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The Tax PublishersSection C

The Finance Act, 2010

Act No. 14 of 2010
An
Act
to give effect to the financial proposals of the Central Government for the financial year 2010-2011.

Be it enacted by Parliament in the Sixty-first Year of the Republic of India as follows:--

CHAPTER I
Preliminary

1. Short title and commencement

(1) This Act may be called the Finance Act, 2010.

(2) Save as otherwise provided in this Act, sections 2 to 56 shall be deemed to have come into force on the 1st day of April, 2010.

CHAPTER II
Rates of income-tax

2. Income-tax

(1) Subject to the provisions of sub-sections (2) and (3), for the assessment year commencing on the 1st day of April, 2010, income-tax shall be charged at the rates specified in Part I of the First Schedule and such tax shall be increased by a surcharge, for purposes of the Union, calculated in each case in the manner provided therein.

(2) In the cases to which Paragraph A of Part I of the First Schedule applies, where the assessee has, in the previous year, any net agricultural income exceeding five thousand rupees, in addition to total income, and the total income exceeds one lakh sixty thousand rupees, then,--

(a) the net agricultural income shall be taken into account, in the manner provided in clause (b) [that is to say, as if the net agricultural income were comprised in the total income after the first one lakh sixty thousand rupees of the total income but without being liable to tax], only for the purpose of charging income-tax in respect of the total income; and

(b) the income-tax chargeable shall be calculated as follows:--

(i) the total income and the net agricultural income shall be aggregated and the amount of income-tax shall be determined in respect of the aggregate income at the rates specified in the said Paragraph A, as if such aggregate income were the total income;

(ii) the net agricultural income shall be increased by a sum of one lakh sixty thousand rupees, and the amount of income-tax shall be determined in respect of the net agricultural income as so increased at the rates specified in the said Paragraph A, as if the net agricultural income as so increased were the total income;

(iii) the amount of income-tax determined in accordance with sub-clause (i) shall be reduced by the amount of income-tax determined in accordance with sub-clause (ii) and the sum so arrived at shall be the income-tax in respect of the total income:

Provided that in the case of every woman, resident in India and below the age of sixty-five years at any time during the previous year, referred to in item (II) of Paragraph A of Part I of the First Schedule, the provisions of this sub-section shall have effect as if for the words 'one lakh sixty thousand rupees', the words 'one lakh ninety thousand rupees' had been substituted:

Provided further that in the case of every individual, being a resident in India, who is of the age of sixty-five years or more at any time during the previous year, referred to in item (III) of Paragraph A of Part I of the First Schedule, the provisions of this sub-section shall have effect as if for the words 'one lakh sixty thousand rupees', the words 'two lakh forty thousand rupees' had been substituted.

(3) In cases to which the provisions of Chapter XII or Chapter XII-A or Chapter XII-H or section 115JB or sub-section (1A) of section 161 or section 164 or section 164A or section 167B of the. Income-tax Act, 1961 (43 of 1961) (hereinafter referred to as the Income-tax Act) apply, the tax chargeable shall be determined as provided in that Chapter or that section, and with reference to the rates imposed by sub-section (1) or the rates as specified in that Chapter or section, as the case may be:

Provided that the amount of income-tax computed in accordance with the provisions of section 111A or section 112 shall be increased by a surcharge, for purposes of the Union, as provided in Paragraph A, B, C, D or E, as the case may be, of Part I of the First Schedule:

Provided further that in respect of any income chargeable to tax under sections 115A, 115AB, 115AC, 115ACA, 115AD, 115B, 115BB, 115BBA, 115BBC, 115E and 115JB of the Income-tax Act, the amount of income-tax computed under this sub-section shall be increased by a surcharge, for purposes of the Union, calculated,--

(a) in the case of a domestic company, at the rate of ten per cent. of such income-tax where the total income exceeds one crore rupees;

(b) in the case of every company, other than a domestic company, at the rate of two and one-half per cent. of such income-tax where the total income exceeds one crore rupees:

Provided also that in the case of every company having total income chargeable to tax under section 115JB of the Income-tax Act, and such income exceeds one crore rupees, the total amount payable as income-tax and surcharge on such income-tax shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

(4) In cases in which tax has to be charged and paid under section 115-O or sub-section (2) of section 115R of the Income-tax Act, the tax shall be charged and paid at the rates as specified in those sections and shall be increased by a surcharge, for purposes of the Union, calculated at the rate of seven and one-half per cent. of such tax.

(5) In cases in which tax has to be deducted under sections 193, 194, 194A, 194B, 194BB, 194D and 195 of the Income-tax Act, at the rates in force, the deductions shall be made at the rates specified in Part II of the First Schedule and shall be increased by a surcharge, for purposes of the Union, calculated in cases wherever prescribed, in the manner provided therein.

(6) In cases in which tax has to be deducted under sections 194C, 194E, 194EE, 194F, 194G, 194H, 194-I, 194J, 194LA, 196B, 196C and 196D of the Income-tax Act, the deductions shall be made at the rates specified in those sections and shall be increased by a surcharge, for purposes of the Union, in the case of every company, other than a domestic company, calculated at the rate of two and one-half per cent. of such tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds one crore rupees.

(7) In cases in which tax has to be collected under the proviso to section 194B of the Income-tax Act, the collection shall be made at the rates specified in Part II of the First Schedule, and shall be increased by a surcharge, for purposes of the Union, calculated, in cases wherever prescribed, in the manner provided therein.

(8) In cases in which tax has to be collected under section 206C of the Income-tax Act, the collection shall be made at the rates specified in that section and shall be increased by a surcharge, for purposes of the Union, in the case of every company, other than a domestic company, calculated at the rate of two and one-half per cent. of such tax, where the amount or the aggregate of such amounts collected and subject to the collection exceeds one crore rupees.

(9) Subject to the provisions of sub-section (10), in cases in which income-tax has to be charged under sub-section (4) of section 172 or sub-section (2) of section 174 or section 174A or section 175 or sub-section (2) of section 176 of the Income-tax Act or deducted from, or paid on, income chargeable under the head 'Salaries' under section 192 of the said Act or in which the 'advance tax' payable under Chapter XVII-C of the said Act has to be computed at the rate or rates in force, such income-tax or, as the case may be, 'advance tax' shall be so charged, deducted or computed at the rate or rates specified in Part III of the First Schedule and such tax shall be increased by a surcharge, for purposes of the Union, calculated in such cases and in such manner as provided therein:

Provided that in cases to which the provisions of Chapter XII or Chapter XII-A or section 115JB or sub-section (1A) of section 161 or section 164 or section 164A or section 167B of the Income-tax Act apply, 'advance tax' shall be computed with reference to the rates imposed by this sub-section or the rates as specified in that Chapter or section, as the case may be:

Provided further that the amount of 'advance tax' computed in accordance with the provisions of section 111A or section 112 of the Income-tax Act shall be increased by a surcharge, for purposes of the Union, as provided in Paragraph E of Part III of the First Schedule pertaining to the case of a company:

Provided also that in respect of any income chargeable to tax under sections 115A, 115AB, 115AC, 115ACA, 115AD, 115B, 115BB, 115BBA, 115BBC, 115E and 115JB of the Income-tax Act, 'advance tax' computed under the first proviso shall be increased by a surcharge, for purposes of the Union, calculated,--

(a) in the case of every domestic company, at the rate of seven and one-half per cent. of such 'advance tax' where the total income exceeds one crore rupees;

(b) in the case of every company, other than a domestic company, at the rate of two and one-half per cent. of such 'advance tax' where the total income exceeds one crore rupees:

Provided also that in the case of every company having total income chargeable to tax under section 115JB of the Income-tax Act, and such income exceeds one crore rupees, the total amount payable as 'advance tax' on such income and surcharge thereon, shall not exceed the total amount payable as 'advance tax' on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

(10) In cases to which Paragraph A of Part III of the First Schedule applies, where the assessee has, in the previous year or, if by virtue of any provision of the Income-tax Act, income-tax is to be charged in respect of the income of a period other than the previous year, in such other period, any net agricultural income exceeding five thousand rupees, in addition to total income and the total income exceeds one lakh sixty thousand rupees, then, in charging income-tax under sub-section (2) of section 174 or section 174A or section 175 or sub-section (2) of section 176 of the said Act or in computing the 'advance tax' payable under Chapter XVII-C of the said Act, at the rate or rates in force,--

(b) such income-tax or, as the case may be, 'advance tax' shall be so charged or computed as follows:--

(i) the total income and the net agricultural income shall be aggregated and the amount of income-tax or 'advance tax' shall be determined in respect of the aggregate income at the rates specified in the said Paragraph A, as if such aggregate income were the total income;

(ii) the net agricultural income shall be increased by a sum of one lakh sixty thousand rupees, and the amount of income-tax or 'advance tax' shall be determined in respect of the net agricultural income as so increased at the rates specified in the said Paragraph A, as if the net agricultural income were the total income;

(iii) the amount of income-tax or 'advance tax' determined in accordance with sub-clause (i) shall be reduced by the amount of income-tax or, as the case may be, 'advance tax' determined in accordance with sub-clause (ii) and the sum so arrived at shall be the income-tax or, as the case may be, 'advance tax' in respect of the total income:

Provided that in the case of every woman, resident in India and below the age of sixty-five years at any time during the previous year, referred to in item (II) of Paragraph A of Part III of the First Schedule, the provisions of this sub-section shall have effect as if for the words 'one lakh sixty thousand rupees', the words 'one lakh ninety thousand rupees' had been substituted:

Provided further that in the case of every individual, being a resident in India, who is of the age of sixty-five years or more at any time during the previous year, referred to in item (III) of Paragraph A of Part III of the First Schedule, the provisions of this sub-section shall have effect as if for the words 'one lakh sixty thousand rupees', the words 'two lakh forty thousand rupees' had been substituted.

(11) The amount of income-tax as specified in sub-sections (1) to (10) and as increased by the applicable surcharge, for purposes of the Union, calculated in the manner provided therein, shall be further increased by an additional surcharge, for purposes of the Union, to be called the 'Education Cess on income-tax', calculated at the rate of two per cent. of such income-tax and surcharge so as to fulfil the commitment of the Government to provide and finance universalised quality basic education:

Provided that nothing contained in this sub-section shall apply to cases in which tax is to be deducted or collected under the sections of the Income-tax Act mentioned in sub-sections (5), (6), (7) and (8), if the income subjected to deduction of tax at source or collection of tax at source is paid to a domestic company and any other person who is resident in India.

(12) The amount of income-tax as specified in sub-sections (1) to (10) and as increased by the applicable surcharge, for purposes of the Union, calculated in the manner provided therein, shall also be increased by an additional surcharge, for purposes of the Union, to be called the 'Secondary and Higher Education Cess on income-tax', calculated at the rate of one per cent. of such income-tax and surcharge so as to fulfil the commitment of the Government to provide and finance secondary and higher education:

(13) For the purposes of this section and the First Schedule,--

(a) 'domestic company' means an Indian company or any other company which, in respect of its income liable to income-tax under the Income-tax Act, for the assessment year commencing on the 1st day of April, 2010, has made the prescribed arrangements for the declaration and payment within India of the dividends (including dividends on preference shares) payable out of such income;

(b) 'insurance commission' means any remuneration or reward, whether by way of commission or otherwise, for soliciting or procuring insurance business (including business relating to the continuance, renewal or revival of policies of insurance);

(c) 'net agricultural income', in relation to a person, means the total amount of agricultural income, from whatever source derived, of that person computed in accordance with the rules contained in Part IV of the First Schedule;

(d) all other words and expressions used in this section and the First Schedule but not defined in this sub-section and defined in the Income-tax Act shall have the meanings, respectively, assigned to them in that Act.

CHAPTER III
Direct taxes
Income-tax

3. Amendment of section 2

In section 2 of the Income-tax Act,--

(a) in clause (15), after the proviso, the following proviso shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 2009, namely:--

'Provided further that the first proviso shall not apply if the aggregate value of the receipts from the activities referred to therein is ten lakh rupees or less in the previous year;';

(b) in clause (24), in sub-clause (xv), after the words, brackets and figures 'value of property referred to in clause (vii)', the words, brackets, figures and letter 'or clause (viia)' shall be inserted with effect from the 1st day of June, 2010.

4. Amendment of section 9

In section 9 of the Income-tax Act, for the Explanation occurring after sub-section (2), the following Explanation shall be substituted and shall be deemed to have been substituted with effect from the 1st day of June, 1976, namely:

'Explanation.--For the removal of doubts, it is hereby declared that for the purposes of this section, income of a non-resident shall be deemed to accrue or arise in India under clause (v) or clause (vi) or clause (vii) of sub-section (1) and shall be included in the total income of the non-resident, whether or not,--

(i) the non-resident has a residence or place of business or business connection in India; or

(ii) the non-resident has rendered services in India.'.

5. Amendment of section 10

In section 10 of the Income-tax Act, in clause (21), with effect from the 1st day of April, 2011,--

(a) for the words 'scientific research association', wherever they occur, the words 'research association' shall be substituted;

(b) in the opening portion, after the word, brackets and figures 'clause (ii)', the words, brackets and figures 'or clause (iii)' shall be inserted;

(A) in sub-clause (i),--

(I) in item (2), for the words 'scientific research', the words 'scientific research or research in social science or statistical research' shall be substituted;

(II) in item (3), after the word, brackets and figures 'clause (ii)', the words, brackets and figures 'or clause (iii)' shall be inserted;

(B) in sub-clause (ii), for the words 'scientific research', the words 'scientific research or research in social science or statistical research' shall be substituted.

6. Amendment of section 10AA

In section 10AA of the Income-tax Act, in sub-section (7), the following proviso shall be inserted, namely:--

'Provided that the provisions of this sub-section [as amended by section 6 of the Finance (No. 2) Act, 2009] (33 of 2009) shall have effect for the assessment year beginning on the 1st day of April, 2006 and subsequent assessment years.'.

7. Amendment of section 12AA

In section 12AA of the Income-tax Act, in sub-section (3), after the word, brackets and figure 'sub-section (1)', the words, figures letter and brackets 'or has obtained registration at any time under section 12A [as it stood before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996)]' shall be inserted with effect from the 1st day of June, 2010.

8. Amendment of section 32

In section 32 of the Income-tax Act, in sub-section (1), in the fifth proviso, for the words, brackets and figures 'clause (xiii) and clause (xiv)', the words, brackets, figures and letter 'clause (xiii), clause (xiiib) and clause (xiv)' shall be substituted with effect from the 1st day of April, 2011.

9. Amendment of section 35

In section 35 of the Income-tax Act, with effect from the 1st day of April, 2011,--

(i) in sub-section (1),--

(a) for the words 'scientific research association', wherever they occur, the words 'research association' shall be substituted;

(b) in clause (ii), for the words 'one and one-fourth', the words 'one and three-fourth' shall be substituted;

(A) for the words 'any sum paid to a university', the words 'any sum paid to a research association which has as its object the undertaking of research in social science or statistical research or to a university' shall be substituted;

(B) in the proviso, for the words 'such university', at both the places where they occur, the words 'such association, university' shall be substituted;

(ii) in sub-section (2AA), in clause (a), for the words 'one and one-fourth', the words 'one and three-fourth' shall be substituted;

(iii) in sub-section (2AB), in clause (1), for the words 'one and one-half', the word 'two' shall be substituted.

10. Amendment of section 35AD

In section 35AD of the Income-tax Act,--

(a) in sub-section (2), in clause (iii), in sub-clause (c), for the words 'one-third of its total pipeline capacity', the words, brackets and figures 'such proportion of its total pipeline capacity as specified by regulations made by the Petroleum and Natural Gas Regulatory Board established under sub-section (1) of section 3 of the Petroleum and Natural Gas Regulatory Board Act, 2006 (19 of 2006)' shall be substituted;

(b) for sub-section (3), the following sub-section shall be substituted with effect from the 1st day of April, 2011, namely:--

(3) Where a deduction under this section is claimed and allowed in respect of the specified business for any assessment year, no deduction shall be allowed under the provisions of Chapter VI-A under the heading 'C.--Deductions in respect of certain incomes' in relation to such specified business for the same or any other assessment year.;

(c ) in sub-section (5), with effect from the 1st day of April, 2011,--

(i) in clause (a), the word 'and', occurring at the end, shall be omitted;

(ii) after clause (a), the following clause shall be inserted, namely:--

'(aa) on or after the 1st day of April, 2010, where the specified business is in the nature of building and operating a new hotel of two-star or above category as classified by the Central Government;

(ab) on or after the 1st day of April, 2010, where the specified business is in the nature of building and operating a new hospital with at least one hundred beds of patients;

(ac) on or after the 1st day of April, 2010, where the specified business is in the nature of developing and building a housing project under a scheme for slum redevelopment or rehabilitation framed by the Central Government or a State Government, as the case may be, and which is notified by the Board in this behalf in accordance with guidelines as may be prescribed; and';

(iii) in clause (b), for the word, brackets and letter 'clause (a)', the words, brackets and letters 'clause (a), clause (aa), clause(ab) and clause(ac)' shall be substituted;

(d) in sub-section (8), in clause (c), after sub-clause (iii), the following sub-clause shall be inserted with effect from the 1st day of April, 2011, namely:--

'(iv) building and operating, anywhere in India, a new hotel of two-star or above category as classified by the Central Government;

(v) building and operating, anywhere in India, a new hospital with at least one hundred beds for patients;

(vi) developing and building a housing project under a scheme for slum redevelopment or rehabilitation framed by the Central Government or a State Government, as the case may be, and notified by the Board in this behalf in accordance with the guidelines as may be prescribed;.

11. Amendment of section 35DDA

In section 35DDA of the Income-tax Act, with effect from the 1st day of April, 2011,--

(a) after sub-section (4), the following sub-section shall be inserted, namely:--

'(4A) Where there has been reorganisation of business, whereby a private company or unlisted public company is succeeded by a limited liability partnership fulfilling the conditions laid down in the proviso to clause (xiiib) of section 47, the provisions of this section shall, as far as may be, apply to the successor limited liability partnership, as they would have applied to the said company, if reorganisation of business had not taken place.';

(b) in sub-section (5), for the words, brackets and figures 'sub-section (3) and in the case of a firm or proprietary concern referred to in sub-section (4)', the words, brackets, figures and letter 'sub section (3), in the case of a firm or proprietary concern referred to in sub-section (4) and in the case of a company referred to in sub-section (4A)' shall be substituted.

12. Amendment of section 40

In section 40 of the Income-tax Act, in clause (a), in sub-clause (ia),--

(a) for the portion beginning with the words 'has not been paid,--' and ending with the words 'the last day of the previous year', the words, brackets and figures 'has not been paid on or before the due date specified in sub-section (1) of section 139' shall be substituted;

(b) for the proviso, the following proviso shall be substituted, namely:--

'Provided that where in respect of any such sum, tax has been deducted in any subsequent year, or has been deducted during the previous year but paid after the due date specified in sub-section (1) of section 139, such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid.'.

13. Amendment of section 43

In section 43 of the Income-tax Act, with effect from the 1st day of April, 2011,--

(a) in clause (1), in Explanation 13, in clause (b), in sub-clause (iii), for the brackets, figures and word '(xiii) and (xiv)', the brackets, figures, letter and word '(xiii), (xiiib) and (xiv)' shall be substituted;

(b) in clause (6), after Explanation 2B, the following Explanation shall be inserted, namely:--

'Explanation 2C.--Where in any previous year, any block of assets is transferred by a private company or unlisted public company to a limited liability partnership and the conditions specified in the proviso to clause (xiiib) of section are satisfied, then, notwithstanding anything contained in clause (1), the actual cost of the block of assets in the case of the limited liability partnership shall be the written down value of the block of assets as in the case of the said company on the date of conversion of the company into the limited liability partnership.'.

14. Amendment of section 44AB

In section 44AB of the Income-tax Act, with effect from the 1st day of April, 2011,--

(a) in clause (a), for the words 'forty lakh rupees', the words 'sixty lakh rupees' shall be substituted;

(b) in clause (b), for the words 'ten lakh rupees', the words 'fifteen lakh rupees' shall be substituted.

15. Amendment of section 44AD

In section 44AD of the Income-tax Act [as amended by section 20 of the Finance (No. 2) Act, 2009 (33 of 2009)], in the Explanation, in clause (b), in sub-clause (ii), for the words 'forty lakh rupees', the words 'sixty lakh rupees' shall be substituted with effect from the 1st day of April, 2011.

16. Amendment of section 44BB

In section 44BB of the Income-tax Act, in the proviso to sub-section (1), after the words, figures and letter 'section 44D or', the words, figures and letters 'section 44DA or' shall be inserted with effect from the 1st day of April, 2011.

17. Amendment of section 44DA

In section 44DA of the Income-tax Act, in sub-section (1), after the proviso, the following proviso 40 shall be inserted with effect from the 1st day of April, 2011, namely:--

'Provided further that the provisions of section 44BB shall not apply in respect of the income referred to in this section.'.

18. Amendment of section 47

In section 47 of the Income-tax Act, after clause (xiiia), the following shall be inserted with effect from the 1st day of April, 2011, namely:--

(xiiib) any transfer of a capital asset or intangible asset by a private company or unlisted public company (hereafter in this clause referred to as the company) to a limited liability partnership or any transfer of a share or shares held in the company by a shareholder as a result of conversion of the company into a limited liability partnership in accordance with the provisions of section 56 or section 57 of the Limited Liability Partnership Act, 2008 (6 of 2009):

Provided that--

(a) all the assets and liabilities of the company immediately before the conversion become the assets and liabilities of the limited liability partnership;

(b) all the shareholders of the company immediately before the conversion become the partners of the limited liability partnership and their capital contribution and profit sharing ratio in the limited liability partnership are in the same proportion as their shareholding in the company on the date of conversion;

(c) the shareholders of the company do not receive any consideration or benefit, directly or indirectly, in any form or manner, other than by way of share in profit and capital contribution in the limited liability partnership;

(d) the aggregate of the profit sharing ratio of the shareholders of the company in the limited liability partnership shall not be less than fifty per cent. at any time during the period of five years from the date of conversion;

(e) the total sales, turnover or gross receipts in business of the company in any of the three previous years preceding the previous year in which the conversion takes place does not exceed sixty lakh rupees; and

(f) no amount is paid, either directly or indirectly, to any partner out of balance of accumulated profit standing in the accounts of the company on the date of conversion for a period of three years from the date of conversion.

Explanation.--For the purposes of this clause, the expressions 'private company' and 'unlisted public company' shall have the meanings respectively assigned to them in the Limited Liability Partnership Act, 2008 (6 of 2009);.

19. Amendment of section 47A

In section 47A of the Income-tax Act, after sub-section (3), the following sub-section shall be inserted with effect from the 1st day of April, 2011, namely:--

(4) Where any of the conditions laid down in the proviso to clause (xiiib) of section 47 are not complied with, the amount of profits or gains arising from the transfer of such capital asset or intangible asset or share or shares not charged under section 45 by virtue of conditions laid down in the said proviso shall be deemed to be the profits and gains chargeable to tax of the successor limited liability partnership or the shareholder of the predecessor company , as the case may be, for the previous year in which the requirements of the said proviso are not complied with.'.

20. Amendment of section 49

In section 49 of the Income-tax Act,--

(a) in sub-section (1), in clause (iii), in sub-clause (e), for the words, brackets, figures and letters 'clause (vicb) of section 47', the words, brackets, figures and letters 'clause (vicb) or clause (xiiib) of section 47' shall be substituted with effect from the 1st day of April, 2011;

(b) after sub-section (2AA). the following sub-section shall be inserted with effect from the 1 st day of April, 2011, namely :--

'(2AAA) Where the capital asset being rights of a partner referred to in section 42 of the Limited Liability Partnership Act, 2008 (8 of 2009) became the property of the assessee on conversion as referred to in clause (xiiib) of section 47, the cost of acquisition of the asset shall be deemed to be the cost of acquisition to him of the share or shares in the company immediately before its conversion.'

(c) in sub-section (4), after the word, brackets and figures 'clause (vii)', at both the places where they occur, the words, brackets, figures and letter 'or clause (viia)' shall be inserted with effect from the 1st day of June, 2010.

21. Amendment of section 56

In section 56 of the Income-tax Act, in sub-section (2),--

(a) in clause (vii),--

(i) for sub-clause (b), the following sub-clause shall be substituted and shall be deemed to have been substituted with effect from the 1st day of October, 2009, namely:--

'(b) any immovable property, without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property;';

(ii) in the Explanation, in clause (d),--

(A) in the opening portion, for the word 'means--', the words 'means the following capital asset of the assessee, namely:--' shall be substituted and shall be deemed to have been substituted with effect from the 1st day of October, 2009;

(B) in sub-clause (vii), the word 'or' shall be omitted with effect from the 1st day of June, 2010;

(D) after sub-clause (viii), the following sub-clause shall be inserted with effect from the 1st day of June, 2010, namely:-

'(ix) bullion;';

(b) after clause (vii), the following shall be inserted with effect from the 1st day of June, 2010, namely:--

(viia) where a firm or a company not being a company in which the public are substantially interested, receives, in any previous year, from any person or persons, on or after the 1st day of June, 2010, any property, being shares of a company not being a company in which the public are substantially interested,--

(i) without consideration, the aggregate fair market value of which exceeds fifty thousand rupees, the whole of the aggregate fair market value of such property;

(ii) for a consideration which is less than the aggregate fair market value of the property by an amount exceeding fifty thousand rupees, the aggregate fair market value of such property as exceeds such consideration:

Provided that this clause shall not apply to any such property received by way of a transaction not regarded as transfer under clause (via) or clause (vic) or clause (vicb) or clause (vid) or clause (vii) of section 47.

Explanation.--For the purposes of this clause, 'fair market value' of a property, being shares of a company not being a company in which the public are substantially interested, shall have the meaning assigned to it in the Explanation to clause (vii);.

22. Amendment of section 72A

In section 72A of the Income-tax Act, with effect from the 1st day of April, 2011,--

(a) after sub-section (6), the following shall be inserted, namely:--

'(6A) Where there has been reorganisation of business whereby a private company or unlisted public company is succeeded by a limited liability partnership fulfilling the conditions laid down in the proviso to clause (xiiib) of section 47, then, notwithstanding anything contained in any other provision of this Act, the accumulated loss and the unabsorbed depreciation of the predecessor company, shall be deemed to be the loss or allowance for depreciation of the successor limited liability partnership for the purpose of the previous year in which business reorganisation was effected and other provisions of this Act relating to set off and carry forward of loss and allowance for depreciation shall apply accordingly:

Provided that if any of the conditions laid down in the proviso to clause (xiiib) of section 47 are not complied with, the set off of loss or allowance of depreciation made in any previous year in the hands of the successor limited liability partnership, shall be deemed to be the income of the limited liability partnership chargeable to tax in the year in which such conditions are not complied with.';

(b) in sub-section (7), for clauses (a) and (b), the following clauses shall, respectively, be substituted, namely:--

(a) 'accumulated loss' means so much of the loss of the predecessor firm or the proprietary concern or the private company or unlisted public company before conversion into limited liability partnership or the amalgamating company or the demerged company, as the case may 35 be, under the head 'Profits and gains of business or profession' (not being a loss sustained in a speculation business) which such predecessor firm or the proprietary concern or the company or amalgamating company or demerged company, would have been entitled to carry forward and set off under the provisions of section 72 if the reorganisation of business or conversion or amalgamation or demerger had not taken place;

(b) 'unabsorbed depreciation' means so much of the allowance for depreciation of the predecessor firm or the proprietary concern or the private company or unlisted public company before conversion into limited liability partnership or the amalgamating company or the demerged company, as the case may be, which remains to be allowed and which would have been allowed to the predecessor firm or the proprietary concern or the company or amalgamating company or demerged company, as the case may be, under the provisions of this Act, if the reorganisation of business or conversion or amalgamation or demerger had not taken place;.

23. Amendment of section 80A

In section 80A of the Income-tax Act, after sub-section (6) and the Explanation thereto, the following sub-section shall be inserted with effect from the 1st day of April, 2011, namely:--

(7) Where a deduction under any provision of this Chapter under the heading 'C.--Deductions in respect of certain incomes' is claimed and allowed in respect of profits of any of the specified business referred to in clause (c) of sub-section (8) of section 35AD for any assessment year, no deduction shall be allowed under the provisions of section 35AD in relation to such specified business for the same or any other assessment year..

24. Insertion of new section 80CCF

After section 80CCE of the Income-tax Act, the following section shall be inserted with effect from the 1st day of April, 2011, namely:--

'80CCF. Deduction in respect of subscription to long-term infrastructure bonds.--In computing the total income of an assessee, being an individual or a Hindu undivided family, there shall be deducted, the whole of the amount, to the extent such amount does not exceed twenty thousand rupees, paid or deposited, during the previous year relevant to the assessment year beginning on the 1st day of April, 2011, as subscription to long-term infrastructure bonds as may, for the purposes of this section, be notified by the Central Government.'.

25. Amendment of section 80D

In section 80D of the Income-tax Act, in sub-section (2), in clause (a), after the words 'his family', the words 'or any contribution made to the Central Government Health Scheme' shall be inserted with effect from the 1st day of April, 2011.

26. Amendment of section 80GGA

In section 80GGA of the Income-tax Act, in sub-section (2), with effect from the 1st day of April, 2011,--

(a) in clause (a), for the words 'scientific research association', the words 'research association' shall be substituted;

(b) in clause (aa),--

(A) for the words 'to a University', the words 'to a research association which has as its object the undertaking of research in social science or statistical research or to a University' shall be substituted;

(B) in the proviso, for the words 'such University', the words 'such association, University' shall be substituted;

(C) in the Explanation, for the words 'scientific research association', the words 'research association' shall be substituted.

27. Amendment in section 80-IB

In section 80-IB of the Income-tax Act, in sub-section (10),--

(i) in clause (a),--

(a) in sub-clause (ii), after the words, figures and letters 'the 1st day of April, 2004', the words, figures and letters 'but not later than the 31st day of March, 2005' shall be inserted;

(b) after sub-clause (ii), the following sub-clause shall be inserted, namely:--

'(iii) in a case where a housing project has been approved by the local authority on or after the 1st day of April, 2005, within five years from the end of the financial year in which the 30 housing project is approved by the local authority.';

(ii) in clause (d),--

(a) for the words 'five per cent.', the words 'three per cent.' shall be substituted;

(b) for the words 'two thousand square feet, whichever is less', the words 'five thousand square feet, whichever is higher' shall be substituted.

28. Amendment of section 80-ID

In section 80-ID of the Income-tax Act, in sub-section (2), with effect from the 1st day of April, 2011,--

(a) in clause (i), for the words, figures and letters 'the 31st day of March, 2010', the words, figures and letters 'the 31st day of July, 2010' shall be substituted;

(b) in clause (ii), for the words, figures and letters 'the 31st day of March, 2010', the words,

29. Amendment of section 115JAA

In section 115JAA of the Income-tax Act, after sub-section (6), the following shall be inserted with effect from the 1st day of April, 2011, namely:--

(7) In case of conversion of a private company or unlisted public company into a limited liability partnership under the Limited Liability Partnership Act, 2008 (6 of 2009), the provisions of this section shall not apply to the successor limited liability partnership.

Explanation.--For the purposes of this section, the expressions 'private company' and 'unlisted public company' shall have the meanings respectively assigned to them in the Limited Liability Partnership Act, 2008 (6 of 2009)..

30. Amendment of section 115JB

In section 115JB of the Income-tax Act, in sub-section (1), with effect from the 1st day of April, 2011,--

(a) for the words, figures and letters 'the 1st day of April, 2010', the words, figures and letters 'the 1st day of April, 2011' shall be substituted;

(b) for the words 'fifteen per cent.' at both the places where they occur, the words 'eighteen per cent.' shall be substituted.

31. Amendment of section 115WE

In section 115WE of the Income-tax Act, in sub-section (1B), for the words, figures and letters 'after the 31st day of March, 2010', the words, figures and letters 'after the 31st day of March, 2011' shall be substituted.

32. Amendment of section 139

In section 139 of the Income-tax Act, in sub-section (4C), for the words 'scientific research association' at both the places where they occur, the words 'research association' shall be substituted with effect from the 1st day of April, 2011.

33. Amendment of section 142A

In section 142A of the Income-tax Act, in sub-section (1), for the words, figures and letter 'section 69B is required to be made', the words, figures, letter and brackets 'section 69B or fair market value of any property referred to in sub-section (2) of section 56 is required to be made' shall be substituted 15 with effect from the 1st day of July, 2010.

34. Amendment of section 143

In section 143 of the Income-tax Act,--

(a) in sub-section (1B), for the words, figures and letters 'after the 31st day of March, 2010', the words, figures and letters 'after the 31st day of March, 2011' shall be substituted;

(b) in sub-section (3), in the first proviso, for the words 'scientific research association', wherever they occur, the words 'research association' shall be substituted with effect from the 1st day of April, 2011.

35. Amendment of section 194B

In section 194B of the Income-tax Act, for the words 'five thousand rupees', the words 'ten thousand rupees' shall be substituted with effect from the 1st day of July, 2010.

36. Amendment of section 194BB

In section 194BB of the Income-tax Act, for the words 'two thousand five hundred rupees', the words 'five thousand rupees' shall be substituted with effect from the 1st day of July, 2010.

37. Amendment of section 194C

In section 194C of the Income-tax Act, in sub-section (5), with effect from the 1st day of July, 2010,--

(a) for the words 'twenty thousand rupees', the words 'thirty thousand rupees' shall be substituted;

(b) in the proviso, for the words 'fifty thousand rupees', the words 'seventy-five thousand rupees' shall be substituted.

38. Amendment of section 194D

In section 194D of the Income-tax Act, in the second proviso, for the words 'five thousand rupees', the words 'twenty thousand rupees' shall be substituted with effect from the 1st day of July, 2010.

39. Amendment of section 194H

In section 194H of the Income-tax Act, in the first proviso, for the words 'two thousand five hundred rupees', the words 'five thousand rupees' shall be substituted with effect from the 1st day of July, 2010.

40. Amendment of section 194-I

In section 194-I of the Income-tax Act, in the first proviso, for the words 'one hundred and twenty thousand rupees', the words 'one hundred eighty thousand rupees' shall be substituted with effect from the 1st day of July, 2010.

41. Amendment of section 194J

In section 194J of the Income-tax Act, in the first proviso to sub-section (1), in clause (B), for the words 'twenty thousand rupees', wherever they occur, the words 'thirty thousand rupees' shall be substituted with effect from the 1st day of July, 2010.

42. Amendment of section 201

In section 201 of the Income-tax Act, for sub-section (1A), the following sub-section shall be substituted with effect from the 1st day of July, 2010, namely:--

'(1A) Without prejudice to the provisions of sub-section (1), if any such person, principal officer or company as is referred to in that sub-section does not deduct the whole or any part of the tax or after deducting fails to pay the tax as required by or under this Act, he or it shall be liable to pay simple interest,--

(i) at one per cent. for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted; and

(ii) at one and one-half per cent. for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid, and such interest shall be paid before furnishing the statement in accordance with the provisions of sub-section (3) of section 200.'.

43. Amendment of section 203

In section 203 of the Income-tax Act, sub-section (3) shall be omitted.

44. Amendment of section 206C

In section 206C of the Income-tax Act, in sub-section (5),--

(a) the first proviso shall be omitted;

(b) in the second proviso, for the words 'Provided further', the word 'Provided' shall be substituted.

45. Amendment of section 245A

In section 245A of the Income-tax Act, in clause (b), with effect from the 1st day of June, 2010,--

(i) in the proviso, clauses (ii) and (iii) shall be omitted;

(ii) in the Explanation,--

(a) clause (ii) shall be omitted;

(b) after clause (iii), the following clause shall be inserted, namely:--

'(iiia) a proceeding for assessment or reassessment for any of the assessment years, referred to in clause (b) of sub-section (1) of section 153A in case of a person referred to in section 153A or section 153C, shall be deemed to have commenced on the date of issue of notice initiating such proceedings and concluded on the date on which the assessment is made;';

(c) in clause (iv), for the words, brackets and figures 'clause (ii) or clause (iii) or clause (iv) of the proviso', the words, brackets, figures and letter 'clause (iv) of the proviso or clause (iiia) of the Explanation' shall be substituted.

46. Amendment of section 245C

In section 245C of the Income-tax Act, in sub-section (1), for the proviso, the following proviso shall be substituted with effect from the 1st day of June, 2010, namely:--

'Provided that no such application shall be made unless,--

(i) in a case where proceedings for assessment or reassessment for any of the assessment years referred to in clause (b) of sub-section (1) of section 153A or clause (b) of sub-section (1) of section 153B in case of a person referred to in section 153A or section 153C have been initiated, the additional amount of income-tax payable on the income disclosed in the application exceeds fifty lakh rupees,

(ii) in any other case, the additional amount of income-tax payable on the income disclosed in the application exceeds ten lakh rupees, and such tax and the interest thereon, which would have been paid under the provisions of this Act had the income disclosed in the application been declared in the return of income before the Assessing Officer on the date of application, has been paid on or before the date of making the application and the proof of such payment is attached with the application.'.

47. Amendment of section 245D

In section 245D of the Income-tax Act, in sub-section (4A),--

(a) in clause (ii), after the words, figures and letters 'the 1st day of June, 2007', the words, figures and letters 'but before the 1st day of June, 2010' shall be inserted;

(b) after clause (ii), the following clause shall be inserted with effect from the 1st day of June, 2010, namely:--

'(iii) in respect of an application made on or after the 1st day of June, 2010, within eighteen months from the end of the month in which the application was made.'.

48. Amendment of section 256

In section 256 of the Income-tax Act, after sub-section (2), the following sub-section shall be inserted and shall be deemed to have been inserted with effect from the 1st day of June, 1981, namely:--

'(2A) The High Court may admit an application after the expiry of the period of six months referred to in sub-section (2), if it is satisfied that there was sufficient cause for not filing the same within that period.'.

49. Amendment of section 260A

In section 260A of the Income-tax Act, after sub-section (2), the following sub-section shall be inserted and shall be deemed to have been inserted with effect from the 1st day of October, 1998, namely:--

'(2A) The High Court may admit an appeal after the expiry of the period of one hundred and twenty days referred to in clause (a) of sub-section (2), if it is satisfied that there was sufficient cause for not filing the same within that period.'.

50. Amendment of section 271B

In section 271B of the Income-tax Act, for the words 'one hundred thousand rupees', the words 'one hundred fifty thousand rupees' shall be substituted with effect from the 1st day of April, 2011.

51. Amendment of section 282B

In section 282B of the Income-tax Act [as inserted by section 78 of the Finance (No. 2) Act, 2009 (33 of 2009)], with effect from the 1st day of October, 2010,--.

(a) in sub-section (1), for the words 'income-tax authority shall', the words, figures and letters 'income-tax authority shall, on or after the 1st day of July, 2011,' shall be substituted;

(b) in sub-section (3), for the words 'received by', the words, figures and letters 'received, on or after the 1st day of July, 2011, by' shall be substituted.

52. Amendment of First Schedule

In the First Schedule to the Income-tax Act, in rule 5, for clause (b) [as inserted by clause (ii) of section 80 of the Finance (No.2) Act, 2009 (33 of 2009)], the following clause shall be substituted with effect from the 1st day of April, 2011, namely:--

'(b) (i) any gain or loss on realisation of investments shall be added or deducted, as the case may be, if such gain or loss is not credited or debited to the profit and loss account;

(ii) any provision for diminution in the value of investment debited to the profit and loss account, shall be added back;'.

Wealth-tax

53. Amendment of section 22A

In section 22A of the Wealth-tax Act, 1957 (27 of 1957) (hereinafter referred to as the Wealth-tax Act), in clause (b), with effect from the 1st day of June, 2010,--

(i) in the proviso, clause (iii) shall be omitted;

(ii) in the Explanation,--

(a) for clause (iii), the following clause shall be substituted, namely:--

'(iii) a proceeding for assessment or reassessment for any of the assessment years, in consequence of a search initiated under section 37A or requisition made under section 37B, shall be deemed to have commenced on the date of issue of notice initiating such proceedings and concluded on the date on which the assessment is made;'.

(b) in clause (iv), for the words, brackets and figures 'or clause (iii) of the proviso', the words, brackets and figures 'of the proviso or clause (iii) of the Explanation' shall be substituted.

54. Amendment of section 22D

In section 22D of the Wealth-tax Act, in sub-section (4A),--

(a) in clause (ii), after the words, figures and letters 'the 1st day of June, 2007', the words, figures and letters 'but before the 1st day of June, 2010' shall be inserted;

(b) after clause (ii), the following clause shall be inserted with effect from the 1st day of June, 2010, namely:--

'(iii) in respect of an application made on or after the 1st day of June, 2010, within eighteen months from the end of the month in which the application was made.'.

55. Amendment of section 27

In section 27 of the Wealth-tax Act, after sub-section (3A), the following sub-section shall be inserted and shall be deemed to have been inserted with effect from the 1st day of June, 1981, namely:--

'(3B) The High Court may admit an application after the expiry of the period of ninety days referred to in sub-section (3), if it is satisfied that there was sufficient cause for not filing the same within that period.'.

56. Amendment of section 27A

In section 27A of the Wealth-tax Act, after sub-section (1), the following sub-section shall be inserted and shall be deemed to have been inserted with effect from the 1st day of October, 1998, namely:--

'(1A) The High Court may admit an appeal after the expiry of the period of one hundred and twenty days referred to in sub-section (1), if it is satisfied that there was sufficient cause for not filing the same within that period.'.

CHAPTER IV
INDIRECT TAXES
Customs
Sections 57 to 60 deal with amendments in the Customs Act, 1962 and sections 61 to 63 deal with amendments in the Customs Tariff Act, 1975. These sections are not reproduced here.
Excise
Sections 64 to 74 deal with amendments in the Central Excise Act, 1944 and rules made thereunder. Section 75 deals with amendments in the Central Excise Tariff Act, 1985. These sections are not reproduced here.
CHAPTER V
SERVICE TAX

76. Amendment of Act 32 of 1994

In the Finance Act, 1994,--

(A) in section 65, save as otherwise provided, with effect from such date as the Central Government may, by notification in the Official Gazette, appoint,--

(1) in clause (19), in sub-clause (ii), the Explanation shall be omitted;

(2) after clause (19a), the following clause shall be inserted, namely:--

(19b) 'business entity' includes an association of persons, body of individuals, company or firm but does not include an individual;;

(3) in clause (25b), for the words 'commercial or industrial construction service', the words 'commercial or industrial construction' shall be substituted;

(3A) for clause (77c), the following clause shall be substituted namely:-

(77c) 'passenger' means any person boarding an aircraft in India for performing domestic journey or international journey.

(4) for clause (82), the following clause shall be substituted, namely:--

(82) 'port service' means any service rendered within a port or other port, in any manner;;

(5) in clause (105),--

(a) for sub-clause (zn), the following sub-clause shall be substituted, namely:--

'(zn) to any person, by any other person, in relation to port services in a port, in any manner:

Provided that the provisions of section 65A shall not apply to any service when the same is rendered wholly within the port;;

(b) in sub-clause (zzc), the following Explanation shall be inserted and shall be deemed to have been inserted with effect from the 1st day of July, 2003, namely:--

Explanation.--For the removal of doubts, it is hereby declared that the expression 'commercial training or coaching centre' occurring in this sub-clause and in clauses (26), (27) and (90a) shall include any centre or institute, by whatever name called, where training or coaching is imparted for consideration, whether or not such centre or institute is registered as a trust or a society or similar other organisation under any law for the time being in force and carrying on its activity with or without profit motive and the expression 'commercial training or coaching' shall be construed 15 accordingly;;

'(zzl) to any person, by any other person, in relation to port services in other port, in any manner:

Provided that the provisions of section 65A shall not apply to any service when the same is rendered wholly within other port;;

(zzm) to any person, by airports authority or by any other person, in any airport or a civil enclave:

Provided that the provisions of section 65A shall not apply to any service when the same is rendered wholly within the airport or civil enclave;';

(d) in sub-clause (zzq),--

(i) the word 'service' shall be omitted;

(ii) the following Explanation shall be inserted, namely:--

'Explanation.--For the purposes of this sub-clause, the construction of a new building which is intended for sale, wholly or partly, by a builder or any person authorised by the builder before, during or after construction (except in cases for which no sum is received from or on behalf of the prospective buyer by the builder or the person authorised by the builder before grant of completion certificate by the authority competent to issue such certificate under any law for the time being in force) shall be deemed to be service provided by the builder to the buyer;';

(e) in sub-clause (zzzh), the following Explanation shall be inserted, namely:--

'Explanation.--For the purposes of this sub-clause, construction of a complex which is intended for sale, wholly or partly, by a builder or any person authorised by the builder before, during or after construction (except in cases for which no sum is received from or on behalf of the prospective buyer by the builder or a person authorised by the builder before the grant of completion certificate by the authority competent to issue such certificate under any law for the time being in force) shall be deemed to be service provided by the builder to the buyer;';

(f) for sub-clauses (zzzn) and (zzzo), the following sub-clauses shall be substituted, namely:--

'(zzzn) to any person, by any other person receiving sponsorship, in relation to such sponsorship, in any manner;

(zzzo) to any passenger, by an aircraft operator, in relation to scheduled or non-scheduled air transport of such passenger embarking in India for domestic journey or international journey;';

(g) in sub-clause (zzzr), the following Explanation shall be inserted, namely:--

Explanation.--For the removal of doubts, it is hereby declared that for the purposes of 50 this sub-clause, 'auction by the Government' means the Government property being auctioned by any person acting as auctioneer;;

(h) in sub-clause (zzzz),--

(i) for the portion beginning with the words 'to any person' and ending with the words 'business or commerce', the following shall be substituted and shall be deemed to have been substituted with effect from the 1st day of June, 2007, namely:--

'to any person, by any other person, by renting of immovable property or any other service in relation to such renting, for use in the course of or, for furtherance of, business 5 or commerce.';

(ii) in Explanation 1, after item (iv), the following item shall be inserted, namely:--

'(v) vacant land, given on lease or license for construction of building or temporary structure at a later stage to be used for furtherance of business or commerce;';

(i) in sub-clause (zzzze), the words 'for use in the course, or furtherance, of business or 10 commerce,' shall be omitted;

(j) in sub-clause (zzzzf), in the Explanation, for clauses (ii) and (iii), the following clause shall be substituted, namely:--

'(ii) the gross amount charged by the insurer from the policy holder for the said service provided or to be provided shall be equal to the maximum amount fixed by the Insurance Regulatory and Development Authority established under section 3 of the Insurance. Regulatory and Development Authority Act, 1999 (41of 1999), as fund management charges for unit linked insurance plan or the actual amount charged for the said purpose by the insurer from the policy holder, whichever is higher;';

(k) Explanation to sub-clause (zzzzm) shall be omitted;

(l) after sub-clause (zzzzm), the following sub-clauses shall be inserted, namely:--

(zzzzn) to any person, by any other person, for promotion, marketing, organising or in any other manner assisting in organising games of chance, including lottery, Bingo or Lotto in whatever form or by whatever name called, whether or not conducted through internet or other electronic networks;

(zzzzo) by any hospital, nursing home or multi-specialty clinic,--

(i) to an employee of any business entity, in relation to health check-up or preventive care, where the payment for such check-up or preventive care is made by such business entity directly to such hospital, nursing home or multi-specialty clinic; or

(ii) to a person covered by health insurance scheme, for any health check-up or treatment, where the payment for such health check-up or treatment is made by the insurance company directly to such hospital, nursing home or multi-specialty clinic;

(zzzzp) to any business entity, by any other person, in relation to storing, keeping or maintaining of medical records of employees of a business entity;

(zzzzq) to any person, by any other person, through a business entity or otherwise, under a contract for promotion or marketing of a brand of goods, service, event or endorsement of name, including a trade name, logo or house mark of a business entity by appearing in advertisement and promotional event or carrying out any promotional activity for such goods, service or event.

Explanation.--For the purposes of this sub-clause, 'brand' includes symbol, monogram, 40 label, signature or invented words which indicate connection with the said goods, service, event or business entity;

(zzzzr) to any person, by any other person, by granting the right or by permitting commercial use or exploitation of any event including an event relating to art, entertainment, business, sports or marriage organised by such other person;

(zzzzs) to any person, by an electricity exchange, by whatever name called, approved by the Central Electricity Regulatory Commission constituted under section 76 of the. Electricity Act, 2003 (36 of 2003), in relation to trading, processing, clearing or settlement of spot contracts, term ahead contracts, seasonal contracts, derivatives or any other electricity related contract;

(zzzzt) to any person, by any other person, for--

(a) transferring temporarily; or

(b) permitting the use or enjoyment of,

any copyright defined in the Copyright Act, 1957 (14 of 1957), except the rights covered under sub-clause (a) of clause (1) of section 13 of the said Act;';

(zzzzu) to a buyer, by a builder of a residential complex, or a commercial complex, or any other person authorised by such builder, for providing preferential location or development of such complex but does not include services covered under sub-clauses (zzg), (zzq), (zzzh) and in relation to parking place.

Explanation.--For the purposes of this sub-clause, preferential location means any location having extra advantage which attracts extra payment over and above the basic sale price;.

(B) in section 66, with effect from such date as the Central Government may, by notification in the Official Gazette, appoint, for the word, brackets and letters 'and (zzzzm)', the brackets, letters and word ',(zzzzm), (zzzzn), (zzzzo), (zzzzp), (zzzzq), (zzzzr), (zzzzs), (zzzzt) and (zzzzu)' shall be substituted;

(C) in section 73, in sub-section (3), the Explanation shall be numbered as Explanation 1 thereof and after Explanation 1 as so numbered, the following Explanation shall be inserted, namely:--

'Explanation 2.--For the removal of doubts, it is hereby declared that no penalty under any of the provisions of this Act or the rules made thereunder shall be imposed in respect of payment of service-tax under this sub-section and interest thereon.';

(D) in section 95, after sub-section (1F), the following sub-section shall be inserted, namely:--

'(1G) If any difficulty arises in respect of implementing, classifying or assessing the value of any taxable service incorporated in this Chapter by the Finance Act, 2010, the Central Government may, by order published in the Official Gazette, not inconsistent with the provisions of this Chapter, remove the difficulty:

Provided that no such order shall be made after the expiry of a period of one year from the date on which the Finance Bill, 2010 receives the assent of the President.'.

77. Validation of action taken under sub-clause (zzzz) of clause (105) of section 65

Any action taken or anything done or omitted to be done or purported to have been taken or done or omitted to be done under sub-clause (zzzz) of clause (105) of section 65 of the Finance Act, 1994 (32 of 1994), at any time during the period commencing on and from the 1st day of June, 2007 and ending with the day, the Finance Bill, 2010 receives the assent of the President, shall be deemed to be and deemed always to have been, for all purposes, as validly and effectively taken or done or omitted to be done as if the amendment made in sub-clause (zzzz) of clause (105) of section 65, by sub-item (i) of item (h) of sub-clause (5) of clause (A) of section 75 of the Finance Act, 2010 had been in force at all material times and, accordingly, notwithstanding anything contained in any judgment, decree or order of any court, tribunal or other authority,--

(a) any action taken or anything done or omitted to be taken or done in relation to the levy and collection of service tax during the said period on the taxable service of renting of immovable property, shall be deemed to be and deemed always to have been, as validly taken or done or omitted to be done as if the said amendment had been in force at all material times;

(b) no suit or other proceedings shall be maintained or continued in any court, tribunal or other authority for the levy and collection of such service tax and no enforcement shall be made by any court of any decree or order relating to such action taken or anything done or omitted to be done as if the said amendment had been in force at all material times;

(c) recovery shall be made of all such amounts of service tax, interest or penalty or fine or other charges which may not have been collected or, as the case may be, which have been refunded but 40 which would have been collected or, as the case may be, would not have been refunded, as if the said amendment had been in force at all material times.

Explanation.--For the removal of doubts, it is hereby declared that no act or omission on the part of any person shall be punishable as an offence which would not have been so punishable had this amendment not come into force.

CHAPTER VI
Central Sales Tax
Sections 78 to 82 deal with amendments in the Central Sales Tax Act, 1956. These sections are not reproduced here.
CHAPTER VII

Clean Energy Cess

Sections 83 to 84 deal with new cess called Clean Energy Cess. These sections are not reproduced here.
CHAPTER VIII

Miscellaneous

Sections 85 to 87 deal with Miscellaneous Amendments. These sections are not reproduced here.
THE FIRST SCHEDULE

(See section 2)

PART I
INCOME-TAX
Paragraph A

(I) In the case of every individual other than the individual referred to in items (II) and (III) of this Paragraph 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 any other Paragraph of this Part applies,--

Rates of income-tax

(1)	where the total income does not exceed Rs. 1,60,000	Nil;
(2)	where the total income exceeds Rs.1,60,000 but does not exceed Rs. 3,00,000	10 per cent. of the amount by which the total income exceeds Rs. 1,60,000;
(3)	where the total income exceeds Rs. 3,00,000 but does not exceed Rs. 5,00,000	Rs. 14,000 plus 20 per cent. of the amount by which the total income exceeds Rs. 3,00,000;
(4)	where the total income exceeds Rs. 5,00,000	Rs. 54,000 plus 30 per cent. of the amount by which the total income exceeds Rs. 5,00,000.

(II) In the case of every individual, being a woman resident in India, and below the age of sixty-five years at any time during the previous year,--

Rates of income-tax

(1)	where the total income does not exceed Rs. 1,90,000	Nil;
(2)	where the total income exceeds Rs. 1,90,000 but does not exceed Rs. 3,00,000	10 per cent. of the amount by which the total income exceeds Rs. 1,90,000;
(3)	where the total income exceeds Rs. 3,00,000 but does not exceed Rs. 5,00,000	Rs. 11,000 plus 20 per cent. of the amount by which the total income exceeds Rs. 3,00,000;
(4)	where the total income exceeds Rs. 5,00,000	Rs. 51,000 plus 30 per cent. of the amount by which the total income exceeds Rs. 5,00,000.

(III) In the case of every individual, being a resident in India, who is of the age of sixty-five years or more at any time during the previous year,--

Rates of income-tax

(1)	where the total income does not exceed Rs. 2,40,000	Nil;
(2)	where the total income exceeds Rs. 2,40,000 but does not exceed Rs. 3,00,000	10 per cent. of the amount by which the total income exceeds Rs. 2,40,000;
(3)	where the total income exceeds Rs. 3,00,000 but does not exceed Rs. 5,00,000	Rs. 6,000 plus 20 per cent. of the amount by which the total income exceeds Rs. 3,00,000;
(4)	where the total income exceeds Rs. 5,00,000	Rs. 46,000 plus 30 per cent. of the amount by which the total income exceeds Rs. 5,00,000.

Paragraph B
In the case of every co-operative society,--
Rates of income-tax

(1)	where the total income does not exceed Rs.10,000	10 per cent. of the total income;
(2)	where the total income exceeds Rs.10,000 but does not exceed Rs. 20,000	Rs.1,000 plus 20 per cent. of the amount by which the total income exceeds Rs.10,000;
(3)	where the total income exceeds Rs. 20,000	Rs. 3,000 plus 30 per cent. of the amount by which the total income exceeds Rs. 20,000.

Paragraph C

In the case of every firm,--

Rate of income-tax

On the whole of the total income

30 per cent.

Paragraph D

In the case of every local authority,--

Rate of income-tax

On the whole of the total income

30 per cent.

Paragraph E

In the case of a company,--

Rates of income-tax

I. In the case of a domestic company			30 per cent of the total income;
II. In the case of a company other than a domestic company--
(i)	on so much of the total income as consists of,--
	(a)	royalties received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 31st day of March, 1961 but before the 1st day of April, 1976; or
	(b)	fees for rendering technical services received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 29th day of February, 1964 but before the 1st day of April, 1976,
and where such agreement has, in either case, been approved by the Central Government			50 per cent.;
(ii)	on the balance, if any, of the total income		40 per cent.

Surcharge on income-tax

The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or in section 111A or section 112, shall, in the case of every company, be increased by a surcharge for purposes of the Union calculated,--

(i) in the case of every domestic company having a total income exceeding one crore rupees, at the rate of ten per cent. of such income-tax;

(ii) in the case of every company other than a domestic company having a total income exceeding one crore rupees, at the rate of two and one-half per cent.:

Provided that in the case of every company having a total income exceeding one crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

PART II
Rates for Deduction of Tax at Source in Certain Cases

In every case in which under the provisions of sections 193, 194, 194A, 194B, 194BB, 194D and 195 of the Income-tax Act, tax is to be deducted at the rates in force, deduction shall be made from the income subject to the deduction at the following rates:--

											Rate of income-tax
1.	In the case of a person other than a company--
	(a)	where the person is resident in India--
		(i)	on income by way of interest other than 'Interest on securities'								10 per cent.;
		(ii)	on income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort								30 per cent.;
		(iii)	on income by way of winnings from horse races								30 per cent.;
		(iv)	on income by way of insurance commission								10 per cent.;
		(v)	on income by way of interest payable on--								10 per cent.;
			(A)		any debentures or securities for money issued by or on behalf of any local authority or a corporation established by a Central, State or Provincial Act;
			(B)		any debentures issued by a company where such debentures are listed on a recognised stock exchange in India in accordance with the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and any rules made thereunder;
			(C)		any security of the Central or State Government
		(vi)	on any other income								10 per cent.;
	(b)	where the person is not resident in India--
		(i)		in the case of a non-resident Indian--
				(A)		on any investment income					20 per cent.;
				(B)		on income by way of long-term capital gains referred to in section 115E					10 per cent.;
				(C)		on income by way of short-term capital gains referred to in section 111A					15 per cent.;
				(D)		on other income by way of long-term capital gains [not being long-term capital gains referred to in clauses (33), (36) and (38) of section 10]					20 per cent.;
				(E)		on income by way of interest payable by Government or an Indian concern on moneys borrowed or debt incurred by Government or the Indian concern in foreign currency					20 per cent.;
				(F)		on income by way of royalty payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern where such royalty is in consideration for the transfer of all or any rights (including the granting of a licence) in respect of copyright in any book on a subject referred to in the first proviso to sub-section (1A) of section 115A of the Income-tax Act, to the Indian concern, or in respect of any computer software referred to in the second proviso to sub-section (1A) of section 115A of the Income-tax Act, to a person resident in India--
						(I)				where the agreement is made on or after the 1st day of June, 1997 but before the 1st day of June, 2005	20 per cent.;
						(II)				where the agreement is made on or after the 1st day of June, 2005	10 per cent.;
				(G)		on income by way of royalty [not being royalty of the nature referred to in sub-item (b)(i)(F)] payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy--
						(I)	where the agreement is made on or after the 1st day of June, 1997 but before the 1st day of June, 2005				20 per cent.;
						(II)	where the agreement is made on or after the 1st day of June, 2005				10 per cent.;
				(H)		on income by way of fees for technical services payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy--
						(I)		where the agreement is made on or after the 1st day of June, 1997 but before the 1st day of June, 2005			20 per cent.;
						(II)		where the agreement is made on or after the 1st day of June, 2005			10 per cent.;
				(I)		on income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort					30 per cent.;
				(J)		on income by way of winnings from horse races					30 per cent.;
				(K)		on the whole of the other income					30 per cent.;
		(ii)		in the case of any other person--
				(A)		on income by way of interest payable by Government or an Indian concern on moneys borrowed or debt incurred by Government or the Indian concern in foreign currency					20 per cent.;
				(B)		on income by way of royalty payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern where such royalty is in consideration for the transfer of all or any rights (including the granting of a licence) in respect of copyright in any book on a subject referred to in the first proviso to sub-section (1A) of section 115A of the Income-tax Act, to the Indian concern, or in respect of any computer software referred to in the second proviso to sub-section (1A) of section 115A of the Income-tax Act, to a person resident in India--
						(I)				where the agreement is made on or after the 1st day of June, 1997 but before the 1st day of June, 2005	20 per cent.;
						(II)				where the agreement is made on or after the 1st day of June, 2005	10 per cent.;
				(C)		on income by way of royalty [not being royalty of the nature referred to in sub-item (b)(ii)(B)] payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy--
						(I)		where the agreement is made on or after the 1st day of June, 1997 but before the 1st day of June, 2005			20 per cent.;
						(II)		where the agreement is made on or after the 1st day of June, 2005			10 per cent.;
				(D)		on income by way of fees for technical services payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy--
						(I)			where the agreement is made on or after the 1st day of June, 1997 but before the 1st day of June, 2005		20 per cent.;
						(II)			where the agreement is made on or after the 1st day of June, 2005		10 per cent.;
				(E)		on income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort					30 per cent.;
				(F)		on income by way of winnings from horse races					30 per cent.;
				(G)		on income by way of short-term capital gains referred to in section 111A					15 per cent.;
				(H)		on income by way of long-term capital gains [not being long-term capital gains referred to in clause (33), (36) and (38) of section 10]					20 per cent.;
				(I)		on the whole of the other income					30 per cent.;
2.	In the case of a company--
	(a)	where the company is a domestic company--
		(i)		on income by way of interest other than 'Interest on securities'							10 per cent.;
		(ii)		on income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort							30 per cent.;
		(iii)		on income by way of winnings from horse races							30 per cent.;
		(iv)		on any other income							10 per cent.;
	(b)	where the company is not a domestic company--
		(i)		on income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort							30 per cent.;
		(ii)		on income by way of winnings from horse races							30 per cent.;
		(iii)		on income by way of interest payable by Government or an Indian concern on moneys borrowed or debt incurred by Government or the Indian concern in foreign currency							20 per cent.;
		(iv)		on income by way of royalty payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 31st day of March, 1976 where such royalty is in consideration for the transfer of all or any rights (including the granting of a licence) in respect of copyright in any book on a subject referred to in the first proviso to sub-section (1A) of section 115A of the Income-tax Act, to the Indian concern, or in respect of any computer software referred to in the second proviso to sub-section (1A) of section 115A of the Income-tax Act, to a person resident in India--
				(A)		where the agreement is made before the 1st day of June, 1997					30 per cent.;
				(B)		where the agreement is made on or after the 1st day of June, 1997 but before the 1st day of June, 2005					20 per cent.;
				(C)		where the agreement is made on or after the 1st day of June, 2005					10 per cent.;
		(v)		on income by way of royalty [not being royalty of the nature referred to in sub-item (b)(iv)] payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy--
				(A)		where the agreement is made after the 31st day of March, 1961 but before the 1st day of April, 1976					50 per cent.;
				(B)		where the agreement is made after the 31st day of March, 1976 but before the 1st day of June, 1997					30 per cent.;
				(C)		where the agreement is made on or after the 1st day of June, 1997 but before the 1st day of June, 2005					20 per cent.;
				(D)		where the agreement is made on or after the 1st day of June, 2005					10 per cent.;
		(vi)		on income by way of fees for technical services payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy--
				(A)		where the agreement is made after the 29th day of February, 1964 but before the 1st day of April, 1976					50 per cent.;
				(B)		where the agreement is made after the 31st day of March, 1976 but before the 1st day of June, 1997					30 per cent.;
				(C)		where the agreement is made on or after the 1st day of June, 1997 but before the 1st day of June, 2005					20 per cent.;
				(D)		where the agreement is made on or after the 1st day of June, 2005					10 per cent.;
		(vii)		on income by way of short-term capital gains referred to in section 111A							15 per cent.;
		(viii)		on income by way of long-term capital gains [not being long-term capital gains referred to in clauses (33), (36) and (38) of section 10]							20 per cent.;
		(ix)		on any other income							40 per cent.;

Explanation.--For the purpose of item 1(b)(i) of this Part, 'investment income' and 'non-resident Indian' shall have the meanings assigned to them in Chapter XII-A of the Income-tax Act.

Surcharge on income-tax

The amount of income-tax deducted in accordance with the provisions of item 2(b) of this Part, shall be increased by a surcharge, for purposes of the Union, in the case of every company other than a domestic company, calculated at the rate of two and one-half per cent. of such income-tax where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds one crore rupees.

PART III
Rates for charging Income-tax in certain cases, deducting income-tax from Income chargeable under the head 'Salaries' and computing 'Advance Tax'

In cases in which income-tax has to be charged under sub-section (4) of section 172 of the Income-tax Act or sub-section (2) of section 174 or section 174A or section 175 or sub-section (2) of section 176 of the said Act or deducted from, or paid on, from income chargeable under the head 'Salaries' under section 192 of the said Act or in which the 'advance tax' payable under Chapter XVII-C of the said Act has to be computed at the rate or rates in force, such income-tax or, as the case may be, 'advance tax' [not being 'advance tax' in respect of any income chargeable to tax under Chapter XII or Chapter XII-A or income chargeable to tax under section 115JB or sub-section (1A) of section 161 or section 164 or section 164A or section 167B of the Income-tax Act at the rates as specified in that Chapter or section or surcharge, wherever applicable, on such 'advance tax' in respect of any income chargeable to tax under section 115A or section 115AB or section 115AC or section 115ACA or section 115AD or section 115B or section 115BB or section 115BBA or section 115BBC or section 115E or section 115JB] shall be charged, deducted or computed at the following rate or rates:--

Paragraph A

Rates of income-tax

(1)	where the total income does not exceed Rs. 1,60,000	Nil;
(2)	where the total income exceeds Rs.1,60,000 but does not exceed Rs. 5,00,000	10 per cent. of the amount by which the total income exceeds Rs. 1,60,000;
(3)	where the total income exceeds Rs. 5,00,000 but does not exceed Rs. 8,00,000	Rs. 34,000 plus 20 per cent. of the amount by which the total income exceeds Rs. 5,00,000;
(4)	where the total income exceeds Rs. 8,00,000	Rs. 94,000 plus 30 per cent. of the amount by which the total income exceeds Rs. 8,00,000;

(II) In the case of every individual, being a woman resident in India, and below the age of sixty-five years at any time during the previous year,--

Rates of income-tax

(1)	where the total income does not exceed Rs. 1,90,000	Nil;
(2)	where the total income exceeds Rs. 1,90,000 but does not exceed Rs. 5,00,000	10 per cent. of the amount by which the total income exceeds Rs. 1,90,000;
(3)	where the total income exceeds Rs. 5,00,000 but does not exceed Rs. 8,00,000	Rs. 31,000 plus 20 per cent. of the amount by which the total income exceeds Rs. 5,00,000;
(4)	where the total income exceeds Rs. 8,00,000	Rs. 91,000 plus 30 per cent. of the amount by which the total income exceeds Rs. 8,00,000.

(III) In the case of every individual, being a resident in India, who is of the age of sixty-five years or more at any time during the previous year,--

Rates of income-tax

(1)	where the total income does not exceed Rs. 2,40,000	Nil;
(2)	where the total income exceeds Rs. 2,40,000 but does not exceed Rs. 5,00,000	10 per cent. of the amount by which the total income exceeds Rs. 2,40,000;
(3)	where the total income exceeds Rs. 5,00,000 but does not exceed Rs. 8,00,000	Rs. 26,000 plus 20 per cent. of the amount by which the total income exceeds Rs. 5,00,000;
(4)	where the total income exceeds Rs. 8,00,000	Rs. 86,000 plus 30 per cent. of the amount by which the total income exceeds Rs. 8,00,000.

Paragraph B

In the case of every co-operative society,--

Rates of income-tax

(1)	where the total income does not exceed Rs. 10,000	10 per cent. of the total income;
(2)	where the total income exceeds Rs.10,000 but does not exceed Rs. 20,000	Rs. 1,000 plus 20 per cent. of the amount by which the total income exceeds Rs. 10,000;
(3)	where the total income exceeds Rs. 20,000	Rs. 3,000 plus 30 per cent. of the amount by which the total income exceeds Rs. 20,000.

Paragraph C

In the case of every firm,--

Rate of income-tax

On the whole of the total income

30 per cent.

Paragraph D

In the case of every local authority,--

Rate of income-tax

On the whole of the total income

30 per cent.

Paragraph E

In the case of a company,--

Rates of income-tax

I.	In the case of a domestic company				30 per cent. of the total income;
II.	In the case of a company other than a domestic company--
	(i)	on so much of the total income as consists of,--
		(a)		royalties received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 31st day of March, 1961 but before the 1st day of April, 1976; or
		(b)		fees for rendering technical services received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 29th day of February, 1964 but before the 1st day of April, 1976,
	and where such agreement has, in either case, been approved by the Central Government				50 per cent.;
	(ii)		on the balance, if any, of the total income		40 per cent.

Surcharge on income-tax

(i) in the case of every domestic company having a total income exceeding one crore rupees, at the rate of seven and one-half per cent. of such income-tax;

(ii) in the case of every company other than a domestic company having a total income exceeding one crore rupees at the rate of two and one-half per cent.:

PART IV

[See section 2(13)(c)]

Rules for Computation of Net Agricultural Income

Rule 1.--Agricultural income of the nature referred to in sub-clause (a) of clause (1A) of section 2 of the Income-tax Act shall be computed as if it were income chargeable to income-tax under that Act under the head 'Income from other sources' and the provisions of sections 57 to 59 of that Act shall, so far as may be, apply accordingly:

Provided that sub-section (2) of section 58 shall apply subject to the modification that the reference to section 40A therein shall be construed as not including a reference to sub-sections (3) and (4) of section 40A.

Rule 2.--Agricultural income of the nature referred to in sub-clause (b) or sub-clause (c) of clause (1A) of section 2 of the Income-tax Act [other than income derived from any building required as a dwelling-house by the receiver of the rent or revenue of the cultivator or the receiver of rent-in-kind referred to in the said sub-clause (c)] shall be computed as if it were income chargeable to income-tax under that Act under the head 'Profits and gains of business or profession' and the provisions of sections 30, 31, 32, 36, 37, 38, 40, 40A [other than sub-sections (3) and (4) thereof], 41, 43, 43A, 43B and 43C of the Income-tax Act shall, so far as may be, apply accordingly.

Rule 3.--Agricultural income of the nature referred to in sub-clause (c) of clause (1A) of section 2 of the Income-tax Act, being income derived from any building required as a dwelling-house by the receiver of the rent or revenue or the cultivator or the receiver of rent-in-kind referred to in the said sub-clause (c) shall be computed as if it were income chargeable to income-tax under that Act under the head 'Income from house property' and the provisions of sections 23 to 27 of that Act shall, so far as may be, apply accordingly.

Rule 4.--Notwithstanding anything contained in any other provisions of these rules, in a case--

(a) where the assessee derives income from sale of tea grown and manufactured by him in India, such income shall be computed in accordance with rule 8 of the Income-tax Rules, 1962, and sixty per cent. of such income shall be regarded as the agricultural income of the assessee;

(b) where the assessee derives income from sale of centrifuged latex or cenex or latex based crepes (such as pale latex crepe) or brown crepes (such as estate brown crepe, re-milled crepe, smoked blanket crepe or flat bark crepe) or technically specified block rubbers manufactured or processed by him from rubber plants grown by him in India, such income shall be computed in accordance with rule 7A of the Income-tax Rules, 1962, and sixty-five per cent. of such income shall be regarded as the agricultural income of the assessee;

(c) where the assessee derives income from sale of coffee grown and manufactured by him in India, such income shall be computed in accordance with rule 7B of the Income-tax Rules, 1962, and sixty per cent. or seventy-five per cent., as the case may be, of such income shall be regarded as the agricultural income of the assessee.

Rule 5.--Where the assessee is a member of an association of persons or a body of individuals (other than a Hindu undivided family, a company or a firm) which in the previous year has either no income chargeable to tax under the Income-tax Act or has total income not exceeding the maximum amount not chargeable to tax in the case of an association of persons or a body of individuals (other than a Hindu undivided family, a company or a firm) but has any agricultural income then, the agricultural income or loss of the association or body shall be computed in accordance with these rules and the share of the assessee in the agricultural income or loss so computed shall be regarded as the agricultural income or loss of the assessee.

Rule 6.--Where the result of the computation for the previous year in respect of any source of agricultural income is a loss, such loss shall be set off against the income of the assessee, if any, for that previous year from any other source of agricultural income:

Provided that where the assessee is a member of an association of persons or a body of individuals and the share of the assessee in the agricultural income of the association or body, as the case may be, is a loss, such loss shall not be set off against any income of the assessee from any other source of agricultural income.

Rule 7.--Any sum payable by the assessee on account of any tax levied by the State Government on the agricultural income shall be deducted in computing the agricultural income.

Rule 8.--(1) Where the assessee has, in the previous year relevant to the assessment year commencing on the 1st day of April, 2010, any agricultural income and the net result of the computation of the agricultural income of the assessee for any one or more of the previous years relevant to the assessment years commencing on the 1st day of April, 2002 or the 1st day of April, 2003 or the 1st day of April, 2004 or the 1st day of April, 2005 or the 1st day of April, 2006 or the 1st day of April, 2007 or the 1st day of April, 2008 or the 1st day of April, 2009, is a loss, then, for the purposes of sub-section (2) of section 2 of this Act,--

(i) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2002, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 2003 or the 1st day of April, 2004 or the 1st day of April, 2005 or the 1st day of April, 2006 or the 1st day of April, 2007 or the 1st day of April, 2008 or the 1st day of April, 2009,

(ii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2003, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 2004 or the 1st day of April, 2005 or the 1st day of April, 2006 or the 1st day of April, 2007 or the 1st day of April, 2008 or the 1st day of April, 2009,

(iii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2004, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 2005 or the 1st day of April, 2006 or the 1st day of April, 2007 or the 1st day of April, 2008 or the 1st day of April, 2009,

(iv) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2005, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 2006 or the 1st day of April, 2007 or the 1st day of April, 2008 or the 1st day of April, 2009,

(v) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2006, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 2007 or the 1st day of April, 2008 or the 1st day of April, 2009,

(vi) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2007, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 2008 or the 1st day of April, 2009,

(vii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2008, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 2009,

(viii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2009, shall be set off against the agricultural income of the assessee for the previous year relevant to the assessment year commencing on the 1st day of April, 2010.

(2) Where the assessee has, in the previous year relevant to the assessment year commencing on the 1st day of April, 2011, or, if by virtue of any provision of the Income-tax Act, income-tax is to be charged in respect of the income of a period other than the previous year, in such other period, any agricultural income and the net result of the computation of the agricultural income of the assessee for any one or more of the previous years relevant to the assessment years commencing on the 1st day of April, 2003 or the 1st day of April, 2004 or the 1st day of April, 2005 or the 1st day of April, 2006 or the 1st day of April, 2007 or the 1st day of April, 2008 or the 1st day of April, 2009 or the 1st day of April, 2010, is a loss, then, for the purposes of sub-section (10) of section 2 of this Act,--

(i) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2003, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 2004 or the 1st day of April, 2005 or the 1st day of April, 2006 or the 1st day of April, 2007 or the 1st day of April, 2008 or the 1st day of April, 2009 or the 1st day of April, 2010,

(ii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2004, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 2005 or the 1st day of April, 2006 or the 1st day of April, 2007 or the 1st day of April, 2008 or the 1st day of April, 2009 or the 1st day of April, 2010,

(iii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2005, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 2006 or the 1st day of April, 2007 or the 1st day of April, 2008 or the 1st day of April, 2009 or the 1st day of April, 2010,

(iv) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2006, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 2007 or the 1st day of April, 2008 or the 1st day of April, 2009 or the 1st day of April, 2010,

(v) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2007, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 2008 or the 1st day of April, 2009 or the 1st day of April, 2010,

(vi) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2008, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 2009 or the 1st day of April, 2010,

(vii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2009, to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 2010,

(viii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2010, shall be set off against the agricultural income of the assessee for the previous year relevant to the assessment year commencing on the 1st day of April, 2011.

(3) Where any person deriving any agricultural income from any source has been succeeded in such capacity by another person, otherwise than by inheritance, nothing in sub-rule (1) or sub-rule (2) shall entitle any person, other than the person incurring the loss, to have it set off under sub-rule (1) or, as the case may be, sub-rule (2).

(4) Notwithstanding anything contained in this rule, no loss which has not been determined by the Assessing Officer under the provisions of these rules or the rules contained in Part IV of the First Schedule to the Finance Act, 2002 (20 of 2002), or of the First Schedule to the Finance Act, 2003 (32 of 2003), or of the First Schedule to the Finance (No. 2) Act, 2004 (23 of 2004) or of the First Schedule to the Finance Act, 2005 (18 of 2005), or of the First Schedule to the Finance Act, 2006 (21 of 2006) or of the First Schedule to the Finance Act, 2007 (22 of 2007) or of the First Schedule to the Finance Act, 2008 (18 of 2008) or of the First Schedule to the Finance (No. 2) Act, 2009 (33 of 2009) shall be set off under sub-rule (1) or, as the case may be, sub-rule (2).

Rule 9.--Where the net result of the computation made in accordance with these rules is a loss, the loss so computed shall be ignored and the net agricultural income shall be deemed to be nil.

Rule 10.--The provisions of the Income-tax Act relating to procedure for assessment (including the provisions of section 288A relating to rounding off of income) shall, with the necessary modifications, apply in relation to the computation of the net agricultural income of the assessee as they apply in relation to the assessment of the total income.

Rule 11.--For the purposes of computing the net agricultural income of the assessee, the Assessing Officer shall have the same powers as he has under the Income-tax Act for the purposes of assessment of the total income.