Section 6 - Amendment of section 10 - Direct Tax Laws (Amendment) Act, 1987

6. Amendment of section 10. In section 10 of the Income-tax Act,- (a) after clause (2), the following clause shall be inserted, namely :- (2A) in the case of a person being a partner of a firm which is 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 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; ; (b) for clauses (4) and (4A), the following clause shall be substituted, namely :- (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 Gazette, specify in this behalf, including income by way of premium on the redemption of such bonds; (ii) in the case of an individual, who is a person resident outside India as defined in clause (q) of section 2 of the Foreign Exchange Regulation Act, 1973 (46 of 1973), 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 said Act and the rules made thereunder; ; (c) for clause (5), the following clause shall be substituted, namely :- (5) subject to such conditions as the Central Government may prescribe (including conditions as to number of journeys and the amount which shall be exempt per head) 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: Provided that the amount exempt under sub-clause (a) or sub-clause (b) shall not, except in such cases and under such circumstances as may be prescribed having regard to the travel concession or assistance granted to the employees of the Central Government, exceed the value of the travel concession or assistance which would have been received by or due to the individual in connection with his proceeding to any place in India on leave or, as the case may be, after retirement from service or after the termination of his service: Provided further 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. ; (d) in clause (10),- (i) in sub-clause (iii), for the words calculated on the basis of the average salary for the three years immediately preceding the year in which the gratuity is paid, subject to a maximum of thirty-six thousand rupees or twenty months salary so calculated, whichever is less , the words 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 limit 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 shall be substituted; (ii) in the first and second provisos, for the words shall not exceed thirty-six thousand rupees , the words shall not exceed the limit so specified shall be substituted; (iii) the third and fourth provisos shall be omitted; (iv) in the Explanation, for the words In this clause , the words, brackets, figures and letters In this clause, and in clause (10AA) shall be substituted; (e) in clause (10A), the proviso shall be omitted; (f) in clause (10AA), in sub-clause (ii),- (i) for the words six months , the words eight months shall be substituted and shall be deemed to have been substituted with effect from the 1st day of July, 1986; (ii) for the words or thirty thousand rupees, whichever is less , the words subject to such limit 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 shall be substituted and shall be deemed to have been substituted with effect from the 1st day of July, 1986; (iii) in the first and second provisos, for the words shall not exceed thirty thousand rupees , the words shall not exceed the limit so specified shall be substituted and shall be deemed to have been substituted with effect from the 1st day of July, 1986; (iv) the third and fourth provisos shall be omitted and shall be deemed to have been omitted with effect from the 1st day of July, 1986; (v) in the Explanation, the brackets and figure (i) , and clause (ii) shall be omitted and shall be deemed to have been omitted with effect from the 1st day of July, 1986. (g) in clause (10B), in the first proviso, for clause (ii), the following clause shall be substituted, namely :- (ii) such amount, not being less than fifty thousand rupees, as the Central Government may, by notification in the Official Gazette, specify in this behalf, ; (h) for clause (14), the following clause shall be substituted, namely :- (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 incurred in the performance of the duties of an office or employment of profit, as the Central Government may, by notification in the Official Gazette, specify, 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 profit are ordinarily performed by him or at the place where he ordinarily resides, or to compensate him for the increased cost of living, as the Central Government may, by notification in the Official Gazette, specify, to the extent specified in the notification; ; (i) in clause (15), for sub-clauses (i), (ia), (ib), (ii) and (iia), the following sub-clause shall be substituted, namely :- (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 notification in the Official Gazette, specify in this behalf, subject to such conditions and limits as may be specified in the said notification; ; (j) for clauses (17A), (17B) and (18), the following clause shall be substituted, namely :- (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 approved 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 approved by the Central Government in this behalf in the public interest; ; (k) clauses (21) and (23) shall be omitted; (l) in clause (23C),- (i) in sub-clause (iii), the word or occurring at the end shall be omitted; (ii) sub-clauses (iv) and (v) and the proviso shall be omitted; (m) after clause (23C), the following clause shall be inserted with effect from the 1st day of April, 1988, namely :- (23D) any income from such Mutual Fund set up by a public sector bank or a public financial institution and subject to such conditions, including the condition that at least ninety per cent. of the income from the Mutual Fund shall be distributed to the unit holders every year, as the Central Government may, by notification 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 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); (b) the expression public financial institution shall have the meaning assigned to it in section 4A of the Companies Act, 1956 (1 of 1956). .