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Section 5 - Amendment of section 35 - Direct Taxes (Amendment) Act, 1974Extract 5. Amendment of section 35. In section 35 of the Income-tax Act,- (a) in clause (i) of sub-section (1), the following Explanation shall be inserted, and shall be deemed to have been inserted, with effect from the 1st day of April, 1974, at the end, namely: - 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; ; (b) in clause (iv) of sub-section (2), for the word, brackets and figures and (iii) , the brackets, figures and word , (iii) and (vi) shall be substituted with effect from the 1st day of April, 1975; (c) after sub-section (2), the following sub-section shall be inserted, and shall be deemed to have been inserted, with effect from the 1st day of April, 1974, namely: - (2A) Where the assessee pays any sum to a scientific research association or university or college or other institution referred to in clause (ii) of sub-section (1) 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. .
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