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Section 40 - Amounts not deductible - Income-tax Act, 1961Extract ..... or any part of the tax in accordance with the provisions of Chapter XVII-B on any such sum but is not deemed to be an assessee in default under the first proviso to sub-section (1) of section 201, then, for the purposes of this sub-clause, it shall be deemed that the assessee has deducted and paid the tax on such sum on the date of furnishing of return of income by the payee referred to in the said proviso;] Explanation.-For the purposes of this sub-clause,- (A) "royalty" shall have the same meaning as in Explanation2 to clause (vi) of sub-section (1) of section 9; (B) "fees for technical services" shall have the same meaning as in Explanation 2 to clause (vii) of sub-section (1) of section 9; (ia) 24[thirty percent. of any sum payable to a resident], on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction, 16[has not been paid on or before the due date specified in sub-section (1) of section 139],- 17[Provided that where in respect of any such sum, tax has been deducted in any subsequent year, or has been deducted during the previous year but paid after the due date specified in subsection (1) of section ..... x x x x x Extracts x x x x x Section 40 - Amounts not deductible - Income-tax Act, 1961 x x x x x Extracts x x x x x ..... is hereby declared that for the purposes of this sub-clause, any sum paid on account of any rate or tax levied includes and shall be deemed always to have included any sum eligible for relief of tax under section 90 or, as the case may be, deduction from the Indian income-tax payable under section 91.] 7[Explanation 2.-For the removal of doubts, it is hereby declared that for the purposes of this sub-clause, any sum paid on account of any rate or tax levied includes any sum eligible for relief of tax under section 90A;] 29[Explanation 3.-For the removal of doubts, it is hereby clarified that for the purposes of this sub-clause, the term “tax” shall include and shall be deemed to have always included any surcharge or cess, by whatever name called, on such tax.] 8[(iia) any sum paid on account of wealth-tax. Explanation.-For the purposes of this sub-clause, "wealth-tax" means wealth-tax chargeable under the Wealth-tax Act, 1957 (27 of 1957), or any tax of a similar character chargeable under any law in force in any country outside India or any tax chargeable under such law with reference to the value of the assets of, or the capital employed in, a business or p ..... x x x x x Extracts x x x x x Section 40 - Amounts not deductible - Income-tax Act, 1961 x x x x x Extracts x x x x x ..... ny partner who is not a working partner; or (ii) any payment of remuneration to any partner who is a working partner, or of interest to any partner, which, in either case, is not authorised by, or is not in accordance with, the terms of the partnership deed; or (iii) any payment of remuneration to any partner who is a working partner, or of interest to any partner, which, in either case, is authorised by, and is in accordance with, the terms of the partnership deed, but which relates to any period (falling prior to the date of such partnership deed) for which such payment was not authorised by, or is not in accordance with, any earlier partnership deed, so, however, that the period of authorisation for such payment by any earlier partnership deed does not cover any period prior to the date of such earlier partnership deed; or (iv) any payment of interest to any partner which is authorised by, and is in accordance with, the terms of the partnership deed and relates to any period falling after the date of such partnership deed in so far as such amount exceeds the amount calculated at the rate of 12[twelve] per cent simple interest per annum; or (v) any payment of remuneration to any ..... x x x x x Extracts x x x x x Section 40 - Amounts not deductible - Income-tax Act, 1961 x x x x x Extracts x x x x x ..... e is a partner;] 13[(ba) in the case of an association of persons or body of individuals [other than a company or a co-operative society or a society 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], any payment of interest, salary, bonus, commission or remuneration, by whatever name called, made by such association or body to a member of such association or body. Explanation 1.-Where interest is paid by an association or body to any member thereof who has also paid interest to the association or body, the amount of interest to be disallowed under this clause shall be limited to the amount by which the payment of interest by the association or body to the member exceeds the payment of interest by the member to the association or body. Explanation 2.-Where an individual is a member of an association or body on behalf, or for the benefit, of any other person (such member and the other person being hereinafter referred to as "member in a representative capacity" and "person so represented", respectively),- (i) interest paid by the association or body to such individual or b ..... x x x x x Extracts x x x x x Section 40 - Amounts not deductible - Income-tax Act, 1961 x x x x x Extracts x x x x x ..... 2006, w.r.e.f. 1-4-2006. 4. Inserted by the Taxation Laws (Amendment) Act, 2006, w.r.e.f.1-4-2006. 5. Inserted by the Finance Act, 2005, w.e.f. 1-4-2006. 6. Inserted by the Finance Act, 2006, w.e.f. 1-4-2006. 7. Inserted by the Finance Act, 2006, w.e.f. 1-6-2006. 8. Inserted by the Income-tax (Amendment) Act, 1972, with retrospective effect from 1-4-1962 subject to savings prescribed by sections 4 and 5 of that Act. 9. Substituted by the Finance Act, 2003, w.e.f. 1-4-2004. Prior to its substitution, sub-clause (iii) read as under : '(iii) any payment which is chargeable under the head "Salaries", if it is payable outside India and if the tax has not been paid thereon nor deducted therefrom under Chapter XVII-B;' 10. Inserted by the Finance Act, 2002, w.e.f. 1-4-2003. Original clause (v) was inserted by the Finance Act, 1968, w.e.f. 1-4-1969, amended by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971 and later on omitted by the Finance (No. 2) Act, 1971, w.e.f. 1-4-1972. 11. Substituted by the Finance Act, 1992, w.e.f. 1-4-1993. Prior to substitution, clause (b) was amended by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-4-1985, the Direct Tax Laws ( ..... x x x x x Extracts x x x x x Section 40 - Amounts not deductible - Income-tax Act, 1961 x x x x x Extracts x x x x x ..... he Finance Act, 2008, w.e.f. 1-4-2009. Prior to omission it was read as under: "any sum paid on account of securities transaction tax under Chapter VII of the Finance (No. 2) Act, 2004;" 19. Substituted vide Finance (No. 2) Act, 2009 with effect from 1-4-2010, before it was read as, (1) in case of a firm carrying on a profession referred to in section 44AA or which is notified for the purpose of that section- (a) on the first ₹ 1,00,000 of the book-profit or in case of a loss ₹ 50,000 or at the rate of 90 per cent of the book-profit, whichever is more; (b) on the next ₹ 1,00,000 of the book-profit at the rate of 60 per cent; (c) on the balance of the book-profit at the rate of 40 per cent; (2) in the case of any other firm- (a) on the first ₹ 75,000 of the book-profit, or in case of a loss ₹ 50,000 or at the rate of 90 per cent of the book-profit, whichever is more; (b) on the next ₹ 75,000 of the book-profit at the rate of 60 per cent; (c) on the balance of the book-profit at the rate of 40 per cent: 20. Inserted vide Finance Act, 2012, w.e.f. 01-04-2013 21. Inserted vide Finance Act, 2013, w.e.f. 01-04-2014. 22. Substituted vide THE F ..... x x x x x Extracts x x x x x Section 40 - Amounts not deductible - Income-tax Act, 1961 x x x x x Extracts x x x x x
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