Section 7 - Amendment of section 40A - Direct Taxes (Amendment) Act, 1974

7. Amendment of section 40A. In section 40A of the Income-tax Act, in sub-section (5), in sub-clause (i) of clause (c), the following proviso shall be inserted, and shall be deemed to have been inserted, with effect from the 1st day of April, 1974, at the end, namely :- Provided that where the expenditure is incurred on payment of any salary to an employee or a former employee engaged in scientific, research during any one or more of the three years immediately preceding the commencement of the business and such expenditure is deemed under the Explanation to clause (i), of sub-section (1) of section 35 to have been laid out or expended in the previous year in which the business is commenced, the limit referred to in this sub-clause shall, in relation to the previous year in which the business is commenced, be an amount calculated at the rate of five thousand rupees for each month or part thereof comprised in the period of his employment in India during the previous year in which such business is commenced and in the period of his employment in India during which he was engaged in scientific research during the three years immediately preceding that previous year; .