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FINANCE ACT 1977

Ministry of Law and Justice

Act nº 11 of 1977


  • Act nº 11 of 1977

Preamble

THE FINANCE ACT, 1977

[Act No. 11 of 1977]

[6th April 1977]

PREAMBLE

An Act to continue for the financial year 1977-78 the existing rates of income-tax with certain modifications and to provide for the continuance of the provisions relating to auxiliary duties of customs and excise and the discontinuance of the duty on salt for the said year

Be it enacted by Parliament in the Twenty-eighth Year of the Republic of India as follows :-

Section 1. Short Title and Commencement

(1) This Act may be called the Finance Act, 1977.

(2) Save as otherwise provided in this Act, it shall be deemed to have come into force on the 1st day of April, 1977.

Section 2. Income-Tax

The provisions of section 2 of, and the First Schedule to, the Finance Act, 1976 (66 of 1976), shall apply in relation to income-tax for the assessment year or, as the case may be, the financial year commencing on the 1st day of April, 1977, as they apply in relation to income-tax for the assessment year or, as the case may be, the financial year commencing on the 1st day of April, 1976, with the following modifications, namely :-

(a) in section 2, -

(i) for sub-section (1), the following sub-section shall be substituted, namely :-

"(1) Subject to the provisions of sub-sections (2) and (4), for the assessment year commencing on the 1st day of April, 1977, income-tax shall be charged at the rates specified in Part I of the First Schedule and shall be increased, -

(a) in the cases to which Paragraphs A, B, C and D of that Part apply, by a surcharge for purposes of the Union; and

(b) in the cases to which Paragraph E of that Part applies, by a surcharge,

calculated in each case in the manner provided therein :

Provided that where an assessee, being a company, has made, during the financial year commencing on the 1st day of April, 1976, any deposit with the Industrial Development Bank of India established under the Industrial Development Bank of India Act, 1964 (18 of 1964), under the Companies Deposits (Surcharge on Income-tax) Scheme, 1976, then, the surcharge on income-tax payable by the company, -

(a) in a case where the amount of the deposit so made is equal to or exceeds the amount of surcharge on income-tax payable by it, shall be nil; and

(b) in a case where the amount of the deposit so made falls short of the amount of surcharge on income-tax payable by it, shall be reduced by the amount of the deposit.";

(ii) sub-section (3) shall be omitted;

(iii) for sub-section (8), the following sub-section shall be substituted, namely :-

"(8) Where an assessee, being a company, makes, during the financial year commencing on the 1st day of April, 1977, any deposit with the Industrial Development Bank of India established under the Industrial Development Bank of India Act, 1964 (18 of 1964), under any such scheme as the Central Government may, by notification in the Official Gazette, frame in this behalf, then, the surcharge on income-tax payable by the company for the assessment year commencing on the 1st day of April, 1978, -

(i) in a case where the amount of the deposit so made is equal to or exceeds the amount of surcharge on income-tax payable by it, shall be nil; and

(ii) in a case where the amount of the deposit so made falls short of the amount of surcharge on income-tax payable by it, shall be reduced by the amount of the deposit.";

(iv) in sub-section (9), in clause (b), for the figures "1976", the figure "1977" shall be substituted;

(b) in the First Schedule, -

(i) in Part I, -

(1) for Paragraph A, the following Paragraph shall be substituted namely :-

"Paragraph A

Sub-Paragraph I

In the case of every individual or Hindu undivided family or unregistered firm or other association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, not being a case to which Sub-Paragraph II of this Paragraph or any other Paragraph of this Part applies, -

RATES OF INCOME-TAX

(1) where the total income does not exceed Rs. 8,000

Nil;

(2) where the total income exceeds Rs. 8,000 but does not exceed Rs. 15,000

15 per cent. of the amount by which the total income exceeds Rs. 8,000;

(3) where the total income exceeds Rs. 15,000 but does not exceed Rs. 20,000

Rs. 1,050 plus 18 per cent. of the amount by which the total income exceeds Rs. 15,000;

(4) where the total income exceeds Rs. 20,000 but does not exceed Rs. 25,000

Rs. 1,950 plus 25 per cent. of the amount by which the total income exceeds Rs. 20,000;

(5) where the total income exceeds Rs. 25,000 but does not exceed Rs. 30,000

Rs. 3,200 plus 30 per cent. of the amount by which the total income exceeds Rs. 25,000;

(6) where the total income exceeds Rs. 30,000 but does not exceed Rs. 50,000

Rs. 4,700 plus 40 per cent. of the amount by which the total income exceeds Rs. 30,000;

(7) where the total income exceeds Rs. 50,000 but does not exceed Rs. 70,000

Rs. 12,700 plus 50 per cent. of the amount by which the total income exceeds Rs. 50,000;

(8) where the total income exceeds Rs. 70,000 but does not exceed Rs. 1,00,000

Rs. 22,700 plus 55 per cent. of the amount by which the total income exceeds Rs. 70,000.

(9) where the total income exceeds Rs. 1,00,000

Rs. 39,200 plus 60 per cent. of the amount by which the total income exceeds Rs. 1,00,000

Surcharge on income-tax

The amount of income-tax computed in accordance with the preceding provisions of this Sub-Paragraph shall be increased by a surcharge for purposes of the Union calculated at the rate of ten per cent. of such income-tax.

Sub-Paragraph II

In the case of every Hindu undivided family which at any time during the previous year has at least one member whose total income of the previous year relevant to the assessment year commencing on the 1st day of April, 1977, exceeds Rs. 8,000, -

RATES OF INCOME-TAX

(1) where the total income does not exceed Rs. 8,000

Nil;

(2) where the total income exceeds Rs. 8,000/- but does not exceed Rs. 15,000

18 per cent. of the amount by which the total income exceeds Rs. 8,000;

(3) where the total income exceeds Rs. 15,000 but does not exceed Rs. 20,000

Rs. 1,260 plus 25 per cent. of the amount by which the total income exceeds Rs. 15,000;

(4) where the total income exceeds Rs. 20,000 but does not exceed Rs. 25,000

Rs. 2,510 plus 30 per cent. of the amount by which the total income exceeds Rs. 20,000;

(5) where the total income exceeds Rs. 25,000 but does not exceed Rs. 30,000

Rs. 4,010 plus 40 per cent. of the amount by which the total income exceeds Rs. 25,000;

(6) where the total income exceeds Rs. 30,000 but does not exceed Rs. 50,000

Rs. 6,010 plus 50 per cent. of the amount by which the total income exceeds Rs. 30,000;

(7) where the total income exceeds Rs. 50,000 but does not exceed Rs. 70,000

Rs. 16,010 plus 55 per cent. of the amount by which the total income exceeds Rs. 50,000;

(8) where the total income exceeds Rs. 70,000

Rs. 27,010 plus 60 per cent. of the amount by which the total income exceeds Rs. 70,000 :

Surcharge on income-tax

The amount of income-tax computed in accordance with the preceding provisions of this Sub-Paragraph shall be increased by a surcharge for purposes of the Union calculated at the rate of ten per cent. of such income-tax.";

(2) Paragraph E shall be omitted;

(3) Paragraph F shall be re-lettered as Paragraph E and in Paragraph E as so re-lettered, -

(A) the words and figures ",other than the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956)" shall be omitted;

(B) for the words, figures and letters "after the 31st day of March, 1961, or", the words, figures and letters "after the 31st day of March, 1961, but before the 1st day of April, 1976, or" shall be substituted;

(C) for the words, figures and letters "after the 29th day of February, 1964,", the words, figures and letters "after the 29th day of February, 1964, but before the 1st day of April, 1976," shall be substituted;

(ii) in Part III, in Sub-Paragraph II of Paragraph A, for the figures "1977", the figures "1978" shall be substituted;

(iii) in Part IV, in rule 9, -

(a) for sub-rules (1) and (2), the following sub-rules shall be substituted, namely :-

(1) Where the assessee has, in the previous year relevant to the assessment year commencing on the 1st day of April, 1977, 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, 1974, or the 1st day of April, 1975, or the 1st day of April, 1976, 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, 1974, to the extent, if any, such loss not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1975, or the 1st day of April, 1976,

(ii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1975, to the extent, if any, such loss not been set off against the agricultural income for the previous year relevant to the assessment year commencing on the 1st day of April, 1976, and

(iii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1976,

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, 1977.

Explanation : In this sub-rule and sub-rule (2), the expression "section 2 of this Act" means section 2 of the Finance Act, 1976 (66 of 1976), as applied for the purposes of this Act.

(2) Where the assessee has, in the previous year relevant to the assessment year commencing on the 1st day of April, 1978, 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 that 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, 1974, or the 1st day of April, 1975, or the 1st day of April, 1976, or the 1st day of April, 1977, is a loss, then, for the purposes of sub-section (7) 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, 1974, 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, 1975, or the 1st day of April, 1976, or the 1st day of April, 1977,

(ii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1975, 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, 1976, or the 1st day of April, 1977,

(iii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1976, 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, 1977, and

(iv) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 1977,

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, 1978, or the period aforesaid.

(b) for sub-rule (5), the following sub-rule shall be substituted, namely :-

"(5) Notwithstanding anything contained in this rule, no loss which has not been determined by the Income-tax Officer under the provisions of these rules, or the rules contained in Part IV of the First Schedule to the Finance Act, 1974 (20 of 1974), or of the First Schedule to the Finance Act, 1975 (25 of 1975), or of the First Schedule to the Finance Act, 1976 (66 of 1976), shall be set off under sub-rule (1) or, as the case may be, sub-rule (2).".

Section 3. Auxiliary Duty of Customs

(1) In the case of goods mentioned in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) (hereinafter referred to as the Customs Tariff Act), or in that Schedule as amended from time to time, there shall be levied and collected as an auxiliary duty of customs an amount equal to twenty per cent. of the value of the goods as determined in accordance with the provisions of section 14 of the Customs Act, 1962 (52 of 1962) (hereinafter referred to as the Customs Act).

(2) Sub-section (1) shall come into force on the 1st day of July, 1977, and cease to have effect after the 31st day of March, 1978, except as respects things done or omitted to be done before such cesser, and section 6 of the General Clauses Act, 1897 (10 of 1897), shall apply upon such cesser as if the said sub-section had then been repealed by a Central Act.

(3) The auxiliary duties of customs referred to in sub-section (1) shall be in addition to any duties of customs chargeable on such goods under the Customs Act, or any other law for the time being in force.

(4) The provisions of the Customs Act, and the rules and regulation made thereunder, including those relating to refunds and exemptions from duties, shall, as far as may be, apply in relation to the levy and collection of the auxiliary duties of customs leviable under this section in respect or any goods as they apply in relation to the levy and collection of the duties of customs on such goods under that Act or those rules and regulations, as the case may be.

Section 4. Auxiliary Duties of Excise

(1) In the case of goods mentioned in the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) (hereinafter referred to as the Central Excises Act), or in that Schedule as amended from time to time, there shall be levied and collected as an auxiliary duty of excise an amount equal to twenty per cent. of the value of the goods as determined in accordance with the provisions of section 4 of the Central Excises Act.

(2) Sub-section (1) shall come into force on the 1st day of July, 1977, and cease to have effect after the 31st day of March, 1978, except as respects things done or omitted to be done before such cesser, and section 6 of the General Clauses Act, 1897 (10 of 1897), shall apply upon such cesser as if the said sub-section had then been repealed by a Central Act.

(3) The auxiliary duties of excise referred to in sub-section (1) shall be in addition to any duties of excise chargeable on such goods under the Central Excises Act, or any other law for the time being in force.

(4) The provisions of the Central Excises Act and the rules made thereunder, including those relating to refunds and exemptions from duties, shall, as far as may be, apply in relation to the levy and collection of the auxiliary duties of excise leviable under this section in respect of any goods as they apply in relation to the levy and collection of the duties of excise on such goods under that Act or those rules, as the case may be.

Section 5. Discontinuance of Salt Duty

For the year beginning on the 1st day of April, 1977, no duty under the Central Excises Act or the Customs Tariff Act shall be levied in respect of salt manufactured in, or imported into India.