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Finance Act, 1964 Complete Act - Bare Act

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FINANCE ACT, 1964

FINANCE ACT, 1964

5 of 1964

28th April, 1964
An Act to give effect to the financial proposals of the Central Government for the financial year 1964-65.
SECTION 01: SHORT TITLE AND COMMENCEMENT
(1) This Act may be called The Finance Act, 1964.
(2) Save as otherwise provided in this Act, sections 3 to 55 shall be deemed to have come into force on the 1st day of April, 1964.
SECTION 02: INCOME-TAX AND SUPER-TAX
(1) Subject to the provisions of sub-sections (2), (3), (4) and (5), for the assessment year
commencing on the 1st day of April, 1964,-
(a) income-tax shall be charged at the rates specified in Part I of the First Schedule and, in the cases to which Paragraphs A, B, C and E of that Part apply, shall be increased by a surcharge for purposes of the Union calculated in either case in the manner provided therein;
(b) super-tax shall, for the purposes of section 95 of the Income-tax, 1961 (hereinafter referred to as the Income-tax Act), be charged at the rates specified in Part II of the First Schedule, and, in the cases to which Paragraphs A, B and C of that Part apply, shall be increased by a surcharge for purposes of the Union calculated in the manner provided therein.
(2) In making any assessment for the assessment year commencing on the 1st day of April, 1964,-
(a) where the total income of an assessee, not being a company, includes any income chargeable under the head "Salaries", the income-tax payable by the assessee on that part of his total income which consists of such inclusion shall be an amount bearing to the total amount of income-tax payable according to the rates applicable under the operation of the Finance Act, 1963, on his total income the same proportion as the amount of such inclusion bears to his total income;
(b) where the total income of an assessee, not being a company, includes any income chargeable under the head "Salaries" on which super-tax has been or might have been deducted under the provisions of sub-section
(1) of section 192 of the Income-tax Act, the super-tax payable by the assessee on that portion of his total income which consists of such inclusion shall be an amount bearing to the total amount of super-tax payable according to the rates applicable under the operation of the Finance Act, 1963, on his total income the same proportion as the amount of such inclusion bears to his total income.
(3) In making any assessment for the assessment year commencing on the 1st day of April, 1964, where the total income of a company, other than the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956, includes any profits and gains from life insurance business, the super-tax payable by it shall be the aggregate of the tax calculated-
(i) on the amount of profits and gains from life insurance business so included, at the rate applicable to the Life Insurance Corporation of India in accordance with Paragraph E of Part II of the First Schedule; and
(ii) on the remaining part of its total income, at the rate applicable to the company on its total income.
(4) In cases to which Chap. XII of the Income-tax Act applies, the tax chargeable shall be determined as provided in that Chapter, and with reference to the rates imposed by sub- section
(1) or the rates as specified in that Chapter, as the case may be.
(5)
(a) In respect of any assessment for the assessment year commencing on the 1st day of April, 1964 -
(i) an assessee being an Indian company or any other company which has made the prescribed arrangements for the declaration and payment of dividends within India or an assessee (other than a company) whose total income includes any profits and gains derived from the export of any goods or merchandise out of India, shall be entitled to a deduction, from the amount of income-tax and super-tax with which he is chargeable, of an amount equal to the income-tax and super-tax calculated respectively at one - tenth of the average rate of income-tax and of the average rate of super-tax on the amount of such profits and gains included in the total income;
(ii) where an assessee of the type referred to in sub-clause (i) engaged in the manufacture of any articles in an industry specified in the First Schedule to the Industries (Development and Regulation) Act, 1951, has exported after the 28the day of February, 1963, such articles out of India, he shall be entitled, in addition to the deduction of tax referred to in sub -clause (i), to a further deduction, from the amount of tax with which he is chargeable for the assessment year, of an amount equal to the income-tax and super-tax calculated respectively at the average rate of income-tax and the average rate of super-tax on an amount equal to two per cent of the sale proceeds receivable by him in respect of such export;
(iii) where an assessee of the type referred to in sub -clause (i) engaged in the manufactuure of any articles in an industry specified in the said First Schedule has sold after the 28th day of February, 1963, such articles to any other person in India who himself has exported them out of India and evidence is produced before the Income-tax Officer of such articles having been so exported, the assessee shall be entitled to a deduction from the amount of income-tax and super-tax with which he is chargeable for the assessment year of an amount equal to the income-tax and super-tax calculated respectively at the average rate of income -tax and the average rate of super-tax on a sum equal to two per cent of the sale proceeds receivable by him in respect of such articles from the exporter:
(b) The total of the deduction under this sub-section shall in no case exceed the amount of income-tax and super-tax otherwise payable by the assessee.
(c) Nothing contained in sub -clause (ii) and sub-clause (iii) of clause (a) shall apply,-
(i) in relation to-
(1) fuels,
(2) fertilisers,
(3) photographic raw film, and paper,
(4) textiles (including those dyed, printed or otherwise processed) made wholly or in part of jute, including jute twine and rope,
(5) newsprint,
(6) pulp-wood pulp, mechanical, chemical, including dissolving pulp,
(7) sugar,
(8) vegetable oils and vanaspathi,
(9) cement and gypsum products,
(10) arms and ammunition, and
(11) cigarettes,
respectively specified in items 2, 18,20,23(2), 24(2), 24(5), 25, 28, 35, 37 and 38 of the First Schedule to the Industries (Development and Regulation) Act, 1951; or
(ii) in relation to textiles specified in items 23(1), 23(3), 23(4) and 23(5) of that Schedule Where such textiles have been exported before the 1st day of March, 1964.
(d) The amount of any profits and gains derived from the export of any goods or merchandise out of India in respect of which deduction of income-tax and super-tax is admissible under sub-clause (i) of clause (a) shall be computed in accordance with the rules made by the Central Board of Direct Taxes in this behalf.
(6) In cases in which tax has to be deducted under sub-section (2) of section 192 and sections 193 to 195 of the Income-tax Act at the rates in force the deduction shall be made at the rates specified in Part III of the First Schedule.
(7) For the purposes of this section, and of the rates of tax imposed thereby, and of sections -
(i) the expressions "assessment year", "average rate of income-tax", "average rate of super-tax", "partner", "tax" and "total income" have, unless the context otherwise requires, the meanings respectively assigned to them under clauses (9), (10), (II), (23), (43) and (45) of section 2 of the Income-tax Act;
(ii) the expression "earned income" has the same meaning as in section 2 of the Finance (No. 2) Act, 1962.
SECTION 03: ANNUITY DEPOSIT
(1) Save as otherwise provided inChapter 22A of the Income- tax Act-, annuity deposit for the assessment year commencing on the 1st day of April, 1964, shall be made by every person to whom the provisions of that Chapter apply at the rates specified in the Second Schedule.
(2) For the purposes of this section and the Second Schedule, the expressions "adjusted total income", "annuity deposit" and "depositor" have the meanings respectively assigned to them under clauses (1), (5) and (6) ofsection 280B of the Income-tax Act-.
SECTION 04: 04-48 AMENDMENTS OF ACT 43 OF 1961
- [Note.- These amendments were then incorporated in that Act.]
SECTION 49: AMENDMENT OF ACT 34 OF 1953
- [Note.- These amendments were then incorporated inthe Estate Duty Act, 1953-]
SECTION 50: AMENDMENT OF ACT 27 OF 1957
- [Note.- These amendments in the Wealth Tax were incorporated in that Act.]
SECTION 51: AMENDMENT OF ACT 29 OF 1957
-[This section had amendedthe Expenditure Tax Act, 1957which has been repealed bythe Finance Act, 1966, S. 40]
SECTION 52: AMENDMENT OF ACT 18 OF 1958
- [Note.- This section amendedsections 5-,32-,34-; insertssection 6A-; omitssection 41-, substitutes newsections 41 A-,41 B-and Schedule ofGift-tax Act, 1958-, which were then incorporated in that Act.]
SECTION 53: EXPENDITURE-TAX TO BE LEVIED FROM 1ST APRIL, 1964
- Notwithstanding anything contained insection 13 of the Finance (No. 2) Act, 1962-expenditure-tax shall be charged underthe Expenditure-tax Act, 1957, for every financial year commencing on or after the 1st day of April, 1964, in respect of the expenditure incurred by an individual or Hindu undivided family.
SECTION 54: AMENDMENT OF ACT 13 OF 1963
- [Note.- This section amended Part I of First Schedule toFinance Act, 1963 These amendments will be found incorporated in that Act.]
SECTION 55: SUPER-PROFITS TAX NOT TO BE LEVIED FROM 1ST APRIL, 1964
- Notwithstanding anything contained inthe Super-profits Tax Act, 1963,1super-profits tax shall not be charged for any assessment year commencing on or after the 1st day of April, 1964, in respect of the chargeable profits of any company.
SECTION 56: AMENDMENT OF ACT 32 OF 1934
- [Note.- This section amendedthe Indian Tariff Act, 1934which is now repealed and replaced bythe Customs Tariff Act, 1975
SECTION 57: SURCHARGE ON DUTIES OF CUSTOMS
(1) In the case of goods chargeable with a duty of customs which is specified in theFirst Schedule to the Tariff Actas amended by this Act or any subsequent Act of Parliament or in that Schedule read with any notification of the Central Government for the time being in force, there shall be levied and collected as an addition to, and in the same manner as the total amount so chargeable, a sum equal to 10 per cent of such amount: Provided that in computing the total amounts so chargeable, any duty chargeable undersection 2A of the Tariff Actorsection 58of this Act shall not be included.
(2) Sub-section (1) shal cease to have effect after the 31st day of March, 1965, except as respects things done or omitted to be done before such cesser; andsection 6 of the General Clauses Act, 1897-, shall apply upon such cesser as if the said sub-section had then been repealed by a Central Act.
Note: Tariff Act, 1934 is now repealed and replaced by the Customs Tariff Act, 1975 (51 of 1975).
SECTION 58: REGULATORY DUTY OF CUSTOMS
(1) There shall be levied and collected with effect from such date as may be specified in this behalf by the Central Government by notification in the Official Gazette, on all goods mentioned in the First Schedule tothe Tariff Actas amended by this Act or any subsequent Act of Parliament a regulatory duty of customs which shall be-
(a) 25 per cent of the rate, if any, specified in the said First Schedule read with any notification issued under section 3 Aor sub-section ( 1 ) ofsection 4 of the Tariff Act; or
(b) 10 per cent of the value of the goods as determined in accordance with the provisions ofsection 14 of the Customs Act, 1962-, whichever is higher: Provided that different dates may be specified by the Central Government for different kinds of goods.
(2) Sub-section (1) shall cease to have effect after the 30th day of April, 1965 except as respects things done or omitted to be done before such cesser; andsection 6 of the General Clauses Act, 1897-, shall apply upon such cesser as if the said sub-section had then been repealed by a Central Act.
(3) The duty of customs leviable under this section in respect of any goods referred to in sub-section (1) shall be in addition to any other duty of customs chargeable on such goods underthe Customs Act, 1962-.
(4)The provisions of the Customs Act, 1962-and the rules and .regulations made thereunder, including those relating to refunds and exemptions from duties, shall, as far as may be. apply in relation to the levy and collection of the regulatory duty of customs leviable under this section in respect of any goods as they apply in relation to the levy and collection of the duties of customs on such goods under that Act or those rules and regulations.
(5) Every Notification issued under sub-section (1) shall, as soon as may be after it is issued, be placed before each House of Parliament.
Note: Tariff Act, 1934 is repealed and replaced by the Customs Tariff Act, 1975 (51 of 1975).
SECTION 59: AMENDMENT OF ACT 1 OF 1949
- This Act is now repealed and replaced bythe Customs Tariff Act, 1975
SECTION 60: AMENDMENT OF ACT I OF 1944
- [Note.- This section amends Central Excises andSalt Act, 1944 These amendments were incorporated in that Act.]
SECTION 61: SPECIAL DUTY OF EXCISE ON CERTAIN GOODS
(1) When goods of the description mentioned in this section chargeable with a duty of excise under the First Schedule lothe Central Excises Act-, as amended by this Act or any subsequent Act of Parliament or under that Schedule read with any notification of the Central Government for the time being in force, are assessed to duty, there shall be levied and collected-
(a) as respects goods comprised in Items Nos. 6, 8,9, 14D, 22A, 23A, except sub-item (1) thereof, 23B, 28, 29, sub -items (2) and (3) of Item No. 31 and Item No. 32 of that Schedule, a special duty of excise equal to 10 per cent of the total amount so chargeable on such goods;
(b) as respects goods comprised in Items Nos. 2,3(1), sub-items 1,11(2), 11(3) of Item No. 4 Items Nos. 13. 14, 14F, 15, 15A, 15B, 16, 16A, 17, 18A(2), 21,22, 23, 23A(1), 27, 30, 31(1), 33, sub -items (1), (3a) and (4) of Item No. 34 and Item No. 37 of that Schedule, a special duty of excise equal to 20 per cent of the total amount so chargeable on such goods and
(c) as respects goods comprised in Items Nos. 411(1), 18, 18A(1), 18B, 20, 29A, 33A, sub -items (2) and (3) of Item No. 34 and radiograms comprised in Item No. 37A of that Schedule, a special duty of excise equal to 33 1/3 per cent of the total amount so chargeable on such goods.
(2) Sub-section (1) shall cease to have effect after the 31st day of March, 1965 except as respects things done or omitted to be done before such cesser; andsection 6 of the General Clauses Act, 1897-, shall apply upon such cesser as if the said sub-section had then been repealed by a Central Act.
(3) The duties of excise referred to in sub-section (1) in respect of the goods specified thereil. Shall be in addition to the duties of excise chargeable on such goods underthe Central Excises Act-or any other law for the time being in force and such special duties shall be levied for purposes of the Union and the proceeds thereof shall not be distributed among the States.
(4) The provisions ofthe Central Excises Act-and the rules made thereunder, including those relating to refunds and exemptions from duties, shall, as far as may be. apply in relation to the levy and collection of the duty of excise leviable under this section in respect of any goods as they apply in relation to the levy and collection of the duties of excise on such goods under that Act or those rules.
SECTION 62: REGULATORY DUTY OF EXCISE
(1) There shall be levied and collected, with effect from such date as may be specified in this behalf by the Central Government by Notification in the Official Gazette, on all goods mentioned in the First Schedule tothe Central Excise Act-as amended by this Act or any subsequent Act of Parliament, a regulatory duty of excise which shall be fifteen per cent of the value of the goods as determined in accordance with the provisions ofsection 4 of the Central Excises Act-: Provided that different dates may be specified by the Central Government for different kinds of goods.
(2) Sub-section (1) shall cease to have effect after the 30th day of April, 1965 except as respects things done or omitted to be done before such cesser; andsection 6 of the General Clauses Act, 1897-, shall apply upon such cesser as if the said sub-section had then been repealed by a Central Act.
(3) The duties of excise referred to in sub-section (1) in respect of the goods specified therein shall be in addition to the duties of excise chargeable on such goods underthe Central Excises Act-or any other law for the time being in force and such regulatory duties shall be levied for purposes of the Union and the proceeds thereof shall not be distributed among the States.
(4) The provisions ofthe Central Excises Act-and the rules made thereunder including those relating to refunds and exemptions from duties, shall, as far as may be, apply in relation to the levy and collection of the regulatory duty of excise, leviable under this section in respect of any goods as they apply in relation to the levy and collection of the duties of excise on .such goods under that Act or those rules.
(5) Every Notification issued under sub-section (1) shall, as soon as may be after it is- issued, be placed before each House of Parliament.
SECTION 63: DISCONTINUANCE OF SALT DUTY
- For the year beginning on the first day of April, 1964 no duty underthe Central Excises Act-, or the Tariff Act shall be levied in respect ot salt manufactured in, or imported into, India.
SECTION 64: AMENDMENT OF ACT 16 OF 1955
- [Note.- This section amendedSection 2-and substituted the existing Schedule of Medicinal Toilet Preparations (Excise Duties) Act, 1955 which were then incorporated in that Act.]
SECTION 65: AMENDMENT OF ACT 21 OF 1963
- [Note.- This section amended Compulsory Deposit Scheme Act, 1963 (Section 4). These amendments were then incorporated in that Act.
SCHEDULE 01: THE FIRST SCHEDULE
PART 01: INCOME-TAX AND SURCHARGE ON INCOME-TAX
Paragraph A (i) In the case of every individual who is married and every Hindu undivided family whose total inconic does no exceed Rs. 20.000 ineither caseRates of Income-tax _____________________________________________________________________________________________________________________ When the individual has no child where the individual has one child Where the individual has more than wholly or mainly dependent on him or wholly or mainly dependent on him one child wholly or mainly depen- where the Hindu undivided family has or where the Hindu undivided dent on him or where the Hindu no minor coparcener, family has one minor coparcener, undivided family has more than one minor coparcener. ______________________________________________________________________________________________________________________ Rs. Rs. Rs. (1) On the first 3,2000 of total income 3,600 of total income 4.000 of total income Nil (2) On the next 1,800 " 1,400 " 1,000 " 6% (3) On the next 2,500 " 2,500 " 2,500 " 10% (4) On the next 5,000 " 5,000 " 5,000 " 15% (5) On the next 7,500 " 7,500 " 7,500 " 20% ________________________________________________________________________________________________________________________ (ii) In the case of every individual who is not married and every individual or Hindu undivided family whose total income in either case exceeds Rs. 20,000 and in the case of every unregistered firm or other association of persons or body of individuals, whether incorporated or not. or every artificial juridical person referred to in sub-clause (vii) of clause (31) ofsection 2 of the Income-tax Act-. not being a case to which any other Paragraph of this Part applies: Per cent. (1)On the first Rs.l.000 of total income ... ... ... ... ... Nil (2) On the next Rs.4,000of total income ... ... ... ... ... 6 (3) On the next Rs. 2.500 of total income ... ... ... ... ... 10 (4)On the next Rs.5,000 of total income ... ... ... ... ... 15 (5) On the next Rs. 7,500 of total income ... ... ... ... ... 20 (6) On the balance of total income ... ... ... ... ... 25Provided that for the purposes of this paragraph (i) no income-tax shall be payable on a total income which does not exceed the limit specified below: (ii) the income-tax payable shall in no case exceed half the amount by which the total income exceeds the said limit: (iii) the income-tax payable by an individual who is married or a Hindu undivided family whose total income exceeds in either case Rs. 20,000 shall not exceed the aggregate of (a) the income-tax which would have been payable if the total income had been Rs. 20.000; (b) half the amount by which the total income exceeds Rs. 20.000: The limit aforesaid shall be (i) Rs. 6,000 in the case of every Hindu undivided family which as at the end of the previous year satisfies either of the following conditions, namely: (a) that it has at least two members entitled to claim partition who are not less than eighteen years of age; or (b) that it has at least two members entitled to claim partition who are not lineally descended one from the other and who are not lineally descended from any other living member of the family; (ii) Rs. 3.000 in every other case. Surcharge on income-tax The amount of income-tax computed at the rate hereinbefore specified shall be increased by a surcharge for purposes of the Union, which shall be equal to the aggregate of the sums computed as hereunder : (a) Where the amount of the income other than earned income, if any. included in the total income exceeds Rs. 10.000 a sum calculated on the difference between the amount of income-tax on the total income and the amount of income-tax on the whole of the earned income, if any. included in the total income if such earned income had been the total income, at the following rate. namely :-" (i)where,the amount of the income other than the at the rate of l2.5 per.cent . . earned income, if any, included in the total in- come exceeds Rs. 10,000 but does not exceed Rs. 25,000. Provided that the amount of surcharge payable under this clause shall in no case exceed one-tenth of the amount by which the income other than the earned income exceeds Rs. 10,000; (ii) Where the amount of the income other than at the rate of 15 per cent the earned income, if any, included in the total income exceeds Rs. 25,000 but does not exceed Rs. 75,000. Provided that the surcharge payable under this clause shall in no case exceed the aggregate of the following sums, namely: - (1) an amount calculated at the rate of twelve and a half per cent. on the amount of income-tax on an income of Rs. 25,000, if such income had been the total income (the income of Rs. 25,000 for this purpose being computed as if such income included income from various sources in the same proportion as the total income of the person concerned); (2) one-tenth of the amount by which the income other than the earned income exceeds Rs. 25,000; (iii) where the amount of the income other than at the rate of 17.5 per cent. the earned income, if any included in the total income exceeds Rs. 75,000. Provided that the surcharge payable under this clause shall in no case exceed the aggregate of the following sums, namely :- (1) an amount calculated at the rate of fifteen per cent on the amount of income-tax on an income of Rs. 75,000, if such income had been the total income-tax (the income of Rs. 75,000 for this purpose being computed as if such income included income from various sources in the same proportion as the total income of the person concerned); (2) one-tenth of the amount by which the income other than the earned income exceed Rs. 75,000; (b) where the earned income included in the total income exceeds Rs. 1,00,000, a sum calculated at ten per cent. of the difference between the amount of income-tax which would have been payable on the whole of the earned income included in the total income, if such earned income had been the total income and the amount of income-tax payable on a total income of Rs. 1,00,000. Paragraph B In the case of every local authority,- Rate of income-tax Per cent On the whole of the total income ... ... ... ... ... ... ... ... ... ... 30 Surcharge on income-tax The amount of income-tax computed at the rate hereinbefore specified shall be increased by a surcharge for purposes of the Union of five per cent of the amount of income-tax. Paragraph C In every case in which under the provisions of the Income-tax Act income-tax is to be charged at the maximun rate,- Rate of income-tax Per cent On the whole of the total income ... ... ... ... ... ... ... ... ... ... 25 Surcharge on income-tax The amount of income-tax computed at the rate hereinbefore specified shall be increased by a surcharge for purposes of the Union of 17.5 per cent of the amount of income-tax. Paragraph D In the case of every company,- Rate of income-tax Per cent On the whole of the total income ... ... .. ... ... ... ... ... ... ... 25 Provided that a rebate at the rate of ten per cent on so much of the total income as consists of dividends from an Indian Company which is not such a company as is referred to inSection 108 of the Income-tax Act-and which is wholy or mainly engaged in the business of generation or distribution of electricity or of manufacture or production of any one or more of the articles specified in the list in Part IV) of this Schedule, shall be allowed in the case of a company which has not made the prescribed arrangements for the declaration and payment of dividends within India. Explanation.- For the purposes of this Paragraph and Part III of this Schedule, acompany shall bedeemed to be mainly engaged in the business of generation or distribution of electricity or of manufacture or production of any one or more of the articles specified in the list in Part IV of this Schedule if the income attributable to any of the aforesaid activities included in its total income for the previous year is not less than fifty-one per cent of such total income. Paragraph E In the case of every registered firm,- Rates of Income-tax Per cent (1) On the first Rs. 35,000 of total income ... ... ... ... ... ... ... ... ... Nil (2) On the next Rs. 25,000 of total income ... ... ... ... ... ... ... ... ... 6 (3) On the next Rs. 50,000 of total income ... ... ... ... ... ... ... ... ... 8 (4)On the balance of total income ... ... ... ... ... ... ... ... ... 12 Surcharge on income-tax The amount of income-tax computed at the rates hereinbefore specified shall be increased by a surcharge forpurposes of the Union equal to the sum of- (i) twenty per cent of the amount of income-tax payable by the firm on its income from any business carried on ` by it calculated at the average rate of income-tax applicable to its total income; and (ii) ten per cent of the amount of income-tax payable by it on its income from all sources other than from any business carried on by it calculated at the average rate of income-tax applicable to its total income.
PART 02: SUPER-TAX AND SURCHARGE ON SUPER-TAX
Paragraph A In the case of every individual, Hindu undivided family, unregistered firm or other association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) ofSection 2 of the Income-tax Act-, not being a case to which any other Paragraph of this Part applies.- Rates of Imome-tax Percent, (1)On the first Rs. 20,000 of total income ... ... ... ... ... ... ... ... ... Nil (2) On the next Rs. .5,000 of total income ... ... ... ... ... ... ... ... ... 10 (3)On the next Rs. 5,000 of total income ... ... ... ... ... ... ... ... ... 15 (4) On the next Rs. 20,000 of total income ... ... ... ... ... ... ... ... ... 30 (4) On the next Rs. 20,000 of total income ... ... ... ... ... ... ... ... ... 45 (6) On the balance of total income ... ... ... ... ... ... ... ... ... 50 Surcharge on super-tax The amount of super-tax computed at the rates hereinbefore specified shall be increased by a surcharge for purposes of the Union, which shall be equal to the aggregate of the sums computed as hereunder:- (a) where the amount of income other than earned income, if any, included in the total income exceeds Rs. 10,000, a sum calculated on the difference between the amount of super-tax on the total income and the amount of super-tax on the whole of the earned income, if any, included in the total income if such earned income had been the total income, at the following rate, namely:- (i) where the amount of the income other than at the rate of l2.5percent the earned income, if any, included in the total income exceeds Rs, 10,000 but does not exceed Rs. 25,000: Provided that the amount of sur- charge payable under this clause shall in no case exceed one-eighth of the amount by which the income other than the earned income exceeds Rs. 10,000: (ii) where the amount of income other than the at the rate of 15 per cent earned income, if any, included in the total income exceeds Rs. 25,000 but does not exceed Rs. 75,000, Provided that the surcharge payable under this clause shall in no case exceed the aggregate of the following sums, name- by :- ( 1 ) an amount calculated at the rate of twelve and a half per cent, on the amount of super-tax on an income of Rs. 25.000, if such income had been the total income (the income of Rs. 25,000 for this purpose being computed as if such income included income from various sources in the same proportion as .the total income of the person concerned); (2) one-eigth of the amount by which the income other than the earned income exceeds Rs. 25,000; (iii) where the amount of the income other than at the rateof l7,5 percent the earned income, if any, included in the total income exceeds Rs. 75,000; Provided that the surcharge payable under this clause shal in no case exceed the aggregate of the following sums, namely: ( 1 ) an amount calculated at the rate of fifteen per cent on the amount of super-tax on an income of Rs. 75.000. if such income had been the total income (the income of Rs. 75,000 for this purpose being computed as if such income included income from various sources in the same proportion as the total come of the person concerned); 2) one-eighth of the amount by which the income other than the earned income exceeds Rs. 75,000: (b) where the earned income included in the total income exceeds Rs. 1,00,000, a sum calculated at ten per cent of the difference between the amount of super-tax which would have been payable on the whole of the earned income included in the total income, if such earned income had been the total income and the amount of super-tax payable on a total income of Rs. 1,00,000. Paragraph B In the case of every local authority,- Rate of super-tax Per cent On the whole of the total income ... ... ... ... ... ... ... ... ... ..., 16 Surcharge on super-tax The amount of super-tax computed at the rate hereinbefore specified shall be increased by a surcharge for purposes of the Union of 12 1/2 per cent of the amount of super-tax, Paragraph C In the case of every association of persons being aco-operative society as defined in clause (19) ofSection 2 of the Income-tax Act--- Rates of super-tax Per cent (1)On the first Rs.25,000 of total income ... .... Nil (2) On the balance of total income ... ... ... ... ... ... ... ... ... 16 Surcharge on super-tax The amount of super-tax computed at the rates hereinbefore specified shall be increased by a surcharge for purposes of the Union of 12 1/2 per cent of the amount of super-tax. Paragraph D In (he case of every company, other than the Life Insurance Coroporation of India established under the Life Insurance Corporation Act, 1956, Rates of super-tax Per cent On the whole of the total income ... ... ... ... ... ... ... ... ... ... 55: Provided that (i) a rebate at the rate of 37.5 per cent on the total income shall be allowed in the case of any company which- (a) inrespect of its profits liable to tax under the Income-tax Act for the assessment year commencing on the 1st day of April, 1964, has made the prescribed arrangements for the declaration and payment within India of the dividends payable out of such profits in accordance with the provisions ofSection 194 of the Act-; and (b) is such a company as is referred to inSection 108 of the Income-tax Act-with a total income not exceeding Rs. 25,000; (ii) a rebate at the rate of 35 per cent on so much of the total income as consists of profits and gains attributable to the business of generation or distribution of electricity or of manufacture or production of any one or more of the articles specified in the list in Part IV of the Schedule; and at the rate of 30 per cent. on the balance of the total income shall be allowed in the case of a company which satisfies condition (a) of the preceding clause and which is such a company as is referred to inSection 108 of the Income-tax Act-with a total income exceeding Rs. 25,000; (iii) (A) in the case of a company which is wholly or mainly engaged in the manufacture or processing of goods or in mining or in the generation or distribution of electricity or any other form of power and whose total income does not exceed rupees five lakhs, a rebate at the rate of 30 per cent on so much of its total income as does not exceed rupees two lakhs and a rebate at the rate of 20 per cent of the balance of the total income; and in addition where the total income includes any income attributable to the business of generation or distribution of electricity or of manufacture or production of any one or more of the articles specified in the list in Part IV of this Schedule, a rebate at the "ate of 5 per cent on so much of such inclusion as does not exceed rupees two lakhs and a rebate at the rate of 6 per cent on the balance, if any, of such inclusion, shall be allowed if- (a) such company satisfies condition (a) of clause (i); and (b) it is not such a company as is referred to inSection 108 of the Income-tax Act-; (B) in the case of any company which is not entitled to any rebate under sub-clause (A) of this clause, a rebate at the. rate of 26 percent on so much of its total income as is attributable to the business of generation or distribution of electricity or of manufacture or production of any one or more of the article specified in the list in Part IV of the Schedule; and at the rate of 20 per cent on the balance of the total income, shall be allowed if- (a) such company satisfies condition (a) of clause (i); and (b) it is not such a company as is referred to insection 108 of the Income-tax Act-; (iv) a rebate at the rate of 30 per cent on so much of the total income as consists of royalties received from an Indian concern in pursuance of an agreement made by it with the Indian concern on or after the 1st day of April, 1961 and which has been approved by the Central Government; at the rate of 30 per cent on so much of the total income as consists of fees for rendering technical services received from an Indian concern in pursuance of an agreement made by it with the Indian concern after the 29th day of February, 1964 and which has been approved by the Central Government; and at the rate of 15 per cent on the balance of the total income shall be allowed in the case of any company not entitled to a rebate under any of the preceding clauses; Provided further that- (i) the amount of the rebate under clause (i) or clause (ii) or clause (iii) of the preceding proviso shall be reduced by the sum, if any, equal to the amount or the aggregate of the amounts, as the case may be, computed as hereunder:- (a) on the aggregate of the sums computed in the at the rate of. l00 per cent. manner provided in clause (i) of the second proviso to Paragraph D of Part II of the First Schedule to the Finance Act, 1963, as reduced by the amount, if any, which is deemed to have been taken into account, in accordance with clause (ii) of the said proviso, for the purpose of reducing the rebate mentioned in clause (i) of the said proviso to nil; (b) on the amount representing the face value at the rate of 12 1/2 per cent of any bonus shares or the amount of any bonus issued to its shareholders during the previous year with a view to increasing the paid-up capital except where such bonus are or bonus have been issued wholly out the share premium account of the company ter the 31st day of March, 1964; and (c) in addition, in the case of a company referred to in clause (i) of clause (ii) or clause (iii) of the preceding proviso [being such a company as is referred to insection 108 of the Income-tax Act-or any other company as is referred to in clause (iii) of sub-section (2) ofsection 104-of that Act] which has declared or distributed to its shareholders during the previous year any dividends other than dividends on preference shares- (A) in the case of a company which since the date of the commencement of its activities has declared or distributed any dividends for the first time during the previous year or any one of the four previous year immediately preceding such previous year- on that part of the dividends other than at the rate of 7.5 per cent dividends on preference shares which ex- ceeds 10 per cent of the paid-up equity pital: B) in any other case- onhe whole amount of the dividends at the rate of 7.5 per cent other than dividends on preference shares: (ii) where the sum arrived at in accordance with clause (i) of this proviso exceeds the amount of the rebate arrived at in accordance with clause (i) or clause (ii) or clause (iii), as the case may be, of the preceding proviso only so much of the amounts of reduction mentioned in sub-clauses (a), (b) and (c) of clause (i) of this proviso as is sufficient. in that order, to reduce the rebate to nill shall bedeemed to have been taken into account for the purpose:
Provided further that the super-lax payable by acompany, as is referred to insection 108 of the Income-tax Act-. and the total income of which exceeds rupees twenty-five thousand, shall not exceed the aggregate of (a) the super-tax which would have been payable by the company if its total income had been Rs. 25,000 (the income of Rs. 25.000 for the purpose being computed as if such income included income from various sources in the same proportion as the total income of the company): and (b) fifty-five per cent of the amount by which its total income exceeds rupees twenty-five thousand: Provided further that the super-tax payable by a company, which is wholly or mainly engaged in the manufacture or processing ol goods or in mining or in the generation or distribution of electricity or other form of power and which is not such a company as is referred to insection 108 of the Income-tax Act-and the total income of which exceeds rupees five lakhs, shall not exceed the aggregate of (a) the super-tax which would have been payable by the company if its total income had been rupees five lakhs (the income of rupees five lakhs for this purpose being computed as if such income included income from various sources in the same proportion as the total income of the company); and (b) fifty-five per cent of the amount by which its total income exceeds rupees five lakhs. Explanation 1.- For the purposes of this Paragraph, a company shall be deemed to be mainly engaged in the manufacture or processing of goods or in mining or in the generation of distribution of electricity or.any other form of power, if the income attributable to any of the aforesaid activities in its total income for the previous year is not less than fifty-per cent of such total income. Explanation 2.- For the purposes of this Paragraph, where a part of the income of a company is not included in its total income because it is agricultural income, the amount declared or distributed as dividends (other than dividends on preference shares), the amount representing the face value of any bonus shares and the amount of any bonus issued to its shareholders shall each he deemed to be such proportion thereof as the sum specified in clause (a) bears to the sum specified in clause (b), such -.sums being (a) the average amount of the total income of the company in the five previous years in which it has been in of taxable income immediately preceding the relevant previous year. and (b) the average amount of the total profits and gains (excluding capital receipts) of the company for the five previous years referred to in clause (a) reduced by such allowances as may be admissible under the Income-tax Act but which have not been taken into account by the company in its profit and loss accounts for the :said five previous years. Explanation 3.- For the removal of doubts it is hereby declared that where any dividends were declared by the company before the commencement of the previous year and are distributed by it during that year no reduction in the rebate shall be made under sub-clause (c) of clause (i) of the second proviso in respect of such dividends. Paragraph E In the case of the Life Insurance Corporation of India established under the Life Insurance Corporation Act. 1956, . . . Rate of super-tax On the whole of its profits and gains from the insurance business ...... ... ... ... 22.5
PART 03: RATES FOR DEDUCTION OF TAX AT SOURCE IN CERTAIN CASES
In every case in which under the provisions of sub-section (2) ofSection 192-andSections 193-to195 of the Income-tax Act-. tax is to he deducted at the rates in force deduction shall be made from the income subject to deduction. at the following rates : Income-tax Super-tax Rate of Rate of Rate of Rate of income-tax surcharge super-tax surcharge 1. In the case of a person other than a company (a) where the person is resident on 18% 2% Nil Nil: the whole income (excluding in- terest payable on any security of the Central Government issued or declared to be income-tax free. and interest payable on any security of a State Government issued income-tax free. the in- come-tax whereon is payable by the State Government): (b) where the person is not resident in India (i)on the whole income (exclud- 25% 4,37% Super-tax and sur-charge on super-tax ing interest payable, on any secu- in accordance with the provisions of rity of the Central Government clause (b) of sub-section ( 1 ) of issued or declared to be income-Section 113 of the Income-tax Act-. tax free. and interest payable on any security of a State Govern- ment issued income-tax free. the income-tax whereon is payable by the State Government): (ii) on the income from interest pay- Nil Nil Super-tax and sur-charge on super-tax able on any security of the Central in accordance with the provisions of Government issued or declared to clause (b) of sub-section (1) of be income-tax free. and interestSection 113 of income-tax Act-. payable on any security of a State Government issued income-tax free. the income tax whereon is payable by the State Government. Rate of Rate of income-tax Super-lax 2. In the case of a company (a) where the company is either an Indian company or company which has made the prescribed arrangement for the declaration and payment of dividends within India. on the whole income (excluding interest payable on any security of the Central Government issued or declared to be income-tax free, and interest pay able on any security of a Slate Government issued income- tax free, the income-lax whereon is payable by the State Govern- ment): ... ... ... ... ... ... ... ... ... 20% (b) where the company is neither an Indian company nor a company which has made the prescribed arrangements for the declaration and payment ol dividends within India (i)on the income from dividends payable by an Indian company which is not such a company as is referred to inSection 108 of the In- come-tax Act-and which is wholly or mainly engaged in the business of Rate of Rate of income-tax Super-tax generation or distribution of electricity or of manufacture or produc- tion of any one or more of the articles specified in the list in Part IV of the Schedule; ... ... ... ... ... ... ... 15% Nil (ii) on the income from dividends payable by any other Indian company or any company which has made the prescribed arrangements for the declaration and payment of dividends within India; ... ... 25% Nil (iii) on the income from royalties payable by an Indian concern in pur- suance of an agreement which is made by it with the Indian concern on or after the 1st day of April, 1961and which has been approved by the Central Government ... ... ... ... ... ... 25% 25% (iv) on the income from fees for rendering technical services received from an Indian concern in pursuance of an agreement made by it with the Indian concern after the 29th day of February, 1964 and which has been approved by the Central Government; ... ... ... 25% 25% (v) on the income from interest payable on any security of the Central Government issued or declared to be income-tax free and interest pay- able on any security of a State Government issued income-tax free, the income-tax whereon is payable by the State Government and... Nil 40% (vi)on any other income ... ... ... ... ... ... ... 25% 40%
PART 04: LIST OF ARTICLES
(1) Iron and steel (metal), ferro-alloys and special steels. (2) Aluminium, copper, lead .and zinc (metals). (3) Coal, lignite, iron ore, bauxite, manganese ore, dolomite, magnesite and mineral oil. (4) Industrial machinery specified under the heading "8. Industrial Machinery", sub-heading "A. Major items of specified equipment used in specific industries," of the First Schedule to the Industries (Development and Regulation) Act, 1951. (5) Boilers and steam-generating plants, stream engines and turbines and internal combustion engines. (6) Equipment for the generation and transmission of electricity including transformers, cables and transmission towers. (7) Machine tools, precision tools, dies and jigs. (8) Tractors and earth-moving machinery. (9) Steel castings and forgings. (10) Cement and refractories. (11) Fertilisers, namely, amr ionium sulphate, ammonium sulphate nitrate (double salt), ammonium nitrate (nitrolime-stone), ammonium chloride, superphosphate, urea and complex fertilisers of synnthetic origin containing both nitrogen and phosphorus, such as ammonium phosphates, ammonium sulphate phosphate and ammonium . nitro-phosphate. (12) Paper and pulp. (13) Tea..(14) Electronic equipment, namely, radar equipment, computers, electronic accounting and business machines, electronic communication equipment, electronic control instruments and basic components, such as valves, transitors, resistors, condensers, coils, magnetic materials and micro wave components. ( 15) Petrochemicals including corresponding products manufactured from other basic raw materials like calcium carbide, ethyl alcohol or hydrocarbons from other sources. (16) Component parts of the articles mentioned in items Nos. (4), (5), (6) and (8), that is to say, such parts as are essential for the working of the machinery referred to in items aforesaid and have been given for that purpose some special shape or quality which would not be essential for their use for any other purpose and are in complete finished form and ready for fitment.
SCHEDULE 02: THE SECOND SCHEDULE
(Seesection 3-) Rates of Annuity Deposits (i) In the case of any depositor whose total income does not exceed Rs. 15,000... Nil. (ii) In the case of any depositor whose total income exceeds Rs. 15,000 but docs not exceed Rs. 20,000-5 per cent of the adjusted total income: Provided that the annuity deposit to be made shall in no case exceed half the amount by which the total income exceed Rs. 15,000. (iii) In the case of a depositor whose total income exceed Rs. 20,000 but does not exceed Rs. 40,000-71/2 per cent of the adjusted total income: Provided that the annuity deposit to be made shall in no case exceed the aggregate of the following sums, namely:- (a) an amount calculated at five percent on so much of the adjusted total income as does not exceed Rs. 20,000; (b) one-half of the amount by which the total income exceeds Rs. 20,000. (iv) In the case of a depositor whose total income exceeds Rs. 40,000 but does not exceed Rs. 70,000-10 per cent of the adjusted total income: Provided that the annuity deposit to be made shall in no case exceed the aggregate of the following sums, namely:- (a) an amount calculated at seven and half per cent on so much of the adjusted total income as does not exceed Rs. 40,000; (b) one-half of the amount by which the total income exceeds Rs. 40,000; (v) In the case of a depositor whose total income exceeds Rs. 70,000-12 1/2 per cent of the adjusted total income: Provided that the annuity deposit to be made shall in no case exceed the aggregate of the following sums, namely:- (a) an amount calculated at ten per cent on so much of the adjusted total income as does not exceed Rs. 70,000; (b) one-half of the amount by which the total income exceeds Rs. 70,000. Explanation.- In this Schedule, "total income" means total income computed in the manner laid down in the Income-tax Act without making any allowance under section 280-0 of that Act.
SCHEDULE 03: THE THIRD SCHEDULE
(Seesection 56-) [Note.- This Third Schedule amended First Schedule to Indian Tariff Act, 1934 which now stands repealed by the Customs Tariff Act, 1975.]
Central Bare Acts


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