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Deduction in respect of earnings in convertible foreign exchange

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..... laid down in sub-section (4); ( b ) for an assessment year beginning on the 1st day of April, 2002, a deduction of a sum equal to the aggregate of- ( i ) thirty per cent of the profits derived by him from services provided to foreign tourists; and ( ii ) so much of the amount not exceeding thirty per cent of the profits referred to in sub-clause ( i ) as is debited to the profit and loss account of the previous year in respect of which the deduction is to be allowed and credited to a reserve account to be utilised for the purposes of the business of the assessee in the manner laid down in sub-section (4); ( c ) for an assessment year beginning on the 1st day of April, 2003, a deduction of a sum equal to the aggregate of- ( i ) 3 [ twenty-five ] per cent of the profits derived by him from services provided to foreign tourists; and ( ii ) so much of the amount not exceeding 4 [ twenty-five ] per cent of the profits referred to in sub-clause ( i ) as is debited to the profit and loss account of the previous year in respect of which the deduction is to be allowed and credited to a reserve account to be utilised for the purposes of the business of the assessee i .....

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..... ). 13 [ Explanation 2. - For the purposes of this sub-section, the expression competent authority means the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange. ] (2A) Every person making payment to an assessee referred to in the Explanation 14 [ 1 ] to sub-section (2) out of Indian currency obtained by conversion of foreign exchange received from or on behalf of a foreign tourist or a group of foreign tourists shall furnish to that assessee a certificate in the prescribed form indicating the amount received in foreign exchange, its conversion into Indian currency and such other particulars as may be prescribed. ] 15 [ (3) For the purposes of sub-section (1), profits derived from services provided to foreign tourists shall be the amount which bears to the profits of the business (as computed under the head Profits and gains of business or profession ) the same proportion as the receipts specified in sub-section (2) 16 [[ as reduced by any payment, referred to in sub-section (2A), made by the assessee ]] bear to the total receipts of the busines .....

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..... es shall be deemed to be the profits of the previous year in which the equity shares are transferred or converted into money. Explanation .- A person shall be treated as having acquired any shares on the date on which his name is entered in relation to those shares in the register of members of the public company .] (6) The deduction under sub-section (1) shall not be admissible unless the assessee furnishes in the prescribed form, along with the return of income, the report of an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed on the basis of the 20 [ 21 [ *** ] amount of convertible foreign exchange received by the assessee for services provided by him to foreign tourists 22 [ ,payments made by him to any assessee referred to in sub-section (2A) ] and the payments received by him in Indian currency as referred to in the Explanation 23 [ 1 ] to sub-section (2). ] 24 [ (7) Where a deduction under sub-section (1) is claimed and allowed in respect of profits derived from the business of a hotel, such part of profits shall not qualify to that extent for deduction .....

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..... ount of the previous year in respect of which the deduction is to be allowed and credited to a reserve account to be utilised for the purposes of the business of the assessee in the manner laid down in sub-section (4) : 3. Substituted for twenty by the Finance Act, 2002, w.e.f. 1-4-2003. 4. Substituted for twenty by the Finance Act, 2002, w.e.f. 1-4-2003. 5. Substituted for ten by the Finance Act, 2002, w.e.f. 1-4-2003. 6. Substituted for ten by the Finance Act, 2002, w.e.f. 1-4-2003. 7. Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991. 8. Substituted for by the assessee in convertible foreign exchange by the Finance Act, 1990, w.e.f. 1-4-1991. 9. Substituted for the portion beginning with the words where the Chief Commissioner and ending with the words may allow in this behalf by the Finance Act, 1999, w.e.f. 1-6-1999. Prior to substitution, the quoted portion, as amended by the Finance Act, 1990, w.e.f. 1-4-1991, read as under : where the Chief Commissioner or Commissioner is satisfied (for reasons to be recorded in writing) that the assessee is, for reasons beyond his control, unable to do so within the said period .....

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