FINANCE ACT, 1965
(1) This Act may be called the Finance Act, 1965.
(2) Save as otherwise provided in this Act, sections 3 to 67 and 69 to 74 shall be deemed to have come into force on the 1st day of April, 1965, and section 68 shall be deemed to have come into force on the 1st day of March, 1965.
(1) Subject to the provisions of sub sections (2), (3), (4) and (5), for the assessment year commencing on the 1st day of April, 1965, 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 D of that Part apply, shall be increased by a surcharge for purposes of the Union calculated in either case in the manner provided therein.
(2) In making any assessment for the assessment year commencing on the 1st day of April, 1965, 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 and super tax payable according to the rates applicable under the operation of the Finance Act, 1964 (5 of
(1) Save as otherwise provided in Chapter XXIIA of the Income tax Act, annuity deposit for the assessment year commencing on the 1st day of April, 1965, 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) of section 280B of the Income tax Act.
In section 2 of the Income tax Act,
(i) in clause (7), for the words "income tax or super tax", the words "any tax" shall be substituted;
(ii) clause (11) shall be omitted;
(iii) in clause (18),
(i) in sub clause (b)(i), for the words and brackets "held by, the Government or a corporation established by a Central, State or Provincial Act or the public (not being a director, or a company to which this clause does not apply)", the following shall be substituted, namely :
"held by
(a) the Government, or
(b) a corporation established by a Central, State or Provincial Act, or
(
In section 8 of the Income tax Act,
(i) for the words "For the purposes of inclusion in the total income of an assessee, any dividend", the words, brackets and letter "For the purposes of inclusion in the total income of an assessee,
(a) any dividend" shall be substituted;
(ii) the following clause shall be inserted at the end, namely :
"(b) any interim dividend shall be deemed to be the income of the previous year in which the amount of such dividend is unconditionally made available by the company to the member who is entitled to it.".
In section 10 of the Income tax Act,
(i) after clause (4), the following clause shall be inserted, namely :
"(4A) in the case of a non resident, any income from interest on moneys standing to his credit in a non resident account in any bank in India in accordance with the Foreign Exchange Regulation Act, 1947 (7 of 1947), and any rules made thereunder;";
(ii) in sub clause (vii)(a) of clause (6),
(a) after the words "such person continues", the words, figure and letters "with the approval of the Central Government obtained before the 1st day of October of the relevant assessment year" shall be inserted;
(b) for the words "twenty four months", the words "sixty months" shall be substituted;
&
In section 18 of the Income tax Act, in clause (i) of sub section (1), after the word "Government", the words, figures and letters "not being interest payable under section 280D in respect of any annuity deposit made under Chapter XXIIA" shall be inserted.
In section 33 of the Income tax Act,
(i) in sub section (1), for clause (iii), the following clause shall be substituted, namely :
"(iii) in the case of machinery or plant installed after the 31st day of March, 1961
(a) where the machinery or plant is installed after the 31st day of March, 1963, and before the 1st day of April, 1966, for the purposes of business of mining coal, thirty five per cent. of the actual cost of the machinery or plant to the assessee,
(b) where the machinery or plant is installed before the 1st day of April, 1965, for the purposes of any other business, twenty per cent.,
(c) where the machinery or plant is installed after the 31st day of March, 1965
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After section 33 of the Income tax Act, the following section shall be inserted, namely :
33A. Development allowance. (1) In respect of planting of tea bushes on any land in India owned by an assessee who carries on business of growing and manufacturing tea in India a sum by way of development allowance equivalent to
(i) where tea bushes have been planted on any land not planted at any time with tea bushes or on any land which had been previously abandoned, forty per cent. of the actual cost of planting; and
(ii) where tea bushes are planted in replacement of tea bushes that have died or have become permanently useless on any land already planted, twenty per cent. of the actual cost of planting,
shall, subject to the provisions of this section, be a
In section 34 of the Income tax Act, in the Explanation to clause (i) of sub section (2), for the words, brackets and figures "is transferred by a company to a subsidiary company, then, if the conditions of clause (iv) of section 47 are satisfied", the following shall be substituted, namely :
"is transferred by a holding company to its subsidiary company or by a subsidiary company to its holding company, then, if the conditions of clause (iv) or, as the case may be, of clause (v) of section 47 are satisfied".
In section 36 of the Income tax Act, in sub section (1), after clause (viii), the following clause shall be inserted, namely :
"(ix) any expenditure bona fide incurred by a company for the purpose of promoting family planning amongst its employees :
Provided that where such expenditure or any part thereof is of a capital nature, one fifth of such expenditure shall be deducted for the previous year in which it was incurred; and the balance thereof shall be deducted in equal instalments for each of the four immediately succeeding previous years :
Provided further that the provisions of sub section (2) of section 32 and of sub section (2) of section 72 shall apply in relation to deductions allowable under this clause as they apply in relation to deductions allowable in respect of depreciation :
In section 37 of the Income tax Act, in clause (i) sub section (2), after the word and figures "section 33", the words, figures and letter "or section 33A" shall be inserted.
In section 40 of the Income tax Act, in sub clause (iii) of clause (c),
(a) in the proviso
(i) after the words, brackets and figure "in sub clause (i)", the words, brackets and figures "or any payment of tax referred to in sub clause (vii)" shall be inserted;
(ii) after the words, brackets and figures "clause (iv) or clause (v)", the words, brackets and figures "or any expenditure referred to in clause (ix)" shall be inserted;
(b) after the proviso, the following proviso shall be inserted, namely :
Provided further that nothing in this sub clause shall apply to any expenditure which results directly or indirectly in the provision of any benefit or amenity or perquisite to an employee whose income chargeab
In section 43 of the Income tax Act,
(a) for Explanation 6 to clause (r), the following Explanation shall be substituted, namely :
"Explanation 6 : When any capital asset is transferred by a holding company to its subsidiary company or by a subsidiary company to its holding company, then, if the conditions of clause (iv) or, as the case may be, of clause (v) of section 47 are satisfied, the actual cost of the transferred capital asset to the transferee company shall be taken to be the same as it would have been if the transferor company had continued to hold the capital asset for the purposes of its business.";
(b) for Explanation 2 to clause (6), the following Explanation shall be substituted, namely :
"Explanation 2 : When any capital asset is tra
In section 47 of Income tax Act, after clause (iv), the following clause shall be inserted, namely :
"(v) any transfer of a capital asset by a subsidiary company to the holding company if
(a) the whole of the share capital of the subsidiary company is held by the holding company, and
(b) the holding company is an Indian company.".
In section 49 of the Income tax Act,
(i) in sub clause (e) of clause (iii), after the word, brackets and figures "clause (iv)", the words, brackets and figure "or clause (v)" shall be inserted;
(ii) at the end, the following Explanation shall be added, namely :
Explanation : In this section the expression "previous owner of the property" in relation to any capital asset owned by an assessee means the last previous owner of the capital asset who acquired it by a mode of acquisition other than that referred to in clause (i) or clause (ii) or clause (iii) of this section,,
After section 54 of the Income tax Act, the following section shall be inserted, namely :
54A. Relief of tax on capital gains in certain cases. (1) Where in the case of an assessee, being an individual who is not a citizen of India or being a company which is not an Indian company, a capital gain arises from the transfer of a capital asset, being shares in an Indian company, and the assessee has, within a period of two years from the date of such transfer, re invested the full value of the consideration or any part thereof received or accruing as a result of such transfer in an investment approved by the Central Government in this behalf (hereinafter in this section referred to as the approved investment), the assessee shall, subject to the provisions of sub section (3), be entitled to a credit of a sum calculated in accordance with the provisions of sub section (2).
In section 56 of the Income tax Act, in sub section (2), after clause (i), the following clause shall be inserted, namely :
"(ia) income referred to in sub clause (viii) of clause (24) of section 2;".
After section 69A of the Income tax Act, the following section shall be inserted under the sub heading "Aggregation of Income", namely :
"69B. Amount of investments, etc., not fully disclosed in books of account. Where in any financial year the assessee has made investments or is found to be the owner of any bullion, jewellery or other valuable article, and the Income tax Officer finds that the amount expended on making such investments or in acquiring such bullion, jewellery or other valuable article exceeds the amount recorded in this behalf in the books of account maintained by the assessee for any source of income, and the assessee offers no explanation about such excess amount or the explanation offered by him is not, in the opinion of the Income tax Officer, satisfactory, the excess amount may be deemed to be the income of the assessee for such financial year.".
After section 80 of the Income tax Act, the following Chapter and sections shall be inserted, namely :
Chapter VIA
Deductions to Be Made In Computing Total Income
80A. Deduction in respect of life insurance premia, annuities and contributions to provident fund, etc. (1) In computing the total income of an assessee there shall be deducted, in accordance with and subject to the provisions of this section, an amount equal to sixty per cent. of the first five thousand rupees of the aggregate of the sums specified in sub section (2) and fifty per cent. of the balance, if any, of such aggregate.
(2) The sums referred to in sub section (1) shall be the following, namely :
(a) where the assessee is an individual,
In section 84 of the Income tax Act, in sub section (6), for the word, figures and letter "Chapter XI D", the word and figures "Chapter XI" shall be substituted.
After section 85 of the Income tax Act, the following section shall be inserted, namely :
"85A. Deduction of tax on intercorporate dividends. Where the total income of an assessee being a company includes any income by way of dividends received by it from an Indian company or a company which has made the prescribed arrangements for the declaration and payment of dividends (including dividends on preference shares) within India, the assessee shall be entitled to a deduction from the income tax with which it is chargeable on its total income for any assessment year of so much of the amount of income tax calculated at the average rate of income tax on the income so included (other than any such income on which no income tax is payable under the provisions of this Act) as exceeds an amount of twenty five per cent. thereof :
Provided that in
In section 86 of the Income tax Act, clauses (i) and (ii) shall be omitted.
In Chapter VII of the Income tax Act, after section 86, the following section shall be inserted, namely :
"86A. Deduction from tax on certain securities. Where there is included in the total income of an assessee
(i) the interest due on any security of the Central Government issued or declared to be income tax free, or
(ii) the interest due on any security of a State Government issued income tax free, the income tax whereon is payable by the State Government,
the assessee shall be entitled to a deduction from the amount of income tax with which he is chargeable on his total income, of an amount equal to the income tax calculated on the amount to included at the average rate of income tax or at the rate of twenty five per cent., whichever is less.".<
In section 87 of the Income tax Act,
(i) in clause (d) of sub section (1), for the words, figure and letter "to the extent provided in rule 7 of Part A of the Fourth Schedule", the words "in so far as the aggregate of such contributions does not exceed one fifth of his salary in that previous year or eight thousand rupees, whichever is less" shall be substituted;
(ii) in sub section (4), the words, figures and letter ",together with the amount of super tax deductible under section 99A," shall be omitted;
(iii) after sub section (4), the following sub section shall be inserted, namely :
(5) This section shall not apply in respect of
(i) the assessment year commencing on the 1st day of April, 1966, and any
In section 88 of the Income tax Act,
(i) in sub section (1), for the words "of an amount equal to the income tax calculated at the average rate of income tax on any sums paid by him in the previous year", the following shall be substituted, namely :
"(a) where the assessee is a company, of an amount equal to the income tax calculated at the average rate of income tax or at the rate of twenty five per cent., whichever is less, and
(b) in the case of any other assessee, of an amount equal to the income tax calculated at the average rate of income tax,
on any sums paid by the assessee in the previous year";
(ii) in sub section (3), after the first proviso, the following proviso shall be inserted, namely :
In section 90 of the Income tax Act, in clause (a), the brackets and words "(including super tax)" shall be omitted.
In section 91 of the Income tax Act, in clause (i) of the Explanation, the words "and super tax" shall be omitted.
In Chapter XI of the Income tax Act,
(i) for the heading "SUPER TAX", the heading "ADDITIONAL INCOME TAX ON UNDISTRIBUTED PROFITS" shall be substituted;
(ii) sub headings "A. General", "B. Incomes forming part of total income on which no super tax is payable", "C. Rebate of super tax" and "D. Additional super tax on undistributed profits" and sections 95 to 103 (both inclusive) shall be omitted.
In section 104 of the Income tax Act, in sub section (1),
(i) for the word "super tax", the word "income tax" shall be substituted;
(ii) in clause (a), the word "and" shall be omitted;
(iii) for the brackets, letter and words "(b) thirty seven per cent. in the case of any other company", the following shall be substituted, namely :
"(b) thirty seven per cent. in the case of a trading company, and
(c) twenty five per cent. in the case of any other company".
In section 109 of the Income tax Act,
(i) in sub section (a) of clause (i), the words "and super tax" shall be omitted and for the words "any super tax", the words "any income tax" shall be substituted;
(ii) after clause (ii), the following clause shall be inserted, namely :
(iia) "trading company" means a company whose business consists wholly or mainly in dealing in goods or merchandise manufactured, produced or processed by a person other than that company and whose income attributable to such business included in its total income is not less than fifty one per cent. of the amount of such total income;;
(iii) in clause (iii), to sub clause (4)(a), the following proviso shall be added, namely :
Provided
For section 110 of the Income tax Act, the following section shall be substituted, namely :
"110. Determination of tax where total income includes income on which no tax is payable. Where there is included in the total income of an assessee any income on which no income tax is payable under the provisions of this Act, the assessee shall be entitled to a deduction, from the amount of income tax with which he is chargeable on his total income, of an amount equal to the income tax calculated at the average rate of income tax on the amount on which no income tax is payable.".
In section 111 of the Income tax Act, for the words "income tax and super tax", the word "tax" shall be substituted.
In section 112 of the Income tax Act,
(i) in clause (i), for word "income tax", the word "tax" shall be substituted;
(ii) clause (ii) shall be omitted;
(iii) in clause (iii), for the words "income tax and super tax", the word "tax" shall be substituted.
Section 113 of the Income tax Act shall be omitted.
In section 114 of the Income tax Act,
(i) the words "and super tax", wherever they occur, shall be omitted;
(ii) in clause (b)
(a) in sub clause (i), the words "and the average rate of super tax respectively" shall be omitted;
(b) in sub clause (ii), after the second proviso, the following proviso shall be inserted, namely :
"Provided further that the amount of income tax so calculated in respect of the capital gains relating to bonus shares, if any, chargeable under sub section (2) of section 45, shall be reduced by an amount equal to twelve and a half per cent. of the face value of such bonus shares or the amount of income tax so calculated, whichever is less."; and
&nbs
For section 115 of the Income tax Act, the following section shall be substituted, namely :
115. Tax on capital gains in case of companies. Where the total income of a company includes any income chargeable under the head "Capital gains" (whether such gains relate to short term capital assets or to other assets), the income tax payable by it shall be the aggregate of
(i) the amount of income tax calculated at the rate of twelve and a half per cent. on the amount of capital gains relating to bonus shares, if any, chargeable under sub section (2) of section 45 as reduced by an amount equal to twelve and a half per cent. of the face value of such bonus shares; so however, that the reduction shall in no case exceed the amount of income tax so calculated;
(ii) the amount of income tax calculated on
In section 131 of the Income tax Act, after the words "Appellate Assistant Commissioner", the words ",Inspecting Assistant Commissioner" shall be inserted.
In section 155 of the Income tax Act,
(i) after sub section (5), the following sub section shall be inserted, namely :
"(5A) Where an allowance by way of development allowance has been made wholly or partly to an assessee in respect of the cost of planting in any area in any assessment year under section 33A and subsequently
(i) at any time before the expiry of eight years from the end of the previous year in which such allowance was made, the land is sold or otherwise transferred by the assessee to any person other than the Government, a local authority, a corporation established by a Central, State or Provincial Act or a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956), or in connection with any amalgamation or succession referred to in sub section (5) or s
In section 164 of the Income tax Act, the words "or total world income" shall be omitted.
In section 178 of the Income tax Act, for sub sections (3) and (4), the following sub sections shall be substituted, namely :
"(3) The liquidator
(a) shall not, without the leave of the Commissioner, part with any of the assets of the company or the properties in his hands until he has been notified by the Income tax Officer under sub section (2); and
(b) on being so notified, shall set aside an amount equal to the amount notified and, until he so sets aside such amount, shall not part with any of the assets of the company or the properties in his hands :
Provided that nothing contained in this sub section shall debar the liquidator from parting with such assets or properties for the purpose of the payment of the tax payable by the company or for ma
In section 181 of the Income tax Act, after the words "tax free", the following words shall be inserted, namely :
"at such rate not exceeding twenty five per cent. as may be notified by the Central Government in the Official Gazette from time to time".
In section 191 of the Income tax Act, the brackets and figure "(1)" and sub section (2) shall be omitted.
In section 192 of the Income tax Act,
(i) in sub section (1), the words "and super tax" and the words "and average rate of super tax respectively" shall be omitted;
(ii) sub section (2) shall be omitted;
(iii) in sub section (3), the words, brackets and figure "or sub section (2)" shall be omitted;
(iv) in sub section (5), for the words "income tax and super tax", the word "tax" shall be substituted;
(v) the Explanation shall be omitted.
In section 193 of the Income tax Act,
(a) the words "and super tax" shall be omitted;
(b) the following Explanation shall be inserted at the end, namely :
Explanation : In this section, and in sections 194, 195 and 197, the expression "rates in force" means the rate or rates specified for the purpose of deduction by the Finance Act of the year in which such deduction is required to be made..
In section 194 of the Income tax Act, the words "and super tax" and the words "or the total world income" shall be omitted.
In section 195 of the Income tax Act, in sub section (1), the words "and super tax", wherever they occur, shall be omitted.
In section 197 of the Income tax Act,
(i) in sub section (1),
(a) the words "or super tax", wherever they occur, and the words "or the total world income" shall be omitted;
(b) in clause (b), for the word "super tax", the word "income tax" shall be substituted;
(ii) in sub section (2), the words "and super tax" shall be omitted;
(iii) in sub section (3),
(a) for the words and figures "sections 84 and 101", the word and figures "section 84" shall be substituted;
(b) the words, brackets and figures "and sub section (2) of section 101" shall be omitted,
(c) for the words and
In section 199 of the Income tax Act, for the words "income tax or super tax, as the case may be,", the word "tax" shall be substituted.
In section 203 of the Income tax Act, for the words "income tax or super tax", wherever they occur, the word "tax" shall be substituted.
In section 206 of the Income tax Act, in clause (c) of sub section (1), the words "and super tax" shall be omitted.
In section 209 of the Income tax Act,
(i) in clause (a),
(a) in sub clauses (ii) and (iii), the words "and super tax", wherever they occur, shall be omitted;
(b) in sub clause (iv), the words "and super tax" and the brackets and letter "(b)" shall be omitted;
(ii) clause (b) shall be omitted;
(iii) in the Explanation, for the words, brackets and letters "clauses (a) and (b)", the word, brackets and letter "clause (a)" shall be substituted.
In sections 213 to 217, 220, 243 and 244 of the Income tax Act, for the words "four per cent.", the words "six per cent." shall be substituted.
In section 226 of the Income tax Act, for sub section (5), the following shall be substituted, namely :
"(5) The Income tax Officer may, if so authorised by the Commissioner by general or special order, recover any arrears of tax due from an assessee by distraint and sale of his movable property in the manner laid down in the Third Schedule.".
In section 235 of the Income tax Act, for clause (b), the following clause shall be substituted, namely :
"(b) where the shareholder
(i) is not a company, the amount of income tax payable by him under this Act but not exceeding income tax calculated at the rate of twenty five per cent., and
(ii) is a company, twenty five per cent.,
on that portion of the dividend which is attributable to the profits of the company assessed to agricultural income tax,".
In section 236 of the Income tax Act, in clause (iii) of Explanation 2, for the words and figures "sections 88 and 100", the word and figures "section 88" shall be substituted.
In section 236A of the Income tax Act, in sub section (2), for the word "super tax", the word "tax" shall be substituted.
After section 276 of the Income tax Act, the following section shall be inserted, namely :
"276A. Failure to comply with the provisions of sub section (1) and (3) of section 178. If a person, without reasonable cause or excuse,
(i) fails to give the notice in accordance with sub section (1) of section 178; or
(ii) fails to set aside the amount as required by sub section (3) of that section; or
(iii) parts with any of the assets of the company or the properties in his hands in contravention of the provisions of the aforesaid sub section,
he shall be punishable with rigorous imprisonment for a term which may extend to two years :
Provided that in the absence of s
In section 279 of the Income tax Act, in sub section (1), after the word and figures "section 276", the words, figures and letter "or section 276A" shall be inserted.
In section 280P of the Income tax Act, the words "and super tax" shall be omitted.
In section 280X of the Income tax Act, in sub section (2), the brackets and words "(but not super tax)" shall be omitted.
After section 280X of the Income tax Act, the following Chapter and sections shall be inserted, namely :
Chapter XXIIB
Tax Credit Certificates
280Y. Definitions. In this Chapter,
(a) "eligible of capital" means an issue of ordinary shares specified as such in the scheme;
(b) "public company" means a public company as defined in section 3 of the Companies Act, 1956 (1 of 1956);
(c) "scheme" means a scheme made under this Chapter;
(d) "urban area" means any area which the Central Government may, having regard to the population, concentration of industries, need for proper planning of the area and other relevant factors
In section 294 of the Income tax Act, the words "or super tax" shall be omitted.
In section 295 of the Income tax Act, in clause (e) of sub section (2), after the words, brackets and figures "clause (i) of sub section (3) of section 87", the words, brackets, figures and letter "or clause (i) of sub section (4) of section 80A, as the case may be" shall be inserted.
In the First Schedule to the Income tax Act, in rule 3, in clause (c), for the words "but no income tax shall be payable on the annual average of the amount of such interest", the words "but the assessee shall be entitled to a deduction from the amount of income tax with which he is chargeable on his total income, of an amount calculated at the rate of twenty five per cent. on the annual average of the amount of such interest" shall be substituted.
In the Fourth Schedule to the Income tax Act,
(a) in Part A,
(i) in rule 6, the words "and super tax" shall be omitted;
(ii) for rule 7, the following rule shall be substituted, namely :
"7. Exemption for employees contributions. An employee participating in a recognised provident fund shall, in respect of his own contributions to his individual account in the fund in the previous year, be entitled to a deduction in the computation of his total income of an amount determined in accordance with section 80A or, as the case may be, to a deduction from the amount of income tax with which he is chargeable on his total income of an amount of income tax determined in accordance with section 87.";
(iii) in sub ru
After the Fourth Schedule to the Income tax Act, the following Schedule shall be inserted namely :
The Fifth Schedule
[See section 33(1)(iii)(c)]
List of Articles and Things
(1) Iron and steel (metal), ferro alloys and special steels.
(2) Aluminium, copper, lead and zinc (metals).
(3) Iron ore, bauxite, manganese ore, dolomite, limestone, magnesite and mineral oil.
(4) Industrial machinery specified under the heading "8. Industrial machinery", sub heading "A. Major items of specialised equipment used in specific industries", of the First Schedule to the Industries (Development and Regulation) Act, 1951 (65 of 1951).<
(1) Where any person makes a declaration in accordance with sub section (2) in respect of the amount representing income
(a) which he has failed to disclose in a return of income for any assessment year filed by him before the 1st day of March, 1965, under the Indian Income tax Act, 1922 (11 of 1922), or the Income tax Act, 1961 (43 of 1961), or
(b) which has escaped assessment for any assessment year for which an assessment has been made before the 1st day of March, 1965, under either of the said Acts, or
(c) for the assessment of which no proceeding under either of the said Acts has been taken before the 1st day of March, 1965,
he shall, notwithstanding anything contained in the said Acts, be charged income tax at the rate specified in sub section
In the Estate Duty Act, 1953, -
(i) in section 9, in sub-section (1), for the words "two years", the words "one year" shall be substituted;
(ii) in section 10, -
(a) in the proviso, for the words "two years", the words "one year" shall be substituted;
(b) after the proviso, the following proviso shall be inserted, namely :-
"Provided further that a house or part thereof taken under any gift made to the spouse, son, daughter, brother or sister, shall not be deemed to pass on the donors death by reason only of the residence therein of the donor except where a right of residence therein is reserved or secured directly or indirectly to the donor under the relevant disposition or under any collateral dispositi
In the Wealth-tax Act, 1957, -
(i) in sub-section (1) of section 5, after clause (xix), the following clause shall be inserted, namely :-
"(xx) the value of any equity shares held by the assessee in any company of the type referred to in clause (d) of section 45, where such shares form part of the initial issue of equity share capital made by the company after the 31st day of March, 1964, for a period of five successive assessment years commencing with the assessment year next following the date on which such company commences the operations for which it has been established;";
(ii) for Part I of the Schedule, the following Part shall be substituted, namely :-
Part I
Paragraph A
In the Gift-tax Act, 1958, -
(i) in section 5, in sub-section (1), after clause (v), the following clause shall be inserted, namely :-
"(va)(i) to such temple, mosque, gurdwara, church or other place as has been notified by the Central Government for the purposes of sub-section (6) of section 88 of the Income-tax Act, 1961 (43 of 1961); or
(ii) by way of settlement on trust, of property the income from which, according to the deed of settlement, is to be used exclusively in connection with the temple, mosque, gurdwara, church or other place specified therein and notified as aforesaid;";
(ii) in Chapter IV, after section 18, the following section shall be inserted, namely :-
"18A. Credit for stamp duty pai
In the Preference Shares (Regulation of Dividends) Act, 1960, -
(i) in section 2, -
(a) in clause (b), for the words, brackets, figures and letters "clause (7A) of section 2 of the Indian Income-tax Act, 1922 (11 of 1922), and includes a company referred to in sub-clause (ii) of clause (5A)", the following shall be substituted, namely :-
"clause (26) of section 2 of the Income-tax Act, 1961 (43 of 1961), and includes a company referred to in sub-clause (ii) of clause (17)";
(b) in clause (c), the words, figures and letters "having been issued and subscribed for before the 1st day of April, 1960" shall be omitted;
(c) in clause (d), for the words and figures "Indian Income-tax Act, 1922 (11 of 1922)", the
In section 32 of the Unit Trust of India Act, 1963, -
(i) in sub-section (1), for clause (b), the following clause shall be substituted, namely :-
(b) where in the case of a unit holder, being an individual, the total income for any previous year as computed under the Income-tax Act, 1961 (43 of 1961), before including therein the amount of qualifying dividend -
(i) does not exceed a sum of twenty thousand rupees, the qualifying dividend shall not be included in computing the total income of the unit holder for that year;
(ii) exceeds a sum of twenty thousand rupees, the qualifying dividend shall be included in computing the total income of the unit holder for that year, but he shall be entitled to a deduction from the amount of income-tax payable b
In the Companies (Profits) Surtax Act, 1964, -
(i) in section 18, the words "and super-tax" shall be omitted;
(ii) in the First Schedule, -
(a) in clause (xii) of rule 1, the words "and super-tax" shall be omitted;
(b) in clause (i) of rule 2, the words "and super-tax", wherever they occur, shall be omitted, and for the word "super-tax" occurring in sub-clause (b), the word "income-tax" shall be substituted;
(iii) in the Third Schedule, -
(a) in Paragraph 1, -
(i) in the first proviso, for the words "of manufacture or production of any one or more of the articles", the words "of construction, manufacture or productio
The First Schedule
(See section 2)
Part I
Income-Tax and Surcharge on Income-Tax
Paragraph A
In the case of every individual or Hindu undivided family or unregistered firm or other association of persons or body of individual, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, not being a case to which any other Paragraph of this Part applies -
Rates of Income-Tax
1. where the total income does not exceed Rs. 5,000 5 per cent. of the total income.
(2) where the total income e
The Second Schedule
(See section 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 does 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 exceeds Rs. 15,000.
(iii) In the case of a depositor whose total income exceeds Rs. 20,000 but does not exceed Rs. 40,000 -
7 1/2 per cent. of the adju
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