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PROMISSORY NOTES (STAMP) ACT, 1926 [REPEALED]

Ministry of Law and Justice

Act nº 11 of 1926


  • Act nº 11 of 1926

Preamble

THE PROMISSORY NOTES (STAMP) ACT, 1926

[Act, No. 11 of 1926]

[2nd March, 1926]

PREAMBLE

An Act to provide for the validation of certain promissory notes.

WHEREAS it is expedient to provide for the validation of certain promissory notes stamped with postage stamps of the denomination of two or four annas; It is hereby enacted as follows :--

Section 1. Short title and extent

(1) This Act may be called The Promissory Notes (Stamp) Act, 1926.

1 [(2) It extends tothe whole of India except 2 [the territories which, immediately beforethe 1st November, 1956, were comprised in Part BStates].

1.Substitutedfor the original sub-section by A. L. O., 1950(26-1-1950).

2.Substitutedfor 'Part BStates' by 3 A. L. O., 1956 (with retrospective effect from 1-11-1956).


Section 2. Validation of certain promissory notes

A promissory note payable on demand for an amount exceeding two hundred and fifty rupees, executed after the 30th day of September, 1923, and before the 5th day of January, 1925, and stamped with an adhesive stamp or adhesive stamps inscribed for postage and of the value required by the law in force at the time the promissory note was executed, shall not, by reason only of the fact that the stamp or the stamps or any of them is or are of a description other than that required by such law, be deemed for any of the purposes of the Indian Stamp Act, 1899, or of the rules made there under, not to have been duly stamped.

Repealing Act1
Finance Act, 2006

THE FINANCE ACT, 2006

[Act,No. 21 of 2006]

[18th April, 2006]

PREAMBLE

to give effect to the financial proposals of the Central Government forthe financial year 2006-2007.

BE it enacted byParliament in the Fifty-seventh Year of the Republic of India as follows:-

CHAPTER I. PRELIMINARY

1. Short title and commencement

(1) This Act may becalled the Finance Act, 2006.

(2) Save as otherwiseprovided in this Act, sections 2 to 57 shall be deemed to have come into forceon the 1st day of April, 2006.

CHAPTER II. RATES OF INCOME-TAX

2. Income-tax

(1) Subject to theprovisions of sub-sections (2) and (3), for the assessment year commencing onthe 1st day of April, 2006, income-tax shall be charged at the rates specifiedin Part I of the First Schedule and such tax as reduced by the rebate ofincome-tax calculated under Chapter VIII-A of the Income-tax Act, 1961(43 of1961) (hereinafter referred to as the Income-tax Act) shall be increased by asurcharge for purposes of the Union calculated in each case in the mannerprovided therein.

(2) In the cases towhich Paragraph A of Part I of the First Schedule applies, where the assesseehas, in the previous year, any net agricultural income exceeding five thousandrupees, in addition to total income, and the total income exceeds one lakhrupees, then,--

(a) the netagricultural income shall be taken into account, in the manner provided inclause (b) [that is to say, as if the net agricultural income were comprised inthe total income after the first one lakh rupees of the total income but withoutbeing liable to tax], only for the purpose of charging income-tax in respect ofthe total income; and

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

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

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

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

Provided that in thecase of every woman, resident in India and below the age of sixty-five years atany time during the previous year, referred to in item (II) of Paragraph A ofPart I of the First Schedule, the provisions of this sub-section shall haveeffect as if for the words "one lakh rupees", the words "one lakhthirty-five thousand rupees" had been substituted:

Provided further thatin the case of every individual, being a resident in India, who is of the age ofsixty-five years or more at any time during the previous year, referred to initem (III) of Paragraph A of Part I of the First Schedule, the provisions ofthis sub-section shall have effect as if for the words "one lakhrupees", the words "one lakh eighty-five thousand rupees" hadbeen substituted:

Provided also that theamount of income-tax so arrived at, as reduced by the amount of rebate ofincome-tax calculated under Chapter VIII-A of the Income-tax Act, shall beincreased by a surcharge for purposes of the Union calculated in each case inthe manner provided in that Paragraph and the sum so arrived at shall be theincome-tax in respect of the total income.

(3) In cases to whichthe provisions of Chapter XII or Chapter XII-A or Chapter XII-H or section 115JBor sub-section (1A) of section 161 or section 164 or section 164A or section167B of the Income-tax Act apply, the tax chargeable shall be determined asprovided in that Chapter or that section, and with reference to the ratesimposed by sub-section (1) or the rates as specified in that Chapter or section,as the case may be:

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

Provided further thatin respect of any income chargeable to tax under sections 115A, 115AB, 115AC,115ACA, 115AD, 115B, 115BB, 115BBA, 115E and 115JB or fringe benefits chargeableto tax under section 115WA of the Income-tax Act, the amount of income-taxcomputed under this subsection shall be increased by a surcharge for purposes ofthe Union, calculated,--

(a) in the case ofevery individual, Hindu undivided family, association of persons and body ofindividuals, whether incorporated or not, at the rate of ten per cent, of suchincome-tax where the total income or fringe benefits, as the case may be,exceeds ten lakh rupees;

(b) in the case ofevery firm, artificial juridical person referred to in sub-clause (vii) ofclause (31) of section 2 of the Income-tax Act, and domestic company at the rateof ten per cent, of such income-tax;

(c) in the case ofevery company, other than a domestic company, at the rate of two and one-halfper cent, of such income-tax.

(4) In cases in whichtax has to be charged and paid under section 115-O or sub-section (2) of section115R of the Income-tax Act, the tax shall be charged and paid at the rate asspecified in those sections and shall be increased by a surcharge for purposesof the Union, calculated at the rate of ten per cent, of such tax.

(5) In cases in whichtax has to be deducted under sections 193, 194, 194A, 194B, 194BB, 194D and 195of the Income-tax Act, at the rates in force, the deductions shall be made atthe rates specified in Part II of the First Schedule and shall be increased, bya surcharge for purposes of the Union, calculated in each case, in the mannerprovided therein.

(6) In cases in whichtax has to be deducted under sections 194C, 194E, 194EE, 194F, 194G, 194H,194-1, 194J, 194LA, 196B, 196C and 196D of the Income-tax Act, the deductionsshall be made at the rates specified in those sections and shall be increased bya surcharge for purposes of the Union, calculated,--

(a) in the case ofevery individual, Hindu undivided family, association of persons and body ofindividuals, whether incorporated or not, at the rate of ten per cent, of suchtax where the income or the aggregate of such incomes paid or likely to be paidand subject to the deduction exceeds ten lakh rupees;

(b) in the case ofevery firm, artificial juridical person referred to in sub-clause (vii) ofclause (31) of section 2 of the Income-tax Act, and domestic company, at therate of ten per cent, of such tax;

(c) in the case ofevery company, other than a domestic company, at the rate of two and one-halfper cent, of such tax.

(7) In cases in whichtax 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 FirstSchedule, and shall be increased, by a surcharge for purposes of the Union,calculated in the manner provided therein.

(8) In cases in whichtax has to be collected under section 206C of the Income-tax Act, the collectionshall be made at the rates specified in that section and shall be increased by asurcharge for purposes of the Union, calculated,--

(a) in the case ofevery individual, Hindu undivided family, association of persons and body ofindividuals, whether incorporated or not, at the rate of ten per cent, of suchtax where the amount or the aggregate of such amounts collected, and subject tothe collection, exceeds ten lakh rupees;

(b) in the case ofevery firm, artificial juridical person referred to in sub-clause (vii) ofclause (31) of section 2 of the Income-tax Act, and domestic company, at therate of ten per cent, of such tax;

(c) in the case ofevery company, other than a domestic company, at the rate of two and one-halfper cent of such tax.

(9) Subject to theprovisions of sub-section (10), in cases in which income-tax has to be chargedunder sub-section (4) of section 172 or sub-section (2) of section 174 orsection 174A or section 175 or sub-section (2) of section 176 of the Income-taxAct 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 becomputed 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 orrates specified in Part III of the First Schedule and such tax as reduced by therebate of income-tax calculated under Chapter VIII-A of the said Act shall beincreased by a surcharge for purposes of the Union, calculated in each case inthe manner provided therein:

Provided that in casesto which the provisions of Chapter XII or Chapter XII-A or Chapter XII-H orsection 115JB or sub-section (1A) of section 161 or section 164 or section 164Aor section 167B of the Income-tax Act apply, "advance tax" shall becomputed with reference to the rates imposed by this subsection or the rates asspecified in that Chapter or section, as the case may be:

Provided further thatthe amount of "advance tax" computed in accordance with the provisionsof section 111A or section 112 of the Income-tax Act shall be increased by asurcharge for purposes of the Union as provided in Paragraph A, B, C, D or E, asthe case may be, of Part III of the First Schedule:

Provided also that inrespect of any income chargeable to tax under sections 115A, 115AB, 115AC,115ACA, 115AD, 115B, 115BB, 115BBA, 115BBC, 115E and 115JB or fringe benefitschargeable to tax under section 115WA of the Income-tax Act, "advancetax" computed under the first proviso shall be increased by a surcharge forpurposes of the Union, calculated,--

(a) in the case ofevery individual, Hindu undivided family, association of persons and body ofindividuals, whether incorporated or not, at the rate of ten per cent, of"advance tax" where the total income or fringe benefits, as the casemay be, exceeds ten lakh rupees;

(b) in the case ofevery firm, artificial juridical person referred to in sub-clause (vii) ofclause (31) of section 2 of the Income-tax Act, and domestic company, at therate of ten per cent, of such "advance tax";

(c) in the case ofevery company, other than a domestic company, at the rate of two and one-halfper cent of such "advance tax".

(10) In cases to whichParagraph 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 theprevious year, in such other period, any net agricultural income exceeding fivethousand rupees, in addition to total income and the total income exceeds onelakh rupees, then, in charging income-tax under sub-section (2) of section 174or section 174A or section 175 or sub-section (2) of section 176 of the said Actor in computing the "advance tax" payable under Chapter XVII-C of thesaid Act, at the rate or rates in force,--

(a) the netagricultural income shall be taken into account, in the manner provided inclause (b) [that is to say, as if the net agricultural income were comprised inthe total income after the first one lakh rupees of the total income but withoutbeing liable to tax], only for the purpose of charging or computing suchincome-tax or, as the case may be, "advance tax" in respect of thetotal income; and

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

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

(ii) the netagricultural income shall be increased by a sum of one lakh rupees, and theamount of income-tax or "advance tax" shall be determined in respectof the net agricultural income as so increased at the rates specified in thesaid Paragraph A, as if the net agricultural income were the total income;

(iii) the amount ofincome-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 thesum so arrived at shall be the income-tax or, as the case may be, "advancetax" in respect of the total income:

Provided that in thecase of every woman, resident in India and below the age of sixty-five years atany time during the previous year, referred to in item (ii) of Paragraph A ofPart III of the First Schedule, the provisions of this sub-section shall haveeffect as if for the words "one lakh rupees", the words "one lakhthirty-five thousand rupees" had been substituted:

Provided further thatin the case of every individual, being a resident in India, who is of the age ofsixty-five years or more at any time during the previous year, referred to initem (III) of Paragraph A of Part III of the First Schedule, the provisions ofthis sub-section shall have effect as if for the words "one lakhrupees", the words "one lakh eighty-five thousand rupees" hadbeen substituted:

Provided also that theamount of income-tax or "advance tax" so arrived at, as reduced by therebate of income-tax calculated under Chapter VIII-A of the said Act, shall beincreased by a surcharge for purposes of the Union calculated in each case, inthe manner provided therein.

(11) The amount ofincome-tax as specified in sub-sections (1) to (10) and as increased by asurcharge 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", so as to fulfil thecommitment of the Government to provide and finance universalised quality basiceducation, calculated at the rate of two per cent, of such income-tax andsurcharge.

(12) For the purposesof this section and the First Schedule,--

(a) "domesticcompany" means an Indian company or any other company which, in respect ofits income liable to income-tax under the Income-tax Act for the assessment yearcommencing on the 1st day of April, 2006, has made the prescribed arrangementsfor the declaration and payment within India of the dividends (includingdividends on preference shares) payable out of such income;

(b) "insurancecommission" means any remuneration or reward, whether by way of commissionor otherwise, for soliciting or procuring insurance business (including businessrelating to the continuance, renewal or revival of policies of insurance);

(c) "netagricultural income", in relation to a person, means the total amount ofagricultural income, from whatever source derived, of that person computed inaccordance with the rules contained in Part IV of the First Schedule;

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

CHAPTER III. DIRECT TAXES

3 TO 56. Income-tax

3. Amendment of section 2

In section 2 of theIncome-tax Act,--

(i) in clause (24),--

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

(a) after the words,brackets and figures "sub-clause (iv) or sub-clause (v)", the words,brackets, figures and letter "or by any university or other educationalinstitution referred to in sub-clause (vi) or by any hospital or otherinstitution referred to in sub-clause (via)" shall be inserted and shall bedeemed to have been inserted with effect from the 1st day of April, 1999;

(b) for the words,brackets, figures and letter "or by any university or other educationalinstitution referred to in sub-clause (vi) or by any hospital or otherinstitution referred to in sub-clause (via)", as so inserted by sub-item(a), the words, brackets, figures and letters "or by any university orother educational institution referred to in sub-clause (iiiad) or sub-clause(vi) or by any hospital or other institution referred to in sub-clause (iiiae)or sub-clause (via)" shall be substituted with effect from the 1st day ofApril, 2007;

(B) after sub-clause(vii), the following sub-clause shall be inserted with effect from the 1st dayof April, 2007, namely:--

"(viia) theprofits and gains of any business of banking (including providing creditfacilities) carried on by a co-operative society with its members;";

(ii) after clause(26), the following clauses shall be inserted, namely:--

'(26A)"infrastructure capital company" means such company which makesinvestments by way of acquiring shares or providing long-term finance to anyenterprise or undertaking wholly engaged in the business referred to insub-section (4) of section 80-IA or sub-section (1) of section 80-IAB or anundertaking developing and building a housing project referred to in subsection(10) of section 80-IB or a project for constructing a hotel of not less thanthree-star category as classified by the Central Government or a project forconstructing a hospital with at least one-hundred beds for patients;

(26B)"infrastructure capital fund" means such fund operating under a trustdeed registered under the provisions of the Registration Act, 1908(16 of 1908)established to raise monies by the trustees for investment by way of acquiringshares or providing long-term finance to any enterprise or undertaking whollyengaged in the business referred to in sub-section (4) of section 80-IA orsubsection (1) of section 80-IAB or an undertaking developing and building ahousing project referred to in sub-section (10) of section 80-IB or a projectfor constructing a hotel of not less than three-star category as classified bythe Central Government or a project for constructing a hospital with at leastone-hundred beds for patients;';

(iii) in clause (37A),in sub-clause (iii), for the words and figures, "an agreement entered intoby the Central Government under section 90, whichever is applicable by virtue ofthe provisions of section 90;", the words, figures and letters "anagreement entered into by the Central Government under section 90, or anagreement notified by the Central Government under section 90A, whichever isapplicable by virtue of the provisions of section 90, or section 90A, as thecase may be;" shall be substituted with effect from the 1st day of June,2006;

(iv) in clause (48),the Explanation shall be omitted.

4. Amendment of section 10

In section 10 of theIncome-tax Act,--

(a) in clause (6BB),for the words, figures and letters "or entered into after the 31st day ofMarch, 2006 and approved by the Central Government in this behalf, the words,figures and letters "or entered into after the 31st day of March, 2007 andapproved by the Central Government in this behalf shall be substituted witheffect from the 1st day of April, 2007;

(b) in clause (15A),in the proviso, for the words, figures and letters "the 1st day of April,2006", the words, figures and letters "the 1st day of April,2007" shall be substituted with effect from the 1st day of April, 2007;

(c) in clause (17),for sub-clause (iii), the following sub-clause shall be substituted with effectfrom the 1st day of April, 2007, namely:--

"(iii) anyconstituency allowance received by any person by reason of his membership of anyState Legislature under any Act or rules made by that State Legislature;";

(d) in clause (23C),--

(i) after the eleventhproviso, the following proviso shall be inserted with effect from the 1st day ofJune, 2006, namely:--

"Provided alsothat in case the fund or trust or institution or any university or othereducational institution or any hospital or other medical institution referred toin the first proviso makes an application on or after the 1st day of June, 2006for the purposes of grant of exemption or continuance thereof, such applicationshall be made at any time during the financial year immediately preceding theassessment year from which the exemption is sought:";

(ii) after the twelfthproviso as so inserted, the following proviso shall be inserted with effect fromthe 1st day of April, 2007, namely:--

"Provided alsothat any anonymous donation referred to in section 115BBC on which tax ispayable in accordance with the provisions of the said section shall be includedin the total income;";

(e) in clause (23EA),for the words "any income", the words "any income, by way ofcontributions received from recognised stock exchanges and the membersthereof," shall be substituted with effect from the 1st day of April, 2007;

(f) clause (23G) shallbe omitted with effect from the 1st day of April, 2007;

(g) in clause (38),--

(i) before theExplanation, the following proviso shall be inserted with effect from the 1stday of April, 2007, namely:--

"Provided thatthe income by way of long-term capital gain of a company shall be taken intoaccount in computing the book profit and income-tax payable under section115JB.";

(ii) in theExplanation, in clause (i), for the words "fifty per cent.", the words"sixty-five per cent." shall be substituted with effect from the 1stday of June, 2006;

(h) after clause (41),the following shall be inserted, namely:--

'(42) any specifiedincome arising to a body or authority which--

(a) has beenestablished or constituted or appointed under a treaty or an agreement enteredinto by the Central Government with two or more countries or a convention signedby the Central Government;

(b) is established orconstituted or appointed not for the purposes of profit;

(c) is notified by theCentral Government in the Official Gazette for the purposes of this clause.

Explanation.--For thepurposes of this clause, "specified income" means the income, of thenature and to the extent, arising to the body or authority referred to in thisclause, which the Central Government may notify in this behalf.'.

5. Amendment of section 10B

In section 10B of theIncome-tax Act, in sub-section (1),--

(a) in the secondproviso, for the word "also", the word "further" shall besubstituted;

(b) after the thirdproviso, the following proviso shall be inserted, namely:--

"Provided alsothat no deduction under this section shall be allowed to an assessee who doesnot furnish a return of his income on or before the due date specified undersub-section (1) of section 139.".

6. Amendment of section 13

In section 13 of theIncome-tax Act, after sub-section (6) and before Explanation 1, the followingsub-section shall be inserted with effect from the 1st day of April, 2007,namely:--

"(7) Nothingcontained in section 11 or section 12 shall operate so as to exclude from thetotal income of the previous year of the person in receipt thereof, anyanonymous donation referred to in section 115BBC on which tax is payable inaccordance with the provisions of that section.".

7. Amendment of section 14A

Section 14A of theIncome-tax Act shall be numbered as sub-section (1) thereof and aftersub-section (1) as so numbered, the following sub-sections shall be inserted,with effect from the 1st day of April, 2007, namely:--

"(2) TheAssessing Officer shall determine the amount of expenditure incurred in relationto such income which does not form part of the total income under this Act inaccordance with such method as may be prescribed, if the Assessing Officer,having regard to the accounts of the assessee, is not satisfied with thecorrectness of the claim of the assessee in respect of such expenditure inrelation to income which does not form part of the total income under this Act.

(3) The provisions ofsub-section (2) shall also apply in relation to a case where an assessee claimsthat no expenditure has been incurred by him in relation to income which doesnot form part of the total income under this Act".

8. Amendment of section 17

In section 17 of theIncome-tax Act, in clause (2), after sub-clause (vi), in the proviso, witheffect from the 1st day of April, 2007,--

(i) in clause (iii),after the words "Central Government", the words, brackets and figures"or the Insurance Regulatory and Development Authority established undersub-section (1) of section 3 of the Insurance Regulatory and DevelopmentAuthority Act, 1999,(41 of 1999)" shall be inserted;

(ii) in clause (iv),after the words "Central Government", the words, brackets and figures"or the Insurance Regulatory and Development Authority established undersub-section (1) of section 3 of the Insurance Regulatory and DevelopmentAuthority Act, 1999,(41 of 1999)" shall be inserted.

9. Amendment of section 36

In section 36 of theIncome-tax Act, in sub-section (1),--

(a) for clause (ib),the following clause shall be substituted with effect from the 1st day of April,2007, namely:--

"(ib) the amountof any premium paid by cheque by the assessee as an employer to effect or tokeep in force an insurance on the health of his employees under a scheme framedin this behalf by--

(A) the GeneralInsurance Corporation of India formed under section 9 of the General InsuranceBusiness (Nationalisation) Act, 1972(57 of 1972) and approved by the CentralGovernment; or

(B) any other insurerand approved by the Insurance Regulatory and Development Authority establishedunder sub-section (1) of section 3 of the Insurance Regulatory and DevelopmentAuthority Act, 1999(41 of 1999);";

(b) in clause (iiia),in the Explanation, clause (iii) shall be omitted;

(c) in clause (viii),in the Explanation, for clause (d), the following clause shall be substitutedwith effect from the 1st day of April, 2007, namely:--

'(d)"infrastructure facility" means--

(i) an infrastructurefacility as defined in the Explanation to clause (i) of sub-section (4) ofsection 80-IA, or any other public facility of a similar nature as may benotified by the Board in this behalf in the Official Gazette and which fulfilsthe conditions as may be prescribed;

(ii) an undertakingreferred to in clause (ii) or clause (iii) or clause (iv) of sub-section (4) ofsection 80-IA; and

(iii) an undertakingreferred to in sub-section (10) of section 80-IB;'.

10. Amendment of section 40

In section 40 of theIncome-tax Act, in clause (a), after sub-clause (ii),--

(a) the followingExplanation shall be inserted, namely:--

"Explanation1.--For the removal of doubts, it is hereby declared that for the purposes ofthis sub-clause, any sum paid on account of any rate or tax levied includes andshall be deemed always to have included any sum eligible for relief of tax undersection 90 or, as the case may be, deduction from the Indian income-tax payableunder section 91.";

(b) after Explanation1 as so inserted, the following Explanation shall be inserted with effect fromthe 1st day of the June, 2006, namely:--

"Explanation2.--For the removal of doubts, it is hereby declared that for the purposes ofthis sub-clause, any sum paid on account of any rate or tax levied includes anysum eligible for relief of tax under section 90A;".

11. Amendment of section 43

In section 43 of theIncome-tax Act, in clause (5), in the proviso, in clause (d), for the bracketsand letters "(aa)", the brackets and letters "(ac)" shall besubstituted.

12. Amendment of section 43B

In section 43B of theIncome-tax Act,--

(a) after Explanation3B, the following Explanation shall be inserted and shall be deemed to have beeninserted with effect from the 1st day of April, 1989, namely:--

"Explanation3C.--For the removal of doubts, it is hereby declared that a deduction of anysum, being interest payable under clause (d) of this section, shall be allowedif such interest has been actually paid and any interest referred to in thatclause which has been converted into a loan or borrowing shall not be deemed tohave been actually paid.";

(b) after Explanation3C as so inserted, the following Explanation shall be inserted and shall bedeemed to have been inserted with effect from the 1st day of April, 1997,namely:--

"Explanation3D.--For the removal of doubts, it is hereby declared that a deduction of anysum, being interest payable under clause (e) of this section, shall be allowedif such interest has been actually paid and any interest referred to in thatclause which has been converted into a loan or advance shall not be deemed tohave been actually paid.".

13. Amendment of section 54EC

In section 54EC of theIncome-tax Act, after sub-section (3), in the Explanation, for clause (b), thefollowing clause shall be substituted, namely:--

'(b) "long-termspecified asset" means any bond, redeemable after three years and issued onor after the 1st day of April, 2006,--

(i) by the NationalHighways Authority of India constituted under section 3 of the National HighwaysAuthority of India Act, 1988(68 of 1988), and notified by the Central Governmentin the Official Gazette for the purposes of this section; or

(ii) by the RuralElectrification Corporation Limited, a company formed and registered under theCompanies Act, 1956(1 of 1956), and notified by the Central Government in theOfficial Gazette for the purposes of this section.'.

14. Amendment of section 54ED

In section 54ED of theIncome-tax Act, in sub-section (1), for the words "from the transfer of along-term capital asset,", the words, figures and letters "from thetransfer before the 1st day of April, 2006, of a long-term capital asset,"shall be substituted with effect from the 1st day of April, 2007.

15. Insertion of new section 80AC

After section 80AB ofthe Income-tax Act, the following section shall be inserted, namely:--

"80AC. Deductionnot to be allowed unless return furnished.--Where in computing the total incomeof an assessee of the previous year relevant to the assessment year commencingon the 1st day of April, 2006 or any subsequent assessment year, any deductionis admissible under section 80-IA or section 80-IAB or section 80-IB or section80-IC, no such deduction shall be allowed to him unless he furnishes a return ofhis income for such assessment year on or before the due date specified undersub-section (1) of section 139.".

16. Amendment of section 80C

In section 80C of theIncome-tax Act, in sub-section (2), with effect from the 1st day of April,2007,--

(a) in clause (xi),for the words, brackets, figures and letter "notified under clause(23D)", the words, brackets, figures and letter "referred to in clause(23D)" shall be substituted;

(b) in clause (xiii),for the words, brackets, figures and letter "notified under clause(23D)", the words, brackets, figures and letter "referred to in clause(23D)" shall be substituted;

(c) in clause (xiv),for the words, brackets, figures and letter "notified under clause(23D)", the words, brackets, figures and letter "referred to in clause(23D)" shall be substituted;

(d) after clause (xx),the following shall be inserted, namely:--

''(xxi) as termdeposit-

(a) for a fixed periodof not less than five years with a scheduled bank; and

(b) which is inaccordance with a scheme framed and notified, by the Central Government, in theOfficial Gazette for the purposes of this clause.".

Explanation.--For thepurposes of this clause, "scheduled bank" means the State Bank ofIndia constituted under the State Bank of India Act, 1955(23 of 1955), or asubsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act,1959(38 of 1959), or a corresponding new bank constituted under section 3 of theBanking Companies (Acquisition and Transfer of Undertakings) Act, 1970(5 of1970), or under section 3 of the Banking Companies (Acquisition and Transfer ofUndertakings) Act, 1980(40 of 1980), or any other bank, being a bank included inthe Second Schedule to the Reserve Bank of India Act, 1934(2 of 1934).'.

17. Amendment of section 80CCC

In section 80CCC of theIncome-tax Act, in sub-section (1), for the words "ten thousandrupees", the words "one lakh rupees" shall be substituted witheffect from the 1st day of April, 2007.

18. Amendment of section 80-IA

In section 80-IA of theIncome-tax Act, in sub-section (4), with effect from the 1st day of April,2007,--

(a) in clause (iii),after the proviso, the following proviso shall be inserted, namely:--

'Provided further thatin the case of any undertaking which develops, develops and operates ormaintains and operates an industrial park, the provisions of this clause shallhave effect as if for the figures, letters and words "31st day of March,2006", the figures, letters and words "31st day of March, 2009"had been substituted;';

(b) in clause (iv),--

(i) in sub-clause (a),for the words, figures and letters "the 31st day of March, 2006", thewords, figures and letters "the 31st day of March, 2010" shall besubstituted;

(ii) in sub-clause(b), for the words, figures and letters "the 31st day of March, 2006",the words, figures and letters "the 31st day of March, 2010" shall besubstituted;

(iii) in sub-clause(c), for the words, figures and letters "the 31st day of March, 2006",the words, figures and letters "the 31st day of March, 2010" shall besubstituted.

19. Amendment of section 80P

In section 80P of theIncome-tax Act, after sub-section (3), the following shall be inserted witheffect from the 1st day of April, 2007, namely:--

'(4) The provisions ofthis section shall not apply in relation to any co-operative bank other than aprimary agricultural credit society or a primary co-operative agricultural andrural development bank.

Explanation.--For thepurposes of this sub-section,--

(a) "co-operativebank" and "primary agricultural credit society" shall have themeanings respectively assigned to them in Part V of the Banking Regulation Act,1949(10 of 1949);

(b) "primaryco-operative agricultural and rural development bank" means a societyhaving its area of operation confined to a taluk and the principal object ofwhich is to provide for long-term credit for agricultural and rural developmentactivities.'.

20. Insertion of new section 90A

In Chapter IX of theIncome-tax Act, after section 90, the following section shall be inserted witheffect from the 1st day of June, 2006, namely:--

'90A. Adoption byCentral Government of agreements between specified associations for doubletaxation relief.--(1) Any specified association in India may enter into anagreement with any specified association in the specified territory outsideIndia and the Central Government may, by notification in the Official Gazette,make such provisions as may be necessary for adopting and implementing suchagreement--

(a) for the grantingof relief in respect of--

(i) income on whichhave been paid both income-tax under this Act and income-tax in any specifiedterritory outside India; or

(ii) income-taxchargeable under this Act and under the corresponding law in force in thatspecified territory outside India to promote mutual economic relations, tradeand investment, or

(b) for the avoidanceof double taxation of income under this Act and under the corresponding law inforce in that specified territory outside India, or

(c) for exchange ofinformation for the prevention of evasion or avoidance of income-tax chargeableunder this Act or under the corresponding law in force in that specifiedterritory outside India, or investigation of cases of such evasion or avoidance,or

(d) for recovery ofincome-tax under this Act and under the corresponding law in force in thatspecified territory outside India.

(2) Where a specifiedassociation in India has entered into an agreement with a specified associationof any specified territory outside India under sub-section (1) and suchagreement has been notified under that sub-section, for granting relief of tax,or as the case may be, avoidance of double taxation, then, in relation to theassessee to whom such agreement applies, the provisions of this Act shall applyto the extent they are more beneficial to that assessee.

(3) Any term used butnot defined in this Act or in the agreement referred to in sub-section (1)shall, unless the context otherwise requires, and is not inconsistent with theprovisions of this Act or the agreement, have the same meaning as assigned to itin the notification issued by the Central Government in the Official Gazette inthis behalf.

Explanation 1.--Forthe removal of doubts, it is hereby declared that the charge of tax in respectof a company incorporated in the specified territory outside India at a ratehigher than the rate at which a domestic company is chargeable, shall not beregarded as less favourable charge or levy of tax in respect of such company.

Explanation 2.--Forthe purposes of this section, the expressions--

(a) "specifiedassociation" means any institution, association or body, whetherincorporated or not, functioning under any law for the time being in force inIndia or the laws of the specified territory outside India and which may benotified as such by the Central Government for the purposes of this section;

(b) "specifiedterritory" means any area outside India which may be notified as such bythe Central Government for the purposes of this section.'.

21. Amendment of section 92C

In section 92C of theIncome-tax Act, in sub-section (4), in the first proviso, for the words, figuresand letters "section 10A or section 10B", the words, figures andletters "section 10A or section 10AA or section 10B" shall besubstituted with effect from the 1st day of April, 2007.

22. Insertion of new section 115BBC

In Chapter XII of theIncome-tax Act, after section 115BBB, the following section shall be insertedwith effect from the 1st day of April, 2007, namely:--

'115BBC. Anonymousdonations to be taxed certain cases.--(1) Where the total income of an assessee,being a person in receipt of income on behalf of any university or othereducational institution referred to in sub-clause (iiiad) or sub-clause (vi) orany hospital or other institution referred to in sub-clause (iiiae) orsub-clause (via) or any fund or institution referred to in sub-clause (iv) orany trust or institution referred to in sub-clause (v) of clause (23C) ofsection 10 or any trust or institution referred to in section 11, includes anyincome by way of any anonymous donation, the income-tax payable shall be theaggregate of--

(i) the amount ofincome-tax calculated on the income by way of any anonymous donation, at therate of thirty per cent.; and

(ii) the amount ofincome-tax with which the assessee would have been chargeable had his totalincome been reduced by the amount of income referred to in clause (i).

(2) The provisions ofsub-section (1) shall not apply to any anonymous donation received by--

(a) any trust orinstitution created or established wholly for religious purposes;

(b) any trust orinstitution created or established wholly for religious and charitable purposesother than any anonymous donation made with a specific direction that suchdonation is for any university or other educational institution or any hospitalor other medical institution run by such trust or institution.

(3) For the purposesof this section, "anonymous donation" means any voluntary contributionreferred to in sub-clause (iia) of clause (24) of section 2, where a personreceiving such contribution does not maintain a record of the identityindicating the name and address of the person making such contribution and suchother particulars as may be prescribed.'.

23. Amendment of section 115JAA

In section 115JAA ofthe Income-tax Act, for sub-sections (2) and (3), the following sub-sectionsshall be substituted with effect from the 1st day of April, 2007, namely:--

"(2) The taxcredit to be allowed under sub-section (1) shall be the difference of the taxpaid for any assessment year under sub-section (1) of section 115JA and theamount of tax payable by the assessee on his total income computed in accordancewith the other provisions of this Act:

Provided that nointerest shall be payable on the tax credit allowed under sub-section (1).

(2A) The tax credit tobe allowed under sub-section (1A) shall be the difference of the tax paid forany assessment year under sub-section (1) of section 115JB and the amount of taxpayable by the assessee on his total income computed in accordance with theother provisions of this Act:

Provided that nointerest shall be payable on the tax credit allowed under sub-section (1A).

(3) The amount of taxcredit determined under sub-section (2) shall be carried forward and set off inaccordance with the provisions of sub-sections (4) and (5) but such carryforward shall not be allowed beyond the fifth assessment year immediatelysucceeding the assessment year in which tax credit becomes allowable undersub-section (1).

(3A) The amount of taxcredit determined under sub-section (2A) shall be carried forward and set off inaccordance with the provisions of sub-sections (4) and (5) but such carryforward shall not be allowed beyond the seventh assessment year immediatelysucceeding the assessment year in which tax credit becomes allowable undersub-section (1A).".

24. Amendment of section 115JB

In section 115JB of theIncome-tax Act, with effect from the 1st day of April, 2007,--

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

(a) for the words,figures and letters "the 1st day of April, 2001", the words, figuresand letters "the 1st day of April, 2007" shall be substituted;

(b) for the words"seven and one-half per cent.", at both the places where they occur,the words "ten per cent." shall be substituted;

(ii) in theExplanation occurring after sub-section (2),--

(a) in clause (f), forthe words, figures, brackets and letters "section 10 (other than theprovisions contained in clause (23G) thereof) or section 10A or section 10B orsection 11 or section 12 apply,", the words, figures, brackets and letters"section 10 [other than the provisions contained in clause (38) thereof] orsection 10A or section 10B or section 11 or section 12 apply; or" shall besubstituted;

(b) after clause (f)--

(A) the followingclause shall be inserted, namely:--

"(g) the amountof depreciation,";

(B) for the portionbeginning with the words "if any amount", and ending with the words"as reduced by--", the following shall be substituted, namely:--

"if any amountreferred to in clauses (a) to (g) is debited to the profit and loss account, andas reduced by--";

(c) in clause (ii),for the words, figures, brackets and letter "section 10 (other than theprovisions contained in clause (23G) thereof)", the words, figures andbrackets "section 10 [other than the provisions contained in clause (38)thereof]" shall be substituted;

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

"(iia) the amountof depreciation debited to the profit and loss account (excluding thedepreciation on account of revaluation of assets); or

(iib) the amountwithdrawn from revaluation reserve and credited to the profit and loss account,to the extent it does not exceed the amount of depreciation on account ofrevaluation of assets referred to in clause (iia); or".

25. Amendment of section 115-O

In section 115-O of theIncome-tax Act, in sub-section (6), the words, brackets, figures and letter"not falling under clause (23G) of section 10" shall be omitted witheffect from the 1st day of April, 2007.

26. Amendment of section 115R

In section 115R of theIncome-tax Act, in sub-section (2), in the proviso, in clause (b), the word"open-ended" shall be omitted with effect from the 1st day of June,2006.

27. Amendment of section 115T

In section 115T of theIncome-tax Act, in the Explanation, in clause (b), with effect from the 1st dayof June, 2006,--

(i) the word"open-ended" shall be omitted;

(ii) in sub-clause(ii), for the words "fifty per cent.", the words "sixty-five percent." shall be substituted.

28. Amendment of section 115WB

In section 115WB of theIncome-tax Act, with effect from the 1st day of April, 2007,--

(a) in sub-section(2),--

(i) in clause (D), inthe proviso,--

(A) in clause (v), theword "and" occurring at the end shall be omitted;

(B) after clause (vi),the following clauses shall be inserted, namely:--

"(vii) being theexpenditure on distribution of free samples of medicines or of medicalequipment, to doctors; and

(viii) being theexpenditure by way of payment to any person of repute for promoting the sale ofgoods or services of the business of the employer,";

(ii) in clause (F),the words and brackets "tour and travel (including foreign travel)"shall be omitted;

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

"(Q) tour andtravel (including foreign travel).";

(b) in sub-section(3), after the words "payable by the employee", the words "or anybenefit or amenity in the nature of free or subsidised transport or any suchallowance provided by the employer to his employees for journeys by theemployees from their residence to the place of work or such place of work to theplace of residence" shall be inserted at the end.

29. Amendment of section 115WC

In section 115WC of theIncome-tax Act, with effect from the 1st day of April, 2007,--

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

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

"(b) the amountof contribution, referred to in clause (c) of sub-section (1) of section 115WB,which exceeds one lakh rupees in respect of each employee;";

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

"(e) five percent. of the expenses referred to in clause (Q) of sub-section (2) of section115WB.";

(b) in sub-section(2),--

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

'(aa) in the case ofan employer engaged in the business of carriage of passengers or goods byaircraft, the value of fringe benefits for the purposes referred to in clause(B) of sub-section (2) of section 115WB shall be "five per cent."instead of "twenty per cent." referred to in clause (c) of sub-section(1);

(ab) in the case of anemployer engaged in the business of carriage of passengers or goods by ship, thevalue of fringe benefits for the purposes referred to in clause (B) ofsub-section (2) of section 115WB shall be "five per cent." instead of"twenty per cent." referred to in clause (c) of sub-section (1);';

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

'(da) in the case ofan employer engaged in the business of carriage of passengers or goods byaircraft, the value of fringe ben