CHAPTER III
DIRECT TAXES
Income-tax
Amendment of section 2.
3. In section 2 of the Income-tax Act,—
(a) in clause (15), after the proviso, the following proviso shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 2009, namely:—
"Provided further that the first proviso shall not apply if the aggregate value of the receipts from the activities referred to therein is ten lakh rupees or less in the previous year;";
(b) in clause (24), in sub-clause (xv), after the words, brackets and figures "value of property referred to in clause (vii)", the words, brackets, figures and letter "or clause (viia)" shall be inserted with effect from the 1st day of June, 2010.
Notes on Clauses:
Clause 3 of the Bill seeks to amend section 2 of the Income-tax Act relating to definitions.
The existing provision contained in clause (15) of the aforesaid section defines "charitable purpose" to include, inter alia, "the advancement of any other object of general public utility". The proviso to the said clause provides that "the advancement of any other object of general public utility" shall not be a charitable
purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity.
Sub-clause (a) proposes to amend the said clause (15) by inserting a second proviso therein to provide that the first proviso shall not apply if the aggregate value of receipts from the activities referred to in the first proviso is ten lakh rupees or less in the previous year.
This amendment will take effect retrospectively from 1st April, 2009 and will, accordingly, apply in relation to the assessment year 2009-2010 and subsequent years.
The existing provision contained in sub-clause (xv) of clause (24) of the aforesaid section provides that any sum of money or value of property referred to in clause (vii) of sub-section (2) of section 56 will fall within the definition of "income".
Sub-clause (b) proposes to amend sub-clause (xv) to also make a reference therein to value of property referred to in the proposed clause (viia) to sub-section (2) of section 56. This amendment is consequential to the amendment made vide sub-clause (b) of clause 21 of the Bill.
This amendment will take effect from 1st June, 2010 and will, accordingly, apply in relation to the assessment year 2011-2012 and subsequent years.
