Section 125 - Insertion of Tenth Schedule - Direct Tax Laws (Amendment) Act, 1987

125. Insertion of Tenth Schedule. In the Income-tax Act, after the Ninth Schedule, the following Schedule shall be inserted, namely :- THE TENTH SCHEDULE [See section 3(3)] MODIFICATIONS SUBJECT TO WHICH THE PROVISIONS OF THIS ACT SHALL APPLY IN CASES WHERE THE PREVIOUS YEAR IN RELATION TO THE ASSESSMENT YEAR COMMENCING ON THE 1ST APRIL, 1989, REFERRED TO IN SECTION 3 (2), EXCEEDS TWELVE MONTHS 1. Definition. In this Schedule, transitional previous year means the period reckoned as the previous year for the assessment year commencing on the 1st day of April, 1989, in the manner specified in sub-section (2) of section 3 and, in a case where the proviso to that sub-section applies, the longer or, as the case may be, the longest of the periods reckoned in the manner laid down in the said proviso. 2. Special provisions in a case where the transitional previous year is longer than twelve months. In a case where the transitional previous year is longer than twelve months, the provisions of this Act and the Finance Act of the relevant year shall apply subject to the modifications specified in rules 3, 4, 5 and 6 of this Schedule. 3. Modifications pertaining to monetary limits, etc. The provisions of this Act specified in column (1) of the Table below shall be subject to the modification that the reference therein to the amount or amounts specified in the corresponding entry in column (2) of the said Table, shall be construed as a reference to the said amount or amounts ag increased by multiplying each such amount by a fraction of which the numerator is the number of months in the transitional previous year and the denominator is twelve: Provided that for the purposes of this rule and rules 5 and 6, where the transitional previous year includes a part of a month, then, if such part is fifteen days or more, it shall be increased to one complete month and if such part is less than fifteen days, it shall be ignored. TABLE Provision of the Act (1) Amount (2) Rs. Section 10(3) . . . . . . 5,000 . Section 16 . . . . . . 10,000 Section 24(I)(ii) . . . . . . 3,600 Section 37(aA) . . . . . . 10,000 Section 44AA(2)(i) and (iii) . . . . . . 25,000 and 2,50,000 Section 44AB . . . . . . 40,00,000 and 10,00,000 Section 48(2) . . . . . . 10,000 Section 80C(I) . . . . . . 6,000, 9,000 and 12,000 Section 80C(a)(d) . . . . . . 10,000 . Section 80C(4) . . . . . . 60,000 and 40,000 Section 80F(2)(b) . . . . . . 50,000 Section 80L(I) . . . . . 7,000 (occurring in two places) Section 80L(1)-1st proviso . . . . . . 3,000 Section 80L(I)-2nd proviso . . . . . . 2,000 Section 80U . . . . . . 15,000 Section 139A . . . . . . 50,000 4. Modification in section 6 Where the transitional previous year comprises a period of eighteen months or more, then, sub-section (1) of section 6 shall be subject to the modification that references therein to the periods of one hundred and eighty-two days and ninety days shall be construed as references, respectively, to the periods of two hundred and seventy-three days and one hundred and thirty-five days. 5. Modification in respect of depreciation allowance. Where the assessee s income under the head Protits and gains of business or profession for a period of thirteen months or more is included in his total income for the transitional previous year, the allowance under clause (u) of sub-section (1) of section 32 in respect of depreciation of buildings, machinery, plant or furniture calculated in the manner stated therein, shall be increased by multiplying it by a fraction of which the numerator is the number of months in the transitional previous year and the denominator is twelve. 6. Modification in respect of rate of tax. The tax chargeable on the total income of the transitional previous year shall be calculated at the average rate of tax on the amount obtained by multiplying such total income by a fraction of which the numerator is twelve and the denominator is the number of months in the transitional previous year, as if the resultant amount were the total income. 7. Power of Board to grant relief in case of hardship. The Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship, by general or special order, grant appropriate relief in any case or class of cases where the transitional previous year is longer than twelve months.