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FINANCE ACT, 1968
(1) This Act may be called the Finance Act, 1968.
(2) Save as otherwise provided in this Act, sections 2 to 33 shall be deemed to have come into force on the 1st day of April, 1968.
(1) Subject to the provisions of sub-sections (2) and (3), for the assessment year commencing on the 1st day of April, 1968, 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 and a special 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, 1968, where the total income of a company, other than the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956), includes any profits and gains from life insurance business, the income-tax payable by it shall the aggregate of the income-tax calculated -
(i)
(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, 1968, shall be made by every person to whom the provisions of that Chapter apply, at the rate or 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, in sub-clause (i) of clause (37A), after the word '"Salaries", the words, brackets, figures and letter "or sub-section (9) of section 80E from any payment referred to therein" shall be inserted.
After section 35A of the Income-tax Act, the following sections shall be inserted, namely :-
35B. Export markets development allowance. - (1)(a) Where an assessee, being a domestic company or a person (other than a company) who is resident in India, has incurred after the 29th day of February, 1968, whether directly or in association with any other person, any expenditure (not being in the nature of capital expenditure or personal expenses of the assessee) referred to in clause (b), he shall, subject to the provisions of this section, be allowed a deduction of a sum equal to one and one-third times the amount of such expenditure incurred during the previous year.
(b) The expenditure referred to in clause (a) is that incurred wholly and exclusively on -
(i) advertisement or publicity outside In
In section 37 of the Income-tax Act, after sub-section (2A), the following Explanation shall be inserted, namely :-
Explanation : For the purposes of this sub-section, "entertainment expenditure" includes -
(i) the amount of any allowance in the nature of entertainment allowance paid by the assessee to any employee or other person after the 29th day of February, 1968;
(ii) the amount of any expenditure in the nature of entertainment expenditure [not being expenditure incurred out of an allowance of the nature referred to in clause (i)] incurred after the 29th day of February, 1968, for the purposes of the business or profession of the assessee by any employee or other person..
After section 40 of the Income-tax Act, the following section shall be inserted, namely :-
40A. Expenses or payments not deductible in certain circumstances. - (1) The provisions of this section shall have effect notwithstanding anything to the contrary contained in any other provision of this Act relating to the computation of income under the head "Profits and gains of business or profession".
(2)(a) Where the assessee incurs any expenditure in respect of which payment has been or is to be made to any person referred to in clause (b) of this sub-section, and the Income-tax Officer is of opinion that such expenditure is excessive or unreasonable having regard to the fair market value of the goods, services or facilities for which the payment is made or the legitimate needs of the business or profession of the assessee or the benefit der
Section 58 of the Income-tax Act shall be re-numbered as sub-section (1) thereof and after sub-section (1) as so re-numbered, the following sub-section shall be inserted, namely :-
(2) The provisions of section 40A shall, so far as may be, apply in computing the income chargeable under the head "Income from other sources" as they apply in computing the income chargeable under the head "Profits and gains of business or profession"..
In section 80K of the Income-tax Act, for the words "being the holder of any share or shares in a company, includes any income by way of dividends paid or deemed to have been paid to him", the words "being the owner of any share or shares in a company, includes any income by way of dividends paid or deemed to have been paid" shall be substituted.
In section 80M of the Income-tax Act, in sub-section (1), the words "received by it", wherever they occur shall be omitted.
After section 141 of the Income-tax Act, the following section shall be inserted, namely :-
"141A. Provisional assessment for refund. - (1) Where a return has been furnished under section 139 and the assessee claims that the tax paid or deemed to have been paid under the provisions of Chapter XVII-B or Chapter XVII-C exceeds the tax payable on the basis of the return and the accounts and documents accompanying it, the Income-tax Officer may, if he is of opinion that the regular assessment of the assessee is likely to be delayed, proceed to make, in a summary manner, a provisional assessment of the sum refundable to the assessee, on the basis of such return, accounts and documents.
(2) In making any assessment under this secti\on due effect shall be given to -
(a) the allowance referred to in s
In section 153 of the Income-tax Act, in sub-section (1), for clause (a), the following clause shall be substituted, namely :-
(a) the expiry of -
(i) four years from the end of the assessment year in which the income was first assessable, where such assessment year is an assessment year commencing on or before the 1st day of April, 1967;
(ii) three years from the end of the assessment year in which the income was first assessable, where such assessment year is the assessment year commencing on the 1st day of April, 1968;
(iii) two years from the end of the assessment year in which the income was first assessable, where such assessment year is an assessment year commencing on or after the 1st day of April, 1969; or".
In section 192 of the Income-tax Act, in sub-section (1), for the words "rates of tax in force", the words "rates in force" shall be substituted.
In section 194A of the Income-tax Act, -
(a) in sub-section (2), for the words "be signed in the presence of a Gazetted Officer of the Central or a State Government and bear an attestation by such Officer to the effect that the person who has signed the statement is known to him", the following shall be substituted, namely :-
"be signed in the presence of -
(a) a Member of Parliament or a State Legislature; or
(b) a member of a District Council or a Metropolitan Council, a Municipal Corporation or Municipal Committee; or
(c) a Gazetted Officer of the Central or a State Government; or
(d) an officer of any banking company (including a co-operative bank) of the r
In section 199 of the Income-tax Act, -
(a) after the words "in the assessment", the brackets, words, figures and letter "(including a provisional assessment under section 141A)" shall be inserted;
(b) for the existing provisos, the following provisos shall be, and shall be deemed always to have been, substituted, namely :-
"Provided that -
(i) in a case where such person or owner or shareholder is a person whose income is included under the provisions of section 60, section 61, section 64, section 93 or section 94 in the total income of another person, the payment shall be deemed to have been made on behalf of, and the credit shall be given to, such other person;
(ii) in any other case, where the dividen
In section 214 of the Income-tax Act, -
(i) to sub-section (1), the following proviso shall be added namely :-
"Provided that in respect of any amount refunded on a provisional assessment under section 141A, on interest shall be paid for any period after the date of such provisional assessment.";
(ii) after sub-section (1), the following sub-section shall be inserted, namely :-
"(1A) Where on completion of the regular assessment the amount on which interest was paid under sub-section (1) has been reduced, the interest shall be reduced accordingly and the excess, if any, paid shall be deemed to be tax payable by the assessee and the provisions of this Act shall apply accordingly.".
To section 219 of the Income-tax Act, the following proviso shall be added, namely :-
"Provided that where, before the completion of the regular assessment, a provisional assessment is made under section 141A, the credit shall be given also in such provisional assessment.".
In section 239 of the Income-tax Act, for sub-section (2), the following sub-section shall be substituted, namely :-
"(2) No such claim shall be allowed, unless it is made within the period specified hereunder, namely :-
(a) where the claim is in respect of income which is assessable for any assessment year commencing on or before the 1st day of April, 1967, four years from the last day of such assessment year;
(b) where the claim is in respect of income which is assessable for the assessment year commencing on the 1st day of April, 1968, three years from the last day of the assessment year;
(c) where the claim is in respect of income which is assessable for any other assessment year, two years from the last day of such assessment year.".
In section 271 of the Income-tax Act, in sub-section (1), for clause (iii), the following clause shall be substituted, namely :-
"(iii) in the cases referred to in clause (c), in addition to any tax payable by him, a sum which shall not be less than, but which shall not exceed twice, the amount of the income in respect of which the particulars have been concealed or inaccurate particulars have been furnished.".
In section 276 of the Income-tax Act, in clause (d), the words, figures and letter "by the provisions of Chapter XVII-B or" shall be omitted.
After section 276A of the Income-tax Act, the following section shall be inserted, namely :-
"276B. Failure to deduct and pay tax. - If a person, without reasonable cause or excuse, fails to deduct or after deducting fails to pay the tax as required by or under the provisions of sub-section (9) of section 80E or Chapter XVII-B, he shall be punishable with rigorous imprisonment for a term which may extent to six months, and shall also be liable to fine which shall be not less than a sum calculated at the rate of fifteen per cent. per annum on the amount of such tax from the date on which such tax was deductible to the date on which such tax is actually paid.".
In section 279 of the Income-tax Act, in sub-section (1), after the word, figures and letter "section 276A" the words, figures and letter "or section 276B" shall be inserted.
In section 280C of the Income-tax Act, -
(a) in sub-section (1), for the words "Where any Central Act enacts", the words, figures and letters "Where, in relation to any assessment year, not being an assessment year commencing on or after the 1st day of April, 1969, any Central Act enacts" shall be substituted;
(b) in clause (ii) of sub-section (2), after the words "or any subsequent assessment year", the words, figures and letters "not being an assessment year commencing on or after the 1st day of April, 1969" shall be inserted.
In section 280-O of the Income-tax Act, in the proviso to sub-section (1), after the words "or any subsequent assessment year", the brackets, words, figures and letters "(not being an assessment year commencing on or after the 1st day of April, 1969)" shall be inserted.
In section 280X of the Income-tax Act, in sub-section (1), after the words "or any subsequent assessment year" the brackets, words, figures and letters "(not being an assessment year commencing on or after the 1st day of April, 1969)" shall be inserted.
In section 280Z of the Income-tax Act, for sub-section (6), the following sub-section shall be substituted namely :-
"(6) The amount shown on a tax credit certificate granted to as individual or Hindu undivided family shall, on the certificate being produced before the Income-tax Officer, be adjusted against any liability of such individual or Hindu undivided family under the Indian Income-tax Act, 1922, (11 of 1922), or this Act, existing on the date on which the certificate was produced before the Income-tax Officer and where the amount of such certificate exceeds such liability, or where there is no such liability, the excess or the whole of such amount, as the case may be, shall, notwithstanding anything contained in Chapter XIX, be deemed, on the said date, to be refund due to such individual or Hindu undivided family, as the case may be, under the Chapter and the provisions o
In section 280ZA of the Income-tax Act, for sub-section (3), the following sub-section shall be substituted namely :-
"(3) The amount shown on a tax credit certificate granted to a public company under this section shall, on the certificate being produced before the Income-tax Officer, be adjusted against any liability of the company under the Indian Income-tax Act, 1922 (11 of 1922), or this Act, existing on the date of which the certificate was produced before the Income-tax Officer and where the amount of such certificate exceeds such liability, or where there is no such liability, the excess or the whole of such amount, as the case may be, shall, notwithstanding anything contained in Chapter XIX, be deemed, on the said date, be refund due to such company under that Chapter and the provisions of the Act shall apply accordingly.".
In section 280ZB of the Income-tax Act, in sub-section (2), for the portion beginning with the words "The amount shown on a tax credit certificate" and ending with the words "shall apply accordingly :", the following shall be substituted, namely :-
"The amount shown on a tax credit certificate granted to any company under this section shall, on the certificate being produced before the Income-tax Officer, be adjusted against any liability of the company under the Indian Income-tax Act, 1922 (11 of 1922), or this Act, existing on the date on which the certificate was produced before the Income-tax Officer and where the amount of such certificate exceeds such liability, or where there is no such liability, the excess or the whole of such amount, as the case may be, shall, notwithstanding anything contained in Chapter XIX, be deemed, on the said date, to be refund due to such company
In section 280ZD of the Income-tax Act, in sub-section (5), for the portion beginning with the words "The amount shown on a tax credit certificate" and ending with the words "shall apply accordingly :", the following shall be substituted, namely :-
"The amount shown on a tax credit certificate granted to any person under this section shall, on the certificate being produced before the income-tax Officer, be adjusted against any liability of that person under the Indian Income-tax Act, 1922 (11 of 1922), or this Act, existing on the date on which the certificate was produced before the Income-tax Officer and where the amount of such certificate exceeds such liability, or where there is no such liability, the excess or the whole of such amount, as the case may be, shall, notwithstanding anything contained in Chapter XIX, be deemed, on the said date, to be refund due to such person un
The amendments directed in the Third Schedule shall be made in the Income-tax Act with effect from the 1st day of April, 1969, except the amendments in items 3 and 23 of the said Schedule relating, respectively, to sections 16 and 139 of the said Act, which shall be deemed to have come into effect on the 1st day of April, 1968.
(1) Notwithstanding the omission of section 85 of the Income-tax Act by section 33 of the Finance (No. 2) Act, 1967 (20 of 1967), the provisions of the said section 85 shall have, and be deemed always to have, in relation to any assessment for the assessment year commencing on or after the 1st day of April, 1962, and before the 1st day of April, 1968, effect subject to the modification that for the words "by a shareholder in respect of so much of any dividend paid or deemed to be paid to him", the words "by an owner of the shares in respect of so much of any dividend paid or deemed to be paid" were substituted.
(2) Notwithstanding the omission of section 85A of the Income-tax Act by section 33 of the Finance (No. 2) Act, 1967 (20 of 1967), the provisions of the said section 85A shall have, and be deemed always to have, in relation to any assessment for the assessment year commencin
In the Wealth-tax Act, 1957, -
(a) in section 5, -
(i) in sub-section (1), -
(1) after clause (xiv), the following clause shall be inserted with effect from the 1st day of April, 1969, namely :-
"(xv) fixed deposits under any scheme framed by the Central Government and notified by it in this behalf in the Official Gazette, to the extent to which the amounts of such deposits do not exceed the maximum amount permitted to be deposited therein;";
(2) in clause (xvi), the words "held by the assessee" shall be omitted with effect from the 1st day of April, 1969;
(3) after clause (xvii), the following clause shall be inserted with effect from the 1st day of April, 196
In the Companies (Profits) Surtax Act, 1964, in the Third Schedule, -
(a) the figures "1", occurring before the words "On the amount by which" shall be omitted;
(b) for the figures and words "35 per cent.", the figures and words "25 per cent." shall be substituted with effect from the 1st day of April, 1969.
The Indian Tariff Act, 1934 (hereinafter referred to as the Tariff Act) shall be amended in the manner specified in the Fourth Schedule.
(1) In the case of goods chargeable with a duty of customs which is specified in the First Schedule to the Tariff Act, or in that Schedule as amended by a subsequent Central Act, if any, 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 special duty of customs equal to 10 per cent. of such amount :
Provided that in computing the total income so chargeable, any duty chargeable under section 2A of the Tariff Act or section 36 of this Act shall not be included.
(2) sub-section (1) shall cease to have effect after 31st day of March, 1969, except as respects things done or omitted to be done before such cesser; and section 6 of the General Clauses Act, 1897 (10 of 1897), shall
(1) With a view to regulating or bringing greater economy in imports, there shall be levied and collected, with effect from such date, and at such rate, as may be specified in this behalf by the Central Government by notification in the Official Gazette, on all or any of the goods mentioned in the First Schedule to the Tariff Act or in that Schedule as amended by a subsequent Central Act, if any, a regulatory duty of customs not exceeding -
(a) 25 per cent. of the rate, if any, specified in the said First Schedule read with any notification issued under section 3A, or sub-section (1) of section 4, of the Tariff Act; or
(b) 10 per cent. of the value of the goods as determined in accordance with the provisions of section 14 of the Customs Act, 1962 (52 of 1962),
whichever is higher :
&n
In the Indian Tariff (Amendment) Act, 1949, in sections 4 and 5, for the figures "1968", the figures "1969" shall be substituted.
In the Central Excises and Salt Act, 1944 (hereinafter referred to as the Central Excises Act), -
(1) in section 37, after sub-section (3), the following sub-section shall be inserted, namely :-
"(4) Notwithstanding anything contained in sub-section (3), and without prejudice to the provisions of section 9, in making rules under this section, the Central Government may provide that if any manufacturer, producer or licensee of a warehouse -
(a) removes any excisable goods in contravention of the provisions of any such rule, or
(b) does not account for all such goods manufactured, produced or stored by him, or
(c) engages in the manufacture, production or storage of such goods without having applied for the
(1) When goods of the description mentioned in this section chargeable with a duty of excise under the Central Excises Act (as amended by this Act or any subsequent Central Act) read with any notification for the time being in force issued by the Central Government in relation to the duty so chargeable, 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 the First Schedule to Central Excises Act, 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 I, II(2) and II(3) of Item No. 4, Items Nos. 13, 14, 14F, 15, 15A, 15B, 16, 16A, 17, 18A(2), 21, 22, 23A(1), 27,
(1) With a view to regulating or bringing greater economy in consumption, there shall be lived and collected, with effect from such date, and at such rate as may be specified in this behalf by the Central Government by notification in the Official Gazette, on all or any of the goods mentioned in the First Schedule to the Central Excises Act as amended by this Act or any subsequent Central Act, a regulatory duty of excise which shall not exceed 15 per cent. of the value of the goods as determined in accordance with the provisions of section 4 of the Central Excises Act :
Provided that different dates and different rates may be specified by the Central Government for different kinds of goods.
(2) Sub-section (1) shall cease to have effect after the 15th day of May, 1969, except as respects things done or omitted to be done before such cess
In section 3 of the Mineral Products (Additional Duties of Excise and Customs) Act, 1858, in sub-section (1), in the Table, -
(a) for item 1 and the entries relating to it, the following shall be substituted, namely :-
"1. Motor Spirit Two hundred rupees per kilolitre at fifteen degrees of Centigrade thermometer.";
(b) for items 3, 4 and 5 and the entries relating thereto, the following shall be substituted, namely :-
"3. Refined diesel oils and vaporizing oil. Four hundred rupees per kilolitre at fifteen degrees of Centigrade thermometer.
4. Diesel oil, not otherwise specified One hundred and twenty-nine rupees and forty-five paise per kilolitre at fifteen degrees of Centigrade thermometer.
For the year beginning on the 1st day of April, 1968, no duty under the Central Excises Act, or the Tariff Act shall be levied in respect of salt manufactured in, or imported into, India.
In the Central Sales Tax Act, 1956, in section 14, item (xi) shall be omitted.
For the First Schedule to the Indian Post Office Act, 1898, the following schedule shall be substituted, namely :-
Schedule I - FIRST SCHEDULE
"The First Schedule
(See section 7)
Inland Postage Rates
Letters
For a weight not exceeding fifteen grams 20 paise
For every fifteen grams, or fraction thereof, exceeding fifteen grams 15 paise
Letter-cards
For a letter-card 15 paise
Post cards
Single 10 paise
Reply 20 paise
Book, Pattern and Sample packets
The Second Schedule
(See section 3)
Rates of Annuity Deposit for the Assessment Year 1968-69
(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 15,000 but does not exceed 6 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 9 per cent. of the adjusted total income :
Provided that the annuity deposit to be
The Third Schedule
(See section 30)
Amendments in the Income-Tax Act
1 Section 2.
In clause (42A), for "twelve months", at both places, substitute "twenty-four months".
2 Section 10.
(a) in clause (4A), for "non-resident account", substitute "Non-resident (External) Account";
(b) in clause (11), insert at the end "or from any other provident fund set up by the Central Government and notified by it in this behalf in the Official Gazette";
(c) in clause (15), after sub-clause (ii), insert -
"(ii-a) interest on fixed deposits under
The Fourth Schedule
(See section 34)
Part I
In the First Schedule to the Tariff Act, in Item No. 22(4)(a), for the entry in the forth column, the entry "Rs. 45 per litre or 170 per cent. ad valorem, whichever is higher", shall be substituted.
Part II
referential rate of duty if the article is the produce or manufacture of
Preferential rate of duty if the article is the produce or manufacutre of
Item No. Name of article Nature of duty Standard rate of duty The United Kindgdom A British Colony Duration of protective rates of duty
1 2 3 4 5 6 7
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