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TMI BlogAmendments at a glance , Rate structure , Amendments to Income-tax Act , Amendments to Wealth-tax Act , Amendments to Companies (Profits) Surtax ActX X X X Extracts X X X X X X X X Extracts X X X X ..... onal savings through (b), (4)(i) life insurance policies, etc. 41-43 (prov.)/(ii) 80J(4)(iii), Extension of "tax holiday" concession to new industrial under- (5)(iii) takings commencing production, etc., after 31-3-1971 at any time during the five-year period up to 31-3-1976 39-40 80L(1)(i), (ii) Increase in the amount of dividends from Indian companies exempt from tax in the case of share-holders of all categories 44 80MM Exemption from tax of Indian companies on 40 per cent of their income by way of royalties, etc., received from any person carrying on a business in India in consideration of provision of technical know-how under an approved agreement 45-47 80P(4) Increase in the quantum of deduction in respect of business income in the case of co-operative societies 36 80RR Deduction for authors, etc., of 25 per cent of the income derived from their foreign sources in India in foreign exchange 48-49 208 Exemption limits for advance tax 20 209(a)(iii) Computation of advance tax 21 211(1), (2) Instalments of advance tax 22 212(3A) and Payment of lower amount of advance tax on taxpayer's own rule 39 estimate of his current income 23, 31 212(3A) Statuto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out a change in the tax liability or which provide a tax incentive or disincentive in any sphere should apply, prospectively, to current incomes due for assessment in the next following assessment year, and not retrospectively to incomes earned in the past, except where there are special circumstances justifying the retrospective operation of any particular provision. In conformity with this principle, changes in the rate schedule of tax which were considered necessary or desirable, have been made operative, prospectively, in relation to income falling due for assessment in the next following assessment year 1970-71. The rate schedule of tax incorporating these changes is set forth in Part III of the First Schedule to the Finance Act and is summarised in Annexure II to this circular. These rates apply for the purposes of deduction of tax at source from "salaries" in the case of individuals and from retirement annuities payable to partners of registered firms engaged in certain professions (chartered accountants, solicitors, lawyers, etc.), during the financial year 1969-70; computation of advance tax payable in that year in the case of all categories of taxpayers; and the charge or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rative societies - Prescription of a simplified rate schedule of tax - Co-operative societies are at present entitled to several concessions under the Income-tax Act in the computation of their taxable income and they also enjoy the benefit of concessional rates of tax on their chargeable income under the annual Finance Acts. The present rate structure of tax in the case of co-operative societies is historically linked to the rate structure of tax in the case of individuals, subject to certain variations. Under the provisions of section 80P, co-operative societies are entitled to deduct from their taxable income the whole of their income from specified business activities, namely, banking, cottage industry; marketing of agricultural produce of their members; supply of agricultural implements, seeds, etc., to their members; processing, without the aid of power, of the agricultural produce of the members; and in the case of a primary co-operative society, the income from supplying milk raised by its members to a federal milk co-operative society. Co-operative societies, in general, are also entitled to deduct, from their taxable income, the first Rs. 15,000 of their income from busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the generality of cases of co-operative societies has been increased by Rs. 5,000 from Rs. 15,000 to Rs. 20,000. This has been brought about by amendment of sub-section (2) of section 80P. Further, the benefit of this exemption up to Rs. 20,000 has been extended also in respect of incomes derived by co-operative societies from insurance business. This result is brought about by the omission of sub-section (4) of section 80P. The above-mentioned changes will be operative with effect from 1-4-1970, i.e., for the assessment year 1970-71 and subsequent years. 2. A new simplified rate structure of tax, different from that in the case of individuals, has been prescribed in the case of co-operative societies for the purpose of computation of advance tax payable by them during the financial year 1969-70. Under the new rate structure of tax, the rate of basic income-tax on the chargeable income of a co-operative society (as computed after deducting the incomes exempt from tax) in the slab Re. 1—Rs. 10,000 is 15 per cent; on the chargeable income in the slab Rs. 10,001—Rs. 20,000, 25 per cent; and on chargeable income above Rs. 20,000, it is 40 per cent. A Union surcharge at 10 per ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m tax from Rs. 25,000 to Rs. 10,000. the rate of tax on income in the slab Rs. 10,001—Rs. 25,000 is prescribed at 4 per cent. The rates of basic income-tax in the income slabs above Rs. 25,000, as also the rates of ordinary surcharge and special surcharge continue unchanged. Finance Act, 1969 10. In consequence of the levy of basic income-tax on incomes of registered firms in the slab Rs. 10,001—Rs. 25,000 at 4 per cent, a firm with a total income of Rs. 25,000 and above, will be liable to pay, in each case, an additional amount of tax (including surcharges) of Rs. 792 (Rs. 726 where the firm derives income mainly from a profession). The partners of the firm will, of course, recoup a part of this additional tax as it is allowed as a deduction in computing their individual shares in the income of the firm. [Paragraph C of Part III of the First Schedule to the Finance Act] Finance Act, 1969 11. Other categories of taxpayers - In the case of local authorities, the Life Insurance Corporation of India and companies (other than the life Insurance Corporation), the rates of income-tax specified respectively in Paragraphs D, E and F of Part III of the First Schedule to the Finance Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tory percentage of their distributable income, failing which they are liable to pay an additional income-tax with reference to their undistributed profits. Closely-held companies are (subject to certain exceptions) also liable to income-tax on their incomes at rates which are higher than in the case of widely-held domestic companies. Finance Act, 1969 16. A public company is treated for the purpose of income-tax as "a company in which the public are substantially interested" only if it satisfies the various tests laid down in the definition of that term in section 2(18). One of these tests is that not less than 50 per cent of its equity capital should have been beneficially held throughout the relevant accounting year by Government, a statutory corporation, any other company in which the public are substantially interested (or a wholly-owned subsidiary of such a company) or by members of the public (excluding a director of the company or a closely-held company). Another test is that the shares in the company were dealt with in any recognised stock exchange in India at any time during the relevant accounting year or were freely transferable by the shareholders to other members of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year 1970-71 and subsequent years. The main features of the changes made by the Finance Act, 1969 in the provisions in the Income-tax Act relating to advance tax are explained in the following paragraphs. Finance Act, 1969 Exemption limits for advance tax 20. No advance tax will be payable in cases where the income subject to advance tax does not exceed the following limits : Rs. a. In the case of a company or a local authority [In these cases, the limit is the same as before] 2,500 b. In the case of a registered firm [Formerly, the exemption limit was Rs.27,500] 30,000 c. In the case of a person other than a company, local authority or a registered firm— (i) for non-residents 5,000 (ii) for others 10,000 Formerly, the exemption limit in the case of non-residents was Rs. 2,500 and in other cases, it was Rs. 6,500. [Section 208 of the Income-tax Act as amended by section 12 of the Finance Act, 1969, with effect from 1-4-1969] Finance Act, 1969 Computation of advance tax 21. In computing the advance tax payable, the tax deductible at source on the gross amount of income which is subject to such deduction and which has been taken into account in comput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t years by all categories of persons in three equal instalments, as against four instalments for certain categories of cases and three for others, under the law prior to its amendment. The due dates of instalments under the new scheme are : 1. In the case of a person deriving 75 per cent or more of the income subject to advance tax from a source or sources for which the previous year ends on or before December 31 June 15, September 15 and December 15. 2. In any other case September 15, December 15 and March 15. Under the proviso to section 211(1), the Central Board of Direct Taxes (Board) may, by a notification in the Official Gazette, authorise any class of assessees for whom the last instalment of advance tax falls due on December 15, as stated at (1) above, to pay such last instalment on March 15 of the financial year, subject to such conditions as may be specified in the notification. The Board will, in issuing such a notification, take into account the nature of dealings in the business carried on by such assessees, the method of accounting followed by them and other relevant factors. [Section 15 of the Finance Act, 1969] Finance Act, 1969 Payment of lower amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessed tax. This provision continues to be applicable to assessments for assessment years up to and inclusive of the assessment year 1969-70. However, under the provisions of section 215 as amended by the Finance Act, 1969, with effect from 1-4-1970 (i.e., for the assessment year 1970-71 and subsequent years), the interest will be calculated on the amount by which the advance tax paid falls short of the assessed tax, instead of the shortfall from only 75 per cent thereof. The condition of liability to the penal interest remains unchanged, that is to say, interest will be chargeable only in cases where the shortfall in payment of advance tax is more than 25 per cent of the assessed tax. Finance Act, 1969 26. The amended provision will apply also in cases where there is a short payment of advance tax on an estimate furnished by the taxpayer under the new sub-section (3A) of section 212 referred to in paragraph 24 above. [Section 18 of the Finance Act, 1969] Finance Act, 1969 Charging of interest where no estimate of the advance tax payable is furnished 27. Section 217 provides for the charging of interest, at the time of regular assessment, in the case of a person who was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 212, the base for calculating the penalty will be the amount by which the advance tax actually paid falls short of 75 per cent of the assessed tax or the advance tax demanded by a notice under section 210, whichever is less; the quantum of the penalty will be a minimum of 10 per cent and a maximum of one and one-half times of such shortfall. 2. In a case where a person has failed, without reasonable cause, to furnish the estimate of advance tax payable by him under the new sub-section (3A) of section 212, the base for calculating the penalty will be the amount by which the tax demanded by a notice under section 210 falls short of 75 per cent of the assessed tax; the quantum of the penalty will be a minimum of 10 per cent and a maximum of one and one-half times of such shortfall. Finance Act, 1969 30. The new provisions of section 273 are applicable for the assessment year 1970-71 and subsequent years. The levy of penalty for defaults in the matter of advance tax for the assessment year 1969-70 and earlier years will be governed by the provisions of section 273 before its amendment by the Finance Act, 1969. [Section 22 of the Finance Act, 1969] Finance Act, 1969 Consequential ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raphic transfers, inter-bank book adjustments and bills of exchange made payable only to a bank. 5. Payments made by book adjustment by the taxpayer in the account of the payee against money due to the taxpayer for any goods supplied or services rendered by the taxpayer to the other party. 6. Payments made to cultivators, growers or producers for purchase of agricultural or forest produce, animal husbandry products (including hides and skins), products of dairy or poultry farming; products of horticulture or apiculture; fish or fish products; or the products of any cottage industry run without the aid of power. 7. Payments made in a village or town not served by any bank to any person ordinarily residing or carrying on any business or profession in any such village or town. 8. Payments of terminal benefits, such as gratuity or retrenchment compensation, to low-paid employees or members of their families. Besides, there is a residuary exception to the operation of the provisions of section 40A(3) in a case where the taxpayer establishes that the payment could not be made by a crossed bank cheque or draft due to exceptional or unavoidable circumstances and also furnishes evidenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to avoid disallowance of the expenditure under section 40A(3), no person shall be allowed to raise, in any suit or other proceeding, a plea based on the ground that the payment was not made or tendered in cash or any other manner. This provision is effective from 1-4-1969, that being the date from which the requirement of section 40A(3) of making payments in respect of expenditure in businesses and professions in amounts exceeding Rs. 2,500 by crossed bank cheques or drafts has become effective under Notification No. SO 623, dated 14-2-1969. Finance Act, 1969 35. It may be noted that the provision in the new sub-section (4) of section 40A does not preclude the recipient of the payment from taking recourse to the remedies open to him under the law for realising the amount due to him in a case where he fails to obtain payment on the cheque issued by the payer. The provision is intended merely to protect persons making payment by a crossed bank cheque or draft in order to comply with the provisions of section 40A(3) from being subjected to legal proceedings for not making the payment in cash or in any other manner. The protection extends even to cases where the recipient of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3-1970, the rates of development rebate will, under the present law, stand reduced to 25 per cent and 15 per cent respectively. Finance Act, 1969 38. To facilitate the modernisation of two of our important export industries, namely, the cotton textile industry and the jute textile industry, so as to increase their productive capacity and strengthen their competitive position in world markets, the Finance Act, 1969 extends to these two industries the "priority industry" treatment for the purpose of development rebate. This is brought about by adding the following two items to the list of articles and things relating to priority industries for the purpose of development rebate, contained in the Fifth Schedule to the Income-tax Act, with effect from 1-4-1970 : "(32) Textiles (including those dyed, printed or otherwise processed) made wholly or mainly of cotton, including cotton yarn, hosiery and rope. (33) Textiles (including those dyed, printed or otherwise processed) made wholly or mainly of jute, including jute twine and jute rope." The effect of adding these items to the list of articles and things in the Fifth Schedule is that all new machinery and plant installed in a cotto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Finance Act, 1969 40. Having regard to our continuing need for establishment of new industrial units and the expansion of our shipping fleet, the Finance Act, 1969 has amended section 80J so as to continue the concession of the "tax holiday" for a further period of 5 years. Under the amendment, the "tax holiday" concession will be available to industrial undertakings commencing production or operation, as also ships brought into use by Indian companies, at any time up to 31-3-1976. [Section 7 of the Finance Act] Measures for facilitating personal savings investment Finance Act, 1969 Enlargement of the scope of tax relief on personal savings through life insurance policies, etc. 41. An individual effecting savings out of his income chargeable to tax through specified media, such as life insurance, provident fund (including the Public Provident Fund), 10-year or 15-year Cumulative Time Deposits in Post Office Savings Banks, etc., is entitled to tax relief on such savings up to a specified limit. A Hindu undivided family is also entitled to tax relief on savings through life insurance up to a specified limit. In regard to savings through life insurance, the tax relief is presen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of premiums on an insurance policy (including a deferred annuity policy) on the life of any child of the individual. This provision will cover premiums paid on insurance policies on the lives of two or more children of the individual, and regardless of whether the child is minor or major. In order to qualify for the tax relief, premiums on such policies should have been paid out of the individual's income chargeable to tax. In the case of a Hindu undivided family, tax relief will be available from the assessment year 1970-71 onwards also in respect of premiums paid out of the family's income on an insurance policy on the life of any female member of the family, whether or not such female member is the wife of male member of the family. Premiums paid on an insurance policy on the life of the wife of a member of the family are already eligible for tax relief under the existing law and will continue to be so eligible. The above changes take effect from 1-4-1970 and will, therefore, be operative for the assessment year 1970-71 and subsequent years. 2. Authors, playwrights, artists, musicians and actors - In their cases, the existing condition in the law that they should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the transfer or servicing of such know-how on a concessional basis. Under new section 80MM, an Indian company deriving income by way of royalties, technical service fees, commission or otherwise (except gains) from any person carrying on a business in India, in consideration of providing technical know-how or rendering technical services to such person, will be entitled to a deduction of 40 per cent of such income in the computation of its taxable income. This provision will cover technical know-how (whether patented or not) which is likely to assist in the manufacture or processing of goods or materials or in the installation or erection of machinery or plant for such manufacture or processing, or in operations relating to mining, including prospecting and testing of mineral deposits or winning access to them, agriculture, animal husbandry, dairy or poultry farming, forestry or fishing. The technical services, covered by this provision relate to services rendered in connection with providing the technical know-how as stated above. The term "provision of technical know-how" has been defined in sub-section (2) of section 80MM. Finance Act, 1969 46. In order to be eligible for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p to Rs. 15,000 50. A provision was made in the Income-tax Act by the Finance Act, 1968, for the allowance of a standard deduction, in the computation of salary income, for maintenance expenditure on, and wear and tear of, a conveyance owned and used by the taxpayer for his employment. In respect of a motor car, the amount of the standard deduction for taxpayers with gross salary income up to Rs. 15,000 is Rs. 150 per month during which the car is used for purposes of employment; for those in the salary range up to Rs. 25,000, Rs. 200 per month; and for taxpayers with a gross salary income exceeding Rs. 25,000, it is Rs. 250 per month. Finance Act, 1969 51. The Finance Act, 1969 has amended the relevant provision in section 16(iv) to increase the amount of the standard deduction for a motor car in the case of a taxpayer with gross salary income up to Rs. 15,000 from Rs. 150 to Rs. 200 for every month during which the motor car is used for the purpose of employment. Finance Act, 1969 52. The amendment of section 16(iv) will take effect from 1-4-1970, and will be applicable for the assessment year 1970-71, i.e., in relation to salary incomes earned during the financial year 1969 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on such land; and (ii) any building owned or occupied by the cultivator of, or receiver of rent or revenue out of, agricultural land. In relation to the assessment year 1970-71, and any subsequent assessment year, "assets" include property of every description, movable or immovable, without the exclusion of the above-mentioned items of agricultural wealth. [The three other items of exclusion from the meaning of the term "assets", namely (i) animals, (ii) the right to any annuity in certain circumstances, and (iii) any interest in property available to the assessee for a period not exceeding six years, continue unchanged.] Finance Act, 1969 55. Simultaneously with the enlargement of the scope of the term "assets", as explained above, sub-section (1) of section 5 has been amended to provide the following specific exemptions in respect of wealth in the form of agricultural property : 1. Under new clause (iva) inserted in section 5(1), a specific exemption has been provided in respect of agricultural land belonging to the assessee up to a value of Rs. 1,50,000. Under the existing clause (iv) of section 5(1), the value of one house property belonging to the assessee and used by him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agricultural or horticultural produce on such land. The value of such tools, implements and equipment will be exempt from wealth-tax, without any monetary limit. However, under the Explanation to clause (ix) (which is a reproduction of the existing Explanation to the said clause) machinery or plant used in any tea or other plantation in connection with the processing of any agricultural produce or in the manufacture of any article from such produce will be outside the scope of the exemption. Finance Act, 1969 56. The exemption of the value of agricultural land up to Rs. 1,50,000 under new clause (iva) of section 5(1), as stated above, is in addition to the existing general exemption from wealth-tax, under the rate schedule of wealth-tax, on the first Rs. 1,00,000 of net wealth in the case of individuals and Rs. 2,00,000 in the case of Hindu undivided families. Accordingly, in the case of a farmer who owns agricultural land worth not more than Rs. 2,50,000, and who does not have any sizable investment in non-agricultural wealth or property, there will be virtually no liability to wealth-tax. In the case of a Hindu undivided family in similar circumstances, no wealth-tax will be pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As and when such an Order is made (which requires the concurrence of the State Government), Parliament will be in a position to undertake the necessary legislation to extend the levy of wealth-tax to wealth in the form of agricultural land situated in the State of Jammu & Kashmir. [Section 24(a) and (b) of the Finance Act] Finance Act, 1969 Increase in the scale of penalties leviable for failure, without reasonable cause, to furnish the return of wealth and to produce accounts, documents, etc., called for by notice 59. The Finance Act, 1969 has amended section 18(1) relating to the levy of penalty for failure, without reasonable cause, to furnish the return of wealth and to produce accounts, documents, etc., called for by notice. Under the provisions as amended, the penalty for these defaults will be calculated with reference to the assessed wealth (subject to certain adjustments) and not with reference to the wealth-tax as formerly. For failure, without reasonable cause, to furnish the return of net wealth within the time allowed, the scale of penalty will be ½ per cent of the assessed wealth as reduced by the amount of the initial exemption from wealth-tax, for every month du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnishing the return of net wealth occurs on or after that date, or having occurred earlier, the default continues on or after 1-4-1969. In the latter circumstance, the scale of penalty for any period of default falling before 1-4-1969, will be that laid down under the law in force before its amendment by the Finance Act, 1969, namely, 2 per cent of the wealth-tax payable for every month during which there was failure, without reasonable cause, to furnish the return of wealth, subject to a maximum, in the aggregate, of an amount equal to 50 per cent of such tax. In regard to defaults, without reasonable cause, in producing accounts and documents called for by notice, the new scale of penalty will be operative where the default occurs on or after 1-4-1969. [Section 24(c) of the Finance Act] Amendments to companies (profits) Surtax Act Finance Act, 1969 Removal, in the case of widely-held domestic companies of the ceiling on their aggregate liability to income-tax and surtax at 70 per cent of their total income 62. Under the Third Schedule to the Surtax Act, in the case of a widely-held domestic company (i.e., a company in which the public are substantially interested) which sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lost its significance altogether and is even misleading. [Section 25 of the Finance Act] Annexure I Rates of Income-tax for the assessment year 1969-70 A. Taxpayers other than companies 1. Individuals, Hindu undivided families, unregistered firms, associations of persons (other than co-operative societies), bodies of individuals and artificial juridical persons Rates of income-tax (exclusive of surcharge on income-tax) On total income— (1) not exceeding Rs. 5,000 5 per cent of the total income; (2) exceeding Rs. 5,000 but not exceeding Rs. 10,000 Rs. 250 plus 10 per cent of the excess over Rs. 5,000; (3) exceeding Rs. 10,000 but not exceeding Rs. 15,000 Rs. 750 plus 15 per cent of the excess over Rs. 10,000; (4) exceeding Rs. 15,000 but not exceeding Rs. 20,000 Rs. 1,500 plus 20 per cent of the excess over Rs. 15,000; (5) exceeding Rs. 20,000 but not exceeding Rs. 25,000 Rs, 2,500 plus 30 per cent of the excess over Rs. 20,000; (6) exceeding Rs. 25,000 but not exceeding Rs. 30,000 Rs, 4,000 plus 40 per cent of the excess over Rs. 25,000; (7) exceeding Rs. 30,000 but not exceeding Rs. 50,000 Rs, 6,000 plus 50 per cent of the excess over Rs. 30,000; (8) exceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 85, respectively, instead of Rs. 220, Rs. 240 and Rs. 260. Resident individuals other than those referred to in (a) above and resident Hindu undivided families are entitled to reduction in the amount of the tax chargeable on their total income, on account of personal allowances, up to the respective amounts specified in the following table : Amount of tax relief Rs. Unmarried individual 125 Married individual who has no child mainly dependent on him, or a Hindu undivided family which has no minor coparcener 200 Married individual who has one child mainly dependent on him or a Hindu undivided family which has one minor coparcener mainly supported from the income of such family 220 Married individual who has more than one child mainly dependent on him, or a Hindu undivided family which has more than one minor coparcener mainly supported from the income of such family 240 In the case of a married individual whose spouse has an independent taxable income exceeding Rs. 4,000, the amount of tax relief will be Rs. 125, Rs. 145 and Rs. 165, respectively, instead of Rs. 200, Rs. 220 and Rs. 240. Where the total income of a resident individual exceeds Rs. 10,000 but does not exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... derived from a profession carried on by the firm 10 per cent of the amount of the income-tax ; (b) any other registered firm 20 per cent of the amount of the income-tax. (2) Special surcharge. The rate of this surcharge is 10 per cent of the amount of income-tax as increased by the ordinary surcharge on income-tax referred to in (1) above. 4. Local authorities Rate of income-tax (exclusive of surcharge on income-tax) On the whole of the total income - 50 per cent. Surcharge on income-tax Surcharge is leviable at the rate of 10 per cent of the amount of income-tax. B. Companies 1. Life Insurance Corporation of India (established under the Life Insurance Corporation Act, 1956) Rates of income-tax (i) On that part of its total income which consists of profits and gains from life insurance business. 52.5 per cent. (ii) On the balance, if any, of the total income The rate of income-tax applicable under item (2) below, to the total income of a domestic company in which the public are substantially interested. Note : In the case of a company other than the Life Insurance Corporation of India, whose total income includes profits and gains from life insurance business, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Indian concern in pursuance of an agreement made by it with the Indian concern after 29-2-1964, and where such agreement has, in either case, been approved by the Central Government - 50 per cent; (ii) on the balance, if any, of the total income - 70 per cent. C. Special provisions regarding computation of tax on "long-term" capital gains (i.e., capital gains other than short-term capital gains) in the case of companies In the case of companies, income-tax on "long-term" capital gains included in their total income is chargeable at the rates specified in section 115(ii) of the Income-tax Act, and not at the rates of tax applicable to the total income of the company. The rates of income-tax specified in section 115(ii) of the Income-tax Act are as follows : (a) in respect of "long-term" capital gains relating to lands or buildings or any rights therein 40 per cent of the amount of such capital gains; (b) in respect of "long-term" capital gains other than those referred to in (a) above. 30 per cent of the amount of such capital gains "Short-term" capital gains (i.e., capital gains arising from the transfer of a capital asset held by the taxpayer for not more than 24 months ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs other than Hindu undivided families referred to in (a) above 4,000 Where the total income does not exceed Rs. 20,000, the tax chargeable after allowing the tax relief on account of personal allowances as at (2) below (where due) is limited, by way of marginal relief, to 40 per cent of the amount by which the total income exceeds the above limit of Rs. 7,000 or Rs. 4,000, as the case may be. (2) Tax relief in the case of resident individuals and Hindu undivided families on account of personal allowances : (a) A resident individual whose total income does not exceed Rs. 10,000 and who has, during the previous year, incurred any expenditure on the maintenance of any one or more of his parents or grandparents mainly dependent on him, is entitled to a reduction in the amount of tax chargeable on his total income, on account of personal allowances, up to the respective amounts specified in the following table : Amount of tax relief Rs. Unmarried individual 145 Married individual who has no child mainly dependent on him 220 Married individual who has one child mainly dependent on him 240 Married individual who has more than one child mainly dependent on him 260 In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20,000 Rs. 4,000 plus 40 per cent of the excess over Rs. 20,000. Surcharge on income-tax Surcharge is leviable at the rate of 10 per cent of the amount of income-tax. 3. Registered firms Rates of income-tax (exclusive of surcharge on income-tax) On total income— (1) not exceeding Rs. 10,000 Nil; (2) exceeding Rs. 10,000 but not exceeding Rs. 25,000 4 per cent of the excess over Rs. 10,000; (3) exceeding Rs. 25,000 but not exceeding Rs. 50,000 Rs. 600 plus 6 per cent of the excess over Rs. 25,000; (4) exceeding Rs. 50,000 but not exceeding Rs. 1,00,000 Rs. 2,100 plus 12 per cent of the excess over Rs. 50,000; (5) exceeding Rs. 1,00,000 Rs. 8,100 plus 20 per cent of the excess over Rs. 1,00,000. Surcharge on income-tax (1) Ordinary surcharge on income-tax— Rate of surcharge (a) a registered firm whose total income to the extent of 51 per cent thereof or more consists of income derived from a profession carried on by the firm 10 per cent of the amount of the income-tax; (b) any other registered firm 20 per cent of the amount of the income-tax. (2) Special surcharge. The rate of this surcharge is 10 per cent of the amount of income-tax as increased by the ordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to tax for the assessment year 1969-70, made the prescribed arrangements for the declaration and payment of dividends within India. The term "industrial company" means a company which is mainly engaged in the generation or distribution of electricity or any other form of power or in the construction of ships or in the manufacture or processing of goods or in mining. A company is deemed to be mainly engaged in such a business if the income attributable to any one or more of the aforesaid activities included in its gross total income for the previous year is not less than 51 per cent of such total income.] II. In the case of a company other than a domestic company— (i) on so much of the total income as consists of— (a) royalties received from an Indian concern in pursuance of an agreement made by it with the Indian concern after 31-3-1961, or (b) fees for rendering technical services received from an Indian concern in pursuance of an agreement made by it with the Indian concern after 29-2-1964, and where such agreement has, in either case, been approved by the Central Government - 50 per cent; (ii) on the balance, if any, of the total income - 70 per cent. C. Special pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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