,—

(a)the accounting policies;

(b)the accounting standards adopted for preparing such accounts

•including statement of profit and loss; and

(c)the method and rates adopted for calculating the depreciation,

•shall be the same as have been adopted for the purpose of preparing such accounts

•including statement of profit and loss and laid before the company at its annual

•general meeting as per the provisions of section 129 of the Companies Act, 2013,

•or correspond to the accounting policies, accounting standards and the method and

•rates for calculating the depreciation which have been adopted for preparing such

•accounts including statement of profit and loss for, such financial year or part of

•such financial year falling within the relevant tax year, where the company has

•adopted or adopts the financial year under the which is different from the tax year

•under this Act.

(6)The provisions of this section shall not be applicable to any assessee, being

•a foreign company, where––

(a)the assessee is a resident of a country or a specified territory with

•which India has an agreement referred to in section 15 9(1) or the Central

•Government has adopted any agreement under section 159(2) and the assessee

•does not have a permanent establishment in India as per the provisions of such

•agreement; or

(b)the assessee is a resident of a country with which India does not have

•an agreement of the nature referred to in clause ( a) and the assessee is not

•required to seek registration under any law in force relating to companies; or

(c)its total income comprises solely of profits and gains from business

•referred to in section 61(2)(Table: Sl. Nos. 1, 3, 4 and 5), and such income has

•been offered to tax at the rates specified in the respective sections.

(7)In the case of a resulting company, where the property and the liabilities

•of the undertaking or undertakings being received by it are recorded at values

•different from the values appearing in the books of account of the demerged

•company immediately before the demerger, any change in such value shall be

•ignored for the purpose of computation of book profit of the resulting company

•under this section.

(8)In the case of an assessee being a company, where ––

(a)there is an increase in book profit of the tax year due to income of past

•year or years included in the book profit on account of ––

(i)an advance pricing agreement entered into by the assessee under section

•168; or

•(ii) a secondary adjustment required to be made unde r section 170; and

(b)the assessee has not utilised the credit of tax paid under this section in

•any subsequent tax year under sub -section ( 13),

•the Assessing Officer shall, on an application made to him in this behalf

•by the assessee, ––

(i)recompute the book profit of the past year or years and tax payable, if

•any, by the assessee during the tax year under sub -section ( 1) in such manner,

•as prescribed; and

•240

•(ii) the provisions of section 287 shall, so far as may be, apply and the

•period of four years specified in sub-sections (7) and (8) of that section shall

•be reckoned from the end of the tax year in which the said application is

•received by the Assessing Officer.

(9)Irrespective of anything contained in any other provisions of this Act, no

•interest shall be payable to an assessee on the refund arising on account of the

•provisions of sub-section (8).

(10)In the case of an assessee being a company, nothing contained in

•sub-section ( 1) shall affect the determination of the amounts in relation to the

•relevant tax year to be carried forward to the subsequent year or years under the

•provisions of––

(a)section 33(11); or

(b)section 111; or

(c)section 112(1); or

(d)section 113; or

(e)section 115.

(11)Every assessee to which this section applies, shall furnish a report in the

•prescribed form from an accountant, certifying that the book profit in the case of a

•company, or adjusted total income in any other case, has been computed as per the

•provisions of this section––

(a)before the specified date referred to in section 63; or

(b)along with the return of income furnished in response to a notice

•under section 268(1) in the case of an assessee being a company.

(12)Save as otherwise provided in this section, all other provisions of this Act

•shall apply to every assessee mentioned in this section.

(13)Where any tax is paid under sub -section (1) by an assessee, then, credit

•shall be allowed to him of an amount which shall be the difference of the tax paid

•for any tax year under sub -section (1) and tax payable by the assessee on his total

•income computed as per the other provisions of this Act.

(14)While allowing credit under sub-section (13),––

(a)no interest shall be payable on the tax credit so allowed; and

(b)where tax credit in respect of any income-tax paid in any country or

•specified territory outside India, under section 159(1) or (2), allowed against

•the tax payable under the provisions of sub-section (1) exceeds such tax credit

•admissible against the tax payable by the assessee on its income as per the

•other provisions of this Act, then, while computing the credit under

•sub-section (13), such excess amount shall be ignored.

(15)Tax credit determined under sub-section (13) shall be carried forward and––

(a)set off in a year, when tax becomes payable on the total income

•computed as per the provisions of this Act exceeds tax determined under

•sub-section (1); and

(b)such set off in respect of brought forward tax credit shall be allowed

•for any tax year to the extent of the difference between the tax on his total

•income and the tax which would have been payable under the provisions of

•sub-section (1) for that tax year,

•and such carry forward shall not be allowed beyond the fifteenth tax year

•immediately succeeding the tax year in which the tax credit becomes allowable

•under sub-section (13).

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•241

•6 of 2009.

•31 of 2016.

•1 of 1986.

•1 of 2004.

•6 of 2009.

•42 of 1956.

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(16)Where as a result of any order passed under this Act, tax payable under

•this Act is reduced or increased, tax credit allowed under sub-section (13) shall also

•be increased or reduced accordingly.

(17)In case of conversion of a private company or unlisted public company into

•a limited liability partnership under the Limited Liability Partnership Act, 2008, the

•provisions of this section shall not apply to the successor limited liability partnership.

(18)The provisions of this section shall not apply to––

(a)a person, being a company having income accruing or arising from

•life insurance business referred to in section 194(1)(Table: Sl. No. 6); or

(b)a person, who has exercised the option under––

(i)section 200(5); or

•(ii) section 201(2); or

•(iii) section 203(5); or

•(iv) section 204(2); or

(c)a person, whose income-tax payable in respect of the total income of

•such person is computed under section 202(1); or

(d)an individual or a Hindu undivided family or an association of

•persons or a body of individuals, whether incorporated or not, or an artificial

•juridical person referred to in section 2(77)(g), if the adjusted total income of

•such person does not exceed twenty lakh rupees; or

(e)any specified fund referred to in Schedule VI (Note 1).

(19)In this section,—

(a)“Adjudicating Authority” shall have the same meaning as

•assigned to it in section 5(1) of the Insolvency and Bankruptcy Code, 2016;

(b)“convergence date” means the first day of the first Indian Accounting

•Standards reporting period as defined in the Indian Accounting Standards 101;

(c)“net worth” shall have the meaning assigned to it in section 3(1)(ga)

•of the Sick Industrial Companies (Special Provisions) Act, 1985, as it stood

•immediately before its repeal by the Sick Industrial Companies (Special

•Provisions) Repeal Act, 2003;

(d)“private company” and “unlisted public company” shall have the

•meanings respectively assigned to them in the Limited Liability Partnership

•Act, 2008;

(e)“securities” shall have the same meaning as assigned to it in

SECTION Section 1108

Untitled Section

•section 2(h) of the Securities Contracts (Regulation) Act, 1956;

(f)“transition amount” means the amount or the aggregate of the

•amounts adjusted in the other equity (excluding capital reserve and

•securities premium reserve) on the convergence date, but not including the

•following:—

(i)amount or aggregate of the amounts adjusted in the other

•comprehensive i ncome on the convergence date which shall be

•subsequently re-classified to the profit or loss;

•(ii) revaluation surplus for assets as per the Indian Accounting

•Standards 16 and Indian Accounting Standards 38 adjusted on the

•convergence date;

•(iii) gains or losses from investments in equity instruments

•designated at fair value through other comprehensive income as per the

•Indian Accounting Standards 109 adjusted on the convergence date;

•(iv) adjustments relating to items of property, plant and equipment

•and intangible assets recorded at fair value as deemed cost as per

•paragraphs D5 and D7 of the Indian Accounting Standards 101 on the

•convergence date;

•242

•Tax on

•dividends,

•royalty and

•technical service

•fees in case of

•foreign

companies.

(v)adjustments relating to investments in subsidiaries, joint

•ventures and associates recorded at fair value as deemed cost as per

•paragraph D15 of the Indian Accounting Standards 101 on the

•convergence date; and

•(vi) adjustments relating to cumulative translation differences of a

•foreign operation as per paragraph D13 of the Indian Accounting

•Standards 101 on the convergence date.

(g)“Tribunal” shall have the same meaning as assigned to it in

SECTION Section 1109

Untitled Section

•section 2(90) of the Companies Act, 2013;

(h)“Unit” means a unit established in an International Financial Services

•Centre;

(i)“year of convergence” means the tax year within which the

•convergence date falls; and

(j)a company shall be a subsidiary of another company, if such other

•company holds more than half in the nominal value of equity share capital of

•the company.

E.—Special provisions relating to non-residents and foreign companies

SECTION Section 111

Untitled Section

102.Unexplained credits.

SECTION Section 1110

Untitled Section

207.(1) The income-tax payable on the total income of a non -resident (not

•being a company) or a foreign company, which includes any income specified in the

•column B of the Table below, shall be the aggregate of income-tax specified in the

•column C thereof.

•Table

Sl.

No.

•Income Income-tax

•payable

•A B C

SECTION Section 1111

Untitled Section

1.Dividend [other than dividends specified against

•serial number 2.

•20%

SECTION Section 1112

Untitled Section

2.Dividend received from a unit in an International

•Financial Services Centre.

•10%

SECTION Section 1113

Untitled Section

3.Interest received from Government or an Indian

•concern on monies borrowed or debt incurred by

•Government or the Indian concern in foreign currency

•not being interest referred to against serial numbers 4

•and 5.

•20%

SECTION Section 1114

Untitled Section

4.Interest received from an infrastructure debt fund

•referred to in Schedule VII (Table: Sl. No. 46).

•5%

SECTION Section 1115

Untitled Section

5.Interest of the nature and extent referred to in section

•393(2) (Table: Sl. No. 2), (Table: Sl. No. 3 and 4).

•Rates

•specified in

SECTION Section 1116

Untitled Section

•section 393( 2)

•(Table: Sl. No. 2,

•3 and 4).

SECTION Section 1117

Untitled Section

6.Distributed income being interest referred to in

SECTION Section 1118

Untitled Section

•section 393(2) (Table: Sl. No. 6).

•Rate specified

•in section 393(2)

•(Table: Sl.

No.6).

SECTION Section 1119

Untitled Section

7.Income received in respect of units, purchased in

•foreign currency, of a Mutual Fund specified in

•Schedule VII (Table: Sl. No. 20 or 21) or of the Unit

•Trust of India.

•20 %

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•18 of 2013.

•243

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•A B C

SECTION Section 112

Untitled Section

103.Unexplained investment.

SECTION Section 1120

Untitled Section

8.Total income as reduced by income referred to

•against serial numbers 1 to 7.

•Income-tax

•chargeable on

•such income.

(2)Where the total income of a non -resident (not being a company) or of a

•foreign company, includes any income by way of royalty or fees for technical

•services received from Government or an Indian concern in pursuance of an

•agreement made after the 31st March,1976, other than income referred to in section

•59(1), and—

(a)the agreement is approved by the Central Government where such

•agreement is with an Indian concern; or

(b)where the agreement relates to a matter included in the industrial

•policy, for the time being in force, of the Government of India, it is as per that

•policy,

•then, subject to the provisions of sub -section (3), the income-tax payable shall be

•the aggregate of income-tax specified in column C of the Table below:––

•Table

Sl.

No.

•Income Income-tax payable

•A B C

SECTION Section 1121

Untitled Section

1.Royalty [other than income referred to in

SECTION Section 1122

Untitled Section

•section 59(1)].

•20%

SECTION Section 1123

Untitled Section

2.Fees for technical services [other than

•income referred to in section 59(1)].

•20%

SECTION Section 1124

Untitled Section

3.Total income as reduced by income

•referred to against serial numbers 1 and 2.

•Income-tax chargeable on

•such income.

(3)Where the royalty referred to in sub-section (2) is in consideration for the

•transfer or grant of all or any rights (including the granting of a licence)––

(a)in respect of copyright in any book to an Indian concern; or

(b)in respect of any computer software to a person resident in India,

•then the provisions of sub-section (2) shall apply in relation to such royalty without

•application of provisions of clause (a) or (b) of that sub-section.

(4)In this section,––

(a)“computer software” means any computer programme recorded on

•any disc, tape, perforated media or other information storage device; or any

•customised electronic data or any product or service of similar nature as

•notified by the Board, which is transmitted or exported from India to a place

•outside India by any means;

(b)“fees for technical services” shall have the meaning assigned to it in

SECTION Section 1125

Untitled Section

•section 9;

(c)“royalty” shall have the meaning assigned to it in section 9.

(5)No deduction in respect of any expenditure or allowance shall be allowed

•under sections 28 to 61 and section 93 for computing income referred to in

•sub-sections (1) and (2).

(6)Where the gross total income of an assessee––

(a)consists only of the income referred to in sub-section (1)(Table: Sl. No.

•1 to 7), no deduction shall be allowed under Chapter VIII;

(b)includes any income referred to in sub -section (1) (Table: Sl. No. 1

•to 7), the gross total income shall be reduced by such income and the deduction

•under Chapter VIII shall be allowed as if such reduced amount were the gross

•total income of the assessee;

•244

•Tax on income

•from units

•purchased in

•foreign

•currency or

•capital gains

•arising from

•their transfer.

(7)the provisions of sub-section (6) shall not apply to a deduction allowed to

•Unit of an International Financial Services Centre under section 147.

(8)It shall not be necessary for an assessee to furnish a return of income under

SECTION Section 1126

Untitled Section

•section 263(1), if—

(a)the total income during the tax year consisted only of income referred

•to in sub-sections (1)(Table: Sl. No. 1 to 7) and sub-section (2) (Table: Sl. No.

•1 and 2); and

(b)the tax deductible at source under the provisions of Chapter XIX -B

•has been deducted from such income at a rate not l ess than the rate specified

•in sub-sections (1) and (2).

SECTION Section 1127

Untitled Section

208.(1) The income-tax payable on the total income of an assessee, being an

•overseas financial organisation (herein referred to as Offshore Fund) , which

•includes income specified in column B of the Table below, shall be the aggregate of

•the amount specified in column C thereof.

•Table

Sl.

No.

•Income Income-tax payable

•A B C

SECTION Section 1128

Untitled Section

1.Income received in respect of units purchased in

•foreign currency.

•10 %

SECTION Section 1129

Untitled Section

2.Long-term capital gains arising from the transfer

•of units purchased in foreign currency.

12.5%

SECTION Section 113

Untitled Section

104.Unexplained asset.

SECTION Section 1130

Untitled Section

3.Total income as reduced by income referred to in

•against serial numbers 1 and 2.

•Income-tax

•chargeable on such

income.

(2)Where the gross total income of the Offshore Fund—

(a)consists only of income from units or income by way of long -term

•capital gains arising from the transfer of units, or both, no deduction shall be

•allowed to the assessee under sections 26 to 61 or section 93(1)(a) and (e) or

•under Chapter VIII;

(b)includes any income referred to in clause (a),––

(i)the gross total income shall be reduced by such income; and

•(ii) the deduct ion under Chapter VIII shall be allowed as if the

•gross total income so reduced were the gross total income of the

assessee.

(3)In this section,––

(a)“overseas financial organisation” means any fund,

•institution, association or body, whether incorporated or not,

•established under the laws of a country outside India,––

(i)which has entered into an arrangement for

•investment in India with any public s ector bank or public

•financial institution or a mutual fund specified in

•Schedule VII (Table: Sl. No. 20 or 21); and

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•15 of 1992.

•18 of 2013.

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•(ii) such arrangement is approved by the Securities and Exchange

•Board of India, established under the Securities and Exchange Board of

•India Act, 1992, for this purpose;

(b)“public financial institution” shall have the same meaning as

•assigned to it in section 2(72) of the Companies Act, 2013;

(c)“unit” means unit of,––

(i)a mutual fund specified in Schedule VII (Table: Sl. No. 20) or

•(Table: Sl. No. 20 or 21); or

•(ii) the Unit Trust of India.

SECTION Section 1131

Untitled Section

209.(1) The income -tax payable, on the total income of an assessee, being a

•non- resident, which includes income specified in column B of the Table below,

•shall be the aggregate of the amounts mentioned in column C thereof.

•Table

Sl.

No.

•Income Income-tax

•payable

•A B C

SECTION Section 1132

Untitled Section

1.From interest on––

(a)bonds of an Indian company issued in

•accordance with such scheme as notified by the

•Central Government; or

(b)bonds of a public sector company sold by the

•Government,

•and purchased in foreign currency.

•10 %

SECTION Section 1133

Untitled Section

2.From dividends on Global Depository Receipts —

(a)issued as per such scheme as the Central

•Government may, notified , against the initial issue

•of shares of an Indian company and purchased in

•foreign currency through an approved intermediary;

•or

(b)issued against the shares of a public sector

•company sold by the Government and purchased by

•him in foreign currency through an approved

•intermediary; or

(c)issued or re -issued in accordance with a

•scheme notified by the Central Government, against

•the existing shares of an Indian company purchased

•in foreign currency through an approved

intermediary.

•10 %

SECTION Section 1134

Untitled Section

3.Long-term capital gains arising from the transfer of

•bonds referred to against serial number 1 or Global

•Depository Receipts referred to against serial number 2.

SECTION Section 1136

Untitled Section

4.Total income as reduced by income referred to against

•serial numbers 1 to 3.

•Income-

•tax chargeable

•on such

income.

•Tax on income

•from bonds or

•Global

•Depository

•Receipts

•purchased in

•foreign

•currency or

•capital gains

•arising from

•their transfer.

•246

•Tax on income of

•Foreign

•Institutional

•Investors from

•securities or

•capital gains

•arising from their

transfer.

(2)Where the gross total income of the non-resident—

(a)consists only of income by way of interest or dividends in respect

•of––

(i)bonds referred to in sub -section ( 1) (Table: Sl. No. 1); or

•sub-section (1); or

•(ii) Global Depository Receipts referred to in sub -section ( 1)

•(Table: Sl. No. 2), no deduction shall be allowed under sections 26 to 61

•or section 93(1)(a) or 93(1)(e) or under Chapter VIII;

(b)includes any income referred to in sub-section (1) (Table: Sl. No. 1)

•to (Table: Sl. No. 3),––

(i)the gross total income shall be reduced by the such income;

•and

•(ii) the deduction under Chapter VIII shall be allowed as if the

•gross total income so reduced, were the gross total income of the

assessee.

(3)The provisions of section 72(6) shall not apply for computation of long-term

•capital gains arising out of the transfer of long-term capital asset being bonds or Global

•Depository Receipts referred to in sub-section (1) (Table: Sl. No. 3).

(4)It shall not be necessary for a non-resident to furnish a return of his income

•under section 263(1), if—

(a)his total income during the tax year consisted only of income referred

•to in sub-sections (1) (Table: Sl. No. 1) and (Table: Sl. No. 2); and

(b)the tax deductible at source under the provisions of Chapter XIX -B

•has been deducted from such income.

(5)Where the assessee acquired Global Depository Receipts or bonds in an

•amalgamated or resulting company by virtue of his holding Global Depos itory

•Receipts or bonds in the amalgamating or demerged company, as the case may be,

•as per the provisions of sub-section (1), the provisions of that sub-section shall apply

•to such Global Depository Receipts or bonds.

(6)In this section,––

(a)“approved intermediary” means an intermediary which is approved

•as per a scheme notified by the Central Government; and

(b)“Global Depository Receipts” shall have the meaning assigned to it

•in section 190(4)(a).

SECTION Section 1137

Untitled Section

210.(1) The income -tax payable on total income of a n assessee, being a

•specified fund or Foreign Institutional Investor, which includes the income referred

•to in column B of the Table below, shall be the aggregate of the amounts mentioned

•in column C thereof.

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•Table

Sl.

No.

•Income Income-tax

•payable

•A B C

SECTION Section 1138

Untitled Section

1.Securities other than units referred to in section

SECTION Section 1139

Untitled Section

208.

(a)20 % in

•case of Foreign

•Institutional

•Investor;

(b)10 % in case

•of specified fund.

SECTION Section 114

Untitled Section

105.Unexplained expenditure.

(v)

SECTION Section 1140

Untitled Section

2.Short-term capital gains (not being short -term

•capital gains referred to in section 196) arising from

•the transfer of such securities.

•30 %

SECTION Section 1141

Untitled Section

3.Short-term capital gains referred to in section 196

•arising from the transfer of such securities

•20 %

SECTION Section 1142

Untitled Section

4.Long-term capital gains (not being long -term

•capital gains referred to in section 198 arising from

•the transfer of such securities

12.5 %

SECTION Section 1143

Untitled Section

5.Long-term capital gains referred to in section 198

•arising from the transfer of such securities which

•exceeds ₹ 1,25,000.

12.5 %

SECTION Section 1144

Untitled Section

6.Total income as reduced by income referred to

•against serial numbers 1 to 5.

•Income-tax

•chargeable on such

income.

(2)In case of specified fund, provisions of this section shall apply only to the

•extent of income that is attributable to units held by non -resident (not being a

•permanent establishment of such non-resident in India) calculated in the manner as

•prescribed, irrespective of the provisions of sub-section (1).

(3)Irrespective of anything contained in sub -section (1), where the

•specified fund ––

(a)is investment division of an offshore banking unit as specified against

•serial number 1 of the Table in Schedule III.6; and

(b)fulfills the conditions referred to in clause ( g)D(ii) of cell E1 of the

•Table in Schedule VI (Note 1),

•the provisions of this section shall apply to the extent of income that is attributable

•to such investment division, calculated in the manner, as prescribed.

(4)Where the gross total income of the specif ied fund or Foreign

•Institutional Investor —

(a)consists only of income in respect of securities referred in

•sub-section (1) (Table: Sl. No. 1) , no deduction shall be allowed to it under

•sections 26 to 61 or section 93( 1)(a) or (e) or under Chapter VIII;

(b)includes any income referred to in sub-section (1) (Table: Sl. No. 1)

•to (Table: Sl. No. 5),––

•248

•Tax on non-

•resident

•sportsmen or

•sports

associations.

(i)the gross total income shall be reduced by the amount of such

•income; and

•(ii) the deduction under Chapter VIII shall be allowed as if the

•gross total income as so reduced, were the gross total income of the

•specified fund or Foreign Institutional Investor.

(5)The provisions of section 72( 6) shall not apply for the computation of

•capital gains arising out of the transfer of securities referred to in sub -section (1)

•(Table: Sl. No. 2) to (Table: Sl. No. 5).

(6)In this section,––

(a)“Foreign Institutional Investor” means an investor so specified in a

•notification by the Central Government;

(b)“permanent establishment” shall have the meaning assigned to it in

SECTION Section 1145

Untitled Section

•section 173(c);

(c)“securities” shall have the same meaning as assigned to it in

SECTION Section 1146

Untitled Section

•section 2(h) of the Securities Contracts (Regulation) Act, 1956;

(d)“specified fund” shall have the meaning assigned to it in Schedule VI

•[Note 1]

SECTION Section 1147

Untitled Section

211.(1) Where the total income of an assessee,––

(a)being a sportsman (including an athlete), who is not a citizen of

•India and is a non -resident, includes any income received or receivable by

•way of––

(i)participation in India in any game [other than a game the

•winnings from which are taxable as specified in section 19 4(1) (Table:

Sl.No. 1)] or sport; or

•(ii) advertisement; or

•(iii) contribution of articles relating to any game or sport in India

•in newspapers, magazines or journals; or

(b)being a non-resident sports association or institution, includes any

•amount guaranteed to be paid or payable to such association or institution

•in relation to any game, other than a game the winni ngs from which are

•taxable as specified in section 194( 1) (Table: Sl. No. 1) or sport played in

•India; or

(c)being an entertainer, who is not a citizen of India and is a

•non-resident, includes any income received or receivable from his

•performance in India,

•then, the income -tax payable by the assessee shall be the aggregate of amounts

•mentioned in column C of the Table below:––

•Table

Sl.No. Income Income-tax payable

•A B C

SECTION Section 1148

Untitled Section

1.Income referred to in clause ( a) or ( b)

•or (c).

•20 %

SECTION Section 1149

Untitled Section

2.Total income as reduced by income

•referred to in clause (a) or (b) or (c).

•Income-tax chargeable

•on such income.

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•10

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•42 of 1956.

•249

•18 of 2013.

•18 of 1944.

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(2)No deduction in respect of any expenditure or allowance shall be allowed

•under any provision of this Act in computing the income referred to in

•sub-section (1).

(3)It shall not be necessary for the assessee to furnish a return of his income

•under section 263(1), if—

(a)his total income during the tax year consisted only of income referred

•to in sub-section (1); and

(b)the tax deductible at source under the provi sions of Chapter XIX-B

•has been deducted from such income.

•212 In sections 213 to 218,—

(a)“foreign exchange asset ” means any specified asset which the

•assessee has acquired or purchased with, or subscribed to in, convertible

•foreign exchange;

(b)“investment income ” means any income derived from a foreign

•exchange asset;

(c)“long-term capital gains” means income chargeable under the head

•“Capital gains ” relating to a capital asset, being a foreign exchange asset

•which is not a short-term capital asset;

(d)“non -resident Indian” means an individual, who is not a resident

•and is—

(i)a citizen of India; or

•(ii) a person of Indian origin;

(e)“specified asset” means any of the following assets:—

(i)shares in an Indian company; or

•(ii) debentures issued by an Indian company which is not a private

•company as defined in the Companies Act, 2013; or

•(iii) deposits with an Indian company which is not a private

•company as defined in the Companies Act, 2013; or

•(iv) any sec urity of the Central Government as defined in

SECTION Section 1150

Untitled Section

•section 2(c) of the Public Debt Act, 1944; or

(v)such other assets as the Central Government may specify in this

•behalf by notification.

SECTION Section 1151

Untitled Section

213.(1) No deduction in respect of any expenditure or allowance shall be

•allowed under any provision of this Act in computing the investment income of a

•non-resident Indian.

(2)In the case of an assessee, being a non-resident Indian, where––

(a)the gross total income consists only of investment income or income

•by way of long-term capital gains or both then no deduction shall be allowed

•under Chapter VIII;

(b)the gross total income includes any income referred to in clause (a),––

•Interpretation

•Special

•provision for

•computation of

•total income of

•non-residents.

•250

•Tax on

•investment

•income and

•long-term capital

gains.

•Capital gains on

•transfer of

•foreign

•exchange assets

•not to be

•charged in

•certain cases.

(i)the gross total income shall be reduced by such income; and

•(ii) the deductions under Chapter VIII shall be allowed as if the

•gross total income as so reduced was the gross total income of the

assessee.

SECTION Section 1152

Untitled Section

214.The Income -tax payable, on the total income of an assessee, being

•a non -resident Indian, which includes income specified in column B of the

•Table below, shall be the aggregate of the amounts mentioned in column C

thereof.

•Table

Sl.

No.

•Income Income-tax payable

•A B C

SECTION Section 1153

Untitled Section

1.Income from investment or income

•from long-term capital gains of an asset

•other than a specified asset.

•20 %

SECTION Section 1154

Untitled Section

2.Income from long-term capital gains

•on specified asset.

12.5%

SECTION Section 1155

Untitled Section

3.Total income as reduced by income

•referred to against serial numbers 1

•and 2.

•Income-tax chargeable on

•such income.

SECTION Section 1156

Untitled Section

215.(1) Where, in case of an assessee, being a non-resident Indian,––

(a)any long -term capital gains arises from the transfer of a foreign

•exchange asset (herein referred as original asset); and

(b)within six months after the date of such transfer, he has invested the

•whole or any part of the net consideration in any specified asset (here in

•referred as new asset),

•then the capital gains shall be dealt with in the following manner:—

(i)if the cost of the new asset is not less than the net consideration in

•respect of the original asset, the whole of such capital gain shall not be charged

•under section 67;

•(ii) if the cost of the new asset is less than the net consideration in respect

•of the original asset, then the capital gain computed by the following formula

•shall not be charged under section 67:––

•A=B×C

•D

•Where,

•A = the capital gains not to be charges being computed;

•B = whole of the capital gain;

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•C = cost of acquisition of the new asset;

•D = net consideration in respect of the original asset.

(2)For the In sub -section ( 1),––

(a)“cost”, in relation to any new asset, being a deposit referred to in

SECTION Section 1157

Untitled Section

•section 212( e)(iii)(v), means the amount of such deposit;

(b)“net consideration” in relation to the transfer of the original asset,

•means the full value of the consideration received or accruing as a result

•of the transfer of such asset as reduced by any expenditure incurred wholly

•and exclusively in connection with such transfer.

(3)Where the new asset is transferred or converted (otherwise than by

•transfer) into money, within three years from date of its acquisition, the capital

•gain arising from transfer of original asset not so charged under section 67 shall

•be deemed to be income by way of capital gains of the tax year in which such

•transfer or conversion takes place relating to capital assets other than short -term

•capital assets of the tax year in which the new asset is transferred or converted

•(otherwise than by transfer) into money.

SECTION Section 1158

Untitled Section

216.It shall not be necessary for a non -resident Indian to furnish a return

•of his income under section 263( 1), if—

(a)his total income during the tax year consisted only of investment

•income or income by way of long -term capital gains or both; and

(b)the tax deductible at source under the provisions of

SECTION Section 1159

Untitled Section

•Chapter XIX -B has been deducted from such income.

SECTION Section 116

Untitled Section

106.Amount borrowed or repaid through negotiable instrument, hundi, etc.

SECTION Section 1160

Untitled Section

217.(1) Where a non -resident Indian in any tax year, ––

(a)becomes assessable as a r esident in India in a subsequent tax year;

•and

(b)furnishes a declaration in writing to the Assessing Officer along

•with his return of income under section 263for the tax year for which he is

•so assessable,to the effect that provisions of sections 212 to 218 shall

•continue to apply to him in relation to the investment income derived from

•any foreign exchange asset referred to in section 212(e) other than a share

•in an Indian company,

•then the provisions of this Chapter shall continue to apply in relation to such

•income until the transfer or conversion (otherwise than by transfer) of such

•assets into money.

SECTION Section 1161

Untitled Section

218.( 1) A non -resident Indian may choose not to be governed by the

•provisions of sections 212 to 217 for any tax year by declaring it in his return of

•income under section 263 for such tax year. and if he does so, —

(a)the provisions of sections 212 to 217 shall not apply to him for

•that tax year, and

(b)his total income for that tax year shall be computed and charged

•to tax according to the other prov isions of this Act.

•Return of

•income not to

•be furnished in

•certain cases.

•Benefit to be

•available in

•certain cases

•even after

•assessee

•becomes

resident.

•Provisions not to

•apply if the

•assessee so

chooses.

•252

•Conversion of an

•Indian branch of

•foreign company

•into subsidiary

•Indian company.

•Foreign

•company said to

•be resident in

India.

SECTION Section 1162

Untitled Section

219.(1) Where a foreign company is engaged in the business of banking in

•India through its branch situate d in India and such branch is converted into a

•subsidiary Indian company as per the scheme framed by the Reserve Bank of India,

•then, irrespective of anything contained in this Act and subject to the conditions as

•notified by the Central Government,—

(a)the capital gains arising from such conversion shall not be chargeable

•to tax in the tax year in which such conversion takes place; and

(b)the provisions of this Act relating to––

(i)treatment of unabsorbed depre ciation, set off or carry forward

•and set off of losses;

•(ii) tax credit in respect of tax paid on deemed income relating to

•certain companies; and

•(iii) computation of income of the foreign company and subsidiary

•Indian company,

•shall apply with such exceptions, modifications and adaptations as specified in that

notification.

(2)In case of failure to comply with any of the conditions specified in the

•scheme or in the notification issued under sub-section (1), all the provisions of this

•Act shall apply to the foreign company and the said subsidiary Indian company

•without any benefit, exemption or relief under the said sub-section.

(3)Where, in a tax year, any benefit, exemption or relief has been claimed and

•granted as per the provisions of sub-section (1) and, subsequently, there is failure to

•comply with any of the conditions specified in the scheme or in the notification

•issued under the said sub-section then,—

(a)such benefit, exemption or relief shall be deemed to have been

•wrongly allowed;

(b)the Assessing Officer may, irrespective of anything in this Act,

•re-compute the total income of the assessee for the said tax year and make the

•necessary amendment; and

(c)the provisions of section 287 shall, so far as may be, apply thereto

•and the period of four years specified in sub -section (8) of that section being

•reckoned from the end of the tax year in which the failure to comply with the

•condition referred to in sub-section (1) takes place.

(4)Every notification issued under this section shall be laid before each House

•of Parliament.

SECTION Section 1163

Untitled Section

220.(1) Where a foreign company is said to be a resident in India in any tax

•year and such company has not been a resident in India in earlier tax years , then,

•irrespective of anything in this Act and subject to the conditions as notified by the

•Central Government in this behalf, the provisions of this Act relating to—

(a)the computation of total income;

(b)treatment of unabsorbed depreciation;

(c)set off or carry forward and set off of losses;

(d)collection and recovery; and

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(e)special provisions relating to avoidance of tax,

•shall apply with such exceptions, modifications and adaptations as specified in

•that notification for such tax years;

(2)Where the determination regarding foreign company to be resident in

•India has been made in the assessment proceedings for any tax year, then, the

•provisions of sub -section ( 1) shall also apply to any other tax year succeeding

•such tax year, which ends on or before the date of completion of such assessment

proceeding.

(3)Where, in a tax year, any benefit, exemption or relief has been claimed

•and granted to the foreign company as per the provisions of sub -section (1), and,

•subsequently, there is failure to comply with any of the conditions specified in

•the notification issued under the said sub -section, then, —

(a)such benefit, exemption or relief shall be deemed to have been

•wrongly allowed;

(b)the Assessing Office r may, irrespective of anything in this Act,

•re-compute the total income of the assessee for the said tax year and make

•the necessary amendment as if the exceptions, modifications and

•adaptation referred to in sub -section ( 1) did not apply; and

(c)the provisions of section 287 shall, so far as may be, apply thereto

•and the period of four years specified in sub -section ( 8) of that section

•being reckoned from the end of the tax year in which the failure to comply

•with the condition referred to in sub -section ( 1) takes place.

(4)Every notification issued under this section shall be laid before each

•House of Parliament.

F.—Special provisions relating to pass -through entities

SECTION Section 1164

Untitled Section

221.( 1) Irrespective of anything contained in this Act, where a person

•being an investor of a securitisation trust, receives any income or any income

•accrues or arises to him, out of investments made in the securitisation trust, such

•income shall be chargeable t o income -tax in the same manner as if, it were the

•income accruing or arising to, or received by, such person, had the investments

•by the securitisation trust been made directly by him.

(2)The income paid or credited by the securitisation trust shall be d eemed

•to be of the same nature and in the same proportion in the hands of the person

•referred to in sub -section ( 1), as if it had been received by, or had accrued or

•arisen to, the securitisation trust during the tax year.

(3)The income accruing or arisin g to, or received by, the securitisation

•trust during a tax year, if not paid or credited to the person referred to in

•sub-section ( 1), shall be deemed to have been credited to the account of the said

•person––

(a)on the last day of the tax year; and

(b)in the same proportion in which such person would have been

•entitled to receive the income had it been paid in the tax year.

•Tax on income

•from

•securitisation

trusts.

•254

•Tax on income

•in case of

•venture capital

undertakings.

(4)The person responsible for crediting or making payment of the income on

•behalf of securitisation trust, and the securitisation trust, shall furnish, within such

•period, as prescribed, to the person who is liable to tax in respect of such income

•and to the prescribed income-tax authority, a statement in such form and verified in

•such manner, giving details of the nature of the income paid or credited during the

•tax year and such other relevant details, as prescribed.

(5)Any income which has been included in the total income of the person

•referred to in sub-section (1) in a tax year, on account of it having accrued or arisen

•in the said tax year, shall not be included in the total income of such person in the

•tax year in which such income is actually paid to him by the securitisation trust.

(6)In this section,—

(a)“investor” means a person who is holder of any securi tised debt

•instrument or securities or security receipt issued by the securitisation trust;

(b)“securities” means debt securities issued by a Special Purpose

•Vehicle as referred to in the guidelines on securitisation of standard assets

•issued by the Reserve Bank of India;

(c)“securitised debt instrument” shall have the same meaning as

•assigned to it in regulation 2( 1)(s) of the Securities and Exchange Board of

•India (Public Offer and Listing of Securitised Debt Instruments) Regulations,

•2008 made under the Securities and Exchange Board of India Act, 1992 and

•the Securities Contracts (Regulation) Act, 1956;

(d)“securitisation trust” means a trust, being a—

(i)“special purpose distinct entity” as defined in regulation 2(1)(u)

•of the Securities and Exchange Board of India (Public Offer and Listing

•of Securitised Debt Instruments) Regulations, 2008 made under the

•Securities and Exchange Board of India Act, 1992 and the Securities

•Contracts (Regulation) Act, 1956 and regulated under the said

•regulations; or

•(ii) “Special Purpose Vehicle” as defined in, and regulated by, the

•guidelines on securitisation of standard assets issued by the Reserve

•Bank of India; or

•(iii) trust set -up by a securitisation company or a reconstruction

•company formed, for the purpos es of the Securitisation and

•Reconstruction of Financial Assets and Enforcement of Security Interest

•Act, 2002, or in pursuance of any guidelines or directions issued for the

•said purposes by the Reserve Bank of India,

•which fulfils such conditions, as prescribed;

(e)“security receipt” shall have the same meaning as assigned to it in

SECTION Section 1165

Untitled Section

•section 2(1)(zg) of the Securitisation and Reconstruction of Financial Assets

•and Enforcement of Security Interest Act, 2002.

SECTION Section 1166

Untitled Section

222.(1) Irrespective of anything contained in any other provision of this Act,

•where a person, out of investments made in a venture capital company or venture

•capital fund, receives any income, or any income accrues or arises to him, such

•income shall be chargeable to income -tax in the same manner as if , it were the

•income accruing or arising to, or received by, such person, had he made investments

•directly in the venture capital undertaking.

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•15 of 1992.

•42 of 1956.

•15 of 1992.

•42 of 1956.

•54 of 2002.

•255

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(2)The person responsible for crediting or making payment of the income on

•behalf of a venture capital company or a venture capital fund and the venture capital

•company or venture capital fund shall furnish, within such time, as prescribed, to

•the person who is liable to tax in respect of such inco me and to the prescribed

•income-tax authority, a statement in the prescribed form and verified in the

•prescribed manner, giving details of the nature of the income paid or credited during

•the tax year and such other relevant details, as prescribed.

(3)The income paid or credited by the venture capital company and the

•venture capital fund shall be deemed to be of the same nature and in the same

•proportion in the hands of the person referred to in sub -section (1) as it had been

•received by, or had accrued or arisen to, the venture capital company or the venture

•capital fund, as the case may be, during the tax year.

(4)The provisions of Chapter XIX-B shall not apply to the income paid by a

•venture capital company or venture capital fund under this Chapter.

(5)The income accruing or arising to or received by the venture capital

•company or venture capital fund during a tax year from investments made in venture

•capital undertaking, if not paid or credited to the person referred to in sub-section (1),

•shall be deemed to have been credited to the account of the said person––

(a)on the last day of the tax year; and

(b)in the same proportion in which such person would have been

•entitled to receive the income had it been paid in the tax year.

(6)Any income which has been included in total income of the person referred

•to in sub-section (1) in a tax year, on account of it having accrued or arisen in the

•said tax year, shall not be included in the total income of such person in the tax year

•in which such income is actually paid to him by the venture capital company or the

•venture capital fund.

(7)Nothing contained in this section shall apply in respect of any income

•accruing or arising to, or received by, a person from investments made in a venture

•capital company or venture capital fund, being an investment fund specified in

SECTION Section 1167

Untitled Section

•section 224(10)(a).

(8)For the purposes of this section, “venture capital company”, “venture capital

•fund” and “venture capital undertaking” shall have the meanings respectively assigned

•to them in Schedule V (Note 4).

SECTION Section 1168

Untitled Section

223.(1) Irrespective of anything contained in any other provisions of this Act,

•any income distributed by a business trust to its unit holders shall be deemed to be

•of the same nature and in the same proportion in the hands of the unit holder as it

•had been received by, or accrued to, the business trust.

(2)Subject to the provisions of sections 196 and 197, the total income of a

•business trust shall be charged to tax at the maximum marginal rate.

(3)If in any tax year, the distributed income or any part thereof, received by a

•unit holder from the business trust is of the nature as referred to in Schedule V

•(Table: Sl. No. 3) or (Table: Sl. No. 4), then, such distributed income or part thereof

•shall be deemed to be income of such unit holder and shall be charged to tax as

•income of the tax year.

(4)The provisions of sub -section (1) shall not apply in respect of any sum

•referred to in section 92(2)(k) received by a unit holder from a business trust.

(5)Any person responsible for making payment of the income distributed on

•behalf of a business trust to a unit holder, shall furnish a statement to the unit holder

•and the prescribed authority, within such time and in such form and manner, as

•Tax on income

•of unit holder

•and business

trust.

•256

•Tax on income

•of investment

•fund and its unit

holders.

•prescribed, giving the details of the nature of the income paid during the tax year

•and such other details, as prescribed.

SECTION Section 1169

Untitled Section

224.(1) Irrespective of anything contained in any other provision of this Act

•and subject to the provisions of this section, where a person, being a unit holder of

•an investment fund, out of investments made in the investment fund, receives any

•income or any income accrues or arises to him, such income shall be chargeable to

•income-tax in the same manner as if, it were the income accruing or arising to, or

•received by, such person, had the investments made by the inv estment fund been

•made directly by him.

(2)Where in any tax year, the net result of computation of total income of

•the investment fund, without giving effect to the provisions of Schedule V

•(Table: Sl. No. 1), is a loss under any head of income and such l oss cannot be or

•is not wholly set off against income under any other head of income of the said

•tax year, then out of such loss, ––

(a)the loss arising to the investment fund as a result of the computation

•under the head “Profits and gains of business or profession”, if any, shall be—

(i)allowed to be carried forward and it shall be set off by the

•investment fund as per the provisions of Chapter VII; and

•(ii) ignored for the purposes of sub-section (1);

(b)the loss other than the loss referred to in clause (a), if any, shall also

•be ignored for the purposes of sub-section (1), if such loss has arisen in respect

•of a unit which has not been held by the unit holder for at least twelve months.

(3)The loss other than the loss under the head “Profits and gain s of business

•or profession”, if any, accumulated at the level of investment fund as on the

•31st March, 2019, shall be—

(a)deemed to be the loss of a unit holder who held the unit on the 31st

•March, 2019 in respect of the investments made by him in the investment fund,

•in the same manner as provided in sub-section (1); and

(b)allowed to be carried forward by such unit holder for the remaining

•period calculated from the year in which the loss had occurred for the first

•time taking that year as the first year and shall be set off by him in as per the

•provisions of Chapter VII.

(4)The loss so deemed under sub -section (3) shall not be available to the

•investment fund on or after the 1st April, 2019.

(5)The income paid or credited by the investment fund shall be deemed to be

•of the same nature and in the same proportion in the hands of the person referred to

•in sub-section (1), as if it had been received by, or had accrued or arisen to, the

•investment fund during the tax year subject to the provisions of sub-section (2).

(6)The total income of the investment fund shall be charged to tax—

(a)at the rate or rates as specified in the Finance Act of the relevant year,

•where such fund is a company or a firm; or

(b)at maximum marginal rate, in any other case.

(7)The income accruing or arising to, or received by, the investment fund,

•during a tax year, if not paid or credited to the person referred to in sub-section (1),

•shall subject to the provisions of sub -section (2), be deemed to have been cred ited

•to the account of the said person on the last day of the tax year in the same proportion

•in which such person would have been entitled to receive the income had it been

•paid in the tax year.

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•257

•15 of 1992.

•50 of 2019.

•2 of 1882.

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(8)Any income, which has been included in total income of the person

•referred to in sub-section (1) in a tax year, on account of it having accrued or arisen

•in the said tax year, shall not be included in the total income of such person in the

•tax year in which such income is actually paid to him by the investment fund.

(9)The person responsible for crediting or making payment of the income on

•behalf of an investment fund and the investment fund shall furnish, within such time,

•as prescribed, to the person who is liable to tax in respect of such income and to the

•prescribed income-tax authority, a statement in the prescribed form and verified in

•such manner, giving details of the nature of the income paid or credited during the

•tax year and such other relevant details, as prescribed.

(10)In this section,—

(a)“investment fund” means any fund established or incorporated in

•India in the form of a trust or a company or a limited liability partnership or a

•body corporate which has been––

(i)granted a certificate of registration as a Category I or a

•Category II A lternative Investment Fund and is regulated under the

•Securities and Exchange Board of India (Alternative Investment Funds)

•Regulations, 2012 made under the Securities and Exchange Board of

•India Act, 1992; or

•(ii) regulated under the International Financi al Services Centres

•Authority (Fund Management) Regulations, 2022 made under the

•International Financial Services Centres Authority Act, 2019;

(b)“trust” means a trust established under the Indian Trusts Act, 1882 or under

•any other law in force; and

(c)“unit” means beneficial interest of an investor in the investment fund or a

•scheme of the investment fund and shall include shares or partnership interests.

G.—Special provisions relating to income of shipping companies

SECTION Section 117

Untitled Section

107.Charge of tax.

SECTION Section 1170

Untitled Section

225.Irrespective of anything contained in sections 26 to 54, in the case of a

•company, the income from the business of operating qualifying ships––

(a)may, at its option, be computed as per provisions of this Part; and

(b)such income shall be deemed to be the profits and gains of such

•business chargeable to tax under the head “Profits and gains of business or

•profession”.

226.(1) In this Part, a company shall—

(a)be regarded as operating a ship or inland vessel, as the case may be,

•if it operates any ship whether owned or chartered by it and includes a case

•where even a part of the ship or inland vessel, as the case may be, has been

•chartered in by it in an arrangement such as slot charter, space charter or joint

•charter; and

(b)not be regarded as operating a ship or inland vessel, as the case may

•be, which has been chartered out by it on bareboat charter-cum-demise terms

•or on bareboat charter terms for a period exceeding three years.

(2)A tonnage tax company engaged in the business of operating qualifyin g

•ships shall compute the profits from such business under the tonnage tax scheme.

(3)The tonnage tax business shall be considered as a separate business distinct

•from all other activities or business carried on by the company.

•Income from

•business of

•operating

•qualifying ships.

•Tonnage tax

scheme.

•258

•Computation of

•tonnage income.

(4)The profits referred to in sub-section (2) shall be computed separately from

•the profits and gains from any other business.

(5)The tonnage tax scheme shall apply only if an option to that effect is made

•as per section 231.

(6)Where a company engaged in the business of operating qualifying ships,––

(a)is not covered under the tonnage tax scheme; or

(b)has not made an option in respect of the tonnage tax scheme as per

SECTION Section 1171

Untitled Section

•section 231,

•the profits and gains of such company from such business shall be computed as per

•other provisions of this Act.

(7)Subject to the other provisions of this Part,––

(a)the tonnage income, shall be––

(i)computed as per section 227; and

•(ii) deemed to be the profits chargeable under the head “Profits and

•gains of business or profession”; and

(b)the relevant shipping income referred to in section 228( 1) shall not

•be chargeable to tax.

SECTION Section 1172

Untitled Section

227.(1) The tonnage income of a tonnage tax company for a tax year shall be

•the aggregate of the tonnage income of each qualifying ship computed as per

•sub-sections (2) and (3).

(2)For the purposes of sub-section (1), the tonnage income of each qualifying

•ship shall be computed as per the following formula:––

•TI= DTI x N

•where,—

•TI = the tonnage income of each qualifying ship;

•DTI = the daily tonnage income of each qualifying ship;

•N = the number of days, in the tax year, or in part of the tax year in

•case the ship is operated by the company as a qualifying ship for only part

•of the tax year.

(3)For the purposes of sub -section ( 2), the daily tonnage income of a

•qualifying ship having tonnage referred to in column A of the Table below shall be

•the amount specified in the corresponding entry in column B thereof.

•Table

Sl.No. Qualifying ship having net tonnage Amount of daily tonnage

•income

•A B C

SECTION Section 1173

Untitled Section

1.Up to 1,000. ₹ 70 for each 100 tons.

SECTION Section 1174

Untitled Section

2.Exceeding 1,000 but not more than

•10,000.

•₹ 700 plus ₹ 53 for each

•100 tons exceeding 1,000

tons.

SECTION Section 1175

Untitled Section

3.Exceeding 10,000 but not more than

•25,000.

•₹ 5,470 plus ₹ 42 for each

•100 tons exceeding 10,000

tons.

SECTION Section 1176

Untitled Section

4.Exceeding 25,000. ₹ 11,770 plus ₹ 29 for

•each 100 tons exceeding

•25,000 tons.

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•44 of 1958.

•24 of 2021.

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(4)In this Part, the tonnage shall—

(a)mean the tonnage of a ship or inland vessel, as the case may be,

•indicated in the certificate referred to in sub-section (9); and

(b)include the deemed tonnage, being the tonnage in respect of an

•arrangement of purchase of slots, slot charter and an arrangement of sharing

•of break-bulk vessel, computed in the manner, as prescribed.

(5)The tonnage shall be rounded off to the nearest multiple of hundred tons

•and for this purpose any tonnage consisting of kilograms shall be ignored and if the

•tonnage so rounded off, as per clause ( a), is not a multiple of hundred, then, if the

•last figure in that amount is,—

(a)fifty tons or more, the tonnage shall be increased to the next higher

•tonnage;

(b)less than fifty tons, the tonnage shall be reduced to the next lower

•tonnage,

•which is a multiple of hundred and the tonnage so rounded off shall be the tonnage

•of the ship for the purposes of this section.

(6)No deduction or set off shall be allowed in computing the tonnage income

•under this Part, irrespective of anything contained in any other provision of this Act.

(7)Where a qualifying ship is operated by two or more companies by way of––

(a)joint interest in the ship; or

(b)an agreement for the use of the ship,

•and their respective shares are definite and ascertainable, the tonnage income of

•each such company shall be an amount equal to a share of income proportionate to

•its share of that interest.

(8)Subject to the provisions of sub-section (7), where two or more companies

•are operators of a qualifying ship, the tonnage income of each company shall be

•computed as if each had been the only operator.

(9)In this Part,––

(a)the tonnage of a ship or inland vessel, as the case may be, shall be

•determined as per the valid certificate indicating its tonnage;

(b)“valid certificate” means,—

(i)in case of ships registered in India,—

(A)having a length of less than twenty-four metres, a certificate

•issued under the Merchant Shipping (Tonnage Measurement of Ship)

•Rules, 1987 made under the Merchant Shipping Act, 1958;

(B)having a length of twenty -four metres or more, an

•international tonnage certificate issued under the provisions of the

•Convention on Tonnage Measurement of Ships, 1969, as specified

•in the Merchant Shipping (Tonnage Measurement of Ship) Rules,

•1987 made under the said Act;

•(ii) in case of ships registered outside India, a licence issued by the

•Director-General of Shipping under section 406 or 407 of the Merchant

•Shipping Act, 1958 specifying the net tonnage on the basis of Tonnage

•Certificate issued by the Flag State Administration , where the ship is

•registered or any other evidence acceptable to the Director -General of

•Shipping produced by the ship owner while seeking per mission for

•chartering in the ship;

•(iii) in case of inland vessel registered in India, a certificate issued

•under the Inland Vessels Act, 2021.

•260

•Relevant

•shipping income

•and exclusion

•from book

profit.

228.(1) In this Part, the relevant shipping income of a tonnage tax

•company means —

(a)its profits from core activities referred to in sub-section (3); and

(b)its profits from incidental activities referred to in sub-section (7).

(2)Where the aggregate of all such incomes specified in sub -section (1)(b)

•exceeds 0.25% of the turnover from core activities referred to in sub -section (3),

•such excess shall not form part of the relevant shipping income for the purposes of

•this Part and shall be taxable under the other provisions of this Act.

(3)The core activities of a tonnage tax company shall be—

(a)its activities from operating qualifying ships; and

(b)other ship-related or inland vessel related activities, as the case may

•be, as follows:—

(i)shipping contracts in respect of—

(A)earning from pooling arrangements;

(B)contracts of affreightment;

•(ii) specific shipping trades, being—

(A)on -board or on -shore activities of passenger ships

•comprising of fares and food and beverages consumed on-board;

(B)slot charters, space charters, joint charters, feeder

•services and container box leasing of container shipping.

(4)In sub-section (3)(b)(i),––

(a)“pooling arrangement” means an agreement between two or more

•persons for providing services through a pool or operating one or more ships or

•inland vessels as the case may be, and sharing earnings or operating profits on

•the basis of mutually agreed terms; and

(b)“contract of affreightment” means a service contract under which a

•tonnage tax company agrees to transport a specified quantity of specified

•products at a specified rate, between designated loading and discharging ports

•over a specified period.

(5)The Central Government, if it considers necessary or expedient so to do,

•may, by notification, exclude any activity referred to in sub-section 3(b) or prescribe

•the limit up to which such activities shall be included in the core activities for the

•purposes of this section.

(6)Every notification issued under this Part shall be laid, as soon as may be

•after it is issued, before ea ch 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 sessi ons aforesaid, both Houses agree in making any

•modification in the notification, or both Houses agree that the notification should

•not be issued, the notification shall thereafter have effect only in such modified form

•or be of no effect; so, however, that any such modification or annulment shall be

•without prejudice to the validity of anything previously done under that notification.

(7)The incidental activities shall be the activities which are incidental to the

•core activities and as prescribed for the purpose.

(8)Where a tonnage tax company operates any ship or inland vessels as the

•case may be, which is not a qualifying ship, the income attributable to operating

•such non-qualifying ship shall be computed under other provisions of this Act.

(9)Where any goods or services held for the purposes of—

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(a)tonnage tax business are transferred to any other business carried on

•by a tonnage tax company; or

(b)any other business carried on by such tonnage tax company are

•transferred to the tonnage tax business,

•and, in either case, the consideration, if any, for such transfer as recorded in the

•accounts of the tonnage tax business does not correspond to the market value of

•such goods or services as on the date of the transfer, then, the relevant shipping

•income under this section shall be computed as if the t ransfer, in either case, had

•been made at the market value of such goods or services as on that date.

(10)In sub-section (9), “market value”, in relation to any goods or services,

•means the price that such goods or services would ordinarily fetch on sale in the

•open market.

(11)Where, in the opinion of the Assessing Officer, the computation of the

•relevant shipping income in the manner specified in sub -section ( 9) presents

•exceptional difficulties, he may compute such income on such reasonable basis as

•he considers fit.

(12)Where it appears to the Assessing Officer that, owing to the close

•connection between the tonnage tax company 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 tonnage tax company more than the

•ordinary profits which might be expected to arise in the tonnage tax business, the

•Assessing Officer shall, in computing the relevant shipping income of the tonnage

•tax company for the purposes of this Part, take income as may reasonably be deemed

•to have been derived therefrom.

(13)In this Part, in case the relevant shipping income of a tonnage tax

•company is a loss, then, such loss shall be ignored for the purposes of computing

•tonnage income.

(14)Where a tonnage tax company also carries on any business or activity

•other than the tonnage tax business, common costs attributable to the tonnage tax

•business shall be determined on a reasonable basis.

(15)Where any asset, other than a qualifying ship, is not exclusively used for

•the tonnage tax business by the tonnage tax company, depreciation on such asset

•shall be allocated between its tonnage tax business and other business on a fair

•proportion to be determined by the Assessing Offic er, having regard to the use of

•such asset for the purposes of the tonnage tax business and for the other business.

(16)The book profit or loss derived from the activities of a tonnage tax

•company, referred to in sub -section (1), shall be excluded from th e book profit of

•the company for the purposes of section 206.

SECTION Section 1177

Untitled Section

229.(1) For the purposes of computing depreciation under section 230(1)(d),

•the depreciation for the first tax year of the tonnage tax scheme (herein referred to

•as the first tax year) shall be computed on the written down value of the qualifying

•ships as specified under sub-section (2).

(2)The written down value of the block of assets, being ships or inland vessels

•as the case may be , as on the first day of the first tax year, shall be divided in the

•ratio of the book written down value of the qualifying ships (herein referred to as

•the qualifying assets) and the book written down value of the non -qualifying ships

•(herein referred to as the other assets), as per the following formula:––

•D = A x B

•B+C

•E = A x C

•B+C

•Depreciation and

•gains relating to

•tonnage tax

assets.

•262

•where,—

•D = the written down value of the block of qualifying assets as on the

•first day of the tax year;

•E = the written down value of the block of other assets as on the first day

•of the tax year;

•A = the written down value of the existing block of assets, being ships

•as on the last day of the immediately preceding tax year;

•B = the aggregate of book written down value of qualifying assets as on

•the last day of the preceding tax year; and

•C = the aggregate of the book written down value of other assets as on

•the last day of the preceding tax year.

(3)The block of qualifying assets as determined under sub-section (2) shall

•constitute a separate block of assets for the purposes of this Part.

(4)Where an asset forming part of a block of,—

(a)qualifying assets begins to be used for purposes other than the tonnage

•tax business, an appropriate portion of the written down value allocable to such

•asset shall be reduced from the written down value of that block and shall be added

•to the block of other assets as per the following formula:—

•A = B x C

•D

•where,––

•A = the appropriate portion to be added to the block of the

•other assets;

•B = the written down value of block of qualifying assets as

•on the first day of the tax year;

•C = the bo ok written down value of qualifying asset which

•begins to be used for purpose other than the tonnage tax business; and

•D = the aggregate of book written down value of all the assets

•forming the block of qualifying assets;

(b)other assets, begins to be use d for tonnage tax business, an

•appropriate portion of the written down value allocable to such asset shall be

•reduced from the written down value of the block of other assets and shall be

•added to the block of qualifying asset as per the following formula:—

•E= F x G

•I

•where,—

•E = the appropriate proportion to be added to the block of qualifying

•asset;

•F = the written down value of block of other assets as on the first

•day of the tax year;

•G = book written down value of the other asset which begins to be

•used for tonnage tax business; and

•I = the aggregate of book written down value of all the assets

•forming the block of other assets.

(5)For the purposes of computing depreciation under section 230( 1)(d) in

•respect of an asset mentioned in sub -sections (4)(a) and ( b), the depreciation

•computed for the tax year shall be allocated in the ratio of the number of days for

•which the asset was used for the tonnage tax business and for purposes other than

•tonnage tax business.

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(6)For the removal of doubts, it is hereby declared that for the purposes of

•this Act, the depreciation on the block of qualifying assets and block of other assets

•so created shall be allowed as if such written down value referred to in

•sub-section (2) had been brought forward from the preceding tax year.

(7)In this section,—

(a)“book written down value” means the written down value as per

•books of accounts; and

(b)“written down value” means the written down value as calculated for

•purposes of income-tax.

(8)Any profits or gains arising from the transfer of a capital asset being an

•asset forming part of the block of qualifying assets shall be chargeable to

•income-tax as per sections 67 and 74, and the capital gains so arising shall be

•computed as per sections 67 to 81.

(9)For the purposes of comp uting such profits or gains, as referred to in

•sub-section (8), the provisions of section 74 shall have effect as if for the words

•“written down value of the block of assets”, the words “written down value of the

•block of qualifying assets” had been substituted.

(10)In this section, “written down value of the block of qualifying assets”

•means the written down value computed as per sub-section (2).

SECTION Section 1178

Untitled Section

230.(1) Irrespective of anything contained in any other provision of this

•Act, in computing the tonna ge income of a tonnage tax company for any tax year

•(herein referred to as the “relevant tax year”) in which it is chargeable to tax as

•per this Part —

(a)sections 28 to 52 shall apply as if every loss, allowance or deduction

•referred to therein and relating to or allowable for any of the relevant tax years,

•had been given full effect to for that tax year itself;

(b)no loss referred to in section 108(1) or (2)(a) or 109 or 112(1) or

•116(1), in so far as such loss relates to the business of operating qualifying

•ships of the company, shall be carried forward or set off where such loss

•relates to any of the tax years when the company is under the tonnage tax

•scheme;

(c)no deduction shall be allowed under Chapter VIII in relation to the

•profits and gains from the business of operating qualifying ships; and

(d)in computing the depreciation allowance under section 33, the

•written down value of any asset used for the purposes of the tonnage tax

•business shall be computed as if the company has cla imed and has been

•actually allowed the deduction in respect of depreciation for the relevant

•tax years.

(2)Section 112 shall apply in respect of any losses that have accrued to a

•company before its option for tonnage tax scheme and which are attributable to its

•tonnage tax business, as if such losses had been set off against the relevant shipping

•income in any of the tax years when the company is under the tonnage tax scheme.

(3)The losses referred to in sub -section (2) shall not be available for set off

•against any income other than relevant shipping income in any tax year beginning

•on or after the company exercises its option under section 231.

•Exclusion of

•deduction, loss,

•set off etc.,

•264

•Method of

•opting of

•tonnage tax

•scheme and

validity.

(4)Any apportionment necessary to determine the losses referred to in

•sub-section (2) shall be made on a reasonable basis.

SECTION Section 1179

Untitled Section

231.(1) A qualifying company may opt for the tonnage tax scheme by making

•an application to the Joint Commissioner having jurisdiction over the company in

•the form and manner, as prescribed, for such scheme.

(2)A qualifying company may make an application within three months, of

•the date of its incorporation, or of the date on whi ch it becomes a qualifying

•company for the first time.

(3)A Unit of an International Financial Services Centre which has availed of

•deduction under section 147 may make an application within three months from the

•date on which such deduction ceases.

(4)O n receipt of an application for option for tonnage tax scheme under

•sub-section (1), the Joint Commissioner may call for such information or documents

•from the company as he thinks necessary in order to satisfy himself about the

•eligibility of the company and after satisfying himself about such eligibility of the

•company to make such option for tonnage tax scheme, he shall pass an order in

•writing––

(a)approving the option for tonnage tax scheme; or

(b)refusing to approve the option for tonnage tax scheme, if he is not so

•satisfied,

•and a copy of such order shall be sent to the applicant.

(5)No order under sub -section 4(b) shall be passed unless the applicant has

•been given a reasonable opportunity of being heard.

(6)Every order under sub-section (4) shall be passed before the expiry of three

•months from the end of the quarter in which the application under sub -section (1)

•was received.

(7)Where an order granting approval is passed under sub -section ( 4), the

•provisions of this Part shall apply from the tax year in which the option for tonnage

•tax scheme is exercised.

(8)An option for tonnage tax scheme, after it has been approved under

•sub-section (4), shall remain in force for ten years from the date on which such

•option has been exercised and shall be taken into account from the tax year in which

•such option is exercised.

(9)An option for tonnage tax scheme shall cease to have effect from the tax

•year, in which—

(a)the qualifying company ceases to be a qualifying company;

(b)a default is made in complying with the provisions contained in

SECTION Section 118

Untitled Section

•CHAPTER VII

•SET OFF, OR CARRY FORWARD AND SET OFF OF LOSSES

SECTION Section 1180

Untitled Section

•section 232(1) to (20);

(c)the tonnage tax company is excluded from the tonnage tax scheme

•under section 234;

(d)the qualifying company furnishes to the Assessing Officer, a

•declaration in writing to the effect that the provisions of this Part may not be

•made applicable to it,

•and the profits and gains of the company from the business of operating qualifying

•ships shall be computed as per other provisions of this Act.

(10)An option for tonnage tax scheme approved under sub-section (4) may be

•renewed within one year from the end of the tax year in which the option ceases to

•have effect.

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(11)The provisions of sub -sections (1) to ( 10) shall apply in relation to a

•renewal of the option for tonnage tax scheme in the same manner as they apply in

•relation to the approval of option for tonnage tax scheme.

(12)A qualifying company,––

(a)which on its own, opts out of the tonnage tax scheme; or

(b)which makes a default in complying with the provisions contained in

•sections 232(1) to (20); or

(c)whose option has be en excluded from tonnage tax scheme in

•pursuance of an order made under section 234(4),

•shall not be eligible to opt for tonnage tax scheme for ten years from the date of

•opting out or default or order.

SECTION Section 1181

Untitled Section

232.(1) A tonnage tax company shall, subject to and as per the provisions of

•this section, be required to credit to a reserve account (herein referred to as the

•Tonnage Tax Reserve Account) an amount, being 20% or more of the book profit

•derived from the activities referred to in section 228( 1)(a) and (b) in each tax year

•to be utilised in the manner laid down in sub-section (6).

(2)In this section, “book profit” shall have the meaning assigned to it in

SECTION Section 1182

Untitled Section

•section 206(2) so far as it relates to the income derived from the activities referred

•to in section 228(1)(a) and (b).

(3)Where the company has––

(a)book profit from the business of operating qualifying ships; and

(b)book loss from any other sources,

•and consequently, the company is not in a position to create the full or any part of

•the reserves under sub -section ( 1), the company shall create the reserves to the

•extent possible in that tax year and the shortfall, if any, shall be added to the reserves

•required to be created for the following tax year and such shortfall shall be deemed

•to be part of the reserve requirement of that following tax year.

(4)For the purposes of sub -section (3), to the extent the shortfall in creation

•of reserves during a particular tax year is carried forward to the following tax year

•under the said sub -section, the company shall be considered as having created

•sufficient reserves for the first mentioned tax year.

(5)Nothing contained in sub -section (4) shall apply in respect of the second

•year in case the shortfall in creation of reserves continues for two con secutive tax

years.

(6)The amount credited to the Tonnage Tax Reserve Account under

•sub-section (1) shall be utilised by the company before the expiry of eight years

•following the tax year in which the amount was credited—

(a)for acquiring a new ship or new inland vessel, as the case may be,

•for the purposes of the business of the company; and

(b)until the acquisition of a new ship or new inland vessel, as the case

•may be, for the purposes of the business of operating qualifying ships other

•than for distribution by way of dividends or profits or for remittance outside

•India as profits or for the creation of any asset outside India.

•Certain

•conditions for

•applicability of

•tonnage tax

scheme.

•266

(7)Where any amount credited to the Tonnage Tax Reserve Account under

•sub-section (1),—

(a)has been utilised for any purpose other than that referred to in

•sub-section (6); or

(b)has not been utilised for the purpose specified in sub-section (6)(a); or

(c)h as been utilised for the purpose of acquiring a new ship or new

•inland vessel, as the case may be, as specified in sub-section (6)(a), but such

•ship or new inland vessel, as the case may be, is sold or otherwise transferred,

•other than in any scheme of dem erger by the company to any person at any

•time before the expiry of three years from the end of the tax year in which it

•was acquired,

•an amount which bears the same proportion to the total relevant shipping income of

•the year in which such reserve was cre ated, as the amount out of such reserve so

•utilised or not utilised bears to the total reserve created during that year under

•sub-section (1) shall be taxable under the other provisions of this Act—

(i)in a case referred to in clause (a), in the year in which the amount was

•so utilised; or

•(ii) in a case referred to in clause (b), in the year immediately following

•eight years specified in sub-section (6); or

•(iii) in a case referred to in clause ( c), in the year in which the sale or

•transfer took place.

(8)The income so taxable under the other provisions of this Act, referred to

•in sub-section (7), shall be reduced by the proportionate tonnage income charged to

•tax in the year of creation of such reserves.

(9)Irrespective of anything contained in any other provision of this Part,

•where the amount credited to the Tonnage Tax Reserve Account as per

•sub-section ( 1) is less than the minimum amount required to be credited under

•sub-section (1), an amount which bear s the same proportion to the total relevant

•shipping income, as the shortfall in credit to the reserves bears to the minimum

•reserve required to be credited under sub-section (1), shall not be taxable under the

•tonnage tax scheme and shall be taxable under the other provisions of this Act.

(10)If the reserve required to be created under sub -section (1) is not created

•for any two consecutive tax years, the option of the company for tonnage tax scheme

•shall cease to have effect from the beginning of the tax year following the second

•consecutive tax year in which the failure to create the reserve under sub-section (1)

•had occurred.

(11)In this section, “new ship” or “new inland vessel”, as the case may be,

•includes a qualifying ship which, before the date of acquisition by the qualifying

•company was used by any other person, if it was not at any time previous to the date

•of such acquisition owned by any person resident in India.

(12)A tonnage tax company, after its option has been approved under

SECTION Section 1183

Untitled Section

•section 231(4), shall comply with the minimum training requirement in respect of

•trainee officers as per the guidelines made by the Director-General of Shipping and

•notified by the Central Government.

(13)The tonnage tax company shall be required to furnish a copy of the

•certificate issued by the Director -General of Shipping in the form and manner as

•prescribed, along with the return of income under section 263 to the effect that such

•company has complied with the minimum training requirement as per the guidelines

•referred to in sub-section (12) for the tax year.

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(14)If the minimum training requirement is not complied with for any five

•consecutive tax years, the option of the company for tonnage tax scheme shall cease

•to have effect from the beginning of the tax year following the fifth consecutive tax

•year in which the failure to comply with the minimum training requirement as per

•sub-section (12) had occurred.

(15)In the case of every company which has opted for tonnage tax scheme,

•not more than 49% of the net tonnage of the qualifying ships operated by it during

•any tax year shall be chartered in.

(16)The proportion of net tonnage referred to in sub-section (15) in respect of a

•tax year shall be calculated based on the average of net tonnage during that tax year.

(17)For the purposes of sub-section (16), the average of net tonnage shall be

•computed in such manner, as prescribed, in consultation with the Director-General

•of Shipping.

(18)Where the net tonnage of ships or new inland vessel, as the case may be,

•chartered in exceeds the limit under sub -section (15) during any tax year, the total

•income of such company in relation to that tax year shall be computed as if the

•option for tonnage tax scheme does not have effect for that tax year.

(19)Where the limit under sub -section ( 15) had exceeded in any two

•consecutive tax years, the option for tonnage tax scheme shall cease to have effect

•from the beginning of the tax year following the second consecutive tax year in

•which the limit had exceeded.

(20)In this section, the term “chartered in” shall exclude a ship or new inland

•vessel, as the case may be, chartered in by the company on bareboat charter -cum-

•demise terms.

(21)An option for tonnage tax scheme by a tonnage tax company shall not

•have effect in relation to a tax year unless such company—

(a)maintains separate books of account in respect of the business of

•operating qualifying ships; and

(b)furnishes, before the specified date referred to in sections 63, the report

•of an accountant, in the prescribed form , duly signed and verified by such

accountant.

(22)A temporary cessation (as against permanent cessation) of operating any

•qualifying ship by a company shall not be considered as a cessation of operating of

•such qualifying ship and the company shall be dee med to be operating such

•qualifying ship for the purposes of this Part.

(23)Where a qualifying company continues to operate a ship or new inland

•vessel, as the case may be, which temporarily ceases to be a qualifying ship, such

•ship or inland vessel, as t he care may be shall not be deemed as a qualifying ship

•for the purposes of this Part.

SECTION Section 1184

Untitled Section

233.(1) Where there has been an amalgamation of a company with another

•company or companies, then, subject to the other provisions of this section, the

•provisions relating to the tonnage tax scheme shall, as far as may be, apply to the

•amalgamated company, if it is a qualifying company.

(2)Where the amalgamated company is not a tonnage tax company, it shall

•exercise an option for tonnage tax scheme under section 231(1) within three months

•from the date of the approval of the scheme of amalgamation.

(3)Where the amalgamating companies are tonnage tax companies, the

•provisions of this Part shall, as far as may be, apply to the amalgamated company

•for such period as the option for tonnage tax scheme which has the longest unexpired

•period continues to be in force.

•Amalgamation

•and demerger.

•268

•Avoidance of tax

•and exclusion

•from tonnage tax

scheme.

(4)Where one of the amalgamating companies is a qualifying company as on

•the 1st October, 2004 and which has not exercised the option for tonnage tax scheme

•before the 1st January, 2005, the provisions of this Part shall not apply to the

•amalgamated company and the income of the amalgamated company from the

•business of operating qualifying ships shall be computed as per the other provisions

•of this Act.

(5)Where in a scheme of demerger, the demerged company transfers its

•business to the r esulting company before the expiry of the option for tonnage tax

•scheme, then, subject to the other provisions of this Part, the tonnage tax scheme

•shall, as far as may be, apply to the resulting company for the unexpired period, if

•it is a qualifying company.

(6)The option for tonnage tax scheme in respect of the demerged company

•shall remain in force for the unexpired period of the tonnage tax scheme if it

•continues to be a qualifying company.

SECTION Section 1185

Untitled Section

234.(1) Subject to the provisions of this Part, the tonnage tax scheme shall not

•apply where a tonnage tax company is a party to any transaction or arrangement

•which amounts to an abuse of the tonnage tax scheme.

(2)For the purposes of sub-section (1), a transaction or arrangement shall be

•considered an abuse, if the entering into or the application of such transaction or

•arrangement results, or would but for this section have resulted, in a tax advantage

•being obtained for—

(a)a person other than a tonnage tax company; or

(b)a tonnage tax company in respect of its non-tonnage tax activities.

(3)In this section, “tax advantage” includes—

(a)the determination of—

(i)the allowance for any expense or interest; or

•(ii) any cost or expense allocated or apportioned,

•which has the effect of reducing the income or increasing the loss, from

•activities other than tonnage tax activities chargeable to tax, computed on the

•basis of entries made in the books of account in respect of the tax year in which

•the transaction was entered into; or

(b)a transaction or arrangemen t which produces to the tonnage tax

•company more than ordinary profits which might be expected to arise from

•tonnage tax activities.

(4)Where a tonnage tax company is a party to any transaction or arrangement

•referred to in sub -section (1), the Assessing Officer shall, by an order in writing,

•exclude such company from the tonnage tax scheme.

(5)The Assessing Officer shall pass an order under sub-section (4), after––

(a)giving an opportunity to the company by serving a notice calling

•upon such company to show cause, on a date and time to be specified in the

•notice, why it should not be excluded from the tonnage tax scheme; and

(b)obtaining prior approval of the Principal Chief Commissioner or

•Chief Commissioner.

(6)The provisions of this section shall not apply where the company satisfies

•the Assessing Officer that the transaction or arrangement was a bona fide

•commercial transaction and had not been entered into for the purpose of obtaining

•tax advantage under this Part.

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•269

•44 of 1958.

•24 of 2021.

•44 of 1958.

•24 of 2021.

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(7)Where an order has been passed under sub -section (4) by the Assessing

•Officer excluding the tonnage tax company from the tonnage tax scheme, the option

•for tonnage tax scheme shall cease to be in force from the first day of the tax year

•in which the transaction or arrangement was entered into.

SECTION Section 1186

Untitled Section

235.In this Part,—

(a)“bareboat charter” means hiring of a ship or inland vessel, as the case

•may be, for a stipulated period on terms which give the charterer possession

•and control of the ship or new inland vessel, as the case may be, including the

•right to appoint the master and crew;

(b)“bareboat charter-cum-demise” means a bareboat charter where the

•ownership of the ship or inland vessel, as the case may be, is intended to be

•transferred after a specified period to the company to whom it has been chartered;

(c)“Director -General of Shipping” means the Director -General of

•Shipping appointed by the Central Government under section 7( 1) of the

•Merchant Shipping Act, 1958;

(d)“fac tory ship” includes a vessel providing processing services in

•respect of processing of the fishing produce;

(e)“fishing vessel” shall have the meaning assigned to it in section 3(12)

•of the Merchant Shipping Act, 1958;

(f)“inland vessel” shall have the meaning assigned to it in section 3( q)

•of the Inland Vessels Act, 2021;

(g)“pleasure craft” means a ship or inland vessel, as the case may be, of

•a kind whose primary use is for the purposes of sport or recreation;

(h)“qualifying company” means a company, if—

(i)it is an Indian company;

•(ii) the place of effective management of the company is in India;

•(iii) it owns at least one qualifying ship; and

•(iv) the main object of the company is to carry on the business of

•operating ships,

•and for the purposes of sub -clause ( ii), “place of effective management of the

•company” means—

(A)the place where the board of directors of the company or its

•executive directors, make their decisions; or

(B)in a case where the board of directors routinely approve t he

•commercial and strategic decisions made by the executive directors or

•officers of the company, the place where such executive directors or

•officers of the company perform their functions.

(i)“qualifying ship” means a ship or inland vessel, as the case may be, if—

(i)it is a seagoing ship or vessel or inland vessel, as the case may

•be, of fifteen net tonnage or more;

•(ii) it is a ship registered under the Merchant Shipping Act, 1958,

•or a ship registered outside India in respect of which a licence has been

•issued by the Director-General of Shipping under section 406 or 407 of

•said Act or an inland vessel registered under the Inland Vessels Act,

•2021, as the case may be; and

•(iii) a valid certificate in respect of such ship or inland vessel, as the

•case may be, indicating its net tonnage is in force,

Interpretation.

•270

•Income-tax

authorities.

•but does not include—

(A)a seagoing ship or vessel or inland vessel, as the case may be,

•if the main purpose for which it is used is the provision of goods or

•services of a kind normally provided on land;

(B)fishing vessels;

(C)factory ships;

(D)pleasure crafts;

(E)harbour and river ferries;

(F)offshore installations; and

(G)a qualifying ship which is used as a fishing vessel for more

•than thirty days during a tax year;

(j)“seagoing ship” means a ship, if it is certified as such by the

•competent authority of any country;

(k)“tonnage income” means the income of a tonnage tax company

•computed as per the provisions of this Part;

(l)“tonnage tax activities” means the activities referred to in section 228(3)

•and (7);

(m)“tonnage tax business” means the business of operating qualifying

•ships giving rise to relevant shipping income as referred to in section 228(1);

(n)“tonnage tax company” means a qualifying company in relation to

•which tonnage tax option is in force;

(o)“tonnage tax scheme” means a scheme for computation of profits and

•gains of business of operating qualifying ships under the provisions of this Part

SECTION Section 1187

Untitled Section

•CHAPTER XIV

•TAX ADMINISTRATION

A.—Authorities, jurisdiction and functions

SECTION Section 1188

Untitled Section

236.For the purposes of this Act, there shall be the following classes of

•income-tax authorities:—

(a)the Central Board of Direct Taxes constituted under the Central

•Boards of Revenue Act, 1963;

(b)Principal Directors General of Income -tax or Principal Chief

•Commissioners of Income-tax;

(c)Directors General of Income -tax or Chief Commissioners of

•Income-tax;

(d)Principal Directors of Income -tax or Principal Commissioners of

•Income-tax;

(e)Directors of Income -tax or Commissioners of Income -tax or

•Commissioners of Income-tax (Appeals);

(f)Additional Directors of Income-tax or Additional Commissioners of

•Income-tax or Additional Commissioners of Income-tax (Appeals);

(g)Joint Directors of Income-tax or Joint Commissioners of Income-tax

•or Joint Commissioners of Income-tax (Appeals);

(h)Deputy Directors of Income -tax or Deputy Commissione rs of

•Income-tax;

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(i)Assistant Directors of Income -tax or Assistant Commissioners of

•Income-tax;

(j)Income-tax Officers;

(k)Tax Recovery Officers; and

(l)Inspectors of Income-tax.

SECTION Section 1189

Untitled Section

237.(1) The Central Government may appoint such persons as it thinks fit to

•be income-tax authorities.

(2)The Central Government may, subject to the rules and its orders regulating

•the conditions of service of persons in public services and posts, authorise the Board,

•or a Principal Director General or Director General, or a Principal Chief

•Commissioner or Chief Commissioner, or a Principal Director or Director, or a

•Principal Commissioner or Commissioner, to appoint income-tax authorities below

•the rank of a Deputy Commissioner or Assistant Commissioner.

(3)Subject to the rules and orders of the Central Government regulating the

•conditions of service of persons in public services and posts, an income -tax

•authority authorised in this behalf by the Board, may ap point such executive or

•ministerial staff as may be necessary to assist it in the execution of its functions.

SECTION Section 119

Untitled Section

108.Set off of losses under the same head of income.

SECTION Section 1190

Untitled Section

238.The Board may, by notification, direct that any income -tax authority or

•authorities specified in the notification shall be subordinate to suc h other

•income-tax authority or authorities as specified in such notification.

SECTION Section 1191

Untitled Section

239.(1) The Board may issue such orders, instructions and directions to other

•income-tax authorities as it considers fit for the proper administration of this Act,

•and such authorities and all other persons employed in the execution of this Act shall

•observe and follow such orders, instructions and directions.

(2)No orders, instructions or directions under sub -section ( 1) shall be

•issued to—

(a)require any income-tax authority to make a particular assessment or

•to dispose of a particular case in a particular manner; or

(b)interfere with the discretion of the Joint Commissioner (Appeals) or

•Commissioner (Appeals) in the exercise of his appellate functions.

(3)Without prejudice to the foregoing power, the Board may,—

(a)if it considers necessary or expedient so to do for the proper and

•efficient management of the work of assessment and collection of revenue,

•issue, from time to time (whether by way of relaxation of any of the provisions

•of section 263, 270, 271, 279, 280, 287, 298, 398(3), 406, 407, 423, 424, 425,

•427, 428, 439, 448, 449 or otherwise), general or special orders in respect of

•any class of incomes or class of cases,––

(i)setting forth directions or instructions (not being prejudicial to

•assessees) as to the guidelines, principles or procedures to be followed

•by other income -tax authorities in the work relating to assessment or

•collection of revenue or the initiation of proceedings for the imposition

•of penalties; and

•(ii) any such order may, if the Board is of the opinion that it is

•necessary in the public interest so to do, be published and circulated in

•the prescribed manner for general information;

•Appointment of

•income-tax

authorities.

•Control of

•income-tax

authorities.

•Instructions to

•subordinate

authorities.

•272

•Taxpayer’s

Charter.

•Jurisdiction of

•income-tax

authorities.

(b)if it considers desirable or expedient so to do for avoiding genuine

•hardship in any case or class of cases, by general or special order, authorise

•any income -tax authority, not being a Joint Commissioner (Appeals) or a

•Commissioner (Appeals) to admit an application or claim for any exemption,

•deduction, refund or any other relief under this Act after the expiry of the

•period specified in this Act for making such application or claim and deal with

•the same on merits as per law;

(c)if it considers desirable or expedient so to do for av oiding genuine

•hardship in any case or class of cases, by general or special order for reasons

•to be specified therein, relax any requirement contained in any of the

•provisions of Chapter IV or VIII, where the assessee has failed to comply with

•any require ment specified in such provision for claiming deduction

•thereunder, subject to the following conditions:—

(i)the default in complying with such requirement was due to

•circumstances beyond the control of the assessee; and

•(ii) the assessee has complied wit h such requirement before the

•completion of assessment in relation to the tax year in which such

•deduction is claimed.

(4)The Central Government shall cause every order issued under

•sub-section (3)(c) to be laid before each House of Parliament.

SECTION Section 1192

Untitled Section

240.The Board shall adopt and declare a Charter for Taxpayers and issue such

•orders, instructions, directions or guidelines to other income -tax authorities as it

•considers fit for the administration of such Charter.

SECTION Section 1193

Untitled Section

241.(1) The income-tax authorities shall exercise all or any of the powers and

•perform all or any of the functions conferred on, or assigned to, such authorities

•under this Act as per such directions as the Board may issue for the exercise of the

•powers and performance of the functions by all or any of those authorities.

(2)Any income -tax authority, being an authority higher in rank, may, if so

•directed by the Board, exercise the powers and perform the functions of an

•income-tax authority lower in rank and any such direction issued by the Board shall

•be deemed to be a direction issued under sub-section (1).

(3)The directions of the Board under sub-section (1) may authorise any other

•income-tax authority to issue orders in writing for the exercise of the powers and

•performance of the functions by all or any of the other income -tax authorities who

•are subordinate to it.

(4)In issuing the directions or orders referred to in sub-sections (1), (2) and (3),

•the Board or other income-tax authority authorised by it may have regard to any one

•or more of the following criteria:—

(a)territorial area;

(b)persons or classes of persons;

(c)incomes or classes of income; and

(d)cases or classes of cases.

(5)Without prejudice to sub -sections ( 1), ( 2) and ( 3), the Board may, by

•general or special order, subject to such conditions, restrictions or limitations as

•specified therein––

(a)authorise any Principal Director General or Director General or

•Principal Director or Director to perform such functions of any other

•income-tax authority as may be assigned to him by the Board;

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(b)empower the specified income-tax authority to issue orders in writing

•that the powers and functions assigned to the Assessing Officer under this Act

•in respect of any specified area, or persons or classes of persons, or incomes

•or classes of income, or c ases or classes of cases, shall be exercised or

•performed by an Additional Commissioner or an Additional Director or a Joint

•Commissioner or a Joint Director.

(6)Where any order is made under sub-section (5)(b), references in any other

•provision of this Act or in any rule made thereunder, to the Assessing Officer shall

•be deemed to be references to such Additional Commissioner or Additional Director

•or Joint Commissioner or Joint Director by whom the powers and functions are to

•be exercised or performed under such order, and any provision of this Act requiring

•approval or sanction of the Joint Commissioner shall not apply.

(7)The directions and orders referred to in sub-sections (1), (2) and (3) may,

•wherever considered necessary or appropriate for the proper management of work,

•require two or more Assessing Officers (whether or not of the same class) to exercise

•and perform, concurrently, the powers and functions in respect of any area, or

•persons or classes of persons, or incomes or classes of incom e, or cases or classes

•of cases, and––

(a)where such powers and functions are exercised and performed

•concurrently by the Assessing Officers of different classes, any authority

•lower in rank amongst them shall exercise the powers and perform the

•functions as any higher authority amongst them may direct; and

(b)references in any other provision of this Act or in any rule made

•thereunder to the Assessing Officer shall be deemed to be references to such

•higher authority and any provision of this Act requir ing approval or sanction

•of any such authority shall not apply.

(8)Irrespective of anything contained in any direction or order issued under

•this section, or in section 242, the Board may, by notification, issue any direction

•for the purposes of furnishing of the return of income or the doing of any other act

•or thing under this Act or any rule made thereunder by any person or class of

persons.

(9)The income -tax authority exercising and performing the powers and

•functions in relation to the person or class of persons referred to in sub -section

(8)shall be such authority as specified in the notification issued under that

•sub-section.

SECTION Section 1194

Untitled Section

242.(1) Where an Assessing Officer has been vested with jurisdiction over

•any area by virtue of any direction or order issued under section 241(1) or (2) or (3),

•he shall have jurisdiction within the limits of such area,—

(a)in respect of any person carrying on a business or profession, if the

•place at which he carries on his business or profession is situated wit hin the

•area, or where his business or profession is carried on in more places than one,

•if the principal place of his business or profession is situated within the

•area; and

(b)in respect of any other person residing within the area.

(2)Where a question arises under this section as to whether an Assessing

•Officer has jurisdiction to assess any person, the question shall be determined by the

•specified income-tax authority.

•Jurisdiction of

•Assessing

Officers.

•274

•Power to transfer

cases.

(3)Where under this section, a question arises relating to areas within the

•jurisdiction of different specified income -tax authorities, the question shall be

•determined––

(a)by the concerned specified income-tax authority concerned; or

(b)if they are no t in agreement, by the Board or by such specified

•income-tax authority as the Board may, by notification, specify.

(4)No person shall call in question the jurisdiction of an Assessing Officer,––

(a)where he has made a return under section 263(1), after the expiry of

•one month from the date on which he was served with a notice under

SECTION Section 1195

Untitled Section

•section 268(1) or 270(8) or after the completion of the assessment, whichever

•is earlier;

(b)where he has made no such return, after the expiry of the time

•allowed by the notice under section 268( 1) or 280( 2) for the making of the

•return or by the notice under section 271(2) to show cause why the assessment

•should not be completed to the best of the judgment of the Assessing Officer,

•whichever is earlier;

(c)where an action has been taken under section 247 or 248, after the

•expiry of one month from the date on which he was served with a notice under

SECTION Section 1196

Untitled Section

•section 153C(2) of the Income-tax Act, 1961 or section 294(1)(a) or after the

•completion of the assessment, whichever is earlier.

(5)Subject to the provisions of sub -section (4), where an assessee calls in

•question the jurisdiction of an Assessing Officer, then the Assessing Officer shall,

•if not satisfied with the correctness of the claim, refer the matter for det ermination

•under sub-section (2) or (3) before the assessment is made.

(6)Irrespective of anything contained in this section or in any direction or

•order issued under section 241, every Assessing Officer shall have all the powers

•conferred under this Act on an Assessing Officer in respect of the income accruing

•or arising or received within the area, if any, over which he has been vested with

•jurisdiction by virtue of the directions or orders issued under section 241(1) or.

(2)or (3) or section (4).

SECTION Section 1197

Untitled Section

243.(1) The specified income-tax authority may transfer any case from one or

•more Assessing Officers subordinate to him (whether with or without concurrent

•jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or

•without concurrent jurisdiction) subordinate to him.

(2)If the Assessing Officer or Assessing Officers, from whom the case is to

•be transferred and the Assessing Officer or Assessing Officers, to whom the case is

•to be transferred are not subordinate to the same specified income-tax authority, and

•the concerned specified income-tax authorities––

(a)are in agreement, then the specified income-tax authority from whose

•jurisdiction the case is to be transferred may pass the order;

(b)are not in agreement, the order trans ferring the case may be passed

•by the Board or any such specified income-tax authority as the Board may, by

•notification, specify.

(3)The order of transfer under sub -section (1) or ( 2) may be passed by the

•specified income-tax authority after giving the assessee a reasonable opportunity of

•being heard wherever it is possible to do so and after recording his reasons therefor.

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(4)Nothing in sub-section (1) or (2) or (3) shall be considered to require any

•opportunity of being heard to be given, where the transfer is from any Assessing

•Officer or Assessing Officers (whether with or without concurrent jurisdiction) to

•any other Assessing Officer or Assessing Officers (whether with or without

•concurrent jurisdiction) and the offices of all such officers are situated in the same

•city, locality or place.

(5)The transfer of a case under sub -section (1) or ( 2) may be made at any

•stage of the proceedings, and it shall not be necessary to re-issue any notice already

•issued by the Assessing Officer or Assessing Officers from whom the case is

transferred.

(6)For the purposes of section 241 and this section, “case”, in relation to any

•person whose name is specified in any order or direction issued thereunder, means

•all proceedings under this Act in respect of any year, which may—

(a)be pending on the date of that order or direction; or

(b)have been completed on or before such date; or

(c)be commenced after the date of such order or direction in respect of

•any year.

(7)For the purposes of sections 241, 242 and this section, “specified income-

•tax authority” means the Principal Director General or Director General or Principal

•Chief Commissioner or Chief Commissioner or Principal Commissioner or

Commissioner.

SECTION Section 1198

Untitled Section

244.( 1) Whenever, in respect of any proceeding under this Act, an

•income-tax authority ceases to exerci se jurisdiction and is succeeded by another

•who has and exercises jurisdiction, the income -tax authority so succeeding may

•continue the proceeding from the stage at which the proceeding was left by his

predecessor.

(2)Before the proceeding referred to in sub-section (1) is so continued, the

•assessee concerned may demand that––

(a)the previous proceeding or any part thereof be reopened; or

(b)he be reheard before any order of assessment is passed against him.

SECTION Section 1199

Untitled Section

245.( 1) The exercise of following powers for the purposes mentioned in

•sub-section (2) shall be as per a Scheme made by the Central Government:––

(a)all or any of the powers and performance of all or any of the functions

•conferred on, or, assigned to, income-tax authorities under this Act referred to

•in section 241; or

(b)vesting the jurisdiction with the Assessing Officer under

SECTION Section 12

Untitled Section

8.Income on receipt of capital asset or stock-in-trade by specified person from

•specified entity.

SECTION Section 120

Untitled Section

109.Set off of losses under any other head of income.

SECTION Section 1200

Untitled Section

•section 242; or

(c)power to transfer cases under section 243; or

(d)exercise of jurisdiction in case of change of incumbency under

SECTION Section 1201

Untitled Section

•section 244.

(2)The purposes of the Scheme referred to in sub-section (1) shall be to impart

•greater efficiency, transparency and accountability by—

(a)eliminating the interface between the income -tax authority and the

•assessee or any other person, to the extent technologically feasible;

(b)optimising utilisation of the resources through economies of scale

•and functional specialisation;

•Change of

•incumbent of an

office.

•Faceless

•jurisdiction of

•income-tax

authorities.

•276

•Power regarding

•discovery,

•production of

•evidence, etc.

(c)introducing a team -based exercise of powers and performance of

•functions by two or more income -tax authorities, concurrently, in respect of

•any area, or persons or classes of persons, or incomes or classes of income, or

•cases or classes of cases, with dynamic jurisdiction.

(3)The Central Government may, for the purpose of giving effect to the

•Scheme made under sub-section (1), by notification, direct that any of the provisions

•of this Act shall not apply or shall apply with such exceptions, modifications and

•adaptations as specified in such notification.

(4)Every notification issued under sub -sections (1) and (3) shall, as soon as

•may be after the notification is issued, be laid before each House of Parliament.

B.—Powers

SECTION Section 1202

Untitled Section

246.(1) The Assessing Officer, Joint Commissioner, Joint Commissioner

•(Appeals), Commissioner (Appeals), Commissioner or Principal Commissioner, or

•Chief Commissioner or Principal Chief Commissioner and the Dispute Resolution

•Panel referred to in section 275(17)(a), shall, for the purposes of this Act, have the

•same powers as are vested in a court under the Code of Civil Procedure, 1908, when

•trying a suit in respect of the following matters:––

(a)discovery and inspection;

(b)enforcing the attendance of any person, including any officer of a

•banking company and examining him on oath;

(c)compelling the production of books of account and other

•documents; and

(d)issuing commissions.

(2)The powers conferred under sub -section ( 1) may also be exercised, in

•respect of any person or class of persons, even when there are no proceedings

•pending with respect to such person or class of persons, by the fo llowing

•income-tax authorities:––

(a)any income -tax authority (not below the rank of Assistant

•Commissioner of Income -tax) notified by the Board, for the purposes of

•making any inquiry or investigation in relation to an agreement referred to in

SECTION Section 1203

Untitled Section

•section 159;

(b)the Principal Director General or Director General or Principal

•Director or Director or Joint Director or Assistant Director for the purposes of

•making any inquiry or investigation, if he has the reason to suspect that any

•income has been concealed, or is likely to be concealed; and

(c)the authorised officer referred to in section 247( 1), before taking

•action under section 247(1)(b)(i) to (viii), or during the course of such action.

(3)Any income -tax authority exercising the powers referred to in

•sub-sections (1) and (2) may, subject to the rules made in this behalf, impound any

•books of account or other documents produced before it in any proceeding under

•this Act.

(4)The Assessing Officer or the Assistant Director shall record the reasons

•for impounding any books of account or other documents under sub-section (3) and

•may retain such impounded books of account or other documents up to fifteen days

•(exclusive of holidays), or for such further period, with the prior sanction of the

•approving authority.

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•5 of 1908.

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SECTION Section 1204

Untitled Section

247.(1) Where the competent authority, in consequence of information in his

•possession, has reason to believe that—

(a)any person to whom a summons under section 246( 1) or a notice

•under section 268(1),––

(i)was issued to produce, or cause to be produced, any books of

•account or other documents or any information stored in any electronic

•media or a computer system, has omitted or failed to produce, or cause

•to be produced, such books of account or other documents or such

•information as required by such summons or notice; or

•(ii) has been issued or might be issued, will not, or would not,

•produce or cause to be produced, any books of account or other

•documents or any informa tion stored in an electronic media or a

•computer system which will be useful for, or relevant to, any

•proceedings under this Act; or

(b)any person is in possession of any asset or information in relation to

•any asset and such asset represents either wholly or partly, income or property

•which has not been, or would not be, disclosed, for the purposes of this Act,

•or the Black Money (Undisclosed Foreign Income and Assets) and Imposition

•of Tax Act, 2015, (herein referred to as the undisclosed income or property in

•this section),

•then the approving authority may authorise any Joint Director or Joint

•Commissioner or Assistant Director or Assistant Commissioner or Income -tax

•Officer, or any Joint Director or Joint Commissioner, so authorised, may authorise

•any A ssistant Director or Assistant Commissioner or Income -tax Officer,

•hereinafter referred to as the authorised officer to––

(i)enter and search any building, place, vessel, vehicle, aircraft where

•he has reason to suspect that such assets, books of account, other documents,

•or any information stored in an electronic media or computer systems are kept;

•(ii) require any person, who is found to be in possession or control of

•any books of account or other documents maintained in the form of electronic

•record [as defined in section 2( 1)(ha), ( i), ( j), ( k), ( l), ( r), and (t) of the

•Information Technology Act, 2000], on computer systems, any information

•stored in an electronic media or computer systems, to afford the authorised

•officer with such reasonable technical and other assistance (including access

•code, by whatever name called) as may be necessary to enable the authorised

•officer to inspect any information, electronic records and communication or

•data contained in or available on such computer systems;

•(iii) break open the lock of any door, box, locker, safe, almirah, or other

•receptacle for exercising the powers conferred by clause ( i), to enter and

•search any building, place, etc., where the keys thereof or the access to such

•building, place, etc., is not available, or gain access by overriding the access

•code to any sa id computer system, or virtual digital space, where the access

•code thereof is not available;

•(iv) search any person who has got out of, or is about to get into, or is in,

•the building, place, vessel, vehicle or aircraft, if the authorised officer has

•reason to suspect that such person has secreted about his person any such

•books of account, other documents, computer systems or asset;

(v)place marks of identification on any books of account or other

•documents or make or cause to be made extracts or copies therefrom and also

•from computer systems;

•(vi) make a note or an inventory of any such asset, and stock-in-trade of

•the business, found as a result of such search;

•Search and

seizure.

•278

•(vii) seize any such books of account, other documents, computer

•systems, or asset (other than stock-in-trade of the business), found as a result

•of such search;

•(viii) serve an order of deemed seizure, on the owner or the person who

•is in immediate possession or control thereof, of any valuable article or thing,

•which is not stock-in-trade, not to remove, part with or otherwise deal with it,

•except with the previous permission of the authorised officer, if it is not

•possible or practicable to take physical possession or removal to a safe place

•of such article o r thing, due to its volume, weight, or other physical

•characteristics or it being of a dangerous nature.

(2)If any building, place, vessel, vehicle or aircraft referred to in sub-section (1)(i)

•is within the area of jurisdiction of any Principal Chief Commissioner or Chief

•Commissioner or Principal Commissioner or Commissioner, but such income -tax

•authority has no jurisdiction over the person referred to in sub-section (1)(a) or(b), then,

•irrespective of the fact that he has no jurisdiction, it sh all be competent for him to

•exercise the powers under sub-section (1), where he has reason to believe that any delay

•in getting the authorisation from the income-tax authority having jurisdiction over such

•person may be prejudicial to the interests of the revenue.

(3)If any Principal Chief Commissioner or Chief Commissioner or Principal

•Commissioner or Commissioner, in consequence of information in his possession,

•has reason to suspect that any books of account, other documents, or any

•information stored in an electronic media or computer systems, or asset in respect

•of which an officer has been authorised by the competent authority to take action

•under sub-section (1)(i) to (viii) are or is kept in any building, place, vessel, vehicle

•or aircraft not men tioned in the authorisation under sub -section ( 1), then such

•Principal Chief Commissioner or Chief Commissioner or Principal Commissioner

•or Commissioner may, irrespective of anything contained in section 241, authorise

•the said officer to take action unde r any of the clauses aforesaid in respect of such

•building, place, vessel, vehicle or aircraft.

(4)The authorised officer may, where it is not practicable to seize, any such books

•of account, other documents, computer systems, asset, bank locker, bank account, for

•reasons other than deemed seizure under of sub-section (1) (viii),––

(a)serve an order on the owner or the person who is in immediate

•possession or control thereof, not to remove, part with or otherwise deal with

•it except with the previous perm ission of such officer and take such steps as

•may be necessary for ensuring compliance with the order; and

(b)such order shall not remain in force for a period exceeding sixty days

•from the date of the order and serving of such order shall not be deemed to be

•seizure of such books of account, other documents or assets under

•sub-section (1)(vii),

(5)The authorised officer may requisition the services of—

(a)any police officer or any officer of the Central Government, or of

•both; or

(b)any person or entity as may be approved by the Principal Chief

•Commissioner or the Chief Commissioner or the Principal Director General

•or the Director General, as per with such procedure, as prescribed,

•to assist him for all or any of the purposes specified in sub-sections (1) and (3) and

•it shall be the duty of every such officer or person or entity to comply with such

requisition.

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(6)The authorised officer may, during the course of any search or seizure,

•examine on oath any person who is found to be in possession or control or access

•holder of any computer systems, books of account, other documents or asset, or any

•other person who is present in the premises or is being searched, and––

(a)any statement made by the such person, during such examination

•may thereafter be used in evidence in any proceeding under this Act; and

(b)the examination of any such person may be not merely in respect of

•any books of account, other documents or assets found as a result of the search,

•but also in respect of all matters relevant for the purposes of any investigation

•connected with any proceeding under this Act.

(7)Where any books of account (in physical form or electronic form), other

•documents or asset, is found in the possession or control of any person in the course

•of a search, it may be presumed—

(a)that such books of account, computer systems, virtual digital space,

•other documents or asset, belong or belongs to such person;

(b)that the contents of such books of account, other documents,

•electronic content, records or communication found on such computer systems

•or virtual digital space, are true;

(c)that the signature and every other part of such books of account and

•other documents which purport to be in the handwriting of any particular

•person or which may reasonably be assumed to have been signed by, or to be

•in the handwriting of, any particular person, are in the handwriting of that

•person; and

(d)in the case of a document stamped, executed or attested, that it was

•duly stamped and executed or attested by the person by whom it purports to

•have been so executed or attested, and that the electronic records, data,

•communication, and information exchange carried out using such electronic

•devices is presumed to be exchanged between the parties thereto.

(8)The authorised officer may , by order in writing, provisionally attach any

•property belonging to the assessee, during the course of the search or seizure, or

•within sixty days from the date of execution of the last of the authorisations for the

•search and such provisional attachment shall––

(a)be made, if t he authorised officer is satisfied, after recording the

•reasons in writing, that it is necessary to do so in the interest of the revenue,

•with the prior approval of Principal Director General or Director General or

•the Principal Director or Director;

(b)be valid for six months from the end of the month in which the order

•of provisional attachment is made, and the rules prescribed as referred to in

SECTION Section 1205

Untitled Section

•section 413 shall, mutatis mutandis, apply to such provisional attachment.

(9)The authorised officer may, during the course of the search or seizure, or

•within sixty days from the date on which the last of the authorisations for search was

•executed, make a reference to a Valuation Officer, or any person registered as a value

•under section 514, or any person or en tity registered by or under any law enforce,

•requiring him to––

(a)estimate the fair market value of the property in the manner, as

•prescribed; and

(b)submit a report of the estimate to the authorised officer or the

•Assessing Officer, within sixty days from the date of receipt of such

•reference .

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•Powers to

requisition.

(10)The provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023 relating

•to searches and seizure shall apply, so far as may be, to search and seizure under

•this section.

(11)The Board may make rules in relation to any search or seizure under this

•section including providing for the procedure to be followed by the authorised

•officer—

(a)for obtaining ingress into any building, place, vessel, vehicle or

•aircraft to be searched where free ingress thereto is not available; and

(b)for ensuring safe custody of any books of account or other documents

•or assets seized.

SECTION Section 1206

Untitled Section

248.(1) Where the approving authority, in consequence of information in his

•possession, has reason to believe that—

(a)any person to whom a summons under section 246(1), or notice under

SECTION Section 1207

Untitled Section

•section 268(1) was issued to produce, or cause to be produced, any books of

•account or other documents or any information stored in an electronic media

•or a computer systems has omitted or failed to produce, or cause to be

•produced, such books of account or other documents, or any information

•stored in an electronic media or a computer systems as required by such

•summons or notice and the said books of account or other documents or such

•electronic media or computer systems have been taken into custody by any

•officer or authority under any other law in force; or

(b)any books of account or other documents or any information stored

•in an electronic media or a computer systems will be useful for, or relevant to,

•any proceeding under this Act and any person to whom a summons or notice

•as aforesaid has been or might be issued will not, or would not, produce or

•cause to be produced, such books of account or other documents or any

•information stored in an electronic media or a computer system on the return

•of such books of account or other documents or such el ectronic media or

•computer system by any officer or authority by whom or which such books of

•account or other documents or such electronic media or computer system have

•been taken into custody under any other law in force; or

(c)any assets represent either wholly or partly income or property which

•has not been, or would not have been, disclosed for the purposes of this Act

•by any person from whose possession or control such assets have been taken

•into custody by any officer or authority under any other law in force,

•then, the approving authority may authorise any, Joint Director or Joint

•Commissioner or Assistant Director or Assistant Commissioner or Income -tax

•Officer ( hereinafter in this section and in section 489( 2) referred to as the

•requisitioning officer) to require the officer or authority referred to in clause ( a) or

(b)or ( c), to deliver such assets or books of account, other documents or such

•electronic media or computer system to the requisitioning officer.

(2)On a requisition being made under sub-section (1), the officer or authority

•referred to in clause (a) or (b) or (c), of that sub-section, shall deliver such assets or

•books of account or other documents or electronic media or computer system to the

•requisitioning officer either forthwith or when such officer or authority is of the

•opinion that it is no longer necessary to retain the same in his or its custody.

(3)Where any assets or books of account or other documents or electronic

•media or computer system have been delivered to the requisitioning officer, the

•provisions of sections 247(7) to (11), 250 and 251shall, so far as may be, apply as

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•43 of 1961.

•22 of 2015.

•43 of 1961.

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•if such books of account or other documents or electronic media or computer system

•or assets had been seized under section 247 by the requisitioning officer from the

•custody of the person referred to in sub-section (1) (a) or (b) or (c), and as if for the

•words “the authorised officer”, occurring in any of the aforesaid sections 247(7) to

(11), 250and 251, the words “the requisitioning officer” were substituted.

SECTION Section 1208

Untitled Section

249.The reason to believe or reason to suspect, as referred to in section 247

•or 248, recorded by the income-tax authority shall not be disclosed to any person or

•authority or the Appellate Tribunal.

SECTION Section 1209

Untitled Section

250.( 1) The Assessing Officer may recover the tax liability (including

•penalty or interest payable other than advance tax) out of the assets seized under

SECTION Section 121

Untitled Section

110.Carry forward and set off of loss from house property.

SECTION Section 1210

Untitled Section

•section 247 or requisitioned under section 248, and such liability shall be the

•aggregate of––

(a)any existing liability under this Act, or under the Income -tax

•Act, 1961 or the Black Money (Undisclosed Foreign Income and Assets) and

•Imposition of Tax Act, 2015;

(b)any liability determined under this Act or under the Acts referred to in

SECTION Section 1211

Untitled Section

•clause (a), up to the date of completion of the assessment or reassessment or

•recomputation in consequence to the search or the requisition;

(c)any liability in respect of which such person is in default or deemed to

•be in default under this Act or under the Income-tax Act, 1961, determined on or

•after the completion of the assessment or reassessment or recomputation in

•consequence of the search or the requisition, and till the date of release of the

•assets; and

(d)any liability arising on an application made before the Interim Board

•of Settlement under section 245C(1) of the Income-tax Act, 1961.

(2)The Assessing Officer may release the assets seized or portion of such asset

•to the person from whose custody the assets were seized, on an application made by

•the person concerned within thirty days from the end of the month in which the asset

•was seized, after fulfilment of the following requirements:––

(a)satisfying himself about the nature and source of acquisition of any

•such asset;

(b)recovering any existing liability referred to in sub-section (1);

(c)obtaining prior approval of the Principal Chief Commissioner or

•Chief Commissioner or Principal Commissioner or Commissioner.

(3)The assets referred to in sub -section ( 2) shall be released within one

•hundred and twenty days from the date on which the last of the authorisations for

•the search or requisition was executed.

(4)If the assets consist solely of money, or partly of money and partly of other

•assets, the Assessing Officer may apply such money in the discharge of the liabilities

•referred to in sub-section (1) and the assessee shall be discharged of such liability

•to the extent of the money so applied.

(5)The assets, other than money, may also be applied for discharge of

•liabilities referred to in sub -section ( 1) as remains undischarged and shall be

•deemed to be under distraint as if such distraint was effected by the Assessing

•Officer or Tax Recovery Officer under authorisation from the Principal Chief

•Commissioner or Chief Commissioner or Princ ipal Commissioner or

•Commissioner and the recovery of any liability out of such assets shall be effected

•in the manner as prescribed.

•Reasons not to

•be disclosed.

•Application of

•seized or

•requisitioned

assets.

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•Copying,

•extraction,

•retention and

•release of books

•of account and

•documents

•seized or

requisitioned.

(6)The mode of recovery of liabilities under sub-section (1) shall not preclude

•the recovery of liabilities aforesaid by any other mode laid down in this Act.

(7)Any assets or proceeds thereof, which remain after the liabilities referred

•to in sub -section (1) are discharged shall be forthwith made over or paid to the

•concerned person.

(8)The Central Government shall pay simple interest at the rate of 0.5% for

•every month or part of a month for the period on the amount determined in

•accordance with the following formula:––

•(A-B)+(C-D)

•where —

•A = the aggregate amount of money seized under section 247 or

•requisitioned under section 248;

•B = the amount of money, if any, released under sub-section (2);

•C = the proceeds, if any, of the assets sold towards the discharge of the

•liability under sub-section (1); and

•D = the aggregate amount required to meet the liabilities referred to in

•sub-section (1).

(9)The interest referred to in sub -section ( 8) shall run from the date

•immediately following the expiry of one hundred and twenty days from the date on

•which the last of the authorisations for the search under section 247 or requisition

•under section 24 8, was executed to the date of completion of the assessment or

•reassessment or recomputation.

SECTION Section 1212

Untitled Section

251.(1) Where, the authorised officer, referred to in section 247(1)(b) has no

•jurisdiction over the person from whom the assets or books of account or other

•documents or electronic media or computer system were seized or requisitioned

•under section 247(1) or 248, he shall hand over the seized or requisitioned assets or

•books of account or other documents or electronic media or computer system to the

•Assessing Officer having jurisdiction over such person and such Assessing Officer

•thereupon shall exercise the powers under sub-sections (2) to (4).

(2)The authorised officer or the Assessing Officer referred in sub-section (1),

•shall, on an application made by the person referred to therein, allow him to make

•copies or take extracts from, the material seized or requisitioned, at such place and

•time as appointed, and in the presence of a person empowered by such officer in this

behalf.

(3)The authorised officer may––

(a)retain the material seized or requisitioned, under section 247 or 248,

•up to one month from the end of the quarter in which the order of assessment

•or reassessment or recomputation is made;

(b)retain such material seized or requisitioned, beyond th e period

•specified in clause ( a), after recording reasons in writing and obtaining

•approval from the approving authority.

(4)The approving authority shall not allow the retention of material seized or

•requisitioned, beyond thirty days from the date on which all proceedings under this

•Act in respect of the years for which the material seized or requisitioned are relevant,

•are completed.

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(5)If a person legally entitled to the material seized or requisitioned under

SECTION Section 1213

Untitled Section

•section 247(1) or section 248, objects for any reason, to the approval given by

•approving authority under sub-section (3)(b), he may make an application to the

•Board stating therein the reasons for such objection and requesting for the return

•of the material seized or requisitioned and the Board may, after giving the

•applicant an opportunity of being heard, pass such orders as it thinks fit.

SECTION Section 1214

Untitled Section

252.(1) The Assessing Officer, the Join t Commissioner or the Joint

•Commissioner (Appeals) or the Commissioner (Appeals) may, for the purposes

•of this Act, require any—

(a)person, including a banking company or any officer thereof, to

•furnish, within such time, requisite information or to furni sh statements of

•account and affairs verified in such manner specified by such authority,

•giving such information in relation to such matters as, in the opinion of such

•authority, will be useful for, or relevant to, any enquiry or proceedings under

•this Act;

(b)firm to furnish him with a return of the names and addresses of the

•partners of the firm and their respective shares;

(c)Hindu undivided family to furnish him with a return of the names

•and addresses of the manager and the members of the family;

(d)person whom he has reason to believe to be a trustee, guardian or

•agent, to furnish him with a return of the names of the persons for or of

•whom he is trustee, guardian or agent, and of their addresses;

(e)assessee to furnish a statement of the names a nd addresses of all

•persons to whom he has paid in any tax year, rent, interest, commission,

•royalty or brokerage, or any annuity, not being any annuity taxable under

•the head “Salaries” amounting to more than ten thousand rupees , or such

•higher amount as prescribed, together with particulars of all such payments

•made;

(f)dealer, broker or agent or any person concerned in the

•management of a stock or commodity exchange to furnish a statement of

•the names and addresses of all persons to whom he or the excha nge has

•paid any sum in connection with the transfer, whether by way of sale,

•exchange or otherwise, of assets, or on whose behalf or from whom he or

•the exchange has received any such sum, together with particulars of all

•such payments and receipts.

(2)The powers conferred under sub-section (1)(a) may also be exercised by

•the competent authority or the Assistant Director.

(3)The powers under sub-section (1)––

(a)shall not be exercised by any income-tax authority below the rank

•of Principal Director or Director or Principal Commissioner or

•Commissioner, other than the Joint Director or Assistant Director, without

•the prior approval of the Principal Director or Director or, as the case may

•be, the Principal Commissioner or Commissioner, in a c ase where no

•proceeding is pending.

(b)may be exercised by an income -tax authority notified under

SECTION Section 1215

Untitled Section

•section 246( 2)(a), for the purposes of an agreement referred to in

SECTION Section 1216

Untitled Section

•section 159, even if no proceedings are pending before it or any other

•income-tax authority.

•Power to call for

information.

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•Powers of

survey.

253.(1) Irrespective of anything contained in any other provision of this

•Act, an income -tax authority may enter any place at which a business or

•profession, or activity for charitable purpose is carried on, whether such place be

•the principal place or not of such business or profession or of such activity for

•charitable purpose, where such place—

(a)is within the limits of the area assigned to such authority; or

(b)is occupied by any person in respect of whom such authority

•exercises jurisdiction; or

(c)in respect of which such authority is authorised for the purposes of

•this section by income-tax authority, who is assigned the area within which

•such place is situated or who exercises jurisdiction in respect of any person

•occupying such place,

•and, upon entry into such a place, may require any proprietor, trustee, employee

•or any other person who may at that time and place be attending in any manner

•to, or helping in, the carrying on of such business or profession or such activity

•for charitable purpose—

(i)to provide the necessary technical and other assistance (including

•access code) to enable the inspection of such books of account or other

•documents, or computer system, or any other material connected with such

•system including virtual digital space, as may be required and which may

•be available at such place;

•(ii) to provide the necessary facility to check or verify the asset, stock,

•which may be found therein; and

•(iii) to furnish such information as such authority may require as to any

•matter which may be useful for, or relevant to, any proceeding under this Act.

(2)For the purposes of this section, a place where a business or profession, or

•activity for charitable purpose is carried on shall also include any other place, whether

•any business or profession or activity for charitable purpose is carried on therein or

•not, in which the person carrying on such business or profession or activit y for

•charitable purpose states that any of his books of account or other documents or any

•part of his cash or stock or other valuable article or thing or computer system relating

•to such business or profession or activity for charitable purpose, are or is kept.

(3)An income-tax authority may enter any place of business or profession

•or activity for charitable purpose referred to in sub -section (1), only during the

•hours at which such place is open for the conduct of business or profession or

•activity for charitable purpose and, in the case of any other place, only after

•sunrise and before sunset.

(4)An income-tax authority acting under this section may, for the purposes

•of verifying that tax has been deducted or collected at source as per the provisions

•of Chapter XIX-B of this Act, after sunrise and before sunset, enter––

(a)any office, or any other place where business or profession or

•activity for charitable purpose is carried on, within the limits of the area

•assigned to such authority; or

(b)any place in respect of which such authority is authorised for the

•purposes of this section by an income-tax authority who is assigned the area

•within which such place is situated or where books of account or documents

•are kept,

•and on entry to such office or pl ace, the income -tax authority may require the

•deductor or the collector or any other person who may at that time and place be

•attending in any manner to such work—

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(i)to provide the necessary facility to inspect such books of account

•or other documents, and access to electronic media or computer system, or

•virtual digital space, as may be required; and

•(ii) to furnish such information as may be required in relation to such matter.

(5)An income-tax authority acting under this section may—

(a)place marks of identification on the books of account or other

•documents inspected by such authority and make or cause to be made

•extracts or copies therefrom or from electronic media or computer system;

(b)record the statement of any person on oath which may be useful

•for, or relevant to, any proceeding under this Act;

(c)impound and retain in custody any books of account or other

•documents inspected by it, after recording reasons for doing so, for a period––

(i)of fifteen days (exclusive of holidays); or

•(ii) exceeding fifteen days (exclusive of holidays) with the prior

•approval of the approving authority;

(d)make an inventory of any asset or stock checked or verified by such

authority.

(6)The income -tax authority acting under sub -section ( 4) shall only

•undertake the actions referred under sub-sections (5)(a) and (5)(b).

(7)An income-tax authority acting under this section shall, on no account,

•remove or cause to be removed from the place wherein it has entered, any asset

•or stock.

(8)The income -tax authority having regard to the nature and scale of

•expenditure incurred, for the purposes of verifying the expenditure made by the person

•in connection with any function, ceremony or event, if it is of the opinion that it is

•necessary and expedient to do so, after such function, ceremony or event, may—

(a)require the person by whom such expenditure has been incurred or

•any other person who is likely to possess the information regarding such

•expenditure, to furnish such information which may be useful for, or

•relevant to, any proceeding under this Act;

(b)record the statements of the person or any other person on oath in

•this behalf; and

(c)any statement so recorded may thereafter be used as evidence in

•any proceeding under this Act.

(9)If a person is required to provide facility to the income -tax authority to

•inspect books of account or other documents in any form or to check or verify any

•cash, stock or other valuable article or thing or to furnish any information or to

•have his statement recorded, either refuses or evades to do so, the income -tax

•authority shall have all the powers under section 246(1) for enforcing compliance

•with the requirement.

(10)The action under this section shall be taken by an income-tax authority

•with the prior approval of the Principal Director General or the Director General

•or the Principal Chief Commissioner or the Chief Commissioner.

(11)In this section, “income-tax authority” means—

(a)a Principal Commissioner or Commissioner, a Principal Director

•or Director, a Joint Commissioner or Joint Director, an Assistant Director or

•a Deputy Director or an Assessing Officer, or a Tax Recovery Officer; and

•286

•Power to collect

•certain

information.

•Power to inspect

•registers of

companies.

•Power of

•competent

authority.

•Proceedings

•before

•income-tax

•authorities to be

•judicial

proceedings.

•Disclosure of

•information

•relating to

assessees.

(b)includes an Inspector of Income -tax, for the purposes of

•sub-sections, (1)(i), (5)(a) and (8),

•who is subordinate to the Principal Director General or the Director General or

•the Principal Chief Commissioner or the Chief Commissioner, as specified by the

Board.

SECTION Section 1217

Untitled Section

254.(1) Irrespective of anything contained in any other provision of this

•Act, an income-tax authority may, for the purposes of collecting any information

•which may be useful for, or relevant to, the purposes of this Act, enter––

(a)any building or place within the limits of the area assigned to such

•authority; or

(b)any building or place occupied by any person in respect of whom

•such authority exercises jurisdiction,

•at which a business or profession is carried on, regar dless of the fact that such

•place be the principal place or not of such business or profession and require any

•proprietor or employee or any other person, who may at that time and place, be

•attending in any manner to, or helping in, or carrying on of such business or

•profession, to furnish such information as prescribed.

(2)The income-tax authority may enter any place of business or profession

•referred to in sub-section (1) only during the hours at which such place is open for

•the conduct of business or profession.

(3)The income-tax authority acting under this section shall, on no account,

•remove or cause to be removed from the building or place wherein it has entered,

•any books of account or other documents or any cash or stock or other valuable

SECTION Section 1218

Untitled Section

•article or thing.

(4)In this section, “income-tax authority” means––

(a)a Joint Commissioner, or a Joint Director or an Assistant Director

•or an Assessing Officer; and

(b)an Inspector of Income-tax, authorised by the Assessing Officer to

•exercise the powers co nferred under this section in relation to the area in

•respect of which the Assessing Officer exercises jurisdiction or part thereof.

SECTION Section 1219

Untitled Section

255.The Assessing Officer, assessment unit, verification unit, the Joint

•Commissioner or the Joint Commissioner (Appeals) or the Commissioner

•(Appeals), or any person subordinate thereof and authorised in writing in this

•behalf by such officer or authority, may inspect, and if necessary, take copies, or

•cause copies to be taken, of any register of the members, debenture holde rs or

•mortgagees of any company or of any entry in such register.

SECTION Section 122

Untitled Section

111.Carry forward and set off of loss from capital gains.

SECTION Section 1220

Untitled Section

256.The competent authority shall be competent to make any enquiry under

•this Act, and for this purpose, shall have all the powers that an Assessing Officer

•has under this Act in relation to the making of enquiries.

SECTION Section 1221

Untitled Section

257.(1) Any proceeding under this Act before an income-tax authority shall

•be deemed to be a judicial proceeding within the meaning of sections 229 and 267

•and for the purposes of section 233 of the Bharatiya Nyaya Sanhita, 2023.

(2)Every income-tax authority shall be deemed to be a Civil Court for the

•purposes of section 215 of the Bharatiya Nagarik Suraksha Sanhita, 2023.

SECTION Section 1222

Untitled Section

258.(1) The Board or any other income-tax authority specified by it by an

•order in this behalf, may furnish or cause to be furnished to—

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•42 of 1999.

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(a)any officer, authority or body performing any functions under any

•law relating to the imposition of any tax, duty or cess, or dealings in foreign

•exchange as defined in section 2( n) of the Foreign Exchange Management

•Act, 1999; or

(b)such officer, autho rity or body performing functions under any

•other law, if in the opinion of the Central Government it is necessary so to

•do in the public interest, as it may specify by notification in this behalf,

•any such information received or obtained by any income -tax authority in the

•performance of its functions under this Act, as may, in the opinion of the Board

•or other income-tax authority, be necessary for the purpose of enabling the officer,

•authority or body, to perform his or its functions under that law.

(2)The Principal Chief Commissioner or Chief Commissioner or Principal

•Commissioner or Commissioner may furnish or cause to be furnished to a person,

•the information relating to any assessee received or obtained by any income -tax

•authority in the performance of his functions under this Act,––

(a)on an application made by such person to the aforesaid authorities

•in the prescribed form and on being satisfied that it is in the public interest

•so to do; and

(b)the decision of the Principal Chief Commissioner o r Chief

•Commissioner or Principal Commissioner or Commissioner in this behalf,

•shall be final and shall not be called in question in any court of law.

(3)Irrespective of anything contained in sub-section (1) or (2) or any other

•law in force, the Central G overnment may, having regard to the practices and

•usages, customary or any other relevant factors, by notification, direct that no

•information or document shall be furnished or produced by a public servant in

•respect of such matters relating to such class of assessees except to such

•authorities as specified in that notification.

SECTION Section 1223

Untitled Section

259.(1) For the purposes of verification of information in the possession of

•the prescribed income-tax authority, such authority may issue a notice requiring

•any person to furnish any information as may be useful for, or relevant to, any

•inquiry or proceeding under this Act in such form and manner and within such

•time, as specified in such notice.

(2)The prescribed income-tax authority may process and utilise such information

•and document received by him as per the scheme notified under section 260.

SECTION Section 1224

Untitled Section

260.(1) The Central Government may make a scheme, by notification, for the

•purposes of calling for information under section 252, collecting certain information

•under section 254, or ca lling for information by prescribed income-tax authority

•under section 259, or exercise of power to inspect register of companies under

SECTION Section 1225

Untitled Section

•section 255, or exercise of power of Assessing Officer under section 256 so as to

•impart greater efficiency, transparency and accountability by—

(a)eliminating the interface between the income-tax authority and the

•assessee or any other person to the extent technologically feasible;

(b)optimising utilisation of the resources through economies of scale

•and functional specialisation;

(c)introducing a team-based exercise of powers, including to call for,

•or collect, or process, or utilise, the information, with dynamic jurisdiction.

(2)The Central Government m ay, for the purpose of giving effect to this

•scheme made under sub -section ( 1), by notification, direct that any of the

•provisions of this Act shall not apply or shall apply with such exceptions,

•modifications and adaptations as specified in the notification.

(3)Every notification issued under sub-sections (1) and (2) shall, as soon as

•may be after the notification is issued, be laid before each House of Parliament.

•Power to call for

•information by

•prescribed

•income-tax

authority.

•Faceless

•collection of

information.

•288

Interpretation.261. For the purposes of this Chapter, the expressions—

(a)“approving authority” means––

(i)the Principal Director General or the Director General; or

•(ii) the Principal Chief Commissioner or the Chief Commissioner; or

•(iii) the Principal Director or the Director; or

•(iv) the Principal Commissioner or the Commissioner;

(b)“asset” includes any money, bullion, jewellery or other valuable

SECTION Section 1226

Untitled Section

•article or thing, held in physical or virtual form;

(c)“authorised officer” means––

(i)the Joint Director or the Additional Director;

•(ii) the Joint Commissioner or the Additional Commissioner;

•(iii) the Assistant Director or the Deputy Director;

•(iv) the Assistant Commissioner or the Deputy Commissioner; or

(v)the Income-tax Officer or the Tax Recovery Officer;

(d)“competent authority” means––

(i)the Principal Director General or the Director General; or

•(ii) the Principal Chief Commissioner or the Chief

•Commissioner; o

•(iii) the Principal Director or the Director; or

•(iv) the Principal Commissioner or the Commissioner; or

(v)the Joint Director or the Additional Director; or

•(vi) the Joint Commissioner or the Additional Commissioner;

(e)“computer system” means computers, computer systems, computer

•networks, computer resources, communication devices, digital or electronic

•data storage devices, used on stand -alone mode or part of a computer

•system, linked through a network, or utilised through intermediaries for

•information creation or processing or storage or exchange, and includes the

•remote server or cloud server or virtual digital space;

(f)“date on which the last of the authorisations for search was

•executed” means—

(i)in the case of search, the date of conclusion of search as

•recorded in the last panchnama drawn in relation to any person in

•whose case the warrant of authorisation has been issued; or

•(ii) in the case of requisition under section 248, the date of actual

•receipt of the books of account or other documents or assets by the

•requisitioning officer;

(g)“material seized” means books of account or other documents or

•digital data storage devices, computer systems, and extracts seized from a

•person during the course of search under section 247 or requisitioned under

SECTION Section 1227

Untitled Section

•section 24 8, and includes seizure of backup taken from any specialised

•programs like tally software, excel sheets, word files and all electronic

•records including data and information in the electronic form containing

•figures and any other relevant noting, and shall be construed to mean as

•book of accounts maintained by the said person;

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•43 of 1961.

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(h)“proceeding” means any proceeding in respect of any year, whether

•under the Income-tax Act, 1961or under this Act, which may be pending on

•the date on which a search under section 247 or requisition under

SECTION Section 1228

Untitled Section

•section 248 is authorised or powers under section 253 are exercised, as the

•case may be, or which may have been completed on or before such date and

•includes all proceedings under this Act or the Income -tax Act, 1961which

•may be commenced after such date in respect of any year;

(i)“virtual digital space” means an environment, area or realm, that is

•constructed and experienced through computer technology and not the

•physical, tangible world which encompasses any digital realm that allows

•users to interact, communicate and perform activities using computer

•systems, computer networks, computer resources, communication devices,

•cyberspace, internet, worldwide web and emerging technologies, using data

•and information in the electronic form for creation or storage or exchange

•and includes––

(i)email servers;

•(ii) social media account;

•(iii) online investment account, trading account, banking

•account, etc.;

•(iv) any website used for storing details of ownership of any asset;

(v)remote server or cloud servers;

•(vi) digital application platforms; and

•(vii) any other space of similar nature.

SECTION Section 1229

Untitled Section

•CHAPTER XV

•RETURN OF INCOME

A.—Allotment of Permanent Account Number

262.(1) Every person who has not been allotted a Permanent Account

•Number shall, within such time as prescribed, apply to the Assessing Officer for

•its allotment if he fulfils any of the following conditions:—

(a)his total income or the total income of any other person for which

•he is assessable under this Act during any tax year exceeded the maximum

•amount not chargeable to income-tax;

(b)he is carrying on any business or profession whose total sales, turnover

•or gross receipts are or is likely to exceed five lakh rupees in any tax year;

(c)he is required to furnish a return of income under section 2 63 for

•any tax year; or

(d)he is a resident, other than an individual, which enters into a

•financial transaction aggregating to two lakh fifty thousand rupees or more

•in a tax year; or

(e)he is the managing director, dire ctor, partner, trustee, author,

•founder, karta, chief executive officer, principal officer or office bearer of

•the person referred to in clause (d) or any person competent to act on behalf

•of the person referred to in clause (d).

•Permanent

•Account

Number.

•290

(2)Any person, not covered under sub -section ( 1) may apply to the

•Assessing Officer for the allotment of a Permanent Account Number after which

•the Assessing Officer shall allot a Permanent Account Number to such person.

(3)Every person shall quote Permanent Account Number in all his returns

•to, or correspondence with, any income -tax authority and in all challans for the

•payment of any sum due under this Act.

(4)Every person shall intimate the Assessing Officer of any change in his

•address or in the name and nature of his business on the basis of which the

•Permanent Account Number was allotted to him.

(5)Every person who is eligible to obtain Aadhaar number shall quote such

•number in the application form for allotment of Permanent Account Number and

•in the return of income.

(6)(a) Every person who has been allotted Permanent Account Number and

•who is eligible to obtain Aadhaar number, shall intimate his Aadhaar number to

•the prescribed income-tax authority in such form and manner, as prescribed;

(b)if a person fails to intimate his Aadhaar number as per clause ( a), the

•Permanent Account Number allotted to that person shall be made inoperative in

•such manner as prescribed.

(7)Every person w ho is required to furnish or intimate or quote his

•Permanent Account Number under this Act, and who—

(a)has not been allotted a Permanent Account Number but possesses

•the Aadhaar number, may furnish or intimate or quote his Aadhaar number

•in lieu of the Permanent Account Number, and such person shall be allotted

•a Permanent Account Number in the manner, as prescribed;

(b)has been allotted a Permanent Account Number, and who has

•intimated his Aadhaar number as per sub-section (6) may furnish or intimate

•or quote his Aadhaar number in lieu of the Permanent Account Number.

(8)A person who has already been allotted a Permanent Account Number

•cannot apply, obtain or possess another Permanent Account Number.

(9)(a) Every person entering into such transaction, as prescribed, shall quote

•his Permanent Account Number or Aadhaar number, in the documents pertaining

•to such transactions and also authenticate such Permanent Account Number or

•Aadhaar number, in the manner, as prescribed;

(b)every person receiving any document relating to the transactions referred

•to in clause (a), shall ensure that Permanent Account Number or Aadhaar number,

•has been duly quoted in such document and that such Permanent Account Number

•or Aadhaar number is authenticated as prescribed.

(10)The Board may make rules providing for—

(a)the form, manner and time in which an application may be made

•for the allotment of Permanent Account Number and the particulars which

•such application shall contain;

(b)class o r classes of persons who shall be required to apply for

•allotment of Permanent Account Number;

(c)categories of documents pertaining to business or profession in

•which Permanent Account Number shall be quoted by every person;

(d)the form and manner in which the person who has not been allotted

•a Permanent Account Number shall make his declaration;

(e)manner of authentication of Permanent Account Number or

•Aadhaar number;

(f)class or classes of persons to whom the provisions of this section

•shall not apply having regard to the transactions or the circumstances.

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(11)(a) The Central Government may, by notification, specify any class or

•classes of persons who shall apply to the Assessing Officer for the allotment of

•Permanent Account Number within such time as mentioned in such notification;

(b)the class or classes of persons in clause (a) may include such persons––

(i)by whom tax is payable under this Act; or

•(ii) by whom any tax or duty is payable under any other law in force; or

•(iii) being importers and exporters, even when no tax is payable by them.

(12)The provisions of sub-sections (5) and (6) shall not apply to such person

•or class or classes of persons or any State or part of any State, as notified by the

•Central Government.

(13)In this section,—

(a)“Aadhaar number” shall have the same meaning as assigned to it

•in section 2 (a) of the Aadhaar (Targeted Delivery of Financial and Other

•Subsidies, Benefits and Services) Act, 2016;

(b)“Assessing Officer ” includes an income -tax authority who is

•assigned the duty of allotting permanent account number;

(c)“authentication” means the process by which the Permanent

•Account Number or Aadhaar number along with demographic information

•or biometric information of an individual is submitted to the income -tax

•authority or such other authority or agency as prescribed for its verification

•and such authority or agency verifies the correctness, or the lack thereof, on

•the basis of information available with it.

B.—Filing of return of income and processing

SECTION Section 123

Untitled Section

112.Carry forward and set off of business loss.

SECTION Section 1230

Untitled Section

263.(1)(a) The following persons shall furnish a return of income for the

•tax year under this Act, on or before the due date:—

(i)a company;

•(ii) a firm;

•(iii) a person other than a company or a firm, if his total income or the

•total income of any other person in respect of which he is assessable under this

•Act during the tax year, without giving effect to the provisions of

SECTION Section 1231

Untitled Section

•Chapter XVII-B or provisions of Schedule VIII (Table: Sl. No. 1) or deductions

•allowable under Chapter IV-E (Capital Gains) or Chapter VIII, as the case may

•be, exceeded the maximum amount which is not chargeable to income-tax;

•(iv) a specified entity if its total income w ithout giving effect to the

•provisions of section 11, exceeds the maximum amount which is not

•chargeable to income-tax;

(v)a University, college or other institution as referred to in section 45(3)(a);

•(vi) a business trust;

•(vii) an investment fund as referred to in section 224;

•(viii) a person who has sustained a loss in the tax year under the head

•“Profits and gains of business or profession ” or under the head “Capital

•gains” and who intends to claim that such loss, or any part thereof, is to be

•carried forward as per this Act;

•(ix) a person who intends to make a claim of refund under Chapter XX;

(x)a person, who is a resident, other than not ordinarily resident, and

•who at any time during the tax year,––

(A)holds, as a beneficial owne r or otherwise, any asset

•(including any financial interest in an entity) located outside India, or

•has signing authority in any account located outside India; or

•Return of

income.

•292

(B)is a beneficiary of any asset (including any financial interest

•in an entity) located outside India, except where any income arising

•from such asset is includible in the income of person referred to in

•item (A);

•(xi) a person, other than a company or firm, who during the tax year,

•fulfils such conditions as prescribed;

(b)for the purposes of this section, “due date” means the date of the financial

•year succeeding the relevant tax year as mentioned in the corresponding entry of

•column C of the Table below in respect of the persons mentioned in column B of

•the said Table below:

•Table

Sl.No. Person Due date

•A B C

SECTION Section 1232

Untitled Section

1.Company. 31st October.

SECTION Section 1233

Untitled Section

2.Person (other than a company)

•whose accounts are required to be

•audited under this Act or under any other

•law in force.

•31st October.

SECTION Section 1234

Untitled Section

3.Partner of a firm whose accounts

•are required to be audited under this Act

•or under any other law in force ; or the

•spouse of such partner (if section 10

•applies to such spouse).

•31st October.

SECTION Section 1235

Untitled Section

4.Assessee, including the partners of

•the firm or the spouse of such partner (if

SECTION Section 1236

Untitled Section

•section 10 applies to such spouse), who

•is required to furnish a report referred to

•in section 172.

•30th November.

SECTION Section 1237

Untitled Section

5.Any other assessee. 31st July.

(2)(a) The Board may make rules providing for the prescribed form for

•furnishing return of income, manner of its verification and such other particulars

•including––

(i)the class or classes of persons who shall be required to furnish the

•return in electronic form or otherwise;

•(ii) the form and the manner in which the return may be furnished,

•whether in electronic form or otherwise;

•(iii) the documents, statements, receipts, certificates, audited reports

•or any other documents which may not be furnished along with the return in

•electronic form but shall be produced befo re the Assessing Officer on

•demand;

•(iv) the computer resource or the electronic record to which the return

•in electronic form may be transmitted;

(b)the particulars prescribed under clause (a) may also include––

(i)income exempt from tax;

•(ii) assets of the prescribed nature and value held by the assessee as a

•beneficial owner or otherwise or in which he is a beneficiary;

•(iii) bank account and credit card held by the assessee;

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•(iv) expenditure exceeding the prescribed limit incurred by the

•assessee under prescribed heads;

(v)such other outgoings as prescribed;

•(vi) the report of any audit referred to in section 63 or a copy thereof;

•(vii) the particulars of the location and style of the principal place of

•the business or profession and all the branches thereof;

•(viii) the names and addresses of the p artners, if any, in the business

•or profession;

•(ix) the names of the other members of the association of person or the

•body of individuals and the extent of the share of the assessee and the shares

•of all such members, in the profits of the business or pr ofession and any

•branches thereof.

(3)The Central Government may, by notification , exempt any class or

•classes of persons, from the obligation to file a return of income under this section,

•subject to the conditions specified therein.

(4)Any person who has not furnished a return within the time allowed to

•him under sub -section (1), may furnish the return for any tax year at any time

•within nine months from the end of the relevant tax year, or before the completion

•of the assessment, whichever is earlier.

(5)If any person, having furnished a return under sub -section ( 1) or

•sub-section (4), discovers any omission or any wrong statement therein, he may

•furnish a revised return at any time within nine months from the end of the relevant

•tax year, or before the completion of the assessment, whichever is earlier.

(6)(a) Any person, whether or not he has furnished a return under

•sub-section (1) or (4) or (5) for a tax year, may furnish an updated return of his

•income or the income of any other person in respect of which he is assessable

•under this Act, at any time within forty-eight months from the end of the financial

•year succeeding the relevant tax year;

(b)the provisions of clause (a) shall continue to apply for a tax year if any person

•has sustained a loss in the said tax year and has furnished a return of loss within the

•due date specified under sub-section (1) and the updated return is a return of income;

(c)the provisions of clause (a) shall not apply for a tax year for any person, if––

(i)the updated return is a return of loss;

•(ii) the updated return has the effect of decreasing the total tax liability

•determined on the basis of return furnished under sub-section (1) or (4) or (5)

•for the said tax year;

•(iii) the updated return results in refund where no refund was due or

•increases the refund due on the basis of return furnished under sub-section (1)

•or (4) or (5) for the said tax year;

•(iv) an updated return has already been furnished;

(v)any proceeding for assessment or reassessment or recomputation

•or revision of income under this Act is pending or has been completed for

•the said tax year;

•(vi) the Assessing Officer is in the possession of information in respect

•of such person for the said tax year regarding violation of specified laws and

•the same has been communicated to him prior t o the date of furnishing of

•updated return;

•294

•(vii) information for the said tax year has been received under an

•agreement referred to in section 159 in respect of such person and the same has

•been communicated to him, prior to the date of furnishing of updated return;

•(viii) any prosecution proceedings under the Chapter XXII have been

•initiated for the said tax year in respect of such person, prior to the date of

•furnishing of updated return; or

•(ix) thirty-six months have expired from the end of the financial year

•succeeding the relevant tax year, and any notice to show -cause under

SECTION Section 1238

Untitled Section

•section 281has been issued in his case, except where an order has been

•passed under section 281( 3) determining that it is not a fit case to issue

•notice under section 280; or

(x)he is such person or belongs to such class of persons, as notified

•by the Board in this regard;

(d)a person shall also not be eligible to furnish an updated return of income,

•where—

(i)a search has been initiated under section 247 or books of account

•or other documents or any assets are requisitioned under section 248 in the

•case of that person;

•(ii) a survey has been conducted under section 253, other than

•sub-section (4) of the said section, in the case of that person; or

•(iii) a notice has been issued to the effect that any money, bullion,

•jewellery, virtual digital asset or valuable article or thing, seized or

•requisitioned under section 247 or 248 in the case of any other person, belongs

•to that person; or

•(iv) a notice has been issued to the effect that any books of account or

•documents, seized or requisitioned under section 247 or 248 in the case of

•any other person, pertain or pertains to, or any other information contained

•therein, relate to, that person,

•for th e tax year in which such search is initiated or survey is conducted or

•requisition is made and any tax year preceding such tax year.

(7)A return of income furnished under this section, shall be treated as

•defective if it is not in conformity with all the conditions as prescribed and shall

•be dealt with in the following manner:––

(a)where the Assessing Officer considers that the return of income

•furnished by the assessee is defective, he may intimate the defect to the

•assessee and give him an opportunity to rectify the defect within fifteen days

•from the date of such intimation or within a further period as may be allowed

•on an application made by the assessee in this behalf;

(b)if the defect is not rectified within the period allowed under clause (a),

•then the return shall be treated as an invalid return and the provisions of this Act

•shall apply as if the assessee had failed to furnish the return;

(c)where the assessee rectifies the defect after the expiry of the period

•allowed under clause (a), but before the assessment is made, the Assessing

•Officer may condone the delay and treat the return as a valid return.

(8)(a) The provisions of this section shall also apply to a return of income

•which is furnished in pursuance of an order passed under section 239(4)(3)(b);

(b)the provisions of this section shall not apply to a specified senior citizen,

•as referred to in section 402( 39), for the relevant tax year in which tax has been

•deducted at source under section 393(1) [Table: Sl. No. 8 (iii)].

(9)In this section,––

(a)“beneficial owner”, in respect of an asset means an individual who has

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•provided, directly or indirectly, consideration for the asset for the immediate or

•future benefit, direct or indirect, of himself or any other person;

(b)“beneficiary ”, in respect of an asset means an individual who

•derives benefit from the asset during the tax year and the consideration

•for such asset has been provided by any person other than such

•beneficiary;

(c)“specified entity” means––

(i)research association referred to in Schedule III (Table: Sl. No. 23);

•(ii) association or institution referred to in Schedule III

•(Table: Sl. No. 24);

•(iii) person referred to in Schedule VII (Table: Sl. No. 2);

•(iv) institution referred to in Schedule III (Table: Sl. No. 25);

(v)any University or other educational institution or any hospital

•or other medical institution referred to in Schedule VII

•(Table: Sl. Nos. 17, 18 and 19);

•(vi) Mutual Fund referred to in Schedule VII (Table: Sl. No. 20

•and 21);

•(vii) securitisation trust referred to in Schedule III (Table: Sl. No. 26);

•(viii) Investor Protection Fund referred to in Schedule III

•(Table: Sl. No. 28 and 29);

•(ix) Core Settlement Guarantee Fund referred to in Schedule III

•(Table: Sl. No. 30);

(x)venture capital company or venture capital fund referred to

•in Schedule V (Table: Sl. No. 6);

•(xi) trade union or association referred to in Schedule III

•(Table: Sl. No. 31);

•(xii) Board or Authority referred to in Schedule VII

•(Table: Sl. No. 33 and 40);

•(xiii) Body or Authority or Board or Trust or Commission (by

•whatever name called) referred to in Schedule III (Table: Sl. No. 36);

•(xiv) infrastructure debt fund referred to in Schedule VII

•(Table: Sl. No. 46);

(d)“specified laws” shall refer to the Smugglers and Foreign

•Exchange Manipulators (Forfeiture of Property) Act, 1976 , or the

•Prohibition of Benami Property Transactions Act, 1988 , or the Prevention

•of Money-laundering Act, 2002, or the Black Money (Undisclosed Foreign

•Income and Assets) and Imposition of Tax Act, 2015.

SECTION Section 1239

Untitled Section

264.(1) The Board may make a Scheme for furnishing returns of income

•through a tax return preparer and such Scheme shall be notified, which—

(a)may enable any specified class or classes of persons in preparing

•and furnishing returns of income through a tax return preparer authorised to

•act as such under the Scheme;

(b)may be made irrespective of provisions of section 263.

•Scheme for

•submission of

•returns through

•tax return

preparers.

•296

•Return by whom

•to be verified.

(2)In this section,—

(a)“tax return preparer ” means any individual, not being a person

•referred to in section 515(3)(a)(ii) or an employee of the “specified class or

•classes of persons”, who has been authorised to act as a tax return preparer

•under the Scheme made under this section;

(b)“specified class or classes of persons ” means any person, other

•than a company or a person, whose accounts are required to be audited under

SECTION Section 124

Untitled Section

113.Set off and carry forward of losses from speculation business.

SECTION Section 1240

Untitled Section

•section 63 or under any other law, who is required to furnish a return of

•income under this Act.

(3)Every notification for the Scheme referred to in sub-section (1) shall be

•issued as per section 534 of this Act.

SECTION Section 1241

Untitled Section

265.The return of income under section 263 required to be furnished by the

•person specified in column B of the Table below shall be verified by the person

•specified in corresponding entry in column C of the said Table:

•Table

Sl.

No.

•Person furnishing return

•of income

•To be verified

•A B C

SECTION Section 1242

Untitled Section

1.An individual. (i) By the individual himself;

•(ii) where the individual is mentally

•incapacitated from attending to his affairs, by

•his guardian or any other person competent

•to act on his behalf;

•(iii) where, for any other reason, it is not

•possible for the individual to verify the

•return, by any person duly authorised by him

•through a valid power of attorney.

SECTION Section 1243

Untitled Section

2.A Hindu undivided

family.

(i)By the karta;

•(ii) where the karta is absent from India or

•is mentally incapacitated from attending to

•his affairs, by any other adult member of

•such family.

SECTION Section 1244

Untitled Section

3.A company [in cases

•other than those

•mentioned at serial

•numbers 4, 5,6 and 7].

(i)By the managing director of the

•company;

•(ii) where there is no managing director,

•or the managing director is not able to

•verify the return due to any unavoidable

•reason, by any director of the company or

•any other person as prescribed for

•verifying th e return.

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SECTION Section 1245

Untitled Section

4.A company not being

•resident in India.

•By any person holding a valid power of

•attorney from the company to do so.

SECTION Section 1246

Untitled Section

5.A company which is

•being wound up by the

•Court or otherwise, or

•where any person has

•been appointed as

•receiver of any assets of

•the company.

•By the liquidator as referred to in

SECTION Section 1247

Untitled Section

•section 322(1).

SECTION Section 1248

Untitled Section

6.A company whose

•management has been

•taken over by the

•Central Government or

•any State Government

•under any law.

•By the principal officer of the company.

SECTION Section 1249

Untitled Section

7.A company, for which

•application se eking

•corporate insolvency

•resolution process has

•been admitted by the

•Adjudicating Authority

•under sections 7 or 9 or 10

•of the Insolvency and

•Bankruptcy Code, 2016

•(31 of 2016).

•By the insolvency professional appointed

•by such Adjudicating Authority, where—

Note.––“Insolvency professional” and

•“Adjudicating Authority” shall have the

•same meanings as assigned to them

•respectively in sections 3(19) and 5(1) of

•the Insolvency and Bankruptcy Code,

•2016 (31 of 2016).

SECTION Section 125

Untitled Section

114.Set off and carry forward of losses from specified business.

SECTION Section 1250

Untitled Section

8.A firm. (i) By the managing partner of the firm;

•(ii) where the managing partner is not able

•to verify the return due to any unavoidable

•reason, or there is no managing partner as such,

•by any partner of the firm, not being a minor.

SECTION Section 1251

Untitled Section

9.A limited liability

partnership.

(i)By the designated partner of the limited

•liability partnership;

•(ii) where the designated partner of the

•limited liability partnership is not able to

•verify the return due to any unavoidable

•reason, or where there is no designated

•partner, by any partner of the limited liability

•partnership or any other person as prescribed

•for verifying the return.

SECTION Section 1252

Untitled Section

10.A local authority. By the principal officer of the local

authority.

SECTION Section 1253

Untitled Section

11.A political party as

•referred to in section

•263(1)(a)(iii).

•By the chief executive officer of such

•political party (whether the chief executive

•officer is known as secretary or by any other

•designation).

SECTION Section 1254

Untitled Section

12.Any other association. (i) By any member of the association; or

•(ii) by the principal officer of the

association.

SECTION Section 1255

Untitled Section

13.Any other person. (i) By the person himself; or

•(ii) by any person competent to act on his

behalf.

•298

•Self-assessment.

266.(1) Where, after taking into account the amounts referred to in

•sub-section ( 2), any tax is payable on the basis of any return required to be

•furnished under section 263 or 268 or 280 or 294, then––

(a)the assessee shall be liable to pay such ta x together with interest

•and fee payable under any provision of this Act for any delay in furnishing

•the return or any default or delay in payment of advance tax, before

•furnishing the return; and

(b)the return shall be accompanied by proof of payment of tax, interest

•and fee.

(2)The amounts referred to in sub-section (1) shall be,—

(a)the amount of tax, if any, already paid under any provision of this Act;

(b)any tax deducted or collected at source;

(c)any relief of tax claimed under section 157;

(d)any relief of tax or deduction of tax claimed under

SECTION Section 1256

Untitled Section

•section 159(1) or 160 on account of tax paid in a country outside India;

(e)any relief of tax claimed under section 159(2) on account of tax paid in

•any specified territory outside India referred to in that section;

(f)any tax credit claimed to be set off as per section 206(13); and

(g)any tax or interest payable according to the provisions of

SECTION Section 1257

Untitled Section

•section 391(2).

(3)Where the amount paid by the assessee under sub -section ( 1) falls

•short of the aggregate of the tax, interest and fee as payable under the said

•sub-section, the amo unt so paid shall be adjusted towards the fee payable and

•thereafter towards the interest payable and the balance, if any, shall be

•adjusted towards the tax payable.

(4)For the purposes of sub -section (1), interest payable under section 423

•shall be comp uted on the tax on the total income as declared in the return as

•reduced by the amount of,—

(a)advance tax, if any, paid;

(b)any tax deducted or collected at source;

(c)any relief of tax claimed under section 157;

(d)any relief of tax or deduction of tax claimed under

SECTION Section 1258

Untitled Section

•section 159(1) or 160 on account of tax paid in a country outside India;

(e)any relief of tax claimed under section 159( 2) on account of tax

•paid in any specified territory outside India referred to in that section; and

(f)any tax credit claimed to be set off as per the provisions of

SECTION Section 1259

Untitled Section

•section 206(13);

(5)For the purposes of sub -section (1), interest payable under section 424

•shall be computed on an amount equal to the assessed tax or, as the case may be,

•on the amount by which the advance tax paid falls short of the assessed tax.

(6)In sub-section (5), “assessed tax” means the tax on the total income as

•declared in the return as reduced by the amount of,—

(a)tax deduc ted or collected at source, as per the provisions of

SECTION Section 126

Untitled Section

115.Set off and carry forward of losses from specified activity.

SECTION Section 1260

Untitled Section

•Chapter XIX -B, on any income which is subject to such deduction or

•collection and which is taken into account in computing such total income;

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(b)any relief of tax claimed under section 157;

(c)any relief of tax or deduction of tax claimed under section 159(1)

•or section 160 on account of tax paid in a country outside India;

(d)any relief of tax claimed under section 159(2) on account of tax

•paid in any specified territory outside India refer red to in that

•section; an d.

(e)any tax credit claimed to be set off as per the provisions of

SECTION Section 1261

Untitled Section

•section 206(13).

(7)After a regular assessment under section 270 or 271 or an

•assessment under section 294 has been made, any amount pai d under sub -

•section ( 1) shall be deemed to have been paid towards such regular

•assessment or assessment.

(8)If any assessee fails to pay the whole or any part of such tax, interest or

•fee as per the provisions of sub-section (1), he shall be deemed to be an assessee

•in default in respect of the tax, interest or fee remaining unpaid and all the

•provisions of this Act shall apply accordingly.

(9)The provisions of sub -section (8) shall apply without prejudice to any

•other consequences which the assessee may incur.

SECTION Section 1262

Untitled Section

267.(1) Where no return of income under section 263(1) or (4) has been

•furnished by an assessee and, after taking into account the amounts referred to in

•sub-section ( 2), tax is payable on the basis of return to be furnished by such

•assessee under section 263(6), then—

(a)the assessee shall be liable to pay such tax together with

•interest and fee p ayable under any of the provisions of this Act for any

•delay in furnishing the return or any default or delay in payment of

•advance tax;

(b)such tax, interest and fee shall be payable along with the payment

•of additional income-tax computed as per sub-section (5), before furnishing

•the return; and

(c)the return shall be accompanied by proof of payment of such tax,

•additional income-tax, interest and fee.

(2)The amounts referred to in sub-section (1) shall be,—

(a)the amount of tax, if any, already paid as advance tax;

(b)any tax deducted or collected at source;

(c)any relief of tax claimed under section 157;

(d)any relief of tax or deduction of tax claimed under

SECTION Section 1263

Untitled Section

•section 159(1) or 160 on account of tax paid in a country outside India;

(e)any relief of tax claimed under section 159( 2) on account of tax

•paid in any specified territory outside India referred to in that section; and

(f)any tax credit claimed to be set off as per the prov isions of

SECTION Section 1264

Untitled Section

•section 206(13).

•Tax on updated

return.

•300

(3)Where, return of income under section 263( 1) or (4) or (5) (referred to

•as earlier return) has been furnished by an assessee and, after taking into account

•the amounts referred to in sub-section (4) [as increased by the amount of refund,

•if any, issued in respect of such earlier return], tax is payable on the basis of return

•to be furnished by such assessee under section 263(6) then—

(a)the assessee shall be liable to pay such tax together with interest

•payable under any provision of this Act for any default or delay in payment

•of advance tax;

(b)such tax, interest and fee shall be payable along with the payment

•of additional income-tax, as computed as per sub-section (5), as reduced by

•the amount of interest paid under the provisions of this Act in the earlier

•return, before furnishing the return; and

(c)the return shall be accompanied by proof of payment of such tax,

•additional income-tax, interest and fee.

(4)The sums referred to in sub-section (3) shall be the following,—

(a)the amount of relief or tax referred to in section 266(1), the credit

•for which has been taken in the earlier return;

(b)tax deducted or collected at source, as per the p rovisions of

SECTION Section 1265

Untitled Section

•Chapter XIX-B, on any income which is subject to such deduction or

•collection and which is taken into account in computing total income and

•which has not been included in the earlier return;

(c)any relief of tax or deduction of tax claimed u nder section 159(1)

•or 160 on account of tax paid in a country outside India on such income

•which has not been included in the earlier return;

(d)any relief of tax claimed under section 159(2) on account of

•tax paid in any specified territory outside Indi a referred to in that

•section on such income which has not been included in the earlier

•return; and

(e)any tax credit claimed, to be set off as per the provisions of

SECTION Section 1266

Untitled Section

•section 206(13), which has not been claimed in the earlier return.

(5)For the purposes of sub-sections (1) and (3), the additional income-tax

•payable at the time of furnishing the return under section 263(6) shall be equal

•to,—

(a)25% of aggregate of tax and interest payable, as determined in

•sub-section (1) or (3), as the case may be, if such return is furnished after

•expiry of the time available under section 263( 4) or ( 5) and before

•completion of twelve months from the end of the financial year succeeding

•the relevant tax year; or

(b)50% of aggregate of tax and interest payable, as determined in

•sub-section (1) or (3), as the case may be, if such return is furnished after

•the expiry of twelve months but before completion of twenty -four

•months from the end of the financial year succeeding the relevant tax

•year;

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(c)60% of aggregate of tax and interest payable, as determined in

•sub-section (1) or (3), as the case may be, if such return is furnished after the

•expiry of twenty -four months, but before completion of thirty -six months,

•from the end of the financial year succeeding the relevant tax year; or

(d)70% of aggregate of tax and interest payable, as determined in

•sub-section (1) or (3), as the case may be, if such return is furnished after the

•expiry of thirty-six months, but before completion of forty-eight months, from

•the end of the financial year succeeding the relevant tax year.

(6)For the purposes of computation of “add itional income-tax” under this

•section, tax shall include surcharge and cess, by whatever name called, on such tax.

(7)Irrespective of anything contained in section 424(2), for the purposes of

•sub-section (3), interest payable under section 424 shall be computed on an amount

•equal to the assessed tax where, “assessed tax” means the tax on the total income as

•declared in the return to be furnished under section 263(6),—

(a)after taking into account,—

(i)the amount of relief or tax referred to in section 266(1), the credit

•for which has been claimed in the earlier return, if any;

•(ii) tax deducted or collected at source, as per the provisions of

SECTION Section 1267

Untitled Section

•Chapter XIX-B, on any income which is subject to such deduction or

•collection and which is taken into account in computing such total income,

•which has not been included in the earlier return;

•(iii) any relief of tax or deduction of tax claimed under

SECTION Section 1268

Untitled Section

•section 159(1) or 160 on account of tax paid in a country outside

•India on such income which has not been included in the earlier

•return;

•(iv) any relief of tax claimed under section 159(2) on account

•of tax paid in any specified territory outside India referred to in that

•section on such income which has not been included in the earlier

•return;

(v)any tax credit claimed, to be set off as per section 206(13),

•which has not been claimed in the earlier return; and

(b)as increased by refund, if any, issued in respect of such earlier return.

(8)If any difficulty arises in giving effect to the provisions of this section, the

•Board may, with the previous approval of the Central Government, by notification,

•issue guidelines removing the difficulty.

(9)No guidelines under sub-section (8) shall be issued after the expiration of

•two years from the 1st April, 2026.

(10)Every guideline issued by the Board under sub-section (8) shall be laid