Reverse Mortgage (Amendment) Scheme, 2013: Disbursement & Period of Loan

Central Government has amended the Reverse Mortgage Scheme, 2008 by Reverse Mortgage (Amendment) Scheme, 2013 by NOTIFICATION NO.79/2013 F.No.149/54/2013-TPLDated 07-10-2013. Through this amendment Government has made the changes in Disbursement of loan, Period of reverse mortgage loan and define terms like annuity sourcing institution

NOTIFICATION NO.79/2013 [F.No.149/54/2013-TPLDated 07-10-2013

In exercise of the powers conferred by clause (XVI) of section 47 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following Scheme to amend the Reverse Mortgage Scheme, 2008, namely:—

1. (1) This Scheme may be called the Reverse Mortgage (Amendment) Scheme, 2013.

    (2) It shall come into force on the date of its publication in the Official Gazette.

2. In the Reverse Mortgage Scheme, 2008, –

(1) in paragraph (2), after clause (a), the following clause shall be inserted, namely:-

“(ab) “annuity sourcing institution” means Life Insurance Corporation of India or any other insurer registered with the Insurance Regulatory and Development Authority established under sub-section

(1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999);” ;

(2) in paragraph (3), in sub-paragraph (2), for the word, brackets and number “sub-rule (1)”, the word, brackets and number “sub-paragraph (1)” shall be substituted;

(3) for paragraph (5), the following paragraph shall be substituted, namely:-

(4) “5. Disbursement of loan. – The approved lending institution may disburse the loan, –

(a) to the reverse mortgagor by any one or more of the following modes, namely:-

(i) periodic payments to be decided mutually between the approved lending institution and the reverse mortgagor;

(ii) lump-sum payment in one or more tranches, to the extent that the aggregate of the amount disbursed as lump sum payments does not exceed fifty per cent of the total loan amount sanctioned; or

(b) in part or in full, to the annuity sourcing institution for the purposes of periodic payments by way of annuity to the reverse mortgagor.”;

(4) for paragraph (6), the following paragraph shall be substituted, namely:-

“6. Period of reverse mortgage loan.- The loan under reverse mortgage shall not be granted for a period exceeding,-

(i) twenty years from the date of signing the agreement by the reverse mortgagor and the approved lending institution, where the loan is disbursed in accordance with clause (a) of Paragraph 5;

(ii) the residual life time of the borrower, where the loan is disbursed in accordance with clause (b) of Paragraph 5.”.

Extension of Due Date of Filing Income Tax Return & Audit Report for FY 2012-13: AY 2013-14

Central Board of Direct Taxes (CBDT) has extended the due date of filing of Income Tax return and Audit report for FY 2012-2013.i.e AY 2013-2014 to 31st Oct 2013 from prescribe due date of 30th September 2013. Such decision has taken by CBDT after Delhi Chartered Accountant Society has filed writ petition in Delhi High Court for  extension of due date of tax audit as on the last date of tax Audit  i.e. 30.09.2013 there was default on the part of the Respondents as the site of the Income Tax Department was not working or response time of income tax website was very slow which made the e-filing of Income tax return impossible.

F.No. 225/117/2013/lTA-II
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
North- New Delhi,

The Order under Section 119 of the Income Tax Act 1961

In exercise of powers conferred under section 119 of the Income-tax act, 1961 The Central Board of Direct Taxes, In continuation to order u/s 119 dated 26.09.2013 in F.No. 225/117/2013/1TA.II, hereby directs that in cases where the ‘due date’ of  furnishing audit and corresponding income-tax returns was 30th September, 2013 and when furnished electronically on or before 31 14 October, 2013, such reports of audit income shall be deemed to have been furnished within the ‘due date’ prescribed under section 139 of the Income-tax Act, 1961.

Extension of Due Date of Furnishing of Electronic Tax Audit Report to 31st Oct 2013

Circular only relating to Electronic Furnishing of Tax Audit Report but Assesee has to furnish tax audit report to Assessing officer on or before due date.

F.No. 225/117/2013/ITA.II

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

Dated- 26th September, 2013

Order under Section 119 of the Income-tax Act. 1961.

CBDT in exercise of power under sec 119(2)(a) of the IT Act, 1961 read with Sec 139 and Rule 12, has decided to relax the requirement of furnishing the Report of Audit electronically as prescribed under the proviso to sub-rule (2) of Rule 12 of the IT Rules for the Assessment Year 2013-14 as under-
(a) The assesses, who are presently finding it difficult to upload the prescribed Reports of Audit (as referred to above) in the system electronically may also furnish the same manually before the jurisdictional Assessing Officer within the prescribed due date.
(b) The said Report of Audit should however be furnished electronically on or before
31.10.2013.

Rohit Garg

Deputy-Secretary to Government of India

Due Date for Filing Income Tax Return 5th August 2013

CBDT has extended the due date for filing Income Tax Return from 31st July, 2013 to 5th August, 2013.

FNo. 225/117 2013/ITA.Il

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

North-Block ITA.Il Division

New Delhi, the 31st of July, 2013

Order under Section 119 of the Income tax Act, 1961

The Central Board of Direct Taxes, in exercise of powers conferred under  section 119 ofthe Income tax Act, 1961, hereby extends the due date for filing Returns of Income from 31st July, 2013 to 5th August, 2013.

COMMODITIES TRANSACTION TAX : NOTIFICATION NO. 45/2013, DATED 19-6-2013

SECTION 115 OF THE FINANCE ACT, 2013 – COMMODITIES TRANSACTION TAX – NOTIFIED DATE FOR ENFORCEMENT OF CHAPTER VII OF FINANCE ACT, 2013

NOTIFICATION NO. 45/2013 [F.NO.142/09/2013-TPL]/SO 1768(E), DATED 19-6-2013

In exercise of the powers conferred by sub-section (2) of section 115 of the Finance Act, 2013 (17 of 2013), the Central Government hereby appoints the 1st day of July, 2013 as the date on which Chapter VII of the said Act shall come into force

CHAPTER VII
COMMODITIES TRANSACTION TAX

105. (1) This Chapter extends to the whole of India.
(2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.
(3) It shall apply to taxable commodities transactions entered into on or after the commencement of this Chapter.
106. In this Chapter, unless the context otherwise requires,—
(1) “Appellate Tribunal” means the Appellate Tribunal constituted under section 252 of the  Incometax Act, 1961;
(2) “Assessing Officer” means the Income-tax Officer or Assistant Commissioner of Income-tax or Deputy Commissioner of Income-tax or Joint Commissioner of Income-tax or Additional Commissioner of Income-tax who is authorised by the Board to exercise or perform all or any of the powers and functions conferred on, or assigned to, an Assessing Officer under this Chapter;
(3) “Board” means the Central Board of Direct Taxes constituted under the Central Boards of
Revenue Act, 1963;
(4) “commodities transaction tax” means tax leviable on the taxable commodities transactions under the provisions of this Chapter;
(5) “commodity derivative” means––
(i) a contract for delivery of goods which is not a ready delivery contract; or
(ii) a contract for differences which derives its value from prices or indices of prices––
(A) of such underlying goods; or
(B) of related services and rights, such as warehousing and freight; or
(C) with reference to weather and similar events and activities, having a bearing on the commodity sector;
(6) “prescribed” means prescribed by rules made under this Chapter;
(7) “taxable commodities transaction” means a transaction of sale of commodity derivatives in respect of commodities, other than agricultural commodities, traded in recognised associations; (8) words and expressions used but not defined in this Chapter and defined in the Forward Contracts (Regulation) Act, 1952, the Income-tax Act, 1961, or the rules made thereunder, shall have the meanings respectively assigned to them in those Acts.
107. On and from the date of commencement of this Chapter, there shall be charged a commodities transaction tax in respect of every taxable commodities transaction, being sale of commodity derivative, at the rate of 0.01 per cent. on the value of such transaction and such tax shall be payable by the seller.

108. The value of a taxable commodities transaction referred to in section 107 shall, with reference to such transaction, be the price at which the commodity derivative is traded.
109. (1) Every recognised association (hereinafter in this Chapter referred to as assessee) shall collect the commodities transaction tax from the seller who enters into a taxable commodities transaction in that recognised association at the rate specified in section 107.
(2) The commodities transaction tax collected during any calendar month in accordance with the provisions of sub-section (1) shall be paid by every assessee to the credit of the Central Government by the seventh day of the month immediately following the said calendar month.
(3) Any assessee who fails to collect the tax in accordance with the provisions of sub-section (1) shall, notwithstanding such failure, be liable to pay the tax to the credit of the Central Government in accordance with the provisions of sub-section (2).
110. (1) Every assessee shall, within the prescribed time after the end of each financial year,
prepare and deliver or cause to be delivered to the Assessing Officer or to any other authority or agency authorised by the Board in this behalf, a return in such form, verified in such manner and setting forth such particulars as may be prescribed, in respect of all taxable commodities transactions entered into during such financial year in that recognised association.
(2) Where any assessee fails to furnish the return under sub-section (1) within the prescribed
time, the Assessing Officer may issue a notice to such assessee and serve it upon him, requiring him to furnish the return in the prescribed form and verified in the prescribed manner setting forth such particulars within such time as may be prescribed.
(3) An assessee who has not furnished the return within the time prescribed under sub-section (1) or sub-section (2), or having furnished a return under sub-section (1) or sub-section (2) notices any omission or wrong statement therein, may furnish a return or a revised return, as the case may be, at any time before the assessment is made.
111. (1) For the purposes of making an assessment under this Chapter, the Assessing Officer may serve on any assessee, who has furnished a return under section 110 or upon whom a notice has been served under sub-section (2) of that section (whether a return has been furnished or not), a notice requiring him to produce or cause to be produced on a date to be specified therein such accounts or documents or other evidence as the Assessing Officer may require for the purposes of this Chapter and may, from time to time, serve further notices requiring the production of such further accounts or documents or other evidence as he may require.
(2) The Assessing Officer, after considering such accounts, documents or other evidence, if any, as he has obtained under sub-section (1) and after taking into account any other relevant material which he has gathered, shall, by an order in writing, assess the value of taxable commodities transactions during the relevant financial year and determine the commodities transaction tax payable or the refund due on the basis of such assessment: Provided that no assessment shall be made under this sub-section after the expiry of two years from the end of the relevant financial year.
(3) Every assessee, in case any amount is refunded to it on assessment under sub-section (2), shall, within such time as may be prescribed, refund such amount to the seller from whom such amount was collected.
112. (1) With a view to rectifying any mistake apparent from the record, the Assessing Officer
may amend any order passed by him under the provisions of this Chapter within one year from the end of the financial year in which the order sought to be amended was passed.
(2) Where any matter has been considered and decided in any proceeding by way of appeal
relating to an order referred to in sub-section (1), the Assessing Officer passing such order may, notwithstanding anything contained in any other law for the time being in force, amend the order under that sub-section in relation to any matter other than the matter which has been so considered and decided.
(3) Subject to the other provisions of this section, the Assessing Officer may make an amendment under sub-section (1), either suo motu or on any mistake brought to his notice by the assessee.

(4) An amendment, which has the effect of enhancing an assessment or reducing a refund or
otherwise increasing the liability of the assessee, shall not be made under this section unless the Assessing Officer has given notice to the assessee of his intention so to do and has given the assessee a reasonable opportunity of being heard.
(5) An order of amendment under this section shall be made by the Assessing Officer in writing. (6) Subject to the other provisions of this Chapter, where any such amendment has the effect of reducing the assessment, the Assessing Officer shall make the refund, which may be due to such assessee.
(7) Where any such amendment has the effect of enhancing the assessment or reducing the
refund already made, the Assessing Officer shall make an order specifying the sum payable by the assessee and the provisions of this Chapter shall apply accordingly.
113. Every assessee, who fails to credit the commodities transaction tax or any part thereof as required under section 109 to the account of the Central Government within the period specified in that section, shall pay simple interest at the rate of one per cent. of such tax for every month or part of a month by which such crediting of the tax or any part thereof is delayed.
114. Any assessee who––
(a) fails to collect the whole or any part of the commodities transaction tax as required under
section 109; or
(b) having collected the commodities transaction tax, fails to pay such tax to the credit of the
Central Government in accordance with the provisions of sub-section (2) of that section,
shall be liable to pay,––
(i) in the case referred to in clause (a), in addition to paying the tax in accordance with the
provisions of sub-section (3) of that section, or interest, if any, in accordance with the provisions of section 113, by way of penalty, a sum equal to the amount of commodities transaction tax that he failed to collect; and
(ii) in the case referred to in clause (b), in addition to paying the tax in accordance with the
provisions of sub-section (2) of that section and interest in accordance with the provisions of
section 113, by way of penalty, a sum of one thousand rupees for every day during which the
failure continues; so, however, that the penalty under this clause shall not exceed the amount of commodities transaction tax that he failed to pay.
115. Where an assessee fails to furnish the return within the time prescribed under sub-section (1) or sub-section (2) of section 110, he shall be liable to pay, by way of penalty, a sum of one hundred rupees for each day during which the failure continues.
116. If the Assessing Officer in the course of any proceedings under this Chapter is satisfied that the assessee has failed to comply with a notice under sub-section (1) of section 111, he may direct that such assessee shall pay, by way of penalty, in addition to any commodities transaction tax and interest, if any, payable by him, a sum of ten thousand rupees for each such failure.
117. (1) Notwithstanding anything contained in section 114 or section 115 or section 116, no penalty shall be imposable for any failure referred to in the said sections, if the assessee proves to the satisfaction of the Assessing Officer that there was reasonable cause for the said failure.
(2) No order imposing a penalty under this Chapter shall be made unless the assessee has been given a reasonable opportunity of being heard.
118. The provisions of sections 120, 131, 133A, 156, 178, 220 to 227, 229, 232,260A, 261, 262, 265 to 269, 278B, 282 and 288 to 293 of the Income-tax Act, 1961 shall apply, so far as may be, in relation to commodities transaction tax, as they apply in relation to income-tax.
119. (1) An assessee aggrieved by any assessment order made by the Assessing Officer under section 111 or any order under section 112, or denying his liability to be assessed under this Chapter, or by an order imposing penalty under this Chapter, may appeal to the Commissioner of Income-tax (Appeals) within thirty days from the date of receipt of the order of the Assessing Officer.
(2) An appeal under sub-section (1) shall be in such form and verified in such manner as may
be prescribed and shall be accompanied by a fee of one thousand rupees.
(3) Where an appeal has been filed under sub-section (1), the provisions of sections 249 to 251 of the Income-tax Act, 1961, shall, as far as may be, apply to such appeal.

120. (1) An assessee aggrieved by an order made by a Commissioner of Income-tax (Appeals) under section 119 may appeal to the Appellate Tribunal against such order.
(2) The Commissioner of Income-tax may, if he objects to any order passed by the Commissioner of Income-tax (Appeals) under section 119, direct the Assessing Officer to appeal to the Appellate Tribunal against such order.
(3) An appeal under sub-section (1) or sub-section (2) shall be filed within sixty days from the date on which the order sought to be appealed against is received by the assessee or by the Commissioner of Income-tax, as the case may be.
(4) An appeal under sub-section (1) or sub-section (2) shall be in such form and verified in such manner as may be prescribed and, in the case of an appeal filed under sub-section (1), it shall be accompanied by a fee of one thousand rupees.
(5) Where an appeal has been filed before the Appellate Tribunal under sub-section (1) or subsection (2), the provisions of sections 253 to 255 of the Income-tax Act, 1961, shall, as far as may be, apply to such appeal.
121 (1) If a person makes a false statement in any verification under this Chapter or any rule made thereunder, or delivers an account or statement, which is false, and which he either knows or believes to be false, or does not believe to be true, he shall be punishable with imprisonment for a term which may extend to three years and with fine.
(2) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, an offence
punishable under sub-section (1) shall be deemed to be non-cognizable within the meaning of that Code.
122. No prosecution shall be instituted against any person for any offence under section 121 except with the previous sanction of the Chief Commissioner of Income-tax.
123. (1) The Central Government may, by notification in the Official Gazette, make rules for carrying out the provisions of this Chapter.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may
provide for all or any of the following matters, namely:––
(a) the time within which and the form and the manner in which the return shall be delivered or
caused to be delivered or furnished under section 110;
(b) the form in which an appeal may be filed and the manner in which it may be verified under
sections 119 and 120.
(3) Every rule made under this Chapter shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.
124. (1) If any difficulty arises in giving effect to the provisions of this Chapter, the Central Government may, by order published in the Official Gazette, not inconsistent with the provisions of this Chapter, remove the difficulty:
Provided that no such order shall be made after the expiry of a period of two years from the date on which the provisions of this Chapter come into force.
(2) Every order made under this section shall be laid, as soon as may be after it is made, before each House of Parliament.
CHAPTER VIII
MISCELLANEOUS
125. In the Finance (No. 2) Act, 2004, in section 98, in the Table, with effect from the 1st day of June, 2013,—
(i) against Sl. No. 1, under column (2) relating to taxable securities transaction,—
(A) the words “or a unit of an equity oriented fund,” shall be omitted;
(B) in item (b), the words “or unit”, at both the places where they occur, shall be omitted;

(ii) against Sl. No. 2, under column (2) relating to taxable securities transaction,—
(A) the words “or a unit of an equity oriented fund,” shall be omitted;
(B) in item (b), the words “or unit”, at both the places where they occur, shall be omitted;
(iii) after serial number 2 and the entries relating thereto, the following serial number and
entries shall be inserted, namely:—
Sl. No. Taxable securities Rate Payable by
transaction (1) (2) (3) (4) “2A Sale of a unit of an equity 0.001 Seller”; oriented fund, where— per cent.
(a) the transaction of such sale is entered into in a recognised stock exchange; and
(b) the contract for the sale of such unit is settled by the actual delivery or transfer of
such unit.
(iv) against Sl. No.4, in item (c), under column (3) relating to rate, for the figures “0.017”, the
figures “0.01” shall be substituted;
(v) against Sl. No. 5, under column (3) relating to rate, for the figures “0.25”, the figures “0.001”
shall be substituted.Declaration under the Provisional Collection of Taxes Act, 1931
It is hereby declared that it is expedient in the public interest that the provisions of clauses 76,
77 (b), 91 and 92 of this Bill shall have immediate effect under the Provisional Collection of Taxes Act, 1931.

MARIA SEVA SANGHA, BANGALORE NOTIFICATION NO. 110/2012, DATED 12-3-2013

SECTION 35AC, READ WITH EXPLANATION (b) THERETO OF THE INCOME-TAX ACT, 1961 – ELIGIBLE PROJECTS OR SCHEMES, EXPENDITURE ON NOTIFIED ELIGIBLE PROJECTS OR SCHEMES“ MARIA SEVA SANGHA, BANGALORE

NOTIFICATION NO. 110/2012 [F.NO. V- 27015/4/2012-SO(NAT.COM)]/S.O. 639(E), DATED 12-3-2013

Whereas by notification of the Government of India, in the Ministry of Finance (Department of Revenue) number S.O.469(E) dated the 2nd July, 1996, issued under sub-section (1) read with clause (b) of the Explanation to section 35AC of the Income-tax Act, 1961 (43 of 1961), the Central Government had notified at serial number 4, “Mid-day Meal Scheme in eighteen schools of Bangalore” by Maria Seva Sangha, Villa Maria, No. 12, Rest House Road, Bangalore – 560001, as an eligible project or scheme for a period of three years beginning with assessment year 1997-1998, which was extended further vide notification number S.O. 317(E) dated the 11th May, 1999 for a period of two years beginning with assessment year 2000-2001, which was extended further videnotification number S.O.552(E) dated the 20th June, 2001 for a period of two years beginning with assessment year 2002-2003, which was extended further vide notification number S.O. 688(E) dated the 13th June, 2003 for a period of one year beginning with assessment year 2004-2005, which was extended further vide notification number S.O. 398(E) dated the 23rd March, 2005 for a period of two years beginning with financial year 2004-2005, which was extended further vide notification number S.O.1407(E) dated the 4th September, 2006 for a period of three years beginning with financial year 2006-2007 and which was extended further vide notification number S.O.836(E) dated the 25th March, 2009 for a period of three years beginning with financial year 2009-10;

And whereas by notification number S.O. 260(E) dated the 27th March, 1997 the estimated cost was enhanced from Rs. 2.30 lakh to Rs. 15.00 lakh, videnotification number S.O.1371(E) dated the 27th November, 2003 the estimated cost was further enhanced from Rs. 15.00 lakh to Rs. 30.00 lakh and vide notification number S.O. 1407(E) dated the 4th September, 2006 the estimated cost was further enhanced from Rs. 30.00 lakh to Rs. 50.00 lakh, videnotification number S.O. 1869(E) dated 11th August, 2011 the estimated cost was further enhanced from Rs. 50 lakh to Rs. 75 lakh;

And whereas the said project or scheme is likely to extend beyond sixteen years;

And whereas the National Committee for Promotion of Social and Economic Welfare, being satisfied that the said project or scheme is being executed properly, made a further recommendation under sub-rule (5) of rule 11M of the Income-tax Rules, 1962 for enhancing the project cost from Rs. 75 lakh to 90 lakh.

Now, therefore, the Central Government, in exercise of the powers conferred by sub-section (1) read with clause (b) of the Explanation to section 35AC of the Income-tax Act, 1961 (43 of 1961), (a) hereby notifies the scheme or project “Mid-day Meal Scheme in three schools of Bangalore” which is being carried out by Maria Seva Sangha, Villa Maria, No. 12, Rest House Road, Bangalore – 560001, as an eligible project or scheme for a further period of three years commencing with financial year 2012-13 i.e. 2012-13, 2013-14 & 2014-15.

(b) further amends the said notification number S.O. 469(E) dated the 2nd July, 1996, to the following effect, namely :-

“In the said notification, in the Table against serial number 4, in column (4), relating to maximum amount of cost to be allowed as deduction under section 35AC, for the letters, figures and word ‘Rs. 75.00 lakh’, the letters, figures and word ‘Rs. 90.00 lakh’ shall be substituted.”

Reference: Section 35 of the income Tax Act, 1961

Expenditure on eligible projects or schemes.

. (1) Where an assessee incurs any expenditure by way of payment of any sum to a public sector company or a local authority or to an association or institution approved by the National Committeefor carrying out any eligible project or scheme, the assessee shall, subject to the provisions of this section, be allowed a deduction of the amount of such expenditure incurred during the previous year :

Provided that a company may, for claiming the deduction under this sub-section, incur expenditure either by way of payment of any sum as aforesaid or directly on the eligible project or scheme.

(2) The deduction under sub-section (1) shall not be allowed unless the assessee furnishes along with his return of income a certificate—

 (a)  where the payment is to a public sector company or a local authority or an association or institution referred to in sub-section (1), from such public sector company or local authority or, as the case may be, association or institution;

 (b)  in any other case, from an accountant, as defined in the Explanation below sub-section (2) of section 288,

in such form, manner and containing such particulars (including particulars relating to the progress in the work relating to the eligible project or scheme during the previous year) as may be prescribed.

 [Explanation.—The deduction, to which the assessee is entitled in respect of any sum paid to a public sector company or a local authority or to an association or institution for carrying out the eligible project or scheme referred to in this section applies, shall not be denied merely on the ground that subsequent to the payment of such sum by the assessee,—

(a)  the approval granted to such association or institution has been withdrawn; or

(b)  the notification notifying the eligible project or scheme carried out by the public sector company or local authority or association or institution has been withdrawn.]

(3) Where a deduction under this section is claimed and allowed for any assessment year in respect of any expenditure referred to in sub-section (1), deduction shall not be allowed in respect of such expenditure under any other provision of this Act for the same or any other assessment year.

 [(4) Where an association or institution is approved by the National Committee under sub-section (1), and subsequently—

(i)  that Committee is satisfied that the project or the scheme is not being carried on in accordance with all or any of the conditions subject to which approval was granted; or

(ii)  such association or institution, to which approval has been granted, has not furnished to the National Committee, after the end of each financial year, a report in such form and setting forth such particulars and within such time as may be prescribed

the National Committee may, at any time, after giving a reasonable opportunity of showing cause against the proposed withdrawal to the concerned association or institution, withdraw the approval:

Provided that a copy of the order withdrawing the approval shall be forwarded by the National Committee to the Assessing Officer having jurisdiction over the concerned association or institution.

(5) Where any project or scheme has been notified as an eligible project or scheme under clause (b) of the Explanation, and subsequently—

(i)  the National Committee is satisfied that the project or the scheme is not being carried on in accordance with all or any of the conditions subject to which such project or scheme was notified; or

(ii)  a report in respect of such eligible project or scheme has not been furnished after the end of each financial year, in such form and setting forth such particulars and within such time as may be prescribed

such notification may be withdrawn in the same manner in which it was issued:

Provided that a reasonable opportunity of showing cause against the proposed withdrawal shall be given by the National Committee to the concerned association, institution, public sector company or local authority, as the case may be:

Provided further that a copy of the notification by which the notification of the eligible project or scheme is withdrawn shall be forwarded to the Assessing Officer having jurisdiction over the concerned association, institution, public sector company or local authority, as the case may be, carrying on such eligible project or scheme.]

 [(6) Notwithstanding anything contained in any other provision of this Act, where—

(i)  the approval of the National Committee, granted to an association or institution, is withdrawn under sub-section (4) or the notification in respect of eligible project or scheme is withdrawn in the case of a public sector company or local authority or an association or institution under sub-section (5); or

(ii)  a company has claimed deduction under the proviso to sub-section (1) in respect of any expenditure incurred directly on the eligible project or scheme and the approval for such project or scheme is withdrawn by the National Committee under sub-section (5),

the total amount of the payment received by the public sector company or the local authority or the association or the institution, as the case may be, in respect of which such company or authority or association or institution has furnished a certificate referred to in clause (a) of sub-section (2) or the deduction claimed by a company under the proviso to sub-section (1) shall be deemed to be the income of such company or authority or association or institution, as the case may be, for the previous year in which such approval or notification is withdrawn and tax shall be charged on such income at the maximum marginal rate in force for that year.]

Explanation.—For the purposes of this section,—

(a)  “National Committee” means the Committee constituted by the Central Government, from amongst persons of eminence in public life, in accordance with the rules made under this Act;

(b)  “eligible project or scheme” means such project or scheme for promoting the social and economic welfare of, or the uplift of, the public as the Central Government may, by notification in the Official Gazette, specify in this behalf on the recommendations of the National Committee.]

8 PER CENT SAVINGS (TAXABLE) BONDS, 2003 – AMENDMENT IN PARAGRAPH 16 OF NOTIFICATION NO. F.4 (10)-W&M/2003, DATED 21-3-2013 NOTIFICATION NO. F.4(10)-W&M.2003, DATED 29-7-2013

8 PER CENT SAVINGS (TAXABLE) BONDS, 2003 – AMENDMENT IN PARAGRAPH 16 OF NOTIFICATION NO. F.4 (10)-W&M/2003, DATED 21-3-2013 NOTIFICATION NO. F.4(10)-W&M.2003, DATED 29-7-2013

The Government of India hereby notifies that Paragraph 16 (Repayment) of the aforesaid Notification shall be amended as follows : 16. Repayment: (i) The bonds shall be repayable on the expiration of 6 (six) years from the date of issue. (ii) Provision for premature encashment Premature encashment in respect of the Bonds shall be allowed for individual investors in the age group of 60 years and above, subject to submission of document relating to date of birth of the investor in support of age to the satisfaction of the bank, after minimum lock in period from the date of issue as indicated below:- (a) Lock in period for investors in the age bracket of 60 to 70 years shall be 5 years from the date of issue. (b) Lock in period for investors in the age bracket of 70 to 80 years shall be 4 years from the date of issue. (c) Lock in period for investors of the age of 80 years and above shall be 3 years from the date of issue. In case of joint holders or more than two holders of Bond anyone of the holders shall fulfil the above conditions of eligibility. After aforesaid minimum lock in period from the date of issue an eligible investor can surrender the Bonds at any time after the 10th, 8th and 6th half year corresponding to the respective lock in period but redemption payment will be made on the following interest payment due date. Thus the effective date of premature encashment for eligible investors will be 1st October and 1st April every year. However, 50% of interest due and payable for the last six months of the holding period will be recovered in such cases both in respect of cumulative and non-cumulative bonds. The other terms and conditions of the Notification shall remain unchanged.

GUJARAT ENERGY RESEARCH AND MANAGEMENT INSTITUTE, GANDHI NAGAR : NOTIFICATION NO. 37/2013, DATED 23-5-2013

SCIENTIFIC RESEARCH EXPENDITURE – APPROVED SCIENTIFIC RESEARCH ASSOCIATIONS/INSTITUTIONS – GUJARAT ENERGY RESEARCH AND MANAGEMENT INSTITUTE, GANDHI NAGAR : NOTIFICATION NO. 37/2013 [F. NO. 203/27/2012/ITA-II], DATED 23-5-2013

It is hereby notified for general information that the organization “Gujarat Energy Research and Management Institute Gandhinagar (PAN-AAATG6316R) has been approved by the Central Government for the purpose of clause (ii) of sub-section (1) of section 35 of the Income-tax Act, 1961 (said Act), read with Rules 5C and 5D of the Income-tax Rules, 1962 (said Rules], from 01.04.2012 onwards in the category of Scientific Research Association’, subject to the following conditions, namely:—

(i)

The sole objective of the approved ‘scientific research association’ shall be to undertake scientific research;

(ii)

The approved organization shall carry out scientific research activity by itself;

(iii)

The approved organization shall maintain separate books of account in respect of the sums received by it for scientific research, reflect therein the amounts used for carrying out research, get such books audited by an accountant as defined in the Explanation to sub-section (2) of section 288 of the said Act, and furnish the report of such audit duly signed and verified by such accountant to the Commissioner of Income-tax or the Director of Income-tax having jurisdiction over the case, by the due date of furnishing the return of income under sub-section (1) of section 139 of the said Act;

(iv)

The approved organization shall maintain a separate statement of donations received and amounts applied for scientific research in respect of concerned Departments and a copy of such statement duly certified by the auditor shall accompany the report of audit referred to above.

2. The Central Government shall withdraw the approval if the approved organization:—

(a)

fails to maintain separate books of account referred to in sub-paragraph (iii) of paragraph 1; or

(b)

fails to furnish its audit report referred to in sub-paragraph (iii) of paragraph 1; or

(c)

fails to furnish its statement of the donations received and sums applied for scientific research referred to in sub-paragraph (iv) of paragraph 1; or

(d)

ceases to carry on its research activities or its research activities are not found to be genuine; or

(e)

ceases to conform to and comply with the provisions of clause (ii) of sub-section (1) of section 35 of the said Act, read with rules 5C and 5E of the said Rules.

Reference: Section 35 of the income Tax Act, 1961

Expenditure on scientific research

(1) In respect of expenditure on scientific research, the following deductions shall be allowed—

(i)  any expenditure (not being in the nature of capital expenditure) laid out or expended on scientific research related to the business.

Explanation.—Where any such expenditure has been laid out or expended before the commencement of the business (not being expenditure laid out or expended before the 1st day of April, 1973) on payment of any salary [as defined in Explanation 2 below sub-section (5) of section 40A to an employee engaged in such scientific research or on the purchase of materials used in such scientific research, the aggregate of the expenditure so laid out or expended within the three years immediately preceding the commencement of the business shall, to the extent it is certified by the prescribed authority to have been laid out or expended on such scientific research, be deemed to have been laid out or expended in the previous year in which the business is commenced ;

(ii)  an amount equal to one and three-fourth times of any sum paid to a research association which has as its object the undertaking of scientific research or to a university, college or other institution to be used for scientific research :

Provided that such association, university, college or other institution for the purposes of this clause—

(A)  is for the time being approved, in accordance with the guidelines, in the manner and subject to such conditions as may be prescribed; and

(B)  such association, university, college or other institution is specified as such, by notification in the Official Gazette, by the Central Government;

(iia)  an amount equal to one and one-fourth times of any sum paid to a company to be used by it for scientific research:

Provided that such company—

(A)  is registered in India,

(B)  has as its main object the scientific research and development,

(C)  is, for the purposes of this clause, for the time being approved by the prescribed authority in the prescribed manner, and

(D)  fulfils such other conditions as may be prescribed;

(iii) an amount equal to one and one-fourth times of any sum paid to a research association which has as its object the undertaking of research in social science or statistical research or to a university, college or other institution to be used for research in social science or statistical research :

Provided that such association, university, college or other institution for the purposes of this clause—

 (A)  is for the time being approved, in accordance with the guidelines, in the manner and subject to such conditions as may be prescribed; and

(B)  such association, university, college or other institution is specified as such, by notification in the Official Gazette, by the Central Government.

Explanation.—The deduction, to which the assessee is entitled in respect of any sum paid to a research association, university, college or other institution to which clause (ii) or clause (iii) applies, shall not be denied merely on the ground that, subsequent to the payment of such sum by the assessee, the approval granted to the association, university, college or other institution referred to in clause (ii) or clause (iii) has been withdrawn;

(iv)  in respect of any expenditure of a capital nature on scientific research related to the business carried on by the assessee, such deduction as may be admissible under the provisions of sub-section (2) :

Provided that the research association, university, college or other institution referred to in clause (ii) or clause (iii) shall make an application in the prescribed form and manner to the Central Government for the purpose of grant of approval, or continuance thereof, under clause (ii) or, as the case may be, clause (iii) :

Provided further that the Central Government may, before granting approval under clause (ii) or clause (iii), call for such documents (including audited annual accounts) or information from the research association, university, college or other institution as it thinks necessary in order to satisfy itself about the genuineness of the activities of the research association, university, college or other institution and that Government may also make such inquiries as it may deem necessary in this behalf :

Provided also that any notification issued, by the Central Government under clause (ii) or clause (iii), before the date on which the Taxation Laws (Amendment) Bill, 2006 receives the assent of the President, shall, at any one time, have effect for such assessment year or years, not exceeding three assessment years] (including an assessment year or years commencing before the date on which such notification is issued) as may be specified in the notification:]

Provided also that where an application under the first proviso is made on or after the date on which the Taxation Laws (Amendment) Bill, 2006 receives the assent of the President†, every notification under clause (ii) or clause (iii) shall be issued or an order rejecting the application shall be passed within the period of twelve months from the end of the month in which such application was received by the Central Government.

(2) For the purposes of clause (iv) of sub-section (1),—

(i)  in a case where such capital expenditure is incurred before the 1st day of April, 1967, one-fifth of the capital expenditure incurred in any previous year shall be deducted for that previous year; and the balance of the expenditure shall be deducted in equal instalments for each of the four immediately succeeding previous years ;

(ia)  in a case where such capital expenditure is incurred after the 31st day of March, 1967, the whole of such capital expenditure incurred in any previous yearshall be deducted for that previous year :

Provided that no deduction shall be admissible under this clause in respect of any expenditure incurred on the acquisition of any land, whether the land is acquired as such or as part of any property, after the 29th day of February, 1984.

[Explanation 1].—Where any capital expenditure has been incurred before the commencement of the business, the aggregate of the expenditure so incurred within the three years immediately preceding the commencement of the business shall be deemed to have been incurred in the previous year in which the business is commenced.

[Explanation 2.—For the purposes of this clause,—

(a)  “land” includes any interest in land ; and

(b)  the acquisition of any land shall be deemed to have been made by the assessee on the date on which the instrument of transfer of such land to him has been registered under the Registration Act, 1908 (16 of 1908), or where he has taken or retained the possession of such land or any part thereof in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882), the date on which he has so taken or retained possession of such land or part ;

(ii)  notwithstanding anything contained in clause (i), where an asset representing expenditure of a capital nature incurred before the 1st day of April, 1967, ceases to be used in a previous year for scientific research related to the business and the value of the asset at the time of the cessation, together with the aggregate of deductions already allowed under clause (i) falls short of the said expenditure, then—

(a)  there shall be allowed a deduction for that previous year of an amount equal to such deficiency, and

(b)  no deduction shall be allowed under that clause for that previous year or for any subsequent previous year ;

(iii)  if the asset mentioned in clause (ii) is sold, without having been used for other purposes, in the year of cessation, the sale price shall be taken to be the value of the asset at the time of the cessation ; and if the asset is sold, without having been used for other purposes, in a previous year subsequent to the year of cessation, and the sale price falls short of the value of the asset taken into account at the time of cessation, an amount equal to the deficiency shall be allowed as a deduction for the previous year in which the sale took place ;

(iv)  where a deduction is allowed for any previous year under this section in respect of expenditure represented wholly or partly by an asset, no deduction shall be allowed under clause (ii) of sub-section (1)] of section 32 for the same or any other previous year in respect of that asset ;

(v)  where the asset mentioned in clause (ii) is used in the business after it ceases to be used for scientific research related to that business, depreciation shall be admissible under clause (ii) of sub-section (1)] of section 32.

(2A) Where, before the 1st day of March, 1984,] the assessee pays any sum (being any sum paid with a specific direction that the sum shall not be used for the acquisition of any land or building or construction of any building) to a scientific research association or university or college or other institution referred to in clause (ii) of sub-section (1) or to a public sector company to be used for scientific research undertaken under a programme approved in this behalf by the prescribed authority having regard to the social, economic and industrial needs of India, then,—

(a)  there shall be allowed a deduction of a sum equal to one and one-third times the sum so paid ; and

(b)  no deduction in respect of such sum shall be allowed under clause (ii) of sub-section (1) for the same or any other assessment year.

[Explanation.—For the purposes of this sub-section, “public sector company” shall have the same meaning as in clause (b) of the Explanation below sub-section (2B) of section 32A.

(2AA)Where the assessee pays any sum to a National Laboratory or a University or an Indian Institute of Technology or a specified person] with a specific direction that the said sum shall be used for scientific research undertaken under a programme approved in this behalf by the prescribed authority, then—

(a)  there shall be allowed a deduction of a sum equal to two times the sum so paid ; and

(b)  no deduction in respect of such sum shall be allowed under any other provision of this Act :

Provided that the prescribed authority shall, before granting approval, satisfy itself about the feasibility of carrying out the scientific research and shall submit its report to the Director General in such form as may be prescribed.

Explanation 1.—The deduction, to which the assessee is entitled in respect of any sum paid to a National Laboratory, University, Indian Institute of Technology or a specified person for the approved programme referred to in this sub-section, shall not be denied merely on the ground that, subsequent to the payment of such sum by the assessee, the approval granted to,—

(a)  such Laboratory, or specified person has been withdrawn; or

(b)  the programme, undertaken by the National Laboratory, University, Indian Institute of Technology or specified person, has been withdrawn.

Explanation [2].—For the purposes of this section,—

(a)  “National Laboratory” means a scientific laboratory functioning at the national level under the aegis of the Indian Council of Agricultural Research, the Indian Council of Medical Research, the Council of Scientific and Industrial Research, the Defence Research and Development Organisation, the Department of Electronics, the Department of Bio-Technology or the Department of Atomic Energy and which is approved as a National Laboratory by the prescribed authority in such manner as may be prescribed ;

(b)  “University” shall have the same meaning as in Explanation to clause (ix) of section 47 ;

(c)  “Indian Institute of Technology” shall have the same meaning as that of “Institute” in clause (g) of section 3of the Institutes of Technology Act, 1961 (59 of 1961)];

(d)  “specified person” means such person as is approved by the prescribed authority.]

(2AB)(1) Where a company engaged in the business of bio-technology or in any business of manufacture or production of any article or thing, not being an article or thing specified in the list of the Eleventh Schedule incurs any expenditure on scientific research (not being expenditure in the nature of cost of any land or building) on in-house research and development facility as approved by the prescribed authority, then, there shall be allowed a deduction of a sum equal to two times of the expenditure so incurred.

Explanation.—For the purposes of this clause, “expenditure on scientific research”, in relation to drugs and pharmaceuticals, shall include expenditure incurred on clinical drug trial, obtaining approval from any regulatory authority under any Central, State or Provincial Act and filing an application for a patent under the Patents Act, 1970 (39 of 1970).]

(2) No deduction shall be allowed in respect of the expenditure mentioned in clause (1) under any other provision of this Act.

(3) No company shall be entitled for deduction under clause (1) unless it enters into an agreement with the prescribed authority for co-operation in such research and development facility and for audit of the accounts maintained for that facility.

(4) The prescribed authority shall submit its report in relation to the approval of the said facility to the Director General in such form and within such time as may be prescribed.

(5) No deduction shall be allowed in respect of the expenditure referred to in clause (1) which is incurred after the 31st day of March, 2012

(6) No deduction shall be allowed to a company approved under sub-clause (C) of clause (iia) of sub-section (1) in respect of the expenditure referred to in clause (1) which is incurred after the 31st day of March, 2008.

(2B)(a) Where, before the 1st day of March, 1984,] an assessee has incurred any expenditure (not being in the nature of capital expenditure incurred on the acquisition of any land or building or construction of any building) on scientific research undertaken under a programme approved in this behalf by the prescribed authority having regard to the social, economic and industrial needs of India, he shall, subject to the provisions of this sub-section, be allowed a deduction of a sum equal to one and one-fourth times the amount of the expenditure certified by the prescribed authority to have been so incurred during the previous year.

(b) Where a deduction has been allowed under clause (a) for any previous year in respect of any expenditure, no deduction in respect of such expenditure shall be allowed under clause (i) of sub-section (1) or clause (ia) of sub-section (2) for the same or any other previous year.

(c) Where a deduction is allowed for any previous year under this sub-section in respect of expenditure represented wholly or partly by an asset, no deduction shall be allowed in respect of that asset under clause (ii) of sub-section (1)] of section 32 for the same or any subsequent previous year.

(d) Any deduction made under this sub-section in respect of any expenditure on scientific research in excess of the expenditure actually incurred shall be deemed to have been wrongly made for the purposes of this Act if the assessee fails to furnish within one year of the period allowed by the prescribed authority for completion of the programme, a certificate of its completion obtained from that authority, and the provisions of sub-section (5B) of section 155 shall apply accordingly.]

(3) If any question arises under this section as to whether, and if so, to what extent, any activity constitutes or constituted, or any asset is or was being used for, scientific research, the Board shall refer the question to—

(a)  the Central Government, when such question relates to any activity under clauses (ii) and (iii) of sub-section (1), and its decision shall be final;

(b)  the prescribed authority, when such question relates to any activity other than the activity specified in clause (a), whose decision shall be final.

(4) The provisions of sub-section (2) of section 32 shall apply in relation to deductions allowable under clause (iv) of sub-section (1) as they apply in relation to deductions allowable in respect of depreciation.

(5) Where, in a scheme of amalgamation, the amalgamating company sells or otherwise transfers to the amalgamated company (being an Indian company) any asset representing expenditure of a capital nature on scientific research,—

(i)  the amalgamating company shall not be allowed the deduction under clause (ii) or clause (iii) of sub-section (2); and

(ii)  the provisions of this section shall, as far as may be, apply to the amalgamated company as they would have applied to the amalgamating company if the latter had not so sold or otherwise transferred the asset.

EXEMPTIONS – FOREIGN OIL COMPANY SELLING CRUDE OIL IN INDIA – NOTIFIED FOREIGN OIL COMPANY NOTIFICATION NO. 64/2013 [F. NO. 142/22/2013-TPL], DATED 19-8-2013

SECTION 10(48) OF THE INCOME-TAX ACT, 1961 – EXEMPTIONS – FOREIGN OIL COMPANY SELLING CRUDE OIL IN INDIA – NOTIFIED FOREIGN OIL COMPANY

NOTIFICATION NO. 64/2013 [F. NO. 142/22/2013-TPL], DATED 19-8-2013

In exercise of the powers’ conferred by clause (48) of section 10, read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Government, having regard to the national interest, hereby notifies for the purposes of the said clause, the National Iranian Oil Company, as the foreign company and the Memorandum of Understanding entered between the Government of India in the Ministry of Petroleum and Natural Gas and the Central Bank of Iran on the 20th day of January, 2013, as the agreement subject to the condition that the said foreign company shall not engage in any activity in India, other than the receipt of income under the agreement aforesaid.

2. This notification shall be deemed to have come into effect from the 20th day of January, 2013.

Reference: Section 10 of the income Tax Act, 1961

Incomes not included in total income.

. In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included—

(1)  agricultural income ;

2(23[subject to the provisions of sub-section (2) of section 64,] any sum received by an individual as a member of a Hindu undivided family, where such sum has been paid out of the income of the family, or, in the case of any impartible estate, where such sum has been paid out of the income of the estate belonging to the family ;

4[(2A)  in the case of a person being a partner of a firm which is separately assessed as such, his share in the total income of the firm.

Explanation.—For the purposes of this clause, the share of a partner in the total income of a firm separately assessed as such shall, notwithstanding anything contained in any other law, be an amount which bears to the total income of the firm the same proportion as the amount of his share in the profits of the firm in accordance with the partnership deed bears to such profits ;]

 [(4)  (i) in the case of a non-resident, any income by way of interest on such securities or bonds as the Central Government may, by notification in the Official Gazette7, specify in this behalf, including income by way of premium on the redemption of such bonds :

8[Provided that the Central Government shall not specify, for the purposes of this sub-clause, such securities or bonds on or after the 1st day of June, 2002;]

 [10(ii) in the case of an individual, any income by way of interest on moneys standing to his credit in a Non-Resident (External) Account in any bank in India in accordance with  [the Foreign Exchange Management Act, 1999 (42 of 1999)], and the rules made thereunder :

Provided that such individual is a person resident outside India as defined in clause (q) of section 2 of the said Act or is a person who has been permitted by the Reserve Bank of India to maintain the aforesaid Account ;]]

13[(4B) in the case of an individual, being a citizen of India or a person of Indian origin, who is a non-resident, any income from interest on such savings certificates issued 14[before the 1st day of June, 2002] by the Central Government as that Government may, by notification in the Official Gazette15, specify in this behalf :

Provided that the individual has subscribed to such certificates in convertible foreign exchange remitted from a country outside India in accordance with the provisions of 15a[the Foreign Exchange Management Act, 1999 (42 of 1999)], and any rules made thereunder.

Explanation.—For the purposes of this clause,—

(a)  a person shall be deemed to be of Indian origin if he, or either of his parents or any of his grandparents, was born in undivided India ;

(b)  “convertible foreign exchange” means foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purposes of 15a[the Foreign Exchange Management Act, 1999 (42 of 1999)], and any rules made thereunder ;]

16[(5)  in the case of an individual, the value of any travel concession or assistance received by, or due to, him,—

(a)  from his employer for himself and his family, in connection with his proceeding on leave to any place in India ;

(b)  from his employer or former employer for himself and his family, in connection with his proceeding to any place in India after retirement from service or after the termination of his service,

subject to such conditions as may be prescribed17 (including conditions as to number of journeys and the amount which shall be exempt per head) having regard to the travel concession or assistance granted to the employees of the Central Government :

Provided that the amount exempt under this clause shall in no case exceed the amount of expenses actually incurred for the purpose of such travel.

Explanation.—For the purposes of this clause, “family”, in relation to an individual, means—

(i)  the spouse and children of the individual ; and

(ii)  the parents, brothers and sisters of the individual or any of them, wholly or mainly dependent on the individual; ]

(5A)  18[Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]

(5B)  19[Omitted by the Finance Act, 2002, w.e.f. 1-4-2003;]

 (6)  in the case of an individual who is not a citizen of India,—

(i)  20[***]

21[(ii)  the remuneration received by him as an official, by whatever name called, of an embassy, high commission, legation, commission, consulate or the trade representation of a foreign State, or as a member of the staff of any of these officials, for service in such capacity :

Provided that the remuneration received by him as a trade commissioner or other official representative in India of the Government of a foreign State (not holding office as such in an honorary capacity), or as a member of the staff of any of those officials, shall be exempt only if the remuneration of the corresponding officials or, as the case may be, members of the staff, if any, of the Government resident for similar purposes in the country concerned enjoys a similar exemption in that country :

Provided further that such members of the staff are subjects of the country represented and are not engaged in any business or profession or employment in India otherwise than as members of such staff ;]

(iii)  to (v) [Sub-clause (ii) substituted for sub-clauses (ii) to (v) by the Finance Act, 1988, w.e.f. 1-4-1989;]

(vi)  the remuneration received by him as an employee of a foreign enterprise for services rendered by him during his stay in India, provided the following conditions are fulfilled—

(a)  the foreign enterprise is not engaged in any trade or business in India ;

(b)  his stay in India does not exceed in the aggregate a period of ninety days in such previous year ; and

(c)  such remuneration is not liable to be deducted from the income of the employer chargeable under this Act ;

(via)  22[Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]

 (vii)  23[Omitted by the Finance Act, 1993, w.e.f. 1-4-1993;]

(viia)  24[Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]

(viii)  any income chargeable under the head “Salaries” received by or due to any such individual being a non-resident as remuneration for services rendered in connection with his employment on a foreign ship where his total stay in India does not exceed in the aggregate a period of ninety days in the previous year ;

(ix)  25[Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]

(x)  26[Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]

27[(xi)  the remuneration received by him as an employee of the Government of a foreign State during his stay in India in connection with his training in any establishment or office of, or in any undertaking owned by,—

(i)  the Government ; or

(ii)  any company in which the entire paid-up share capital is held by the Central Government, or any State Government or Governments, or partly by the Central Government and partly by one or more State Governments ; or

(iii)  any company which is a subsidiary of a company referred to in item (ii) ; or

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

(v)  any society registered under the Societies Registration Act, 1860 (14 of 1860), or under any other corresponding law for the time being in force and wholly financed by the Central Government, or any State Government or State Governments, or partly by the Central Government and partly by one or more State Governments ;]

28[(6A) where in the case of a foreign company deriving income by way of royalty or fees for technical services received from Government or an Indian concern in pursuance of an agreement made by the foreign company with Government or the Indian concern after the 31st day of March, 1976 29[but before the 1st day of June, 2002] 30[and,—

(a)  where the agreement relates to a matter included in the industrial policy, for the time being in force, of the Government of India, such agreement is in accordance with that policy ; and

(b)  in any other case, the agreement is approved by the Central Government,

the tax on such income is payable, under the terms of the agreement, by Government or the Indian concern to the Central Government, the tax so paid].

Explanation.—For the purposes of this clause 31[and clause (6B)],—

(a)  “fees for technical services” shall have the same meaning as in Explanation 2 to clause (vii) of sub-section (1) of section 9 ;

(b)  “foreign company” shall have the same meaning as in section 80B ;

(c)  “royalty” shall have the same meaning as in Explanation 2 to clause (vi) of sub-section (1) of section 9;]

31[(6B) where in the case of a non-resident (not being a company) or of a foreign company deriving income (not being salary, royalty or fees for technical services) from Government or an Indian concern in pursuance of an agreement entered into 32[before the 1st day of June, 2002] by the Central Government with the Government of a foreign State or an international organisation, the tax on such income is payable by Government or the Indian concern to the Central Government under the terms of that agreement or any other related agreement approved 32[before that date] by the Central Government, the tax so paid ;]

33[(6BB) where in the case of the Government of a foreign State or a foreign enterprise deriving income from an Indian company engaged in the business of operation of aircraft, as a consideration of acquiring an aircraft or an aircraft engine (other than payment for providing spares, facilities or services in connection with the operation of leased aircraft) on lease under 34[an agreement entered into after the 31st day of March, 1997 but before the 1st day of April, 1999, or entered into after the 35[31st day of March, 36[2007]] and approved by the Central Government in this behalf] and the tax on such income is payable by such Indian company under the terms of that agreement to the Central Government, the tax so paid.

Explanation.—For the purposes of this clause, the expression “foreign enterprise” means a person who is a non-resident;]

37[(6C)  any income arising to such foreign company, as the Central Government may, by notification38 in the Official Gazette, specify in this behalf, by way of39[royalty or]fees for technical services received in pursuance of an agreement entered into with that Government for providing services in or outside India in projects connected with security of India ;]

(7)  any allowances or perquisites paid or allowed as such outside India by the Government to a citizen of India for rendering service outside India ;

(8)  in the case of an individual who is assigned to duties in India in connection with any co-operative technical assistance programmes and projects in accordance with an agreement entered into by the Central Government and the Government of a foreign State (the terms whereof provide for the exemption given by this clause)—

(a)  the remuneration received by him directly or indirectly from the Government of that foreign State for such duties, and

(b)  any other income of such individual which accrues or arises outside India, and is not deemed to accrue or arise in India, in respect of which such individual is required to pay any income or social security tax to the Government of that foreign State ;

40[(8A)  in the case of a consultant—

(a)  any remuneration or fee received by him or it, directly or indirectly, out of the funds made available to an international organisation [hereafter referred to in this clause and clause (8B) as the agency] under a technical assistance grant agreement between the agency and the Government of a foreign State ; and

(b)  any other income which accrues or arises to him or it outside India, and is not deemed to accrue or arise in India, in respect of which such consultant is required to pay any income or social security tax to the Government of the country of his or its origin.

Explanation.—In this clause, “consultant” means—

(i)  any individual, who is either not a citizen of India or, being a citizen of India, is not ordinarily resident in India ; or

(ii)  any other person, being a non-resident,

engaged by the agency for rendering technical services in India in connection with any technical assistance programme or project, provided the following conditions are fulfilled, namely :—

(1)  the technical assistance is in accordance with an agreement entered into by the Central Government and the agency ; and

(2)  the agreement relating to the engagement of the consultant is approved by the prescribed authority41 for the purposes of this clause ;

(8B)  in the case of an individual who is assigned to duties in India in connection with any technical assistance programme and project in accordance with an agreement entered into by the Central Government and the agency—

(a)  the remuneration received by him, directly or indirectly, for such duties from any consultant referred to in clause (8A) ; and

(b)  any other income of such individual which accrues or arises outside India, and is not deemed to accrue or arise in India, in respect of which such individual is required to pay any income or social security tax to the country of his origin, provided the following conditions are fulfilled, namely :—

(i)  the individual is an employee of the consultant referred to in clause (8A) and is either not a citizen of India or, being a citizen of India, is not ordinarily resident in India ; and

(ii)  the contract of service of such individual is approved by the prescribed authority42 before the commencement of his service ;]

(9)  the income of any member of the family of any such individual as is referred to in clause (843[or clause (8A) or, as the case may be, clause (8B)] accompanying him to India, which accrues or arises outside India, and is not deemed to accrue or arise in India, in respect of which such member is required to pay any income or social security tax to the Government of that foreign State 43a[or, as the case may be, country of origin of such member];

44[45(10)  46(i) any death-cum-retirement gratuity received under the revised Pension Rules of the Central Government or, as the case may be, the Central Civil Services (Pension) Rules, 1972, or under any similar scheme applicable to the members of the civil services of the Union or holders of posts connected with defence or of civil posts under the Union (such members or holders being persons not governed by the said Rules) or to the members of the all-India services or to the members of the civil services of a State or holders of civil posts under a State or to the employees of a local authority or any payment of retiring gratuity received under the Pension Code or Regulations applicable to the members of the defence services ;

(ii)  any gratuity received under the Payment of Gratuity Act, 1972 (39 of 1972), to the extent it does not exceed an amount calculated in accordance with the provisions of sub-sections (2) and (3) of section 447 of that Act ;

(iii)  any other gratuity received by an employee on his retirement or on his becoming incapacitated prior to such retirement or on termination of his employment, or any gratuity received by his widow, children or dependants on his death, to the extent it does not, in either case, exceed one-half month’s salary for each year of completed service4849[calculated on the basis of the average salary for the ten months immediately preceding the month in which any such event occurs, subject to such limit50 as the Central Government may, by notification in the Official Gazette, specify in this behalf having regard to the limit applicable in this behalf to the employees of that Government] :

Provided that where any gratuities referred to in this clause51 are received by an employee from more than one employer in the same previous year, the aggregate amount exempt from income-tax under this clause 52[shall not exceed the limit so specified] :

Provided further that where any such gratuity or gratuities was or were received in any one or more earlier previous years also and the whole or any part of the amount of such gratuity or gratuities was not included in the total income of the assessee of such previous year or years, the amount exempt from income-tax under this clause 52[shall not exceed the limit so specified] as reduced by the amount or, as the case may be, the aggregate amount not included in the total income of any such previous year or years.

53[* * *]

Explanation.54[In this clause, and in clause (10AA)], “salary” shall have the meaning assigned to it in clause (h) of rule 2 of Part A of the Fourth Schedule ;]

55[56(10A57(i) any payment in commutation of pension received under the Civil Pensions (Commutation) Rules of the Central Government or under any similar scheme applicable 58[to the members of the civil services of the Union or holders of posts connected with defence or of civil posts under the Union (such members or holders being persons not governed by the said Rules) or to the members of the all-India services or to the members of the defence services or to the members of the civil services of a State or holders of civil posts under a State or to the employees of a local authority] or a corporation established by a Central, State or Provincial Act ;

(ii) any payment in commutation of pension received under any scheme of any other employer, to the extent it does not exceed—

(a)  in a case where the employee receives any gratuity, the commuted value of one-third of the pension which he is normally entitled to receive, and

(b)  in any other case, the commuted value of one-half of such pension,

such commuted value being determined having regard to the age of the recipient, the state of his health, the rate of interest and officially recognised tables of mortality ;

59[* * *]

60[ (iii) any payment in commutation of pension received from a fund under clause (23AAB) ;]

61[62(10AA) (i) any payment received by an employee of the Central Government or a State Government as the cash equivalent of the leave salary in respect of the period of earned leave at his credit at the time of his 63retirement 64[whether] on superannuation or otherwise ;

(ii) any payment of the nature referred to in sub-clause (i) received by an employee, other than an employee of the Central Government or a State Government, in respect of so much of the period of earned leave at his credit at the time of his retirement 64[whether] on superannuation 63or otherwise as does not exceed 65[ten] months, calculated on the basis of the average salary drawn by the employee during the period of ten months immediately preceding his retirement 64[whether] on superannuation or otherwise, 66[subject to such limit as the Central Government may, by notification in the Official Gazette, specify in this behalf having regard to the limit67 applicable in this behalf to the employees of that Government] :

Provided that where any such payments are received by an employee from more than one employer in the same previous year, the aggregate amount exempt from income-tax under this sub-clause 68[shall not exceed the limit so specified] :

Provided further that where any such payment or payments was or were received in any one or more earlier previous years also and the whole or any part of the amount of such payment or payments was or were not included in the total income of the assessee of such previous year or years, the amount exempt from income-tax under this sub-clause 69[shall not exceed the limit so specified], as reduced by the amount or, as the case may be, the aggregate amount not included in the total income of any such previous year or years.

70[* * *]

Explanation.—For the purposes of sub-clause (ii),—

71[* * *] the entitlement to earned leave of an employee shall not exceed thirty days for every year of actual service rendered by him as an employee of the employer from whose service he has retired ;

72[* * *]

73[(10B)  any compensation received by a workman under the Industrial Disputes Act, 1947 (14 of 1947), or under any other Act or Rules, orders or notifications issued thereunder or under any standing orders or under any award, contract of service or otherwise, 74[at the time of his retrenchment :

Provided that the amount exempt under this clause shall not exceed—

 (i)  an amount calculated in accordance with the provisions of 75clause (b) of section 25F of the Industrial Disputes Act, 1947 (14 of 1947) ; or

76[(ii)  such amount, not being less than fifty thousand rupees, as the Central Government may, by notification77 in the Official Gazette, specify in this behalf,]

whichever is less :

Provided further that the preceding proviso shall not apply in respect of any compensation received by a workman in accordance with any scheme which the Central Government may, having regard to the need for extending special protection to the workmen in the undertaking to which such scheme applies and other relevant circumstances, approve in this behalf.]

Explanation.—For the purposes of this clause—

(a)  compensation received by a workman at the time of the closing down of the undertaking in which he is employed shall be deemed to be compensation received at the time of his retrenchment ;

(b)  compensation received by a workman, at the time of the transfer (whether by agreement or by operation of law) of the ownership or management of the undertaking in which he is employed from the employer in relation to that undertaking to a new employer, shall be deemed to be compensation received at the time of his retrenchment if—

(i)  the service of the workman has been interrupted by such transfer ; or

(ii)  the terms and conditions of service applicable to the workman after such transfer are in any way less favourable to the workman than those applicable to him immediately before the transfer ; or

(iii)  the new employer is, under the terms of such transfer or otherwise, legally not liable to pay to the workman, in the event of his retrenchment, compensation on the basis that his service has been continuous and has not been interrupted by the transfer ;

78(c) the expressions “employer” and “workman” shall have the same meanings as in the Industrial Disputes Act, 1947 (14 of 1947);]

79[(10BB) any payments made under the Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985 (21 of 1985), and any scheme framed thereunder except payment made to any assessee in connection with the Bhopal Gas Leak Disaster to the extent such assessee has been allowed a deduction under this Act on account of any loss or damage caused to him by such disaster ;]

80[(10BC) any amount received or receivable from the Central Government or a State Government or a local authority by an individual or his legal heir by way of compensation on account of any disaster, except the amount received or receivable to the extent such individual or his legal heir has been allowed a deduction under this Act on account of any loss or damage caused by such disaster.

Explanation.—For the purposes of this clause, the expression “disaster” shall have the meaning assigned to it under clause (d) of section 281 of the Disaster Management Act, 2005 (53 of 2005);]

82[(10C83any amount received84 85[or receivable]by an employee of—

(i)  a public sector company ; or

(ii)  any other company ; or

(iii)  an authority established under a Central, State or Provincial Act ; or

(iv)  a local 86[authority ; or]

87[(v) a co-operative society ; or

(vi)  a University established or incorporated by or under a Central, State or Provincial Act and an institution declared to be a University under section 3 of the University Grants Commission Act, 1956 (3 of 1956) ; or

(vii)  an Indian Institute of Technology within the meaning of clause (g) of section 388 of the Institutes of Technology Act, 1961 (59 of 1961) ; or

89[(viia)  any State Government; or]

90[(viib)  the Central Government; or]

91[(viic)  an institution, having importance throughout India or in any State or States, as the Central Government may, by notification in the Official Gazette92, specify in this behalf; or]

(viii)  such institute of management as the Central Government may, by notification93 in the Official Gazette, specify in this behalf,]

94[on his] 95[voluntary retirement or termination of his service, in accordance with any scheme or schemes of voluntary retirement or in the case of a public sector company referred to in sub-clause (i), a scheme of voluntary separation, to the extent such amount does not exceed five lakh rupees] :

Provided that the schemes of the said companies or authorities 96[or societies or Universities or the Institutes referred to in sub-clauses (vii) and (viii)], as the case may be, governing the payment of such amount are framed in accordance with such guidelines (including inter alia criteria of economic viability) as may be 97prescribed 98[***]:

Provided further that where exemption has been allowed to an employee under this clause for any assessment year, no exemption thereunder shall be allowed to him in relation to any other assessment year :]

99[Provided also that where any relief has been allowed to an assessee under section 89 for any assessment year in respect of any amount received or receivable on his voluntary retirement or termination of service or voluntary separation, no exemption under this clause shall be allowed to him in relation to such, or any other, assessment year;]

99a[(10CC) in the case of an employee, being an individual deriving income in the nature of a perquisite, not provided for by way of monetary payment, within the meaning of clause (2) of section 17, the tax on such income actually paid by his employer, at the option of the employer, on behalf of such employee, notwithstanding anything contained in section 20099b of the Companies Act, 1956 (1 of 1956);]

99c[(10D)  any sum received under a life insurance policy, including the sum allocated by way of bonus on such policy, other than—

(a) any sum received under sub-section (3) of section 80DD or sub-section (3) of section 80DDA *; or

(b)  any sum received under a Keyman insurance policy; or

(c)  any sum received under an insurance policy issued on or after the 1st day of April, 2003 99d[but on or before the 31st day of March, 2012] in respect of which the premium payable for any of the years during the term of the policy exceeds twenty per cent of the actual capital sum assured99d[; or]

99d[(d)  any sum received under an insurance policy issued on or after the 1st day of April, 2012 in respect of which the premium payable for any of the years during the term of the policy exceeds ten per cent of the actual capital sum assured:]

Provided that the provisions of 1[sub-clauses (c) and (d)] shall not apply to any sum received on the death of a person:

Provided further that for the purpose of calculating the actual capital sum assured under 2[sub-clause (c)], effect shall be given to the3[Explanation to sub-section (3) of section 80C or the Explanation to sub-section (2A) of section 88, as the case may be].

The following third proviso shall be inserted after the second proviso to sub-clause (d) of clause (10D) of section 10 by the Finance Act, 2013, w.e.f. 1-4-2014 :

Provided also that where the policy, issued on or after the 1st day of April, 2013, is for insurance on life of any person, who is—

(i) a person with disability or a person with severe disability as referred to in section 80U; or

(ii) suffering from disease or ailment as specified in the rules made under section 80DDB,

the provisions of this sub-clause shall have effect as if for the words “ten per cent”, the words “fifteen per cent” had been substituted.

4[Explanation 1].For the purposes of this clause, “Keyman insurance policy” means a life insurance policy taken by a person on the life of another person who is or was the employee of the first-mentioned person or is or was connected in any manner whatsoever with the business of the first-mentioned person 4a[and includes such policy which has been assigned to a person, at any time during the term of the policy, with or without any consideration];]

5[Explanation 2.—For the purposes of sub-clause (d)the expression “actual capital sum assured” shall have the meaning assigned to it in theExplanation to sub-section (3A) of section 80C;]

(11)  any payment from a provident fund to which the Provident Funds Act, 1925 (19 of 1925), applies 6[or from any other provident fund set up by the Central Government and notified7 by it in this behalf in the Official Gazette];

(12)  the accumulated balance due and becoming payable to an employee participating in a recognised provident fund, to the extent provided in rule 8 of Part A of the Fourth Schedule ;

8[(13) any payment from an approved superannuation fund made—

(i)  on the death of a beneficiary ; or

(ii)  to an employee in lieu of or in commutation of an annuity on his retirement at or after a specified age or on his becoming incapacitated prior to such retirement ; or

(iii)  by way of refund of contributions on the death of a beneficiary ; or

(iv)  by way of refund of contributions to an employee on his leaving the service in connection with which the fund is established otherwise than by retirement at or after a specified age or on his becoming incapacitated prior to such retirement, to the extent to which such payment does not exceed the contributions made prior to the commencement of this Act and any interest thereon;]

8a[8b(13A) any special allowance specifically granted to an assessee by his employer to meet expenditure actually incurred on payment of rent (by whatever name called) in respect of residential accommodation occupied by the assessee, to such extent 8c[* * *] as may be prescribed9 having regard to the area or place in which such accommodation is situate and other relevant considerations.]

10[Explanation.—For the removal of doubts, it is hereby declared that nothing contained in this clause shall apply in a case where—

(a)  the residential accommodation occupied by the assessee is owned by him ; or

(b)  the assessee has not actually incurred expenditure on payment of rent (by whatever name called) in respect of the residential accommodation occupied by him ;]

11[(14) (i) any such special allowance or benefit, not being in the nature of a perquisite within the meaning of clause (2) of section 17, specifically granted to meet expenses wholly, necessarily and exclusively incurred12 in the performance of the duties of an office or employment of profit1314[as may be prescribed], to the extent to which such expenses are actually incurred for that purpose ;

(ii) any such allowance granted to the assessee either to meet his personal expenses at the place where the duties of his office or employment of profit13are ordinarily performed by him or at the place where he ordinarily resides, or to compensate him for the increased cost of living, 15[as may be prescribed and to the extent as may be prescribed] :]

16[Provided that nothing in sub-clause (ii) shall apply to any allowance in the nature of personal allowance granted to the assessee to remunerate or compensate him for performing duties of a special nature relating to his office or employment unless such allowance is related to the place of his posting or residence ;]

(14A)17[***]

(15)  18[(i) income by way of interest, premium on redemption or other payment on such securities, bonds, annuity certificates, savings certificates, other certificates issued by the Central Government and deposits as the Central Government may, by notification19 in the Official Gazette, specify in this behalf, subject to such conditions and limits as may be specified in the said notification ;]

20[(iib21[in the case of an individual or a Hindu undivided family,] interest on such Capital Investment Bonds as the Central Government may, by notification22 in the Official Gazette, specify in this behalf :]

23[Provided that the Central Government shall not specify, for the purposes of this sub-clause, such Capital Investment Bonds on or after the 1st day of June, 2002;]

24[(iic) in the case of an individual or a Hindu undivided family, interest on such Relief Bonds25 as the Central Government may, by notification in the Official Gazette, specify in this behalf ;]

26[(iid) interest on such bonds, as the Central Government may, by notification27 in the Official Gazette, specify, arising to—

(a)  a non-resident Indian, being an individual owning the bonds ; or

(b)  any individual owning the bonds by virtue of being a nominee or survivor of the non-resident Indian ; or

(c)  any individual to whom the bonds have been gifted by the non-resident Indian :

Provided that the aforesaid bonds are purchased by a non-resident Indian in foreign exchange and the interest and principal received in respect of such bonds, whether on their maturity or otherwise, is not allowable to be taken out of India :

Provided further that where an individual, who is a non-resident Indian in any previous year in which the bonds are acquired, becomes a resident in India in any subsequent year, the provisions of this sub-clause shall continue to apply in relation to such individual :

Provided also that in a case where the bonds are encashed in a previous year prior to their maturity by an individual who is so entitled, the provisions of this sub-clause shall not apply to such individual in relation to the assessment year relevant to such previous year :

28[Provided also that the Central Government shall not specify, for the purposes of this sub-clause, such bonds on or after the 1st day of June, 2002.]

Explanation.—For the purposes of this sub-clause, the expression “non-resident Indian” shall have the meaning assigned to it in clause (e) of section 115C;]

(iii) interest on securities held by the Issue Department of the Central Bank of Ceylon constituted under the Ceylon Monetary Law Act, 1949;

29[(iiia) interest payable to any bank incorporated in a country outside India and authorised to perform central banking functions in that country on any deposits made by it, with the approval of the Reserve Bank of India, with any scheduled bank.

Explanation.—For the purposes of this sub-clause, “scheduled bank” shall have the meaning assigned to it in 30[clause (ii) of the Explanation to clause (viia) of sub-section (1) of section 36];]

31[(iiib) interest payable to the Nordic Investment Bank, being a multilateral financial institution constituted by the Governments of Denmark, Finland, Iceland, Norway and Sweden, on a loan advanced by it to a project approved by the Central Government in terms of the Memorandum of Understanding entered into by the Central Government with that Bank on the 25th day of November, 1986;]

32[(iiic) interest payable to the European Investment Bank, on a loan granted by it in pursuance of the framework-agreement for financial co-operation entered into on the 25th day of November, 1993 by the Central Government with that Bank;]

(iv) interest payable—

33[(a) by Government or a local authority on moneys borrowed by it before the 1st day of June, 2001 from, or debts owed by it before the 1st day of June, 2001 to, sources outside India;]

(b)  by an industrial undertaking in India on moneys borrowed by it under 34[a loan agreement entered into before the 1st day of June, 2001 with any such financial institution] in a foreign country as may be approved35 in this behalf by the Central Government by general or special order ;

36(c) by an industrial undertaking in India on any moneys borrowed or debt incurred by it 37[before the 1st day of June, 2001]in a foreign country in respect of the purchase outside India of raw materials 38[or components] or capital plant and machinery, 39[to the extent to which such interest does not exceed the amount of interest calculated at the rate approved by the Central Government in this behalf40, having regard to the terms of the loan or debt and its repayment.]

41[42[Explanation 1.]—For the purposes of this item, “purchase of capital plant and machinery” includes the purchase of such capital plant and machinery under a hire-purchase agreement or a lease agreement with an option to purchase such plant and machinery.]

43[Explanation 2.—For the removal of doubts, it is hereby declared that the usance interest payable outside India by an undertaking engaged in the business of ship-breaking in respect of purchase of a ship from outside India shall be deemed to be the interest payable on a debt incurred in a foreign country in respect of the purchase outside India;]

44[(d)  by the Industrial Finance Corporation of India established by the Industrial Finance Corporation Act, 1948 (15 of 1948), or the Industrial Development Bank of India established under the Industrial Development Bank of India Act, 1964 (18 of 1964), 45[or the Export-Import Bank of India established under the Export-Import Bank of India Act, 1981 (28 of 1981),] 46[or the National Housing Bank established under section 3 of the National Housing Bank Act, 1987 (53 of 1987),] 47[or the Small Industries Development Bank of India established under section 3 of the Small Industries Development Bank of India Act, 1989 (39 of 1989),] or the Industrial Credit and Investment Corporation of India [a company formed and registered under the Indian Companies Act, 1913 (7 of 1913)], on any moneys borrowed by it from sources outside India 48[before the 1st day of June, 2001],to the extent to which such interest does not exceed the amount of interest calculated at the rate approved by the Central Government in this behalf, having regard to the terms of the loan and its repayment;]

49[(e) by any other financial institution established in India or a banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act), on any moneys borrowed by it from sources outside India 50[before the 1st day of June, 2001]under a loan agreement approved by the Central Government where the moneys are borrowed either for the purpose of advancing loans to industrial undertakings in India for purchase outside India of raw materials or capital plant and machinery or for the purpose of importing any goods which the Central Government may consider necessary to import in the public interest, to the extent to which such interest does not exceed the amount of interest calculated at the rate approved by the Central Government in this behalf, having regard to the terms of the loan and its repayment;]

51[(f) by an industrial undertaking in India on any moneys borrowed by it in foreign currency from sources outside India under a loan agreement approved by the Central Government 52[before the 1st day of June, 2001]having regard to the need for industrial development in India, to the extent to which such interest does not exceed the amount of interest calculated at the rate approved by the Central Government in this behalf, having regard to the terms of the loan and its repayment;

53[(fa)  by a scheduled bank 54[***] 55[to a non-resident or to a person who is not ordinarily resident within the meaning of sub-section (6)† of section 6] on deposits in foreign currency where the acceptance of such deposits by the bank is approved by the Reserve Bank of India.

56[Explanation.—For the purposes of this item, the expression “scheduled bank” means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980), or any other bank being a bank included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934), but does not include a co-operative bank;]

57[(g) by a public company formed and registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes, 58[being a company eligible for deduction under clause (viii) of sub-section (1) of section 36] on any moneys borrowed by it in foreign currency from sources outside India under a loan agreement approved by the Central Government59[before the 1st day of June, 2003], to the extent to which such interest does not exceed the amount of interest calculated at the rate approved by the Central Government in this behalf, having regard to the terms of the loan and its repayment.]

Explanation.—For the purposes of 60[items (f61[, (fa)] and (g)], the expression 62“foreign currency” shall have the meaning assigned to it in62a[the Foreign Exchange Management Act, 1999 (42 of 1999)];]

63[(h)  by any public sector company in respect of such bonds or debentures and subject to such conditions, including the condition that the holder of such bonds or debentures registers his name and the holding with that company, as the Central Government may, by notification64 in the Official Gazette, specify in this behalf;]

65[(i)  by Government on deposits made by an employee of the Central Government or a State Government 66[or a public sector company], in accordance with such scheme as the Central Government may, by notification67 in the Official Gazette, frame in this behalf, out of the moneys due to him on account of his retirement, whether on superannuation or otherwise.]

68[69[Explanation 1].—For the purposes of this sub-clause, the expression “industrial undertaking” means any undertaking which is engaged in—

(a)  the manufacture or processing of goods; or

70[(aa)  the manufacture of computer software or recording of programme on any disc, tape, perforated media or other information device; or]

(b)  the business of generation or distribution of electricity or any other form of power; or

71[(ba)  the business of providing telecommunication services; or]

(c)  mining; or

(d)  the construction of ships; or

72[(da)  the business of ship-breaking; or]

73[(e)  the operation of ships or aircrafts or construction or operation of rail systems.]]

74[Explanation 1A.—For the purposes of this sub-clause, the expression “interest” shall not include interest paid on delayed payment of loan or on default if it is in excess of two per cent per annum over the rate of interest payable in terms of such loan.]

75[Explanation 2.—For the purposes of this clause, the expression “interest” includes hedging transaction charges on account of currency fluctuation;]

76[(v) interest on—

(a)  securities held by the Welfare Commissioner, Bhopal Gas Victims, Bhopal, in the Reserve Bank’s SGL Account No. SL/DH 048;

(b)  deposits for the benefit of the victims of the Bhopal gas leak disaster held in such account, with the Reserve Bank of India or with a public sector bank, as the Central Government may, by notification77 in the Official Gazette, specify, whether prospectively or retrospectively but in no case earlier than the 1st day of April, 1994 in this behalf.

Explanation.—For the purposes of this sub-clause, the expression “public sector bank” shall have the meaning assigned to it in the Explanation to clause (23D);]

78[(vi) interest on Gold Deposit Bonds issued under the Gold Deposit Scheme, 1999 notified by the Central Government;]

79[(vii) interest on bonds—

(a)  issued by a local authority or by a State Pooled Finance Entity; and

(b)  specified by the Central Government by notification80 in the Official Gazette.

Explanation.—For the purposes of this sub-clause, the expression “State Pooled Finance Entity” shall mean such entity which is set up in accordance with the guidelines for the Pooled Finance Development Scheme notified by the Central Government in the Ministry of Urban Development;]

81[(viii) any income by way of interest received by a non-resident or a person who is not ordinarily resident, in India on a deposit made on or after the 1st day of April, 2005, in an Offshore Banking Unit82 referred to in clause (u) of section 2 of the Special Economic Zones Act, 2005;]

83[(15A) any payment made, by an Indian company engaged in the business of operation of aircraft, to acquire an aircraft or an aircraft engine (other than a payment for providing spares, facilities or services in connection with the operation of leased aircraft) on lease83a from the Government of a foreign State or a foreign enterprise under an agreement 84[85[, not being an agreement entered into between the 1st day of April, 1997 and the 31st day of March, 1999,] and] approved by the Central Government in this behalf :

86[Provided that nothing contained in this clause shall apply to any such agreement entered into on or after the 87[1st day of April, 88[2007]].]

Explanation.—For the purposes of this clause, the expression “foreign enterprise” means a person who is a non-resident;]

89(16 90scholarships granted to meet the cost of education;

91[(17)  any income by way of—

(i)  daily allowance received by any person by reason of his membership of Parliament or of any State Legislature or of any Committee thereof; 92[* * *]

93[(ii)  any allowance received by any person by reason of his membership of Parliament under the Members of Parliament (Constituency Allowance) Rules, 1986;

94[(iii)  any constituency allowance received by any person by reason of his membership of any State Legislature under any Act or rules made by that State Legislature;]]]

95[(17A) any payment made, whether in cash or in kind,—

(i)  in pursuance of any award instituted in the public interest by the Central Government or any State Government or instituted by any other body and approved96 by the Central Government in this behalf; or

(ii)  as a reward by the Central Government or any State Government for such purposes as may be approved96 by the Central Government in this behalf in the public interest;]

97[(18)  any income by way of—

(i)  pension received by an individual who has been in the service of the Central Government or State Government and has been awarded “Param Vir Chakra” or “Maha Vir Chakra” or “Vir Chakra” or such other gallantry award as the Central Government may, by notification98 in the Official Gazette, specify in this behalf;

(ii)  family pension received by any member of the family of an individual referred to in sub-clause (i).

Explanation.—For the purposes of this clause, the expression “family” shall have the meaning assigned to it in the Explanation to clause (5);]

(18A)  99[Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]

1[(19)  family pension received by the widow or children or nominated heirs, as the case may be, of a member of the armed forces (including para-military forces) of the Union, where the death of such member has occurred in the course of operational duties, in such circumstances and subject to such conditions, as may be prescribed2;]

3[(19A)  the annual value of any one palace in the occupation of a Ruler, being a palace, the annual value whereof was exempt from income-tax before the commencement of the Constitution (Twenty-sixth Amendment) Act, 1971, by virtue of the provisions of the Merged States (Taxation Concessions) Order, 1949, or the Part B States (Taxation Concessions) Order, 1950, or, as the case may be, the Jammu and Kashmir (Taxation Concessions) Order, 1958:

Provided that for the assessment year commencing on the 1st day of April, 1972, the annual value of every such palace in the occupation4 of such Ruler during the relevant previous year shall be exempt from income-tax;]

5(20)  the income of a local authority which is chargeable under the head 6[* * *] “Income from house property”, “Capital gains” or “Income from other sources” or from a trade or business carried on by it which accrues or arises from the supply of a commodity or service 7[(not being water or electricity) within its own jurisdictional area or from the supply of water or electricity within or outside its own jurisdictional area].

8[Explanation.—For the purposes of this clause, the expression “local authority” means—

(i)  Panchayat as referred to in clause (d) of article 243 of the Constitution9; or

(ii)  Municipality as referred to in clause (e) of article 243P of the Constitution10; or

(iii)  Municipal Committee and District Board,

legally entitled to, or entrusted by the Government with, the control or management of a Municipal or local fund; or

(iv)  Cantonment Board as defined in section 311 of the Cantonments Act, 1924 (2 of 1924);]

(20A)  12[***]

13[14(21)  15any income of a 16[research association] for the time being approved for the purpose of clause (ii17[or clause (iii)]of sub-section (1) of section 35:

Provided that the 16[research association]—

(a)  applies its income, or accumulates it for application, wholly and exclusively to the objects for which it is established, and the provisions of sub-section (2) and sub-section (3) of section 11 shall apply in relation to such accumulation subject to the following modifications, namely :—

(i)  in sub-section (2),—

(1)  the words, brackets, letters and figure “referred to in clause (a) or clause (b) of sub-section (1) read with the Explanation to that sub-section” shall be omitted;

(2)  for the words “to charitable or religious purposes”, the words “for the purposes of 18[scientific research or research in social science or statistical research]” shall be substituted;

(3)  the reference to “Assessing Officer” in clause (a) thereof shall be construed as a reference to the “prescribed authority” referred to in clause (ii17[or clause (iii)]of sub-section (1) of section 35;

(ii)  in sub-section (3), in clause (a), for the words “charitable or religious purposes”, the words “the purposes of 18[scientific research or research in social science or statistical research]” shall be substituted; and

19[(b) does not invest or deposit its funds, other than—

(i)  any assets held by the 20[research association] where such assets form part of the corpus of the fund of the association as on the 1st day of June, 1973;

(ii)  any assets (being debentures issued by, or on behalf of, any company or corporation), acquired by the 20[research association] before the 1st day of March, 1983;

(iii)  any accretion to the shares, forming part of the corpus of the fund mentioned in sub-clause (i), by way of bonus shares allotted to the 20[research association];

(iv)  voluntary contributions received and maintained in the form of jewellery, furniture or any other article as the Board may, by notification in the Official Gazette, specify,

for any period during the previous year otherwise than in any one or more of the forms or modes specified in sub-section (5) of section 11:]

21[Provided further that the exemption under this clause shall not be denied in relation to voluntary contribution, other than voluntary contribution in cash or voluntary contribution of the nature referred to in clause (b) of the first proviso to this clause, subject to the condition that such voluntary contribution is not held by the 20[research association], otherwise than in any one or more of the forms or modes specified in sub-section (5) of section 11, after the expiry of one year from the end of the previous year in which such asset is acquired or the 31st day of March, 1992, whichever is later:

Provided also] that nothing contained in this clause shall apply in relation to any income of the 20[research association], being profits and gains of business, unless the business is incidental to the attainment of its objectives and separate books of account are maintained by it in respect of such business:]

22[Provided also that where the 20[research association]is approved by the Central Government and subsequently that Government is satisfied that—

(i)  the 20[research association]has not applied its income in accordance with the provisions contained in clause (a) of the first proviso; or

(ii)  the 20[research association]has not invested or deposited its funds in accordance with the provisions contained in clause (b) of the first proviso; or

(iii)  the activities of the 20[research association]are not genuine; or

(iv)  the activities of the 23[research association]are not being carried out in accordance with all or any of the conditions subject to which such association was approved,

it may, at any time after giving a reasonable opportunity of showing cause against the proposed withdrawal to the concerned association, by order, withdraw the approval and forward a copy of the order withdrawing the approval to such association and to the Assessing Officer;]

 (22)  24[Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]

(22A)  25[Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]

26[(22B)  any income of such news agency set up in India solely for collection and distribution of news as the Central Government may, by notification27 in the Official Gazette, specify in this behalf:

Provided that the news agency applies its income or accumulates it for application solely for collection and distribution of news and does not distribute its income in any manner to its members:

Provided further that any notification issued by the Central Government under this clause shall, at any one time, have effect for such assessment year or years, not exceeding three assessment years (including an assessment year or years commencing before the date on which such notification is issued) as may be specified in the notification:]

28[Provided also that where the news agency has been specified, by notification, by the Central Government and subsequently that Government is satisfied that such news agency has not applied or accumulated or distributed its income in accordance with the provisions contained in the first proviso, it may, at any time after giving a reasonable opportunity of showing cause, rescind the notification and forward a copy of the order rescinding the notification to such agency and to the Assessing Officer;]

 (23)  29[Omitted by the Finance Act, 2002, w.e.f. 1-4-2003;]

30[31(23A) any income (other than income chargeable under the head 32[* * *] “Income from house property” or any income received for rendering any specific services or income by way of interest or dividends derived from its investments) of an association or institution established in India having as its object the control, supervision, regulation or encouragement of the profession of law, medicine, accountancy, engineering or architecture or such other profession33 as the Central Government may specify in this behalf, from time to time, by notification in the Official Gazette:

Provided that—

(i)  the association or institution applies its income, or accumulates it for application, solely to the objects for which it is established; and

(ii)  the association or institution is for the time being approved34 for the purpose of this clause by the Central Government by general or special order:]

35[Provided further that where the association or institution has been approved by the Central Government and subsequently that Government is satisfied that—

(i)  such association or institution has not applied or accumulated its income in accordance with the provisions contained in the first proviso; or

(ii)  the activities of the association or institution are not being carried out in accordance with all or any of the conditions subject to which such association or institution was approved,

it may, at any time after giving a reasonable opportunity of showing cause against the proposed withdrawal to the concerned association or institution, by order, withdraw the approval and forward a copy of the order withdrawing the approval to such association or institution and to the Assessing Officer;]

36[(23AA) any income received by any person on behalf of any Regimental Fund or Non-Public Fund established by the armed forces of the Union for the welfare of the past and present members of such forces or their dependants;]

37[(23AAA) any income received by any person on behalf of a fund established, for such purposes as may be notified38 by the Board in the Official Gazette, for the welfare of employees or their dependants and of which fund such employees are members if such fund fulfils the following conditions, namely :—

(a)  the fund—

(i)  applies its income or accumulates it for application, wholly and exclusively to the objects for which it is established; and

(ii)  invests its funds and contributions and other sums received by it in the forms or modes specified in sub-section (5) of section 11;

(b)  the fund is approved by the Commissioner in accordance with the rules39 made in this behalf:

Provided that any such approval shall at any one time have effect for such assessment year or years not exceeding three assessment years as may be specified in the order of approval;]

40[(23AAB) any income of a fund, by whatever name called, set up by the Life Insurance Corporation of India on or after the 1st day of August, 1996 41[or any other insurer] under a pension scheme,—

(i)  to which contribution is made by any person for the purpose of receiving pension from such fund;

(ii)  which is approved by the Controller of Insurance 42[or the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999), as the case may be].

Explanation.—For the purposes of this clause, the expression “Controller of Insurance” shall have the meaning assigned to it in clause (5B) of section 2 of the Insurance Act, 1938 (4 of 1938)43;]

44[(23B) any income of an institution constituted as a public charitable trust or registered under the Societies Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act in force in any part of India, and existing solely for the development of khadi or village industries or both, and not for purposes of profit, to the extent such income is attributable to the business of production, sale, or marketing, of khadi or products of village industries:

Provided that—

(i)  the institution applies its income, or accumulates it for application, solely for the development of khadi or village industries or both; and

(ii)  the institution is, for the time being, approved for the purpose of this clause by the Khadi and Village Industries Commission:

Provided further that the Commission shall not, at any one time, grant such approval for more than three assessment years beginning with the assessment year next following the financial year in which it is granted:

45[Provided also that where the institution has been approved by the Khadi and Village Industries Commission and subsequently that Commission is satisfied that—

(i)  the institution has not applied or accumulated its income in accordance with the provisions contained in the first proviso; or

(ii)  the activities of the institution are not being carried out in accordance with all or any of the conditions subject to which such institution was approved,

it may, at any time after giving a reasonable opportunity of showing cause against the proposed withdrawal to the concerned institution, by order, withdraw the approval and forward a copy of the order withdrawing the approval to such institution and to the Assessing Officer.]

Explanation.—For the purposes of this clause,—

(i)  “Khadi and Village Industries Commission” means the Khadi and Village Industries Commission established under the Khadi and Village Industries Commission Act, 1956 (61 of 1956);

(ii)  46“khadi” and “village industries” have the meanings respectively assigned to them in that Act;]

47[(23BB) any income of an authority (whether known as the Khadi and Village Industries Board or by any other name) established in a State by or under a State or Provincial Act for the development of khadi or village industries in the State.

Explanation.—For the purposes of this clause, 46“khadi” and “village industries” have the meanings respectively assigned to them in the Khadi and Village Industries Commission Act, 1956 (61 of 1956);]

47[(23BBA) any income of any body or authority (whether or not a body corporate or corporation sole) established, constituted or appointed by or under any Central, State or Provincial Act which provides for the administration of any one or more of the following, that is to say, public religious or charitable trusts or endowments (including maths, temples, gurdwaras, wakfs, churches, synagogues, agiaries or other places of public religious worship) or societies for religious or charitable purposes registered as such under the Societies Registration Act, 1860 (21 of 1860), or any other law for the time being in force:

Provided that nothing in this clause shall be construed to exempt from tax the income of any trust, endowment or society referred to therein;]

48[(23BBB) any income of the European Economic Community derived in India by way of interest, dividends or capital gains from investments made out of its funds under such scheme49 as the Central Government may, by notification in the Official Gazette, specify in this behalf.

Explanation.—For the purposes of this clause, “European Economic Community” means the European Economic Community established by the Treaty of Rome of 25th March, 1957;]

50[(23BBC) any income of the SAARC Fund for Regional Projects set up by Colombo Declaration issued on the 21st day of December, 1991 by the Heads of State or Government of the Member Countries of South Asian Association for Regional Cooperation established on the 8th day of December, 1985 by the Charter of the South Asian Association for Regional Cooperation;]

51[(23BBD) any income of the Secretariat of the Asian Organisation of the Supreme Audit Institutions registered as “ASOSAI-SECRETARIAT” under the Societies Registration Act, 1860 (21 of 1860) for 52[ten previous years relevant to the assessment years beginning on the 1st day of April, 2001 and ending on the 31st day of March, 2011];

(23BBE) any income of the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999);]

53[(23BBF) any income of the North-Eastern Development Finance Corporation Limited, being a company formed and registered under the Companies Act, 1956 (1 of 1956) :

Provided that in computing the total income of the North-Eastern Development Finance Corporation Limited, the amount to the extent of—

(i)  twenty per cent of the total income for assessment year beginning on the 1st day of April, 2006;

(ii)  forty per cent of the total income for assessment year beginning on the 1st day of April, 2007;

(iii)  sixty per cent of the total income for assessment year beginning on the 1st day of April, 2008;

(iv)  eighty per cent of the total income for assessment year beginning on the 1st day of April, 2009;

(v)  one hundred per cent of the total income for assessment year beginning on the 1st day of April, 2010 and any subsequent assessment year or years,

shall be included in such total income;]

54[(23BBG) any income of the Central Electricity Regulatory Commission constituted under sub-section (1) of section 76 of the Electricity Act, 2003 (36 of 2003);]

55[(23BBH) any income of the Prasar Bharati (Broadcasting Corporation of India) established under sub-section (1) of section 3 of the Prasar Bharati (Broadcasting Corporation of India) Act, 1990 (25 of 1990);]

56[57(23C) any income58 received by any person on behalf of—

(i)  the Prime Minister’s National Relief Fund; or

(ii)  the Prime Minister’s Fund (Promotion of Folk Art); or

(iii)  the Prime Minister’s Aid to Students Fund; 59[or]

60[(iiia)  the National Foundation for Communal Harmony; or]

61[(iiiab)  any university or other educational institution62 existing62 solely62 for educational purposes and not for purposes of profit, and which is wholly or substantially financed by the Government; or

(iiiac)  any hospital or other institution for the reception and treatment of persons suffering from illness or mental defectiveness or for the reception and treatment of persons during convalescence or of persons requiring medical attention or rehabilitation, existing solely for philanthropic purposes and not for purposes of profit, and which is wholly or substantially financed by the Government; or

(iiiad)  any university or other educational institution62 existing62 solely62 for educational purposes and not for purposes of profit if the aggregate annual receipts of such university or educational institution do not exceed the amount of annual receipts as may be prescribed63; or

(iiiae)  any hospital or other institution for the reception and treatment of persons suffering from illness or mental defectiveness or for the reception and treatment of persons during convalescence or of persons requiring medical attention or rehabilitation, existing solely for philanthropic purposes and not for purposes of profit, if the aggregate annual receipts of such hospital or institution do not exceed the amount of annual receipts as may be prescribed63; or]

64[(iv65any other fund or institution established for charitable purposes 66[which may be approved by the prescribed authority67], having regard to the objects of the fund or institution and its importance throughout India or throughout any State or States; or

(v)  68any trust (including any other legal obligation) or institution wholly for public religious purposes or wholly for public religious and charitable purposes, 69[which may be approved by the prescribed authority70], having regard to the manner in which the affairs of the trust or institution are administered and supervised for ensuring that the income accruing thereto is properly applied for the objects thereof;

71[(vi) any university or other educational institution72 existing72 solely72 for educational purposes and not for purposes of profit, other than those mentioned in sub-clause (iiiab) or sub-clause (iiiad) and which may be approved73 by the prescribed authority74; or

(via)  any hospital or other institution for the reception and treatment of persons suffering from illness or mental defectiveness or for the reception and treatment of persons during convalescence or of persons requiring medical attention or rehabilitation, existing solely for philanthropic purposes and not for purposes of profit, other than those mentioned in sub-clause (iiiac) or sub-clause (iiiae) and which may be approved75 by the prescribed autho-rity76 :]

Provided that the fund or trust or institution 77[or any university or other educational institution78 or any hospital or other medical institution] referred to in sub-clause (iv) or sub-clause (v77[or sub-clause (vi) or sub-clause (via)] shall make an application in the prescribed form79 and manner to the prescribed authority80 for the purpose of grant of the exemption, or continuance thereof, under sub-clause (iv) or sub-clause (v81[or sub-clause (vi) or sub-clause (via)]:

82[Provided further that the prescribed authority, before approving any fund or trust or institution or any university or other educational institution or any hospital or other medical institution, under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via), may call for such documents (including audited annual accounts) or information from the fund or trust or institution or any university or other educational institution or any hospital or other medical institution, as the case may be, as it thinks necessary in order to satisfy itself about the genuineness of the activities of such fund or trust or institution or any university or other educational institution or any hospital or other medical institution, as the case may be, and the prescribed authority may also make such inquiries as it deems necessary in this behalf:]

Provided also that the fund or trust or institution 83[or any university or other educational institution84 or any hospital or other medical institution] referred to in sub-clause (iv) or sub-clause (v83[or sub-clause (vi) or sub-clause (via)]—

85[(a)   applies its income, or accumulates it for application, wholly and exclusively to the objects for which it is established and in a case where more than fifteen per cent of its income is accumulated on or after the 1st day of April, 2002, the period of the accumulation of the amount exceeding fifteen per cent of its income shall in no case exceed five years; and]

86[(b)  does not invest or deposit its funds, other than—

(i)  any assets held by the fund, trust or institution 87[or any university or other educational institution88 or any hospital or other medical institution] where such assets form part of the corpus of the fund, trust or institution 89[or any university or other educational institution or any hospital or other medical institution] as on the 1st day of June, 1973;

90[(ia)  any asset, being equity shares of a public company, held by any university or other educational institution or any hospital or other medical institution where such assets form part of the corpus of any university or other educational institution or any hospital or other medical institution as on the 1st day of June, 1998;]

(ii)  any assets (being debentures issued by, or on behalf of, any company or corporation), acquired by the fund, trust or institution 91[or any university or other educational institution92 or any hospital or other medical institution] before the 1st day of March, 1983;

(iii)  any accretion to the shares, forming part of the corpus mentioned in sub-clause (i93[and sub-clause (ia)], by way of bonus shares allotted to the fund, trust or institution 91[or any university or other educational institution or any hospital or other medical institution] ;

(iv)  voluntary contributions received and maintained in the form of jewellery, furniture or any other article as the Board may, by notification in the Official Gazette, specify,

for any period during the previous year otherwise than in any one or more of the forms or modes specified in sub-section (5) of section 11:]

Provided also that the exemption under sub-clause (iv) or sub-clause (v) shall not be denied in relation to any funds invested or deposited before the 1st day of April, 1989, otherwise than in any one or more of the forms or modes specified in sub-section (5) of section 11 if such funds do not continue to remain so invested or deposited after the 30th day of March, 94[1993] :

95[Provided also that the exemption under sub-clause (vi) or sub-clause (via) shall not be denied in relation to any funds invested or deposited before the 1st day of June, 1998, otherwise than in any one or more of the forms or modes specified in sub-section (5) of section 11 if such funds do not continue to remain so invested or deposited after the 30th day of March, 2001 :]

96[Provided also that the exemption under sub-clause (iv) or sub-clause (v95[or sub-clause (vi) or sub-clause (via)] shall not be denied in relation to voluntary contribution, other than voluntary contribution in cash or voluntary contribution of the nature referred to in clause (b) of the third proviso to this sub-clause, subject to the condition that such voluntary contribution is not held by the trust or institution 97[or any university or other educational institution or any hospital or other medical institution], otherwise than in any one or more of the forms or modes specified in sub-section (5) of section 11, after the expiry of one year from the end of the previous year in which such asset is acquired or the 31st day of March, 1992, whichever is later:]

Provided also that nothing contained in sub-clause (iv) or sub-clause (v98[or sub-clause (vi) or sub-clause (via)] shall apply in relation to any income of the fund or trust or institution 98[or any university or other educational institution or any hospital or other medical institution], being profits and gains of business, unless the business is incidental to the attainment of its objectives and separate books of account are maintained by it in respect of such business:

Provided also that any 99[notification issued by the Central Government under sub-clause (iv) or sub-clause (v), before the date on which the Taxation Laws (Amendment) Bill, 2006 receives the assent of the President*, shall, at any one time1, have effect for such assessment year or years, not exceeding three assessment years] (including an assessment year or years commencing before the date on which such notification is issued) as may be specified in the notification:]

2[Provided also that where an application under the first proviso is made on or after the date on which the Taxation Laws (Amendment) Bill, 2006 receives the assent of the President,* every notification under sub-clause (iv) or sub-clause (v) shall be issued or approval under 3[sub-clause (iv) or sub-clause (v) or] sub-clause (vi) or sub-clause (via) shall be granted or an order rejecting the application shall be passed within the period of twelve months from the end of the month in which such application was received:

Provided also that where the total income, of the fund or trust or institution or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via), without giving effect to the provisions of the said sub-clauses, exceeds the maximum amount which is not chargeable to tax in any previous year, such trust or institution or any university or other educational institution or any hospital or other medical institution shall get its accounts audited in respect of that year by an accountant as defined in theExplanation below sub-section (2) of section 288 and furnish along with the return of income for the relevant assessment year, the report of such audit in the prescribed form4 duly signed and verified by such accountant and setting forth such particulars as may be prescribed:]

5[Provided also that any amount of donation received by the fund or institution in terms of clause (d) of sub-section (2) of section 80G 6[in respect of which accounts of income and expenditure have not been rendered to the authority prescribed under clause (v) of sub-section (5C) of that section, in the manner specified in that clause, or] which has been utilised for purposes other than providing relief to the victims of earthquake in Gujarat or which remains unutilised in terms of sub-section (5C) of section 80G and not transferred to the Prime Minister’s National Relief Fund on or before the 31st day of March, 7[2004] shall be deemed to be the income of the previous year and shall accordingly be charged to tax:]

8[***]

9[Provided also that where the fund or trust or institution or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) does not apply its income during the year of receipt and accumulates it, any payment or credit out of such accumulation to any trust or institution registered under section 12AA or to any fund or trust or institution or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) shall not be treated as application of income to the objects for which such fund or trust or institution or university or educational institution or hospital or other medical institution, as the case may be, is established :

Provided also that where the fund or institution referred to in sub-clause (iv) or trust or institution referred to in sub-clause (v) is notified by the Central Government 10[or is approved by the prescribed authority, as the case may be,] or any university or other educational institution referred to in sub-clause (vi) or any hospital or other medical institution referred to in sub-clause (via), is approved by the prescribed authority and subsequently that Government or the prescribed authority is satisfied that—

(i)  such fund or institution or trust or any university or other educational institution or any hospital or other medical institution has not—

(A) applied its income in accordance with the provisions contained in clause (a) of the third proviso; or

(B) invested or deposited its funds in accordance with the provisions contained in clause (b) of the third proviso; or

(ii)  the activities of such fund or institution or trust or any university or other educational institution or any hospital or other medical institution—

(A) are not genuine; or

(B) are not being carried out in accordance with all or any of the conditions subject to which it was notified or approved,

it may, at any time after giving a reasonable opportunity of showing cause against the proposed action to the concerned fund or institution or trust or any university or other educational institution or any hospital or other medical institution, rescind the notification or, by order, withdraw the approval, as the case may be, and forward a copy of the order rescinding the notification or withdrawing the approval to such fund or institution or trust or any university or other educational institution or any hospital or other medical institution and to the Assessing Officer:]

11[Provided also that in case the fund or trust or institution or any university or other educational institution or any hospital or other medical institution referred to in the first proviso makes an application on or after the 1st day of June, 2006 for the purposes of grant of exemption or continuance thereof, such application shall be 12[made on or before the 30th day of September of the relevant assessment year] from which the exemption is sought :]

13[Provided also that any anonymous donation referred to in section 115BBC on which tax is payable in accordance with the provisions of the said section shall be included in the total income :]

14[Provided also that all pending applications, on which no notification has been issued under sub-clause (iv) or sub-clause (v) before the 1st day of June, 2007, shall stand transferred on that day to the prescribed authority and the prescribed authority may proceed with such applications under those sub-clauses from the stage at which they were on that day:]

15[Provided also that the income of a trust or institution referred to in sub-clause (iv) or sub-clause (v) shall be included in its total income of the previous year if the provisions of the first proviso to clause (15) of section 2 become applicable to such trust or institution in the said previous year, whether or not any approval granted or notification issued in respect of such trust or institution has been withdrawn or rescinded;]

16[(23D17[18[19[subject to the provisions of Chapter XII-E, any income of]—]

(i)  a Mutual Fund registered under the Securities and Exchange Board of India Act, 1992 (15 of 1992) or regulations made thereunder;

(ii)  such other Mutual Fund set up by a public sector bank or a public financial institution or authorised by the Reserve Bank of India and subject to such conditions as the Central Government may, by notification20 in the Official Gazette, specify in this behalf.]

Explanation.—For the purposes of this clause,—

(a)  the expression “public sector bank” means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), a corres-ponding new Bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Under-takings) Act, 1970 (5 of 1970), or under section 3 of the Banking Companies (Acquisition and Transfer of Under-takings) Act, 1980 (40 of 1980) 21[and a bank included in the category “other public sector banks” by the Reserve Bank of India];

(b)  the expression “public financial institution” shall have the meaning assigned to it in section 4A of the Companies Act, 1956 (1 of 1956)22;]

23[(c)  the expression 24“Securities and Exchange Board of India” shall have the meaning assigned to it in clause (a) of sub-section (1) of section 2 of the Securities and Exchange Board of India Act, 1992 (15 of 1992);]

The following clause (23DA) shall be inserted after clause (23D) of section 10 by the Finance Act, 2013, w.e.f. 1-4-2014 :

(23DA)  any income of a securitisation trust from the activity of securitisation.

Explanation.—For the purposes of this clause,—

(a) “securitisation” shall have the same meaning as assigned to it,—

(i)  in clause (r) of sub-regulation (1) of regulation 224a 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 (15 of 1992) and the Securities Contracts (Regulation) Act, 1956 (42 of 1956); or

(ii)  under the guidelines on securitisation of standard assets issued by the Reserve Bank of India;

(b) “securitisation trust” shall have the meaning assigned to it in the Explanation below section 115TC;

    (23E) 25[Omitted by the Finance Act, 2002, w.e.f. 1-4-2003;]

26[(23EA) any income 27[, by way of contributions received from recognised stock exchanges and the members thereof,] of such Investor Protection Fund set up by recognised stock exchanges in India, either jointly or separately, as the Central Government may, by notification28 in the Official Gazette, specify in this behalf:

Provided that where any amount standing to the credit of the Fund and not charged to income-tax during any previous year is shared, either wholly or in part, with a recognised stock exchange, the whole of the amount so shared shall be deemed to be the income of the previous year in which such amount is so shared and shall accordingly be chargeable to income-tax;]

29[(23EB) any income of the Credit Guarantee Fund Trust for Small 30[***] Industries, being a trust created by the Government of India and the Small Industries Development Bank of India established under sub-section (1) of section 3 of the Small Industries Development Bank of India Act, 1989 (39 of 1989), for five previous years relevant to the assessment years beginning on the 1st day of April, 2002 and ending on the 31st day of March, 2007;]

31[(23EC) any income, by way of contributions received from commodity exchanges and the members thereof, of such Investor Protection Fund set up by commodity exchanges in India, either jointly or separately, as the Central Government may, by notification in the Official Gazette, specify in this behalf:

Provided that where any amount standing to the credit of the said Fund and not charged to income-tax during any previous year is shared, either wholly or in part, with a commodity exchange, the whole of the amount so shared shall be deemed to be the income of the previous year in which such amount is so shared and shall accordingly be chargeable to income-tax.

Explanation.—For the purposes of this clause, “commodity exchange” shall mean a “registered association” as defined in clause (jj) of section 2 of the Forward Contracts (Regulation) Act, 1952 (74 of 1952)32;]

The following clause (23ED) shall be inserted after clause (23EC) of section 10 by the Finance Act, 2013, w.e.f. 1-4-2014 :

(23ED) any income, by way of contributions received from a depository, of such Investor Protection Fund set up in accordance with the regulations by a depository as the Central Government may, by notification in the Official Gazette, specify in this behalf:

Provided that where any amount standing to the credit of the Fund and not charged to income-tax during any previous year is shared, either wholly or in part with a depository, the whole of the amount so shared shall be deemed to be the income of the previous year in which such amount is so shared and shall, accordingly, be chargeable to income-tax.

Explanation.—For the purposes of this clause,—

(i)  “depository” shall have the same meaning as assigned to it in clause (e) of sub-section (1) of section 232a of the Depositories Act, 1996 (22 of 1996);

(ii)  “regulations” means the regulations made under the Securities and Exchange Board of India Act, 1992 (15 of 1992) and the Depositories Act, 1996 (22 of 1996);

33[(23F) any income by way of dividends or long-term capital gains of a venture capital fund or a venture capital company from investments made by way of equity shares in a venture capital undertaking :

Provided that such venture capital fund or venture capital company is approved for the purposes of this clause by the prescribed autho-rity34 in accordance with the rules35 made in this behalf and satisfies the prescribed conditions :

Provided further that any approval by the prescribed authority shall, at any one time, have effect for such assessment year or years, not exceeding three assessment years, as may be specified in the order of approval :

36[Provided also that nothing contained in this clause shall apply in respect of any investment made after the 31st day of March, 1999.]

37[* * *]

37[* * *]

Explanation.—For the purposes of this clause,—

(a)  “venture capital fund” means such fund, operating under a trust deed registered under the provisions of the Registration Act, 1908 (16 of 1908), established to raise monies by the trustees for investments mainly by way of acquiring equity shares of a venture capital undertaking in accordance with the prescribed guidelines;

(b)  “venture capital company” means such company as has made investments by way of acquiring equity shares of venture capital undertakings in accordance with the prescribed guidelines;

38[(c)  “venture capital undertaking” means such domestic company whose shares are not listed in a recognised stock exchange in India and which is engaged in the business of generation or generation and distribution of electricity or any other form of power or engaged in the business of providing telecommunication services or in the business of developing, maintaining and operating any infrastructure facility or engaged in the manufacture or production of such articles or things (including computer software) as may be notified39 by the Central Government in this behalf; and

(d)  “infrastructure facility” means a road, highway, bridge, airport, port, rail system, a water supply project, irrigation project, sanitation and sewerage system or any other public facility of a similar nature as may be notified by the Board in this behalf in the Official Gazette and which fulfils the conditions specified in sub-section (4A) of section 80-IA;]

40[(23FA) any income by way of dividends 41[, other than dividends referred to in section 115-O], or long-term capital gains of a venture capital fund or a venture capital company from investments made by way of equity shares in a venture capital undertaking :

Provided that such venture capital fund or venture capital company is approved, for the purposes of this clause, by the Central Government on an application made to it in accordance with the rules42 made in this behalf and which satisfies the prescribed conditions :

Provided further that any approval by the Central Government shall, at any one time, have effect for such assessment year or years, not exceeding three assessment years, as may be specified in the order of approval :

43[Provided also that nothing contained in this clause shall apply in respect of any investment made after the 31st day of March, 2000.]

Explanation.—For the purposes of this clause,—

(a)  “venture capital fund” means such fund, operating under a trust deed registered under the provisions of the Registration Act, 1908 (16 of 1908), established to raise monies by the trustees for investments mainly by way of acquiring equity shares of a venture capital undertaking in accordance with the prescribed guidelines;

(b)  “venture capital company” means such company as has made investments by way of acquiring equity shares of venture capital undertakings in accordance with the prescribed guidelines; and

(c)  “venture capital undertaking” means such domestic company whose shares are not listed in a recognised stock exchange in India and which is engaged in the—

(i)  business of—

(A) software;

(B) information technology;

(C) production of basic drugs in the pharmaceutical sector;

(D) bio-technology;

(E) agriculture and allied sectors; or

(F) such other sectors as may be notified44 by the Central Government in this behalf; or

(ii)  production or manufacture of any article or substance for which patent has been granted to the National Research Laboratory or any other scientific research institution approved by the Department of Science and Technology;]

45[(23FB) any income of a venture capital company or venture capital fund 46[from investment] in a venture capital undertaking.

47[Explanation.—For the purposes of this clause,—

(a) “venture capital company” means a company which—

(A)   has been granted a certificate of registration, before the 21st day of May, 2012, as a Venture Capital Fund and is regulated under the Securities and Exchange Board of India (Venture Capital Funds) Regulations, 1996 (hereinafter referred to as the Venture Capital Funds Regulations) made under the Securities and Exchange Board of India Act, 1992 (15 of 1992); or

(B)  has been granted a certificate of registration as Venture Capital Fund as a sub-category of Category I Alternative Investment Fund and is regulated under the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 (hereinafter referred to as the Alternative Investment Funds Regulations) made under the Securities and Exchange Board of India Act, 1992 (15 of 1992), and which fulfils the following conditions, namely:—

 (i)  it is not listed on a recognised stock exchange;

 (ii) it has invested not less than two-thirds of its investible funds in unlisted equity shares or equity linked instruments of venture capital undertaking; and

(iii) it has not invested in any venture capital undertaking in which its director or a substantial shareholder (being a beneficial owner of equity shares exceeding ten per cent of its equity share capital) holds, either individually or collectively, equity shares in excess of fifteen per cent of the paid-up equity share capital of such venture capital undertaking;

(b) “venture capital fund” means a fund—

(A)   operating under a trust deed registered under the provisions of the Registration Act, 1908 (16 of 1908), which—

(I)  has been granted a certificate of registration, before the 21st day of May, 2012, as a Venture Capital Fund and is regulated under the Venture Capital Funds Regulations; or

(II) has been granted a certificate of registration as Venture Capital Fund as a sub-category of Category I Alternative Investment Fund under the Alternative Investment Funds Regulations and which fulfils the following conditions, namely:—

(i)  it has invested not less than two-thirds of its investible funds in unlisted equity shares or equity linked instruments of venture capital undertaking;

(ii)  it has not invested in any venture capital undertaking in which its trustee or the settler holds, either individually or collectively, equity shares in excess of fifteen per cent of the paid-up equity share capital of such venture capital undertaking; and

(iii)  the units, if any, issued by it are not listed in any recognised stock exchange; or

(B)  operating as a venture capital scheme made by the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963);

(c) “venture capital undertaking” means—

(i)  a venture capital undertaking as defined in clause (n) of regulation 2 of the Venture Capital Funds Regulations48-49; or

(ii) a venture capital undertaking as defined in clause (aa) of sub-regulation (1) of regulation 2 of the Alternative Investment Funds Regulations48-49;]

50[***]

(23G51[Omitted by the Finance Act, 2006, w.e.f. 1-4-2007;]

52[53(24) any income chargeable under the heads “Income from house property” and “Income from other sources” of—

(a)  a registered union within the meaning of the Trade Unions Act, 1926 (16 of 1926), formed primarily for the purpose of regulating the relations between workmen and employers or between workmen and workmen;

(b)  an association of registered unions referred to in sub-clause (a);]

(25) (i)  interest on securities which are held by, or are the property of, any provident fund to which the Provident Funds Act, 1925 (19 of 1925), applies, and any capital gains of the fund arising from the sale, exchange or transfer of such securities;

(ii)  any income received by the trustees on behalf of a recognised provident fund;

(iii)  any income received by the trustees on behalf of an approved superannuation fund;

54[(iv) any income received by the trustees on behalf of an approved gratuity fund;]

55[(v) any income received—

(a)  by the Board of Trustees constituted under the Coal Mines Provident Funds and Miscellaneous Provisions Act, 1948 (46 of 1948), on behalf of the Deposit-linked Insurance Fund established under section 3G of that Act; or

(b)  by the Board of Trustees constituted under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952), on behalf of the Deposit-linked Insurance Fund established under section 6C of that Act;]

56[(25A) any income of the Employees’ State Insurance Fund set up under the provisions of the Employees’ State Insurance Act, 1948 (34 of 1948);]

57[(2658in the case of a member of a 59Scheduled Tribe as defined in clause (25) of article 366 of the Constitution, residing60 in any area specified60 in Part I or Part II of the Table appended to paragraph 20 of the Sixth Schedule to the Constitution or in the 61[States of Arunachal Pradesh, Manipur, Mizoram, Nagaland and Tripura] or in the areas covered by notification No. TAD/R/35/50/109, dated the 23rd February, 1951, issued by the Governor of Assam under the proviso to sub-paragraph (3) of the said paragraph 20 [as it stood immediately before the commencement of the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971)] 62[or in the Ladakh region of the State of Jammu and Kashmir], any income which accrues or arises to him,—

(a)  from any source in the areas 63[or States aforesaid], or

(b)  by way of dividend or interest on securities;]

64[(26A) any income accruing or arising to any person 65[* * *] from any source in the district of Ladakh or outside India in any previous year relevant to any assessment year commencing before the 1st day of April, 66[1989], where such person is resident in the said district in that previous year :

Provided that this clause shall not apply in the case of any such person unless he was resident in that district in the previous year relevant to the assessment year commencing on the 1st day of April, 1962.

67[Explanation 1].—For the purposes of this clause, a person shall be deemed to be resident in the district of Ladakh if he fulfils the requirements of sub-section (1)68 or sub-section (2) or sub-section (3) or sub-section (4) of section 6, as the case may be, subject to the modifications that—

(i)  references in those sub-sections to India shall be construed as references to the said district; and

(ii)  in clause (i) of sub-section (3), reference to Indian company shall be construed as reference to a company formed and registered under any law for the time being in force in the State of Jammu and Kashmir and having its registered office in that district in that year.]

69[Explanation 2.—In this clause, references to the district of Ladakh shall be construed as references to the areas comprised in the said district on the 30th day of June, 1979;]

(26AA70[* * *]

71[(26AAA72in case of an individual, being a Sikkimese, any income which accrues or arises to him—

(a)  from any source in the State of Sikkim; or

(b)  by way of dividend or interest on securities:

Provided that nothing contained in this clause shall apply to a Sikkimese woman who, on or after the 1st day of April, 2008, marries an individual who is not a Sikkimese.

Explanation.—For the purposes of this clause, “Sikkimese” shall mean—

(i)  an individual, whose name is recorded in the register maintained under the Sikkim Subjects Regulation, 1961 read with the Sikkim Subject Rules, 1961 (hereinafter referred to as the “Register of Sikkim Subjects”), immediately before the 26th day of April, 1975; or

(ii)  an individual, whose name is included in the Register of Sikkim Subjects by virtue of the Government of India Order No. 26030/36/90-I.C.I., dated the 7th August, 1990 and Order of even number dated the 8th April, 1991; or

(iii)  any other individual, whose name does not appear in the Register of Sikkim Subjects, but it is established beyond doubt that the name of such individual’s father or husband or paternal grand-father or brother from the same father has been recorded in that register;]

 [(26AAB) any income of an agricultural produce market committee or board constituted under any law for the time being in force for the purpose of regulating the marketing of agricultural produce;]

 [(26B) any income of a corporation established by a Central, State or Provincial Act or of any other body, institution or association (being a body, institution or association wholly financed by Government) where such corporation or other body or institution or association has been established or formed for promoting the interests of the  [members of the Scheduled Castes or the Scheduled Tribes or backward classes or of any two or all of them].

 [Explanation.—For the purposes of this clause,—

(a)   Scheduled Castes” and “Scheduled Tribes” shall have the meanings respectively assigned to them in clauses (24) and (25) of article 366 of the Constitution;

(b)  “backward classes” means such classes of citizens, other than the Scheduled Castes and the Scheduled Tribes, as may be notified—

(i)  by the Central Government; or

(ii)  by any State Government,

as the case may be, from time to time;]

 [(26BB) any income of a corporation established by the Central Government or any State Government for promoting the interests of the members of a minority community.

Explanation.—For the purposes of this clause, “minority community” means a community notified as such by the Central Government in the Official Gazette in this behalf;]

 [(26BBB) any income of a corporation established by a Central, State or Provincial Act for the welfare and economic upliftment of ex-servicemen being the citizens of India.

Explanation.—For the purposes of this clause, “ex-serviceman” means a person who has served in any rank, whether as combatant or non-combatant, in the armed forces of the Union or armed forces of the Indian States before the commencement of the Constitution (but excluding the Assam Rifles, Defence Security Corps, General Reserve Engineering Force, Lok Sahayak Sena, Jammu and Kashmir Militia and Territorial Army) for a continuous period of not less than six months after attestation and has been released, otherwise than by way of dismissal or discharge on account of misconduct or inefficiency, and in the case of a deceased or incapacitated ex-serviceman includes his wife, children, father, mother, minor brother, widowed daughter and widowed sister, wholly dependant upon such ex-serviceman immediately before his death or incapacitation;]

 [(27) any income of a co-operative society formed for promoting the interests of the members of either the Scheduled Castes or Scheduled Tribes or both referred to in clause (26B) :

Provided that the membership of the co-operative society consists of only other co-operative societies formed for similar purposes and the finances of the society are provided by the Government and such other societies;]

(28)  [* * *]

(29)  [Omitted by the Finance Act, 2002, w.e.f. 1-4-2003;]

 [(29A) any income accruing or arising to—

(a)  the Coffee Board constituted under section 4 of the Coffee Act, 1942 (7 of 1942) in any previous year relevant to any assessment year commencing on or after the 1st day of April, 1962 or the previous year in which such Board was constituted, whichever is later;

(b)  the Rubber Board constituted under sub-section (1) of section 4 of the Rubber Board Act, 1947 (24 of 1947) in any previous year relevant to any assessment year commencing on or after the 1st day of April, 1962 or the previous year in which such Board was constituted, whichever is later;

(c)  the Tea Board established under section 4 of the Tea Act, 1953 (29 of 1953) in any previous year relevant to any assessment year commencing on or after the 1st day of April, 1962 or the previous year in which such Board was constituted, whichever is later;

(d)  the Tobacco Board constituted under the Tobacco Board Act, 1975 (4 of 1975) in any previous year relevant to any assessment year commencing on or after the 1st day of April, 1975 or the previous year in which such Board was constituted, whichever is later;

(e)  the Marine Products Export Development Authority established under section 4 of the Marine Products Export Development Authority Act, 1972 (13 of 1972) in any previous year relevant to any assessment year commencing on or after the 1st day of April, 1972 or the previous year in which such Authority was constituted, whichever is later;

(f)  the Agricultural and Processed Food Products Export Development Authority established under section 4 of the Agricultural and Processed Food Products Export Development Act, 1985 (2 of 1986) in any previous year relevant to any assessment year commencing on or after the 1st day of April, 1985 or the previous year in which such Authority was constituted, whichever is later;

(g)  the Spices Board constituted under sub-section (1) of section 3 of the Spices Board Act, 1986 (10 of 1986) in any previous year relevant to any assessment year commencing on or after the 1st day of April, 1986 or the previous year in which such Board was constituted, whichever is later;]

 [(h)  the Coir Board established under section 4 of the Coir Industry Act, 1953 (45 of 1953);]

 [(30)  in the case of an assessee who carries on the business of growing and manufacturing tea in India, the amount of any subsidy received from or through the Tea Board under any such schemefor replantation or replacement of tea bushes  [or for rejuvenation or consolidation of areas used for cultivation of tea] as the Central Government may, by notification in the Official Gazette, specify:

Provided that the assessee furnishes to the  [Assessing] Officer, along with his return of income for the assessment year concerned or within such further time as the  [Assessing] Officer may allow, a certificate from the Tea Board as to the amount of such subsidy paid to the assessee during the previous year.

Explanation.—In this clause, “Tea Board” means the Tea Board established under section 4 of the Tea Act, 1953 (29 of 1953);]

 [(31)  in the case of an assessee who carries on the business of growing and manufacturing rubber, coffee, cardamom or such other commodity in India, as the Central Government may, by notification in the Official Gazette, specify in this behalf, the amount of any subsidy received from or through the concerned Board under any such scheme for replantation or replacement of rubber plants, coffee plants, cardamom plants or plants for the growing of such other commodity or for rejuvenation or consolidation of areas used for cultivation of rubber, coffee, cardamom or such other commodity as the Central Government may, by notification in the Official Gazette, specify:

Provided that the assessee furnishes to the Assessing Officer, along with his return of income94 for the assessment year concerned or within such further time as the Assessing Officer may allow, a certificate from the concerned Board, as to the amount of such subsidy paid to the assessee during the previous year.

Explanation.—In this clause, “concerned Board” means,—

(i)  in relation to rubber, the Rubber Board constituted under section 4 of the Rubber Act, 1947 (24 of 1947),

(ii)  in relation to coffee, the Coffee Board constituted under section 4 of the Coffee Act, 1942 (7 of 1942),

(iii)  in relation to cardamom, the Spices Board constituted under section 3 of the Spices Board Act, 1986 (10 of 1986),

(iv)  in relation to any other commodity specified under this clause, any Board or other authority established under any law for the time being in force which the Central Government may, by notification in the Official Gazette, specify in this behalf;]

 [(32)  in the case of an assessee referred to in sub-section (1A) of section 64, any income includible in his total income under that sub-section, to the extent such income does not exceed one thousand five hundred rupees in respect of each minor child whose income is so includible;]

 [(33) any income arising from the transfer of a capital asset, being a unit of the Unit Scheme, 1964 referred to in Schedule I to the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002)97 and where the transfer of such asset takes place on or after the 1st day of April, 2002;]

 [(34) any income by way of dividends referred to in section 115-O;

99[***]

The following clause (34A) shall be inserted after clause (34) of section 10 by the Finance Act, 2013, w.e.f. 1-4-2014 :

(34A) any income arising to an assessee, being a shareholder, on account of buy back of shares (not being listed on a recognised stock exchange) by the company as referred to in section 115QA;

(35)  any income by way of,—

(a)  income received in respect of the units of a Mutual Fund specified under clause (23D); or

(b)  income received in respect of units from the Administrator of the specified undertaking; or

(c)  income received in respect of units from the specified company:

Provided that this clause shall not apply to any income arising from transfer of units of the Administrator of the specified undertaking or of the specified company or of a mutual fund, as the case may be.

Explanation.—For the purposes of this clause,—

(a)  “Administrator” means the Administrator as referred to in clause (a) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002)1;

(b)  “specified company” means a company as referred to in clause (h) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002)1;

The following clause (35A) shall be inserted after clause (35) of section 10 by the Finance Act, 2013, w.e.f. 1-4-2014 :

(35A) any income by way of distributed income referred to in section 115TA received from a securitisation trust by any person being an investor of the said trust.

Explanation.—For the purposes of this clause, the expressions “investor” and “securitisation trust” shall have the meanings respectively assigned to them in the Explanation below section 115TC;

(36)  any income arising from the transfer of a long-term capital asset, being an eligible equity share in a company purchased on or after the 1st day of March, 2003 and before the 1st day of March, 2004 and held for a period of twelve months or more.

Explanation.—For the purposes of this clause, “eligible equity share” means,—

(i)  any equity share in a company being a constituent of BSE-500 Index of the Stock Exchange, Mumbai as on the 1st day of March, 2003 and the transactions of purchase and sale of such equity share are entered into on a recognised stock exchange in India;

(ii)  any equity share in a company allotted through a public issue on or after the 1st day of March, 2003 and listed in a recognised stock exchange in India before the 1st day of March, 2004 and the transaction of sale of such share is entered into on a recognised stock exchange in India;]

2[(37)  in the case of an assessee, being an individual or a Hindu undivided family, any income chargeable under the head “Capital gains” arising from the transfer of agricultural land, where—

(i)  such land is situate in any area referred to in item (a) or item (b) of sub-clause (iii) of clause (14) of section 2;

(ii)  such land, during the period of two years immediately preceding the date of transfer, was being used for agricultural purposes by such Hindu undivided family or individual or a parent of his;

(iii)  such transfer is by way of compulsory acquisition under any law, or a transfer the consideration for which is determined or approved by the Central Government or the Reserve Bank of India;

(iv)  such income has arisen from the compensation or consideration for such transfer received by such assessee on or after the 1st day of April, 2004.

Explanation.—For the purposes of this clause, the expression “compensation or consideration” includes the compensation or consideration enhanced or further enhanced by any court, Tribunal or other authority;

(38)  any income arising from the transfer of a long-term capital asset, being an equity share in a company or a unit of an equity oriented fund where—

(a)  the transaction of sale of such equity share or unit is entered into on or after the date on which Chapter VII of the Finance (No. 2) Act, 2004 comes into force3; and

(b)  such transaction is chargeable to securities transaction tax under that Chapter :

4[Provided that the income by way of long-term capital gain of a company shall be taken into account in computing the book profit and income-tax payable under section 115JB.]

Explanation.—For the purposes of this clause, “equity oriented fund” means a fund—

(i)  where the investible funds are invested by way of equity shares in domestic companies to the extent of more than 5[sixty-five] per cent of the total proceeds of such fund; and

(ii)  which has been set up under a scheme of a Mutual Fund specified under clause (23D) :

Provided that the percentage of equity shareholding of the fund shall be computed with reference to the annual average of the monthly averages of the opening and closing figures;]

6[(39) any specified income, arising from any international sporting event held in India, to the person or persons notified7 by the Central Government in the Official Gazette, if such international sporting event—

(a)  is approved by the international body regulating the international sport relating to such event;

(b)  has participation by more than two countries;

(c)  is notified7 by the Central Government in the Official Gazette for the purposes of this clause.

Explanation.—For the purposes of this clause, “the specified income” means the income, of the nature and to the extent, arising from the international sporting event, which the Central Government may notify7 in this behalf;

(40)  any income of any subsidiary company by way of grant or otherwise received from an Indian company, being its holding company engaged in the business of generation or transmission or distribution of power if receipt of such income is for settlement of dues in connection with reconstruction or revival of an existing business of power generation:

Provided that the provisions of this clause shall apply if reconstruction or revival of any existing business of power generation is by way of transfer of such business to the Indian company notified under sub-clause (a) of clause (v) of sub-section (4) of section 80-IA;

(41)  any income arising from transfer of a capital asset, being an asset of an undertaking engaged in the business of generation or transmission or distribution of power where such transfer is effected on or before the 31st day of March, 2006, to the Indian company notified under sub-clause (a) of clause (v) of sub-section (4) of section 80-IA;]

8[(42)  any specified income arising to a body or authority which—

(a)  has been established or constituted or appointed under a treaty or an agreement entered into by the Central Government with two or more countries or a convention signed by the Central Government;

(b)  is established or constituted or appointed not for the purposes of profit;

(c)  is notified by the Central Government in the Official Gazette9 for the purposes of this clause.

Explanation.—For the purposes of this clause, “specified income” means the income, of the nature and to the extent, arising to the body or authority referred to in this clause, which the Central Government may notify9 in this behalf;]

10[(43)  any amount received by an individual as a loan, either in lump sum or in instalment, in a transaction of reverse mortgage referred to in clause (xvi) ofsection 47;]

11[(44) any income received by any person for, or on behalf of, the New Pension System Trust established on the 27th day of February, 2008 under the provisions of the Indian Trusts Act, 1882 (2 of 1882);]

12[(45) any allowance or perquisite, as may be notified13 by the Central Government in the Official Gazette in this behalf, paid to the Chairman or a retired Chairman or any other member or retired member of the Union Public Service Commission;]

14[(46)  any specified income arising to a body or authority or Board or Trust or Commission (by whatever name called) which—

(a)  has been established or constituted by or under a Central, State or Provincial Act, or constituted by the Central Government or a State Government, with the object of regulating or administering any activity for the benefit of the general public;

(b)  is not engaged in any commercial activity; and

(c)  is notified15 by the Central Government in the Official Gazette for the purposes of this clause.

Explanation.—For the purposes of this clause, “specified income” means the income, of the nature and to the extent arising to a body or authority or Board or Trust or Commission (by whatever name called) referred to in this clause, which the Central Government may, by notification in the Official Gazette, specify in this behalf;

(47)  any income of an infrastructure debt fund, set up in accordance with the guidelines as may be prescribed,16 which is notified by the Central Government in the Official Gazette for the purposes of this clause;]

17[(48)  any income received in India in Indian currency by a foreign company on account of 17a[sale of crude oil to any person] in India:

Provided that—

(i)  receipt of such income in India by the foreign company is pursuant to an agreement or an arrangement entered into by the Central Government or approved by the Central Government;

(ii)  having regard to the national interest, the foreign company and the agreement or arrangement are notified17b by the Central Government in this behalf; and

(iii)  the foreign company is not engaged in any activity, other than receipt of such income, in India;]

DOUBLE TAXATION AGREEMENT – AGREEMENT FOR AVOIDANCE OF DOUBLE TAXATION AND PREVENTION OF FISCAL EVASION WITH FOREIGN COUNTRIES – SWEDEN – AMENDMENT IN NOTIFICATION NO. GSR 705(E), DATED 17-12-1997 NOTIFICATION NO. 63/2013 [F. NO. 505/02/1981-FTD-I]/SO 2459(E), DATED 14-8-2013

SECTION 90 OF THE INCOME-TAX ACT, 1961 – DOUBLE TAXATION AGREEMENT – AGREEMENT FOR AVOIDANCE OF DOUBLE TAXATION AND PREVENTION OF FISCAL EVASION WITH FOREIGN COUNTRIES – SWEDEN – AMENDMENT IN NOTIFICATION NO. GSR 705(E), DATED 17-12-1997

NOTIFICATION NO. 63/2013 [F. NO. 505/02/1981-FTD-I]/SO 2459(E), DATED 14-8-2013

Whereas a Protocol (hereinafter referred to as the said Protocol) amending the convention between the Government of the Republic of India and the Government of the Kingdom of Sweden for the avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on Income and on Capital, which was signed at New Delhi on the 24th June, 1997, was signed on the 7th February, 2013 in Stockholm ;

And whereas, the date of entry into force of the said Protocol is the 16th day of August, 2013, being the thirtieth day after the receipt of the later of the notifications of the completion of the procedures required by the respective laws for the entry into force of this Protocol, in accordance with Paragraph 2 of Article 3 of the said Protocol;

And whereas, Paragraph 2 of Article 3 of the said Protocol provides that the Amending Protocol shall enter into force on the thirtieth day after the receipt of the later of the notifications and shall thereupon have effect forthwith ;

Now, therefore, in exercise of the powers conferred by section 90 of the Income- tax Act, 1961 (43 of 1961), the Central Government hereby directs that all the provisions of the said Protocol, as set out in the Annexure hereto, shall be given effect to in the Union of India with effect from the 16th August, 2013.

Protocol Amending the Convention between the Government of the Republic of India and The Government of The Kingdom of Sweden for The Avoidance of Double Taxation and The Prevention of fiscal evasion with respect to taxes on income and on capital, which was Signed at New Delhi on 24th June, 1997.

The Government of the Republic of India and the Government of the Kingdom of Sweden;

Desiring to conclude a Protocol (hereinafter referred to as “Amending Protocol”) to amend the Convention between the Government of the Republic of India and the Government of the Kingdom of Sweden for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on Income and on Capital, which was signed at New Delhi on 24th June, 1997 and which entered into force on 25th December, 1997 (hereinafter referred to as “the Convention”);

Have agreed as follows:

ARTICLE 1

Article 27 (Exchange of Information) of the Convention shall be deleted and replaced by the following Article:

“ARTICLE 27

EXCHANGE OF INFORMATION

1. The competent authorities of the Contracting States shall exchange such information (including documents or certified copies of the documents) as is foreseeably relevant for carrying out the provisions of this Convention or to the administration or enforcement of the domestic laws concerning taxes of every kind and description imposed on behalf of the Contracting States, or of their political sub-divisions or local authorities, insofar as the taxation thereunder is not contrary to the Convention. The exchange of information is not restricted by Articles 1 and 2.

2. Any information received under paragraph 1 by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of, the enforcement or prosecution in respect of, the determination of appeals in relation to the taxes referred to in paragraph 1, or the oversight of the above. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions. Notwithstanding the foregoing, information received by a Contracting State may be used for other purposes when such information may be used for such other purposes under the laws of both States and the competent authority of the supplying State authorises such use.

3. In no case shall the provisions of paragraphs 1 and 2 be construed so as to impose on a Contracting State the obligations:

(a)

to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State;

(b)

to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State;

(c)

to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information the disclosure of which would be contrary to public policy (ordre public).

4. If information is requested by a Contracting State in accordance with this Article, the other Contracting State shall use its information gathering measures to obtain the requested information, even though that other State may not need such information for its own tax purposes. The obligation contained in the preceding sentence is subject to the limitations of paragraph 3 but in no case shall such limitations be construed to permit a Contracting State to decline to supply information solely because it has no domestic interest in such information.

5. In no case shall the provisions of paragraph 3 be construed to permit a Contracting State to decline to supply information solely because the information is held by a bank, other financial institution, nominee or person acting in an agency or a fiduciary capacity or because it relates to ownership interests in a person.”

ARTICLE 2

The following new paragraph shall be added to the Protocol to the Convention after the paragraph titled ” With reference to Article 25:”

“With reference to Article 27:

1. A Contracting State may allow representatives of the competent authority of the other Contracting State to enter the territory of the first-mentioned Contracting State to interview individuals and examine records with the written consent of the persons concerned. The competent authority of the second-mentioned Contracting State shall notify the competent authority of the first-mentioned Contracting State of the time and place of the meeting with the individuals concerned.

2. At the request of the competent authority of one Contracting State, the competent authority of the other Contracting State may allow representatives of the competent authority of the first-mentioned Contracting State to be present at the appropriate part of a tax examination in the second-mentioned Contracting State.

3. If the request referred to in paragraph 2 is acceded to, the competent authority of the Contracting State conducting the examination shall, as soon as possible, notify the competent authority of the other Contracting State about the time and place of the examination, the authority or official designated to carry out the examination and the procedures and conditions required by the first-mentioned Contracting State for the conduct of the examination. All decisions with respect to the conduct of the tax examination shall be made by the Contracting State conducting the examination.”

ARTICLE 3

1. Each of the Contracting States shall notify the other, in writing, of the completion of the procedures required by its law for the entry into force of this Amending Protocol.

2. This Amending Protocol shall enter into force on the thirtieth day after the receipt of the later of these notifications and thereupon have effect forthwith.

3. This Amending Protocol shall remain in effect as long as the Convention remains in effect.

In witness whereof the undersigned, duly authorised thereto by their respective Governments, have signed this Amending Protocol.

Done in duplicate at Stockholm this 7th day of Feb, 2013 in the Hindi, Swedish and English languages, all texts being equally authentic. In case of divergence between the texts, the English text shall be the operative one.

Reference: Section 90 of the income Tax Act, 1961

Agreement with foreign countries or specified territories.

 (1) The Central Government may enter into an agreement with the Government of any country outside India or specified territory outside India,—

(a)  for the granting of relief in respect of—

 (i)  income on which have been paid both income-tax under this Act and income-tax in that country or specified territory, as the case may be, or

(ii)  income-tax chargeable under this Act and under the corresponding law in force in that country or specified territory, as the case may be, to promote mutual economic relations, trade and investment, or

(b)  for the avoidance of double taxation of income under this Act and under the corresponding law in force in that country or specified territory, as the case may be, or

(c)  for exchange of information for the prevention of evasion or avoidance of income-tax chargeable under this Act or under the corresponding law in force in that country or specified territory, as the case may be, or investigation of cases of such evasion or avoidance, or

(d)  for recovery of income-tax under this Act and under the corresponding law in force in that country or specified territory, as the case may be,

and may, by notification in the Official Gazette, make such provisions as may be necessary for implementing the agreement.

(2) Where the Central Government has entered into an agreement with the Government of any country outside India or specified territory outside India, as the case may be, under sub-section (1) for granting relief of tax, or as the case may be, avoidance of double taxation, then, in relation to the assessee to whom such agreement applies, the provisions of this Act shall apply to the extent they are more beneficial to that assessee.

(2A) 60[***]

The following sub-section (2A) shall be inserted after sub-section (2) of section 90 by the Finance Act, 2013, w.e.f. 1-4-2016 :

(2A) Notwithstanding anything contained in sub-section (2), the provisions of Chapter X-A of the Act shall apply to the assessee even if such provisions are not beneficial to him.

(3) Any term used but not defined in this Act or in the agreement referred to in sub-section (1) shall, unless the context otherwise requires, and is not inconsistent with the provisions of this Act or the agreement, have the same meaning as assigned to it in the notification issued by the Central Government in the Official Gazette in this behalf.

60a[(4) An assessee, not being a resident, to whom an agreement referred to in sub-section (1) applies, shall not be entitled to claim any relief under such agreement unless 60b[a certificate of his being a resident] in any country outside India or specified territory outside India, as the case may be, is obtained by him from the Government of that country or specified territory.]

60c[(5) The assessee referred to in sub-section (4) shall also provide such other documents and information, as may be prescribed.]

Explanation 1.—For the removal of doubts, it is hereby declared that the charge of tax in respect of a foreign company at a rate higher than the rate at which a domestic company is chargeable, shall not be regarded as less favourable charge or levy of tax in respect of such foreign company.

Explanation 2.—For the purposes of this section, “specified territory” means any area outside India which may be notified61 as such by the Central Government.]

62[Explanation 3.—For the removal of doubts, it is hereby declared that where any term is used in any agreement entered into under sub-section (1) and not defined under the said agreement or the Act, but is assigned a meaning to it in the notification issued under sub-section (3) and the notification issued thereunder being in force, then, the meaning assigned to such term shall be deemed to have effect from the date on which the said agreement came into force.]