FINANCE ACT, 1993
(1) This Act may be called the Finance Act, 1993.
(2) Save as otherwise provided in this Act, sections 2 to 42 (except section 14) shall be deemed to have come into force on the 1st day of April, 1993.
(1) Subject to the provisions of sub-sections (2) and (3), for the assessment year commencing on the 1st day of April, 1993, income-tax shall charged at the rates specified in Part I of the First Schedule and such tax as reduced by the rebate of income-tax calculated under Chapter VIII-A of the Income-tax Act, 1961 (43 of 1961) (hereinafter referred to as the Income-tax Act) shall be increased, -
(a) in the cases to which Paragraphs A, B, C, and D of that Part apply, by a surcharge for purposes of the Union; and
(b) in the cases to which Paragraph E of that Part applies, by a surcharge,
calculated in each case in the manner provided therein.
(2) In the cases to which Sub-Paragraph I or Sub-Paragraph II of Paragraph A of Part I of the First Schedule
In section 10 of the Income-tax Act, -
(a) after clause (5A), the following clause shall be inserted with effect from the 1st day of April, 1994, namely :-
'(5B) in the case of an individual who renders services as a technician in the employment (commencing from a date after the 31st day of March, 1993) of the Government or of a local authority or of any corporation set up under any special law or of any such institution or body established in India for carrying on scientific research as is approved for the purposes of this clause or sub-clause (viia) of clause (6) by the prescribed authority or in any business carried on in India and the individual was not resident in India in any of the four financial years immediately preceding the financial year in which he arrived in India and the tax on his income for such services chargeable under
In section 10A of the Income-tax Act, -
(a) in sub-section (2), for clause (i), the following clause shall be substituted with effect from the 1st day of April, 1994, namely :-
"(i) it has begun or begins to manufacture or produce articles or things during the previous year relevant to the assessment year -
(a) commencing on or after the 1st day of April, 1981, in any free trade zone; or
(b) commencing on or after the 1st day of April, 1994, in any electronic hardware technology park or, as the case may be, software technology park;";
(b) in sub-section (4), in clause (iii), after the word, figures and letter "section 80-I", the words, figures and letters "or section 80-IA" shall be inserted and shall be
In section 10B of the Income-tax Act, in sub-section (4), in clause (iii), after the word, figures and letter "section 80-I", the words, figures and letters "or section 80-IA" shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 1991.
In section 11 of the Income-tax Act, in sub-section (2), the following proviso shall be inserted at the end and shall be deemed always to have been inserted, namely :-
"Provided that in computing the period of ten years referred to in clause (a), the period during which the income could not applied for the purpose for which it is so accumulated or set apart, due to an order or injunction of any court, shall be excluded."
In section 16 of the Income-tax Act, in clause (i), with effect from the 1st day of April, 1994, -
(a) in the opening portion, for the words "twelve thousand rupees", the words "fifteen thousand rupees" shall be substituted;
(b) in the proviso, for the words "twelve thousand rupees" and "fifteen thousand rupees", the words "fifteen thousand rupees" and "eighteen thousand rupees" shall respectively be substituted.
In section 17 of the Income-tax Act, in clause (2), in the proviso, in clause (vi), -
(a) in sub-clause (2), for the words "travel or stay", the words "travel and stay" shall be substituted;
(b) for the portion beginning with the words "subject to the condition", and ending with the words "Reserve Bank of India in this behalf, prescribe", the following shall be substituted, namely :-
"subject to the condition that -
(A) the expenditure on medical treatment and stay abroad shall be excluded from perquisite only to the extent permitted by the Reserve Bank of India; and
(B) the expenditure on travel shall be excluded from perquisite only in the case of an employee whose gross total income, as computed before
In section 35 of the Income-tax Act, after sub-section (2A), the following sub-section shall be inserted with effect from the 1st day of April, 1994, namely :-
'(2AA) Where the assessee pays any sum to a National Laboratory with a specific direction that the said sum shall be used for scientific research undertaken under a programme approved in this behalf by the prescribed authority, then -
(a) there shall be allowed a deduction of a sum equal to one and one-fourth times the sum so paid; and
(b) no deduction in respect of such sum shall be allowed under any other provision of the Income-tax Act :
Provided that every National Laboratory desirous of obtaining approval under this sub-section shall make an application in the prescribed form and manner
In section 36 of the Income-tax Act, in sub-section (1), in clause (viia), in sub-clause (a), for the words "two per cent.", the words "four per cent." shall be substituted with effect from the 1st day of April, 1994.
In section 44C of the Income-tax Act, -
(a) clause (b) shall be omitted;
(b) in the Explanation, clause (iii) shall be omitted.
In section 80DD of the Income-tax Act, in sub-section (1), for the words "twelve thousand rupees", the words "fifteen thousand rupees" shall be substituted with effect from the 1st day of April, 1994.
In section 80G of the Income-tax Act, -
(1) in sub-section (1), in clause (i), -
(a) after the words, brackets, figures and letters "or in sub-clause (iiiab)", the words, brackets, figures and letter "or in sub-clause (iiie)" shall be inserted;
(b) after the words, brackets, figures and letter "or in sub-clause (iiie)" [as inserted by sub-clause (a) of this clause], the words, brackets, figures and letter "or in sub-clause (iiif)" shall be inserted with effect from the 1st day of April, 1994;
(2) in sub-section (2), in clause (a), -
(a) after sub-clause (ibid), the following sub-clause shall be inserted, namely :-
"(iiie) the National Foundation for Communal Ha
In section 80HHE of the Income-tax Act, in sub-section (1), in the proviso, for the figures "1994", the figures "1995" shall be substituted.
In section 80-IA of the Income-tax Act, with effect from the 1st day of April, 1994, -
(1) in sub-section (2), for clause (iv), the following clause shall be substituted, namely :-
"(iv)(a) in the case of an industrial undertaking not specified in sub-clause (b), it begins to manufacture or produce articles or things or to operate such plant or plants, at any time during the period beginning on the 1st day of April, 1991, and ending on the 31st day of March, 1995, or such further period as the Central Government may, by notification in the Official Gazette, specify with reference to any particular industrial undertaking;
(b) in the case of an industrial undertaking located in an industrially backward State specified in the Eight Schedule or set up in any part of India for the generation, or ge
In section 80L of the Income-tax Act, in sub-section (1), in clauses (1) and (2), for the words "seven thousand", the words "ten thousand" shall be substituted with effect from the 1st day of April, 1994.
In section 80M of the Income-tax Act, in sub-section (1), the following proviso shall be inserted at the end, with effect from the 1st day April, 1994, namely :-
"Provided that where any domestic company receives any income by way of dividend from the units of the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963), such domestic company shall, subject to the aforesaid provisions, be eligible for deduction to the extent of -
(a) four-fifth of such income in respect of the previous year relevant to the assessment year commencing on the 1st day of April, 1994;
(b) two-fifth of such income in respect of the previous year relevant to the assessment year commencing on the 1st day of April, 1995,
and no deduction shall be
In section 80P of the Income-tax Act, in sub-section (3), -
(a) after the words, figures and letter "or section 80-I", the words, figures and letters "or section 80-IA" shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 1991;
(b) after the word, figures and letter "section 80-I,", the word, figures and letters "section 80-IA," shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 1991.
After section 80U of the Income-tax Act, the following section shall be inserted with effect from the 1st day of April, 1994, namely :-
"80V. Deduction from gross total income of the parent in certain cases. - Where a minor child, whose income is included in the total income one of his parents under sub-section (1A) of section 64, is suffering from any disability of the nature specified in section 80U, then, in computing the total income of such parent, there shall be allowed from the gross total income of such parent a deduction of a sum to which such minor child would have been entitled under section 80U had the total income of such minor child been computed separately."
In section 88B of the Income-tax Act, with effect from the 1st day of April, 1994, -
(a) for the words "fifty thousand rupees", the words "seventy-five thousand rupees" shall be substituted;
(b) for the words "ten per cent.", the words "twenty per cent." shall be substituted.
After section 115AC of the Income-tax Act, the following section shall be inserted, namely :-
'115AD. Tax on income of Foreign Institutional Investors from securities or capital gains arising from their transfer. - (1) Where the total income of a Foreign Institutional Investor includes -
(a) income received in respect of securities (other than units referred to in section 115AB) listed in a recognised stock exchange in India in accordance with the provisions of the Securities Contracts (Regulation) Act, 1956 (42 of 1956), and any rules made thereunder; or
(b) income by way of short-term or long-term capital gains arising from the transfer of such securities,
the income-tax payable shall be the aggregate of -
&n
In section 115K of the Income-tax Act, -
(a) in sub-section (1), -
(i) in clause (a), for the words, brackets and figure "equal to seven per cent. of the amount specified in sub-section (5)", the words "of thirty-seven thousand rupees" shall be substituted with effect from the 1st day of April, 1994;
(ii) in clause (b), -
(A) after the words "eating place", the words "or of operating, hiring or leasing a goods carriage, a motor cab, a maxicab or a three-wheeled motor vehicle" shall be inserted;
(B) for the words "thirty-five", the words "thirty-seven" shall be substituted with effect from the 1st day of April, 1994;
(b) in sub-section (2), -
&nbs
In section 115N of the Income-tax Act, for the words "retail trade or eating place or vocation", the words "the business of retail trade or from the business of running an eating place or from the business of operating, hiring or leasing a goods carriage, a motor cab, a maxicab or a three-wheeled motor vehicle or from any vocation" shall be substituted. .
In section 143 of the Income-tax Act, in sub-section (1A), -
(i) for clause (a), the following clause shall be substituted and shall be deemed to have been substituted with effect from the 1st day of April, 1989, namely :-
"(a) Where as a result of the adjustments made under the first proviso to clause (a) of sub-section (1), -
(i) the income declared by any person in the return is increased; or
(ii) the loss declared by such person in the return is reduced or is converted into income, the Assessing Officer shall, -
(A) in a case where the increase in income under sub-clause (i) of this clause has increased the total income of such person, further increase the amount of tax payable under sub-section (1) b
In section 194 of the Income-tax Act, the second proviso shall be omitted with effect from the 1st day of June, 1993.
In section 196B of the Income-tax Act, in the opening portion, for the words, figures and letters "where any income is payable in respect of units referred to in section 115AB to an Offshore Fund", the following shall be substituted with effect from the 1st day of June, 1993, namely :-
"Where any income in respect of units referred to in section 115AB or by way of long-term capital gains arising from the transfer of such units is payable to an Offshore Fund."
In section 196C of the Income-tax Act, in the opening portion, for the words, figures and letters "Where any income by way of interest or dividends is payable in respect of bonds or shares referred to in section 115AC to a non-resident", the following shall be substituted with effect from the 1st day of June, 1993, namely :-
"Where any income by way of interest or dividends in respect of bonds or shares referred to in section 115AC or by way of long-term capital gains arising from the transfer of such bonds or shares is payable to a non-resident."
After section 196D of the Income-tax Act, the following section shall be inserted with effect from the 1st day of June, 1993, namely :-
"196D. Income of Foreign Institutional Investors from securities. - (1) Where any income in respect of securities referred to in clause (a) of sub-section (1) of section 115AD is payable to a Foreign Institutional Investor, the person responsible for making the payment shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of twenty per cent.
(2) No deduction of tax shall be made from any income, by way of capital gains arising from the transfer of securities referred to in section 115AD, payable to a Foreign Institutional Investor."
In section 197 of the Income-tax Act, in sub-section (1), after the figures "193,", the figures "194," shall be inserted with effect from the 1st day of June, 1993.
In sections 198, 199, 200, 202, 203, 203A and 205 of the Income-tax Act, for the words, figures and letter "and section 196C", the words, figures and letters ", section 196C and section 196D" shall be substituted with effect from the 1st day of June, 1993.
After Chapter XIX-A of the Income-tax Act, the following Chapter shall be inserted with effect from the 1st day of June, 1993, namely: -
CHAPTER XIX-B
Advance Rulings
245N. Definitions. - In this Chapter, unless the context otherwise requires, -
(a) "advance ruling" means the determination, by the Authority, of a question of law or fact specified in the application in relation to a transaction which has been undertaken, or is proposed to be undertaken, by the applicant;
(b) "applicant" means a non-resident making an application;
(c) "application" means an application made to the Authority under sub-section (1) of section 245Q;
In section 253 of the Income-tax Act, for sub-section (6), the following sub-section shall be substituted and shall be deemed to have been substituted with effect from the 1st day of June, 1992, namely :-
"(6) An appeal to the Appellate Tribunal shall be in the prescribed form and shall be verified in the prescribed manner and shall, in the case of an appeal made on or after the 1st day of June, 1992, irrespective of the date of initiation of the assessment proceedings relating thereto, be accompanied by a fee of, -
(a) where the total income of the assessee as computed by the Assessing Officer in the case to which the appeal relates is one lakh rupees or less, two hundred and fifty rupees;
(b) where the total income of the assessee computed as aforesaid in the case to which the appeal relates
In section 269UC of the Income-tax Act, in sub-section (1), for the words "three months", the words "four months" shall be substituted with effect from the 1st day of June, 1993.
In section 269UD of the Income-tax Act, -
(1) in sub-section (1), -
(a) in the opening portion, for the words "The appropriate authority", the words, brackets, figures and letters "Subject to the provisions of sub-sections (1A) and (1B), the appropriate authority" shall be substituted and shall be deemed to have been substituted with effect from the 17th day of November, 1992;
(b) the words "and for reasons to be recorded in writing," shall be omitted and shall be deemed to have been omitted with effect from the 17th day of November, 1992;
(c) after the first proviso, the following proviso shall be inserted with effect from the 1st day of June, 1993, namely :-
'Provided further that where the statement re
In section 269UE of the Income-tax Act, -
(a) in sub-section (1), -
(i) for the words "free from all encumbrances", the words, brackets, figures and letters "in terms of the agreement for transfer referred to in sub-section (1) of section 269UC" shall be substituted and shall be deemed to have been substituted with effect from the 17th day of November, 1992;
(ii) the following proviso shall be inserted and shall be deemed to have been inserted with effect from the 17th day of November, 1992, namely :-
"Provided that where the appropriate authority, after giving an opportunity of being heard to the transferor, the transferee or other persons interested in the said property, under sub-section (1A) of section 269UD, is of the opinion that any encumbran
In section 273A of the Income-tax Act, with effect from the 1st day of June, 1993, -
(a) in sub-section (1), the words "Chief Commissioner or" shall be omitted;
(b) in sub-section (2), for the words "Chief Commissioner or Commissioner except with the previous approval of the Board", the words "the Commissioner except with the previous approval of the Chief Commissioner or Director General, as the case may be" shall be substituted;
(c) in sub-section (4), -
(i) the words "Chief Commissioner or" shall be omitted;
(ii) in the proviso, for the words "the Chief Commissioner or Commissioner except with the previous approval of the Board", the words "the Commissioner except with the previous approval of the Chie
After the Seventh Schedule to the Income-tax Act, the following Schedule shall be inserted with effect from the 1st day of April, 1994, namely :-
The Eighth Schedule
[See section 80-IA(2)(iv)(b)]
LIST OF INDUSTRIALLY BACKWARD STATES AND UNION TERRITORIES
(1) Arunachal Pradesh
(2) Assam
(3) Goa
(4) Himachal Pradesh
(5) Jammu and Kashmir
(6) Manipur
(7) Meghalaya
(8) Mizoram
(9) Nagaland
In section 2 of the Wealth-tax Act, 1957 (27 of 1957) (hereinafter referred to as the Wealth-tax Act), in clause (ea), in the Explanation, in clause (b), the words "or any land held by the assessee as stock-in-trade for a period of three years from the date of its acquisition by him" shall be inserted at the end with effect from the 1st day of April, 1994.
In section 5 of the Wealth-tax Act, in sub-section (1), after clause (v), the following clause shall be inserted with effect from the 1st day of April, 1994, namely :-
"(vi) one house or part of a house belonging to an individual or a Hindu undivided family;".
In section 18B of the Wealth-tax Act, with effect from the 1st day of June, 1993, -
(a) in sub-section (1), the words "Chief Commissioner or" shall be omitted;
(b) in sub-section (2), for the words "the Chief Commissioner or Commissioner, except with the previous approval of the Board", the words "the Commissioner except with the previous approval of the Chief Commissioner or Director General, as the case may be" shall be substituted;
(c) in sub-section (4), the words "Chief Commissioner or" shall be omitted.
In section 5 of the Gift-tax Act, 1958 (18 of 1958) (hereinafter referred to as the Gift-tax Act), -
(a) in sub-section (1), -
(i) after clause (iid), the following clause shall be inserted, namely :-
'(iie) being an individual who is a non-resident Indian, once out of the moneys standing to his credit in an account opened and operated in accordance with the Non-resident (Non-repatriable) Rupee Deposit Scheme, 1992.
Explanation : For the purposes of this clause, "non-resident Indian" shall have the meaning assigned to it in clause (e) of section 115C of the Income-tax Act;';
(ii) in clause (vii), for the words "ten thousand", the words "thirty thousand" shall be substituted with effect from the 1st day of
In Schedule II to the Gift-tax Act, -
(a) in the opening portion, occurring after the heading "RULES FOR DETERMINING THE VALUE OF PROPERTY GIFTED", -
(i) for the words "the value of any property", the figures and words "1. Subject to the provisions of rules 2 to 7, the value of any property" shall be substituted;
(ii) for the words "the Wealth-tax Act", the words, figures and brackets "the Wealth-tax Act, 1957 (27 of 1957) (hereinafter referred to as the Wealth-tax Act)" shall be substituted;
(b) after rule 1 as so numbered, the following rules shall be inserted, namely :-
2. Quoted shares and debentures of companies. - The value of an equity share or a preference share in any company or a debenture of an
The First Schedule
[See section 2]
PART I
Income-Tax
Paragraph A
Sub-Paragraph I
In the case of every individual or Hindu undivided family or 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) of section 2 of the Income-tax Act, not being a case to which Sub-Paragraph II of this Paragraph or any other Paragraph of this Part applies, -
RATES OF INCOME-TAX
(1) where the total income does Nil;
not
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