INCOME RULES 2008

(Notification No. SO 969, dated 26 March, 1962)[CS1]

(As amended upto-date)

In exercise of the powers conferred by section 295 of the Income-tax Act, 1961 (43 of 1961), and rule 15 of Part A, rule 11 of Part B and rule 9 of Part C of the Fourth Schedule to that Act, the Central Board of Revenue hereby makes the following rules, namely:

PART I

PRELIMINARY

1. Short title and commencement

(1) These rules may be called the Income-tax Rules, 1962.

(2) They shall come into force on the 1st day of April, 1962.

2. Definitions

(1) In these rules, unless the context otherwise requires,—

(a) "Act" means the Income-tax Act, 1961 (43 of 1961);

[2] [(aa)"authorised bank" means any bank as may be appointed by the Reserve Bank of India as its agent under the provisions of sub-section (1) of section 45 of the Reserve Bank of India Act, 1934 (2 of 1934);]

(b) "Chapter", "Section" and "Schedule" means respectively Chapter and section of, and Schedule to, the Act.

(2) All references to "Forms" in these rules shall be construed as references to the forms set out in

Appendix II hereto.

PART II

DETERMINATION OF INCOME

A.—Salaries

[3] [2A. Limits for the purposes of section 10(13A)[4][4]

The amount which is not to be included in the total income of an assessee in respect of the special allowance referred to in clause (13A) of section 10 shall be—

(a) the actual amount of such allowance received by the assessee in respect of the relevant period; or

(b) the amount by which the expenditure actually incurred by the assessee in payment of rent in respect of residential accommodation occupied by him exceeds one-tenth of the amount of salary due to the assessee in respect of the relevant period; or

[5] [(c) an amount equal to—

(i) where such accommodation is situate at Bombay, Calcutta, Delhi or Madras, one-half of the amount of salary due to the assessee in respect of the relevant period; and

(ii) where such accommodation is situate at any other place, two-fifth of the amount of salary due to the assessee in respect of the relevant period,]

[6] [(d) * * *]Whichever is the least.

Explanation.—In this rule—

(i) "Salary" shall have the meaning assigned to it in clause (h)[7] of rule 2 of Part A of the Fourth Schedule;

(ii) "Relevant period" means the period during which the said accommodation was occupied by the assessee during the previous year.]

[8] [(iii) * * *]

[9] [2B. Conditions for the purpose of section 10(5)[10]

(1) The amount exempted under clause (5) of section 10 in respect of the value of travel concession or assistance received by or due to the individual from his employer or former employer for himself and his family, in connection with his proceeding,—

(a) On leave to any place in India;

(b) to any place in India after retirement from service or after the termination of his service,shall be the amount actually incurred on the performance of such travel subject to the following conditions, namely:—

[11] [ (i) where the journey is performed on or after the 1st day of October, 1997 by air, an amount not exceeding the air economy fare of the National Carrier by the shortest route to the place of destination;

(ii) where places of origin of journey and destination are connected by rail and the journey is performed on or after the 1st day of October, 1997 by any mode of transport other than by air, an amount not exceeding the air-conditioned first class rail fare by the shortest route to the place of destination; and

(iii) where the places of origin of journey and destination or part thereof are not connected by rail and the journey is performed on or after the 1st day of October, 1997 between such places, the amount eligible for exemption shall be— 

(A) where a recognised public transport system exists, an amount not exceeding the 1st class or deluxe class fare, as the case may be, on such transport by the shortest route to the place of destination; and

(B) where no recognised public transport system exists, an amount equivalent to the air-conditioned first class rail fare, for the distance of the journey by the shortest route, as if the journey had been performed by rail.]

(2) The exemption referred to in sub-rule (1) shall be available to an individual in respect of two journeys performed in a block of four calendar years commencing from the calendar year 1986:

[12] [Provided that nothing contained in this sub-rule shall apply to the benefit already availed of by the assessee in respect of any number of journeys performed before the 1st day of April, 1989 except to the extent that the journey or journeys so performed shall be taken into account for computing the limit of two journeys specified in this sub-rule.]

(3) Where such travel concession or assistance is not availed of by the individual during any such block of four calendar years, an amount in respect of the value of the travel concession or assistance, if any, first availed of by the individual during first calendar year of the immediately succeeding block of four calendar years shall be eligible for exemption.

Explanation.—The amount in respect of the value of the travel concession or assistance referred to in this sub-rule shall not be taken into account in determining the eligibility of the amount in respect of the value of the travel concession or assistance in relation to the number of journeys under sub-rule (2).]

[13] [(4) The exemption referred to in sub-rule (1) shall not be available to more than two surviving children of an individual after 1st October, 1998:

Provided that this sub-rule shall not apply in respect of children born before 1st October, 1998 and also in case of multiple births after one child.]

[14] [2BA. Guidelines for the purposes of section 10(10C)

The amount received[15] by an employee of—

(i) a public sector company; or

(ii) any other company; or

(iii) an authority established under a Central, State or Provincial Act; or

(iv) a local

[16] [authority; or]

[17] [(v) a co-operative society; or

(vi) a University established or incorporated by or under a Central, State or Provincial Act and an institution declared to be a University under section 3 of the University Grants Commission Act, 1956 (3 of 1956); or

(vii) an Indian Institute of Technology within the meaning of clause (g) of section 3 of the Institutes of Technology Act, 1961 (59 of 1961); or

[18] [(viia) an institution, having importance throughout India or in any State or States, as the Central Government may, by notification in the Official Gazette, specify in this behalf; or]

(viii) such institute of management as the Central Government may, by notification[19] in the Official Gazette, specify in this behalf,]at the time of his voluntary retirement [20][20] [or voluntary separation] shall be exempt under clause (10C) of section 10 only if the scheme of voluntary retirement framed by the aforesaid company or authority [21][21] [or co-operative society or University or Institute], as the case may be, [22][22] [or if the scheme of voluntary separation framed by a public sector company,] is in accordance with the following requirements,[23][23] namely:—

(i) it applies to an employee [24][24] [* * *] who has completed 10 years of service or completed 40 years of age;

[25][25] [(ii) it applies to all employees (by whatever name called) including workers and executives of a company or of an authority or of a co-operative society, as the case may be, excepting Directors of a company or of a co-operative society;]

(iii) the scheme of voluntary retirement [26][26] [or voluntary separation] has been drawn to result in overall reduction in the existing strength of the employees [27][27] [* * *];

(iv) the vacancy caused by the voluntary retirement [28][28] [or voluntary separation] is not to be filled up;

(v) the retiring employee of a company shall not be employed in another company or concern belonging to the same management;

(vi)[29][29] the amount receivable on account of voluntary retirement [30][30] [or voluntary separation] of the employee does not exceed the amount equivalent to [31][31] [three months'] salary for each completed year of service or salary at the time of retirement multiplied by the balance months of service left before the date of his retirement on superannuation:

[32][32] [Provided that requirement of (i) above would not be applicable in case of amount received by an employee of a public sector company under the scheme of voluntary separation framed by such public sector company.]

Explanation.—In this rule, the expression 'salary' shall have the same meaning as is assigned to it in clause (h) of rule 2 of Part A of the Fourth Schedule.]

[33][33] [2BB. Prescribed allowances for the purposes of clause (14) of section 10

[34][34] (1) For the purposes of sub-clause (i) of clause (14) of section 10, prescribed allowances, by whatever name called, shall be the following, namely:—

(a) any allowance granted to meet the cost of travel on tour or on transfer;

(b) any allowance, whether granted on tour or for the period of journey in connection with transfer, to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty;

[35][35] (c) any allowance granted to meet the expenditure incurred on conveyance in performance of duties of an office or employment of profit:

Provided that free conveyance is not provided by the employer;

(d) any allowance granted to meet the expenditure incurred on a helper where such helper is engaged for the performance of the duties of an office or employment of profit;

(e) any allowance granted for encouraging the academic, research and training pursuits in educational and research institutions;

(f) any allowance granted to meet the expenditure incurred on the purchase or maintenance of uniform for wear during the performance of the duties of an office or employment of profit.

Explanation.—For the purpose of clause (a), "allowance granted to meet the cost of travel on transfer" includes any sum paid in connection with transfer, packing and transportation of personal effects on such transfer.

(2) For the purposes of sub-clause (ii) of clause (14) of section 10, the prescribed allowances, by whatever name called, and the extent thereof shall be the following, namely:—

Sl. No.

Name of allowance

Place at which allowance is exempt

Extent to which allowance is exempt

(1)

(2)

(3)

(4)

1.

Any Special Compensatory

Allowance in the nature of [36][36] [Special Compensatory (Hilly Areas)] Allowance or High Altitude Allowance or Uncongenial Climate Allowance or Snow Bound Area Allowance or Avalanche               

Allowance.               

I.	(a)		Manipur Mollan/RH-2365
	(b)		Arunachal Pradesh.
		(i)	Kameng.
		(ii)	North Eastern Arunachal Pradesh where heights are 9,000 ft. and above.
		(iii)	Areas east or west of Siang and Subansiri sectors.
	(c)		Sikkim
		(i)	Area North-NE-East of line Chhaten LR 0105, Launchung LR 1902, pt. 4326 LW 1790, pt. 4349 LW 1479, pt. 3601 LW 1471 to mile 13 LW 1367 to Berluk LW 2253.
		(ii)	All other areas at 9,000 ft. and above.
	(d)		Uttar Pradesh Areas of Harsil, Mana and Malari sub-divisions and other areas of heights at 9,000 ft. and above.
	(e)		Himachal Pradesh
		(i)	All areas at 9,000 ft. and above ahead of line joining Puh-Kaja-Kunzomla towards the bower.
		(ii)	Area ahead of line joining Karchham and Shigrila towards the bower.
		(iii)	All areas in Kalpa, Spiti, Lahul and Tisa.
	(f)		Jammu and Kashmir
		(i)	All areas from NR 396950 to NR 350850, NR 370790, NR 311776 North of Shaikhra Village, North of Pindi Village to NR 240800.
		(ii)	Areas of Doda, Sank and other posts located in areas at a height of 9,000 ft. and above.
		(iii)	North of line Kud-Dudu and Basttgarh, Bilwar, Batote and Patnitop.
		(iv)	All areas ahead of Zojila served by Road Srinagar-Zojila-Leh in Leh District.
		(v)	Gulmarg—all areas forward of line joining Anita Linyan 3309—Kaunrali-2407.
		(vi)	Uri South—all areas forward of Kaunrali—Kandi 1810 Kustam 1505—Sebasantra 1006 Changez 0507—Jak 19904 Keekar 9704 Jamun 9607 Neeta 9508.
		(vii)	BAAZ Kaiyan Bowl—all areas forward of Dulurja 9712—BAAZ 0317—Shamsher 0416 including New Shamsher 0615—Zorawar 1017—Malaugan Base 1027—Radha 0836 to Nastachun Pass 9847.
		(viii)	Tangdhar—all areas west of Nastachun Pass Tangdhar Bowl and on Shamshabari Range and forward of it.
		(ix)	Karan and Machhal sub-sectors—all areas along the line Pharkiangali 0869 to Z Gali 4376 and forward of Shamshabari Range.
		(x)	Panzgam, Trehgam and Drugmul.
II.			Siachen area of Jammu and Kashmir.
III.			All places located at a height of 1,000 metres or more above the sea level, other than places specified at (I) and (II) above.

[37][37] [Rs. 800] per month

[38][38] [Rs. 7,000] per month

[39][39] [Rs. 300] per month

[40][40] [2.

Any Special Compensatory Allowance in the nature of Border Area Allowance, Remote Locality Allowance or Difficult Area Allowance or Disturbed Area

Allowance.

1.	(a)		Little Andaman, Nicobar and Narcondum Islands.
	(b)		North and Middle Andamans.
	(c)		Throughout Lakshadweep and Minicoy Islands.
	(d)		All places on or north of the following demarcation line: Point 14600 (2881) to Sala MS 2686-Matau MS 6777-Sakong MT 1379-Bamong-Khonawa MO 2803-Nyapin MO 7525-River Khru to its junction with the river Kamla MP-2226-Taliha-Yapuik MK 7410-Gshong MK 9749-Yinki Yong NF 4324-Damoroh MF 6208-Ahinkolin NF 8811-Kronli MG 2407-Hanili NM 4096-Gurongon  NM 4592- Loon NM 7579-Mayu-liang NM 0169-Chawah NM 9943-Kamphu NM 1125-Point 6490 (NM 1493) Vijaynagar NSA-486.
	(e)		Following areas in Himachal Pradesh:—
		(i)	Pangi Sub-division of Chamba District;
		(ii)	Following Panchayats and villages of Bharmour Tehsil of Chamba District
		(A)	Panchayat Badgaun, Bajol, Deol Kugti Nayagam and Tundah.
		(B)	Villages Ghatu of Gram Panchayat Jagat Kanarsi of Gram Panchayat Cauhata.
		(iii)	Lahul and Spiti District;
		(iv)	Kinnaur District:
		(A)	Asrang, Chitkul and Hango Kuno Charang Panchayats
		(B)	15/20 Area comprising the Gram Panchayats of Chhota Khamba, Nathpa and Rupi.
		(C)	Pooh Sub-Division excluding the Panchayat Areas specified above.
		(v)	15/20 Area of Rampur Tehsil comprising of Panchayats of Koot, Labana-Sadana, Sarpara and Chandi Branda of Shimla District.
		(vi)	15/20 Area of Nirmand Tehsil, comprising the Gram Pancha-yats of Kharga, Kushwar and Sarga of Kullu District.
	(f)		Chimptuipui District of Mizoram and areas beyond 25 km from Lunglei town in Lunglei District of Mizoram.
	(g)		Following areas in Jammu and Kashmir:—
		(i)	Niabat Bani, Lohi, Malhar and Macchodi of Kathua District;
		(ii)	Dudu Basantgarh Lander Thamag Illaqa, Thakrakote and Nagote of Udhampur District.
		(iii)	All areas in Tehsil Mahore except those specified at III(f)(i) below in Udhampur District;
		(iv)	Illaqas of Padder and Niabat Nowgaon in Kishtwar Tehsil of Doda District;
		(v)	Leh District;
		(vi)	Entire Gurez — Niabat, Tangdar Sub-Division and Keran Illaqa of Baramulla District.
	(h)		Following areas of Uttar Pradesh:—
		(i)	Chamoli District;
		(ii)	Pithoragarh District;
		(iii)	Uttarakashi District;
	(i)		Throughout Sikkim State
II.			Installations in the continental shelf of India and the Exclusive Economic Zone of India
III	(a)		Throughout Arunachal Pradesh  other than areas covered by those specified at I(d) above
	(b)		Throughout Nagaland State.
	(c)		South Andaman (including Port Blair).
	(d)		Throughout Lunglei District (excluding areas beyond 25 km from Lunglei town) of Mizoram.
	(e)		Dharmanagar, Kailasahar, Amarpur and Khowai in Tripura.
	(f)		Following areas in Jammu and Kashmir:—
		(i)	Areas up to Goel from Kamban side and areas upto Arnas from Keasi side in Tehsil Mahore of Udhampur District;
		(ii)	Matchill in Barmulla District.
	(g)		Following areas in Himachal Pradesh:—
		(i)	Bharmour Tehsil, excluding Panchayats and villages covered by those specified at I(e)(ii) above of Chamba District.
		(ii)	Chhota Bhangal and Bara Bhangal area of Kangra District;
		(iii)	Kinnaur District other than areas specified at I(e)(iv)
		(iv)	Dodra — Kawar Tehsil, Gram Panchayats of Darkali in Rampur, Kashapath Tehsil and Munish, Ghori Chaibis of Pargana Sarhan of Shimla District.
IV.	(a)		Throughout Aizawal District of Mizoram
	(b)		Throughout Tripura except areas those specified at III(e).
	(c)		Throughout Manipur.
	(d)		Following areas of Himachal Pradesh:—
		(i)	Jhandru Panchayat in Bhatiyat Tehsil, Churah Tehsil, Dalhousie Town (including Banikhet proper) of Chamba District.
		(ii)	Outer Seraj (excluding Village of Jakat-Khana and Burow in Nirmand Tehsil of Kullu District.
		(iii)	Following areas of Mandi District:—
		(A)	Chhuar Valley (Jogindernagar Tehsil)
		(B)	Bagara, Chhatri, Chhotdhar, Garagushain, Gatoo, Gharyas, Janjheli, Jaryar, Johar Kalhani Kalwan, Kholanal, Loth, Silibagi, Somachan, Thachdhar, Tachi and Thana Panchayats of Thunag Tehsil;
		(C)	Binga, Kamlah, Saklana, Tanyar and Tarakholah, Panchayats of Dharampur Block.
		(D)	Balidhar, Bagra, Gopalpur, Khajol, Mahog, Mehudi, Manj, Pekhi, Sainj, Sarahan and Teban, Panchayats of Karsog Tehsil.
		(E)	Bohi, Batwara, Dhanyara, Paura-Kothi, Seri and Shoja, Panchayats of Sundernagar Tehsil.
		(iv)	Following areas and offices of Kangra District:
		(A)	Dharamsala town and Women's ITI, Dari, Mechanical Workshop, Ramnagar, Child Welfare and Town Country Planning Offices. Sakoh; CRSF Office at lower Sakoh; Kangra Milk Supply Scheme, Shamnagar; Tea Factory, Dari; Forest Corporation Office, Sham-nagar; Tea Factory, Dari; Settlement Office, Shamnagar and Binwa Project, Sham-nagar, Offices located outside the Municipal limit of Dharamshala town but included in Dharamsala town for purposes of eligibility to special Compensatory (Remote Locality) Allowance;
		(B)	Palampur town, including HPKVV Campus at Palampur and H.P. Krishi Vishvavidyala Campus; Cattle Development Office/Jersy Farm, Banuri; Sericulture Office/Indo-German Agricul-ture Workshop/HPPWD Division, Bundla; Electrical Sub-Division, Lohna; D.P.O. Corporation, Bundla and Electrical HPSEE Division, Ghuggar offices located outside the municipal limits of Palampur town but included in Palampur town for the purpose of above allowance.
		(v)	Chopal Tehsil; Ghoris, Panjgaon, Patsnu, Naubis and Teen Koti of Pargana Sarahan; Deothi Gram Panahayat of Taklesh Area; Pargana Barabis; Kasba Rampur and Ghori Nog of Pargana Rampur of Rampur Tehsil of Shimla District and Shimla Town and its suburbs (Dhalli, Jatog, Kasumpti, Mashobra, Taradevi and Tutu)
		(vi)	Panchayats of Bani, Bakhali (Pachhad Tehsil), Bharog Bheneri (Paonata Tehsil), Birla (Nahan Tehsil), Dibber (Pachhad Tehsil) of Thanan Kasoga (Nahan Tehsil) in Sirmour District and Thansgiri Tract of Sirmour District;
		(vii)	Mangal Panchayat of Solan District;
	(e)		Following areas in Jammu and Kashmir:—
		(i)	Areas in Poonch and Rojouri Districts excluding the towns of Poonch and Rajouri and Sunderbani and other Urban areas in the two districts;
	(f)		Following areas in Jammu and Kashmir:—
			Areas not included in I(g), III(f) and IV(e) above, but which are within a distance of 8 km from the line of actual control or at places which may be declared as qualifying for Border Allowance from time to time by the State Government for their own staff.
V.			Jog Falls in Shimoga District in Karnataka
VI	(a)		Throughout the State of Himachal Pradesh other than areas covered by those specified in I(e), III(g) and IV(d)
	(b)		Throughout the State of Assam and Meghalaya]

Rs. 1,300 per month

Rs. 1,100 per month

Rs. 1,050 per month

Rs. 750 per month

Rs. 300 per month

Rs. 200 per month

3.

[41][41] [Special Compensatory (Tribal Areas/ Schedule Areas/ Agency Areas)] Allowance.

Madhya Pradesh

Tamil Nadu

Uttar Pradesh

Karnataka

Tripura

Assam

West Bengal

Bihar

Orissa

[42[42] ][Rs. 200] per month

4.

Any allowance granted to an employee working in any transport system to meet his personal expenditure during his duty performed in the course of running of such transport from one place to another place, provided that such employee is not in receipt of daily allowance.

Whole of India

70% of such      

allowance up to a maximum of [43][43] [Rs. 6,000] per month.

5.

Children Education               

Allowance.               

Whole of India

[44][44] [Rs. 100] per

month per child up to a maximum of two children.

6.

Any allowance granted to an

employee to meet the hostel               

expenditure on his child.      

Whole of India

[45][45] [Rs. 300] per month per child up to a maximum of two children.

7.

Compensatory Field Area Allowance.

(a)		Following areas in Arunachal Pradesh:—
	(i)	Tirap and Changlang districts;
	(ii)	all areas north of line joining point 4448 in LZ 4179-Nukme Dong MS 3272-Sepla MT 2969-Palin MO 9213-Daporijo NR 5841-Along NL 1273-Hunli NM 3196-Tidding Tuwi MT 6369-Hayuliang NN 0170-Tawaken MT 8136-Champai Bun NM 8814, all inclusive;
(b)		Throughout Manipur and Nagaland;
(c)		Following areas in Sikkim,—
		All areas north and north-east of line joining Phalut LV 4750-Gezing LV 7059-Mangkha LV 6160-Penlang La LW 0666-Rangli LW 1448-BP 1 in LW 2453 on Indo-Bhutan Border, all inclusive.
(d)		Following areas in Himachal Pradesh:—
		All areas east of line joining Umasila NV 3951-Udaipur NY 8663-Manikaran SB 2300-Pir Parbati Pass TA 1459 — Taranda TA 2335-Barasua-Pass TA 8801, all inclusive.
(e)		Following areas in Uttar Pradesh:—
		All areas north and north-east of line joining Barasua Pass Gangnani TG 1362-Govind Ghat TG 0937-Tapovan TH 1822-Musiari TN 8982-Relagad TO 2466, all inclusive.
(f)		Following areas in Jammu and Kashmir:—
	(i)	areas north and east of line joining Zojila MU 3036-Baralachala NE 6672 along the Great Himalayan Range, all inclusive;
	(ii)	all areas west of line joining Point 1556 in NR 5470-Gulmarg MT 3105-Naushara MY 3105-Ringapat MT 2133-Handwara MT 2043-Laingyal MT 2339-Point 8405 in NG 4565 — north of line joining point 8403-Bunakut MT 5453-Razan NN 2239-Zojila, all inclusive;
	(iii)	all areas west of line joining tip of Chicken Neck RD 7073-Canal Junction RD 6364-Mawa Brahmana RD 6183-Chauki RD 6393-Road junction RD 6499-Baramgala MY 3854-Point 1556 in NR 5470, all inclusive.

[46][46] [Rs. 2,600]

per month.

8.

Compensatory               

Modified Field Area Allowance.

(a)		Following areas in Punjab and Rajasthan:—
		areas  west of line joining Jessai, Barmer, Jaisalmer, Pokharan, Udasar, Mahajan Ranges, Suratgarh, Lalgarh, Jattan, Abohar, Govindgarh, Fazilka, Jandiala Guru, Moga, Dholewal, Deas, Bir Sarangwal, Hussainiwala, Dera Baba Nanak, Laisain Pulge upto the international border, all inclusive;
(b)		Following areas in Haryana;— Satrod (Hissar),
(c)		Following areas in Himachal Pradesh:— areas north of line joining Narkhanda, Keylong upto Field Area line/High Altitude line.
(d)		Following areas in Arunachal Pradesh and Assam:—
	(i)	Cachar and North Cachar districts of Assam including Silchar;
	(ii)	all areas of Arunachal Pradesh and Assam north of river Brahmaputra, except Tejpur, Misamari and Field Areas;
(e)		Throughout Mizoram and Tripura;
(f)		Following areas in Sikkim and West Bengal:—
		areas northwards of line joining Sevoke LV 9112-Burdong LV 985-Sherwani LV 9453-Bagrakot LW 0113-Damdim LW 1109-New Mal-Hasimara-QB 7894 Ganga Ram Tea Estate QA 1377 upto the High Altitude line/Field Area line/ international border, all inclusive.
(g)		Following areas in Uttar Pradesh:—
		areas north of line joining Uttarkashi, Karan Prayag, Gauchar, Joshimath, Chamoli, Rudra Prayag, Askote, Charamgad, Dharchula, Kausani and Narendra Nagar upto international border, all inclusive.
(h)		Following areas in Jammu and Kashmir:—
	(i)	areas west of line joining Pattan, Baramulla, Kupwara, Drugmula, Panges, Mankes, Buniyar, Pantha Chowk, Khanabal, Anantnag, Khundru and Khru upto the existing High Altitude line, all inclusive;
	(ii)	areas west of line joining-BP-19, Brahmana-di-Bari, Jindra, Dhansal, Katra, Sanjhi Chatt, Batote, Patni Top, Ramban and Banihal upto the existing High Altitude line, all inclusive.

[47][47] [Rs. 1,000] per month    

9.

Any special allowance in the nature of\ counter-insurgency allowance granted to the members of armed forces operating in areas away from their permanent locations  [48][48] [* * *]

Whole of India

[49][49] [Rs. 3,900] per month

[50][50] [10.

Transport allowance granted to an [51][51] [employee other than an
employee referred to in serial number 11] to meet his expenditure for the purpose of commuting between the place of his residence and the place of his duty.

Whole of India

Rs. 800 per month]

[52][52] [11.

Transport allowance granted to an employee, who is blind or orthopaedically handicapped with disability of lower extremities, to meet his expenditure for the purpose of commuting between the place of his residence and the place of his duty.

Whole of India

Rs. 1,600 per  month]

[53][53] [12.

Underground Allowance granted to an employee who is working in uncongenial, unnatural climate in underground [54][54] [* * *] mines.

Whole of India

Rs. 800 per month]

[55][55] [13.

Any special allowance in the nature of high altitude (uncong-enial climate) allowance granted to the member of the armed forces operating in high altitude areas 

For altitude of 9,000 to 15,000 feet

For altitude above 15,000 feet 

Rs. 1,060 per month

Rs. 1,600 per month

14.

Any special allowance granted to the members of the armed forces in the nature of special compen-satory highly active field area allowance

Whole of India

Rs. 4,200 per month]

[56][56] [15.

Any special allowance granted to the member of the armed forces in the nature of island (duty) allowance

Andaman & Nicobar and Lakshadweep Group of Islands

Rs. 3,250 per month:]

Provided that any assessee claiming exemption in respect of the allowances mentioned at serial numbers 7 and 8 shall not be entitled to the exemption in respect of the allowance referred to at serial number 2:

Provided further that any assessee claiming exemption in respect of the allowance mentioned at serial number 9 shall not be entitled to the exemption in respect of disturbed area allowance referred to at serial number 2.]

[57][57] [2BBA. Circumstances and conditions for the purposes of clause (19) of section 10

(1) For the purposes of clause (19) of section 10, the circumstances of death of a member of the armed forces (including paramilitary forces) of the Union in the course of operational duties shall be the following, namely:—

(i) acts of violence or kidnapping or attacks by terrorists or anti-social elements;

(ii) action against extremists or anti-social elements;

(iii) enemy action in international war;

(iv) action during deployment with a peace keeping mission abroad;

(v) border skirmishes;

(vi) laying or clearance of mines including enemy mines as also mine sweeping operations;

(vii) explosions of mines while laying operationally oriented mine-fields or lifting or negotiation mine-fields laid by the enemy or own forces in operational areas near international borders or the line of control;

(viii) in the aid of civil power in dealing with natural calamities and rescue operations;

(ix) in the aid of civil power in quelling agitation or riots or revolts by demonstrators.

(2) It shall be certified by the Head of the Department where the deceased member of the armed forces (including para-military forces) last served, or the service headquarters, as the case may be, that the death of such member has occurred in the course of operational duties in circumstances mentioned in sub-rule (1).]

[58][58] [2BC. Amount of annual receipts for the purposes of sub-clauses (iiiad) and (iiiae) of clause (23C) of section 10

(1) For the purposes of sub-clause (iiiad) of clause (23C) of section 10, the amount of annual receipts on or after the 1st day of April, 1998, of any university or other educational institution, existing solely for educational purposes and not for purposes of profit, shall be one crore rupees.

(2) For the purposes of sub-clause (iiiae) of clause (23C) of section 10, the amount of annual receipts on or after the 1st day of April, 1998, of any hospital or other institution for the reception and treatment of persons suffering from illness or mental defectiveness or for the reception and treatment of persons during convalescence or of persons requiring medical attention or rehabilitation, existing solely for philanthropic purposes and not for purposes of profit, shall be one crore rupees.]

[59][59] [2C. Guidelines for approval under sub-clauses (iv) and (v) of clause (23C) of section 10

(1) The prescribed authority under sub-clauses (iv) and (v) of clause (23C) of section 10 shall be the Chief Commissioner or Director General, to whom the application shall be made as provided in sub-rule (2).

(2) The application to be furnished under sub-clauses (iv) and (v) of clause (23C) of section 10 by a fund, trust or institution shall be in Form No. 56.

Explanation.—For the purposes of this rule, Chief Commis-sioner or Director General means the Chief Commissioner or Director General whom the Central Board of Direct Taxes may authorise to act as prescribed authority for the purposes of sub-clause (iv) or sub-clause (v) of clause (23C) of section 10 in relation to any fund or trust or institution.]

[60][60] [2CA. Guidelines for approval under sub-clauses (vi) and (via) of clause (23C) of section 10

(1) The prescribed authority under sub-clauses (vi) and (via) of clause (23C) of section 10 shall be the Chief Commissioner or Director General, to whom the application shall be made as provided in sub-rule (2).

(1A) The prescribed authority under sub-clauses (vi) and (via) of clause (23C) of section 10 shall be the Central Board of Direct Taxes constituted under the Central Boards of Revenue Act, 1963 (54 of 1963) for applications received prior to 3rd day of April, 2001:

[61][61] [Provided that in case of applications received prior to 3rd day of April, 2001 where no order has been passed granting approval or rejecting the application as on 31st day of May, 2007, the prescribed authority under sub-clauses (vi) and (via) of clause (23C) of section 10 shall be the Chief Commissioner or Director General.]

(2) An application for approval shall be made in Form No. 56D by any university or other educational institution or any hospital or other medical institution referred to in sub-clause (vi) or sub-clause (via) of clause (23C) of section 10.

[62][62] [(3) The approval of the Central Board of Direct Taxes or Chief Commissioner or Director General, as the case may be, granted before the 1st day of December, 2006 shall at any one time have effect for a period not exceeding three assessment years.]

[63][63] [Explanation.—For the purposes of this rule, "Chief Commissioner or Director General" means the Chief Commissioner or Director General whom the Central Board of Direct Taxes may, authorise to act as prescribed authority, for the purposes of sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, in relation to any university or other educational institution or any hospital or other medical institution.]

[1][64] [2D. Guidelines for approval under clause (23F) of section 10

(1) For the purposes of clause (23F) of section 10, the prescribed authority shall be the Director of Income-tax (Exemptions) having jurisdiction over the venture capital fund or the venture capital company who makes application for approval under sub-rule (2).

(2) An application for approval shall be made in Form 56A by a venture capital fund or a venture capital company to the Director of Income-tax (Exemptions) referred to in sub-rule (1).

(3) Every application under sub-rule (2) may be made in any previous year in which any income by way of dividend or long-term capital gains of a venture capital fund or a venture capital company from investments made by way of equity shares in a venture capital undertaking shall not be included in computing the total income of such venture capital fund or venture capital company.

(4) Every application for approval under sub-rule (2) shall be accompanied by the following documents, namely:—

(a) a copy of trust deed or certificate of incorporation under Companies Act, 1956 (1 of 1956);

(b) balance sheets and profit and loss account for three previous years immediately preceding the previous year in which the application is made;

(c) Forms 56B and 56C duly filled in and signed by the applicant; and

(d) a copy of the certificate of registration issued by the Securities and Exchange Board of India.

(5) The Director of Income-tax (Exemptions) shall approve the venture capital fund or the venture capital company, as the case may be, subject to the following conditions, namely:—

(a) the venture capital fund or the venture capital company, as the case may be, is registered with the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992);

[2][65] [(b) * * *]

[3][66] [(c) * * *]

(d) a venture capital fund or a venture capital company, as the case may be, shall not invest more than [4][67] [twenty] per cent of its total monies raised or total paid-up share capital in one venture capital undertaking;

(e) a venture capital fund or a venture capital company, as the case may be, shall not make investment of more than forty per cent in the equity capital of one venture capital undertaking;

(f) every venture capital fund and venture capital company, shall maintain books of account and get such books audited by an accountant, as defined in Explanation to sub-section (2) of section 288 and furnish the report of such audit duly signed and verified by such accountant to the Director, Income-tax (Exemptions) before the due date of filing of the return under sub-section (1) of section 139.

(6) The Director, Income-tax (Exemptions) shall pass an order in writing granting approval or refusing approval to the venture capital fund or venture capital company, as the case may be:

Provided that the Director, Income-tax (Exemptions) shall not refuse the approval except in concurrence with the Director General of Income-tax (Exemptions):

Provided further that every venture capital fund or venture capital company, as the case may be, shall be given an opportunity of being heard before passing an order under this rule.

(7) The Director, Income-tax (Exemptions) shall withdraw the approval granted under sub-rule (6) in the following circumstances, namely:—

(a) If the venture capital fund or the venture capital company—

(i) fails to make investments in the manner specified in sub-rule (5);

(ii) invests more than [5][68] [twenty] per cent of the monies raised by a venture capital fund or [6][69] [twenty] per cent of paid up share capital of the venture capital company, as the case may be, in one venture capital undertaking;

(iii) makes an investment of more than forty per cent in the equity capital in one venture capital undertaking;

(iv) fails to maintain books of account and get such accounts audited by an accountant or fails to file the audit report required in clause (f) of sub-rule (5);

(v) violates the provisions of the Act or rules made thereunder;

(b) if the certificate of registration granted under section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), to a venture capital fund or a venture capital company is suspended or cancelled by the Securities and Exchange Board of India.]

[7][70] [2DA. Guidelines for approval under clause (23FA) of section 10

(1) An application for approval shall be made in Form No. 56AA by a venture capital fund or a venture capital company to the Central Government.

(2) Every application under sub-rule (1) may be made in any previous year in which any income by way of dividend or long-term capital gains of a venture capital fund or a venture capital company from investments made by way of equity shares in a venture capital undertaking shall not be included in computing the total income of such venture capital fund or venture capital company.

(3) Every application for approval under sub-rule (1) shall be accompanied by the following documents, namely:—

(a) a copy of the trust deed registered under the provision of the Registration Act, 1908 or a certificate of incorporation under the Companies Act, 1956 (1 of 1956);

(b) balance sheets and profit and loss accounts for three previous years immediately preceding the previous year in which the application is made;

(c) Forms 56BA and 56CA duly filled in and signed by the applicant; and

(d) a copy of the certificate of registration issued by the Securities and Exchange Board of India under sub-section (1) of section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992).

(4) The Central Government may approve the venture capital fund or the venture capital company, as the case may be, subject to the following conditions, namely:—

(a) a venture capital fund or a venture capital company, as the case may be, is registered with the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992);

(b) a venture capital fund or a venture capital company, as the case may be, shall not invest more than twenty-five per cent of its total monies raised or total paid-up share capital in one venture capital undertaking;

(c) every venture capital fund and venture capital company, shall maintain books of account and get such books audited by an accountant, as defined in Explanation to sub-section (2) of section 288 of the Act and furnish the report of such audit duly signed and verified by such accountant to the Central Government before the due date of filing of the return under sub-section (1) of section 139 of the Act.

(5) The Central Government may pass an order in writing granting approval or refusing approval to the venture capital fund or venture capital company, as the case may be:

Provided that no order refusing the approval shall be passed unless an opportunity of being heard has been given to the venture capital fund or the venture capital company.

(6) The approval of the Central Government under sub-rule (5) shall at any one time have effect for such assessment year or years, not exceeding three assessment years.

(7) The Central Government shall withdraw the approval granted under sub-rule (5) in the following circumstances:—

(a) if the venture capital fund or the venture capital company—

 (i) fails to make investments in the manner specified in sub-rule (4);

 (ii) invests more than twenty-five per cent of the monies raised by a venture capital fund or twenty-five per cent of paid-up share capital of the venture capital company, as the case may be, in one venture capital undertaking;

(iii) fails to maintain books of accounts and get such accounts audited by an accountant or fails to file the audit report required in clause (d) of sub-rule (4);

(iv) violates the provisions of the Act or rules made thereunder;

(b) if the certificate of registration granted under section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), to a venture capital fund or a venture capital company is suspended or cancelled by the Securities and Exchange Board of India.]

[8][71] [2E. Guidelines for approval under clause (23G) of section 10

(1) An application for approval shall be made on or after the 1st day of June, 1998 in Form No. 56E by an enterprise to the Central Government.

(2) Every application for approval made under sub-rule (1) shall be accompanied by the following documents, namely:—

(a) a copy of certificate of incorporation under the Companies Act, 1956 (1 of 1956) or a copy of the document evidencing the constitution of the enterprise and its legal status;

(b) a copy of the project report or agreement in respect of the eligible business duly approved by the Central Government or any State Government or any local authority or any other statutory body, as the case may be;

(c) balance sheets and profit and loss accounts for the three previous years immediately preceding the previous year in which the application has been made and also for the relevant part of the previous year in which the application has been made:

Provided that an application made under sub-rule (1) may be accompanied by the balance sheets and profit and loss accounts for less than three previous years where an enterprise has been formed at any time during the three previous years immediately preceding the previous year in which the application has been made and also for the relevant part of the previous year in which the application has been made.

(3) The Central Government shall approve an enterprise for the purposes of clause (23G) of section 10, if such enterprise is wholly engaged in the eligible business.

(4) The Central Government may, before approving an enterprise, call for such documents (including audited annual accounts) or information from the enterprise, as it thinks necessary in order to satisfy itself that such enterprise is wholly engaged in the eligible business and that Government may also make such enquiries as it may deem necessary in this behalf.

(5) The Central Government shall pass an order in writing while granting approval or refusing approval to the enterprise:

Provided that no order refusing the approval shall be passed unless an opportunity of being heard has been given to the enterprise.

(6) Every enterprise approved under sub-rule (5) shall maintain books of account and get such books audited by an accountant, as defined in Explanation to sub-section (2) of section 288 and furnish the report of such audit duly signed and verified by such accountant to the Chief Commissioner of Income-tax under whose jurisdiction it is assessed, before the due date of filing of the return under sub-section (1) of section 139.

(7) Where the enterprise,—

(a) ceases to carry on the eligible business; or

(b) fails to maintain books of account and get such accounts audited by an accountant as required by sub-rule (6); or

(c) fails to furnish the audit report as required by sub-rule (6);the Chief Commissioner of Income-tax shall, after making such enquiries as he may deem necessary, furnish a report on the circumstances referred to in clauses (a), (b) and (c) to the Central Government, within six months from the due date of filing of return under sub-section (1) of section 139.

(8) The Central Government, on being satisfied that any or all of the circumstances referred to in clauses (a), (b) and (c) of sub-rule (7) exist, shall withdraw the approval granted under sub-rule (5):

Provided that no order withdrawing the approval shall be passed unless an opportunity of being heard has been given to the enterprise.

Explanation.—For the purposes of this rule,—

(a) the expression "enterprise" means any enterprise wholly engaged in the eligible business;

(b) the expression "eligible business" means the business referred to in sub-section (4) of section 80-IA or a housing project referred to in sub-section (10) of section 80-IB and which fulfils the conditions specified in the said sub-sections or a hotel project or a hospital project as defined in clauses (g) and (h) of Explanation 1 to clause (23G) of section 10.]

[9][72] [3. Valuation of perquisites*[73]

For the purpose of computing the income chargeable under the head "Salaries", the value of perquisites provided by the employer directly or indirectly to the assessee (hereinafter referred to as employee) or to any member of his household by reason of his employment shall be determined in accordance with the following sub-rules, namely:—

(1) The value of residential accommodation[10][74] provided by the employer during the previous year shall be determined on the basis provided in the Table below:—

[11][75] [Table I

Sl No.	Circumstances	Where accommodation is unfurnished	Where accommodation is furnished
(1)	(2)	(3)	(4)
(1)[12][76]	Where the accommoda-tion is provided by the Central Government or any State Government to the employees either holding office or post in connection with the affairs of the Union or of such State or serving with any body or undertaking under the control of such Government on deputation.	License fee determined by the Central Government or any State Government in respect of accommodation in accordance with the rules framed by such Government as reduced by the rent actually paid by the employee.	The value of perquisite as determined under column (3) and increased by 10% per annum of the cost of furniture (including television sets, radio sets, refrigerators, other household appliances, air-conditioning plant or equipment) or if such furniture is hired from a third party, the actual hire charges payable for the same as reduced by any charges paid or payable for the same by the employee during the previous year.
(2)	Where the accommodation is provided by any other employer and where the accommo-dation is owned by the employer, or where the accommo-dation is taken on lease or rent by the employer.	15% of salary in cities having population exceeding 25 lakhs as per 2001 census; 10% of salary in cities having population exceeding 10 lakhs but not exceeding 25 lakhs as per 2001 census; 7.5% of salary in other areas,in respect of the period during which the said accommodation was occupied by the employee during the previous year as reduced by the rent, if any, actually paid by the employee. Actual amount of lease rental paid or payable by the employer or 15% of salary which-ever is lower as redu-ced by the rent, if any, actually paid by the employee.	The value of perquisite as deter-mined under column (3) and increased by 10% per annum of the cost of furniture (including television sets, radio sets, refrigerators, other house-hold appliances, air-conditioning plant or equipment or other similar appliances or gadgets) or if such furniture is hired from a third party, by the actual hire charges payable for the same as reduced by any charges paid or payable for the same by the employee during the previous year. The value of perquisite as deter-mined under column (3) and increased by 10% per annum of the cost of furniture (including television sets, radio sets, refrigerators, other household appliances, air-conditioning plant or equipment or other similar appliances or gadgets) or if such furniture is hired from a third party, by the actual hire charges payable for the same as reduced by any charges paid or payable for the same by the employee during the previous year.
(3)	Where the accommodation is provided by the employer specified in serial number (1) or (2) in a hotel (except where the employee is provided such accommodation for a period not exceeding in aggregate fifteen days on his transfer from one place to another)	Not applicable	24% of salary paid or payable for the previous year or the actual charges paid or payable to such hotel, which is lower, for the period during which such accommodation is provided as reduced by the rent, if any, actually paid or payable by the employee.

[13][77] [Provided that nothing contained in this sub-rule shall apply to any accommodation provided to an employee working at mining site or an onshore oil exploration site or a project execution site, or a dam site or a power generation site or an offshore site which,—

(i) being of a temporary nature and having plinth area not exceeding 800 square feet, is located not less than eight kilometres away from the local limits of any municipality or a cantonment board; or

(ii) is located in a remote area:]

Provided further that where on account of his transfer from one place to another, the employee is provided with accommodation at the new place of posting while retaining the accommodation at the other place, the value of perquisite shall be determined with reference to only one such accommodation which has the lower value with reference to the Table above for a period not exceeding 90 days and thereafter the value of perquisite shall be charged for both such accommodations in accordance with the Table.

[14][78] [(2) (A) The value of perquisite provided by way of use of motor car to an employee by an employer, who is not liable to pay fringe benefit tax under Chapter XII-H of the Act, shall be determined in accordance with the following Table, namely:—

Table II

VALUE OF PERQUISITE PER CALENDAR MONTH

Sl No.	Circumstances	Where cubic capacity of engine does not exceed 1.6 litres	Where cubic capacity of engine exceeds 1.6 litres
(1)	(2)	(3)	(4)
(1)	Where the motor car is owned or hired by the employer and— is used wholly and exclusively in the performance of his official duties; is used exclusively for the private or personal purposes of the employee or any member of his household and the running and maintenance expenses are met or reimbursed by the employer; is used partly in the performance of duties and partly for private or personal purposes for his own or any member of his household and the expenses on maintenance and running are met or reimbursed by the employer, the expenses on running and maintenance for such private or personal use are fully met by the assessee.	No value: Provided that the documents specified in clause (B) of this sub-rule are maintained by the employer. Actual amount of expenditure incurred by the employer on the running and maintenance of motor car during the relevant previous year including remuneration, if any, paid by the employee to the chauffeur as increased by the amount representing normal wear and tear of the motor car and as reduced by any amount charged from the employee for such use. Rs. 1,200 (plus Rs. 600, if chauffeur is also provided to run the motor car) Rs. 400 (plus Rs. 600, if chauffeur is provided by the employer to run the motor car)	No value: Provided that the documents specified in clause (B) of this sub-rule are maintai-ned by the employer. Actual amount of expenditure incurred by the employer on the running and maintenance of motor car during the relevant previous year including remuneration, if any, paid by the employer to the chauffeur as increased by the amount representing normal wear and tear of the motor car and as reduced by any amount charged from the employee for such use. Rs. 1,600 (plus Rs. 600, if chauffeur is also provided to run the motor car) Rs. 600 (plus Rs. 600, if chauffeur is also provided to run the motor car)
(2)	Where the employee owns a motor car but the actual running and maintenance charges (including remuneration of the chauffeur, if any) are met or reimbursed to him by the employer and such reimbursement is for the use of the vehicle wholly and exclusively for official purposes, such reimbursement is for the use of the vehicle partly for official purposes and partly for personal or private purposes of the employee or any member of his household.	No value: Provided that the documents specified in clause (B) of this sub-rule are maintained by the employer. Subject to the provi-sions of clause (B) of this sub-rule, the actual amount of expenditure incurred by the employer as reduced by the amount specified in Sl. No. (1)(c)(i) above.	No value: Provided that the documents specified in clause (B) of this sub-rule are maintained by the employer. Subject to the provisions contained in clause (B) of this sub-rule, the actual amount of expendi-ture incurred by the employer as reduced by the amount specified in Sl. No. (1)(c)(i) above.
(3)	Where the employee owns any other automotive conveyance but the actual running and maintenance charges are met or reimbursed to him by the employer and such reimbursement is for the use of the vehicle wholly and exclusively for official purposes, such reimbursement is for the use of the vehicle partly for official purposes and partly for personal or private purposes of the employee.	No value provided that the documents specified in clause (B) of this sub-rule are maintained by the employer. Subject to the provisions of clause (B) of this sub-rule, the actual amount of expenditure incurred by the employer as reduced by an amount of Rs. 600:	Not applicable

Provided that where one or more motor-cars are owned or hired by the employer and the employee or any member of his household are allowed the use of such motor-car or all or any of such motor-cars (otherwise than wholly and exclusively in the performance of his duties), the value of perquisite shall be the amount calculated in respect of one car in accordance with Sl. No. (1)(c)(i) of Table II as if the employee had been provided one motor-car for use partly in the performance of his duties and partly for his private or personal purposes and the amount calculated in respect of the other car or cars in accordance with Sl. No. (1)(b) of Table II as if he had been provided with such car or cars exclusively for his private or personal purposes.

(B) Where the employer or the employee claims that the motor-car is used wholly and exclusively in the performance of official duty or that the actual expenses on the running and maintenance of the motor-car owned by the employee for official purposes is more than the amounts deductible in Sl. Nos. 2(ii) or 3(ii) of Table II, he may claim a higher amount attributable to such official use and the value of perquisite in such a case shall be the actual amount of charges met or reimbursed by the employer as reduced by such higher amount attributable to official use of the vehicle provided that the following conditions are fulfilled:—

(a) the employer has maintained complete details of journey undertaken for official purpose which may include date of journey, destination, mileage and the amount of expenditure incurred thereon;

(b) the employer gives a certificate to the effect that the expenditure was incurred wholly and exclusively for the performance of official duties.

Explanation.—For the purposes of this sub-rule, the normal wear and tear of a motor-car shall be taken at 10% per annum of the actual cost of the motor-car or cars.]

(3) The value of benefit to the employee or any member of his household resulting from the provision by the employer of services of a sweeper, a gardener, a watchman or a personal attendant, shall be the actual cost to the employer. The actual cost in such a case shall be the total amount of salary paid or payable by the employer or any other person on his behalf for such services as reduced by any amount paid by the employee for such services.

(4) The value of the benefit to the employee resulting from the supply of gas, electric energy or water for his household consumption shall be determined as the sum equal to the amount paid on that account by the employer to the agency supplying the gas, electric energy or water. Where such supply is made from resources owned by the employer, without purchasing them from any other outside agency, the value of perquisite would be the manufacturing cost per unit incurred by the employer. Where the employee is paying any amount in respect of such services, the amount so paid shall be deducted from the value so arrived at.

(5) The value of benefit to the employee resulting from the provision of free or concessional educational facilities for any member of his household shall be determined as the sum equal to the amount of expenditure incurred by the employer in that behalf or where the educational institution is itself maintained and owned by the employer or where free educational facilities for such member of employees household are allowed in any other educational institution by reason of his being in employment of that employer, the value of the perquisite to the employee shall be determined with reference to the cost of such education in a similar institution in or near the locality. Where any amount is paid or recovered from the employee on that account, the value of benefit shall be reduced by the amount so paid or recovered:

Provided that where the educational institution itself is maintained and owned by the employer and free educational facilities are provided to the children of the employee or where such free educational facilities are provided in any institution by reason of his being in employment of that employer, nothing contained in this sub-rule shall apply if the cost of such education or the value of such benefit per child does not exceed Rs. 1,000 p.m.

[15][79] [(6) The value of any benefit or amenity resulting from the provision by an employer, who is not liable to pay fringe benefit tax under Chapter XIIH of the Income-tax Act and is engaged in the carriage of passengers or goods to any employee or to any member of his household for personal or private journey free of cost or at concessional fare, in any conveyance owned, leased or made available by any other arrangement by such employer for the purpose of transport of passengers or goods shall be taken to be the value at which such benefit or amenity is offered by such employer to the public as reduced by the amount, if any, paid by or recovered from the employee for such benefit or amenity:

Provided that nothing contained in this sub-rule shall apply to the employees of an airline or the railways.]

(7) In terms of provisions contained in sub-clause (vi) of sub-section (2) of section 17, the following other fringe benefits or amenities are hereby prescribed and the value thereof shall be determined in the manner provided hereunder:

(i) The value of the benefit to the assessee resulting from the provision of interest-free or [16][80] [concessional loan for any purpose made available to the employee or any member of his household during the relevant previous year by the employer or any person on his behalf shall be determined as the sum equal to the interest computed at the rate charged per annum by the State Bank of India, constituted under the State Bank of India Act, 1955 (23 of 1955), as on the 1st day of the relevant previous year in respect of loans for the same purpose advanced by it] on the maximum outstanding monthly balance as reduced by the interest, if any, actually paid by him or any such member of his household.

However, no value would be charged if such loans are made available for medical treatment in respect of diseases specified in rule 3A of these Rules or where the amount of loans are petty not exceeding in the aggregate Rs. 20,000:

Provided that where the benefit relates to the loans made available for medical treatment referred to above, the exemption so provided shall not apply to so much of the loan as has been reimbursed to the employee under any medical insurance scheme.

[17][81] [(ii) The value of travelling, touring, accommodation and any other expenses paid for or borne or reimbursed by the employer, who is not liable to pay fringe benefit tax under Chapter XIIH of the Act, for any holiday availed of by the employee or any member of his household, other than concession or assistance referred to in rule 2B of these rules, shall be determined as the sum equal to the amount of the expenditure incurred by such employer in that behalf. Where such facility is maintained by the employer, and is not available uniformly to all employees, the value of benefit shall be taken to be the value at which such facilities are offered by other agencies to the public. Where the employee is on official tour and the expenses are incurred in respect of any member of his household accompanying him, the amount of expenditure so incurred shall also be a fringe benefit or amenity. However, where any official tour is extended as a vacation, the value of such fringe benefit shall be limited to the expenses incurred in relation to such extended period of stay or vacation. The amount so determined shall be reduced by the amount, if any, paid or recovered from the employee for such benefit or amenity.

(iii) The value of free food and non-alcoholic beverages provided by the employer, who is not liable to pay fringe benefit tax under Chapter XIIH of the Act, to an employee shall be the amount of expenditure incurred by such employer. The amount so determined shall be reduced by the amount, if any, paid or recovered from the employee for such benefit or amenity:

Provided that nothing contained in this sub-rule shall apply to free food and non-alcoholic beverages provided by such employer during working hours at office or business premises or through paid vouchers which are not transferable and usable only at eating joints, to the extent the value thereof in either case does not exceed Rs. 50 per meal or to tea or snacks provided during working hours or to free food and non-alcoholic beverages during working hours provided in a remote area or an off-shore installation.

(iv) The value of any gift, or voucher, or token in lieu of which such gift may be received by the employee or by member of his household on ceremonial occasions or otherwise from the employer, who is not liable to pay fringe benefit tax under Chapter XIIH of the Act, shall be determined as the sum equal to the amount of such gift. However, where the value of such gift, voucher or token, as the case may be, is below Rs. 5,000 in the aggregate during the previous year, the value of perquisite shall be taken as 'nil'.

(v) The amount of expenses including membership fees and annual fees incurred by the employee or any member of his household, which is charged to a credit card (including any add-on-card), provided by the employer, who is not liable to pay fringe benefit tax under Chapter XIIH of the Act, or otherwise, paid for or remibursed by such employer shall be taken to be the value of perquisite chargeable to tax. However, there shall be no value of such benefit where the expenses are incurred wholly and exclusively for official purposes and the following conditions are fulfilled—

 (a) complete details in respect of such expenditure are maintained by the employer which may, inter alia, include the date of expenditure and the nature of expenditure;

(b) the employer gives a certificate for such expenditure to the effect that the same was incurred wholly and exclusively for the performance of official duties.

The amount so determined shall be reduced by the amount, if any paid or recovered from the employee for such benefit or amenity.

(vi)(A) The value of benefit to the employee resulting from the payment or reimbursement by the employer, who is not liable to pay fringe benefit tax under Chapter XIIH of the Act, of any expenditure incurred (including the amount of annual or periodical fee) in a club by him or by any member of his household shall be determined to be the actual amount of expenditure incurred or reimbursed by such employer on that account. The amount so determined shall be reduced by the amount, if any paid or recovered from the employee for such benefit or amenity. However, where the employer has obtained corporate membership of the club and the facility is enjoyed by the employee or any member of his household, the value of perquisite shall not include the initial fee paid for acquiring such corporate membership.

(B) Nothing contained in this sub-rule shall apply if such expenditure is incurred wholly and exclusively for business purposes and the following conditions are fulfilled:—

(a)    complete details in respect of such expenditure are maintained by the employer which may, inter alia, include the date of expenditure, the nature of expenditure and its business expediency;

(b)    the employer gives a certificate for such expenditure to the effect that the same was incurred wholly and exclusively for the performance of official duties;

(c)    nothing contained in this sub-rule shall apply for use of health club, sports and similar facilities provide uniformly to all employees by the employer.]

(vii) The value of benefit to the employee resulting from the use by the employee or any member of his household of any movable asset (other than assets already specified in this Rule and other than laptops and computers) belonging to the employer or hired by him shall be determined at 10% per annum of the actual cost of such asset or the amount of rent or charge paid or payable by the employer, as the case may be, as reduced by the amount, if any, paid or recovered from the employee for such use.

(viii) The value of benefit to the employee arising from the transfer of any movable asset belonging to the employer directly or indirectly to the employee or any member of his household shall be determined to be the amount representing the actual cost of such asset to the employer as reduced by the cost of normal wear and tear calculated at the rate of 10% of such cost for each completed year during which such asset was put to use by the employer and as further reduced by the amount, if any, paid or recovered from the employee being the consideration for such transfer:

Provided that in the case of computers and electronic items, the normal wear and tear would be calculated at the rate of 50% and in the case of motor cars at the rate of 20% by the reducing balance method.

[18][82] [(ix) The value of any other benefit or amenity, service, right or privilege provided by the employer shall be determined on the basis of cost to the employer under an arm's length transaction as reduced by the employee's contribution, if any:

Provided that nothing contained in this item shall apply to the expenses on telephones including a mobile phone actually incurred on behalf of the employee by the employer.]

[19][83] [(8) Omitted by the Income-tax (Seventh Amendment) Rules, 2005, w.e.f. 1-4-2005 (from A.Y. 2006-07)]

(9) This Rule shall come into force with effect from the 1st day of April, 2001:

Provided that the employee may, at his option, compute the value of all perquisites made available to him or any member of his household for the period beginning on 1st day of April, 2001 and ending on 30th day of September, 2001 in accordance with the Rules as they stood prior to this amendment:

[20][84] [Provided further that for an employee being an employee of an airline [21][85] [* * *], the provisions of sub-rule (6) shall come into force with effect from the 1st day of April, 2002.]

Explanation.—For the purposes of this Rule:—

(i) "Accommodation" includes a house, flat, farm house or part thereof, or accommodation in a hotel, motel, service apartment, guest house, caravan, mobile home, ship or other floating structure;

(ii) "Entertainment" includes hospitality of any kind and also, expenditure on business gifts other than free samples of the employers own product with the aim of advertising to the general public;

(iii) "Hotel" includes licensed accommodation in the nature of motel, service apartment or guest house;

(iv) "Member of household" shall include,—

(a) spouse(s),

(b) children and their spouses,

(c) parents,

(d) servants and dependants;

(v) "remote area", for purposes of proviso to this sub-rule means an area that is located at least 40 kilometers away from a town having a population not exceeding 20,000 based on latest published all India census;

(vi) "salary" includes the pay, allowances, bonus or commission payable monthly or otherwise or any monetary payment, by whatever name called from one or more employers, as the case may be, but does not include the following, namely:—

 (a) dearness allowance or dearness pay unless it enters into the computation of superannuation or retirement benefits of the employee concerned;

(b) employer's contribution to the provident fund account of the employee;

(c) allowances which are exempted from payment of tax;

(d) the value of perquisites specified in clause (2) of section 17 of the Income-tax Act;

(e) any payment or expenditure specifically excluded under proviso to sub-clause (iii) of clause (2) or proviso to clause (2) of section 17;

(vii) "Maximum outstanding monthly balance" means the aggregate outstanding balance for each loan as on the last day of each month.]

(i)    Where the accommodation is provided—

(A)    By Government to a person holding an office or post in connection with the affairs of the Union or of a State;

(B)    By a body or undertaking under the control of Government to any officer of Government whose services have been lent to that body or undertaking (the accommodation itself having been allotted to it by Government),an amount equal to—

(1)    if the accommodation is unfurnished, the rent which has been or would have been determined as payable by such person or officer in accordance with the rules framed by Government for allotment of residences to its officers;

(2)    if the accommodation is furnished, an amount calculated in accordance with sub-clause (i)(1) plus 10 per cent per annum of the original cost of the furniture (including television sets, radio sets, refrigerators, other household appliances and air-conditioning plant or equipment) or if such furniture is hired from a third party, the actual hire charges payable therefor;(ii)    where the accommodation is provided—                                                              

(A)    by the Reserve Bank of India, to any person employed by it;

(B)    by a corporation established by a Central, State or Provincial Act, or by a company in which all the shares are held (whether singly or taken together) by the Government or the Reserve Bank of India or a corporation owned by that Bank, to any person employed by it;

(BB)    by a company [not being a company referred to in sub-clause (ii)(B) or sub-clause (ii)(D)] in which all the shares are held by a corporation referred to in sub-clause (ii)(B) or by a company referred to in that sub-clause, to any person employed by it;

(C)    by a body or undertaking including a society registered under the Societies Registration Act, 1860 (21 of 1860), financed wholly or mainly by the Government, to any person employed by it;

(D)    by a company [not being a company referred to in sub-clause (ii)(B) or sub-clause (ii)(BB)] in which not less than 40 per cent of the shares are held (whether singly or taken together) by the Government or the Reserve Bank of India or a corporation owned by that Bank, to any officer of Government whose services have been lent to it or to any person employed by it after his retirement from the service of Government,an amount equal to—

(1)    if the accommodation is unfurnished, 10 per cent of the salary due to such person or officer, as the case may be, in respect of the period during which the said accommodation was occupied by him during the previous year:

Provided that where the assessee claims and the Assessing Officer is satisfied that the sum arrived at on the aforesaid basis exceeds the fair rental value of the accommodation, the value of the perquisite to the assessee shall be limited to such fair rental value;

(2)    if the accommodation is furnished, an amount calculated in accordance with sub-clause (ii)(1) plus 10 per cent per annum of the original cost of the furniture (including television sets, radio sets, refrigerators, other household appliances and air-conditioning plant or equipment) or if such furniture is hired from a third party, the actual hire charges payable therefor;(iii)    in any other case,—

(A)    the value of rent-free residential accommodation which is not furnished shall ordinarily be a sum equal to 10 per cent of the salary due to the assessee in respect of the period during which the said accommodation was occupied by him during the previous year:

Provided that—

(1)    where the fair rental value of the accommodation is in excess of 20 per cent of the assessee's salary, the value of the perquisite shall be taken to be 10 per cent of the salary increased by a sum equal to the amount by which the fair rental value exceeds 20 per cent of the salary; so, however, that the Assessing Officer may, having regard to the nature of the accommodation, determine the sum by which 10 per cent of the salary is to be increased, as a percentage (not exceeding 100 per cent) of the amount by which the fair rental value exceeds 20 per cent of the salary;

(2)    where the assessee claims, and the Assessing Officer is satisfied that the sum arrived at on the basis provided above exceeds the fair rental value of the accommodation, the value of the perquisite to the assessee shall be limited to such fair rental value;

(B)    where the accommodation is furnished, the value of rent free residential accommodation shall be the aggregate of the following sums, namely:—

(1)    the fair rental value of the accommodation arrived at in accordance with the provisions of sub-clause (iii)(A) as if the accommodation were not furnished; and

(2)    the fair rent for the furniture (including television sets, radio sets, refrigerators, other household appliances and air-conditioning plant or equipment) calculated at 10 per cent per annum of the original cost of such furniture or if such furniture is hired from a third party, the actual hire charges payable therefor.

Explanation 1.—"Salary" includes the pay, allowances, bonus or commission payable monthly or otherwise, but does not include the following, namely:—

(i)    dearness allowance or dearness pay unless it enters into the computation of superannuation or retirement benefits of the assessee concerned;

(ii)    employer's contributions to the provident fund account of the assessee;

(iii)    allowances which are exempted from payment of tax;

(iv)    any allowance in the nature of an entertainment allowance, to the extent such allowance is deductible under clause (ii) of section 16.

Explanation 2.—For the purposes of sub-clause (iii), the fair rental value of accommodation which is not furnished shall be the rent which a similar accommodation would realise in the same locality or the municipal valuation in respect of the accommodation, whichever is higher.

 (b) The value of residential accommodation provided at a concessional rent shall be determined as the sum by which the value computed in accordance with clause (a), as if the accommodation were provided free of rent, exceeds the rent actually payable by the assessee for the period of his occupation during the relevant previous year.

(ba) The benefit to the assessee resulting from the provision by the employer of free services of a sweeper, a gardener or a watchman shall be valued at Rs. 120 per month per person.

c)    (i)   ` The value of a motor-car provided by the employer for use by the assessee exclusively for his private or personal purposes shall be determined as the sum actually expended by the employer on the maintenance and running of the motor-car during the relevant previous year (including remuneration, if any, paid by the employer to the chauffeur) and, where the motor-car is owned by the employer, as the aggregate of such sum and the amount representing the normal wear and tear of the motor-car;

(ii)    the value of a motor-car provided by the employer for use by the assessee partly in the performance of his duties and partly for his private or personal purposes shall be determined to be a sum equal to that part of the amount actually expended by the employer on the maintenance and running of the motor-car during the relevant previous year (including remuneration, if any, paid by the employer to the chauffeur) which can reasonably be attributed to the user of the motor-car by the assessee for his private or personal purposes or, where the motor-car is owned by the employer, the aggregate of such sum and of a sum equal to that part of the amount representing the normal wear and tear of the motor-car which can reasonably be attributed to the user of the motor-car by the assessee for his private or personal purposes; so, however, that where a determination on the basis mentioned above presents difficulty, the value of the perquisite may be determined on the basis provided in the Table below:

TABLE

Value of perquisite per calendar month
1	2	3
	Where the h. p. rating of the car does not exceed 16 or the cubic capacity of the engine does not exceed 1.88 litres	Where the h.p. rating of the car exceeds 16 or the cubic capacity of the engine exceeds 1.88 litres
	Rs.	Rs.
1.     Where the motor-car is owned or hired by the employer and all the expenses on maintenance and running are met or reimbursed to the assessee by the employer.	600	800
2.     Where the motor-car is owned or hired by the employer but the expenses on maintenance and running for the assessee's private or personal purposes are met by the assessee.	200	300:

Provided that where a chauffeur is also provided to run the motor-car, the value of the perquisite as calculated in accordance with this Table shall be increased by a sum of Rs. 300 per month;

(iii)  where one or more motor-cars are owned or hired by the employer of the assessee and the assessee is allowed the use of such motor-car or all or any of such motor-cars (otherwise than wholly and exclusively in the performance of his duties), an amount calculated in accordance with the Table under sub-clause (ii) and the proviso thereto, as if the assessee had been provided one motor-car for use partly in the performance of his duties and partly for his private or personal purposes:

Provided that where two or more motor-cars are allowed to be so used and the h.p. rating of any one of such motor-cars exceeds 16 or the cubic capacity of the engine of any one of such motor-cars exceeds 1.88 litres, the assessee shall be deemed to have been provided by the employer with one motor-car of h.p. rating exceeding 16:

Provided further that where two or more motor-cars are allowed to be so used and a chauffeur is also provided to run any such motor-car, the value of the perquisite as so calculated shall be increased by a sum of Rs. 300 per month;

(iv)   where the assessee owns a motor-car but the actual running or maintenance charges (including remuneration of the chauffeur, if any) are met, or reimbursed to him, by the employer, the value of the perquisite to the assessee shall be determined as the sum actually expended by the employer which, in the opinion of the Assessing Officer, can reasonably be attributed to the user of the car by the assessee otherwise than wholly and exclusively in the performance of his duties;

(v)  the value of a motor-car or motor-cars provided for the use of, or allowed to be used by, the assessee (otherwise than wholly and exclusively in the performance of his duties) at a concessional rate shall be determined as the sum by which the value computed in accordance with the foregoing provisions of this clause exceeds the amount actually payable by the assessee for the use of such motor-car or motor-cars for the period of use during the relevant previous year;

(vi)  the value of the free use by the assessee of any other type of conveyance provided by the employer shall be determined as so much of the sum actually expended by the employer on the maintenance and running of the conveyance during the relevant previous year, and where the conveyance is owned by the employer, as so much of the aggregate of such sum and the amount representing the normal wear and tear of the conveyance, as, in the opinion of the Assessing Officer, can reasonably be attributed to the user by the assessee, otherwise than wholly and exclusively in the performance of his duties;

 (d) the value of the benefit to the assessee resulting from the supply of gas, electric energy or water for his household consumption free of any charge shall be determined as the sum equal to the amount paid on that account by the employer to the agency supplying the gas, electric energy or water, but—

(i)    where such supply is made from resources owned by the employer without purchasing them from any other outside agency, the value therefor shall be taken as nil, and

(ii)    where the Assessing Officer is satisfied that the gas, electric energy or water supply to any assessee are consumed also for the purposes of his official duties, the Assessing Officer shall determine the value of the benefit to the assessee to be equal to the amount paid on that account by the employer to the agency supplying the gas, electric energy or water or 61/4 per cent of the salary of the assessee, whichever is lower;

 (e) the value of the benefit to the assessee resulting from the provision of free education facilities for any member of his household shall be determined as the sum equal to the amount of the expenditure incurred by the employer in that behalf, but where the educational institution itself is maintained and run by the employer for the benefit of all his employees as a group, the value of the perquisite to the assessee shall be determined with reference to the reasonable cost of such education in a similar institution in or near the locality;

(f) the value of any benefit or amenity resulting from the provision by any undertaking engaged in the carriage of passengers or goods to any employee of the undertaking or to members of his family or his dependent relatives, of journey free of cost or at concessional fares, in any conveyance owned by the undertaking for the purpose of transport of passengers or goods shall be taken as nil;

(g) the value of any benefit or amenity not included in the preceding clauses of this rule shall be determined on such basis and in such amount as the Assessing Officer considers fair and reasonable."

Sl. No.

Circumstances

Where the accommo-dation is unfurnished

Where the accommo-dation is furnished

(1)

(2)

(3)

(4)

(1)

Where the accommo-dation is provided by Union or State Govern-ment to their employees either holding office or post in connection with the affairs of Union or State or serving with any body or undertaking under the control of such Government on deputation.

License fee determined by Union or State Government in respect of accommodation in accordance with the rules framed by that government as reduced by the rent actually paid by the employee.

The value of perquisite as determined under col. (3) and increased by 10% per annum of the cost of furniture (including tele-vision sets, radio sets, refrigerators, other household appliances, air conditioning plant or equipment) or if such furniture is hired from a third party, the actual hire charges payable for the same as reduced by any charges paid or payable for the same by the employee during the previous year.        

(2)

Where the accommo-dation is provided by any other employer and

(a)	where the accommo-dation is owned by the employer; or
(b)	where the accommo-dation is taken on lease or rent by the employer.

(i)	10% of salary in cities having popu-lation exceeding 4 lacs as per 1991 census;
(ii)	7.5% of salary in other cities, in respect of the period during

which the said accom-modation was occupied by the employee during the previous year as reduced by the rent, if any, actually paid by the employee.

Actual amount of lease rental paid or payable by the employer or 10% of salary which-ever is lower as redu-ced by the rent, if any, actually paid by the employee.

The value of perquisite as determined under col. (3) and increased by 10% per annum of the cost of furniture (including television sets, radio sets, refrigerators, other household appliances, air conditioning plant or equipment or other similar appliances or gadgets) or if such furniture is hired from a third party, by the actual hire charges payable for the same as reduced by any charges paid or payable for the same by the employee during the previous year.

(3)

Where the accommo-dation is provided by the employer specified in Sl. No. (1) or (2) above in a hotel (except where the employee is provided such accommodation for a period not exceeding in aggregate 15 days on his transfer from one place to another)

Not applicable

24% of salary paid or payable for the previous year or the actual charges paid or payable to such hotel, which is lower, for the period during which such accommodation is provided as reduced by the rent, if any, actually paid or payable by the employee:"

Sl. No.	Circumstances	Where cubic capacity of engine does not exceed 1.6 litres	Where cubic capacity of engine exceeds 1.6 litres
(1)	(2)	(3)	(4)
1.	Where the motor car is owned or hired by the employer and, (a)   is used wholly and exclusively in the perfor-mance of his official duties; (b)       is used exclusi-vely for the private or per- sonal purposesof the employee or any member of his household and the running and mainten-ance expenses are met or reimbursed by the employer. (c)  is used partly in the performance of duties and partly for pri- vate or personal purposes of his own or any member of his household and, (i) the expenses on main- tenance and running are met or reim- bursed by the employer. (ii)    the expenses on running and mainten- ance for such private or per- sonal use are fully met by the assessee.	No value provided thatthe documents speci-fied in clause (B) ofthis sub-rule are main-tained by the employer. Actual amount of expenditure incurred by the employer on the running and main-tenance of motor carduring the relevantprevious year including remuneration, if any, paid by the employer to the chauffeur as increased by the amount representing normal wear and tear of the motor car and as reduced by any amount charged from the employee for such use. Rs. 1,200 (plus Rs. 600, if chauffeur is also provided to run the motor car) Rs. 400 (plus Rs. 600, if chauffeur is provi- ded by the employer to run the motor car)	No value provided that the documents specified in clause (B) of this sub-rule are maintained by the employer. Actual amount of expenditure incurred by the employer on  the running and  maintenance of motor car during the relevant previous year including remuneration, if any, paid by the employer to the chauffeur as increased by the amount representing normal wear and tear of the motor car and as reduced by any amount  charged from the employee for such use. Rs. 1,600 (plus Rs. 600, if chauffeur is also provided to run the motor car) Rs. 600 (plus Rs. 600, if chauffeur is also provided to run the motor car)
2.	Where the employee                owns a motor car but  the actual running    and maintenance      charges (including     remuneration of the chauffeur, if any) are  met or reimbursed to   him by the employer                and,          (i) such reimburse-ment is for the use of the vehicle wholly and exclusively for  official purposes,                (ii)  such reimburse-  ment is for the use of the vehicle partly for official purposes and partly for personal or private purposes of the or any member of his household.	No value provided that the documents specified in clause (B) of this sub-rule are maintained  by the employer. employer. Subject to the provi- sions contained in    clause (B) of this sub-rule, the actual amount of expenditure incur- ed by the employer as                 reduced by the amount  specified in col. (1)(c)(i) above.	No value provided that the documents specified in clause (B) of this sub-rule are maintained by the Subject to the provisions contained in clause (B) of this sub-rule, the actual amount of expenditure incurred by the employer as reduced by the amount specified in col. (1)(c)(i) above.
3.	Where the employee                owns any other auto-motive conveyance  but the actual running and maintenance      charges are met or    reimbursed to him by the employer and, (i)  such reimburse- ment is for the use of the vehicle wholly and exclu- sively for official purposes,	No value provided that the documents speci-fied in clause (B) of this sub-rule are main-tained by the employer.	Not applicable
	(ii)  such reimburse-  ment is for the use of the vehicle partly for official purposes and partly for personal or private purposes of the employee.	Subject to the provi-sions contained in clause (B) of this sub-rule, the actual amount of expenditure incurred by the employer as reduced by an amount of Rs. 600:

Provided that where one or more motor cars are owned or hired by the employer and the employee or any member of his household are allowed the use of such motor car or all or any of such motor cars (otherwise than wholly and exclusively in the performance of his duties), the value of perquisite shall be the amount calculated in respect of one car in accordance with item (1)(c)(i) of the Table II as if the employee had been provided one motor car for use partly in the performance of his duties and partly for his private or personal purposes and the amount calculated in respect of the other car or cars in accordance with item (1)(b) of the Table II as if he had been provided with such car or cars exclusively for his private or personal purposes.

1[(B) Where the employer or the employee claims that the motor-car is used wholly and exclusively in the performance of official duty or that the actual expenses on the running and maintenance of the motor-car owned by the employee for official purposes is more than the amounts deductible in item 2(ii) or 3(ii) of the above Table, he may claim a higher amount attributable to such official use and the value of perquisite in such a case shall be the actual amount of charges met or reimbursed by the employer as reduced by such higher amount attributable to official use of the vehicle provided that the following conditions are fulfilled:—

(a) the employer has maintained complete details of journey undertaken for official purpose which may include date of journey, destination, mileage and the amount of expenditure incurred thereon;

(b) the employer gives a certificate to the effect that the expenditure was incurred wholly and exclusively for the performance of official duties.]

Explanation.—For the purposes of this sub-rule, the normal wear and tear of a motor car shall be taken at 10% per annum of the actual cost of the motor car or cars."

1 Substituted by the Income-tax (Seventeenth Amendment) Rules, 2002, w.e.f. 1-8-2002. Prior to the substitution, clause (B), as originally enacted, read as under:

"(B) Where the employer or the employee claims that the motor car is used wholly and exclusively in the performance of official duty or that the actual expenses on the running and maintenance of the motor car owned by the employee for official purposes is more than the amounts deductible in item 2(ii) or 3(ii) of the above Table, he may claim a higher amount attributable to such official use and the value of perquisite in such a case shall be the actual amount of charges met or reimbursed by the employer as reduced by such higher amount attributable to official use of the vehicle provided that the following conditions are fulfilled:—

(i)    the employer has maintained complete details of journey undertaken for official purpose which may include date of journey, destination, mileage, and the amount of expenditure incurred thereon;

(ii)    the employee gives a certificate that the expenditure was incurred wholly and exclusively for the performance of his official duty;

(iii)    the supervising authority of the employee, wherever applicable, gives a certificate to the effect that the expenditure was incurred wholly and exclusively for the performance of official duties."

(a)    Complete details in respect of such expenditure is maintained by the employer which may, inter alia, include the date of expenditure and the nature of expenditure;

(b)    The employer gives a certificate for such expenditure to the effect that the same was incurred wholly and exclusively for the performance of official duties.

The amount so determined shall be reduced by the amount, if any paid or recovered from the employee for such benefit or amenity.]

(vi)  (A)    The value of benefit to the employee resulting from the payment or reimbursement by the employer of any expenditure incurred (including the amount of annual or periodical fee) in a club by him or by any member of his household shall be determined to be the actual amount of expenditure incurred or reimbursed by the employer on that account. The amount so determined shall be reduced by the amount, if any paid or recovered from the employee for such benefit or amenity. However, where the employer has obtained corporate membership of the club and the facility is enjoyed by the employee or any member of his household, the value of perquisite shall not include the initial fee paid for acquiring such corporate membership.

4[(B)    Nothing contained in this sub-rule shall apply if such expenditure is incurred wholly and exclusively for business purposes and the following conditions are fulfilled:—

(a)    complete details in respect of such expenditure is maintained by the employer which may, inter alia, include the date of expenditure, the nature of expenditure and its business expediency;

(b)    the employer gives a certificate for such expenditure to the effect that the same was incurred wholly and exclusively for the performance of official duties.]

(C)    Nothing contained in this sub-rule shall apply for use of health club, sports and similar facilities provided uniformly to all employees by the employer."

 1 Substituted for "food" by the Income-tax (Thirteenth Amendment) Rules, 2004, w.r.e.f. 1- 10-2004.

2 Substituted by the Income-tax (Thirteenth Amendment) Rules, 2004, w.r.e.f. 1-10-2004. Prior to substitution, the proviso read as under:

"Provided that nothing contained in this sub-rule shall apply to free meals provided by the employer during office hours at office or business premises or through paid vouchers which are not transferable and usable only at eating joints if the value thereof in either case is upto Rs. 50 per meal or to tea or snacks provided during office hours or to free meals during working hours provided in a remote area or an offshore installation."

3 Substituted by the Income-tax (Seventeenth Amendment) Rules, 2002, w.e.f. 1-8-2002.

Prior to the substitution, clause (v), as originally enacted, read as under:

"(v)    The amount of expenses including membership fees and annual fees incurred by the employee or any member of his household, which is charged to a credit card (including any add-on-card), provided by the employer or otherwise, paid for or reimbursed by the employer shall be taken to be the value of perquisite chargeable to tax. However, there shall be no value of such benefit where the expenses are incurred wholly and exclusively for official purposes and the following conditions are fulfilled:

 (a)    complete details in respect of such expenditure are maintained by the employer which may, inter alia, include the date of expenditure and the nature of expenditure;

 (b)    it is certified by the employee that such expenditure was incurred wholly and exclusively for the performance of official duty;

 (c)    the supervising authority of the employee gives a certificate for such expenditure to the effect that the same was incurred wholly and exclusively for the performance of official duties;

 (d)    where an employee incurs expenditure on entertainment and claims the same to have been incurred wholly and exclusively in the performance of his duties, details of such entertainment expenses, inter alia, include the nature and purpose of entertainment and persons entertained.

The amount so determined shall be reduced by the amount, if any paid or recovered from the employee for such benefit or amenity."

4 Substituted by the Income-tax (Seventeenth Amendment) Rules, 2002, w.e.f. 1-8-2002. Prior to the substitution, sub-clause (B), as originally enacted, read as under:

"(B)    Nothing contained in this sub-rule shall apply if such expenditure is incurred wholly and exclusively for business purposes and the following conditions are fulfilled,—

 (a)    complete details in respect of such expenditure are maintained by the employer which may, inter alia, include the date of expenditure, the nature of expenditure and its business expediency;            

 (b)    it is certified by the employee that such expenditure was incurred wholly and exclusively for the performance of official duty;

 (c)    the supervising authority of the employee gives a certificate for such expenditure to the effect that the same was incurred wholly and exclusively for the performance of official duties;

 (d)    where an employee incurs expenditure on entertainment and claims the same to have been incurred wholly and exclusively for the performance of his duties, details of such entertainment expenses, inter alia, include the nature and purpose of entertainment, persons entertained and business expediency for such entertainment."

[1][86] [3A. Exemption of medical benefits from perquisite value in respect of medical treatment of prescribed diseases or ailments in hospitals approved by the Chief Commissioner

(1) [2][87] [In granting approval to any hospital other than a hospital for Indian system of medicine and homoeopathic treatment for the purposes of sub-clause (b) of clause (ii) of the proviso to sub-clause (vi) of clause (2) of section 17,] the Chief Commissioner shall satisfy himself that the hospital is registered with the local authority and fulfils the following requirements, namely:—

(i) The building used for the hospital complies with the municipal bye-laws in force.

(ii) The rooms are well ventilated, lighted and are kept in clean and hygienic conditions.

(iii) At least ten iron spring beds are provided for patients.

(iv) At least one properly equipped operation theatre is provided, with minimum floor space of 180 square feet and with a separate sterilisation room.

(v) At least one labour room is provided, with minimum floor space of 180 square feet, in case the hospital provides medical service for maternity cases.

(vi) Aseptic conditions are maintained in the operation theatre and the labour room.

(vii) A duty room is provided for the nursing staff on duty.

(viii) Adequate space for storage of medicines, food articles, equipments, etc. is provided.

(ix) The water used in the hospital or nursing home is fit for drinking.

(x) Adequate arrangements are made for isolating septic and infectious patients.

(xi) The hospital is provided with and maintains:—

(a) high pressure sterilizer and instrument sterilizer;

(b) oxygen cylinders and necessary attachments for giving oxygen;

(c) adequate surgical equipments, instruments and apparatus including intravenous apparatus;

(d) a pathological laboratory for testing of blood, urine and stool;

(e) electro-cardiogram monitoring system;

(f) stand-by generator for use in case of power failure.

(xii) There is at least one qualified doctor available on duty around the clock for every twenty beds or fraction thereof.

(xiii) In hospitals providing intensive care unit facilities, there are at least two qualified doctors available on duty around the clock exclusively for such intensive care unit.

(xiv) One nurse is on duty around the clock for every five beds or a fraction thereof.

(xv) In hospitals providing intensive care unit facilities, there are at least four nurses provided exclusively for every four beds or fraction thereof for such intensive care unit.

(xvi) The hospital maintains record of health of every patient containing information about the patient's name, address, occupation, sex, age, date of admission, date of discharge, diagnosis of disease and treatment undertaken.

[3][88] [(1A) In granting approval to any hospital for Indian system of medicine and homoeopathic treatment for the purposes of sub-clause (b) of clause (ii) of the proviso to sub-clause (vi) of clause (2) of section 17, the Chief Commissioner shall satisfy himself that the hospital fulfils the conditions specified vide Office Memorandum, dated the 6th June, 2002, by the Department of Indian Systems of Medicine and Homoeopathy, Ministry of Health and Family Welfare for approval of private hospitals for Indian system of medicine and homoeopathic treatment to Central Government Health Scheme beneficiaries and Central Government employees.]

(2) For the purpose of sub-clause (b) of clause (ii) of the proviso to [4][89] [sub-clause (vi) of] clause (2) of section 17, the prescribed diseases or ailments shall be the following namely:—

(a) cancer;

(b) tuberculosis;

(c) acquired immunity deficiency syndrome;

(d) disease or ailment of the heart, blood, lymph glands, bone marrow, respiratory system, central nervous system, urinary system, liver, gall bladder, digestive system, endocrine glands or the skin, requiring surgical operation;

(e) ailment or disease of the eye, ear, nose or throat, requiring surgical operation;

(f) fracture in any part of the skeletal system or dislocation of vertebrae requiring surgical operation or orthopaedic treatment;

(g) gynaecological or obstetric ailment or disease requiring surgical operation, caesarean operation or laperoscopic intervention;

(h) ailment or disease of the organs mentioned at (d), requiring medical treatment in a hospital for at least three continuous days;

(i) gynaecological or obstetric ailment or disease requiring medical treatment in a hospital for at least three continuous days;

(j) burn injuries requiring medical treatment in a hospital for at least three continuous days;

(k) mental disorder — neurotic or psychotic — requiring medical treatment in a hospital for at least three continuous days;

(l) drug addiction requiring medical treatment in a hospital for at least seven continuous days;

(m) anaphylectic shocks including insulin shocks, drug reactions and other allergic manifestations requiring medical treatment in a hospital for at least three continuous days.

Explanation.—For the purpose of this rule—

(a) "qualified doctor" means a person who holds a degree recognised by the Medical Council of India and is registered by the Medical Council of any State;

(b) "nurse" means a person who holds a certificate of a recognised Nursing Council and is registered under any law for the registration of nurses;

(c) "surgical operation" includes treatment by modern methodology such as angioplasty, dialysis, lithotropsy, laser or cryo-surgery.]

B.—Income from house property

[5][90] [4. Unrealised rent

For the purposes of the Explanation below sub-section (1) of section23, the amount of rent which the owner cannot realise shall be equal to the amount of rent payable but not paid by a tenant[6][91] of the assessee and so proved to be lost and irrecoverable where,—

(a) the tenancy is bona fide;

(b) the defaulting tenant has vacated, or steps have been taken to compel him to vacate the property;

(c) the defaulting tenant is not in occupation of any other property of the assessee;

(d) the assessee has taken all reasonable steps to institute legal proceedings[7][92] for the recovery of the unpaid rent or satisfies the Assessing Officer that legal proceedings would be useless.]

C.—Profits and gains of business or profession

[8][93] [5. Depreciation[9][94]

(1) Subject to the provisions of sub-rule (2), the allowance under clause (ii) of sub-section (1) of section 32 in respect of depreciation of any block of assets shall be calculated at the percentages specified in the secondcolumn of the Table in Appendix I to these rules on the written-down value of such block of assets as are used for the purposes of the business or profession of the assessee at any time during the previous year.[10][95]

[11][96] [(1A) The allowance under clause (i) of sub-section (1) of section 32 of the Act in respect of depreciation of assets acquired on or after 1st day of April, 1997 shall be calculated at the percentage specified in the second column of the Table in Appendix IA of these rules on the actual cost thereof to the assessee as are used for the purposes of the business of the assessee at any time during the previous year:

Provided that the aggregate depreciation allowed in respect of any asset for different assessment years shall not exceed the actual cost of the said asset:

Provided further that the undertaking specified in clause (i) of sub-section (1) of section 32 of the Act may, instead of the depreciation specified in Appendix IA, at its option, be allowed depreciation under sub-rule (1) read with Appendix I, if such option is exercised before the due date for furnishing the return of income under sub-section (1) of section 139 of the Act,

(a) for the Assessment Year 1998-99, in the case of an undertaking which began to generate power prior to 1st day of April, 1997; and

(b) for the Assessment Year relevant to the previous year in which it begins to generate power, in case of any other undertaking:

Provided also that any such option once exercised shall be final and shall apply to all the subsequent assessment years.]

(2) Where any new machinery or plant is installed during the previous year relevant to the assessment year commencing on or after the 1st day of April, 1988, for the purposes of business of manufacture or production of any article or thing and such article or thing—

(a) is manufactured or produced by using any technology (including any process) or other know-how developed in, or

(b) is an article or thing invented in,

a laboratory owned or financed by the Government or a laboratory owned by a public sector company or a University or an institution recognised in this behalf by the Secretary, Department of Scientific and Industrial Research, Government of India,such plant or machinery shall be treated as a part of block of assets qualifying for depreciation at the rate of [12][97] [40 per cent] of written down value, if the following conditions are fulfilled, namely:—

(i) the right to use such technology (including any process) or other know-how or to manufacture or produce such article or thing has been acquired from the owner of such laboratory or any person deriving title from such owner;

(ii) the return furnished by the assessee for his income, or the income of any other person in respect of which he is assessable, for any previous year in which the said machinery or plant is acquired, shall be accompanied by a certificate from the Secretary, Department of Scientific and Industrial Research, Government of India, to the effect that such article or thing is manufactured or produced by using such technology (including any process) or other know-how developed in such laboratory or is an article or thing invented in such laboratory; and

(iii) the machinery or plant is not used for the purpose of business of manufacture or production of any article or thing specified in the list in the Eleventh Schedule to the Act.

Explanation.—For the purposes of this sub-rule,—

(a) "laboratory financed by the Government" means a laboratory owned by any body [including a society registered under the Societies Registration Act, 1860 (21 of 1860)], and financed wholly or mainly by the Government;

(b) "public sector company" means any corporation established by or under any Central, State or Provincial Act or a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956); and

(c) "University" means a University established or incorporated by or under a Central, State or Provincial Act and includes an institution declared under section 3 of the University Grants Commission Act, 1956 (3 of 1956), to be a University for the purposes of that Act.]

[13][98] [5A. Form of report by an accountant for claiming deduction under section 32(1)(iia)

The report from an accountant which is required to be furnished by the assessee under the third proviso toclause (iia) of sub-section (1) of section 32 shall be in Form No. 3AA.]

[14][99] [[15][100] [5AA]. Prescribed authority[16][101] for investment allowance[17][102]

For the purposes of sub-section (2B) of section 32A, the "prescribed authority" shall be the Secretary, Department of [18][103] [Scientific and Industrial Research], Government of India.]

[19][104] [5AB. Report of audit of accounts to be furnished under section 32AB(5)[20][105]

The report of audit of the accounts of an assessee, which is required to be furnished under sub-section (5) of section 32AB shall be in Form No. [21][106] [3AAA].]

[22][107] [5AC. Report of audit of accounts to be furnished under section 33AB(2)[23][108]

The report of audit of accounts of an assessee, which is required to be furnished under sub-section (2) of section 33AB, shall be in Form No. 3AC.]

[24][109] [5AD. Report of audit of accounts to be furnished under section 33ABA(2)

The report of audit of the accounts of an assessee, which is required to be furnished under sub-section (2) of section 33ABA, shall be in Form No. 3AD.]

[25][110] [[26][111] [5B]. Development rebate[27][112]

The deduction to be allowed by way of development rebate in respect of any ship or machinery or plant referred to in sub-section (1A) of section 33 shall be a sum equivalent to—

[28][113] [(a) in the case of any such ship—

(i) where the ship is acquired by the assessee at any time before the expiry of seven years from the date she was built, thirty per cent of the actual cost of the ship to the assessee; and

(ii) in any other case, twenty per cent of the actual cost of the ship to the assessee;]

(b) in the case of any such machinery or plant installed after the 31st day of March, 1964—

(i) where it is installed before the 1st day of April, 1966 for the purposes of business of mining coal, twenty per cent of the actual cost of the machinery or plant to the assessee; and

(ii) in any other case, ten per cent of the actual cost of the machinery or plant to the assessee.

Explanation.—In this rule, "actual cost" shall have the meaning assigned to it in clause (1) of section 43.]

[29][114] [5C. Guidelines, form and manner in respect of approval under clause (ii) and clause (iii) of sub-section (1) of section 35

(1) n application for approval,—

(i) under clause (ii) of sub-section (1) of section 35 by a scientific research association in duplicate in Form No. 3CF-I;

(ii) under clause (ii) or clause (iii) of sub-section (1) of section 35 by a university, college or other institution in duplicate in Form No. 3CF-IIshall be made, at any time during the financial year immediately preceding the assessment year from which the approval is sought, to the Commissioner of Income-tax or the Director of Income-tax having jurisdiction over the applicant.

(2) nnexure to the application in Form No. 3CF-I shall be filled out if the association claims exemption under clause (21) of section 10 of the Income-tax Act.

(3) he applicant shall send a copy of the application in Form No. 3CF-I or, as the case may be, Form No. 3CF-II to Member (IT), Central Board of Direct Taxes accompanied by the acknowledgement receipt as evidence of having furnished the application Form in duplicate in the office of the Commissioner of Income-tax or the Director of Income-tax having jurisdiction over the case.

(4) he period of one year, as specified in the fourth proviso to sub-section (1) of section 35, before the expiry of which approval is to be granted or the application is to be rejected by the Central Government shall be reckoned from the end of the month in which the application Form from the applicant for approval is received in the office of Member (IT), Central Board of Direct Taxes.

(5) f any defect is noticed in the application in Form No. 3CF-I or Form No. 3CF-II or if any relevant document is not attached thereto, the Commissioner of Income-tax or, as the case may be, the Director of Income-tax shall serve a deficiency letter on the applicant, before the expiry of one month from the date of receipt of the application Form in his office.

(6) he applicant shall remove the deficiency within a period of fifteen days from the date of service of the deficiency letter or within such further period which, on an application made in this behalf may be extended, so however, that the total period for removal of deficiency does not exceed thirty days, and if the applicant fails to remove the deficiency within the period of thirty days so allowed, the Commissioner of Income-tax or, as the case may be, the Director of Income-tax shall send his recommendation for treating the application as invalid to the Member (IT), Central Board of Direct Taxes.

(7) he Central Government, if satisfied, may pass an order treating the application as invalid.

(8) f the application Form is complete in all respects, the Commissioner of Income-tax or, as the case may be, the Director of Income-tax, may make such inquiry as he may consider necessary regarding the genuineness of the activity of the association or university or college or other institution and send his recommendation to the Member (IT) for grant of approval or rejection of the application before the expiry of the period of three months to be reckoned from the end of the month in which the application Form was received in his office.

(9) he Central Government may before granting approval under clause (ii) or clause (iii) shall call for such documents or information from the applicant as it may consider necessary and may get any inquiry made for verification of the genuineness of the activity of the applicant.

(10) he Central Government may, under sub-section (1) of section 35, issue the notification to be published in the Official Gazette granting approval to the association or university or college or other institution or for reasons to be recorded in writing reject the application.

(11) he Central Government may withdraw the approval granted under clause (ii) or clause (iii) of sub-section (1) of section 35 if it is satisfied that the scientific research association or university or college or other institution has ceased its activities or its activities are not genuine or are not being carried out in accordance with all or any of the conditions under rule 5D or rule 5E.

(12) o order treating the application as invalid or rejecting the application or withdrawing the approval, shall be passed without giving a reasonable opportunity of being heard to the scientific research association or university or college or other institution.

(13) copy of the order invalidating or rejecting the application or withdrawing the approval shall be communicated to the applicant, the Assessing Officer and the Commissioner of Income-tax or, as the case may be, the Director of Income-tax.

5D. onditions subject to which approval is to be granted to a Scientific Research Association under clause (ii) of sub-section (1) of section 35

(1) he sole object of the applicant scientific research association shall be to undertake scientific research.

(2) he applicant scientific research association shall carry on the scientific research activity by itself.

(3) he scientific research association seeking approval under clause (ii) of sub-section (1) of section 35 shall maintain books of account and get such books audited by an accountant as defined in the Explanation to sub-section (2) of section 288 and furnish the report of such audit duly signed and verified by such accountant to the Commissioner of Income-tax or the Director of Income-tax having jurisdiction over the case, by the due date of furnishing the return of income under sub-section (1) of section 139.

(4) he scientific research association shall maintain a separate statement of donations received and amount applied for scientific research and a copy of such statement duly certified by the auditor shall accompany the report of audit referred to in sub-rule (3).

(5) f the Commissioner of Income-tax or the Director of Income-tax is satisfied that the scientific research association,—

(a) is not maintaining books of account, or

(b) has failed to furnish its audit report, or

(c) has not furnished its statement of the sums received and the sums applied for scientific research, or

(d) has ceased to carry on its research activities, or its activities are not genuine, or

(e) is not fulfilling the conditions subject to which approval was granted to it,he may after making appropriate enquiries furnish a report on the circumstances referred to in clauses (a) to (e) above to the Central Government within six months from the date of furnishing the return of income under sub-section (1) of section 139.

5E. onditions subject to which approval is to be granted to a University, College or other Institution under clause (ii) and clause (iii) of sub-section (1) of section 35

(1) he sum paid to a university, college or other institution shall be used for scientific research and research in social science or statistical research.

(2) he applicant university, college or other institution shall carry out scientific research, research in social science or statistical research through its faculty members or its enrolled students.

(3) university or college or other institution approved under clause (ii) or clause (iii) of sub-section (1) of section 35 shall maintain separate books of account in respect of the sums received by it for scientific research or, as the case may be, for research in social science or statistical research, reflect therein the amount used for carrying out research, get such books of account audited by an accountant, as defined in the Explanation to sub-section (2) of section 288 and furnish the report of such audit duly signed and verified by such accountant to the Commissioner of Income-tax or the Director of Income-tax having jurisdiction over the case, by the due date of furnishing the return of income under sub-section (1) of section 139.

(4) he university or college or other institution shall maintain a separate statement of donations received and the amount used for research and a copy of such statement duly certified by the auditor shall accompany the report of audit referred to in sub-rule (3).

(5) f the Commissioner of Income-tax or the Director of Income-tax is satisfied that the university or college or other institution,—

(a) is not maintaining separate books of account for research activities, or

(b) has failed to furnish its audit report, or

(c) has not furnished its statement of the sums received and the sums used for research, or

(d) has ceased to carry on its research activities, or its activities are not genuine, or

(e) is not fulfilling the conditions subject to which approval was granted to it,he may after making appropriate enquiries furnish a report on the circumstances referred to in clauses (a) to (e) above to the Central Government within six months from the date of furnishing the return of income under section 139(1).]

[30][115] [6. Prescribed authority[31][116] for expenditure on scientific research

(1) or the purposes of [32][117] [clause (i) of] [33][118] [sub-section (1) and sub-section (2A) of] section 35, the prescribed authority shall be the Director General (Income-tax Exemptions) in concurrence with the Secretary, Department of Scientific and Industrial Research, Government of India.

[34][119] [(1A) or the purposes of sub-section (2AA) of section 35, the prescribed authority shall be:—

(a) in the case of a National Laboratory or a University or an Indian Institute of Technology, the head of the National Laboratory or the University or the Indian Institute of Technology, as the case may be; and

(b) in the case of a specified person, the Principal Scientific Adviser to the Government of India.]

[35][120] [(1B) or the purposes of sub-section (2AB) of section 35, the prescribed authority shall be the Secretary, Department of Scientific and Industrial Research.]

[36][121] [(2) * * *]]

[37][122] [(3) The application for obtaining approval under sub-section (2AA) of section 35 shall be made by a sponsor in Form No. 3CG.

Explanation.—For the purposes of this rule 'sponsor' means a person who makes an application in Form No. 3CG.]

[38][123] [(4) The application required to be furnished by a company under sub-section (2AB) of section 35 shall be in Form No. 3CK.]

[39][124] [(5) The head of the National Laboratory or the University or the Indian Institute of Technology [40][125] [or the Principal Scientific Adviser to the Government of India] shall, if he is satisfied that it is feasible to carry out the scientific research programme then, subject to other conditions prescribed in this rule and section 35(2AA) of the Act, pass an order in writing in Form No. 3CH:

Provided that a reasonable opportunity of being heard shall be granted to the sponsor before rejecting an application:

Provided further that an order under this rule shall be passed within two months of the receipt of the application under sub-rule (1A):]

[41][126] [Provided also that the Principal Scientific Adviser to the Government of India may authorise an officer who is not below the rank of a Deputy Secretary to issue such order, after the scientific research programme has been approved by him.]

[42][127] [(5A) he prescribed authority shall, if he is satisfied that the conditions provided in this rule and in sub-section (2AB) of section 35 of the Act are fulfilled, pass an order in writing in Form No. 3CM:

Provided that a reasonable opportunity of being heard shall be granted to the company before rejecting an application.

[43][128] [* * *]

(6) he [44][129] [National Laboratory, [45][130] [University, Indian Institute of Technology or specified person] shall issue a receipt of payment for carrying out an approved programme of scientific research under sub-section (2AA), in Form No. 3CI.

[46][131] [(7) Approval of a programme under sub-section (2AA) shall be subject to the following conditions:—

(a) The programme should not relate purely to market research, sales promotion, quality control, testing, commercial production, style changes, routine data collection or activities of a like nature;

(b) The prescribed authority shall submit its report to the Director General (Income-tax Exemptions) in Form No. 3CJ within a period of three months from the date of granting approval to the programme:

[47][132] [Provided that the officer authorised by the prescribed authority, being the Principal Scientific Adviser to the Government of India, under sub-rule (5) shall submit such report to the Director General (Income-tax Exemptions);]

(c) The sponsor and the National Laboratory, [48][133] [University, Indian Institute of Technology or specified person], as the case may be, shall submit to the Director General (Income-tax Exemptions) a yearly statement showing progress of implementation of the approved programme and actuals of expenditure incurred thereon;

(d) The prescribed authority shall not extend the duration of the programme or approve any escalation in costs;

(e) The National Laboratory, [49][134] [University, Indian Institute of Technology or specified person], as the case may be, shall maintain a separate account for each approved programme; which shall be audited annually and a copy thereof shall be furnished to the Director General (Income-tax Exemptions) by 31st day of October of each succeeding year;

(f) Assets acquired by the prescribed authority for executing the approved programme shall not be disposed of without the approval of the Director General (Income-tax Exemptions);

(g) On completion of the approved programme, a completion certificate along with a copy of the report on the research activities carried out and salient features of the result obtained and its further application for commercial exploitation shall be jointly submitted by the sponsor and the National Laboratory, [50][135] [University, Indian Institute of Technology or specified person] to the Director General (Income-tax Exemptions);

(h) A copy of the audited statement of accounts for the approved programme shall be submitted by the Head of the National Laboratory, University or Indian Institute of Technology [51][136] [or the Principal Scientific Adviser to the Government of India] to the Director General (Income-tax Exemptions) within six months of the completion of the programme.]

[52][137] [(7A) Approval of expenditure incurred on in-house research and development facility by a company under sub- section (2AB) of section 35 shall be subject to the following conditions, namely:—

(a) The facility should not relate purely to market research, sales promotion, quality control, testing, commercial production, style changes, routine data collection or activities of a like nature;

(b) The prescribed authority shall submit its report in relation to the approval of in-house Research and Development facility in Form No. 3CL to the Director General (Income-tax Exemptions) within sixty days of its granting approval;\

(c) The company shall maintain a separate account for each approved facility; which shall be audited annually and a copy thereof shall be furnished to the Secretary, Department of Scientific and Industrial Research by 31st day of October of each succeeding year.

Explanation.—For the purposes of this sub-rule the expression "audited" means the audit of accounts by an accountant, as defined in the Explanation below sub-section (2) of section 288 of the Income-tax Act, 1961;

(d) Assets acquired in respect of development of scientific research and development facility shall not be disposed off without the approval of the Secretary, Department of Scientific and Industrial Research.]

[53][138] [6A. * * *]

[54][139] [6AA. * * *]

[55][140] [[56][141] [6AAA]. Prescribed authority[57][142] for the purposes of sections 35CC[58][143] and 35CCA

For the purposes of section 35CC and section 35CCA,—

(i) The "prescribed authority" to approve the programme of rural development referred to in sub-section (1) of section 35CC and in clause (a) of sub-section (1) of section 35CCA shall be the Committee consisting of the following, namely:—

(a) the [59][144] [Chief Commissioner or Commissioner] of Income-tax who exercises jurisdiction over the State or, as the case may be, the Union territory in which the programme of rural development is to be carried out .......... Chairman;

 (b) an Officer not below the rank of a Secretary to the Government of the State or, as the case may be, the Union territory in which the programme of rural development is to be carried out .......... Member;

(ii) the "prescribed authority" to approve an association or institution referred to in clause (a) or clause (b) of sub-section (1) of section 35CCA shall be the Committee consisting of the following, namely:—

(a) the [60][145] [Chief Commissioner or Commissioner] of Income-tax, who exercises jurisdiction over the State or, as the case may be, the Union territory in which the principal office of the association or institution is situated .......... Chairman;

(b) an Officer not below the rank of a Secretary to the Government of the State or, as the case may be, the Union territory in which the principal office of the association or institution is situated .......... Member:

Provided that where in a case whether falling under clause (i) or clause (ii) two or more [61][146] [Chief Commissioners or Commissioners] exercise jurisdiction over the State or, as the case may be, the Union territory, the Board may, by notification in the Official Gazette, empower the [62][147] [Chief Commissioner or Commissioner] specified in this behalf to be the Chairman of the Committee.

Explanation.—In this rule, "programme of rural development" shall have the meaning assigned to it in the Explanation to sub-section (1) of section 35CC of the Income-tax Act.]

[63][148] [6AAB. * * *]

[64][149] [6AAC. Prescribed authority[65][150] for the purposes of section 35CCB

For the purposes of section 35CCB, the "prescribed authority" shall be the Secretary, Department of Environment, Government of India.]

[66][151] [[67][152] [6AB]. Form of audit report for claiming deductions under sections 35D and 35E

The report of audit of the accounts of an assessee, other than a company or a co-operative society, which is required to be furnished under sub-section (4) of section 35D or sub-section (6) of section 35E shall be in [68][153] [Form No. 3AE].]

[69][154] [6ABA. Computation of aggregate average advances for the purposes of clause (viia) of sub-section (1) of section 36

For the purposes of clause (viia) of sub-section (1) of section 36, the aggregate average advances made by the rural branches of a scheduled bank shall be computed in the following manner, namely:—

(a) the amounts of advances made by each rural branch as outstanding at the end of the last day of each month comprised in the previous year shall be aggregated separately;

(b) the sum so arrived at in the case of each such branch shall be divided by the number of months for which the outstanding advances have been taken into account for the purposes of clause (a);

(c) the aggregate of the sums so arrived at in respect of each of the rural branches shall be the aggregate average advances made by the rural branches of the scheduled bank.

Explanation.—In this rule, "rural branch" and "scheduled bank" shall have the meanings assigned to them in the Explanation to clause (viia) of sub-section (1) of section 36.]

[70][155] [6ABAA. Conditions to be fulfilled for being notified as an infra-structure facility[71][156]

The conditions to be fulfilled by a public facility to be eligible to be notified as an infrastructure facility in accordance with the provisions of clause (d) of the Explanation to clause (viii) of sub-section (1) of section 36 shall be the following, namely:—

(a) it is owned by a company registered in India or by a consortium of such companies or by an authority or a board or a corporation or any other body established or constituted under the Central or State Act;

(b) it has entered into an agreement with the Central Government or a State Government or a local authority or any other statutory body for (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining a new infrastructure facility similar in nature to an infrastructure facility referred to in the Explanation to clause (i) of sub-section (4) of section 80-IA;

(c) it has started or starts operating and maintaining such infrastructure facility on or after the 1st day of April, 1995.]

[72][157] [6ABB. Form of report for claiming deduction under clause (xi) of sub-section (1) of section 36

The report of an accountant, which is required to be furnished under clause (xi) of sub-section (1) of section 36 shall be in Form No. 3BA.]

[73][158] [6AC. * * *]

[74][159] [6B. * * *]

[75][160] [6C. * * *]

[76][161] [6D. * * *]

[77][162] [[78][163] 6DD. Cases and circumstances in which payment in a sum exceeding twenty thousand rupees may be made otherwise than by an account payee cheque drawn on a bank or account payee bank draft[79][164]

No disallowance under clause (a) of sub-section (3)[80][165] of section 40A shall be made and no payment shall be deemed to be the profits and gains of business or profession under clause (b) of sub-section (3) of section 40A where any payment in a sum exceeding twenty thousand rupees is made otherwise than by an account payee cheque drawn on a bank or account payee bank draft in the cases and circumstances specified hereunder, namely:—

(a) where the payment is made to—

(i) the Reserve Bank of India or any banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949);

(ii) the State Bank of India or any subsidiary bank as defined in section 2 of the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959);

(iii) any co-operative bank or land mortgage bank;

(iv) any primary agricultural credit society or any primary credit society as defined under section 56 of the Banking Regulation Act, 1949 (10 of 1949);

(v) the Life Insurance Corporation of India established under section 3 of the Life Insurance Corporation Act, 1956 (31 of 1956);

[81][166] (b) where the payment is made to the Government and, under the rules framed by it, such payment is required to be made in legal tender;

(c) where the payment is made by—

(i) any letter of credit arrangements through a bank;

(ii) a mail or telegraphic transfer through a bank;

(iii) a book adjustment from any account in a bank to any other account in that or any other bank;

(iv) a bill of exchange made payable only to a bank

(v) the use of electronic clearing system through a bank account;

(vi) a credit card;

(vii) a debit card.

Explanation.—For the purposes of this clause and clause (g), the term "bank" means any bank, banking company or society referred to in sub-clauses (i) to (iv) of clause (a) and includes any bank [not being a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949)], whether incorporated or not, which is established outside India;

[82][167] (d) where the payment is made by way of adjustment against the amount of any liability incurred by the payee for any goods supplied or services rendered by the assessee to such payee;

(e) where the payment is made for the purchase of—

(i) 83][168] agricultural or forest produce; or

(ii) 84][169] the produce of animal husbandry (including livestock, meat, hides and skins)[85][170] or dairy or poultry farming; or

(iii) fish or fish products; or

(iv) the products of horticulture or apiculture, to the cultivator, grower or producer[86][171] of such articles, produce or products;

(f) where the payment is made for the purchase of the products manufactured or processed without the aid of power in a cottage industry, to the producer of such products;

(g) where the payment is made in a village or town, which on the date of such payment is not served by any bank, to any person who ordinarily resides, or is carrying on any business, profession or vocation, in any such village or town;

(h) where any payment is made to an employee of the assessee or the heir of any such employee, on or in connection with the retirement, retrenchment, resignation, discharge or death of such employee, on account of gratuity, retrenchment compensation or similar terminal benefit and the aggregate of such sums payable to the employee or his heir does not exceed fifty thousand rupees;

(i) where the payment is made by an assessee by way of salary to his employee after deducting the income-tax from salary in accordance with the provisions of section 192 of the Act, and when such employee—

(i) is temporarily posted for a continuous period of fifteen days or more in a place other than his normal place of duty or on a ship; and

 (ii) does not maintain any account in any bank at such place or ship;

(j) where the payment was required to be made on a day on which the banks were closed either on account of holiday or strike;

(k) where the payment is made by any person to his agent who is required to make payment in cash for goods or services on behalf of such person;

(l) where the payment is made by an authorised dealer or a money changer against purchase of foreign currency or travellers cheques in the normal course of his business.

Explanation.—For the purposes of this clause, the expressions "authorised dealer" or "money changer" means a person authorised as an authorised dealer or a money changer to deal in foreign currency or foreign exchange under any law for the time being in force.]

[87][172] [6DDA. Conditions that a stock exchange is required to fulfil to be notified as a recognised stock exchange for the purposes of clause (d) of proviso to clause (5) of section 43

For the purposes of clause (d) of proviso to clause (5) of section 43, a stock exchange shall fulfil the following conditions in respect of trading in derivatives, namely:—

(i) the stock exchange shall have the approval of the Securities and Exchange Board of India established under the Securities and Exchange Board of India Act, 1992 (15 of 1992) in respect of trading in derivatives and shall function in accordance with the guidelines or conditions laid down by the Securities and Exchange Board of India;

(ii) the stock exchange shall ensure that the particulars of the client (including unique client identity number and PAN) are duly recorded and stored in its databases;

(iii) the stock exchange shall maintain a complete audit trail of all transactions (in respect of cash and derivative market) for a period of seven years on its system;

(iv) the stock exchange shall ensure that transactions once registered in the system cannot be erased or modified.

6DDB. Notification of a recognised stock exchange for the purposes of clause (d) of proviso to clause (5) of section 43

(1) An application for Notification of a stock exchange as a recognised stock exchange for the purposes of clause (d) of proviso to clause (5) of section 43 may be made to the Member (L), Central Board of Direct Taxes, North Block, New Delhi-110 001.

(2) The application referred to in sub-rule (1) shall be accompanied with the following documents, namely:—

(i) approval granted by Securities and Exchange Board of India for trading in derivatives;

(ii) up-to-date rules, bye-laws and trading regulations of the stock exchange;

(iii) confirmation regarding fulfilling the conditions referred to in clause (ii) to clause (iv) of rule 6DDA;

(iv) such other information as the stock exchange may like to place before the Central Government.

(3) The Central Government may call for such other information from the applicant as it deems necessary for taking a decision on the application.

(4) The Central Government, after examining the information furnished by the stock exchange under sub-rule (2) or sub-rule (3), shall notify the stock exchange as a recongnised stock exchange for the purposes of clause (d) of proviso to clause (5) of section 43 or issue an order rejecting the application before the expiry of four months from the end of the month in which the application is received.

(5) The notification referred to in sub-rule (4) shall be effective until the approval granted by the Securities and Exchange Board of India is withdrawn or expired, or the notification is rescinded by the Central Government.]

(i)    the Reserve Bank of India or any banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949);

(ii)    the State Bank of India or any subsidiary bank as defined in section 2 of the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959);

(iii)    ny co-operative bank or land mortgage bank;

(iv)    ny primary agricultural credit society as defined in clause (cii) of section 2 of the Reserve Bank of India Act, 1934 (2 of 1934), or any primary credit society as defined in clause (civ) of that section;

(v)    the Life Insurance Corporation of India established under section 3 of the Life Insurance Corporation Act, 1956 (31 of 1956);

(vi)    he Industrial Finance Corporation of India established under section 3 of the Industrial Finance Corporation Act, 1948 (15 of 1948);

(vii)    the Industrial Credit and Investment Corporation of India Ltd.;

(viii)    the Industrial Development Bank of India established under section 3 of the Industrial Development Bank of India Act, 1964 (18 of 1964);

(ix)  the Unit Trust of India established under section 3 of the Unit Trust of India Act, 1963 (52 of 1963);

(x)    the Madras Industrial Investment Corporation Ltd., Madras;

(xi) the Andhra Pradesh Industrial Development Corporation Ltd., Hyderabad;

(xii)    the Kerala State Industrial Development Corporation Ltd., Trivandrum;

(xiii) the State Industrial and Investment Corporation of Maharashtra Ltd., Bombay;

(xiv)   the Punjab State Industrial Development Corporation Ltd., Chandigarh;

(xv)    the National Industrial Development Corporation Ltd., New Delhi;

(xvi)  the Mysore State Industrial Investment and Development Corporation Ltd., Bangalore;

(xvii)    the Haryana State Industrial Development Corporation Ltd., Chandigarh;

(xviii)   any State Financial Corporation established under section 3 of the State Financial Corporations Act, 1951 (63 of 1951);

 (b) where the payment is made to Government and, under the rules framed by it, such payment is required to be made in legal tender;

 (c) where under any contract entered into by the assessee before the 1st day of April, 1969, the payment is required to be made in legal tender;

 (d) where the payment is made by—

(i)    any letter of credit arrangements through a bank;

(ii)    a mail or telegraphic transfer through a bank;

(iii)    a book adjustment from any account in a bank to any other account in that or any other bank;

(iv)    a bill of exchange made payable only to a bank.

Explanation.—For the purposes of this clause and clause (h), the term "bank" means any bank, banking company or society referred to in sub-clauses (i) to (iv) of clause (a) and includes any bank [not being a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949)], whether incorporated or not, which is established outside India;

(e) where the payment is made by way of adjustment against the amount of any liability incurred the payee for any goods supplied or services rendered by the assessee to such payee;

(f) where the payment is made for the purchase of—

(i)  agricultural or forest produce; or

(ii)    the produce of animal husbandry (including hides and skins) or dairy or poultry farming; or

(iii)    fish or fish products; or

(iv)    the products of horticulture or apiculture,to the cultivator, grower or producer of such articles, produce or products;

(g) where the payment is made for the purchase of the products manufactured or processed without the aid of power in a cottage industry, to the producer of such products;

(h) where the payment is made in a village or town, which on the date of such payment is not served by any bank, to any person who ordinarily resides, or is carrying on any business, profession or vocation, in any such village or town;

 (i) where any payment by way of gratuity, retrenchment compensation or similar terminal benefit, is made to an employee of the assessee or the heirs of any such employee on or in connection with the retrenchment, resignation, discharge or death of such employee, if the income chargeable under the head "Salaries" of the employee in respect of the financial year in which such retirement, resignation, discharge or death took place or the immediately preceding financial year did not exceed Rs. 7,500;5

6[(j) where the payment is made by an assessee by way of salary to his employee after deducting the income-tax from salary in accordance with the provisions of section 192 of the Income-tax Act, 1961 and when such employee—

(A)    is temporarily posted for a continuous period of fifteen days or more in a place other than his normal place of duty or on a ship; and

(B)    does not maintain any account in any bank at such place or ship;

 (k) where the payment was required to be made on a day on which the banks were closed either on account of holiday or strike;

 (l) where the payment is made by any person to his agent who is required to make payment in cash for goods or services on behalf of such person;]]

7[(m) where the payment is made by an authorised dealer or a money changer against purchase of foreign currency or travellers cheques in the normal course of his business.

Explanation.—For the purpose of this clause, the expression "authorised dealer" or "money changer" means a person authorised as an authorised dealer or money changer to deal in foreign currency or foreign exchange under any law for the time being in force."

1 Substituted for "ten thousand" by the Income-tax (Thirty-first Amendment) Rules, 1999, w.r.e.f. 1-4-1997, which was earlier substituted for "two thousand five hundred" by the Income-tax (Fifth Amendment) Rules, 1989, w.e.f. 18-5-1989.

2 Substituted for "a crossed cheque drawn on a bank or by a crossed bank draft" by the Income-tax (Thirteenth Amendment) Rules, 2006, w.e.f. 9-11-2006.

3 Substituted for "ten thousand" by the Income-tax (Thirty-first Amendment) Rules, 1999, w.r.e.f. 1-4-1997, which was earlier substituted for "two thousand five hundred" by the Income-tax (Fifth Amendment) Rules, 1989, w.e.f. 18-5-1989.

4 Substituted for "a crossed cheque drawn on a bank or by a crossed bank draft" by the Income-tax (Thirteenth Amendment) Rules, 2006, w.e.f. 9-11-2006.

5 Should also be enhanced to Rs. 20,000 in view of the amended section 40A(3).

6 Inserted by the Income-tax (Twenty-first Amendment) Rules, 1995, w.e.f. 1-12-1995. Clause (j), as originally enacted, was substituted by the Income-tax (Fifth Amendment) Rules, 1970, w.e.f. 1-4-1970 and omitted by the Income-tax (Fourteenth Amendment) Rules, 1995, w.e.f. 25-7-1995.

7 Inserted by the Income-tax (Sixteenth Amendment) Rules, 2000, w.e.f. 6-9-2000.

[1][173] [[2][174] [6E]. Limits of reserve for unexpired risks

In the computation of profits and gains of any business of insurance other than life insurance, the amount carried over to a reserve for unexpired risks including any amount carried over to any such additional reserve which is to be allowed as a deduction under clause (c) of rule 5 of the First Schedule, shall not exceed—

[3][175] [(a) where the insurance business relates to fire insurance or engineering insurance and which provides insurance for terrorism risks, 100 per cent of the net premium income of such business of the previous year;

(aa) where the insurance business relates to fire insurance or miscellaneous insurance other than the insurance business covered under clause (a), 50 per cent of the net premium income of such business of the previous year;]

(b) where the insurance business relates to marine insurance, 100 per cent of the net premium income of such business of the previous year:

Provided that any amount out of the amount carried over to such reserve or additional reserve which is not allowed as a deduction under this rule in respect of any previous year shall not be included in the total income for the assessment year relevant to the immediately next succeeding previous year in the revenue account relating to which the amount aforesaid is credited.

[4][176] [Explanation.—For the purposes of this rule,—

(a) "net premium income" means the amount of premium received as reduced by the amount of reinsurance premium paid during the relevant previous year;

(b) "marine insurance" includes the Export Credit Insurance.]

[5][177] [6EA. Conditions for the applicability of section 43D[6][178]

The provisions of section 43D shall apply in the case of every public financial institution, scheduled bank, State financial corporation and State industrial investment corporation where its income by way of interest pertains to the following categories of bad and doubtful debts, namely:—

(a)(i) Non-viable or sticky advances, i.e., where irregularities of the nature specified in sub-clause (ii) are noticed in the accounts of the borrowers for a period of six months and more and there are no minimum prospects of regularisation of accounts, or where the accounts or information in relation to such accounts reflect usual signs of sickness, such as,—

1.    pparent stagnation in the business as a result of the slow or negligible turnover;

2.    frequent requests for over-drawing or issue of cheques without ensuring availability of funds in the account;

3.    bills purchased or discounted remain overdue for 3 months and more or the recovery of such bills from the borrower poses difficulties;

4.    in the case of term-loans, instalments which are overdue for 6 months or more;

5.    unexplained delays by the borrower in submission of quarterly or half-yearly operating statements or stock statements or balance sheets and other information required by the bank;

6.   slow movement or stagnation of stocks observed during inspections;

7.    ow or negligible level of activity observed during inspections or suspension or closure of the business;

8.    ersistent delay in compliance with vital requirements like execution of documents, producing additional security when required or non-compliance with such requirements;

9.    iversion of funds to sister units or acquiring capital assets not relevant to the business or large personal withdrawals by the borrowers;

10.    ntentional non-adherence to project schedules leading to substantial cost escalations and requirement of additional term finance;

11.    he pressure on the liquidity leading to non-payment of wages to workers or statutory dues or rents of office and factory premises;

12.    he current liabilities exceeding current assets;

13.   any grave irregularities observed by the auditors of the borrowers which remain to be rectified;

14.    basic weakness revealed by the financial statements of the unit, for example, continued cash loss beyond one year;(ii) the irregularities referred to in sub-clause (i) in the accounts of the borrowers are,—

1.   where the accounts are over-drawn beyond the drawing power or the sanctioned limit, for a temporary period;

2.    instalments in respect of term loss are overdue for less than 6 months or import bills under letters of credit or instalments under deferred payment carried are overdue for less than 3 months;

3.    bills not exceeding 10% to 15% of the total outstandings in the bills purchased or discounted account of the borrower are overdue for payment for a period of less than 3 months and refund in respect of unpaid bills is not forthcoming immediately;

(b) advances recalled, i.e., where the repayment is highly doubtful and revival of the unit is not considered worthwhile and a decision has been taken to recall the advances;

(c) suit-filed accounts, i.e., where legal action or recovery proceedings have been initiated and suits are pending for recovery of advances;

(d) decreed debts, i.e., where suits have been filed and decree obtained and such decree is pending for execution;

(e) debts recoverability whereof has become doubtful on account of shortfalls in value of security, difficulty in enforcing and realising the securities, or inability or unwillingness of the borrower to repay the banks dues partly or wholly and such debts have not been included in preceding clauses (a) to (d).]

[7][179] [6EB. Categories of bad or doubtful debts in the case of a public company under clause (b) of section

43D

The provisions of clause (b) of section 43D shall apply in the case of every public company where its income by way of interest pertains to the following categories of bad and doubtful debts, namely:—

(a)(i) doubtful asset that is, a debt which has remained non-performing asset of the nature pecified in sub-clause (ii) for a period exceeding two years;

(ii) non-performing asset referred to in sub-clause (i) shall be the following:—

(1)    term loan beyond one year, if the interest amount remains 'past due' for six months or instalment is over-due for more than six months;

(2)    lease rental or hire purchase instalment, if the rental or the instalment is 'past due' for six months;

(3)    bill purchased or discounted, if the bill remains over due and unpaid for six months; or

(4)    any other credit facility in the nature of short-term loan or advance [other than those referred to in (1), (2) and (3) above], if any amount to be received in respect of such a facility remains 'past due' for a period of six months;

(b) loss asset, that is, a debt which has been identified as loss and considered as uncollectible but has not been written off in the accounts of the assessee.

Explanation.—For the purposes of this rule, an amount shall be deemed to be 'past due' when it remains unpaid for thirty days beyond the due date.]

[8][180] [CC.—Books of account

6F. Books of account and other documents to be kept and maintained under section 44AA(3)[9][181] by persons carrying on certain professions

(1) Every person carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or authorised representative or film artist shall keep and maintain the books of account and other documents specified in sub-rule (2):

[10][182] [Provided that nothing in this sub-rule shall apply in relation to any previous year in the case of any person if his total gross receipts in the profession do not exceed one lakh fifty thousand rupees in any one of the three years immediately preceding the previous year, or, where the profession has been newly set up in the previous year, his total gross receipts in the profession for that year are not likely to exceed the said amount.[11][183] ]

(2) The books of account and other documents referred to in sub-rule (1) shall be the following, namely:—

(i) a cash book;

(ii) a journal, if the accounts are maintained according to the mercantile system of accounting;

(iii) a ledger;

[12][184] [(iv) carbon copies of bills, whether machine numbered or otherwise serially numbered, wherever such bills are issued by the person, and carbon copies or counter-foils of machine numbered or otherwise serially numbered receipts issued by him:

Provided that nothing in this clause shall apply in relation to sums not exceeding twenty-five rupees;]

(v) original bills wherever issued to the person and receipts in respect of expenditure incurred by the person or, where such bills and receipts are not issued and the expenditure incurred does not exceed fifty rupees, payment vouchers prepared and signed by the person:

[13][185] Provided that the requirements as to the preparation and signing of payment vouchers shall not apply in a case where the cash book maintained by the person contains adequate particulars in respect of the expenditure incurred by him.]

Explanation.—In this rule,—

(a) "authorised representative" means a person who represents any other person, on payment of any fee or remuneration, before any tribunal or authority constituted or appointed by or under any law for the time being in force, but does not include an employee of the person so represented or a person carrying on legal profession or a person carrying on the profession of accountancy;

(b) "cash book" means a record of all cash receipts and payments, kept and maintained from day to day and giving the cash balance in hand at the end of each day or at the end of a specified period not exceeding a [14][186] [month];

(c) "film artist" means any person engaged in his professional capacity in the production of a cinematograph film, whether produced by him or by any other person, as—

(i) an actor;

(ii) a cameraman;

(iii) a director, including an assistant director;

(iv) a music director, including an assistant music director;

(v) an art director, including an assistant art director;

(vi) a dance director, including an assistant dance director;

(vii) an editor;

(viii) a singer;

(ix) a lyricist;

(x) a story writer;

(xi) a screen-play writer;

(xii) a dialogue writer; and

(xiii) a dress designer.

(3) A person carrying on medical profession shall, in addition to the books of account and other documents specified in sub-rule (2), keep and maintain the following, namely:—

(i) a daily case register in Form No. 3C;

(ii) an inventory [15][187] [under broad heads,] as on the first and the last day of the previous year, of the stock of drugs, medicines and other consumable accessories used for the purpose of his profession.

(4) The books of account and other documents specified in sub-rule (2) and sub-rule (3) [16][188] [other than those relating to a previous year which has come to an end] shall be kept and maintained by the person at the place where he is carrying on the profession or, where the profession is carried on in more places than one, at the principal place of his profession:

Provided that where the person keeps and maintains separate books of account in respect of each place where the profession is carried on, such books of account and other documents may be kept and maintained at the respective places at which the profession is carried on.

(5) The books of account and other documents specified in sub-rule (2) and sub-rule (3) shall be kept and maintained for a period of [17][189] [six] years from the end of the relevant assessment year:

[18][190] [* * *]

Provided [19][191] [* * *] that where the assessment in relation to any assessment year has been reopened under section 147 of the Act within the period specified in section 149 of the Act, all the books of account and other documents which were kept and maintained at the time of reopening of the assessment shall continue to be so kept and maintained till the assessment so reopened has been completed.]

[20][192] [(6) Notwithstanding anything contained in sub-rules (1) to (3), it shall not be necessary for any person carrying on any of the professions specified in sub-rule (1) to keep and maintain the books of account and other documents specified in sub-rule (2) or sub-rule (3) in relation to any previous year commencing before the first day of [21][193] [March, 1983].]

[22][194] [CCC.—Reports of audit of accounts of persons carrying on business or profession

[23][195] [6G. Report of audit of accounts to be furnished under section 44AB

(1) The report of audit of the accounts of a person required to be furnished under section 44AB shall—

(a) in the case of a person who carries on business or profession and who is required by or under any other law to get his accounts audited, be in Form No. 3CA;

(b) in the case of a person who carries on business or profession, but not being a person referred to in clause (a), be in Form No. 3CB.

(2) The particulars which are required to be furnished under section 44AB shall be in Form No. 3CD.]

[24][196] [CCCA. Report of audit in case of income by way of royalties, etc. in case of non-residents

6GA Form of report of audit to be furnished under sub-section (2) of section 44DA

The report of audit of accounts of the non-resident (not being a company) or a foreign company, which is required to be furnished under sub-section (2) of section 44DA shall be in Form No. 3CE.]

[25][197] [CCCC.—Report in the case of slump sale

6H. Form of report of an accountant under sub-section (3) of section 50B

The report of an accountant which is required to be furnished by every assessee along with the return of income, in case of slump sale, under sub-section (3) of section 50B shall be in Form No. 3CEA.]

D.—Special cases

7. ncome which is partially agricultural and partially from business[26][198]

(1) In the case of income which is partially agricultural income as defined in section 2 and partially income chargeable to income-tax under the head "Profits and gains of business", in determining that part which is chargeable to income-tax the market value of any agricultural produce which has been raised by the assessee or received by him as rent-in-kind and which has been utilised as a raw material in such business or the sale receipts of which are included in the accounts of the business shall be deducted, and no further deduction shall be made in respect of any expenditure incurred by the assessee as a cultivator or receiver of rent-in-kind.

(2) For the purposes of sub-rule (1) "market value" shall be deemed to be:—

(a) where agricultural produce is ordinarily sold in the market in its raw state, or after application to it of any process ordinarily employed by a cultivator or receiver of rent-in-kind to render it fit to be taken to market, the value calculated according to the average price at which it has been so sold during the relevant previous year;

(b) where agricultural produce is not ordinarily sold in the market in its raw state or after application to it of any process aforesaid, the aggregate of—

(i) the expenses of cultivation;

(ii) the land revenue or rent paid for the area in which it was grown; and

(iii) such amount as the [27][199] [Assessing Officer] finds, having regard to all the ircumstances in each case, to represent a reasonable profit.

[28][200] [7A. ncome from the manufacture of rubber

[29][201] [(1) Income derived from the 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 from field latex or coagulum obtained from rubber plants grown by the seller in India shall be computed as if it were income derived from business, and thirty-five per cent of such income shall be deemed to be income liable to tax.]

(2) In computing such income, an allowance shall be made in respect of the cost of planting rubber plants in replacement of plants that have died or become permanently useless in an area already planted, if such area has not previously been abandoned, and for the purpose of determining such cost, no deduction shall be made in respect of the amount of any subsidy which, under the provisions of clause (31) of section 10, is not includible in the total income.

7B. Income from the manufacture of coffee

[30][202] [(1) Income derived from the sale of coffee grown and cured by the seller in India shall be computed as if it were income derived from business, and twenty-five per cent of such income shall be deemed to be income liable to tax.[31][203]

(1A) Income derived from the sale of coffee grown, cured, roasted and grounded by the seller in India, with or without mixing chicory or other flavouring ingredients, shall be computed as if it were income derived from business, and forty per cent of such income shall be deemed to be income liable to tax.[32][204]

Explanation.—For the purpose of sub-rules (1) and (1A) "curing" shall have the same meaning as assigned to it in sub-section (d) of section 3 of the Coffee Act, 1942 (7 of 1942).]

(2) In computing [33][205] [the incomes referred to in sub-rules (1) and (1A)], an allowance shall be made in respect of the cost of planting coffee plants in replacement of plants that have died or become permanently useless in an area already planted, if such area has not previously been abandoned, and for the purpose of determining such cost, no deduction shall be made in respect of the amount of any subsidy which, under the provisions of clause (31) of section 10, is not includible in the total income.]

8. [34][206] Income from the manufacture of tea[35][207]

(1) Income derived from the sale of tea grown and manufactured by the seller in India shall be computed as if it were income derived from business, and forty per cent of such income shall be deemed to be income liable to tax.[36][208]

(2) In computing such income an allowance shall be made in respect of the cost of planting bushes in replacement of bushes that have died or become permanently useless in an area already planted[37][209] , if such area has not previously been abandoned [38][210] [, and for the purpose of determining such cost, no deduction shall be made in respect of the amount of any subsidy which, under the provisions of clause (30) of section 10, is not includible in the total income].

[39][211] [8A. Conditions for the grant of development allowance[40][212]

The other conditions referred to in clause (iii) of sub-section (3) of section 33A shall be the following, namely:—

(a) the assessee shall, at least three months before commencing the operations for planting or, as the case may be, replanting tea bushes, give notice of his intention to do so to the Tea Board in writing in Form No. 4:

Provided that in a case where such operations have commenced before the 1st day of [41][213] [anuary, 1968], this condition shall be deemed to have been fulfilled if notice of such commencement is given by the assessee before the 1st day of [42][214] [February, 1968];

(b) the assessee shall afford the Tea Board or such other person or agency as may be authorised in writing by the Tea Board in this behalf, every reasonable facility to enter upon and inspect the area under planting or, as the case may be, replanting;

(c) the assessee shall furnish to the Tea Board such particulars, documents or statements in relation to the planting or replanting of tea, as the Tea Board may require him to furnish;

(d) [43][215] the assessee shall furnish to the [44][216] [Assessing Officer], along with his return of income for the previous year for which the deduction is claimed, a certificate from the Tea Board in Form No. 5 [45][217] [and a statement of particulars in Form No. 5A].

Explanation.—For the purposes of this rule, "Tea Board" means the Tea Board established under section 4 of the Tea Act, 1953 (29 of 1953).]

[46][218] [8B. Guidelines for notification of zero coupon bond

(1) An application by an infrastructure capital company or infrastructure capital fund or a public sector company for notification under clause (48) of section 2 of any zero coupon bond proposed to be issued by it shall be made in Form No. 5B at least three months before the date of issue of such bond:

Provided that an application shall not be made for notification of a bond to be issued after two financial years following the financial year in which the application is made.

(2) Every application, under sub-rule (1), shall be accompanied by the following documents, namely:—

(i) where the application is made by any infrastructural capital company or a public sector company, being a government company as defined in section 617 of the Companies Act, 1956 (1 of 1956), a copy of certificate of incorporation under the Companies Act, 1956 (1 of 1956);

(ii) where the application is made by any infrastructure capital fund, a copy of the trust deed registered under the provisions of the Registration Act, 1908 (16 of 1908);

(iii) where the application is made by a public sector company, being any corporation, established by or under any Central or State or Provincial Act, a copy of the relevant Act.

(3) The Central Government, while specifying a zero coupon bond by notification in the Official Gazette shall satisfy itself that the following conditions are fulfilled, namely:—

(i) the period of life of the bond is not less than ten years and not more than twenty years;

(ii) the infrastructure capital company or infrastructure capital fund or public sector company proposing to issue a zero coupon bond has an investment grade rating from at least two credit rating agencies registered under sub-section (1A) of section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992);

(iii) necessary arrangement has been made by the infrastructure capital company or infrastructure capital fund or public sector company for listing the zero coupon bond in a recognised stock exchange in India;

(iv) where the application is made by the infrastructural capital company or infrastructure capital fund, such company or fund shall furnish along with the application an undertaking that the money realised on issue of the zero coupon bond shall be invested by it in the following manner, namely:—

 (i) twenty-five per cent or more of such realisation before the end of the financial year immediately following the financial year in which the bond is issued;

 (ii) the balance of such realisation within a period of four financial years immediately following the financial year in which the bond is issued;

(v) where the application is made by a public sector company, such company shall furnish along with the application an undertaking that the money realised on issue of the zero coupon bond shall be invested or utilised by it in the following manner, namely:—

(i) fifteen per cent or more of such realisation before the end of the financial year immediately following the financial year in which the bond is issued;

(ii) the balance of such realisation within a period of six financial years immediately following the financial year in which the bond is issued.

(4) The Central Government, after having satisfied itself about fulfilling of the conditions referred to in sub-rule (1), sub-rule (2), and sub-rule (3) shall specify the bond, by notification in the Official Gazette, giving therein, inter alia, the following particulars, namely:—

(a) name of the bond;

(b) period of life of the bond;

(c) the time schedule of the issue of the bond;

(d) the amount to be paid on maturity or redemption of the bond;

(e) the discount;

(f) the number of bonds to be issued.

(5) The Central Government may, if the applicant fails to fulfil the conditions referred to in sub-rule (1) or sub-rule (2) or sub-rule (3), reject the application for notification after giving an opportunity of being heard to the infrastructure capital company or infrastructure capital fund or public sector company, as the case may be.

(6) Every infrastructure capital company or infrastructure capital fund or public sector company shall submit within two months from the end of each financial year referred to in sub-clause (i) or sub-clause (ii) of clause (iv) of sub-rule (3), or as the case may be, in sub-clause (i) or sub-clause (ii) of clause (v) of sub-rule (3), a certificate from an accountant as defined in the Explanation to sub-section (2) of section 288, specifying the amount invested in each year.

(7) The Central Government shall have the power to withdraw the notification if the applicant fails to fulfil any of the conditions referred to in sub-rule (3) or sub-rule (6).

Explanation.—For the purpose of this rule, the expressions "discount" and "period of life of the bond" shall have the same meanings respectively assigned to them in clause (i) and clause (ii) of the Explanation to clause (iiia) of sub-section (1) of section 36.

8C. Computation of pro rata amount of discount on a zero coupon bond for the purpose of clause (iiia) of sub-section (1) of section 36

For the purposes of clause (iiia) of sub-section (1) of section 36, the pro rata amount of discount on a zero coupon bond shall be computed in the following manner, namely:—

(a) the period of life of the bond shall be converted into number of calendar months and, for this purpose, where the calendar month in which the bond is issued or the bond matures or is redeemed contains a part of a calendar month then, if such part is fifteen days or more than fifteen days, it shall be increased to one calendar months and if such part is less than fifteen days it shall be ignored;

(b) the amount of discount shall be divided by the number of calendar months determined, in accordance with clause (a);

(c) where one or more than one calendar month out of calendar months determined in accordance with clause (a) is or are included in a previous year, the amount determined in accordance with clause (b) shall be multiplied by the number of calendar months so included and the amount so arrived at shall be taken to be the pro rata amount of discount for the previous year.]

9. Royalties or copyright fees, etc., for literary or artistic work

(1) Where a claim for an allocation is or has been made under section 12AA of the Indian Income-tax Act, 1922 (11 of 1922), in respect of the amount referred to in that section, it shall be dealt with in the following manner, namely:—

(i) where the time taken by the author of the literary or artistic work in the making thereof is more than twelve but less than twenty-four months, one-half of the amount referred to in the said section shall be included in the total income of the previous year in which the whole amount is received or receivable, and the other half in the total income of the next succeeding previous year; and

(ii) where the time so taken is twenty-four months or more, one-third of the amount referred to in the said section shall be included in the total income of the previous year in which the whole amount is received or receivable and one-third of the said amount in the total income of each of the two next succeeding previous years.

[47][219] (2) Where a claim for an allocation is made by an assessee under section 180 for the assessment year 1962-63 or any subsequent assessment year, it shall be dealt with in the following manner, namely:—

(i) the tax for the assessment year relevant to the previous year in which the whole amount is received or receivable shall be—

 (a) the amount of tax payable on the total income as reduced by two-thirds of the amount referred to in section 180 included in the total income of the previous year aforesaid had the total income so reduced been his total income; plus

 (b) the tax on an amount equal to two-thirds of the amount referred to in section 180 included in the total income of the previous year aforesaid at the rate applicable to a total income of an amount equal to one-third of such inclusion; and

(ii) one-third of the amount referred to in section 180 included in the total income of the previous year aforesaid shall be included in the total income of each of the two next succeeding previous years and the tax payable, if any, in respect of each of the assessments relevant to the two said succeeding previous years shall be reduced by an amount equal to one-half of the tax referred to in sub-clause (b) of clause (i).

[48][220] [9A. [49][221] Deduction in respect of expenditure on production of feature films[50][222]

[51][223] [(1) In computing the profits and gains of the business of production of feature films carried on by a person (the person carrying on such business hereafter in this rule referred to as film producer), the deduction in respect of the cost of production of a feature film certified for release by the Board of Film Censors in a previous year shall be allowed in accordance with the provisions of sub-rule (2) to sub-rule (4).

Explanation.—In this rule,—

(i) "Board of Film Censors" means the Board of Film Censors constituted under the Cinematograph Act, 1952 (37 of 1952);

(ii) "Cost of production" in relation to a feature film, means the expenditure incurred on the production of the film, not being—

(a) the expenditure incurred for the preparation of the positive prints of the film; and

 (b) the expenditure incurred in connection with the advertisement of the film after it is certified for release by the Board of Film Censors:]

[52][224] [Provided that the cost of production of a feature film, shall be redu-ced by the subsidy received by the film producer under any scheme framed by the Government, where such amount of subsidy has not been included in computing the total income of the assessee for any assessment year.]

(2) Where a [53][225] [* * *] feature film is certified for release by the Board of Film Censors in any previous year and in such previous year,—

(a) the film producer sells all rights of exhibition of the film, the entire cost of production of the film shall be allowed as a deduction in computing the profits and gains of such previous year; or

(b) the film producer—

(i) himself exhibits the film on a commercial basis in all or some of the areas; or

(ii) sells the rights of exhibition of the film in respect of some of the areas; or

(iii) himself exhibits the film on a commercial basis in certain areas and sells the rights of exhibition of the film in respect of all or some of the remaining areas,and the film is released for exhibition on a commercial basis at least [54][226] [ninety] days before the end of such previous year, the entire cost of production of the film shall be allowed as a deduction in computing the profits and gains of such previous year.

(3) Where a [55][227] [* * *] feature film is certified for release by the Board of Film Censors in any previous year and in such previous year, the film producer—

(a) himself exhibits the film on a commercial basis in all or some of the areas; or

(b) sells the rights of exhibition of the film in respect of some of the areas; or

(c) himself exhibits the film on a commercial basis in certain areas and sells the rights of exhibition of the film in respect of all or some of the remaining areas,and the film is not released for exhibition on a commercial basis at least [56][228] [ninety] days before the end of such previous year, the cost of production of the film in so far as it does not exceed the amount realised by the film producer by exhibiting the film on a commercial basis or the amount for which the rights of exhibition are sold or, as the case may be, the aggregate of the amounts realised by the film producer by exhibiting the film and by the sale of the rights of exhibition, shall be allowed as a deduction in computing the profits and gains of such previous year; and the balance, if any, shall be carried forward to the next following previous year and allowed as a deduction in that year.

(4) Where, during the previous year in which a [57][229] [* * *] feature film is certified for release by the Board of Film Censors, the film producer does not himself exhibit the film on a commercial basis or does not sell the rights of exhibition of the film, no deduction shall be allowed in respect of the cost of production of the film in computing the profits and gains of such previous year, and the entire cost of production of the film shall be carried forward to the next following previous year and allowed as a deduction in that year.

[58][230] [(5)] Notwithstanding anything contained in the foregoing provisions of this rule, the deduction under this rule shall not be allowed unless,—

(a) in a case where the film producer—

(i) has himself exhibited the feature film on a commercial basis; or

(ii) has sold the rights of exhibition of the feature film; or

[59][231] [(iii) has himself exhibited the feature film on a commercial basis in some areasand has sold the rights of exhibition of the feature film in respect of all or some of the remaining areas,]the amount realised by exhibiting the film, or the amount for which the rights of exhibition have been sold or, as the case may be, the aggregate of such amounts, is credited in the books of account maintained by him in respect of the year in which the deduction is admissible;

(b) in a case where the film producer has transferred the rights of exhibition of the feature film on a minimum guarantee basis, the minimum amount guaranteed and the amount, if any, received or due in excess of the guaranteed amount or where the film producer follows cash system of accounting, the amount received towards the minimum guarantee and the amount, if any, received in excess of the guaranteed amount, are credited in the books of account maintained by him in respect of the year in which the deduction is admissible.

[60][232] (6)] Where the [61][233] [Assessing Officer] is of opinion that—

[62][234] [(a)]  the rights of exhibition of the feature film have been transferred by the film producer by a mode not covered by the provisions of this rule; or

[63][235] [(b)]  having regard to the facts and circumstances of any case, it is not practicable to apply the provisions of this rule to such case,deduction in respect of the cost of production of the film may be allowed by the 64][236] [Assessing Officer] in such other manner as he may deem suitable.

[65][237] [(7)] For the purposes of this rule,—

(i) the sale of the rights of exhibition of a feature film includes the lease of such rights or their transfer on a minimum guarantee basis;

(ii) the rights of exhibition of a feature film shall be deemed to have been sold only on the date when the positive prints of the film are delivered by the film producer to the purchaser of such rights or where in terms of the agreement between the film producer and the film distributor as defined in rule 9B, the positive prints are to be made by the film distributor, the date on which the negative of the film is delivered by the film producer to the film distributor.

[66][238] [(8)] [67][239] [Nothing contained in this rule shall apply in relation to any assessment year commencing before the 1st day of April, 1987.]

[68][240] [* * *]

[69][241] [9B. Deduction in respect of expenditure on acquisition of distribution rights of feature films[70][242]

(1) In computing the profits and gains of the business of distribution of feature films carried on by a person (the person carrying on such business hereafter in this rule referred to as film distributor), the deduction in respect of the cost of acquisition of a feature film shall be allowed in accordance with sub-rule (2) to sub-rule (4).

Explanation.—For the purposes of this rule, "cost of acquisition", in relation to a feature film, means the amount paid [71][243] [by the film distributor to the film producer or to another distributor under an agreement entered into by the film distributor with such film producer or such other distributor, as the case may be] for acquiring the rights of exhibition and, where the rights of exhibition have been acquired on a minimum guarantee basis, the minimum amount guaranteed, not being—

(i) the amount of expenditure incurred by the film distributor for the preparation of the positive prints of the film; and

(ii) the expenditure incurred by him in connection with the advertisement of the film.

(2) Where a feature film is acquired by the film distributor in any previous year and in such previous year,—

(a) the film distributor sells all rights of exhibition of the film, the entire cost of acquisition of the film shall be allowed as a deduc-tion in computing the profits and gains of such previous year; or

(b) the film distributor,—

(i) himself exhibits the film on a commercial basis in all or some of the areas; or

(ii) sells the rights of exhibition of the film in respect of some of the areas; or

(iii) himself exhibits the film on a commercial basis in certain areas and sells the rights of exhibition of the film in respect of all or some of the remaining areas,and the film is released for exhibition on a commercial basis at least [72][244] [ninety] days before the end of such previous year, the entire cost of acquisition of the film shall be allowed as a deduction in computing the profits and gains of such previous year.

(3) Where a feature film is acquired by the film distributor in any previous year and in such previous year the film distributor—

(a) himself exhibits the film on a commercial basis in all or some of the areas; or

(b) sells the rights of exhibition of the film in respect of some of the areas; or

(c) himself exhibits the film on a commercial basis in certain areas and sells the rights of exhibition of the film in respect of all or some of the remaining areas,and the film is not released for exhibition on a commercial basis at least [73][245] [ninety] days before the end of such previous year, the cost of acquisition of the film in so far as it does not exceed the amount realised by the film distributor by exhibiting the film on a commercial basis or the amount for which the rights of exhibition have been sold or, as the case may be, the aggregate of the amounts realised by the film distributor by exhibiting the film and by the sale of the rights of exhibition, shall be allowed as a deduction in computing the profits and gains of such previous year; and the balance, if any, shall be carried forward to the next following previous year and allowed as a deduction in that year.

(4) Where during the previous year in which a feature film is acquired by the film distributor, he does not himself exhibit the film on a commercial basis or does not sell the rights of exhibition of the film, no deduction shall be allowed in respect of the cost of acquisition of the film in computing the profits and gains of such previous year; and the entire cost of acquisition shall be carried forward to the next following previous year and allowed as a deduction in that year.

(5) Notwithstanding anything contained in the foregoing provisions of this rule, the deduction under this rule shall not be allowed unless—

(a) in a case where the film distributor—

(i) has himself exhibited the feature film on a commercial basis; or

 (ii) has sold the rights of exhibition of the feature film; or

 (iii) has himself exhibited the feature film on a commercial basis in some areas and has sold the rights of exhibition of the feature film in respect of all or some of the remaining areas,

the amount realised by exhibiting the film, or the amount for which the rights of exhibition have been sold, or, as the case may be, the aggregate of such amounts, is credited in the books of account maintained by him in respect of the year in which the deduction is admissible;

(b) in a case where the film distributor has transferred the rights of exhibition of the feature film on a minimum guarantee basis, the minimum amount guaranteed and the amount, if any, received or due in excess of the guaranteed amount, or where the film distributor follows cash system of accounting, the amount received towards the minimum guarantee and the amount, if any, received in excess of the guaranteed amount, are credited in the books of account maintained by him in respect of the year in which the deduction is admissible.

(6) or the purposes of this rule,—

(i) the sale of the rights of exhibition of a feature film includes the lease of such rights or their transfer on a minimum guarantee basis;

(ii) the rights of exhibition of a feature film shall be deemed to have been sold only on the date when the positive prints of the film are delivered by the film distributor to the purchaser of such rights;

[74][246] [(iii) distributor shall include a sub-distributor.]

[75][247] [(7) Nothing contained in this rule shall apply in relation to any assessment year commencing before the 1st day of April, 1987.]

[76][248] [9C. Conditions for carrying forward or set-off of accumulated loss and unabsorbed depreciation allowance in case of amalgamation

The conditions referred to in clause (iii) of sub-section (2) of section 72A shall be the following, namely:—

(a) the amalgamated company, owning an industrial undertaking of the amalgamating company by way of amalgamation, shall achieve the level of production of at least fifty per cent of the installed capacity of the said undertaking before the end of four years from the date of amalgamation and continue to maintain the said minimum level of production till the end of five years from the date of amalgamation:

rovided that the Central Government, on an application made by the amalgamated company, may relax the condition of achieving the level of production or the period during which the same is to be achieved or both in suitable cases having regard to the genuine efforts made by the amalgamated company to attain the prescribed level of production and the circumstances preventing such efforts from achieving the same;

(b) the amalgamated company shall furnish to the Assessing Officer a certificate in Form No. 62, duly verified by an accountant, with reference to the books of accounts and other documents showing particulars of production, along with the return of income for the assessment year relevant to the previous year during which the prescribed level of production is achieved and for subsequent assessment years relevant to the previous years falling within five years from the date of amalgamation.

Explanation.—For the purposes of this rule,—

(a) 'installed capacity' means the capacity of production existing on the date of amalgamation; and

(b) "accountant" means the accountant as defined in the Explanation below sub-section (2) of section 288 of the Income-tax Act, 1961.]

10. Determination of income in the case of non-residents[77][249]

In any case in which the [78][250] [Assessing Officer] is of opinion that the actual amount of the income accruing or arising to any non-resident person whether directly or indirectly, through or from any business connection in India or through or from any property in India or through or from any asset or source of income in India or through or from any money lent at interest and brought into India in cash or in kind cannot be definitely ascertained, the amount of such income for the purposes of assessment to income-tax [79][251] [* * *] may be calculated—

(i) at such percentage of the turnover so accruing or arising as the [80][252] [Assessing Officer] may consider to be reasonable, or

(ii) on any amount which bears the same proportion to the total profits and gains of the business of such person (such profits and gains being computed in accordance with the provisions of the Act), as the receipts so accruing or arising bear to the total receipts of the business, or

(iii) in such other manner as the [81][253] [Assessing Officer] may deem suitable.

[82][254] [10A. Meaning of expressions used in computation of arm's length price[83][255]

For the purposes of this rule and rules 10B to 10E:—

(a) 'uncontrolled transaction' means a transaction between enterprises other than associated enterprises, whether resident or non-resident;

(b) 'property' includes goods, articles or things, and intangible property;

(c) 'services' include financial services;

(d) 'transaction' includes a number of closely linked transactions.

10B. Determination of arm's length price under section 92C

(1) For the purposes of sub-section (2) of section 92C, the arm's length price in relation to an international transaction shall be determined by any of the following methods, being the most appropriate method, in the following manner, namely:—

(a) comparable uncontrolled price method, by which:— 

(i) the price charged or paid for property transferred or services provided in a comparable uncontrolled transaction, or a number of such transactions, is identified;

 (ii) such price is adjusted to account for differences, if any, between the international transaction and the comparable uncontrolled transactions or between the enterprises entering into such transactions, which could materially affect the price in the open market;

 (iii) the adjusted price arrived at under sub-clause (ii) is taken to be an arm's length price in respect of the property transferred or services provided in the international transaction;

(b) resale price method, by which:—

(i) the price at which property purchased or services obtained by the enterprise from an associated enterprise is resold or are provided to an unrelated enterprise, is identified;

 (ii) such resale price is reduced by the amount of a normal gross profit margin accruing to the enterprise or to an unrelated enterprise from the purchase and resale of the same or similar property or from obtaining and providing the same or similar services, in a comparable uncontrolled transaction, or a number of such transactions;

 (iii) the price so arrived at is further reduced by the expenses incurred by the enterprise in connection with the purchase of property or obtaining of services;

 (iv) the price so arrived at is adjusted to take into account the functional and other differences, including differences in accounting practices, if any, between the international transaction and the comparable uncontrolled transactions, or between the enterprises entering into such transactions, which could materially affect the amount of gross profit margin in the open market;

 (v) the adjusted price arrived at under sub-clause (iv) is taken to be an arm's length price in respect of the purchase of the property or obtaining of the services by the enterprise from the associated enterprise;

(c) Cost plus method, by which:— 

(i) the direct and indirect costs of production incurred by the enterprise in respect of property transferred or services provided to an associated enterprise, are determined;

 (ii) the amount of a normal gross profit mark-up to such costs (computed according to the same accounting norms) arising from the transfer or provision of the same or similar property or services by the enterprise, or by an unrelated enterprise, in a comparable uncontrolled transaction, or a number of such transactions, is determined;

 (iii) the normal gross profit mark-up referred to in sub-clause (ii) is adjusted to take into account the functional and other differences, if any, between the international transaction and the comparable uncontrolled transactions, or between the enterprises entering into such transactions, which could materially affect such profit mark-up in the open market;

 (iv) the costs referred to in sub-clause (i) are increased by the adjusted profit mark-up arrived at under sub-clause (iii);

 (v) the sum so arrived at is taken to be an arm's length price in relation to the supply of the property or provision of services by the enterprise;

(d) profit split method, which may be applicable mainly in international transactions involving transfer of unique intangibles or in multiple international transactions which are so interrelated that they cannot be evaluated separately for the purpose of deter-mining the arm's length price of any one transaction, by which:—

(i) the combined net profit of the associated enterprises arising from the international transaction in which they are engaged, is determined;

(ii) the relative contribution made by each of the associated enterprises to the earning of such combined net profit, is then evaluated on the basis of the functions performed, assets employed or to be employed and risks assumed by each enterprise and on the basis of reliable external market data which indicates how such contribution would be evaluated by unrelated enterprises performing comparable functions in similar circumstances;

 (iii) the combined net profit is then split amongst the enterprises in proportion to their relative contributions, as evaluated under sub-clause (ii);

 (iv) the profit thus apportioned to the assessee is taken into account to arrive at an arm's length price in relation to the international transaction:

Provided that the combined net profit referred to in sub-clause (i) may, in the first instance, be partially allocated to each enterprise so as to provide it with a basic return appropriate for the type of international transaction in which it is engaged, with reference to market returns achieved for similar types of transactions by independent enterprises, and thereafter, the residual net profit remaining after such allocation may be split amongst the enterprises in proportion to their relative contribution in the manner specified under sub-clauses (ii) and (iii), and in such a case the aggregate of the net profit allocated to the enterprise in the first instance together with the residual net profit apportioned to that enterprise on the basis of its relative contribution shall be taken to be the net profit arising to that enterprise from the international transaction;

(e) transactional net margin method, by which:—

(i) the net profit margin realised by the enterprise from an international transaction entered into with an associated enterprise is computed in relation to costs incurred or sales effected or assets employed or to be employed by the enterprise or having regard to any other relevant base;

 (ii) the net profit margin realised by the enterprise or by an unrelated enterprise from a comparable uncontrolled transaction or a number of such transactions is computed having regard to the same base;

 (iii) the net profit margin referred to in sub-clause (ii) arising in comparable uncontrolled transactions is adjusted to take into account the differences, if any, between the international transaction and the comparable uncontrolled transactions, or between the enterprises entering into such transactions, which could materially affect the amount of net profit margin in the open market;

 (iv) the net profit margin realised by the enterprise and referred to in sub-clause (i) is established to be the same as the net profit margin referred to in sub-clause (iii);

 (v) the net profit margin thus established is then taken into account to arrive at an arm's length price in relation to the international transaction.

(2) For the purposes of sub-rule (1), the comparability of an international transaction with an uncontrolled transaction shall be judged with reference to the following, namely:—

(a) the specific characteristics of the property transferred or services provided in either transaction;

(b) the functions performed, taking into account assets employed or to be employed and the risks assumed, by the respective parties to the transactions;

(c) the contractual terms (whether or not such terms are formal or in writing) of the transactions which lay down explicitly or implicitly how the responsibilities, risks and benefits are to be divided between the respective parties to the transactions;

(d) conditions prevailing in the markets in which the respective parties to the transactions operate, including the geographical location and size of the markets, the laws and government orders in force, costs of labour and capital in the markets, overall economic development and level of competition and whether the markets are wholesale or retail.

(3) An uncontrolled transaction shall be comparable to an international transaction if:—

(i) none of the differences, if any, between the transactions being compared, or between the enterprises entering into such transactions are likely to materially affect the price or cost charged or paid in, or the profit arising from, such transactions in the open market; or

(ii) reasonably accurate adjustments can be made to eliminate the material effects of such differences.

(4) The data to be used in analysing the comparability of an uncontrolled transaction with an international transaction shall be the data relating to the financial year in which the international transaction has been entered into:

Provided that data relating to a period not being more than two years prior to such financial year may also be considered if such data reveals facts which could have an influence on the determination of transfer prices in relation to the transactions being compared.

10C. Most appropriate method

(1) For the purposes of sub-section (1) of section 92C, the most appropriate method shall be the method which is best suited to the facts and circumstances of each particular international transaction, and which provides the most reliable measure of an arm's length price in relation to the international transaction.

(2) In selecting the most appropriate method as specified in sub-rule (1), the following factors shall be taken into account, namely:—

(a) the nature and class of the international transaction;

(b) the class or classes of associated enterprises entering into the transaction and the functions performed by them taking into account assets employed or to be employed and risks assumed by such enterprises;

(c) the availability, coverage and reliability of data necessary for application of the method;

(d) the degree of comparability existing between the international transaction and the uncontrolled transaction and between the enterprises entering into such transactions;

(e) the extent to which reliable and accurate adjustments can be made to account for differences, if any, between the international transaction and the comparable uncontrolled transaction or between the enterprises entering into such transactions;

(f) the nature, extent and reliability of assumptions required to be made in application of a method.

10D. Information and documents to be kept and maintained under section 92D

(1) Every person who has entered into an international transaction shall keep and maintain the following information and documents, namely:—

(a) a description of the ownership structure of the assessee enterprise with details of shares or other ownership interest held therein by other enterprises;

(b) a profile of the multinational group of which the assessee enterprise is a part along with the name, address, legal status and country of tax residence of each of the enterprises comprised in the group with whom international transactions have been entered into by the assessee and ownership linkages among them;

(c) a broad description of the business of the assessee and the industry in which the assessee operates, and of the business of the associated enterprises with whom the assessee has transacted;

(d) the nature and terms (including prices) of international transactions entered into with each associated enterprise, details of property transferred or services provided and the quantum and the value of each such transaction or class of such transaction;

(e) a description of the functions performed, risks assumed and assets employed or to be employed by the assessee and by the associated enterprises involved in the international transaction;

(f) a record of the economic and market analysis, forecasts, budgets or any other financial estimates prepared by the assessee for the business as a whole and for each division or product separately, which may have a bearing on the international transactions entered into by the assessee;

(g) a record of uncontrolled transactions taken into account for analysing their comparability with the international transactions entered into, including a record of the nature, terms and conditions relating to any uncontrolled transaction with third parties which may be of relevance to the pricing of the international transactions;

(h) a record of the analysis performed to evaluate comparability of uncontrolled transactions with the relevant international transaction;

(i) a description of the methods considered for determining the arm's length price in relation to each international transaction or class of transaction, the method selected as the most appropriate method along with explanations as to why such method was so selected, and how such method was applied in each case;

(j) a record of the actual working carried out for determining the arm's length price, including details of the comparable data and financial information used in applying the most appropriate method, and adjustments, if any, which were made to account for differences between the international transaction and the comparable uncontrolled transactions, or between the enterprises entering into such transactions;

(k) the assumptions, policies and price negotiations, if any, which have critically affected the determination of the arm's length price;

(l) details of the adjustments, if any, made to transfer prices to align them with arm's length prices determined under these rules and consequent adjustment made to the total income for tax purposes;

(m) any other information, data or document, including information or data relating to the associated enterprise, which may be relevant for determination of the arm's length price.

(2) Nothing contained in sub-rule (1) shall apply in a case where the aggregate value, as recorded in the books of account, of international transactions entered into by the assessee does not exceed one crore rupees:

Provided that the assessee shall be required to substantiate, on the basis of material available with him, that income arising from international transactions entered into by him has been computed in accordance with section 92.

(3) The information specified in sub-rule (1) shall be supported by authentic documents, which may include the following:—

(a) official publications, reports, studies and data bases from the Government of the country of residence of the associated enterprise, or of any other country;

(b) reports of market research studies carried out and technical publications brought out by institutions of national or international repute;

(c) price publications including stock exchange and commodity market quotations;

(d) published accounts and financial statements relating to the business affairs of the associated enterprises;

(e) agreements and contracts entered into with associated enterprises or with unrelated enterprises in respect of transactions similar to the international transactions;

(f) letters and other correspondence documenting any terms negotiated between the assessee and the associated enterprise;

(g) documents normally issued in connection with various transactions under the accounting practices followed.

(4) The information and documents specified under sub-rules (1) and (2), should, as far as possible, be contemporaneous and should exist latest by the specified date referred to in clause (iv) of section 92F:

Provided that where an international transaction continues to have effect over more than one previous years, fresh documentation need not be maintained separately in respect of each previous year, unless there is any significant change in the nature or terms of the international transaction, in the assumptions made, or in any other factor which could influence the transfer price, and in the case of such significant change, fresh documentation as may be necessary under sub-rules (1) and (2) shall be maintained bringing out the impact of the change on the pricing of the international transaction.

(5) The information and documents specified in sub-rules (1) and (2) shall be kept and maintained for a period of eight years from the end of the relevant assessment year.

10E. Report from an accountant to be furnished under section 92E

The report from an accountant required to be furnished under section 92E by every person who has entered into an international transaction during a previous year shall be in Form No. 3CEB and be verified in the manner indicated therein.]

[1][256] [11. * * *.]

E.—Deductions to be made in computing total income

[2][257] [11A. Medical authority for certifying autism, cerebral palsy and multiple disabilities and certificate to be obtained from the medical authority for the purposes of deduction under section 80DD and section 80U

(1) For the purposes of clause (e) of the Explanation to sub-section (4) of section 80DD and clause (b) of the Explanation to sub-section (2) of section 80U, the medical authority for certifying 'autism', 'cerebral palsy', 'multiple disabilities', 'person with disability' and 'severe disability' referred to in clauses (a), (c), (h), (j) and (o) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999), shall consist of the following,—

(i) a Neurologist having a degree of Doctor of Medicine (MD) in Neurology (in case of children, a Paediatric Neurologist having an equivalent degree); or

(ii) a Civil surgeon or Chief Medical Officer in a Government hospital.

(2) For the purposes of sub-section (4) of section 80DD and sub-section (2) of section 80U, the assessee shall furnish along with the return of income, a copy of the certificate issued by the medical authority,—

(i) in Form No. 10-IA, where the person with disability or severe disability is suffering from autism, cerebral palsy or multiple disability; or

(ii) in the form prescribed vide Notification No. 16-18/97-NI. 1, dated the 1st June, 2001 published in the Gazette of India, Part I, Section 1, dated the 13th June, 2001 and Notification No. 16-18-97-NI. 1, dated the 18th February, 2002 published in the Gazette of India, Part I, Section 1, dated the 27th February, 2002 and notified under the Guidelines for evaluation of various disabilities and procedure for certification, keeping in view the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996), in any other case.

(3) Where the condition of disability is temporary and requires reassess-ment after a specified period, the certificate shall be valid for the period starting from the assessment year relevant to the previous year during which the certificate was issued and ending with the assessment year relevant to the previous year during which the validity of the certificate expires.]

[3][258] [11AA.Requirements for approval of an institution or fund under section 80G[4][259]

(1) The application for approval of any institution or fund under clause (vi) of sub-section (5) of section 80G shall be in Form No. 10G and shall be made in triplicate.

(2) The application shall be accompanied by the following documents, namely:—

(i) Copy of registration granted under section 12A or copy of notification issued under section 10(23) or 10(23C);

(ii) Notes on activities of institution or fund since its inception or during the last three years, whichever is less;

(iii) Copies of accounts of the institution or fund since its inception or during the last three years, whichever is less.

(3) The Commissioner may call for such further documents or information from the institution or fund or cause such inquiries to be made as he may deem necessary in order to satisfy himself about the genuineness of the activities of such institution or fund.

(4) Where the Commissioner is satisfied that all the conditions laid down in clauses (i) to (v) of sub-section (5) of section 80G are fulfilled by the institution or fund, he shall record such satisfaction in writing and grant approval to the institution or fund specifying the assessment year or years for which the approval is valid.

(5) Where the Commissioner is satisfied that one or more of the conditions laid down in clauses (i) to (v) of sub-section (5) of section 80G are not fulfilled, he shall reject the application for approval, after recording the reasons for such rejection in writing:

Provided that no order of rejection of an application shall be passed without giving the institution or fund an opportunity of being heard.

(6) The time limit within which the Commissioner shall pass an order either granting the approval or rejecting the application shall not exceed six months from the date on which such application was made:

Provided that in computing the period of six months, any time taken by the applicant in not complying with the directions of the Commissioner under sub-rule (3) shall be excluded.[5][260] ]

[6][261] [11B. Conditions for allowance for deduction under section 80GG

The deduction to be allowed under section 80GG in respect of any expenditure incurred by an assessee towards payment of rent for any furnished or unfurnished accommodation occupied by him for the purposes of his own residence shall be allowed subject to the condition that the assessee files the declaration in Form No. 10BA.]

[7][262] [11C. Prescribed fields for the purposes of deduction in respect of remuneration received from foreign employers or Indian concerns under section 80RRA

For the purposes of clause (vi) of Explanation 2 to section 80RRA, the prescribed fields shall be,—

(a) the profession of actuaries;

(b) Banking;

(c) Insurance; and

(d) Journalism.]

[8][263] [11D. * * *]

[9][264] [11DD. Specified diseases and ailments for the purposes of deduction under section 80DDB

(1) For the purposes of section 80DDB, the following shall be the eligible diseases or ailments:—

(i) Neurological Diseases where the disability level has been certified to be of 40% and above:

(a) Dementia

(b) Dystonia Musculorum Deformans

(c) Motor Neuron Disease

(d) Ataxia

(e) Chorea

(f) Hemiballismus

(g) Aphasia

(h) Parkinsons Disease

(ii) Malignant Cancers

(iii) Full Blown Acquired Immuno-Deficiency Syndrome (AIDS)

(iv) Chronic Renal failure

(v) Hematological disorders:(i) Hemophilia, (ii) Thalassaemia.

(2) The certificate in respect of the diseases or ailments specified in sub-rule (1) shall be issued by the following specialists working in a Government hospital—

(a) for diseases or ailments mentioned in clause (i) of sub-rule (1) — a Neurologist having a Doctorate of Medicine (D.M.) degree in Neurology or any equivalent degree, which is recognised by the Medical Council of India;

(b) for diseases or ailments mentioned in clause (ii) of sub-rule (1) — an Oncologist having a Doctorate of Medicine (D.M.) degree in Oncology or any equivalent degree which is recognised by the Medical Council of India;

(c) for diseases or ailments mentioned in clause (iv) of sub-rule (1) — a Nephrologist having a Doctorate of Medicine (D.M.) degree in Nephrology or a urologist having an Master of Chirurgiae (M.Ch.) degree in Urology or any equivalent degree, which is recognised by the Medical Council of India;

(d) for diseases or ailments mentioned in clause (v) of sub-rule (1) — a specialist having a Doctorate of Medicine (D.M.) degree in Hematology or any equivalent degree, which is recognised by the Medical Council of India:

Provided that where in respect of any diseases or ailments specified in sub-rule (1), no specialist has been specified or where the specialist specified is not posted in the Government hospital in which the patient is receiving the treatment, such certificate, with prior approval of the Head of that hospital, may be issued by any other specialist working full-time in that hospital and having a post-graduate degree in General or Internal Medicine, which is recognised by the Medical Council of India.

(3) The certificate from the prescribed authority to be furnished along with the return of income shall be in Form 10-I.]

[10][265] [11E. * * *]

[11][266] [11EA. Guidelines for specifying industrially backward districts for the purpose of deduction under [12][267] [sub-section (5) of section 80-IB]

[13][268] [(1)] In specifying a district for notification as an industrially backward district [14][269] [of Category A] under [15][270] [sub-section (5) of section 80-IB], the Central Government shall satisfy itself that,—

(a) the district has a "Total Weighted Index Count" of 250 or less in the 'All India Gradation List' appended in Appendix III of these rules; or

(b) the district is a "no industry" district as indicated in the 'All India Gradation List' mentioned in clause (a); or

(c) the district is an inaccessible hill area district as indicated in the Eighth Plan Document and has a "Total Weighted Index Count" of 500 or less in the 'All India Gradation List' mentioned in clause (a); or

(d) the district has no rail heads as on 1-4-1994 and has a "Total Weighted Index Count" of 500 or less in the 'All India Gradation List' mentioned in clause (a)

Explanation.—A district notified under these rules, shall be based on the districts as they stood in the Census Report of 1991. Where a district notified under these rules, is re-organised, either by split or otherwise, after the Census Report of 1991, all the areas comprised in the district as it existed in the Census Report of 1991 will qualify for the purpose of these rules.]

[16][271] [(2) In specifying a district for notification as an industrially backward district of Category 'B' under [17][272] [sub-section (5) of section 80-IB], the Central Government shall satisfy itself that,—

(a) the district has a "Total Weighted Index Count" of more than 250 but less than or equal to 500 in the 'All India Gradation List' as indicated in the "All India Gradation List" mentioned in clause (a) of sub-rule (1):

Provided that no district shall be notified under this sub-rule if such district has been notified under sub-rule (1).]

[18][273] 11EE[* * *]

[19][274] [F.—National Committee for Promotion of Social and Economic Welfare

11F. General

In this sub-part "National Committee" means the National Committee defined in section 35AC.

11G. Composition of the National Committee

(1) The National Committee shall consist of fourteen members appointed by the Central Government from amongst persons of eminence in public life.

(2) The term of office of a member shall be for three years commencing on the date of notification.

[20][275] (3) One of the members of the National Committee shall be appointed as Chairman by the Central Government. In the event of vacancy of the Office of Chairman for any reason and until a new Chairman is appointed, no meeting of the National Committee shall be held:

Provided that if for any meeting, the Chairman is absent, the members present for the meeting may elect one amongst themselves to preside over the day's sitting.]

(4) The National Committee may appoint one or more sub-committees from among its members for looking into specific areas of activity from time to time. The National Committee may invite any expert to examine any matter of technical nature.

11H. Headquarters and Secretariat

(1) The headquarters of the National Committee shall be at New Delhi. Its sittings shall take place at New Delhi or such other place as the Central Government may decide.

(2) Secretariat to the Committee will be provided by the Department of Revenue, Ministry of Finance, Government of India and a Joint Secretary to the Government of India in the Department of Revenue shall act as Secretary to the Committee.

11-I. Functions

(1) The functions of the National Committee shall be—

(i) to approve associations and institutions for the purpose of carrying out any eligible project or scheme; and

(ii) to recommend to the Central Government projects and schemes of any company including a public sector company, a local authority or an approved association or institution, for being notified as eligible projects or schemes for the purposes of section 35AC.

11J. Guidelines for approval of associations and institutions In according approval to any association or institution, the National Committee shall satisfy itself that,—

(i) the association or institution is—

(a) constituted as a public charitable trust; or

 (b) registered under the Societies Registration Act, 1860 (Act 21 of 1860), or under

any law corresponding to that Act in force in any part of India; or

 (c) registered under section 25 of the Companies Act, 1956 (Act 1 of 1956);

(ii) persons managing the affairs of the association or institution are persons of proven integrity;

(iii) the activities of the association or institution are open to citizens of India without any distinction of religion, race, caste, sex, place of birth or any of them and are not expressed to be for the benefit of any individual or community;

(iv) the association or institution maintains regular accounts of its receipts and expenditure; and

(v) the instrument under which the association or institution is constituted does not or the rules or regulations governing the association or institution do not contain any provision for the transfer or application, at any time, of the whole or any part of the income or assets of the association or institution for any purpose other than a charitable purpose.

11K. Guidelines for recommending projects or schemes

In making recommendations to the Central Government with regard to any project or scheme for being notified in the Official Gazette as an eligible project or scheme, the National Committee shall satisfy itself that,—

(i) the project or scheme relates to the provisions of one or more of the following:—

(a) construction and maintenance of drinking water projects in rural areas and in urban slums including installation of pump-sets, digging of wells, tube-wells and laying of pipes for supply of drinking water;

(b) construction of dwelling units for the economically weaker sections;

(c) construction of school buildings primarily for children belonging to the economically weaker sections of the society;

(d) establishment and running of non-conventional and renewable source of energy systems;

(e) construction and maintenance of bridges, public highways and other roads;

(f) any other programme for uplift of the rural poor or the urban slum-dwellers, as the National Committee may consider fit for support;

[21][276] (g) promotion of sports;]

[22][277] (h) pollution control;]

[23][278] (i) establishment and running of educational institutions in rural areas exclusively for women and children upto 12 years of age;

(j) establishment and running of hospitals and medical facilities in rural areas, exclusively for

women and children upto 12 years of age;

(k) establishment and running of creches and schools for the children of workers employed in factories or at building sites;

(l) encouraging the production of bacteria induced fertilizers;

(m) any programme that promotes road safety, prevention of accidents and traffic awareness;]

[24][279] [(n) construction of hostel accommodation for women or handicapped individuals or individuals who are of the age of sixty-five years or more;]

[25][280] [(o) establishment and running of institutions for vocational education and training in rural areas or towns which consist of population of less than five lakhs;]

[26][281] [(p) establishment and running of institutions imparting education in the field of engineering and medicine in rural areas or towns which consist of population of less than five lakhs;]

[27][282] [(q) plantation of softwood on degraded non-forest land;

(r) any programme of conservation of natural resources or of afforestation;]

[28][283] [(s) relief and rehabilitation of handicapped individuals;]

(ii) the benefit of the project or scheme shall flow to the public in general or to individuals belonging to the economically weaker sections of the society;

(iii) the applicant has the necessary expertise, personnel and other facilities for efficient implementation of the project or scheme;

(iv) the applicant shall maintain separate accounts in respect of the eligible project or scheme.

11L. Application for approval of an association or institution or for recommendation of a project or scheme by the National Committee[29][284]

(1) An application for approval of an association or institution or for recommendation of a project or scheme by the National Committee for the purposes of section 35AC may be made to the Secretary to the National Committee for Promotion of Social and Economic Welfare, Department of Revenue, Government of India, North Block, New Delhi-110 001.

(2) The application should be submitted in two sets, written either in English or Hindi, and should be accompanied with details about the name, address and status of applicant, the district/ward/circle where assessed/ registered, permanent account number, audited balance-sheet and profit and loss account or income and expenditure account for the latest year for which these are available and two preceding years.

(3) The application for approval of an association or institution should contain the following particulars and be accompanied with relevant documents,—

(i) Name and address of the association or institution;

(ii) How constituted (whether as a trust, society, etc.) supported by relevant documents like trust deed, rules and regulations, memo-randum of association, etc., and registration certificate, if any;

(iii) Names and addresses of the persons managing the affairs of the association or institution, including those who had, at any time, during the three years preceding the date of application, managed the affairs of the association or institution;

(iv) If the association or the institution is notified by the Central Government for the purposes of sub-clause (iv) or (v) of clause (23C) of section 10 of the Income-tax Act, 1961 (43 of 1961), or is approved for the purposes of section 80G, the particulars of the approval granted;

[30][285] [(v) Brief particulars of the activities of the association or institution during three years preceding the date of application:

Provided that when an association or institution has been in existence for a period of less than 3 years, in that case, that association or institution may furnish particulars of its activities for the period of its existence;]

(vi) Such other information as the association or institution may like to place before the National Committee.

(4) The application for recommendation of a project or scheme should contain the following particulars and be accompanied with relevant documents,—

(i) Title of project or scheme;

(ii) Date of commencement;

(iii) Duration and the likely date of completion;

(iv) Estimated cost of the project or scheme duly supported by a copy of the resolution of the Managing Committee of the association, institution or the local authority or, as the case may be, the board of directors of the company;

(v) Categories or classes of persons who are likely to be benefited from the project or scheme;

(vi) Affirmation that no benefit from the project or scheme, other than remuneration or honorarium for whole-time or part-time work done or for reimbursement of actual expenses related to the project will accrue to the persons managing the affairs of the association or institution or to individuals not belonging to the economically weaker sections of the society;

(vii) Where the project or scheme is to be executed by a company, information about whether the project or scheme is such which the company is required to execute under any law for the time being in force or under agreement with employees or otherwise;

(viii) Such other particulars as the applicant may like to place before the National Committee.

11M. Procedure before the National Committee

(1) All applications under rule 11L should be circulated by the Secretary to the National Committee to all the members of the Committee and will be considered by the National Committee at its sitting held at least seven days after the date on which the application is circulated. In exceptional cases, the Chairman may curtail the period of notice and may also direct consideration of the application by circulation only.

(2) The National Committee may call for such other information from the applicant as it deems necessary for taking a decision on the application and may also direct its Secretary to make or cause to be made enquiries on any matter relating to the application.

(3) The quorum for taking a decision on an application shall be at least five members, including Chairman. If a meeting is adjourned without taking a decision for lack of quorum, the [31][286] [decision to adjourn the meeting] may be taken by the members present, even without the requisite quorum. [32][287] [This decision would be conveyed to the absentee members alongwith notice about the date, time and place for re-holding the adjourned meeting.]

(4) Approval of an association or institution shall be for such period as the National Committee may decide, generally not exceeding a period of three years at a time. Subsequent approvals, if required, for a further period, can be granted only if the National Committee is satisfied about the activities of the association or institution during the preceding period of approval.

(5) The National Committee shall recommend ordinarily to the Central Government a project or scheme for being notified as an eligible project or scheme for an initial period up to three financial years. If the project or scheme is likely to extend beyond three financial years, the National Committee shall make further recommendations for a period of three years at a time after being satisfied that the project or, as the case may be, scheme is being executed properly. For this purpose, the National Committee may monitor the execution of project or scheme and call for such information as it deems necessary.

[33][288] [11MA. Form of report by an approved association or institution under clause (ii) of sub-section (4) of section 35AC

(1) The report to be furnished by the approved association or institution under clause (ii) of sub-section (4) of section 35AC shall be in Form No. 58C.

(2) The report referred to in sub-rule (1) shall be furnished to the National Committee before the expiry of three months from the end of the financial year.

(3) The National Committee, after receipt of the report referred to in sub-rule (2) may, at any time, undertake to inspect or verify the information furnished by the association or institution.

11MAA. Form of report by public sector company or local authority or association or institution, which is carrying out a notified eligible project or scheme, under clause (ii) of sub-section (5) of section 35AC

(1) The report to be furnished by a public sector company or local authority or an association or institution in respect of the eligible project or scheme, under clause (ii) of sub-section (5) of section 35AC shall be in Form No. 58D.

(2) The report referred to in sub-rule (1) shall be furnished to the National Committee before the expiry of three months from the end of the financial year.

(3) The National Committee, after receipt of the report referred to in sub-rule (2) may, at any time, undertake to inspect or verify the information furnished by the public sector company or local authority or association or institution.]

11N. Other provisions

(1) The members of the National Committee shall not be entitled to any remuneration.

[34][289] [(2) The members and Chairman of the National Committee shall be entitled to—

(i) Sitting fee of Rs. 250 per day for attending a meeting of the National Committee or any subordinate Committee set up by the Chairman of the National Committee. However, sitting fee would not be payable where applications are considered by circulation or when a member is on tour.

(ii) Reimbursement of actual expenditure incurred by way of travel by rail, road or air, for attending any meeting of the National Committee or its subordinate Committee. The entitlement of air travel would be restricted to the amount charged by Indian Airlines for its economy class for the Members and to the amount charged for the executive class of the Indian Airlines for the Chairman. Members including Chairman may travel by any class on train. Members and Chairman would also be entitled to the reimbursement of taxi fare for reaching the venue of the meeting from their place of stay and for going back to the place of stay after the meeting.

(iii) Daily allowance for out-station members would be admissible in accordance with the following Table:

Table

City or Locality	Stay in hotel and/or other establishment providing boarding and/ or lodging at scheduled tariff (Rs.)	Does not  stay in hotel or makes own arrangement (Rs.)
(A)	(B)	(C)
I. 'A' Class cities/specially expensive localities Cities Ahmedabad UA Bangalore UA Calcutta UA Delhi UA Greater Bombay UA Hyderabad UA Kanpur UA Madras UA Pune UA Localities Darjeeling District (except Siliguri sub-division) Darjeeling Town NEFA areas beyond Inner Line Naga Hills Tuensang area beyond the Inner Line The following expensive/remote localities of Himachal Pradesh:— Lahaul and Spiti District; Kinnaur District; Bharmour sub-division and Pangi sub-division of Chamba District; Paragana of Pandrahbis; Outer Seraj and Malana Panchayat area of Kulu District; Chhuhar Valley of Joginder-nagar Tehsil of Mandi District; Mangal Panchayat area of Solan District; Dodrakwar area of Rohru Tehsil; Paraganas of Chhebis, Naubis, Barabis, Pandrahbis and Atharahbis, Sarahan and Gram Panchayats of Munish, Darkali and Kashapet of Rampur Tehsil of Simla District; and Chhota Bhangal and Bara Bhangal areas of Palampur Sub-division of Kangra District. The following hill areas in Manipur which do not fall on the National Highway:— Ukhrul Churachandpur Tamenlong Jiribam Mao Maram Tengnampal	265	106
II. 'B-1' Class Cities/Expensive localities	225	85
Cities Coimbatore UA Indore City UA Jaipur UA Lucknow UA Madurai UA Nagpur UA Patna UA Surat UA Expensive localities The following areas of Himachal Pradesh:— Simla; Janjehli Block of Chachiot Tehsil of Mandi District; Chopal Tehsil of Simla District; Trans-Giri Tract of Sirmur District; Churah Tehsil, Salooni Tehsil, Kunr Panchayat and Belej Paragana of Chamba Tehsil of Chamba District; Manali-Ujhi area, Parvati and Lagg Valley and Banjar Block of Kulu District. The whole of Jammu and Kashmir; Andaman and Nicobar Islands; The entire territory of the Laccadive, Minicoy and Amindivi Islands.
III. Other cases	205	78

(iv) At the option of the Chairman or Member, in lieu of Daily allownace mentioned in item (iii) above, the out-station Chairman or member may opt to stay and claim reimbursement of rent in any State guest house or for single room in medium range ITDC Hotel like Lodi Hotel, Qutab Hotel, Janpath Hotel, Ashoka Yatri Niwas or State Government run tourist hotels/hostels or residential accommodation provided by registered societies like India International Centre or India Habitat Centre. In this situation the daily allowance would be restricted to Rs. 72, 57 or 53 for the 'A' Class; 'B-1' Class and other cities or localities respectively mentioned in item (iii) above.

(v) Members and Chairman would have the same entitlement for travel, boarding and lodging in respect of tours undertaken in pursuance of a decision taken by the National Committee. However, sitting fee would not be admissible while on tour.

(vi) Sitting fee would not be admissible in case the National Committee takes decisions by circulation of the application alone. Actual postal charges and other expenses incurred by Members and Chairman for circulating the application would be reimbursed.

(vii) Reimbursement of any other expenditure with the approval of Secretary (Revenue) and the Financial Advisor, Department of Revenue, Ministry of Finance.]

(3) In granting approval to any project or scheme undertaken by a company, the National Committee shall satisfy itself that, where any expenditure is to be incurred in the acquisition or erection of a capital asset, the applicant company has made adequate arrangements for divesting itself of the ownership of such asset without consideration in cash or otherwise immediately on completion of the eligible project, in the following manner:—

(i) in the case of drinking water projects to individuals belonging to the economically weaker sections or to the local authority or the village panchayat, as the case may be;

(ii) in the case of dwelling units to individuals belonging to the economically weaker sections, or to the local authority, village panchayat or an authority constituted under any law for the purpose of satisfying the need for housing accommodation or for the purpose of development or improvement of cities, towns and villages, as the National Committee may decide;

(iii) in the case of school buildings to an educational institution existing solely for educational purposes and not for profit or to the State Government, local authority or a village panchayat;

(iv) in the case of non-conventional or renewable energy systems to the District administration, local authority, village panchayat or to individuals belonging to the economically weaker sections, or such other statutory body as the National Committee may decide;

(v) in the case of bridges, public highways or other roads to the Central or the State Government, local authority or such other statutory body as the National Committee may decide;

(vi) in the case of equipment purchased for the purpose of eligible project or scheme, to the State Government, local authority or such other statutory body as the National Committee may decide having regard to the capacity of the authority concerned to gainfully utilise such equipment.

Note.—Where before the completion of any eligible project/ scheme, the company undertakes other eligible project(s)/ scheme(s) and transfers the equipments to such subsequent project/ scheme, the company will be required to divest itself of the ownership of the equipment only after the completion of the last eligible project/scheme;

(vii) in any other case, to such authority as the National Committee may decide.

(4) Immediately on completion of an eligible project/scheme, the company shall furnish details of the execution thereof to the National Committee. The National Committee shall satisfy itself that the project/ scheme has been completed in accordance with the approval granted and that the company has divested itself of the assets in the manner prescribed by the National Committee. If the National Committee is not so satisfied, it may, after giving an opportunity of being heard on the proposed action, order withdrawal of the approval which shall then be deemed never to have been granted.]

[35][290] [11-O.Certificate of payment or expenditure in respect of eligible projects or schemes notified under section 35AC

(1) The certificate referred to in clause (a) of sub-section (2) of section 35AC shall be in Form No. 58A.

(2) The certificate referred to in clause (b) of sub-section (2) of section 35AC shall be in Form No. 58B.

(3) Every public sector company or a local authority or an association or institution, as the case may be, who issues a certificate referred to in sub-rule (1) or sub-rule (2) shall, in respect of the 31st March in each financial year, deliver or cause to be delivered to the Secretary, National Committee, an annual report indicating the progress of work relating to the project/scheme during the year as well as the following information (Please specify the information in respect of each contributor separately):

(i) Names of the contributors and their addresses.

(ii) Permanent Account Number/GIR Number of the contributors.

(iii) Amount(s) of contribution.

(iv) The project/scheme for which contribution was made.

(v) Total amount of contribution received during the previous year.

(vi) Total cost of the project approved by the National Committee (with date of Committee's approval).

(4) Every public sector company or a local authority or an association or institution, as the case may be, who issues a certificate referred to in sub-rule (1) or sub-rule (2) shall send an annual statement of donation received and the details of the project to the National Committee and to each contributor by 30th June, following the financial year in which the amounts are received.]

[36][291] [G.—Tonnage tax scheme for shipping companies

11P. Application for exercising or renewing the option for tonnage tax scheme

An application under sub-section (1) of section 115VP for exercising an option for the tonnage tax scheme or under sub-section (1) of section 115VR for renewing the option for the tonnage tax scheme, as the case may be, shall be made in Form No. 65 and shall be verified in the manner provided therein.]

[37][292] [11Q. Computation of deemed tonnage

(1) For the purpose of the Explanation to sub-section (4) of section 115VG, deemed tonnage in respect of an arrangement of purchase of slots and slot charter shall be computed (illustrative formula given in Note 3 appearing after the corresponding Form No. 66) on the following basis:

2.5 TEU = 1 Net Tonnage (1 NT)

where TEU is Twenty foot Equivalent Unit (Container of this size)

(2) Computation of deemed tonnage (illustrative formula given in Note 4 appearing after the corresponding Form No. 66) in respect of an arrangement of sharing of break-bulk vessel shall be made on the following basis:

(i) in case where cargo is restricted by volume: 19 cubic meter (cbm) = 1 net tonnage (1 NT); and

(ii) in case where cargo is restricted by weight 14 metric tons = 1 net tonnage (1 NT)

11R. Incidental activities for purposes of relevant shipping income

The incidental activities (details given in Note 5 appearing after the corresponding Form No. 66) referred to in sub-section (5) of section 115V-I shall be the following, namely:—

(i) maritime consultancy charges;

(ii) income from loading or unloading of cargo;

(iii) ship management fees or remuneration received for managed vessels; and

(iv) maritime education or recruitment fees.

11S. Computation of average of net tonnage for charter-in of tonnage

The limit for charter-in of tonnage of the qualifying ships referred to in section 115VV (to be worked out according to the illustration explained in Note 6 appearing after the corresponding Form No. 66) during any previous year shall be computed by dividing the total number of chartered-in ton days by the total number of ton days operated by the company.

11T. Form of report of an accountant under clause (ii) of section 115VW

The report of audit of accounts of a qualified company which is required to be furnished under clause (ii) of section 115VW shall be in Form No. 66.]

PART III

ASSESSMENT PROCEDURE

[38][293] [12. Return of income and return of fringe benefits

(1) The return of income required to be furnished under sub-section (1) or sub-section (3) or sub-section (4A) or sub-section (4B) or sub-section (4C) or sub-section (4D) of section 139 or clause (i) of sub-section (1) of section 142 or sub-section (1) of section 148 or section 153A or the return of fringe benefits required to be furnished under sub-section (1) or sub-section (2) of section 115WD relating to the assessment year commencing on the 1st day of April, 2007 or any subsequent assessment year shall,—

(a) in the case of a person being an individual where the total income includes income chargeable to income-tax under the head "salaries" or income in the nature of family pension as defined in the Explanation to clause (iia) of section 57 but does not include any other income except income by way of interest chargeable to income-tax under the head "income from other sources", be in Form No. ITR-1 and be verified in the manner indicated therein;

(b) in the case of a person being an individual [not being an individual to whom clause (a) applies] or a Hindu Undivided family where the total income does not include any income chargeable to income-tax under the head "Profits or gains of business or profession", be in Form No. ITR-2 and be verified in the manner indicated therein;

(c) in the case of a person being an individual or a Hindu Undivided family who is a partner in a firm and where income chargeable to income-tax under the head "Profits or gains of business or profession" does not include any income except the income by way of any interest, salary, bonus, commission or remuneration, by whatever name called, due to, or received by him from such firm, be in Form No. ITR-3 and be verified in the manner indicated therein;

(d) in the case of a person being an individual or a Hindu Undivided family other than the individual or Hindu Undivided family referred to in clause (a) or clause (b) or clause (c) and deriving income from a proprietory business or profession, be in Form No. ITR-4 and be verified in the manner indicated therein;

(e) in the case of a person not being an individual or a Hindu Undivided family or a company or a person to which clause (g) applies, be in Form No. ITR-5 and be verified in the manner indicated therein;

(f) in the case of a company not being a company to which clause (g) applies, be in Form No. ITR-6 and be verified in the manner indicated therein;

(g) In the case of a person including a company whether or not registered under section 25 of the Companies Act, 1956 (1 of 1956), required to file a return under sub-section (4A) or sub-section (4B) or sub-section (4C) or sub-section (4D) of section 139, be in Form No. ITR-7 and be verified in the manner indicated therein;

(h) in the case of a person who is not required to furnish the return of income but is required to furnish the return of fringe benefits, be in Form No. ITR-8 and be verified in the manner indicated therein.

(2) The return of income and return of fringe benefits required to be furnished in Form No. ITR-1 or Form No. ITR-.2 or Form No. ITR-3 or Form No. ITR-4 or Form No. ITR-5 or Form No. ITR-6 or Form No. ITR-8 shall not be accompanied by a statement showing the computation of the tax payable on the basis of the return, or proof of the tax, if any, claimed to have been deducted or collected at source or the advance tax or tax on self-assessment, if any, claimed to have been paid or any document or copy of any account or Form or report of audit required to be attached with the return of income or the return of fringe benefits under any of the provisions of the Act.

(3) The return of income or return of fringe benefits referred to in sub-rule (1) may be furnished in any of the following manners, namely:—

(i) furnishing the return in a paper form;

(ii) furnishing the return electronically under digital signature;

(iii) transmitting the data in the return electronically and thereafter submitting the verification of the return in Form ITR-V;

(iv) furnishing a bar-coded return in a paper form:

Provided that—

(a) a firm required to furnish the return in Form ITR-5 and to whom provisions of section 44AB are applicable or a company required to furnish the return in Form ITR-6 shall furnish the return in the manner specified in clause (ii) or clause (iii);

(b) a person required to furnish the return in Form ITR-7 shall furnish the return in the manner specified in clause (i).

(4) The Director-General of Income-tax (Systems) shall specify the procedures, formats and standards for ensuring secure capture and transmission of data and shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to furnishing the returns in the manners specified in clauses (ii), (iii) and (iv) of sub-rule (3).

(5) Where a return of income or return of fringe benefits, relates to the assessment year commencing on the 1st day of April, 2006 or any earlier assessment year, it shall be furnished in the appropriate form as applicable in that assessment year.]

(a)    permanent physical disability of more than 50 per cent in one limb; or

(b)    permanent physical disability of more than 60 per cent in two or more limbs; or

(c)    permanent deafness with hearing impairment of 71 decibels and above; or

(d)    permanent and total loss of voice;

  (ii) 1mental retardation shall be regarded as a mental retardation if intelligence quotient is less than 50 on a test with a mean of 100 and a standard deviation of 15 such as the Wechsle scale.

 (iii) blindness shall be regarded as a permanent physical disability, if it is incurable and falls in any one of the categories specified below, namely:—

All with corrections

Better eye Worse eye

(a)        6/60-4/60 or Field of vision 110-20 3/60 to Nil

(b)        3/60 to 1/60 or Field of vision 100F.C. at 1 foot to Nil

(c)         F.C. at 1 foot to Nil or F.C. at 1 foot to Nil or

Field of vision 100 Field of vision 100

(d)         Total absence of sight Total absence of sight."

(a)    Dementia

(b)    Dystonia Musculorum Deformans

(c)    Motor Neuron Disease

(d)    Ataxia

(e)    Chorea

(f)    Hemiballismus

(g)    Aphasia

(h)    Parkinson's Disease

Explanation.—For the purposes of this rule the above-mentioned diseases shall be treated as chronic and protracted, if the disability has been certified to be 40% and above.

(i)    where the total income includes any income chargeable to income-tax under the head "Profits and gains of business or profession", be in Form No. 2 and be verified in the manner indicated therein;

[(ii)    * * *]

(iii)    where the total income does not include any income chargeable to income-tax under the head "Profits and gains of business or profession" be in Form No. 3 and be verified in the manner indicated therein:

Provided that the assessee to whom clause (b) applies shall also have the option of filing the return in Form No. 2D SARAL:

Provided further that in the case of an individual or a Hindu undivided family, resident in India, where the total income does not include income chargeable to income-tax under the head "Profits and gains of business or profession" or "Capital gains" or agricultural income, the assessee shall also have the option of filing the return in Form No. 2E NAYA SARAL on or before 31st day of July, 2006:

Provided also that in the case of an individual, resident in India, where—

(a)    his total income includes income chargeable to income-tax under the head 'Salaries';

(b)    the income from salaries before allowing deductions under section 16 of the Income-tax Act, 1961 does not exceed rupees one lakh fifty thousand;

(c)    his total income does not include income chargeable to income-tax under the head 'Profits and gains of business or profession' or 'Capital gains' or agricultural income; and

(d)    he is not in receipt of any other income from which tax has been deducted at source by any person other than the employer; the assessee shall also have the option of filing return in Form No. 16AA:

Provided also that in the case of an assessee being an individual or a Hindu undivided family, resident in India, where—

(a) the total income does not include income chargeable to income-tax under the head "Profits and gains of business or profession" or "Capital gains" or agricultural income;

(b) no relief under section 89 in respect of arrears or advance of salary is claimed; and

(c) he does not own more than one house property,the assessee shall also have the option of filing the return in Form No. 2F and the return in this Form shall not be accompanied by a statement showing the computation of the tax payable on the basis of the return, or proof of the tax, if any, claimed to have been deducted at source or the advance tax or tax on self-assessment, if any, claimed to have been paid:

(c) in the case of a person [including a company whether or not registered under section 25 of the Companies Act, 1956 (1 of 1956)], in receipt of income derived from property held under trust or other legal obligation wholly for charitable or religious purposes, or in part only for such purposes, who claims exemption under section 11, be in Form No. 3A and be verified in the manner indicated therein;

(d) in the case of a person required to file a return under proviso to sub-section (1) of section 139, be in Form No. 2C and verified in the manner prescribed therein;

(e) in the case of a person required to file a return under sub-section (4C) of section 139 or sub-section (4D) of section 139, be in Form No. 3A and be verified in the manner indicated therein;

(f) in the case of a person who—

(i) is required to furnish the return of income and also the return of fringe benefits but has filed the return of income in Form No. 1 or Form No. 2 or Form No. 2D or Form No. 3A for the assessment year 2006-07 before the publication of these rules or opts to furnish the return of income in Form No. 2D; or

(ii) is not required to furnish the return of income but is required to furnish the return of fringe benefits,the return of fringe benefits shall be in Form No. 3B and be verified in the manner indicated therein.

(1A) The return setting forth the total income including the undisclosed income for the block period required to be furnished under clause (a) of section 158BC shall be in Form No. 2B and be verified in the manner indicated therein.

(2) Notwithstanding anything contained in sub-rule (1),—

(a) where a return of income relates to the assessment year commencing on the 1st day of April, 1961, or any earlier assessment year, it shall be furnished in the appropriate form prescribed in rule 19 of the Indian Income-tax Rules, 1922, and shall be verified in the manner indicated therein;

(b) where a return of income relates to the assessment year commencing on the 1st day of April, 1962, or the 1st day of April, 1963, or the 1st day of April, 1964, it shall be furnished in the appropriate form in force immediately before the 1st day of April, 1967 and shall be verified in the manner indicated therein.

(3) The return of income or the return of fringe benefits to be furnished in Form No. 1 or Form No. 2 or Form No. 3 or Form No. 3B shall not be accompanied by a statement showing the computation of the tax payable on the basis of the return, or proof of the tax, if any, claimed to have been deducted at source or the advance tax or tax on self-assessment, if any, claimed to have been paid or any document or copy of any account or Form or report of audit required to be attached with the return of income or the return of fringe benefits under any of the provisions of the Income-tax Act, 1961."

The original rule 12 was amended by the Income-tax (Amendment) Rules, 1962 and Income-tax (Third (Amendment) Rules, 1964

[1][294] [12A. Preparation of return by authorised representative[2][295]

Every authorised representative of an assessee, being an authorised representative specified in clause (iii) or clause (iv) or clause (v) or clause (vi) or clause (vii) of sub-section (2) of section 288, who has prepared the return of income furnished by the assessee shall, either before making an appearance before the [3][296] [Assessing Officer] having jurisdiction to assess that assessee, or immediately after making such appearance, furnish to that officer—

(a) particulars of accounts, statements or other documents supplied to him by the assessee for the preparation of the return of income; and

(b) where the authorised representative has for the purpose of preparation of the return of income carried out any examination of such accounts, statements or documents, a report on the scope and results of such examination.]

[4][297] [12B. Statement under sub-section (3A) of section 115R

(1) The statement of income distributed shall be furnished as provided in sub-rules (2) and (3) to,—

(i) the Assessing Officer so designated by the Chief Commissioner or Commissioner of Income-tax, within whose area of jurisdiction, the principal office of the Unit Trust of India or the concerned Mutual Fund is situated;

(ii) in any other case, to the Assessing Officer within whose area of jurisdiction, the principal office of the Unit Trust of India or the concerned Mutual Fund is situated.

(2) The statement of distributed income which is to be furnished under sub-section (3A) of section 115R by the Unit Trust of India shall be in Form No. 63, duly verified by an accountant in the manner indicated therein.

(3) The statement of distributed income which is to be furnished under sub-section (3A) of section 115R by a Mutual Fund shall be in Form No. 63A, duly verified by an accountant in the manner indicated therein.]

[5][298] [12C. Statement under sub-section (2) of section 115U

(1) The statement of distributed income shall be furnished by the 30th November of the financial year following the previous year during which such income is distributed, to the Chief Commissioner or Commissioner of Income-tax, within whose jurisdiction, the principal office of the Venture Capital Company or the Venture Capital Fund, as the case may be, is situated.

(2) The statement of distributed income which is to be furnished under sub-section (2) of section 115U by the Venture Capital Company or the Venture Capital Fund shall be in Form No. 64, duly verified by an accountant in the manner indicated therein.]

[6][299] [13. * * *]

14. Form of verification under section 142

The information which a person is required by the [7][300] [Assessing Officer] to furnish under clause (ii)[8][301] of sub-section (1) of section 142 shall be verified in the following manner, namely:

"I declare that to the best of my knowledge and belief, the information furnished in the statement/statements is correct and complete and other particulars shown therein are truly stated."

[9][302] [14A. Form of audit report under section 142(2A)[10][303]

The report of audit of the accounts of an assessee which is required to be furnished under sub-section (2A) of section 142 shall be in Form No. 6B.]

[11][304] [14B. Guidelines for the purposes of determining expenses for audit

(1) Every Chief Commissioner shall maintain a panel of accountants, out of the persons referred to in the Explanation to sub-section (2) of section 288, for the purposes of sub-section (2A) of section 142.

(2) Where the Assessing Officer directs for audit under sub-section (2A) of section 142 on or after the 1st day of June, 2007, the expenses of, and incidental to, audit (including the remuneration of the Accountant, qualified Assistants, semi-qualified and other Assistants who may be engaged by such Accountant) shall not be less than rupees three thousand seven hundred and fifty and not more than rupees seven thousand and five hundred for every hour of the period as specified by the Assessing Officer under sub-section (2C) of section 142.

(3) The period referred to in sub-rule (2) shall be specified in terms of the number of hours required for completing the report.

(4) The Accountant referred to in sub-section (2A) of section 142 shall maintain a time-sheet and shall submit it to the Chief Commissioner or Commissioner, along with the bill.

(5) The Chief Commissioner or the Commissioner shall ensure that the number of hours claimed for billing purposes is commensurate with the size and quality of the report submitted by the Accountant.]

15. Notice of demand for regular assessment, etc.

(1) Subject to the provisions of rules [12][305] [[13][306] [* * *] 38 and 48A], the notice of demand under section 156 shall be in Form No. 7.

[14][307] [* * *]

[15][308] [PART IIIA

AVOIDANCE OF REPETITIVE APPEALS

16. Declaration under section 158A

(1) The declaration referred to in sub-section (1) of section 158A shall be in Form No. 8 and shall be verified in the manner indicated therein.

(2) The declaration and the verification referred to in sub-rule (1) shall be signed by the person specified in sub-rule (2) of rule 45.

(3) The declaration referred to in sub-rule (1) shall,—

(a) in a case where it is furnished to the [16][309] [Deputy Commissioner (Appeals)] or the Commissioner (Appeals), be in duplicate, and

(b) in a case where it is furnished to the Appellate Tribunal, be in triplicate.]

PART IV

TAX EXEMPTIONS [17][310] [AND RELIEFS]

[18][311] [16A. Prescribed authority[19][312] for approving any institution or body established for scientific research

For the purposes of sub-clause (viia) of clause (6) of section 10, the "prescribed authority" shall be the Secretary, Department of [20][313] [Scientific and Industrial Research], Government of India:

Provided that every case pending on or before the 1st day of June, 1982, with any authority, other than the said Secretary, shall stand transferred to the said Secretary for disposal.]

[21][314] [16B. Prescribed authority[22][315] for the purposes of clauses (8A) and (8B) of section 10

For the purposes of clauses (8A) and (8B) of section 10, the 'prescribed authority' shall be the Additional Secretary, Department of Economic Affairs in the Ministry of Finance, Government of India in concurrence with Member (Income-tax) of the Board.]

[23][316] [16C. Requirements for approval of a fund under section 10(23AAA)

(1) The fund shall be formed under a trust and it shall be evidenced by a trust deed.

(2) The contributions to the fund are to be made by the employees by way of periodical subscription.

(3) The application for approval of any fund under clause (23AAA) of section 10 shall be made in Form No. 9 to the Commissioner having jurisdiction over the area or territory in which the accounts are kept and such application shall be accompanied by the documents mentioned therein.

(4) Where the Commissioner is satisfied that all the conditions laid down in clause (23AAA) of section 10 are fulfilled in the case of the fund, he shall record such satisfaction in writing and grant approval to the fund specifying the assessment year or years for which the approval is valid so however that such approval shall at one time have effect for such assessment year or years not exceeding three assessment years.

(5) Where the Commissioner is satisfied that one or more of the conditions laid down in clause (23AAA) of section 10 are not fulfilled, he shall reject the application for approval, after recording the reasons for such rejection in writing:

Provided that no order of rejection of an application shall be passed without giving an opportunity of being heard.]

[24][317] [16CC. Report of audit of accounts of a fund or trust or institution, etc.*[318]

The report of audit of the accounts of a fund or trust or institution or any university or other educational institution or any hospital or other medical institution which is required to be furnished under the tenth proviso to clause (23C) of section 10 shall be in Form No. 10BB.]

[25][319] [16D. Form of Report for claiming deduction under section 10A

The report of an accountant which is required to be furnished by the assessee along with the return of income, under sub-section (5) of section 10A shall be in Form No. 56F.]

[26][320] [16DD. Form of particulars to be furnished alongwith return of income for claiming deduction under clause (b) of sub-section (1B) of section 10A

The particulars, which are required to be furnished by the assessee alongwith the return of income under clause (b) of sub-section (1B) of section 10A shall be in Form No. 56FF.]

[27][321] [16E. Form of Report for claiming deduction under section 10B

The report of an accountant which is required to be furnished by the assessee along with the return of income, under sub-section (5) of section 10B shall be in Form No. 56G.]

[28][322] [16F. Form of report for claiming deduction under section 10BA

The report of an accountant which is required to be furnished by the assessee along with the return of income, under sub-section (5) of section 10BA shall be in Form No. 56H.]

[29][323] [17. Notice for accumulation of income by charitable or religious trust or institution or association referred to in clauses (21) and (23) of section 10[30][324]

The notice to be given to the Assessing Officer or the prescribed authority under sub-section (2) of section 11 or under the said provision as applicable under clause (21) or clause (23) of section 10 shall be in Form No. 10 and shall be delivered before the expiry of the time allowed under sub-section (1) of section 139, for furnishing the return of income.]

[31][325] [17A. Application for registration of charitable or religious trusts, etc.

An application under [32][326] [clause (aa) of sub-section (1)] of section 12A for registration of a charitable or religious trust or institution shall be made in duplicate in Form No. 10A and shall be accompanied by the following documents, namely:—

(a) where the trust is created, or the institution is established, under an instrument, the instrument in original, together with one copy thereof; and where the trust is created, or the institution is established, otherwise than under an instrument, the document evidencing the creation of the trust or the establishment of the institution, together with one copy thereof:

Provided that if the instrument or document in original cannot conveniently be produced, it shall be open to the [33][327] [* * * Commissioner] to accept a certified copy in lieu of the original;

(b) where the trust or institution has been in existence during any year or years, prior to the financial year in which the application for registration is made, two copies of the accounts of the trust or institution relating to such prior year or years (not being more than three years immediately preceding the year in which the said application is made) for which such accounts have been made up.]

[34][328] [17B. Audit report in the case of charitable or religious trusts, etc.

The report of audit of the accounts of a trust or institution, which is required to be furnished under clause (b) of section 12A, shall be in Form No. 10B.]

[35][329] [17C. Forms or modes of investment or deposits by a charitable or religious trust or institution

The forms and modes of investment or deposits under clause (xii) of sub-section (5) of section 11 shall be the following, namely:—

(i) investment in the units issued under any scheme of the mutual fund referred to in clause (23D) of section 10 of the Income-tax Act, 1961;

[36][330] [* * *];

(ii) any transfer of deposits to the Public Account of India;]

[37][331] [(iii) deposits made with an authority constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both;]

[38][332] [(iv) investment by way of acquiring equity shares of a depository as defined in clause (e) of sub-section (1) of section 2 of the Depositories Act, 1996 (22 of 1996);]

[39][333] [(v) investment made by a recognised stock exchange referred to in clause (f) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956), (hereafter referred to as investor) in the equity share capital of a company (hereafter referred to as investee)—

(A) which is engaged in dealing with securities or mainly associated with the securities market;

(B) whose main object is to acquire the membership of another recognised stock exchange for the sole purpose of facilitating the members of the investor to trade on the said stock exchange through the investee in accordance with the directions or guidelines issued under the Securities and Exchange Board of India Act, 1992 (15 of 1992) by the Securities and Exchange Board of India established under section 3 of that Act; and

(C) in which at least fifty-one per cent of equity shares are held by the investor and the balance equity shares are held by members of such investor;]

[40][334] [(vi) investment by way of acquiring equity shares of an incubatee by an incubator.

Explanation.—For the purposes of this clause,—

(a) "incubatee" shall mean such incubatee as may be notified by the Government of India in the Ministry of Science and Technology;

(b) "incubator" shall mean such Technology Business Incubator or Science and Technology Entrepreneurship Park as may be notified by the Government of India in the Ministry of Science and Technology.]

[41][335] [17D. Prescribed foreign projects for the purposes of deduction in respect of profits and gains from projects outside India under section 80HHB

For the purposes of sub-clause (iii) of clause (b) of sub-section (2) of section 80HHB, any project for execution of work of exploration, exploitation, development and production of hydrocarbons outside India shall be a foreign project.]

[42][336] [18. * * *]

[43][337] [18A. * * *]

[44][338] [18AA. * * *]

[45][339] [18AAA.Prescribed authority[46][340] for approval of a University or any educational institution of national eminence for the purpose of section 80G

For the purpose of sub-clause (iiif) of clause (a) of sub-section (2) of section 80G, the prescribed authority,—

(a) in relation to a University or any non-technical institution of national eminence shall be the Director General (Income-tax Exemptions) who shall grant approval with the concurrence of the Secretary, University Grants Commission;

(b) in relation to any technical institution of national eminence shall be the Director General (Income-tax Exemption) who shall grant approval with the concurrence of the Secretary, All India Council of Technical Education.

Explanation.—For the purposes of this rule—

(1) "All India Council of Technical Education" means the All India Council of Technical Education established under section 3 of the All India Council for Technical Education Act, 1987 (52 of 1987);

(2) "University Grants Commission" means the University Grants Commission established under section 4 of the University Grants Commission Act, 1956 (3 of 1956).]

[47][341] [18AAAA. Prescribed authority for the purpose of receiving separate accounts from trusts or funds or institutions for providing relief to the victims of earthquake in Gujarat

(1) For the purpose of sub-section (5C) of section 80G, the prescribed authority shall be the Director General of Income-tax (Exemptions).

(2) The trust, the fund or the institution, which is established in India for a charitable purpose and is approved in terms of clause (vi) of sub-section (5) shall maintain separate accounts of income and expenditure for providing relief to the victims of earthquake in Gujarat and get such accounts audited by an accountant, as defined in the Explanation to sub-section (2) of section 288 and furnish the report of such audit, duly signed and verified by such accountant to the Director General of Income-tax (Exemptions) in Form No. 10AA. Such authority, on receipt of the accounts in the said form, shall give the finding as to whether the donations received for the purpose of providing relief to the victims of earthquake in Gujarat are chargeable to tax in the hands of the trusts or the fund or the institution under clause (23C) of section 10 or under section 12 or not, as the case may be, and determine the extent thereof.

(3) Where the findings of the Director General of Income-tax (Exemptions) are not beneficial to the assessee, such authority shall give an opportunity to the assessee before making the findings.

(4) The Director General of Income-tax (Exemptions) shall bring his findings to the knowledge of the concerned Assessing Officer within one month of making such findings.]

[48][342] [18AAAAA. Guidelines for specifying an association or institution for the purposes of notification under clause (c) of sub-section (2) of section 80G

In specifying an association or institution for notification under clause (c) of sub-section (2) of section 80G, the Central Government shall satisfy itself that,—

(a) the association or institution has as its object the control, supervision, regulation or encouragement in India of the games or sports notified under Explanation 4 to section 80G;

(b) the association or institution has a proven record of its dedication towards development of infrastructure of sports or games or promotion of sports or games for at least a period of three years;

(c) the association or institution does not distribute any part of its income in any manner to its members except as grants to any association or institution affiliated to it;

(d) the association or institution applies the amount received by way of donation referred to in clause (c) of sub-section (2) of section 80G for purposes of development of infrastructure for games or sports in India or for sponsoring of games or sports in India;

(e) the association or institution maintains regular accounts of its receipt and expenditure;

(f) the association or institution files its return of income regularly;

(g) the notification issued by the Central Government under clause (c) of sub-section (2) of section 80G shall have effect in relation to the assessment year or years, not exceeding three assessment years (including an assessment year or years commencing before the date on which such notification is issued), as may be specified in such notification.]

[49][343] [18AAB. Prescribed authority for approval of companies engaged in Scientific and Industrial Research and Development for the purposes of section 80-IA

For the purposes of sub-section (4B) of section 80-IA, the prescribed authority shall be the Secretary, Department of Scientific and Industrial Research, Ministry of Science and Technology, Government of India.]

[50][344] [18B. Form of audit report for claiming deduction under section 80HH

The report of audit of the accounts of an assessee, other than a company or a co-operative society, which is required to be furnished under sub-section (5) of section 80HH shall be in Form No. 10C.]

[51][345] [18BB. Form of audit report for claiming deduction under section 80HHA

The report of the audit of the accounts of an assessee, other than a company or a co-operative society, which is required to be furnished under sub-section (4) of section 80HHA shall be in Form No. 10CC.]

[52][346] [18BBA. [53][347] [Form of reports for claiming deduction under section 80HHB or under section 80HHC or under section 80HHD and prescribed authority under section 80HHD]

(1) The report of the audit of the accounts of an assessee, other than a company or a co-operative society, which is required to be furnished under clause (i) of sub-section (3) of section 80HHB shall be in Form No. 10CCA.

[54][348] [(1A) The report of the audit of the accounts of an assessee which is required to be furnished under clause (i) of sub-section (2) of section 80HHBA shall be in Form No. 10CCAA.]

[55][349] [(1B) The certificate from an accountant which is required to be furnished by the assessee under clause (ia) of sub-section (3) of section 80HHB shall be in Form No. 10CCAH.]

[56][350] [(2) The certificate from the Export House or Trading House which is required to be furnished by the supporting manufacturer under clause (b) of sub-section (4A) of section 80HHC shall be in Form No. 10CCAB.

[57][351] [(2A) The certificate from the undertaking in the Special Economic Zone which is required to be furnished under proviso to sub-section (4) of section 80HHC by an undertaking referred to in sub-section (4C) of that section shall be in Form No. 10CCABA.]

(3) The report of an accountant which is required to be furnished by the assessee under sub-section (4) or clause (a) of sub-section (4A) of section 80HHC shall be in Form No. 10CCAC.]]

[58][352] [(4) The report of the accountant which is required to be furnished by the assessee under sub-section (6) of section 80HHD shall be in Form No. 10CCAD.]

[59][353] [(5) For the purposes of section 80HHD, the "prescribed authority" shall be the Director General in the Directorate General of Tourism, Government of India.]

[60][354] [(6) The certificate from a person making payment to an assessee, engaged in the business of a hotel or of a tour operator or of a travel agent which is required to be furnished under sub-section (2A) of section 80HHD shall be in Form No. 10CCAE.]

[61][355] [(7) The report of an accountant which is required to be furnished by the assessee under sub-section (4) [62][356] [or clause (i) of sub-section (4A)] of section 80HHE shall be in Form No. 10CCAF.]

[63][357] [(8) The certificate from the exporting company which is required to be furnished by the supporting software developer under clause (ii) of sub-section (4A) of section 80HHE shall be in Form No. 10CCAG.]

[64][358] [(9) The report of an accountant which is required to be furnished by the assessee under sub-section (4) of section 80HHF shall be in Form No. 10CCAI.]

[65][359] [18BBB. Form of audit report for claiming deduction under section 80-I or section 80-IA or section 80-IB [66][360] [or section 80-IC]

(1) The report of the audit of the accounts of an assessee, which is required to be furnished under sub-section (7) of section 80-IA or sub-section (7) of section 80-I, except in the cases of multiplex theatres as defined in sub-section (7A) of section 80-IB or convention centres as defined in sub-section (7B) of section 80-IB [67][361] [or hospitals in rural areas as defined in sub-section (11B) of section 80-IB], shall be in Form Number 10CCB.

(2) A separate report is to be furnished by each undertaking or enterprise of the assessee claiming deduction under section 80-I or 80-IA or 80-IB [68][362] [or section 80-IC] and shall be accompanied by the Profit and Loss Account and Balance Sheet of the undertaking or enterprise as if the undertaking or the enterprise were a distinct entity.

(3) In the case of an enterprise carrying on the business of developing or operating and maintaining or developing, operating and maintaining an infrastructure facility, the form shall be accompanied by a copy of the agreement of the enterprise with the Central Government or the State Government or the local authority for carrying on the business of developing or operating and maintaining or developing, operating and maintaining the infrastructure facility.

(4) In any other case, the form shall be accompanied by a copy of the agreement, approval or permission, as the case may be, to carry on the activity signed or issued by the Central Government or the State Government or the local authority for carrying on the eligible business.]

[69][363] [18BBC. Prescribed authority for approval of hotels located in certain areas

(1) For the purposes of sub-clause (iii) of clause (c) of sub-section (7) of section 80-IB the prescribed authority,—

(a) in relation to hotels located in an area or place referred to in clause (a) of that sub-section, shall be the Director General (Income-tax Exemptions) who shall grant approval on the concurrence of the Director General in the Directorate General of Tourism, Government of India;

(b) in relation to hotels located in any place referred to in clause (b) of that sub-section, shall be the Director General in the Directorate General of Tourism, Government of India.

(2) For the purpose of clause (a) of sub-section (7) of section 80-IB, a hotel shall be approved by the prescribed authority if the following conditions are fulfilled, namely:—

(a) such hotel is located in an area or place specified under clause (a) of the said sub-section (7);

(b) there are not more than 300 hotel rooms of 3-star category and above in the aggregate, in areas or places specified under clause (a) of the said sub-section (7) within the jurisdiction of the revenue sub-division in which the hotel is located;

(c) in case the hotel is located in a place where there is need for development of infrastructure for tourism, such place has been specified by the Central Government under clause (a) of the said sub-section (7) on the recommendations of the Department of Tourism.]

[70][364] [18BBD. Prescribed authority for approval of companies carrying on scientific and industrial research and development

For the purposes of sub-section (4B) of section 80-IA, the prescribed authority shall be Secretary in the Department of Scientific and Industrial Research and Development, Ministry of Science and Technology, Government of India.]

[71][365] [18BBE. Computation of profits of certain activities forming integral part of a highway project for the purpose of section 80-IA

(1) For the purpose of sub-section [72][366] [(6) of section 80-IA],—

(a) the profits of housing or other activities, which are integral part of a highway project, shall be computed on the basis and manner specified below:—

(i) In a case where the annual profits of the housing or other activities which are integral part of a highway project can be arrived at in accordance with the regular method of accounting followed, the profits so arrived at as computed under the provisions of the Act;

 (ii) In any other case, the amount of profits arrived at based on the percentage of completion of the activities referred to in clause (i) during the relevant previous year.

(2) Every assessee shall maintain separate accounts for the activities referred to in sub-rule (1) and shall submit a certificate from an accountant, specifying the amount credited to the reserve account and the amount utilised during the relevant previous year for the highway project.

Explanation.—For the purposes of this rule, accountant means,—

(i) a Chartered Accountant within the meaning of the Chartered Accountants Act, 1949 (38 of 1949); or

(ii) any person who, in relation to any State, is, by virtue of the provisions in sub-section (2) of section 226 of the Companies Act, 1956 (1 of 1956), entitled to be appointed to act as an auditor of companies registered in that State.

(3) The certificate referred to in sub-rule (2) shall be in Form No. 10CCC.]

[73][367] [18C. Eligibility of Industrial Parks for benefits under section 80-IA(4)(iii).—

(1) The undertaking shall begin to develop, develop and operate or maintain and operate an industrial park any time during the period beginning on the 1st day of April, 2006, and ending on the 31st day of March, 2009.

(2) The undertaking and the Industrial Park shall be notified by the Central Government under the Industrial Park Scheme, 2008.

(3) The undertaking shall continue to fulfill the conditions envisaged in the Industrial Park Scheme, 2008.]

[74][368] [18D. Prescribed authority for approval of companies carrying on scientific research and development

(1) For the purposes of sub-section (8A) of section 80-IB, the prescribed authority shall be the Secretary, Department of Scientific and Industrial Research, Ministry of Science and Technology, Government of India.

(2) The prescribed authority shall initially grant approval to a company carrying on scientific research and development for a period of three assessment years and subject to satisfactory performance of that company on periodic review extend the said approval for a further period of three assessment years so that the total period of approval is for ten consecutive assessment years, beginning from the initial assessment year.

18DA. Prescribed conditions for deduction under sub-section (8A) of section 80-IB

(1) Any company carrying on scientific research and development shall be eligible for deduction specified in sub-section (8A) of section 80-IB, if such company,—

(a) is registered in India;

(b) has its main object the scientific and industrial research and development;

(c) has adequate infrastructure such as laboratory facilities, qualified manpower, scale-up facilities and prototype development facilities for undertaking scientific research and development of its own;

(d) has a well formulated research and development programme comprising of time bound research and development projects with proper mechanism for selection and review of the projects or programme;

(e) is engaged exclusively in scientific research and development activities leading to technology development, improvement of technology and transfer of technology developed by themselves;

(f) submits the annual return along with statement of accounts and annual report within eight months after the close of each accounting year to the prescribed authority.

(2) Every company which is approved under sub-rule (2) of rule 18D shall,—

(a) sell any prototype or output, if any, from its laboratories or pilot plants with the prior permission of the prescribed authority;

(b) intimate the change, if any, in its memorandum of association and articles of association relating to its main objects and forward the altered copy of memorandum of association and articles of association to the prescribed authority;

(c) apply for extension of the approval at least three months before expiry of the approval already granted by the prescribed authority;

(d) have a system of monitoring the cost of research and development projects.

(3) If, at any stage, it is found that—

(a) the approval granted to the company referred to in sub-rule (2) of rule 18D is to avoid payment of taxes by its group companies or companies related to its directors or majority of its shareholders;

(b) any provisions of the Act or the rules have been violated,the prescribed authority specified may withdraw the approval so granted.

(4) Every company referred to in sub-rule (1) shall make an application to the prescribed authority for the purposes of obtaining approval.

(5) Every application referred to in sub-rule (4) shall be accompanied by—

(a) memorandum of association and articles of association incorporating all amendments duly certified by the company secretary or managing director of the company;

(b) annual report of the company for the last three years, if available;

(c) photocopies of the memorandum of understanding relating to all ongoing and future sponsored research projects or programmes.

(6) The prescribed authority may call for any information or document which may be necessary for consideration of the grant of approval under sub-rule (2) of rule 18D.

(7) The prescribed authority shall grant approval within four months from the date of receipt of the application:

Provided that where the approval is not granted, the decision of the said authority shall be communicated to the applicant within the said period of four months:

Provided further that no approval shall be refused unless the applicant has been given an opportunity of being heard.]

[75][369] [18DB. Prescribed area, facilities and amenities for multiplex theatres and particulars of audit report, for deduction under sub-section (7A) and clause (da) of sub-section (14) of section 80-IB

(1) For the purpose of sub-section (7A) and clause (da) of sub-section (14) of section 80-IB, the multiplex theatre shall have the following area, facilities and amenities:—

(a) The total built-up area occupied by all the cinema theatres comprised in the multiplex shall be not less than 22,500 square feet, and shall consist at least 50% of the total built-up area of the multiplex excluding the area specified for parking.

(b) The multiplex theatres shall be comprised of at least three cinema theatres and at least three commercial shops.

(c) Total seating capacity of all the cinema theatres comprised in the multiplex shall be at least 900 seats, and no cinema theatre should consist of less than 100 seats.

(d) The total built-up area occupied by all the commercial shops compri-sed in the multiplex theatre shall be not less than 3000 sq. ft., and the minimum built-up area of each shop shall not be less than 250 sq. ft.

(e) There shall be at least one lobby or foyer in the cinema theatres, whose area shall be at least 3 sq. ft. per seat.

(f) The multiplex theatre shall have adequate parking, toilet blocks and other public conveniences, as per local building or cinema regulations, and shall also fulfil all local building or cinema regulations in respect of fire and safety.

(g) The cinema theatres comprised in the multiplex theatre shall use modern stereo projection systems with at least two screen speakers per screen and one surround speaker per 25 seats in a theatre.

(h) The cinema theatres shall use seats with seat pitch not less than 20" (centre to centre).

(i) Ticketing system employed by the cinema theatres shall be fully computerised.

(j) The multiplex theatre cinema shall be centrally air-conditioned.

Explanation.—For the purposes of this rule, the expression "modern stereo projection systems" shall consist of zenon lamp, platter and digital sound systems.

(2) A separate report of the audit shall be furnished along with the return of income in respect of each eligible multiplex theatre, in Form Number 10CCBA and shall be duly signed and verified by an accountant as defined in the Explanation below sub-section (2) of section 288.

(3) In the first year of the claim of deduction, the assessee shall enclose along with the audit report, a copy of approvals for exhibition of cinema given by various State or local authorities, which shall, where applicable, include the following:—

(a) No-Objection-Certificate with respect to the location of the multiplex by the concerned licensing authority;

(b) permission for construction of the multiplex by the concerned licensing authority;

(c) permission to construct the building from the town planning authority or municipal corporation;

(d) completion certificate or occupation certificate, as the case may be, from the town planning authority or municipal corporation, certifying the completion of the multiplex theatre, during the period commencing on the 1st day of April, 2002 and ending on the 31st day of March, 2005; and

(e) operating license issued by the concerned licensing authority.

(4) After the first year of claim of deduction, in the subsequent four years, the audit report shall be enclosed with the operating license issued from time to time, by the concerned licensing authority for exhibition of cinema.]

[76][370] [18DC. Prescribed area, facilities and amenities for convention centres and particulars of audit report, for deduction under sub-section (7B) and clause (aa) of sub-section (14) of section 80-IB

(1) For the purpose of sub-section (7B) and clause (aa) of sub-section (14) of section 80-IB, the convention centre shall have the following area, facilities and amenities,—

(i) A convention centre located in a town or city mentioned in column (1) of the table below, shall have a minimum plinth area mentioned in column (2), minimum seating capacity mentioned in column (3) and minimum number of conference or seminar halls mentioned in column (4) of the said table, as under:—

Town size population (as per 2001 census)	Minimum area covered plinth area (in Sq. mtrs.)	Minimum seating capacity range	Minimum number of Conference or Seminar halls
(1)	(2)	(3)	(4)
Below 5 lakhs	2000	200-300	2
5-10 lakhs	5000	500-750	3
10-40 lakhs	10000	1000-1500	5
Above 40 lakhs (Mega cities)	15000	1500-2000	7

(ii) The convention centre shall have conference or seminar halls, auditorium and exhibition halls for holding seminars, conferences.

(iii) Each conference, seminar hall, exhibition hall and the auditorium of the convention centre shall be equipped with modern public address system, slide and power point projection system and LCD projector or Video screening facility.

(iv) The convention centre shall also have a documentation centre with computers and printers, telephone with STD/ISD facilities, E-mail, photocopy and scanning facility along with trained operators to provide these facilities.

(v) The conference or seminar hall, documentation centre, auditorium and the exhibition hall of the convention centre shall be air-conditioned.

(vi) The convention centre shall have adequate parking facility and other public conveniences as per the local building regulations and should also fulfil all local building regulations in respect of fire and safety.

(2) In addition to facilities mentioned in sub-rule (1), the convention centres may have,—

(i) an amphi-theatre, landscaped open spaces for outdoor conference or seminar related activities;

(ii) a kitchen, dining facility, cafeteria or restaurant only to support events in the convention centre.

(3) A separate report of the audit shall be furnished along with the return of income in respect of each eligible convention centre, in Form No. 10CCBB and shall be duly signed and verified by an accountant as defined in the Explanation below sub-section (2) of section 288.

(4) In the first year of the claim of deduction, the assessee shall enclose along with the audit report, a copy of approvals for building of convention centre given by State or local authorities, which shall, where applicable, include the following:—

(i) permission for construction of the convention centre, from the town planning authority or municipal corporation;

(ii) completion certificate or occupation certificate, as the case may be, from the town planning authority or municipal corporation, certifying the completion of the convention centre, during the period commencing on the 1st day of April, 2002 and ending on the 31st day of March, 2005.]

[77][371] [18DD. Form of report for claiming deduction under sub-section (11B) of section 80-IB

The report of an accountant which is required to be furnished by the assessee along with the return of income, under sub-section (11B) of section 80-IB shall be in Form No. 10CCBC.]

[78][372] [18DE. Prescribed area, minimum seating capacity, facilities and amenities for convention centres; minimum number of convention halls in the convention centres; and particulars of audit report, for deduction under section 80-ID

(1) For the purposes of clause (a) of sub-section (6) of section 80-ID, the convention centre shall have the following area, facilities and amenities,—

(a) A convention centre located in the specified area mentioned in column (1) of the Table below, shall have a minimum covered plinth area mentioned in column (2), minimum seating capacity mentioned in column (3) and minimum number of convention halls, for the purpose of holding conferences and seminars, mentioned in column (4) of the said table.

Table

Specified area	Minimum covered plinth area (in sq. mtrs.)	Minimum seating capacity	Minimum number of convention halls
(1)	(2)	(3)	(4)
National Capital Territory of Delhi, Faridabad, Gurgaon, Gautam Budh Nagar and Ghaziabad	25000	3000	10

(b) The convention centre shall have convention halls, whether called conference halls or seminar halls or auditorium or by any other name, for holding seminars and conferences.

(c) Each convention hall of the convention centre shall be equipped with modern public address system, slide and power point projection system and LCD projector or Video screening facility.

(d) The convention centre shall have a documentation centre with computers and printers, telephone with STD/ISD facilities, E-mail, photocopy and scanning facility along with trained operators to provide these facilities.

(e) The convention centre shall be completely centrally air-conditioned.

(f) The convention centre shall have adequate parking facility and other public conveniences as per the local building regulations and should also fulfil all local building regulations in respect of fire and safety.

(2) In addition to the facilities mentioned in sub-rule (1), the convention centres may have,

(a) an amphitheatre and landscaped open spaces for outdoor conference or seminar related activities;

(b) a kitchen, dining facility, cafeteria or restaurant only to support events in the convention centre.

(3) For the purposes of clause (iv) of sub-section (3) of section 80-ID, the report of an audit shall be in Form No. 10CCBBA.

[79][373] [19. * * *]

[80][374] [19A. * * *]

[81][375] [19AB.Form of report for claiming deduction under section 80JJA

Report of an accountant which is required to be furnished by the assessee alongwith the return of income under clause (b) of sub-section (2) of section 80JJA shall be in Form No. 10DA.]

[82][376] [19AC.Form of certificate to be furnished under sub-section (3) of section 80QQB

(1) The certificate, which is required to be furnished by the assessee under sub-section (3) of section 80QQB from a person responsible for making payment to the assessee, shall be in Form No. 10CCD.

(2) The certificate in Form No. 10CCD duly verified by a person responsible for making the payment to the assessee is required to be furnished along with the return of income.]

[83][377] [19AD.

(1) For the purposes of sub-section (2) of section 80RRB, the prescribed authority shall be the Controller, referred to in clause (b) of sub-section (1) of section 2 of the Patents Act, 1970 (39 of 1970).

(2) The certificate, which is required to be furnished by the assessee under sub-section (2) of section 80RRB from the prescribed authority shall be in Form No. 10CCE.]

[84][378] [19AE.

The report of the accountant, which is required to be furnished by the assessee under sub-section (3) of section 80LA shall be in Form No. 10CCF.]

[85][379] [20. Guidelines for approval [86][380] [under clause (xix) of sub-section (2) of section 80C or] under clause (xvi) of sub-section (2) of section 88

The Board, before granting approval to a public company [87][381] [under clause (xix) of sub-section (2) of section 80C or] under clause (xvi) of sub-section (2) of section 88, shall satisfy itself that the application made to it fulfils the following requirements, namely:—

(1) An application for approval has been made in the Form No. 59 by the public company three months before the [88][382] [eligible issue of capital].

[89][383] [Explanation:-For the purposes of this rule, "the eligible issue of capital" means an issue referred to in clause (i) of the Explanation to clause (xix) in sub-section (2) of section 80C or in clause (i) of the Explanation to clause (xvi) in sub-section (2) of section 88.]

(2) Every application shall be accompanied by the following documents, namely:—

(a) a copy of certificate of incorporation under Companies Act, 1956 (1 of 1956);

(b) audited balance sheets and profit and loss account for three previous years immediately preceding the previous year in which the application is made:

Provided that where a company has been in existence for a period of less than three years, in that case that company may furnish balance sheet and profit and loss account for the period of its existence.

(3) Every such public company shall invest its total paid up capital (hereinafter referred to as such capital) raised through equity issue or debentures in the following manner:—

(i) twenty-five per cent or more of such capital shall be invested in the infrastructure facility before the end of one year from the date of approval of the Board;

(ii) the balance of such capital shall be invested within a period of three years from the date of approval.

(4) Every such public company shall submit a certificate from an accountant, as defined in the Explanation in sub-section (2) of section 288, specifying the amount invested in each year, from the date of approval of the Board.

(5) The Board shall pass an order in writing granting approval or refusing approval to such public company, as the case may be:

Provided, that no order refusing approval shall be passed by the Board before allowing an opportunity of being heard to the public company.

(6) The Board shall have the power to withdraw the approval granted under sub-rule (5) in the following circumstances, namely:—

(a) If such public company fails to make investments as per conditions mentioned in sub-rule (3); or

(b) if such public company fails to file the certificate referred to in sub-rule (4).]

[90][384] [20A. Guidelines for approval [91][385] [under clause (xx) of sub-section (2) of section 80C or] under clause (xvii) of sub-section (2) of section 88

(1) For the purpose of [92][386] [under clause (xx) of sub-section (2) of section 80C or] clause (xvii), sub-section (2) of section 88, the prescribed authority shall be the Central Board of Direct Taxes.

(2) An application for approval shall be made in Form No. 59A by the Mutual Fund to the Board referred in sub-rule (1) three months before the public issue.

(3) Every application for approval under sub-rule (2) shall be accompanied by the following documents, namely:—

(a) Audited Balance sheets and profit and loss account for three previous years immediately preceding the previous year in which the application is made:

Provided that where a Mutual Fund has been in existence for a period of less than three years, in that case that company may furnish balance sheet and profit and loss account for the period of its existence;

(b) a copy of the certificate of registration issued by the Securities and Exchange Board of India.

(4) Every such Mutual Fund shall invest its total paid up capital (hereinafter referred to as such capital) raised through equity issue or debentures in the following manner:—

(i) Twenty-five per cent or more of such capital shall be invested in the "eligible issue of capital of any company" referred to in [93][387] [clause (i) of Explanation to clause (xix) of sub-section (2) of section 80C or in] clause (i) of Explanation to clause (xvi) of sub-section (2) of section 88, before the end of the year from the date of approval of the Board;

(ii) The balance of such capital shall be invested within a period of three years from the date of approval.

(5) Every such Mutual Fund shall submit a certificate from an accountant, as defined in the Explanation to sub-section (2) of section 288, specifying the amount invested in each year, from the date of approval of the Board.

(6) The Board shall pass an order in writing granting approval or refusing approval to such Mutual Fund, as the case may be:

Provided that no order of refusing approval shall be passed by the Board without an opportunity of being heard given to the Mutual Fund.

(7) The Board shall have the power to withdraw the approval granted under sub-rule (6) under the following circumstances, namely:—

(a) if such Mutual Fund fails to make investments as mentioned in sub-rule (4); or

(b) if such Mutual Fund fails to file the certificate referred to in sub-rule (5).]

[94][388] [20AB. Evidence of payment of security transaction tax for claiming deduction under section 88E

The evidence of payment of securities transaction tax which is required to be furnished alongwith the return of income by the assessee under first proviso to section 88E,—

(i) on value of transaction entered into by him in a recognised stock exchange, shall be in Form No. 10DB and shall be verified in the manner indicated therein;

(ii) on value of transaction of sale, by him, of a unit of an equity oriented fund to the Mutual Fund, shall be in Form No. 10DC and shall be verified in the manner indicated therein.]

[95][389] [21. * * *]

[96][390] [21A. Relief when salary is paid in arrears or in advance, etc.[97][391]

[98][392] [(1) Where, by reason of any portion of an assessee's salary being paid in arrears or in advance or, by reason of any portion of family pension received by an assessee being paid in arrears or, by reason of his having received in any one financial year salary for more than twelve months or a payment which under the provisions of clause (3) of section 17 is a profit in lieu of salary, his income is assessed at a rate higher than that at which it would otherwise have been assessed, the relief to be granted under sub-section (1) of section 89 shall be—

(a) where any portion of the assessee's salary is received in arrears or in advance or, any portion of family pension is received by an assessee in arrears, in accordance with the provisions of sub-rule (2);

(b) where the payment is in the nature of gratuity in respect of past services of the assessee extending over a period of not less than five years, in accordance with the provisions of sub-rule (3);

(c) where the payment is in the nature of compensation received by the assessee from his employer or former employer at or in connection with the termination of his employment after continuous service for not less than three years and where the unexpired portion of his term of employment is also not less than three years, in accordance with the provisions of sub-rule (4);

(d) where the payment is in commutation of pension, in accordance with the provisions of sub-rule (5); and

(e) where the payment is not in the nature of salary paid in arrears or in advance or gratuity in respect of past services or compensation received at or in connection with the termination of employment or in commutation of pension, in accordance with the provisions of sub-rule (6).

(2)(a) In a case referred to in clause (a) of sub-rule (1), the tax payable by the assessee on his total income of the previous year in which the salary is received in arrears or in advance or, in which the family pension is received in arrears (such salary or family pension being hereafter in this sub-rule referred to respectively as the additional salary or additional family pension, as the case may be, and such previous year being hereafter in this sub-rule referred to as the relevant previous year) shall be reduced by the amount, if any, by which the tax on the additional salary or additional family pension, calculated in the manner specified in clause (b), exceeds the tax or the aggregate tax on the additional salary or additional family pension, calculated in the manner specified in clause (c) or clause (d), as the case may be.

(b) Tax shall be calculated on the total income of the relevant previous year as reduced by the additional salary or additional family pension, as the case may be, as if the total income so reduced were the total income of the assessee, and the amount by which the tax so calculated falls short of the tax on the total income before such reduction shall, for the purposes of clause (a), be taken to be the tax on the additional salary or additional family pension, under this clause.

(c) Where the additional salary or additional family pension, as the case may be, relates to only one previous year, tax shall be calculated on the total income of the said previous year as increased by the additional salary or additional family pension, as if the total income so increased were the total income of the assessee, and the amount by which the tax so calculated exceeds the tax payable by the assessee in respect of the total income of the said previous year shall, for the purposes of clause (a), be taken to be the tax on the additional salary or additional family pension, under this clause.

(d) Where the additional salary or additional family pension, as the case may be, relates to more than one previous year,—

(i) the previous years to which the additional salary or additional family pension relates and the amount relating to each such previous year shall first be ascertained;

(ii) tax shall, then, be calculated on the total income of each such previous year as increased by the amount relating to such previous year ascertained under sub-clause (i), as if the total income so increased were the total income of that previous year, and the amount by which the aggregate amount of tax in respect of the aforesaid previous years as calculated under sub-clause (ii) exceeds the aggregate amount of tax payable by the assessee in respect of the total income of the said previous years shall, for the purposes of clause (a), be taken to be the aggregate tax on the additional salary or additional family pension, under this clause.]

(3)(a) In a case referred to in clause (b) of sub-rule (1), the tax payable by the assessee on his total income of the previous year in which the payment by way of gratuity is received (such previous year being hereafter in this sub-rule referred to as the relevant previous year) shall be reduced by the amount, if any, by which the tax on the amount of the gratuity included in the total income of the relevant previous year, calculated at the average rate of tax applicable to such total income, exceeds the tax on the amount of such gratuity, calculated at the rate of tax determined under clause (b) or, as the case may be, clause (c).

(b) Where the payment by way of gratuity is made in respect of past services of the assessee extending over a period of not less than five years but less than fifteen years,—

(i) the total income of the assessee in respect of each of the two previous years immediately preceding the relevant previous year shall be increased by an amount equal to one-half of the amount of the gratuity included in the total income of the relevant previous year, and the average rate of tax for each of the said two previous years shall be calculated as if the total income so increased were the total income of that previous year; and

(ii) the average of the average rates of tax for the two previous years immediately preceding the relevant previous year, calculated in accordance with sub-clause (i), shall, for the purposes of clause (a), be the rate of tax determined under this clause.

(c) Where the payment by way of gratuity is made in respect of past services of the assessee extending over a period of not less than fifteen years,—

(i) the total income of the assessee in respect of each of the three previous years immediately preceding the relevant previous year shall be increased by an amount equal to one-third of the amount of the gratuity included in the total income of the relevant previous year, and the average rate of tax for each of the said three previous years shall be calculated as if the total income so increased were the total income of that previous year; and

(ii) the average of the average rates of tax for the three previous years immediately preceding the relevant previous year, calculated in accordance with sub-clause (i), shall, for the purposes of clause (a), be the rate of tax determined under this clause.

(4)(a) In a case referred to in clause (c) of sub-rule (1), the tax payable by the assessee on his total income of the previous year in which the payment by way of compensation is received (such previous year being hereafter in this sub-rule referred to as the relevant previous year) shall be reduced by the amount, if any, by which the tax on the amount of the compensation included in the total income of the relevant previous year, calculated at the average rate of tax applicable to such total income, exceeds the tax on the amount of such compensation, calculated at the rate of tax determined under clause (b).

(b) The total income of the assessee in respect of each of the three previous years immediately preceding the relevant previous year shall be increased by an amount equal to one-third of the amount of the compensation included in the total income of the relevant previous year, and the average rate of tax for each of the said three previous years shall be calculated as if the total income so increased were the total income of that previous year; and the average of the average rates of tax so calculated for the three previous years shall, for the purposes of clause (a), be the rate of tax determined under this clause.

(5)(a) In a case referred to in clause (d) of sub-rule (1), the tax payable by the assessee on his total income of the previous year in which the payment in commutation of pension is received (such previous year being hereafter in this sub-rule referred to as the relevant previous year) shall be reduced by the amount, if any, by which the tax on the payment in commutation of pension included in the total income of the relevant previous year, calculated at the average rate of tax applicable to such total income, exceeds the tax on the amount of such payment, calculated at the rate of tax determined under clause (b).

(b) The total income of the assessee in respect of each of the three previous years immediately preceding the relevant previous year shall be increased by an amount equal to one-third of the amount of payment in commutation of pension included in the total income of the relevant previous year, and the average rate of tax for each of the said three previous years shall be calculated as if the total income so increased were the total income of that previous year; and the average of the average rates of tax so calculated for the three previous years shall, for the purposes of clause (a), be the rate of tax determined under this clause.

(6) In a case referred to in clause (e) of sub-rule (1), the Board may, having regard to the circumstances of the case, allow such relief as it deems fit.]

[1][393] [21AA.Furnishing of particulars for claiming relief under section 89(1)[2][394]

Where the assessee, being a Government servant or an employee in a [3][395] [company, co-operative society, local authority, university, institution, association or body], is entitled to relief under sub-section (1) of section 89, he may furnish to the person responsible for making the payment referred to in sub-section (1) of section 192, the particulars specified in Form No. 10E.]

[4][396] [21B. * * *]

PART V[5][397]

REGISTRATION OF FIRMS

22. Application for registration of a firm

(1) An application for registration of a firm for the purposes of the Act shall be made in accordance with the provisions of sub-rules (2) to (5).

(2) Where the application is made before the end of the relevant previous year—

(i) [6][398] and where no change in the constitution of the firm or the shares of the partners has taken place during the previous year before the date of the application—

(a) the application shall be made in Form No. 11; and

(b) it shall be accompanied by the original instrument evidencing the partnership at the date of the application together with a copy thereof. A certified copy of the instrument together with a duplicate copy thereof may be attached to the application if, for sufficient reason, the original instrument cannot be produced;

(ii) [7][399] and where any change or changes in the constitution of the firm or the shares of the partners have taken place during the previous year before the date of the application—

(a) the application shall be made in Form No. 11A; and

(b) it shall be accompanied by the original instrument or instruments evidencing the partnership as in existence from time to time during the previous year up to the date of the application together with copies thereof. A certified copy of the instrument or instruments together with a duplicate copy thereof may be attached to the application if, for sufficient reason, the original instrument or instruments cannot be produced.

(3) Where, after the date of making an application under sub-rule (2), any change or changes in the constitution of the firm or the shares of the partners have taken place during the previous year, a fresh application shall be made after each such change takes place in accordance with the provisions of sub-clauses (a) and (b) of clause (ii) of sub-rule (2) and the time-limit prescribed in sub-section (4) of section 184 shall apply to each such application.

(4) Where the application is made after the end of the relevant previous year—

(i) and where no change in the constitution of the firm or the shares of the partners has taken place during the said previous year and up to the date of the application, the application shall be made in accordance with the provisions of sub-clauses (a) and (b) of clause (i) of sub-rule (2);

(ii) and where any change or changes in the constitution of the firm or the shares of the partners have taken place during the said previous year and/or after the end of the previous year but before the date of the application—

(a) the application shall be made in Form No. 11A; and

(b) it shall be accompanied by the original instrument or instruments evidencing the partnership as in existence from time to time during the previous year and up to the date of the application together with copies thereof. A certified copy of the instrument or instruments together with a duplicate copy thereof may be attached to the application if, for sufficient reason, the original instrument or instruments cannot be produced.

[8][400] (5) The application shall be signed personally[9][401] by all the partners (not being minors)[10][402] in the firm as constituted at the date of the application and, in the case of a dissolved firm, personally by all the persons (not being minors) who were partners in the firm immediately before its dissolution and by the legal representative of any such partner who is deceased, so, however, that in the case of any partner who is absent from India or is a lunatic or an idiot, the application may be signed by any person duly authorised by him in this behalf, or as the case may be, by a person entitled under law to represent him.

23. Intimation regarding subsequent changes in constitution, etc.

If after the date of the application, or of the last application where more than one application are made, for registration of a firm for any assessment year and before the assessment for that assessment year is completed by the [11][403] [Assessing Officer], so far as known to the firm, any change or changes take place in the constitution of the firm or the shares of the partners, the details of such change or changes shall be communicated by the firm to the [12][404] [Assessing Officer] as soon as possible after each such change takes place.

24. Declaration for continuation of registration[13][405]

The declaration to be furnished under sub-section (7) of section 184 shall be in Form No. 12 and shall be verified in the manner indicated therein and shall be signed by the persons concerned[14][406] in accordance with sub-rule (5) of rule 22.

[15][407] [24A. Communication regarding partner who is a benamidar

(1) The communication required to be made by any partner of a firm under clause (b) of the Explanation below sub-section (1) of section 185 shall be in Form No. 12A.

(2) The communication referred to in sub-rule (1) shall be made,—

(a) in a case where the firm has not been registered under section 184, before the end of the previous year for the assessment year in respect of which registration of the firm is sought:

Provided that where the registration is sought for the assessment year commencing on the 1st day of April, 1976, the communication may be made before the expiry of the time allowed under sub-section (1) or sub-section (2) of section 139 (whether fixed originally or on extension) for furnishing the return of income for that assessment year;

(b) in a case where the registration of the firm has effect under sub-section (7) of section 184 for any assessment year, before the expiry of the time allowed under sub-section (1) or sub-section (2) of section 139 (whether fixed originally or on extension) for furnishing the return of income for that assessment year.]

25. Certificate of registration

The certificate under sub-section (4) of section 185 shall be recorded on the last of the instruments evidencing the partnership during the relevant previous year (or on the certified copy submitted in lieu thereof) attached with the application for registration of the firm made in accordance with sub-rules (2) to (4) of rule 22.

PART VI

DEDUCTION OF TAX AT SOURCE

[16][408] [26. Rate of exchange for the purpose of deduction of tax at source on income payable in foreign currency[17][409]

For the purpose of deduction of tax at source on any income payable in foreign currency, the rate of exchange for the calculation of the value in rupees of such income payable to an assessee outside India shall be the telegraphic transfer buying rate of such currency as on the date on which the tax is required to be deducted at source under the provisions of Chapter XVIIB by the person responsible for paying such income.

Explanation.—For the purposes of this rule, "telegraphic transfer buying rate", in relation to a foreign currency, means the rate [18][410] [or rates] of exchange adopted by the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), for buying such currency [19][411] [having regard to the guidelines specified from time to time by the Reserve Bank of India for buying such currency,] where such currency is made available to that bank through a telegraphic transfer.]

[20][412] [26A. Furnishing of particulars of income under the head 'Salaries'[21][413]

(1) The assessee may furnish to the person responsible for making the payment referred to in sub-section (1) of section 192, the details of the income under the head "Salaries" due or received by him from the other employer or employers referred to in sub-section (2) of that section and of any tax deducted at source from such income in Form No. 12B.

(2) The person responsible for paying any income chargeable under the head "Salaries" shall furnish to the person to whom such payment is made, a statement giving correct and complete particulars of perquisites or profits in lieu of salary and the value thereof in,—

(a) relevant columns provided in Form No. 16, if the amount of salary paid or payable to the employee is not more than one lakh and fifty thousand rupees; or

[22][414] [(b) Form No. 12BA, if the amount of salary paid or payable to the employee is more than one lakh and fifty thousand rupees, which shall accompany the return of income of the employee.]

Explanation.—'Salary' for the purposes of this rule shall have the same meaning as given in rule 3.]

[23][415] [26B. Statement of particulars of income under heads of income other than "Salaries" for deduction of tax at source[24][416]

(1) The assessee may send to the person responsible for making payment under sub-section (1) of section 192, a statement of any income chargeable under any head of income other than "Salaries" (not being a loss under any such head other than the loss under the head "Income from house property"), received by the assessee for the same financial year, and of any tax deducted on such income.

(2) A verification in the following form shall be annexed to the statement referred to in sub-rule (1):—

Form of Verification

I, ................. (name of the assessee), do declare that what is stated above is true to the best of my information and belief.]

27. Prescribed arrangements for declaration and payment of dividends within India

The arrangements referred to in [25][417] [sections 194 and 236] to be made by a company for the declaration and payment of dividends (including dividends on preference shares) within India shall be as follows:

(1) The share-register of the company for all shareholders shall be regularly maintained at its principal place of business within India, in respect of any assessment year from a date not later than the 1st day of April of such year.

(2) The general meeting for passing the accounts of the previous year relevant to the assessment year and for declaring any dividends in respect thereof shall be held only at a place within India.

(3) The dividends declared, if any, shall be payable only within India to all shareholders.

[26][418] [28. Application for certificates for deduction of tax at lower rates

(1) An application by a person, [27][419] [* * *] for a certificate under sub-section (1) of section 197 shall be made in Form No. 13.

[28][420] [(2) * * *]

[29][421] [(3) * * *]

[30][422] [(4) * * *]

[31][423] [(5) * * *]

[32][424] [28A. * * *]

[33][425] [28AA. Certificate of no deduction of tax or deduction at lower rates from income other than dividends

(1) The Assessing Officer, on an application made by a person [34][426] [under sub-rule (1) of rule 28, may issue a certificate in accordance with the provisions of sub-section (1) of section 197] for deduction of tax at source at the rate or rates calculated in the manner specified below:—

(i) at such average rate of tax as determined by the total tax payable on estimated income, as reduced by the sum of advance tax already paid and tax already deducted at source, as a percentage of the payment referred to in section 197 for which the application under sub-rule (1) [35][427] [* * *] of rule 28 has been made; or

(ii) at the average of the average rates of tax paid by the assessee in the last three years; whichever is higher.

(2) The certificate shall be valid for the assessment year to be specified in the certificate, unless it is cancelled by him at any time before the expiry of the specified period. An application for a fresh certificate may be made, if required, after the expiry of the period of validity of the earlier certificate.

(3) The certificate shall be valid only for the person named therein.

(4) The certificate shall be issued direct to the person responsible for paying the income under advice to the applicant.

[36][428] [(5) * * *]]

[37][429] [28AB.Certificate of no deduction of tax in case of certain entities

(1) Subject to the conditions specified in sub-rule (2), a person—

(a) in respect of income or deemed income derived from property held under trust wholly for charitable or religious purposes and who claims exemption under section 11 or section 12; or

(b) required to file a return in respect of a scientific research association, news agency, association or institution, fund or trust or university or other educational institution or any hospital or other medical institution or trade union referred to in sub-section (4C) of section 139,may make an application to the Assessing Officer for the grant of a certificate under sub-section (1) of section 197 authorizing him to receive incomes without deduction of tax at source.

(2) The conditions referred to in [38][430] [sub-rule (1)] are the following, namely:—

(i) the person concerned has furnished the returns of income for all assessment years for which such returns became due on or before the date on which the application under sub-rule (1) is made;

(ii) the trust, scientific research association, news agency, association or institution, fund or trust or university or other educational institution or any hospital or other medical institution or trade union referred to in sub-rule (1) is for the time being approved for the purpose of exemption from income-tax; and

(iii) the applicant gives a list of deductors from whom amounts are to be received without deduction of tax at source every six months alongwith the names, addresses and the amounts received.

(3) An application for the certificate is to be made to the Assessing Officer in accordance with sub-rule (1) of rule 28.

(4) The Assessing Officer may issue a certificate authorizing payment of incomes without deduction of tax at source if he is satisfied that all the conditions laid down in sub-rule (2) are fulfilled and the issue of any such certificate will not be prejudicial to the interests of revenue.

(5) The applicant may furnish copies of certificate issued under sub-rule (4) to the person responsible for paying the income for the purpose of no deduction of tax at source.

(6) The certificate shall be valid for the financial year specified therein unless it is cancelled by the Assessing Officer at any time before the expiry of the said financial year.

(7) An application for a fresh certificate may be made, if the assessee so desires, after the expiry of the period of validity of the earlier certificate.]

29. Certificate of no deduction of tax or deduction at lower rates from dividends

(1) [39][431] [The Assessing Officer, on being satisfied that the total income of the shareholder justifies the deduction of income-tax at any lower rates or no deduction of income-tax, as the case may be, shall, on an application made under sub-rule (1) of rule 28 by the assessee, give him a certificate authorising the payment of a dividend to him, under sub-section (1) of section 197, without deduction of tax or, as the case may be, after deduction of tax at rates lower than the rate in force only if the following conditions are satisfied, namely:]

(a) The shares in respect of which the certificate is sought for by him—

(i) are shares in public companies; and

(ii) stand in his name and are beneficially owned by him, and the dividends therefrom are not includible in the total income of any other person under sections 60 to 64, orstand in his name and are held by him under trust wholly for charitable or religious purposes, and the dividends therefrom [40][432] [are exempt from tax under the provisions of sections 11 to 13].

(b) An application for the certificate is made to the [41][433] [Assessing Officer] in accordance with sub-rule [42][434] [(1)] [43][435] [* * *] of rule 28.

[44][436] (2) The certificate shall be valid for such period (not exceeding three years from the date of certificate), as the [45][437] [Assessing Officer] may specify therein, unless it is cancelled by him at any time before the expiry of the specified period. An application for a fresh certificate may be made, if required, after the expiry of the period of validity of the earlier certificate.

(3) The certificate shall be valid only for the person named therein, and shall cease to be operative from the date of notice to the company of the transfer of any of the shares mentioned therein to another person, in respect of the shares so transferred.

(4) The certificate shall be issued direct to the principal officer of the company under advice to the applicant shareholder.

[46][438] [(5) * * *]

[47][439] [29A. Form of certificate to be furnished along with the return of income under sub-section (4) of section 80QQB, sections 80R, 80RR and 80RRA and sub-section (3) of section 80RRB and the prescribed authority for the purposes of sub-section (4) of section 80QQB and sub-section (3) of section 80RRB

(1) he certificate referred to in sub-section (4) of section 80QQB, sub-section (3) of section 80RRB, sections 80R, 80RR and 80RRA shall be in Form No. 10H.

(2) For the purpose of sub-section (4) of section 80QQB and sub-section (3) of section 80RRB, the prescribed authority shall be the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange.]

[48][440] [29AA. Certificate under second proviso to section 80-O[49][441]

The certificate referred to in second proviso to section 80-O shall be in Form No. 10HA.]

[50][442] [29B. Application for certificate authorising receipt of interest and other sums without deduction of tax

(1) Any person entitled to receive any interest, or other sum, on which income-tax has to be deducted under sub-section (1) of section 195 may, if he fulfils the conditions specified in sub-rule (2), make an application for the grant of a certificate under sub-section (3) of section 195 authorising him to receive without deduction of tax under sub-section (1) of that section any such income as is specified hereinbelow, namely:—

(i) where the person concerned is a banking company which is neither an Indian company nor a company which has made the prescribed arrangements for the declaration and payment of dividends within India, and which carries on operations in India through a branch, any income by way of interest, not being "Interest on securities", or any other sum, not being dividends;

(ii) in the case of any other person who carries on a business or profession in India through a branch, any sum, not being interest or dividends,in so far as such interest or other sum is receivable by such branch on its own account and not on behalf of its head office or any branch situated outside India, or any other person.

(2) The conditions referred to in sub-rule (1) are the following, namely:

(i) the person concerned has been regularly assessed to income-tax in India and has furnished the returns of income for all assessment years for which such returns became due on or before the date on which the application under sub-rule (1) is made;

(ii) he is not in default or deemed to be in default in respect of any tax (including advance tax and tax payable under section 140A), interest, penalty, fine, or any other sum payable under the Act;

(iii) he has not been subjected to penalty under clause (iii) of sub-section (1) of section 271;

(iv) where the person concerned is not a banking company referred to in clause (i) of sub-rule (1)—

(a) he has been carrying on business or profession in India continuously for a period of not less than five years immediately preceding the date of the application, and

(b) the value of the fixed assets in India of such business or profession as shown in his books for the previous year which ended immediately before the date of the application or, where the accounts in respect of such previous year have not been made up before the said date, the previous year immediately preceding that year, exceeds fifty lakhs of rupees.

(3) The application under sub-rule (1) by a banking company shall be in Form No. 15C and by any other person referred to in clause (ii) of sub-rule (1) shall be in Form No. 15D.

(4) The [51][443] [Assessing Officer] may give a certificate authorising the person concerned to receive the income specified in clause (i) or clause (ii) of sub-rule (1), without deduction of tax under sub-section (1) of section 195, if he is satisfied that all the conditions laid down in sub-rule (2) are fulfilled and the issue of any such certificate will not be prejudicial to the interests of revenue.

(5) The certificate shall be valid for the financial year specified therein, unless it is cancelled by the [52][444] [Assessing Officer] at any time before the expiry of the said financial year. An application for a fresh certificate may be made, if required, after the expiry of the period of validity of the earlier certificate, or within three months before the expiry thereof.

[53][445] [(6) * * *]]

[54][446] [29C. Declaration by person claiming receipt of certain incomes without deduction of tax

(1) A declaration under sub-section (1) by an individual or under sub-section (1A) of section 197A by a person (not being a company or firm) shall be in Form No. 15G and shall be verified in the manner indicated therein.

[55][447] [(1A) A declaration under sub-section (1C) of section 197A by an individual resident in India, who is of the age of sixty-five years or more at any time during the previous year and is entitled to a deduction from the amount of income-tax on his total income referred to in section 88B shall be in Form No. 15H and shall be verified in the manner indicated therein.]

(2) The declaration referred to in sub-rule (1) [56][448] [or sub-rule (1A)] shall be furnished in duplicate to the person responsible for paying the "interest on securities" or dividend or interest other than "interest on securities" or, income in respect of units, or, as the case may be, any amount referred to in clause (a) of sub-section (2) of section 80CCA.

(3) The person referred to in sub-rule (2) shall deliver or cause to be delivered to the Chief Commissioner or Commissioner, one copy of the declaration referred to in sub-rule (1) on or before the seventh day of the month next following the month in which the declaration is furnished to him.

Explanation.—For the purposes of sub-rule (3), the Chief Commissioner or the Commissioner means the Chief Commissioner or Commissioner to whom the Assessing Officer having jurisdiction to assess the person referred to in sub-rule (2) is subordinate.]

[57][449] [29D. Declaration under section 194C by a sub-contractor*[450]

(1) The declaration under the second proviso to clause (i) of sub-section (3) of section 194C by a sub-contractor shall be in Form No. 15-I and shall be verified in the manner indicated therein by such sub-contractor.

(2) The declaration referred to in sub-rule (1) may be furnished to the contractor responsible for paying or crediting any sum to the account of the sub-contractor before the event of such sum being credited or paid to such sub-contractor.

(3) The particulars under the third proviso to clause (i) of sub-section (3) of section 194C to be furnished by a contractor responsible for paying any sum to such sub-contractor shall be in Form No. 15J.

(4) The particulars referred to in sub-rule (3) shall be furnished,—

(i) to the Commissioner of Income-tax, so designated by the Chief Commissioner of Income-tax, within whose area of jurisdiction, the office of the contractor referred to in sub-rule (3) is situated;

(ii) on or before the 30th June following the financial year.]

30. Time and mode of payment to Government account of tax deducted at source [58][451] [or tax paid under sub-section (1A) of section 192]

[59][452] [(1) All sums deducted in accordance with the provisions of sections 192 to 194, section 194A, section 194B, section 194BB, section 194C, section 194D, section 194E, section 194EE, section 194F, section 194G, section 194H, section 194-I, section 194J, section 194K, [60][453] [section 194LA,] section 195, section 196A, section 196B, section 196C and section 196D shall be paid to the credit of the Central Government—

(a) in the case of deduction by or on behalf of the Government, on the same day;

(b) in the case of deduction by or on behalf of persons other than those mentioned in clause (a),—

 (i) in respect of sums deducted in accordance with the provisions of section 193, section 194A, section 194C, section 194D, section 194E, section 194G, section 194H, section 194-I, section 194J, section 195, section 196A, section 196B, section 196C and section 196D—(1)    where the income by way of interest on securities referred to in section 193 or the income by way of interest referred to in section 194A or the sum referred to in section 194C or the income by way of insurance commission referred to in section 194D or the payment to non-resident sportsmen or sports associations referred to in section 194E or the income by way of commission, remuneration or prize on sale of lottery tickets referred to in section 194G or the income by way of commission or brokerage referred to in section 194H or the income by way of rent referred to in section 194-I or the income by way of fees for professional or technical services referred to in section 194J or the interest or any other sum referred to in section 195 or the income of a foreign company referred to in sub-section (2) of section 196A or the income from units referred to in section 196B or the income from foreign currency bonds or shares of an Indian company referred to in section 196C or the income of Foreign Institutional Investors from securities referred to in section 196D is credited by a person to the account of the payee as on the date up to which the accounts of such person are made, within two months of the expiration of the month in which that date falls;

(2)    in any other case, within one week from the last day of the month in which the deduction is made, and

(ii) in respect of sums deducted in accordance with the other provisions within one week from the last day of the month in which the deduction is made:

Provided that the Assessing Officer may, in special cases, and with the approval of the Joint Commissioner—

(a)    in cases falling under sub-clause (i), permit any person to pay the income-tax deducted from any income by way of interest, other than income by way of interest on securities or any income by way of insurance commission or any income by way of commission or brokerage referred to in section 194H quarterly on July 15, October 15, January, 15 and April 15; and

(b)    in cases falling under sub-clause (ii), permit an employer to pay income-tax deducted from any income chargeable under the head "Salaries" quarterly on June 15, September 15, December 15 and March 15.]

[61][454] [(1A) All sums paid under sub-section (1A) of section 192 shall be paid to the credit of the Central Government—

(a) in the case of payment on behalf of the Government, on the same day;

(b) in all other cases, within one week from the last day of each month on which the income-tax is due under sub-section (1B) of section 192.]

(2) The person responsible for making the deduction from any income chargeable under the head "Salaries" or, [62][455] [the person who pays tax, referred to in sub-section (1A) of section 192, or] in cases covered by sub-section (5) of section 192, the trustees shall pay the amount of tax so deducted to the credit of the Central Government by remitting it within the time prescribed in sub-rule (1) into [63][456] [any branch of the Reserve Bank of India or of the State Bank of India or of any authorised bank] accompanied by an income-tax challan [64][457] [* * *]:

[65][458] [* * *]

[66][459] [Provided that] where the deduction [67][460] [or payment, as the case may be] is made by or on behalf of Government, the amounts shall be credited within the time and in the manner aforesaid without the production of a challan.

(3) The person responsible for making deduction under sections [68][461] [193, 194, [69][462] [194A, 194B, [70][463] [194BB,] 194C,] [71][464] [194D, 194E, [72][465] [194EE, 194F, 194G, 194H, [73][466] [194-I,] [74][467] [194J, 194K,] 195, 196A [75][468] [, 196B [76][469] [, 196C and 196D]]]]] shall pay the amount of tax so deducted to the credit of the Central Government by remitting it within the time prescribed in sub-rule (1) into [77][470] [any branch of the Reserve Bank of India or of the State Bank of India or of any authorised Bank] accompanied by an income-tax challan, [78][471] [* * *] provided that where the deduction is made by or on behalf of Government the amount shall be credited within the time and in the manner aforesaid without the production of a challan.

[79][472] [30A. * * *]

[80][473] [31. Certificate of tax deducted at source [81][474] [or tax paid under sub-section (1A) of section 192]

[82][475] [(1) [83][476] The certificate of deduction of tax at source [84][477] [or, the certificate of payment of tax by the employer on behalf of the employee,] under section 203 to be furnished by any person deducting tax in accordance with the provisions of—

(a) section 192 shall be in Form No. 16:[85][478]

[86][479] [Provided that in the case of an individual, resident in India, where his income from salaries before allowing deductions under section 16 of the Income-tax Act, 1961 does not exceed rupees one lakh fifty thousand, the certificate of deduction of tax at source shall be in Form No. 16AA.]

[87][480] [(b) section 193, section 194, section 194A, section 194B, section 194BB, section 194C, section 194D, section 194E, section 194EE, section 194F, section 194G, [88][481] [section 194-I,] [89][482] [section 194J, section 194K,] [90][483] [section 194LA,] section 195,[91][484] section 196A, section 196B, section 196C and section 196D shall be in Form No. 16A.]

[92][485] [(2) * * *]

[93][486] (3) The certificate mentioned in sub-rule (1) shall be furnished within a period of [94][487] [one month from the end of the month during which the credit has been given or the sums have been paid or, as the case may be, a cheque or warrant for payment of any dividend has been issued to a shareholder]:

Provided that [95][488] [where the income by way of interest on securities referred to in section 193 or the income by way of interest referred to in section 194A or the sum referred to in section 194C or the income by way of insurance commission referred to in section 194D or the payment to non-resident sportsmen or sports associations referred to in section 194E [96][489] [or the income by way of commission, remuneration or prize on sale of lottery tickets referred to in section 194G or the income by way of commission or brokerage referred to in section 194H [97][490] [or the income by way of rent referred to in section 194-I] [98][491] [or the income by way of fees for professional or technical services referred to in section 194J] or the interest or any other sum referred to in section 195 or the income of a foreign company referred to in sub-section (2) of section 196A or the income from units referred to in section 196B]] [99][492] [or the income from foreign currency bonds or shares of an Indian company referred to in section 196C] [100][493] [or the income of Foreign Institutional Investors from securities referred to in section 196D] is credited by a person [101][494] [to the account of the payee as on the date up to which the account of such person] are made, the certificate under sub-rule (1) shall be issued within a week after the expiry of two months from the month in which income is so credited:

Provided further that the certificate in the case of deduction of tax [102][495] [under sub-section (1) of section 192 or, payment of tax by the employer on behalf of the employee, under sub-section (1A), of that section] [103][496] [or section 194D] may be furnished within one month from the close of the financial year in which such deduction was made:

[104][497] [Provided also that the certificate in cases, other than those mentioned in the second proviso, where payment of income-tax deducted is permitted quarterly in accordance with clause (a) of the proviso to clause (b) of sub-rule (1) of rule 30 may be furnished within fourteen days from the date of payment of income-tax:]

[105][498] [Provided also that where more than one certificate is required to be furnished to a payee for deductions of income-tax made during a financial year, the person deducting the tax, may on request from such payee, issue within one month from the close of such financial year a consolidated certificate in Form No. 16A for tax deducted during whole of such financial year.]

(4) Where in a case, the TDS certificate issued under this rule is lost, the person deducting tax at source may issue a duplicate certificate of deduction of tax at source on a plain paper giving necessary details as contained in Form No. 16 [106][499] [or Form No. 16A [107][500] [* * *], as the case may be].

(5) The Assessing Officer before giving credit for the tax deducted at source on the basis of duplicate certificate referred to in sub-rule (4), shall get the payment certified from the [108][501] [Assessing Officer] designated in this behalf by the Chief Commissioner or the Commissioner and shall also obtain an Indemnity Bond from the assessee.]

9[(i)    in respect of sums deducted in accordance with the provisions of 10[section 193, section 194A, section 194C, 11[section 194D, section 194E, 12[section 194G, section 194H, 13[section 194-I,] 14[section 194J, section 194K,] section 195, section 196A 15[, section 196B 16[, section 196C and section 196D]]]],—]

(1)    17[where the income by way of interest on securities referred to in section 193 or the income by way of interest referred to in section 194A or the sum referred to in section 194C or the income by way of insurance commission referred to in section 194D 18[or the payment to non-resident sportsmen or sports associations referred to in section 194E 19[or the income by way of commission, remuneration or prize on sale of lottery tickets referred to in section 194G or the income by way of commission or brokerage referred to in section 194H 20[or the income by way of rent referred to in section 194-I] 21[or the income by way of fees for professional or technical services referred to in section 194J] or the interest or any other sum referred to in section 195 or the income of a foreign company referred to in sub-section (2) of section 196A or the income from units referred to in section 196B]]] 22[or the income from foreign currency bonds or shares of an Indian company referred to in section 196C] 23[or the income of Foreign Institutional Investors from securities referred to in section 196D] is credited by a person 24[to the account of the payee as on the date up to which the accounts of such person] are made, within two months of the expiration of the month in which that date falls;(2)in any other case, within one week from the last day of the month in which the deduction is made; and]

(ii)    in respect of sums deducted in accordance with the other provi-sions, 25[* * *] within one week from the date of such deduction:

Provided that the 26[Assessing Officer] may, in special cases, and with the approval of the 27[Deputy Commissioner],—    

(a)    in cases falling under clause (i), permit any person to pay the income-tax 28[* * *] deducted from any income by way of interest, other than 29[income by way of interest on securities] or any income by way of insurance commission 30[or any income by way of commission or brokerage referred to in section 194H] quarterly on July 15th, October 15th, January 15th and April 15th, and

(b)    in cases falling under clause (ii), permit an employer to pay income-tax deducted from any income chargeable under the head "salaries" quarterly on June 15th, September 15th, December 15th and March 15th."

(a)    the Government or the Reserve Bank of India or any body corporate owned by the Government, or the Reserve Bank of India, or in which not less than forty per cent of the shares are held (whether singly or taken together) by the Government or the Reserve Bank of India or a corporation owned by that bank;

(b)    a local authority;

(c)    the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), or any of its subsidiary banks;

(d)    any banking company, including a co-operative bank or a land mortgage bank;

(e)    the Industrial Finance Corporation of India, the Industrial Credit and Investment Corporation of India Ltd., the Madras Industrial and Investment Corporation of India Ltd. and the Refinance Corporation for Industry Ltd.;

(f)    a State Financial Corporation established under the State Financial Corporations Act, 1951 (63 of 1951);

(g)    an Industrial Development Corporation established in India by a State Government;

(h)    the Life Insurance Corporation of India established under the Life Insurance Corporation of India Act, 1956 (31 of 1956);

(i)    the Industrial Development Bank of India established under the Industrial Development Bank of India Act, 1964 (18 of 1964);

 (vi) where shares are held by a trustee appointed under a trust declared by a duly executed instrument in writing whether testamentary or otherwise [including any wakf deed which is valid under the Mussalman Wakf Validating Act, 1913 (6 of 1913)] and the dividend thereon is received by the trustee on behalf of, or for the benefit of, any person who is a beneficiary of the trust;

 (vii) where the shares owned by a firm are held in the name of any of its partners;

 (viii) where the shares owned by a Hindu undivided family are held in the name of the karta or any other adult member of the family;

 (ix) where the shares have been sold or otherwise transferred by the registered shareholder and action for registering the transfer in the name of the purchaser or other person has been taken in accordance with the provisions of section 108 of the Companies Act, 1956 (1 of 1956);

 (x) where the shares owned by a member of a recognised Stock Exchange in India deposited with the Stock Exchange in accordance with the regulations of the Exchange are registered in the names of the trustees of the Exchange or the bankers of the Exchange.

(2) The credit referred to in sub-rule (1) shall not be given unless the person entitled to such credit furnishes to the 1[Assessing Officer] a declaration in Form No. 15B made by him and the shareholder concerned, together with a certificate of deduction of tax at source in Form No. 19."

[1][502] [31A. Quarterly statement of deduction of tax under sub-section (3) of section 200

[2][503] [(1)] Every person, being a person responsible for deducting tax under Chapter XVII-B shall, in accordance with the provisions of sub-section (3) of section 200, deliver or cause to be delivered to [3][504] [the Director General of Income-tax (Systems) or the person authorised[4][505] by the Director General of Income-tax (Systems)], quarterly statement—

(i) in Form No. 24Q in respect of deduction of tax at source under sub-sections (1) and (1A) of section 192; and

(ii) in Form No. 26Q in respect of other cases of deduction of tax at source,on or before the 15th July, the 15th October, the 15th January in respect of the first three quarters of the financial year and on or before the [5][506] [15th June] following the last quarter of the financial year:

[6][507] [Provided that where,—

(a) the deductor is an office of Government: or

(b) the deductor is a company; or

(c) the deductor is a person required to get his accounts audited under section 44AB in the immediately preceding financial year; or

(d) the number of deductees records in a quarterly statement for any quarter of the immediately preceding financial year is equal to or more than fifty,the person responsible for deducting tax at source, and the principal officer in the case of a company shall deliver or cause to be delivered such quarterly statements on computer media (3.5" 1.44 MB floppy diskette or CD-ROM of 650 MB capacity):]

Provided further that a person other than a person referred to in the first proviso, responsible for deducting tax at source, may at his option, deliver or cause to be delivered the quarterly statements on computer media (3.5" 1.44 MB floppy diskette or CD-ROM of 650 MB capacity):

Provided also that person responsible for deducting tax at source from the payments referred to in rule 37A shall furnish quarterly statements in accordance with the provisions of rule 37A and rule 37B.]

[7][508] [(2) The person responsible for deducting tax at source and preparing quarterly statements shall,—

(i) quote his tax deduction and collection account number (TAN) and permanent account number (PAN) in the quarterly statement:

Provided that the permanent account number shall not be required to be quoted where tax has been deducted by or on behalf of the Government;

(ii) quote the permanent account number of all persons in respect of whom income-tax has been deducted:

Provided that the permanent account number shall not be quoted in respect of the persons to whom the second proviso to sub-section (5B) of section 139A of the Act applies;

(iii) furnish particulars of the tax paid to the Central Government.

(3) The person responsible for deducting tax at source and preparing quarterly statements on computer media shall, in addition to the provisions in sub-rule (2),—

(i) Prepare the quarterly statement as per the data structure provided by the e-filing Administrator designated by the Board for the purposes of administration of Electronic Filing of Returns of Tax Deducted at Source Scheme, 2003 supported by a declaration in Form No. 27A in paper format:

Provided that in case any compression software has been used for preparing the quarterly statement on computer media, such compres-sion software shall be furnished on the same computer media;

(ii) Affix a label indicating name, permanent account number, tax deduction and collection account number and address of the person responsible for deduction of tax at source, the period to which the statement pertains and the volume number of the said computer media in case more than one volume of such media is used.]

31AA. Quarterly statement of collection of tax under sub-section (3) of section 206C

[8][509] [(1)] Every person, being a person responsible for collecting tax under section 206C shall, in accordance with the proviso to sub-section (3) of section 206C, deliver or cause to be delivered to [9][510] [the Director General of Income-tax (Systems) or the person authorised[10][511] by the Director General of Income-tax (Systems)], quarterly statement in Form No. 27EQ on or before the 15th July, the 15th October, the 15th January in respect of the first three quarters of the financial year and on or before the 30th April following the last quarter of the financial year:

[11][512] [Provided that where,—

(a) the collector is an office of Government; or

(b) the collector is a company; or

(c) the collector is a person required to get his accounts audited under section 44AB in the immediately preceding financial year; or

(d) the number of collectees records in a quarterly statement for any quarter of the immediately preceding financial year is equal to or more than fifty,the person responsible for collecting tax at source, and the principal officer in the case of a company shall deliver or cause to be delivered such quarterly statements on computer media (3.5" 1.44 MB floppy diskette or CD-ROM of 650 MB capacity):]

Provided further that a person other than a person referred to in the first proviso, responsible for collecting tax at source, may at his option, deliver or cause to be delivered the quarterly statements on computer media (3.5" 1.44 MB floppy diskette or CD-ROM of 650 MB capacity).]

[12][513] [(2) The person responsible for collecting tax at source and preparing quarterly statements shall,—

(i) quote his tax deduction and collection account number (TAN) and permanent account number (PAN) in the quarterly statement:

Provided that the permanent account number shall not be required to be quoted where tax has been collected by or on behalf of the Government;

(ii) quote the permanent account number of all persons in respect of whose income, tax has been collected;

(iii) furnish particulars of the tax paid to the Central Government.

(3) The person responsible for collecting tax at source and preparing quarterly statements on computer media shall, in addition to the provisions in sub-rule (2),—

(i) prepare the quarterly statement as per the data structure provided by the e-filing Administrator designated by the Board for the purposes of administration of Electronic Filing of Returns of Tax Collected at Source Scheme, 2005 supported by a declaration in Form No. 27B in paper format:

Provided that in case any compression software has been used for preparing the quarterly statement on computer media, such com-pression software shall be furnished on the same computer media;

(ii) affix a label indicating name, permanent account number, tax deduction and collection account number and address of the person responsible for collection of tax at source, the period to which the statement pertains and the volume number of the said computer media in case more than one volume of such media is used.]

31AB. Annual statement of tax deducted or collected or paid

[13][514] [ The Director General of Income-tax (Systems) or the person authorised by the Director General of Income-tax (Systems) shall deliver,—

(i) to every person from whose income the tax has been deducted; or

(ii) to the buyer referred to in sub-section (1) or, as the case may be, to the licence or lessee referred to in sub-section (1C) of section 206C from whom the amount has been collected; or

(iii) to every person in respect of whose income the tax has been paid,

[14][515] [a statement referred to in section 203AA or the second proviso to sub-section (5) of section 206C, in Form No. 26AS by the 31st July] following the financial year during which taxes were deducted or collected or paid.]

[15][516] [31AC.Maintenance of particulars of time deposits by a banking company for furnishing quarterly return under section 206A

(1) Every branch of a banking company, which is required to make a quarterly return under sub-section (1) of section 206A in respect of interest on time deposits without deduction of tax at source, shall keep and maintain the particulars of such time deposits in Form No. 26QA.

(2) Every branch referred to in sub-rule (1) which is maintaining its daily accounts on computer media, shall keep and maintain the particulars in Form No. 26QA on computer readable media.

31ACA. Quarterly return under section 206A

(1) The quarterly return to be furnished by a banking company under sub-section (1) of section 206A in respect of time deposits shall be in Form No. 26QAA and shall be verified in the manner indicated therein.

(2) The quarterly return referred to in sub-rule (1) shall be furnished,—

(i) to the Director General of Income-tax (Investigation), New Delhi or the person authorised by the Director General of Income-tax (Investigation), New Delhi;

(ii) on or before the 31st July, the 31st October, the 31st January and the 30th June following the respective quarter of the financial year.

(3) The quarterly return comprising Part A and Part B of Form No. 26QAA, referred to in sub-rule (1), shall be furnished on computer readable media being on CD-ROM (650 MB or higher capacity) or Digital Video Disc (DVD), along with Part A of such Form on paper.

(4) The person responsible for furnishing the return referred to in sub-rule (1) shall ensure that—

(i) where the data relating to the return is copied using data compression or backup software utility, the corresponding software utility or procedure for its decompression or restoration shall also be furnished along with the return made on computer readable media;

(ii) the return is accompanied with a certificate regarding clean and virus-free data.

Explanation.—For the purposes of rule 31AC and rule 31ACA, "time deposits" means deposits (excluding recurring deposits) repayable on the expiry of fixed periods.]

[32. Omitted by the Income-tax (Third Amndt.) Rules, 1996, w.e.f. 2-7-1996]

[16][517] [33. Statement of deduction of tax from contributions paid by the trustees of an approved superannuation fund

(1) In cases where the trustees of an approved superannuation fund pay any contributions made by an employer, including interest on such contributions, to an employee during his life time, they shall send within two months from the end of the financial year to the Assessing Officer referred to in rule 36A, a statement giving the following particulars, namely:—

(i) Name of the superannuation fund;

(ii) Name and address of the employee;

(iii) The period for which the employee has contributed to the superannuation fund;

(iv) The amount of contribution repaid on account of principal and interest;

(v) The average rate of deduction of tax during the preceding three years; and

(vi) The amount of tax deducted on repayment.

(2) A verification in the following form shall be annexed to the statement referred to in sub-rule (1):—

Form of Verification

We/I, the trustee(s) of the above named fund, do declare that what is stated in the above statement is true to the best of our/my information and belief.]

[34. Omitted by the Income-tax (6th Amndt.) Rules, 1988, w.e.f. 12-7-1988.]

[35. Omitted by the Income-tax (6th Amndt.) Rules, 1988, w.e.f. 12-7-1988.]

36. Prescribed persons for section 206

[17][518] [(1)] In the case of offices of the Government the return under [18][519] [* * *] section 206 shall be furnished by—

(a) Civil Audit Officers/Pay and Accounts Officers for all Gazetted Officers and others who draw their pay from Audit Offices/Pay and Accounts Offices on separate bills; and also for all pensioners who draw their pensions from Audit Offices;

(b) Treasury Officers for all Gazetted Officers and others who draw their pay from treasuries on separate bills without counter-signature and also for all pensioners who draw their pensions from treasuries;

[19][520] [(c) Heads of Civil or Military Offices for all Gazetted Officers and others, except those referred to in clause (b), and all non-gazetted officers, whose pay is drawn on establishment bills or on bills countersigned by the Head of Office;]

(d) Forest Disbursing Officers and Public Works Department Disbursing Officers in cases where direct payment from treasuries is not made, for themselves and their establishments;

(e) Head Postmasters for (i) themselves, their gazetted subordinates and the establishments of which the establishment pay bills are prepared by them, and (ii) gazetted supervising and controlling officers of whose headquarters post office they are incharge, and (iii) pensioners drawing their pensions through post offices; Head Record Clerks for themselves and all the staff whose pay is drawn in their establishment pay bills; Divisional Engineers in respect of Telegraph and Telephone Engineering Divisions; Accounts Officers, Stores and Workshops for the Stores and Workshops organisation and the Disbursing Officers in the case of the Administrative and Audit Offices;

(f) (i) Controllers of Defence Accounts for defence services officers and others including civilian Gazetted Officers under their payment control;

(ii) Officer Commanding Air Force Central Accounts Office, New Delhi — for air force officers and others for whom IRLAs are maintained by them;

(iii) Supply Officer-in-charge, Naval Pay Office, Bombay—for navy officers and ratings for whom IRLAs are maintained by them;

(iv)Chief Accounting Officer, London—for defence services personnel serving in or attached to High Commission in U.K.;

(g) The Financial Adviser and Chief Accounts Officer/Deputy Financial Adviser and Chief Accounts Officer of the Railways concerned — for all railway employees including the employees of the Railway Audit Department under their payment control;

(h) Heads of offices in the Missions and Posts abroad for themselves and for all gazetted and other officers under their administrative control;

(i) Trade Commissioners abroad, wherever their establishments are independent of the Missions, for themselves and for all gazetted and other officers under their administrative control;

(j) The Chief Accounts Officers, India Supply Mission, Washington, and India Stores Department, London for themselves and for the gazetted and other officers under their administrative control;

(k) The Directors/Managers of the tourist offices abroad, for themselves and for the gazetted and other officers under their administrative control.

[20][521] [(2) In the case of a local authority or any other public body or association, the return under section 206 shall be furnished by—

(a) the secretary, treasurer, manager or agent of the authority, public body or association, or

(b) any person connected with the management or administration of the local authority, public body or association upon whom the [21][522] [Assessing Officer] has served a notice of his intention of treating him as the person responsible for filing the return.]

[22][523] [36A.Prescribed authority for furnishing of returns regarding tax deducted at source*[524]

The returns referred to in rules 37 and 37A shall be furnished to the Director General of Income-tax (Systems) or the person or agency authorised[23][525] by the Director General of Income-tax (Systems).]

[24][526] [37. Prescribed returns regarding tax deducted at source under section 206[25][527]

Every person, being a person responsible for deducting tax under Chapter XVII-B shall, in respect of a previous year, deliver or cause to be delivered to the [26][528] [Director General of Income-tax (Systems) or the person or agency authorised by the Director General of Income-tax (Systems)] referred to in rule 36A, the returns mentioned in column (1) of the Table below in Form No. specified in the corresponding entry in column (2) of the said Table by the end of the month falling in the financial year immediately following the previous year as specified in the corresponding entry in column (3) of the said Table:—

1[TABLE

S. No.	Nature of returns	Form No.	Month
	(1)	(2)	(3)
1.	Annual return of deduction of tax under section 192 from "Salaries"[27][529]	24	June
2.	Annual return of deduction of tax u/s 193 from "Interest on securities", under section 194 from "Dividends", under section 194A from "Interest other than interest on securities", under section 194B from "Winnings from lotteries or crossword puzzles", under section 194BB from "Winnings from horse races", under section 194C from "Payments to any contractor or sub-contractor", under section 194D from "Insurance commission", under section 194EE from "Payments in respect of deposits under National Savings Scheme, etc." under section 194F from "Payments on account of repurchase of units by Mutual Fund or Unit Trust of India", u/s 194G from "Commission, etc., on sale of lottery tickets", u/s 194H from "Commission or brokerage", under section 194-I from "Rent", under section 194J from "Fees for profes-sional or technical services" [28][530] [, under section 194K from "Income in respect of units" and under section 194LA from "Payment of compensation on acquisition of certain immovable property"]	26	June]

[29][531] [37A. Returns regarding tax deducted at source in the case of non-residents

The person making deduction of tax in accordance with sections 193, [30][532] [194, 194E, 195 [31][533] [, 196A [32][534] [, 196B [33][535] [, 196C and 196D]]]] of the Act from any payment made to—

(i) a person, not being a company, who is a non-resident or a resident but not ordinarily resident, or

(ii) a company which is neither an Indian company nor a company which has made the prescribed arrangements for the declaration and payment of dividends within India;[34][536] [shall send within fourteen days from the end of the quarter a statement in [35][537] [Form No. 27Q]] to the [36][538] [Director General of Income-tax (Systems) or the person or agency authorised by the Director General of Income-tax (Systems)] referred to in rule 36A:]

[37][539] [Provided that where the income by way of interest on securities referred to in section 193 or the payment to non-resident sportsmen or sports associations referred to in section 194E or the interest or any other sum referred to in section 195 or the income of a foreign company referred to in sub-section (2) of section 196A [38][540] [or the income from units referred to in section 196B] [39][541] [or the income from foreign currency bonds or shares of an Indian company referred to in section 196C] [40][542] [or the income of Foreign Institutional Investors from securities referred to in section 196D] is credited by a person [41][543] [to the account of the payee as on the date up to which the accounts of such person] are made, the statement in [42][544] [Form No. 27Q] shall be sent within fourteen days after the expiry of two months from the month in which income is so credited.]

[43][545] [37AA. * * *]

8[37B. Returns regarding tax deducted at source on computer media under sub-section (2) of section 206

(1) Where a person responsible for deducting tax under Chapter[44][546] XVIIB is required to file any return or statement referred to in rule 37 or rule 37A on a computer media, he shall deliver or cause to be delivered such return or statement in accordance with such scheme as may be specified by the Board in this behalf within the time specified under rule 37 or rule 37A, as the case may be.

(2) The return or statement filed on a computer media shall contain all the information required under rule 37 or rule 37A, as the case may be.

(3) The return or statement filed on computer media shall be accom-panied by Form No. 27A furnishing the information specified therein.]

[45][547] [PART VIA

COLLECTION OF TAX AT SOURCE

2[37C. Declaration by a buyer for no collection of tax at source under section 206C(1A)

(1) A declaration under sub-section (1A) of section 206C to the effect that any of the goods referred to in the Table in sub-section (1) of that[46][548] section are to be utilised for the purposes of manufacturing, processing[47][549] or producing articles or things and not for trading purposes shall be in Form No. 27C and shall be verified in the manner indicated therein.

(2) The declaration referred to in sub-rule (1) shall be furnished in duplicate to the person responsible for collecting tax.

(3) The person referred to in sub-rule (2) shall deliver or cause to be delivered to the Chief Commissioner or Commissioner, one copy of the declaration referred to in sub-rule (1) on or before the seventh day of the month next following the month in which the declaration is furnished to him.

Explanation.—For the purposes of sub-rule (3), the Chief Commissioner or Commissioner means the Chief Commissioner or Commissioner to whom the Assessing Officer, having jurisdiction to assess the person referred to in sub-rule (2), is subordinate.

37CA. Time and mode of payment to Government account of tax collected at source under section 206C

(1) All sums collected in accordance with the provisions of sub-section (1) [48][550] [or sub-section (1C)] of section 206C shall be paid to the credit of the Central Government within one week from the last day of the month in which the collection is made.

(2) The person responsible for making collection under sub-section (1) [49][551] [or sub-section (1C)] of section 206C shall pay the amount of tax so collected to the credit of the Central Government by remitting it within the time prescribed in sub-rule (1) into any branch of the Reserve Bank of India or of the State Bank of India or of any authorised bank accompanied by an income-tax challan:

Provided that where the collection is made by or on behalf of the Government, the amount shall be credited within the time and in the manner aforesaid without the production of a challan.

37D. Certificate for collection of tax at source under section 206C(5)

(1) The certificate of collection of tax at source under sub-section (5) of section 206C to be furnished by any person collecting tax at source under sub-section (1) [50][552] [or sub-section (1C)] of that section shall be in Form No. 27D.

(2) The certificate referred to in sub-rule (1) shall be furnished within a period of one month from the end of the month during which the amount is debited to the account of the buyer [51][553] [or licensee or lessee] or payment is received from the buyer [52][554] [or licensee or lessee], as the case may be:

Provided that where more than one certificate is required to be furnished to a buyer [53][555] [or licensee or lessee] for tax collected at source in respect of the period ending on the 30th September and the 31st March in each financial year, the person collecting the tax, may on request from such buyer [54][556] [or licensee or lessee], issue within one month from the end of such period, a consolidated certificate in Form No. 27D for tax collected during whole of such period.

(3) Where in a case, the certificate for tax collected at source issued under this rule is lost, the person collecting tax at source may issue a duplicate certificate of collection of tax at source on a plain paper giving necessary details as contained in Form No. 27D.

(4) The Assessing Officer before giving credit for the tax collected at source on the basis of duplicate certificate referred to in sub-rule (3), shall get the payment certified from the Assessing Officer designated in this behalf by the Chief Commissioner or Commissioner and shall also obtain an Indemnity Bond from the assessee.]

[55][557] [37E. Prescribed returns regarding tax collected at source under section 206C(5A)

Every person collecting tax in accordance with the provisions of section 206C shall, in respect of a financial year, deliver or cause to be delivered to the [56][558] [Director General of Income-tax (Systems) or the person or agency authorised by the Director General of Income-tax (Systems)] referred to in rule 37F, the return for collection of tax in Form No. 27E by the end of June following the financial year.]

[57][559] [37EA.Returns regarding tax collected at source on computer media under sub-section (5B) of section 206

(1) Where a person responsible for collecting tax under Chapter XVII-BB is required to file any return referred to in rule 37E on computer media, such person shall deliver or cause to be delivered such return in accordance with such scheme as may be specified by the Board in this behalf within the time specified under rule 37E.

(2) The return filed on the computer media shall contain all the information required under rule 37E.

(3) The return filed on the computer media shall be accompanied by Form No. 27B furnishing the information specified therein.]

[58][560] [37F.Prescribed authority for returns regarding tax collected at source*[561]

The return referred to in rule 37E shall be furnished to the Director General of Income-tax (Systems) or the person or agency authorised[59][562] by the Director General of Income-tax (Systems).]

[60][563] [37G.Application for certificate for collection of tax at lower rates under sub-section (9) of section 206C

An application by [61][564] [the buyer or licensee or lessee] for a certificate under sub-section (9) of section 206C shall be made in [62][565] [Form No. 13].

37H. Certificate for collection of tax at lower rates from buyer†[566] under sub-section (9) of section 206C

(1) Where the Assessing Officer is satisfied that the total income of the buyer [63][567] [or licensee or lessee] justifies the collection of tax at any lower rate than the relevant rate specified in sub-section (1) [64][568] [or sub-section (1C)] of section 206C, he shall, on an application made by the buyer [65][569] [or licensee or lessee] under rule 37G, give to him a certificate [66][570] [* * *] for  collection of tax at such lower rate than the relevant rate specified in sub-section (1) [67][571] [or sub-section (1C)] of that section.

(2) The certificate given under sub-rule (1) shall be valid for the assessment year specified in that certificate, unless it is cancelled by the Assessing Officer at any time before the expiry of the specified period.

(3) An application for a fresh certificate may be made, if required, after the expiry of the period of validity of the earlier certificate given under sub-rule (1).

(4) The certificate shall be valid only for the person named therein.

(5) The certificate shall be issued direct to the person responsible for collecting the tax under advice to the buyer who made an application for issue of such certificate.]

PART VII

PAYMENT OF ADVANCE TAX

38. Notice of demand

Notwithstanding anything contained in rule 15, the notice of demand under section 156 to be served upon the assessee in pursuance of an order under section 210 shall be in Form No. 28.

[68][572] [38A. * * *]

[69][573] [39. Estimate of advance tax

The intimation which an assessee has to send to the Assessing Officer under sub-section (5) of section 210 shall be in Form No. 28A.]

40. Waiver of interest[70][574]

The [71][575] [Assessing Officer] may reduce or waive the interest[72][576] payable under section 215 or section 217 in the cases and under the circumstances mentioned below, namely:

(1) [73][577] When the relevant assessment is completed more than one year after the submission of the return, the delay in assessment not being attributable to the assessee.

(2) Where a person is under section 163 treated as an agent of another person and is assessed upon the latter's income.

(3) Where the assessee has income from an unregistered firm assessed under the provisions of clause (b) of section 183.

(4) Where the previous year is the financial year or any year ending about the close of the financial year and large profits are made after the 1st March (or the 15th March in cases where the proviso to section 211 applies), in circumstances which could not be foreseen.

(5) [74][578] Any case in which the [75][579] [Deputy Commissioner] considers that the circumstances are such that a reduction or waiver of the interest payable under section 215 or section 217 is justified.

[76][580] [(6) Nothing contained in this rule shall apply in respect of any assessment for the assessment year commencing on the first day of April, 1989, or any subsequent assessment year.]

[77][581] [PART VIIA

40A. * * *]

[78][582] [Part VIIB

40B. Special provision for payment of tax by certain companies

The report of an accountant which is required to be furnished by the assessee along with the return of income, under sub-section (4) of section 115JB shall be in Form No. 29B.]

[79][583] [PART VIIC

FRINGE BENEFIT TAX

40C. Valuation of specified security or sweat equity share being a share in the company

(1) For the purposes of clause (ba) of sub-section (1) of section 115WC, the fair market value of any specified security or sweat equity share, being an equity share in a company, on the date on which the option vests with the employee, shall be determined in accordance with the provisions of sub-rule (2) or sub-rule (3).

(2) In a case where, on the date of the vesting of the option, the share in the company is listed on a recognized stock exchange, the fair market value shall be the average of the opening price and closing price of the share on that date on the said stock exchange:

Provided that where, on the date of vesting of the option, the share is listed on more than one recognized stock exchanges, the fair market value shall be the average of opening price and closing price of the share on the recognised stock exchange which records the highest volume of trading in the share:

Provided further that where, on the date of vesting of the option, there is no trading in the share on any recognized stock exchange, the fair market value shall be—

(a)    the closing price of the share on any recognised stock exchange on a date closest to the date of vesting of the option and immediately preceding such date; or

(b)    the closing price of the share on a recognised stock exchange, which records the highest volume of trading in such share, if the closing price, as on the date closest to the date of vesting of the option and immediately preceding such date, is recorded on more than one recognized stock exchange.

(3) In a case where, on the date of vesting of the option, the share in the company is not listed on a recognized stock exchange, the fair market value shall be such value of the share in the company as determined by a merchant banker on the specified date.

(4) For the purpose of this rule,—

(a)   "closing price" of a share on a recognised stock exchange on a date shall be the price of the last settlement on such date on such stock exchange:

Provided that where the stock exchange quotes both "buy" and "sell" prices, the closing price shall be the "sell" price of the last settlement.

(b)   "merchant banker" means category I merchant banker registered with Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992);

(c)    "opening price" of a share on a recognised stock exchange on a date shall be the price of the first settlement on such date on such stock exchange:

Provided that where the stock exchange quotes both "buy" and "sell" prices, the opening price shall be the "sell" price of the first settlement.

(d)    "recognised stock exchange" shall have the same meaning assigned to it in clause (f) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);

(e)    "specified date" means,—

  (i)    the date of vesting of the option; or

(ii)    any date earlier than the date of the vesting of the option, not being a date which is more than

[79a][584] [(f)    Omitted by the Income-tax (Second Amendment) Rules, 2008, w.e.f. 1-4-2008.]]

[79b][585] [40D. Valuation of specified security not being an equity share in the company

For the purposes of clause (ba) of sub-section (1) of section 115WC, the fair market value of any specified security, not being an equity share in a company, on the date on which the option vests with the employee, shall be such value as determined by a merchant banker on the specified date.

Explanation.—For the purposes of this rule, "merchant banker" and "specified date" shall have the meanings assigned to them in clause (b) and clause (e) respectively of sub-rule (4) of Rule 40C.]

PART VIII

REFUNDS

41. Refund claim[80][586]

(1) A claim for refund under Chapter XIX shall be made in Form No. 30.

(2) The claim under sub-rule (1) shall be accompanied by a return in the form prescribed under section 139 unless the claimant has already made such a return to the [81][587] [Assessing Officer].

(3) Where any part of the total income of a person making a claim for refund of tax consists of dividends or any other income from which tax has been deducted under the provisions of [82][588] [sections 192 to 194, section 194A and section 195], the claim shall be accompanied by the certificates prescribed under section 203.

(4) The claim under sub-rule (1) may be presented by the claimant in person or through a duly authorised agent or may be sent by post.

PART IX

TAX CLEARANCE CERTIFICATES

[83][589] [42. Prescribed authority for tax clearance certificates[84][590]

(1) For the purposes of sub-section (1) of section 230, the prescribed authority shall be the Chief Commissioner of Income-tax or the Director-General of Income-tax, as the case may be, who has jurisdiction over the persons not domiciled in India or any other income-tax authority authorised by such Chief Commissioner or Director General in this behalf.

(2) For the purposes of sub-section (1A) of section 230, the prescribed authority shall be the Chief Commissioner of Income-tax having jurisdiction over the persons domiciled in India or any other income-tax authority authorised by him in this behalf:

Provided that in the case of a person domiciled in India referred to in the first proviso to sub-section (1A) of section 230, the application shall be made to the Assessing Officer who has jurisdiction to assess such person.

43. Forms and certificates for the purposes of sub-sections (1) and (1A) of section 230[85][591]

(1) An undertaking to be furnished to the prescribed authority by a person not domiciled in India from the persons referred to in clause (i) or clause (ii), as the case may be, shall be in Form No. 30A.

(2) A No-Objection Certificate to be issued by the prescribed authority under sub-section (1) of section 230 shall be in Form No. 30B and shall be valid for the period mentioned therein.

(3) The information to be furnished by a person domiciled in India shall be in Form No. 30C.

(4) An application under the first proviso to sub-section (1A) of section 230 may be made in Form No. 31.

(5) A tax clearance certificate issued under the first proviso to sub-section (1A) of section 230 shall be in Form No. 33 and shall be valid for the period mentioned therein.

(6) A copy of the undertaking referred to in sub-rule (1) and the no-objection certificate referred to in sub-rule (2) shall be forwarded to the Chief Commissioner or Director General, as the case may be, having jurisdiction over the persons referred to in clause (i) or clause (ii) of sub-section (1) of section 230.]

44. Production of certificate[86][592]

Any person leaving India shall, at the request of any Customs Officer, produce to him for examination the tax clearance certificate or the exemption certificate, as the case may be.

[87][593] [44A. Application for tax clearance certificate for registration of documents in certain cases[88][594]

An application under sub-section (2) of section 230A for a certificate under sub-section (1) of that section shall be made in duplicate in Form No. 34A to the [89][595] [Assessing Officer].]

[90][596] [44B. Grant of tax clearance certificate or refusal[91][597]

Within 60 days of the receipt of the application referred to in rule 44A, the [92][598] [Assessing Officer] shall—

(i) if he is satisfied that the applicant has either paid or made satisfactory provision for payment of all existing liabilities under the enactments specified in clause (a) of sub-section (1) of section 230A or that the registration of the document referred to in the application will not prejudicially affect the recovery of any such liability, grant the certificate and forward the same to the registering officer concerned; or

(ii) if he is not so satisfied, pass an order in writing refusing to grant the certificate, recording his reasons therefor.]

[93][599] [part ixa

SETTLEMENT OF CASES

44C. Form of application for settlement of case [94][600] [and intimation to the Assessing Officer]

(1) An application for settlement of a case under sub-section (1) of section 245C shall be made in quintuplicate in Form No. 34B [95][601] [and shall be verified in the manner indicated therein].

[96][602] [(2) The application referred to in sub-rule (1), the verification appended thereto, the Annexure to the said application and the statements and documents accompanying the Annexure shall be signed by the person specified in sub-rule (2) of rule 45.]

(3) Every application in connection with the settlement of a case shall be accompanied by a fee of five hundred rupees.]

[97][603] [(4) The assessee shall, on the date on which he makes the application to the Settlement Commission, intimate in Form No. 34BA to the Assessing Officer of having made such application to the Commission.]

[98][604] [44CA. Disclosure of information in the application for settlement of cases.—

(1) The Settlement Commission shall, while calling for a report from the Commissioner under sub-section (2B) of section 245D, forward a copy of the application in Form No. 34B (other than the Annexure and the statements and other documents accompanying such Annexure) along with a copy of the order under sub-section (1) of section 245D or, as the case may be, an intimation in respect of an application deemed to have been allowed to be proceeded with under sub-section (2A) of that section 245D.

(2) Where an application has not been declared invalid under sub-section (2C) of section 245D or an application has been allowed to be further proceeded with under sub-section (2D) of section 245D, the information contained in the Annexure to the application in Form No. 34B and in the statements and other documents accompanying such Annexure shall be sent to the Commissioner.]

44D. Fee for furnishing copy of report

(1) The following scale of fees shall be levied by the Settlement Commission for furnishing under section 245G a copy of any report or part of any report made by any Income-tax authority to the Settlement Commission:—

For the first two hundred words or less                                                            80 paise.

For every additional hundred words or fraction thereof                                    40 paise.

(2) The fee referred to in sub-rule (1) shall be recovered in advance in cash.]

[99][605] [Chapter IXB[100][606]

Advance Rulings[101][607]

44E. Form of application for obtaining an advance ruling

[102][608] [(1) An application for obtaining an advance ruling under sub-section (1) of section 245Q shall be made in quadruplicate,—

(a) in Form No. 34C in respect of a non-resident applicant;

[103][609] [(b) in Form No. 34D in respect of a resident applicant seeking advance ruling in relation to a transaction undertaken or proposed to be undertaken by him with a non-resident; and

(c) in Form No. 34E in respect of a resident falling within any such class or category of person as notified by Central Government in exercise of the powers conferred by sub-clause (b) of section 245N,]and shall be verified in the manner indicated therein.]

(2) The application referred to in sub-rule (1), the verification appended thereto, the annexures to the said application and the statements and documents accompanying it, shall be signed,—

(a) in the case of an individual,—

(i) by the individual himself;

(ii) where, for any unavoidable reason, it is not possible for the individual to sign the application, by any person duly authorised by him in this behalf:

Provided that in a case referred to in sub-clause (ii) the person signing the application holds a valid power of attorney from the individual to do so, which shall be attached to the application;

(b) in the case of a Hindu undivided family,—

(i) by the karta thereof, and

(ii) where, for any unavoidable reason, it is not possible for the karta to sign the

application, by any other adult member of such family;

(c) in the case of a company,—

(i) by the Managing Director thereof, or where for any unavoidable reason such Managing Director is not able to sign and verify the application, or where there is no Managing Director, by any Director thereof;

(ii) where, for any unavoidable reason, it is not possible for the Managing Director or the Director to sign the application, by any person duly authorised by the company in this behalf:

Provided that in the case referred to in sub-clause (ii), the person signing the application holds a valid power of attorney from the company to do so, which shall be attached to the application;

(d) in the case of a firm, by the managing partner thereof, or where for any unavoidable reason such managing partner is not able to sign and verify the application or where there is no managing partner as such, by any partner thereof, not being a minor;

(e) in the case of an association of persons, by any member of the association or the principal officer thereof, and

(f) in the case of any other person, by that person or by some person competent to act on his behalf.

Sl. No.	Nature of returns	Form No.	Month
1.	Annual return of deduction of tax under section 192 from "salaries"	24	May
2.	Annual return of deduction of tax under section 193 from "interest on securities"	25	June
3.	Annual return of deduction of tax under section 194 from "divi-dends" or under section 194K from "income in respect of units"	26	April
4.	Annual return of deduction of tax under section 194A from "interest other than interest on securities"	26A	June
5.	Annual return of deduction of tax under section 194B from "winnings from lotteries or crossword puzzles"	26B	May
6.	Annual return of deduction of tax under section 194BB from "winnings from horse races"	26BB	May
7.	Annual return of deduction of tax under section 194C from "payments to any contractor or sub-contractor"	26C	June
8.	Annual return of deduction of tax under section 194D from "insurance commission"	26D	June
10.	Annual return of deduction of tax under section 194EE from "pay-ments in respect of deposits under National Savings Scheme, etc."	26F	June
11.	Annual return of deduction of tax under section 194F from "payments on account of repurchase of units by Mutual Fund or Unit Trust of India"	26G	June
12.	Annual return of deduction of tax under section 194G from "commission, etc., on sale of lottery tickets"	26H	June
13.	Annual return of deduction of tax under section 194H from "Commission or brokerage"	26-I	June
14.	Annual return of deduction of tax under section 194-I from "rent"	26J	June
15.	Annual return of deduction of tax under section 194J from "fees for professional or technical services"	26K	June

44F. Certification of copies of the advance rulings pronounced by the Authority

The copy of the advance ruling pronounced by the Authority to be sent to the applicant and to the Commissioner having jurisdiction over his case, shall be certified to be true copy thereof by the Commissioner or Deputy Commissioner, Authority for Advance Rulings, as the case may be.]

[1][610] [PART IXC

Mutual Agreement Procedure

44G. Application for giving effect to the terms of any agreement under clause (h) of sub-section (2) of section 295

Where a resident assessee is aggrieved by any action of the tax authorities of any country outside India for the reason that, according to him, such action is not in accordance with the terms of agreement with such other country outside India, he may make an application to the Competent Authority in India seeking to invoke the mutual agreement procedure, if any, provided therein, in terms of Form No. 34F.

44H. Action by the Competent Authority of India and procedure for giving effect to the decision under the agreement

(1) Where a reference has been received from the competent authority of a country outside India under any agreement with that country with regard to any action taken by any Income-tax authority in India, the Competent Authority in India shall call for and examine the relevant records with a view to give his response to the competent authority of the country outside India.

(2) The Competent Authority in India shall endeavour to arrive at a resolution of the case in accordance with such agreement.

(3) The resolution arrived at under mutual agreement procedure, in consultation with the competent authority of the country outside India, shall be communicated, wherever necessary, to the Chief Commissioner or the Director-General of Income-tax, as the case be, in writing.

(4) The effect to the resolution arrived at under mutual agreement procedure shall be given by the Assessing Officer within ninety days of receipt of the same by the Chief Commissioner or the Director-General of Income-tax, if the assessee,—

(i) gives his acceptance to the resolution taken under mutual agreement procedure; and

(ii) withdraws his appeal, if any, pending on the issue which was the subject-matter for adjudication under mutual agreement procedure.

(5) The amount of tax, interest or penalty already determined shall be adjusted after incorporating the decision taken under mutual agreement procedure in the manner provided under the Income-tax Act, 1961 (43 of 1961), or the rules made thereunder to the extent that they are not contrary to the resolution arrived at.

Explanation.—For the purposes of rules 44G and 44H, "Competent Authority of India" shall mean an officer authorised by the Central Government for the purposes of discharging the functions as such.]

PART X

APPEALS

45. Form of appeal[2][611] to [3][612] [[4][613] [* * *] [5][614] [* * *] Commissioner (Appeals)]

[6][615] [(1) An appeal to [7][616] [* * *] [8][617] [* * *]] the Commissioner (Appeals) shall be made in Form No. 35].

[9][618] [(2) [10][619] The form of appeal prescribed by sub-rule (1), the grounds of appeal and the form of verification appended thereto relating to an assessee shall be signed[11][620] and verified by the person who is authorised to sign the return of income under section 140 of the Income-tax Act, 1961 as applicable to the assessee.]

46. Mode of service[12][621]

(1) The intimation of any such order as is referred to in clause (c) of sub-section (2) of section 249 shall be served in the same manner as is laid down in section 282 for the service of a notice or requisition.

(2) Any other order, not being a notice or requisition, which is to be sent or communicated to, or served on, any person shall be sent, communicated or served either by post or as if it were a summons issued by a court under the Code of Civil Procedure, 1908 (5 of 1908).

[13][622] [46A. Production of additional evidence[14][623] before the [15][624] [Deputy Commissioner (Appeals)] [16][625] [and Commissioner (Appeals)]

(1) The appellant shall not be entitled to produce before the [17][626] [Deputy Commissioner (Appeals)] [18][627] [or, as the case may be, the Commissioner (Appeals)], any evidence, whether oral or documentary, other than the evidence produced by him during the course of proceedings before the [19][628] [Assessing Officer], except in the following circumstances, namely:—

(a) where the [20][629] [Assessing Officer] has refused to admit evidence which ought to have been admitted; or

(b) where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to produce by the [21][630] [Assessing Officer]; or

(c) where the appellant was prevented by sufficient cause from producing before the [22][631] [Assessing Officer] any evidence which is relevant to any ground of appeal; or

(d) where the [23][632] [Assessing Officer] has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal.

(2) No evidence shall be admitted under sub-rule (1) unless the [24][633] [Deputy Commissioner (Appeals)] [25][634] [or, as the case may be, the Commissioner (Appeals)] records in writing the reasons[26][635] for its admission.

(3) The [27][636] [Deputy Commissioner (Appeals)] [28][637] [or, as the case may be, the Commissioner (Appeals)] shall not take into account any evidence produced under sub-rule (1) unless the [29][638] [Assessing Officer] has been allowed a reasonable opportunity—

(a) to examine the evidence or document or to cross-examine the witness produced by the appellant, or

(b) to produce any evidence or document or any witness in rebuttal of the additional evidence produced by the appellant.[30][639]

(4) [31][640] Nothing contained in this rule shall affect the power of the [32][641] [Deputy Commissioner (Appeals)] [33][642] [or, as the case may be, the Commissioner (Appeals)] to direct the production of any document, or the examination of any witness, to enable him to dispose of the appeal, or for any other substantial cause including the enhancement of the assessment or penalty (whether on his own motion or on the request of the [34][643] [Assessing Officer] under clause (a) of sub-section (1) of section 251 or the imposition of penalty under section 271.]

47. Form of appeal and memorandum of cross-objections to Appellate Tribunal[35][644]

(1) An appeal under sub-section (1) or sub-section (2) of section 253 to the Appellate Tribunal shall be made in Form No. 36 [36][645] [, and where the appeal is made by the assessee, the form of appeal, the grounds of appeal and the form of verification appended thereto shall be signed by the person specified in sub-rule (2) of rule 45].

(2) A memorandum of cross-objections under sub-section (4) of section 253 to the Appellate Tribunal shall be made in Form No. 36A [37][646] [, and where the memorandum of cross-objections is made by the assessee, the form of memorandum of cross-objections, the grounds of cross-objections and the form of verification appended thereto shall be signed by the person specified in sub-rule (2) of rule 45].

48. Form of application for reference to High Court

An application under sub-section (1) of section 256 requiring the Appellate Tribunal to refer to the High Court any question of law, shall be made in Form No. 37.

[38][647] [part xa

48A. . . . 48C. * * *]

[39][648] [PART XB

ACQUISITION OF IMMOVABLE PROPERTIES UNDER CHAPTER XXA[40][649]

48D. Jurisdiction of competent authorities

Where any immovable property is situate within the local limits of the jurisdiction of two or more competent authorities, the competent authority within whose jurisdiction the office of the registering officer who registered the instrument of transfer in respect of such property is situate shall be the competent authority to perform the functions of competent authority under Chapter XXA in relation to such property.

[41][650] [48DD. Statement to be registered with the competent authority under section 269AB

(1) The statement required to be registered with the competent authority under sub-section (2) of section 269AB shall be in Form No. 37EE and shall be signed and verified in the manner indicated therein by each of the parties to the transaction referred to in sub-section (1) of that section or by any of the parties to such transaction acting on behalf of himself and on behalf of the other parties.

(2) The statement in Form No. 37EE shall be made in duplicate and shall be furnished to the competent authority within a period of thirty days from the date on which the transaction referred to in sub-section (1) of section 269AB takes place:

Provided that in relation to any such transaction which has taken place between the 1st day of July, 1982 and the date of the publication of the Income-tax (Eighth Amendment) Rules, 1982 in the Official Gazette, the provisions of this sub-rule shall have effect as if for the words "thirty days", the words "sixty days" had been substituted.

(3) Where the competent authority considers that the statement in Form No. 37EE furnished under sub-section (2) of section 269AB is defective, he may intimate the defect to the parties or, as the case may be, the party furnishing such statement and give them an opportunity to rectify the defect within a period of fifteen days from the date of such intimation or within such further period which, on an application made in this behalf, the competent authority may, in his discretion, allow; and if the defect is not rectified within the period of fifteen days or, as the case may be, the further period so allowed, then, notwithstanding anything contained in any other provision of this rule, the statement in Form No. 37EE shall be treated as an invalid statement and the provisions of the Act shall apply as if the parties to the transaction had not complied with the provision of section 269AB.

(4) The competent authority shall, within a period of sixty days from the date of the receipt by him of the statement in Form No. 37EE or, as the case may be, from the date of the rectification of the defects under sub-rule (3), make an order registering the statement under section 269AB; and if no such order is made by the competent authority within the said period of sixty days, the statement shall be deemed to have been registered under section 269AB as on the date on which the said period of sixty days expires.]

48E. Manner of publication of notice for acquisition

The substance of the notice under sub-section (1) of section 269D in respect of any immovable property shall be made known in the locality in which such property is situate by proclamation in the language of the District by beat of drum or other customary mode.

48F. Form of appeal to the Appellate Tribunal[42][651]

An appeal under section 269G to the Appellate Tribunal shall be in Form No. 37F and the form of appeal, the grounds of appeal and the form of verification appended thereto shall be signed by the person specified in sub-rule (2) of rule 45.

48G. Statement to be furnished in respect of transfers of immovable property

The statement required to be furnished to the registering officer under sub-section (1) of section 269P shall be in Form No. 37G, and shall be signed and verified by the transferee in the manner indicated therein.

48H. Form of fortnightly return to be forwarded by registering officer to the competent authority

The return to be forwarded by the registering officer to the competent authority under clause (b) of sub-section (2) of section 269P shall be in Form No. 37H and be verified in the manner indicated therein.]

[43][PART XC

PURCHASE OF IMMOVABLE PROPERTIES UNDER CHAPTER XXC

48-I. Rate of interest for determination of discounted value of consideration[44]

The rate of interest for determination of the discounted value of consideration under sub-clause (1) or sub-clause (2) of clause (b) of section 269UA shall be eight per cent per annum.

48J. Jurisdiction of appropriate authority

Where any immovable property is situate within the local limits of the jurisdiction of two or more appropriate authorities, the appropriate authority within whose jurisdiction the office of the registering officer appointed under the Registration Act, 1908 (16 of 1908), who is entitled to register any document of transfer in respect of such property, is situate, shall be the appropriate authority to perform the function of appropriate authority under Chapter XXC in relation to such property.

[48K. Value of immovable property

The value of any immovable property for the purposes of sub-section (1) of section 269UC shall be, where the agreement for transfer prescribed under the said sub-section—

(a) is entered into, on or before the 31st day of July, 1995, the apparent consideration of that property exceeding 10 lakh rupees;

(b) is entered into, after 31st day of July, 1995, the apparent consideration[46]of that property as specified in column (3) of the table below:—

Sl. No.	Area within which the appropriate authorities shall perform their function	Value of any immovable property   for the purposes of sub-section (1)  of  section  269UC
(1)	(2)	(3)
1. notified vide S.O. 480(E), dated 7th August, 1986.[47]		The area comprised in Greater Bombay as The apparent consideration of the  property exceeding Rs. 75  lakhs.
2. apparent consideration of the Territory of Delhi as notified vide S.O. 480(E), dated 7th August, 1986.[48]		The area comprised in the Union The property exceeding Rs. 50 lakhs.
3. apparent consideration of the Metropolitan Area and Madras Metropolitan Planning Area as notified vide S.O. 480(E), dated 7th August, 1986.[49][652]		The area comprised in Calcutta The property exceeding Rs. 25 lakhs.
4. politan Region and the Areas declared as Ahmedabad Urban Development Area and the areas comprised in the city of Ahmedabad as notified vide S.O. 835(E), dated 21st September, 1987.[50][653]		The areas comprised in Bangalore Metro- The apparent consideration of the  property exceeding Rs. 25 lakhs.
5. as notified vide S.O. 339(E), dated 8th May, 1989.[51][654]		The areas comprised in the City of Pune The apparent consideration of the property exceeding Rs. 25 lakhs.
6. Sl. No. 5 above and notified vide S.O. 339(E), dated 8th May, 1989, S.O. 53(E), dated 19th January, 1990 and S.O. 180(E), dated 14th March, 1991.[52][655]		The areas other than those mentioned at The apparent consideration of the property exceeding Rs. 20 lakhs.

48L. Statement to be furnished under section 269UC(3)

[53][656] (1) The statement required to be furnished to the appropriate authority under sub-section (3) of section 269UC shall be in Form No. 37-I and shall be signed and verified in the manner indicated therein by each of the parties to the transfer referred to in sub-section (1) of that section or by any of the parties to such transfer acting on behalf of himself and on behalf of the other parties.

[54][657] [(2) The statement in Form No. 37-I shall be furnished, in duplicate, to the appropriate authority—

(a) before the 30th day of October, 1987,[55][658] in a case where the agreement for transfer is entered into before the coming into force of Chapter XXC in the areas comprised in the "Bangalore Metropolitan Region", and "Ahmedabad Urban Development Area" and the areas comprised in the city of Ahmedabad, as referred to in the notification of the Government of India in the Department of Revenue No. SO 835(E), dated 21-9-1987[56][659] ;

(b) before the expiry of 15 days from the date on which the provisions of Chapter XXC come into force in any areas, other than the areas referred to in clause (a), where the agreement for transfer is entered into before such date; and

(c) before the expiry of 15 days from the date on which the agreement for transfer is entered into, in cases not covered by clauses (a) and (b).]]

PART XI

AUTHORISED REPRESENTATIVES

49. Definitions

In this Part—

(a) "authorised income-tax practitioner" means any authorised representative as defined in clause (v) or clause (vi) or clause (vii) of sub-section (2) of section 288;

(b) "prescribed authority" means the prescribed authority referred to in rule 52;

(c) "register" means the register of income-tax practitioners referred to in rule 53.

[57][660] [50. Accountancy examinations recognised

The following accountancy examinations are recognised for the purpose of clause (v) of sub-section (2) of section 288, namely:

(1) The National Diploma in Commerce awarded by the All India Council for Technical Education under the Ministry of Education, New Delhi, provided the diploma-holder has taken Advanced Accountancy and Auditing as an elective subject for the Diploma Examination.

(2) Government Diploma in Company Secretaryship awarded by the Department of Company Affairs, under the Ministry of Industrial Development and Company Affairs, New Delhi.]

[58][661] [(2A) Final Examination of the Institute of Company Secretaries of India, New Delhi.]

[59][662] [(3) The Final Examination of the Institute of Cost and Works Accountants of India constituted under the Cost and Works Accountants Act, 1959 (23 of 1959).]

[60][663] [(4) The Departmental Examinations conducted by or on behalf of the Central Board of Direct Taxes for [61][664] [Assessing Officers], Class I or Group 'A' Probationers, or for [62][665] [Assessing Officers] Class II or Group 'B' Probationers or for promotion to the post of [63][666] [Assessing Officers], Class II or Group 'B' as the case may be.]

[64][667] [(5) The Revenue Audit Examination for Section Officers conducted by the Office of the Comptroller and Auditor-General of India.]

51. Educational qualifications prescribed

The following educational qualifications are prescribed for the purpose of clause (vi) of sub-section (2) of section 288:

A degree in Commerce or Law conferred by any of the following Universities:

I. [65][668] Indian Universities:

Any Indian University incorporated by any law for the time being in force.

II. Rangoon University.

III. English and Welsh Universities:

The Universities of Birmingham, Bristol, Cambridge, Durham, Leeds, Liverpool, London, Manchester, Oxford, Reading, Sheffield and Wales.

IV. Scottish Universities:

The Universities of Aberdeen, Edinburgh, Glasgow and St. Andrews.

V. Irish Universities:

The Universities of Dublin (Trinity College), the Queen's University, Belfast and the National University of Dublin.

VI. Pakistan Universities:

Any Pakistan University incorporated by any law for the time being in force.

52. Prescribed authority[66][669] for section 288(5)(b)

For the purposes of clause (b) of sub-section (5) of section 288 the "prescribed authority" shall be the [67][670] [Chief Commissioner or Commissioner] having jurisdiction over the case in the proceedings connected with which the income-tax practitioner is alleged to be guilty of misconduct.

53. Register of income-tax practitioners[68][671]

Every [69][672] [Chief Commissioner or Commissioner] shall maintain in Form No. 38, a register of authorised income-tax practitioners to whom certificates of registration have been issued by him under rule 55.

54. Application for registration

(1) Any person who wishes to have his name entered as an authorised income-tax practitioner in the register shall apply to the [70][673] [Chief Commissioner or Commissioner] within whose area or jurisdiction he has been practising. The application shall be made in Form No. 39 and shall be accompanied by documentary evidence regarding his eligibility for income-tax practice under clause (v) or clause (vi) [71][674] [or clause (via)] or clause (vii) of sub-section (2) of section 288.

(2) The applicant shall also furnish such further information as the [72][675] [Chief Commissioner or Commissioner] may require in connection with the disposal of the application.

55. Certificate of registration

If the [73][676] [Chief Commissioner or Commissioner] is satisfied that the applicant fulfils the requirements of clause (v) or clause (vi) [74][677] [or clause (via)] or clause (vii) of sub-section (2) of section 288 and has been practising before income-tax authorities for not less than one year on the date of the application, the [75][678] [Chief Commissioner or Commissioner] shall enter the name of the applicant in the register and issue him a certificate of registration in Form No. 40.

56. Cancellation of certificate

(1) A certificate of registration shall stand cancelled when the name of the holder of the certificate is removed from the register under these rules.

(2) When the name of the holder of the certificate is removed from the register, the [76][679] [Chief Commissioner or Commissioner] maintaining the register shall notify the fact of such removal to the authorised income-tax practitioner concerned and also to other [77][680] [Chief Commissioners or Commissioners] of Income-tax (who shall notify the fact of the removal to the income-tax authorities subordinate to them) and to the Appellate Tribunal.

57. Cancellation of certificate obtained by misrepresentation

(1) If at any time the [78][681] [Chief Commissioner or Commissioner] is satisfied that a certificate of registration was obtained by misrepresentation as to an essential fact, he shall order the removal of the name of the income-tax practitioner from the register.

(2) No order under sub-rule (1) shall be passed unless the authorised income-tax practitioner has been given a reasonable opportunity of being heard in regard to the proposed removal.

58. Removal of name of authorised income-tax practitioner who is insolvent or on whom penalty has been imposed

During the period for which a person whose name has been entered in the register is in the circumstances referred to in clause (b) or clause (c) of sub-section (4) of section 288 disqualified to represent an assessee, his name shall be removed from the register and shall be re-entered only after the completion of the aforesaid period.

59. Prescribed authority to order an inquiry

No order directing that an authorised income-tax practitioner shall be disqualified to represent an assessee shall be passed under clause (b) of sub-section (5) of section 288 except after an enquiry held as far as may be in the manner hereinafter provided in rules 60 to 65.

60. Charge-sheet

Where the prescribed authority on the basis of information in its possession is of the opinion that prima facie an authorised income-tax practitioner is guilty of misconduct in connection with any income-tax proceedings, it shall frame definite charges against the income-tax practitioner and shall communicate them in writing to him together with a statement of the allegations in support of the charges. The authorised income-tax practitioner shall be required to submit within such time as may be specified by the prescribed authority a written statement of his defence and also to state whether he desires to be heard in person.

61. Inquiry Officer

The prescribed authority shall, unless it proposes to conduct the inquiry itself, appoint an Inquiry Officer, not below the rank of an Assistant Commissioner of Income-tax to conduct the inquiry and shall inform the authorised income-tax practitioner of the appointment of such an Inquiry Officer.

62. Proceedings before Inquiry Officer

(1) On receipt of the written statement of defence, or if no such statement is received within the time specified, the Inquiry Officer shall inquire into such of the charges as are not admitted.

(2) The Inquiry Officer shall, in the course of the inquiry, consider such documentary evidence and take such oral evidence as may be relevant or material in regard to the charges. The authorised income-tax practitioner shall be entitled to cross-examine witnesses examined in support of the charges and to give evidence in person. If the Inquiry Officer declines to examine any witness on the ground that his evidence is not relevant or material, he shall record his reasons in writing.

(3) At the conclusion of the inquiry the Inquiry Officer shall prepare a report of the inquiry, recording his findings on each of the charges together with the reasons therefor.

63. Order of the prescribed authority

(1) The prescribed authority shall consider the report of the Inquiry Officer and record its findings on each charge and, where it does not agree with the findings of the Inquiry Officer, shall record the reasons for its disagreement.

(2) If the prescribed authority is satisfied on the basis of its findings on the Inquiry Officer's report that the authorised income-tax practitioner is guilty of misconduct in connection with any income-tax proceedings, it shall pass an order directing that the authorised income-tax practitioner shall be disqualified to represent an assessee under sub-section (1) of section 288 for such period as it may determine and his name shall be removed from the register for that period.

(3) The prescribed authority shall while communicating its order under sub-rule (2) furnish to the authorised income-tax practitioner a copy of the report of the Inquiry Officer and a statement of its findings together with the reasons for disagreement, if any, with the findings of the Inquiry Officer.

64. Procedure if no Inquiry Officer appointed

The procedure prescribed in the aforesaid rules shall mutatis mutandis apply when the prescribed authority itself conducts the inquiry without appointing an Inquiry Officer.

65. Change of Inquiry Officer

If a change of an Inquiry Officer becomes necessary in the midst of an inquiry, the prescribed authority may appoint any other Inquiry Officer not below the rank of an Assistant Commissioner of Income-tax and the proceedings shall be continued by the succeeding Inquiry Officer from the stage at which they were left by his predecessor.

66. Powers of prescribed authority and Inquiry Officer

For the purposes of any proceedings under rules 59 to 65, the prescribed authority and the Inquiry Officer shall have the same powers as are vested in a court under the Code of Civil Procedure, 1908 (5 of 1908), when trying a suit in respect of the following matters:—

(a) discovery and inspection;

(b) enforcing the attendance of any person including any officer of a banking company and examining him on oath;

(c) compelling the production of books of accounts and other documents; and

(d) issuing commissions.

PART XII

RECOGNISED PROVIDENT FUNDS[79][682]

[80][683] [67. Investment of fund moneys[81][684]

(1) All moneys contributed to a provident fund (whether by the employer or by the employees) after the 31st day of October, 1974, or transferred after that date from the individual account of an employee in any recognised provident fund maintained by his former employer or accruing after that date by way of interest or otherwise to the fund may be deposited in a Post Office Savings Bank Account in India [82][685] [or in a current account or a Savings Bank Account with any scheduled bank]; and to the extent such moneys as are not so deposited (such moneys as are not so deposited being hereafter in this rule referred to as investible moneys) shall be invested in the manner specified in sub-rule (2).

Explanation.—For the purposes of this rule and rules 85 and 101,—

(i) moneys received after the 31st day of October, 1974, on transfer, maturity or realisation of any security or deposit forming part of a fund or by withdrawal from any account in a bank (including a Post Office Savings Bank Account) shall be deemed to be moneys accruing to the fund after that date;

(ii) "scheduled bank" means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), [83][686] [or under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980),] or any other bank being a bank included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934).

[84][687] [(2) The manner of investment referred to in sub-rule (1) shall be in accordance with the following Table, namely:—

Table

Investment Pattern

S. No.	Investment	Minimum percentage of investible moneys to be invested in items referred to in column (2)
(1)	(2)	(3)
(i)	in Central Government securities as defined in section 2 of the Public Debt Act, 1944 (18 of 1944); and/or units of such mutual funds which have been set up as dedicated funds for investment in Government securities and which are regulated by the Securities and Exchange Board of India;	Twenty five per cent
(ii)	(a) in Government securities as defined in section 2 of the Public Debt Act, 1944 (18 of 1944), created and issued by any State Government, and/or units of such mutual funds which have been set up as dedicated funds for investment in Government securities and which are regulated by the Securities and Exchange Board of India; and/or (b) in any other negotiable securities the principal whereof and interest whereon is fully and unconditionally guaranteed by the Central Government or any State Government except those covered under (iii)(a) below;	Fifteen per cent
(iii)	(a) in bonds/securities, of a public financial institution or of a public sector company or of a public sector bank, which have an investment grade rating from at least two credit rating agencies; and/or (b) Term Deposit Receipts (TDR) upto three years issued by public sector banks; and/or (c) in Collateral Borrowing and Lending Obligation (CBLO) issued by Clearing Corporation of India Limited and approved by the Reserve Bank of India	Thirty per cent
(iv)	to be invested in any of the above three categories, as decided by their Trustees.	Thirty per cent:

Provided that any moneys received on the maturity of investments made prior to the 1st day of April, 2005, reduced by obligatory outgoings, shall be invested in accordance with the manner of investment specified in this sub-rule:

Provided further that the trustees, subject to their assessment of the risk-return prospectus, may, if they so decide, divide the total portfolio referred to in clause (i) and sub-clause (a) of clause (ii) of the said Table into tradable and non-tradable categories and upto ten per cent of the said portfolio at the end of the preceding financial year can be treated as tradable and may be used for active management:

Provided also that the tradable portfolio of Government securities mentioned in the second proviso shall be marked to the market and the mutual funds, which have been set up as dedicated funds for investment in Government securities, shall be valued at Net Asset Value at the end of the financial year:

Provided also that irrespective of the proportion of investments stated in clauses (i) and (ii) of the said Table, exposure of a trust to any individual mutual fund which has been set up as a dedicated fund for investment in Government securities, shall not exceed five per cent of its total portfolio at any point of time:

Provided also that the trustees may invest an amount not exceeding five per cent out of the amount referred to in clause (iii) of the said Table in the shares of any company which has an investment grade debt rating from at least two credit rating agencies registered under sub-section (1A) of section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992):

Provided also that the trustees may invest an amount not exceeding one-third out of the amount referred to in clause (iv) of the said Table in the debt instruments of any company, other than a public sector company, which has an investment grade rating from at least two credit rating agencies registered under sub-section (1A) of section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992) and/or in equity linked scheme of mutual funds regulated by Securities and Exchange Board of India:

Provided also that in the event of the rating of any instruments mentioned in this sub-rule for being rated and their rating falling below the investment grade, as certified by at least two credit rating agencies registered under sub-section (1A) of section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), then the option of exit from such instruments can be exercised and the released funds shall be invested in accordance with the manner provided in the Table of this sub-rule:

Provided also that any amount invested after 31st March, 2005, but on or before the date of issue of this notification in accordance with the manner of investment in force in this behalf from the 1st day of April, 1997 to 31st March, 2005, shall be deemed to have been invested in the manner specified in this sub-rule.

Explanation 1.—The manner of investment specified in this sub-rule shall apply to the aggregate amount of investible moneys with the fund in the previous year.

Explanation 2.—For the purposes of this sub-rule,—

(i) the expression "public financial institutions" shall have the meaning assigned to it in section 4A of the Companies Act, 1956 (1 of 1956);

(ii) the expression "public sector company" shall have the meaning assigned to it in clause (36A) of section 2 of the Income-tax Act; and

(iii) the expression "public sector bank" shall have the meaning assigned to it in clause (23D) of section 10 of the Income-tax Act.]

[85][688] [67A.Nomination

(1) An employee may be allowed by the trustees of the provident fund to make a nomination conferring on one or more persons the right to receive the amount that may stand to his credit in the provident fund in the event of his death, before that amount becomes payable or, having become payable, has not been paid. Such a nomination shall be made in Form No. 40A or in a form as near thereto as may be necessary.

(2) If an employee nominates more than one person under sub-rule (1), he shall, in his nomination, specify the amount or share payable to each of the nominees in such manner as to cover the whole of the amount that may stand to his credit in the provident fund.

(3) Where an employee has a family at the time of making a nomination, the nomination shall be in favour of one or more persons belonging to his family. Any nomination made by an employee in favour of a person not belonging to his family shall be invalid.

(4) If at the time of making a nomination the employee has no family, the nomination may be in favour of any person or persons, but if the employee subsequently acquires a family, such nomination shall forthwith be deemed to be invalid and the employee may be allowed to make a fresh nomination in favour of one or more persons belonging to his family.

(5) A nomination made by an employee may, at any time, be modified by him after giving a written notice to the trustees of his intention of doing so in Form No. 40B or in a form as near thereto as may be. If the nominee predeceases the employee, the interest of the nominee shall revert to the employee, who may thereupon make a fresh nomination in respect of such interest.

(6) A nomination or its modification shall take effect to the extent that it is valid on the date on which it is received by the trustees.

Explanation.—For the purposes of this rule, "family" means the employee's spouse, legitimate children, step children [86][689] [, deceased son's widow, deceased son's legitimate children, deceased son's step children] and dependent parents [87][690] [* * *].]

68. Circumstances in which withdrawals may be permitted

(1) Withdrawals by employees may be allowed by the trustees of the provident fund in the following circumstances:—

(a) to pay expenses incurred in connection with the illness of the employee or a member of his family;

[88][691] [(aa) meeting the cost of higher education, including, where necessary, the travelling expenses of any child of the employee actually dependent on him in the following cases, namely—

 (i) education outside India for academic, technical, professional or vocational courses beyond the [89][692] [matriculation] stage, and

 (ii) any medical, engineering or other technical or specialised course in India beyond the [90][693] [matriculation stage];]

(b) to pay for the cost of passage to a place out of India of an employee or any member of his family;

(c) to pay expenses in connection with marriages, funerals or ceremonies, which by the religion of the employee it is incumbent upon him to perform;

[91][694] [(d) to meet the expenditure on building a house, or purchasing a site [92][695] [or a house] or a house and a site[93][696] and, in the case of an employee whose pay does not exceed rupees [94][697] [five thousand] per month also on additions, substantial alterations or improvements necessary to a house:

Provided that the employee furnishes an undertaking to the trustees not to encumber or alienate such house or site [95][698] [or such house and site] or house and site, as the case may be:

[96][699] [Provided further that in the case of an employee whose pay does not exceed rupees [97][700] [five thousand] per month, such house or site or such house and site shall not be deemed to be an encumbered property merely because such house or site or such house and site is—

(i) mortgaged, solely for having obtained funds for the purchase of the said house or site or the said house and site or for the building of such house to any of the following agencies, namely, (a) the Central Government; (b) a State Government; (c) a co-operative society, being a society registered or deemed to be registered under the Co-operative Societies Act, 1912, or under any other law for the time being in force in any State relating to co-operative societies; (d) an institution; (e) a trust; (f) a local body; or (g) a Housing Finance Corporation; or

 (ii) held in the name of any of the aforesaid agencies and the employee is precluded from transferring or otherwise disposing of that house or site or that house and site without the prior approval of such agency.]

Explanation.—For the purposes of this clause "pay" shall have the meaning assigned to it in the Explanation to sub-rules (2A) and (2B) of rule 69;]

[98][701] [(dd) for repayment of loan previously raised for the purpose of construction or purchase of a house;]

(e) to pay premia on policies of insurance on the life of the employee or of his wife provided that the policy is assigned to the trustees of the fund or at their discretion deposited with them and that the receipts granted by the insurance company for the premia are from time to time handed over to the trustees for inspection by the [99][702] [Assessing Officer];

(f) to meet the cost of legal proceedings instituted by the employee for vindicating his position in regard to any allegations made against him in respect of any act done or purporting to be done by him in the discharge of his official duty or to meet the cost of his defence when he is prosecuted by the employer in any court of law in respect of any official misconduct on his part:

Provided that the advance under this clause shall not be admissible to an employee who institutes legal proceedings in any court of law either in respect of any matter unconnected with his official duty or against the employer in respect of any condition of service or penalty imposed on him;

[100][703] [(g) to meet the expenses of the damage caused to the movable or immovable property of the employee as a direct result of—

(i) flood, cyclone, earthquake or other convulsion of nature; or

(ii) riot;]

[101][704] [(h) in the case of an employee whose pay does not exceed rupees [102][705] [five thousand] per month,—

(i) to meet his household expenses if a factory or other establishment, wherein he is working, is locked up or closed down for more than fifteen days for reasons other than a strike rendering him unemployed without any compensation or if he is not in receipt of wages for a continuous period of two months or more;

 (ii) to meet his household expenses if the factory or other establishment wherein he is working, suffers cut in supply of electricity resulting in a loss of one-fourth or more of the total wages of the employee;

 (iii) to meet the cost of purchasing an equipment required by a physically handicapped employee which will minimise his hardship on account of the handicap;

[103][706] [(iv) to meet his household expenses where the employee is discharged or dismissed or retrenched by the employer and such discharge, dismissal or retrenchment, as the case may be, is challenged by the employee in any court or tribunal and the case is pending in that court or tribunal.]

Explanation.—For the purposes of this clause, "pay" shall have the meaning assigned to it in the Explanation to sub-rules (2A) and (2B) of rule 69.]

(2) For the purposes of sub-rule (1), "family" means any of the following persons who are wholly dependent on the employee, namely:—the employee's wife, legitimate children, step-children, parents, sisters and minor brothers.

69. Conditions for withdrawal for various purposes

[104][707] [(1) The withdrawal [105][708] [in connection with expenses on illness as specified in clause (a) of sub-rule

(1) of rule 68 or] in connection with expenses on marriages as specified in clause (c) of sub-rule (1) of rule 68, by an employee whose pay exceeds rupees [106][709] [five thousand] per month shall not exceed six months' pay or the total of the accumulation of exempted contributions and exempted interest lying to the credit of the employee, whichever is less.

(1A) The withdrawal for the purposes specified in clause (aa) and clause (c) of sub-rule (1) of rule 68, by an employee, whose pay does not exceed rupees [107][710] [five thousand] per month, shall be subject to the following conditions, namely:—

(a) the amount of withdrawal shall not exceed one-half of the employee's contributions to the fund with interest thereon;

(b) the employee shall have completed seven years of service;

(c) the amount of the employee's contributions to the fund with interest thereon is not less than rupees one thousand.]

(2) The withdrawal for the purpose specified in clause (d) [108][711] [and clause (dd)] of sub-rule (1) of rule 68 [109][712] [by any employee whose pay exceeds rupees [110][713] [five thousand] per month,] shall be subject to the following conditions:—

(i) the amount of withdrawal shall not exceed one-half of the amount standing to the employee's credit or the actual cost of the house and/or of the site, whichever is less;

[111][714] [(ii) the employee shall have completed [112][715] [ten] years of service or is due to retire within the next ten years];

(iii) the construction of the house should be commenced within six months of the withdrawal and should be completed within one year from the date of the commencement of the construction;

(iv) if the withdrawal is made for the purchase of a house and/or a site for a house,[113][716] the purchase should be made within six months of the withdrawal;

(v) if the withdrawal is made for the repayment of loan previously raised for the purpose of construction or purchase of a house, the repayment of the loan should be made within three months of the withdrawal;

(vi) where the withdrawal is for the construction of a house, it shall be permitted in two or more equal instalments (not exceeding four), a later instalment being permitted only after verification by the trustees about the actual utilisation of the earlier withdrawal;

(vii) the withdrawal shall be permitted only if the house and/or site is free from encumbrances and no withdrawal shall be permitted for purchasing a share in a joint property or building or house or land whose ownership is divided;

(viii) if the amount withdrawn exceeds the actual cost of the purchase or construction of the house and/or site, or if the amount is not utilised for the purpose for which it is withdrawn, the excess or the whole amount, as the case may be, shall be refunded to the trustees forthwith in one lump sum together with interest from the month of such withdrawal at the rate prescribed in sub-rule (4) of rule 71. The amount refunded shall be credited to the employee's account in the provident fund.

[114][717] [(2A) The withdrawal for the purpose specified in clause (d) of sub-rule (1) of rule 68, by any employee whose pay does not exceed rupees [115][718] [five thousand] per month, shall be subject to the following conditions, namely:—

[116][719] [(i) the amount of withdrawal shall not exceed—

 (a) the employee's basic wages and dearness allowance for [117][720] [thirty-six] months; or

 (b) the actual cost of building the house, or of purchasing the house or the site or the house and the site; or

 (c) the employee's contribution to the fund together with the specified percentage of the employer's contributions to that fund with interest thereon;whichever is less.

Explanation.—For the purposes of sub-clause (c), "specified percentage" means—

(1) 75 per cent of the employee's contribution forming part of the accumulation as on the date of the authorisation of payment, if the period of membership of the employee in the fund is five years or more, but less than ten years;

(2) 85 per cent of such contribution, if the period of membership of the employee in the fund is 10 years or more, but less than 15 years; and

(3) 100 per cent of such contribution, if the period of membership of the employee in the fund is 15 years or more;]

(ii) the employee shall have completed five years of service or is due to retire within the next ten years;

(iii) the withdrawal shall be permitted only if the house and/or site is free from encumbrances;

(iv) no withdrawal shall be permitted for purchasing a share in a joint property or a building or a house or land whose ownership is divided except where a site is owned jointly with the spouse;

(v) where the withdrawal is for construction of a house, the payment of the withdrawal may be sanctioned in such number of instalments (not exceeding four) as the trustees of the fund think fit;

(vi) where the withdrawal is for the construction of a house, the construction of the house should be commenced within six months of the withdrawal and should be completed within twelve months of the withdrawal of final instalment;

(vii) if the withdrawal is made for the purchase of a house and/or a site for a house, the purchase should be made within six months of the withdrawal;

(viii) if the amount withdrawn exceeds the actual cost of the purchase or construction of the house and/or site or if the amount is not utilised for the purpose for which it is withdrawn, the excess or the whole amount, as the case may be, shall be refunded to the trustees forthwith in one lump sum together with interest from the month of such withdrawal at the rate prescribed in sub-rule (4) of rule 71 and the amount so refunded shall be credited to the employee's account in the fund.]

[118][721] [(2B) A withdrawal for additions, substantial alterations or improvements necessary to the house owned by the employee or jointly owned by the employee and the spouse may be granted once and in one instalment only to an employee whose pay does not exceed rupees [119][722] [five thousand] per month, up to [120][723] [twelve months'] basic wages and dearness allowance or the employee's own share of contribution with interest thereon or the amount standing to his credit in the fund, whichever is less:

Provided that the said withdrawal shall be admissible only after a period of five years from the date of purchase or completion of the house:

Provided further that where the amount withdrawn is not utilised in whole or in part for the purpose for which it was withdrawn, the excess or the whole amount, as the case may be, shall be refunded to the trustees forthwith in one lump sum together with interest from the month of such withdrawal at the rate prescribed in sub-rule (4) of rule 71 and the amount so refunded shall be credited to the employee's account in the fund.

Explanation.—For the purposes of sub-rules (2A) and (2B), "pay" includes basic wages with dearness allowance, retaining allowance (if any), and cash value of food concession admissible thereon, to which the employee is entitled at the time when the withdrawal is granted or, in the case of an employee referred to in sub-rule (2) of rule 5 of Part A of the Fourth Schedule, the pay (including increments, if any) which he would have received had he not entered the armed

forces of the Union or being taken into or employed in the national service.]

(3) The withdrawal for the purpose specified in clause (f) of sub-rule (1) of rule 68 shall not exceed three months' pay or Rs. 500, whichever is greater, but shall in no case exceed half the amount to the credit of the employee.

(4) The withdrawal for any other purpose referred to in sub-rule (1) of rule 68 [121][724] [except as provided in sub-rule (1A)] shall not exceed three months' pay or the total of the accumulation of exempted contributions and exempted interest lying to the credit of the employee, whichever is less.

(5) For the purpose of this rule, [122][725] [except sub-rules (2A) and (2B)], "pay"[123][726] means the pay to which the employee is entitled at the time when the withdrawal is granted or, in the case of an employee referred to in sub-rule (2) of rule 5 of Part A of the Fourth Schedule, the pay (including increments, if any) which he would have received had he not entered the armed forces of the Union or been taken into or employed in the national service.

S. No.	Investment	Minimum percentage of investible moneys to be invested in items referred to in column (2)
(1)	(2)	(3)
(i)	in Central Government securities as defined in section 2 of the Public Debt Act, 1944 (18 of 1944); and/or units of such Mutual Funds which have been set up as dedicated Funds for investment in Government Securities and which have been approved by the Securities and Exchange Board of India;	Twenty-five per cent
(ii)	(a) in Government securities as defined in section 2 of the Public Debt Act, 1944 (18 of 1944), created and issued by any State Govern-ment, and or units of such Mutual Funds which have been set up as dedicated Funds for invest-ment in Government Securities and which have been approved by the Securities and Exchange Board of India; and/or	Fifteen per cent
	(b) in any other negotiable securities, the principle whereof and interest whereon is fully and unconditionally guaranteed by the Central Government or any State Government except those covered under (iii)(a) below;
(iii)	(a) in bonds/securities of a public financial institution or of a public sector company or of a public sector bank; and/or (b) short duration (less than a year) Term Deposit Receipts (TDR) issued by public sector banks.	Thirty per cent
(iv)	to be invested in any of the above three categories, as decided by their Trustees.	Thirty per cent

Provided that any moneys received on the maturity of investments made prior to 1st day of April, 2003, reduced by obligatory outgoing, shall be invested in accordance with the manner of investment specified in this sub-rule:
Provided further that the trustees may invest an amount not exceeding one-third out of the amount referred to in clause (iv) of the said Table in the bonds or securities of any company, other than a public sector company, which have an investment grade rating from at least two credit rating agencies registered under sub-section (1A) of section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992):
Provided also that in the event of the rating of any instruments mentioned in the second proviso to this sub-rule falling below the investment grade, as certified by at least two credit rating agencies registered under sub-section (1A) of section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), then the option of exit from such instruments can be exercised and the released funds shall be invested in accordance with the manner provided in the Table of this sub-rule:
Provided also that any amount invested after 31st March, 2003, but on or before the date of issue of this notification in accordance with the manner of investment in force in this behalf from the 1st day of April, 1997 to 31st March, 2003, shall be deemed to have been invested in the manner specified in this sub-rule.
Explanation 1.—The manner of investment specified in this sub-rule shall apply to the aggregate amount of investible moneys with the fund in the previous year.
Explanation 2.—For the purposes of this sub-rule,—
(i)	the expression "public financial institutions" shall have the meaning assigned to it in section 4A of the Companies Act, 1956 (1 of 1956);
(ii)	the expression "public sector company" shall have the meaning assigned to it in clause (36A) of section 2 of the Income-tax Act; and
(iii)	the expression "public sector bank" shall have the meaning assigned to it in clause (23D) of section 10 of the Income-tax Act."

70. Second withdrawal

(1) Save as in sub-rule (2) [1][727] [and sub-rule (3)], a second withdrawal shall not be permitted until the sum first withdrawn has been fully repaid.

[2][728] [(2) A withdrawal may be permitted—

(a) for any purpose specified in clause (d) or clause (e) of sub-rule (1) of rule 68 notwithstanding that the sum withdrawn earlier for any purpose has not been repaid;

(b) for any other purpose specified in sub-rule (1) of rule 68 notwithstanding that any sum withdrawn earlier for any purpose specified in clause (d) or clause (e) of the said sub-rule (1) has not been repaid.]

[3][729] [(3) A withdrawal, referred to in clause (a) of sub-rule (2), of an amount equal to the difference between the amount of withdrawal admissible under sub-rule (2A) of rule 69 as on the date of application and the amount actually withdrawn by the employee for the purpose specified in clause (d) of sub-rule (1) of rule 68 any time during six years preceding the 3rd day of October, 1981, may be permitted to the employee, whose pay does not exceed rupees [4][730] [five thousand] per month, subject to the following conditions, namely:—

(i) the employee had availed of the first withdrawal for purchase of a site and now proposes to construct a house on the site so purchased; or

(ii) the employee had availed of the first withdrawal for making initial payment towards allotment or purchase of a house from any of the agencies referred to in the second proviso to clause (d) of sub-rule (1) of rule 68 and now proposes to withdraw the amount for completing the transaction and for acquiring ownership of the house so purchased; or

(iii) the employee had availed of the first withdrawal for construction of a house but the said construction could not be completed due to shortage of funds.]

71. Repayment of amounts withdrawn

(1) Subject to the provisions of clause (viii) of sub-rule (2) [5][731] [or clause (viii) of sub-rule (2A) or the second proviso to sub-rule (2B)] of rule 69 where a withdrawal is allowed for a purpose specified in [6][732] [clause (d) or clause (dd) or clause (e) or sub-clause (i) of clause (h)] of sub-rule (1) of rule 68, the amount withdrawn need not be repaid.

(2) Where a withdrawal is allowed in connection with marriages as specified in clause (c) of sub-rule (1) of rule 68, the amount withdrawn shall be repaid in not more than forty-eight equal monthly instalments.

(3) Where a withdrawal is allowed for any other purpose, the amount withdrawn shall be repaid in not more than twenty-four equal monthly instalments.

(4) In respect of withdrawals referred to in sub-rules (2) and (3) and of the amount referred to in clause (viii) of sub-rule (2) [7][733] [or clause (viii) of sub-rule (2A) or the second proviso to sub-rule (2B)] of rule 69, interest shall be paid in accordance with the following Table:

TABLE

1	2
Where the amount is repaid in not more than 12 monthly instalments	One additional instalment of 4% on the amount withdrawn.
Where the amount is repaid in more than 12 monthly instalments but not more than 24 monthly instalments	Two additional instalments of 4% on the amount withdrawn.
Where the amount is repaid in more than 24 monthly instalments but not more than 36 monthly instalments	Three additional instalments of 4% on the amount withdrawn.
Where the amount is repaid in more than 36 monthly instalments but not more than 48 monthly instalments	Four additional instalments of 4% on the amount withdrawn.
Where the amount is refunded under clause (viii) of sub-rule (2) of rule 69	4% of the amount which is refundable:

Provided that at the discretion of the trustees of the fund, interest may be recovered on the amount aforesaid or the balance thereof outstanding from time to time at one per cent above the rate which is payable for the time being on the balance in the fund at the credit of the employee.

(5) The employer shall deduct the instalments aforesaid from the employee's salary, and pay them to the trustees of the fund. These deductions shall commence from the second monthly payment of salary made after the withdrawal or, in the case of an employee on leave without pay, from the second monthly payment of salary made after his return to duty.

[8][734] [71A. Certain rules not to apply

The conditions stipulated in rules 68, 69, 70 and 71 shall not apply in respect of withdrawals made after 1st April, 2007 from a fund which fulfils the conditions stipulated in sub-rule (ea) of rule 4 of Part A of the Fourth Schedule to the Income-tax Act, 1961.]

72. Amount withdrawn but not repaid may be deemed as income

In case of default of repayment of instalments due under sub-rule (2) or sub-rule (3) or sub-rule (4) of rule 71 or where the amount withdrawn is not utilised for the purpose for which it is withdrawn, the [9][735] [Chief Commissioner or Commissioner] may at his discretion order that the amount of the withdrawal or the amount outstanding shall be added to the total income of the employee for the year in which the default occurs or the withdrawn amount is finally held not to have been utilised for the purpose for which it is withdrawn, and the [10][736] [Assessing Officer] shall assess the employee accordingly.

[11][737] [73. Withdrawal within twelve months before retirement

Notwithstanding anything contained in rules 68 to 72, it shall be open to the trustees of a provident fund to permit at any time within twelve months before the date of retirement on superannuation of an employee, the withdrawal of upto ninety per cent of the amount standing at the credit of the employee.]

74. Accounts

(1) The accounts of a provident fund shall be prepared at intervals of not more than twelve months.

(2) An account shall be maintained for each subscriber to the fund and it shall include the particulars shown in Form No. 41.

(3) Where the accounts of a provident fund are kept outside India, certified copies of the accounts shall be supplied not later than the 15th June in each year to a local representative of the employer in India:

Provided that the [12][738] [Assessing Officer] may in any year appoint a date later than the 15th June as the date by which the certified copies shall be supplied.

[13][739] [(4) An abstract for the financial year or other applicable accounting period of the individual account of each employee participating in a provident fund shall be furnished by the trustees to the Assessing Officer of the area in which the accounts of the fund are kept or if the accounts are kept outside India, to the Assessing Officer of the area in which the local headquarters of the employer are situated, not later than the fifteenth day of June in each year or any other subsequent date fixed by the Assessing Officer. It shall be in the form prescribed in sub-rule (2) of this rule, but shall show only the totals of the various columns thereof for the financial year or other accounting period. It shall also give an account of any temporary withdrawals by the employee during the year and of the repayment thereof. Similar abstract shall also be furnished in respect of other employees participating in a provident fund who come within the purview of sub-rule (1) of rule 75.]

(5) The account to be made under the provisions of sub-rule (1) of rule 11 of Part A of the Fourth Schedule shall show in respect of each employee (i) the total salary paid to the employee during the period of his participation in the provident fund, (ii) the total contributions, (iii) the total interest which has accrued thereon, and (iv) so far as may be, the percentage of the employee's salary in accordance with which contributions have been made by the employer and employee.

[14][740] [(6) Every employer shall, as soon as possible, after the close of each financial year, send to each member, a statement of his account in the fund showing the opening balance at the beginning of the period, amount contributed during the year, the total amount of interest credited at the end of the period or debited in the period and the closing balance at the end of the period.]

75. Limits for contributions

[15][741] (1) Where an employee of a company owns shares in the company with a voting power exceeding ten per cent of the whole of such power, the sum of the contributions of the employee and employer to the recognised provident fund maintained by the company shall not exceed Rs. 250 in any month.[16][742]

(2) For the purpose of clause (a) of sub-rule (4) of rule 5 of Part A of the Fourth Schedule the employer's aggregate contribution in any year, including the normal contribution, to the individual account of any one employee whose salary does not exceed five hundred rupees per mensem shall not exceed double the amount of the contribution of the employee in that year.

(3) The amount of the periodical bonuses and other contributions of a contingent nature which may be credited by an employer in any year under clause (b) of sub-rule (4) of rule 5 of Part A of the Fourth Schedule to the individual account of any one employee shall not exceed the amount of the contributions of the employee in that year:

Provided, however, that the above limit shall not apply to bonus contributions made by an employer under an award by an Industrial Tribunal or under an order of a court or under an agreement with the employees' union(s) to the individual accounts of employees whose salary does not exceed Rs. 500 per month.

76. Penalty for assigning or creating a charge on beneficial interest

If an employee assigns or creates a charge upon his beneficial interest in a recognised provident fund, the [17][743] [Assessing Officer] shall, on the fact of the assignment or charge coming to his knowledge, give notice to the employee that if he does not secure the cancellation of the assignment or charge within two months of the date of receipt of the notice, the consideration received for such assignment or charge shall be deemed to be income received by him in the year in which the fact became known to the [18][744] [Assessing Officer] and shall be assessed accordingly.

77. Application for recognition

(1) An application for recognition shall be made by the employers maintaining a provident fund for which recognition is sought and shall be accompanied by the following documents:—

(a) the trust deed, if any, in original with one copy thereof, the latter to be retained by the [19][745] [Chief Commissioner or Commissioner], and

(b) the rules of the fund:

Provided that if the original of the trust deed cannot conveniently be produced, it shall be open to the [20][746] [Chief Commissioner or Commissioner] to accept in lieu of the original a copy certified either by a Magistrate or in any manner specified in rule 17 of the Companies (Central Government's) General Rules and Forms, 1956, in which case an additional copy shall be furnished for retention by the [21][747] [Chief Commissioner or Commissioner].

(2) The application shall be submitted through the [22][748] [Assessing Officer] of the area in which the accounts of the fund are kept or, if the accounts are kept outside India, through the [23][749] [Assessing Officer] of the area in which the local headquarters of the employer are situate.

(3) [24][750] [The application shall be furnished in Form No. 40C and shall include the following information:]

(a) Name of employer and address, his business, profession, etc., also his principal place of business.

(b) Number of employees subscribing to the fund—

(i) in India,

(ii) outside India.

(c) Place where the accounts of the fund are or will be maintained.

(d) If the fund is already in existence—

(i) a copy of the last balance sheet of the fund, where such is maintained,

(ii) details of investments of the fund.

[25][R751] [(4) The application in Form number 40C shall be verified in the manner specified therein.]

[26][R752] [(5) A fund which has been granted recognition on or before 31st March, 2006 or has applied for recognition before the publication of this notification in the Official Gazette, shall make a fresh application in Form No. 40C through the Assessing Officer referred to in sub-rule (2).]

78. Order of recognition

An order according recognition to a provident fund shall take effect from the last day of the month in which the application for recognition is received by the income-tax authority concerned, unless, at the request of the employer, the last day of any later month in the same financial year is specified:

[27][R753] [Provided that if the [28][R754] [Chief Commissioner or Commissioner] is satisfied that there was sufficient reason for the delay in making such application, he may accord recognition to the fund from a date not earlier than the 1st day of April of the financial year in which the application is made.]

[29][R755] [79. Withdrawal of recognition

(1) The Chief Commissioner or Commissioner may withdraw recogni-tion granted to a provident fund if it does not fulfil the conditions specified in Part A of the Fourth Schedule to the Income-tax Act, 1961 or subsequent to grant of recognition under the Income-tax Act, 1961 the exemption granted under section 17 of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 is withdrawn under sub-section (4) of section 17 of the said Act.

(2) Before withdrawing recognition, the Chief Commissioner or Commissioner shall give an opportunity to the employer and the trustees of the fund to show cause why recognition should not be withdrawn.]

80. Exemption from tax when recognition withdrawn

If the [30][R756] [Chief Commissioner or Commissioner] withdraws recognition from a provident fund, the balance to the credit of each employee at the end of the financial year prior to the date of the withdrawal of recognition shall, subject to the provisions of rule 9 of Part A of the Fourth Schedule, be paid to him free of [31][R757] [tax] at the time when such employee receives the accumulated balance due to him. The remainder of the accumulated balance due to him shall be liable to [32][R758] [tax] as if the fund had never been recognised.

81. Appeal

An appeal under sub-rule (1) of rule 13 of Part A of the Fourth Schedule shall be in Form No. 42 and shall be verified in the manner indicated therein and shall be accompanied by a fee of rupees one hundred.

PART XIII

APPROVED SUPERANNUATION FUNDS[33][R759]

82. Definitions

In this Part—

(1) "beneficiary" means a person referred to in clause (b) of rule 3 of Part B of the Fourth Schedule for whom provision of annuity is made;

(2) "fund" means a superannuation fund or a part of a superannuation fund [34][R760] [which includes a fund, by whatever name called, established or constituted with a sole purpose of making payment of pension or family pension by the employer to his employees]; and

(3) "trust" means the trust under which the superannuation fund is established and "trustee" means a trustee thereof.

83. Establishment of fund and trust

The fund and the trust shall be established in India.

84. Conditions regarding trustees

(1) The trust shall have at least two trustees, provided that a company [as defined in clause (i) of sub-section (1) of section 3 of the Companies Act, 1956 (1 of 1956)], shall not be appointed as a trustee without the prior approval of the [35][R761] [Chief Commissioner or Commissioner].

(2) The trustees of the fund shall be resident in India and any trustee who leaves India permanently shall vacate his office.

[36][R762] [85. Investment of fund moneys

All moneys contributed to the fund after the 31st day of October, 1974, or received or accruing after that date by way of interest or otherwise to the fund may be deposited in a Post Office Savings Bank Account in India or in a current account [37][R763] [or in a savings account] with any scheduled bank or utilised in accordance with rule 89 for making payments under a scheme of insurance or for purchase of annuities referred to in that rule; and to the extent such moneys as are not so deposited or utilised shall be invested in the manner specified in sub-rule (2) of rule 67, and for this purpose, the expression "investible moneys" in that sub-rule shall mean the moneys of the fund as are not deposited or utilised as aforesaid.]

86. Admission of directors to a fund

Where the employer is a company as defined in clause (i) of sub-section (1) of section 3 of the Companies Act, 1956 (1 of 1956), a director of the company may be admitted to the benefits of the fund only if he is a whole-time bona fide employee of the company and does not beneficially own shares in the company carrying more than five per cent of the total voting power.

87. Ordinary annual contributions

The ordinary annual contribution by the employer to a fund in respect of any particular employee shall not exceed [38][R764] [twenty-seven] per cent of his salary for each year as reduced by the employer's contribution, if any, to any provident fund (whether recognised or not) in respect of the same employee for that year.

88. Initial contributions[39][R765]

Subject to any condition which the Board may think fit to specify under clause (iv) of sub-section (1) of section 36, the amount to be allowed as a deduction on account of an initial contribution which an employer may make in respect of the past services of an employee admitted to the benefits of a fund shall not exceed twenty-five per cent of the employee's salary for each year [40][R766] [up to the 21st September, 1997 and after 21st September, 1997, twenty-seven per cent of the employee's salary for each year] of his past service with the employer as reduced by the employer's contribution, if any, to any provident fund (whether recognised or not) in respect of that employee for each such year.

89. Scheme of insurance or annuity[41][R767]

For the purpose of providing the annuities for the beneficiaries, the trustees shall—

(i) enter into a scheme of insurance with the Life Insurance Corporation established under the Life Insurance Corporation Act, 1956 (31 of 1956) [42][R768] [or any other insurer as defined in clause (28BB) of section 2 of the Income-tax Act, 1961], or

(ii) accumulate the contributions in respect of each beneficiary and purchase an annuity from the said Life Insurance Corporation of India [43][R769] [or any other insurer] at the time of the retirement or death of each employee or on his becoming incapacitated prior to retirement:

[44][R770] [Provided that nothing in this rule shall apply to a fund established or constituted, under an irrevocable trust which has its sole purpose to make payment of pension or family pension, in accordance with the rules or regulations made under the following Central Acts, namely:—

(i) the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970); or

(ii) the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980); or

(iii) the State Bank of India Act, 1955 (23 of 1955); or

(iv) the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959); or

(v) The Industrial Development Bank of India Act, 1964 (18 of 1964); or

(vi) the National Bank for Agriculture and Rural Development Act, 1981 (61 of 1981); or

(vii) the Export-Import Bank of India Act, 1981 (28 of 1981); or

(viii) the Industrial Reconstruction Bank of India Act, 1984 (62 of 1984); or

(ix) the Small Industries Development Bank of India Act, 1989 (39 of 1989); or

(x) the National Housing Bank Act, 1987 (53 of 1987).]

[45][R771] [90. Commutation of annuity

Any payment in commutation of annuity shall not exceed—

(a) in a case where the employee receives any gratuity, the commuted value of [46][R772] [one-third] of the annuity which he is normally entitled to receive, and

(b) in any other case, the commuted value of [47][R773] [one-half] of such annuity,such commuted value being determined having regard to the age of the recipient, the state of his health, the rate of interest and officially recognised tables of mortality.]

91. Beneficiary not to have any interest in insurance and employer not to have any interest in fund's moneys[48][R774]

(1) No beneficiary shall have any interest in any insurance policy taken out by the trustees under the rules of a fund and he shall be entitled only to an annuity from the fund.

(2) No money belonging to the fund shall be receivable by the employer under any circumstances nor shall the employer have any lien or charge on the fund.

92. Penalty if employee assigns or charges interest in fund

If an employee assigns or creates a charge upon his beneficial interest in a fund, the [49][R775] [Assessing Officer] shall give notice to the employee that if he does not secure the cancellation of the assignment or charge within two months of the date of receipt of the notice, the consideration received for such assignment or charge shall be deemed to be income received by him in the previous year in which the fact became known to the [50][R776] [Assessing Officer] and shall be assessed accordingly.

93. Arrangements on winding-up, etc., of business[51][R777]

Where the employer's trade or undertaking is to be wound-up or discontinued, the trustees shall, with the prior approval of, and subject to such conditions as may be imposed by, the [52][R778] [Chief Commissioner or Commissioner], make satisfactory arrangements for the payment of annuities to the existing employees or, on the death of the employees, to their widows, children or dependants.

94. Arrangements for winding-up, etc., of fund[53][R779]

Any arrangements for the winding-up of the fund or for its amalgamation with another fund shall be subject to the prior approval of, and subject to such conditions as may be imposed by, the [54][R780] [Chief Commissioner or Commissioner].

95. Application for approval

(1) The application for approval of a fund or part of a fund under sub-rule (1) of rule 4 of Part B of the Fourth Schedule shall contain the following information:

(a) Name of employer and address, his business, profession, etc., also his principal place of business.

(b) Classes and number of employees entitled to the benefits of the fund—

(i) in India,

(ii) outside India.

(c) Place where the accounts of the fund are or will be maintained.

(d) If the fund is already in existence, the details of investment of the fund.

(2) A verification in the following form shall be annexed to the application:

Form of verification

We/I, the trustee(s) of the above-named fund, do declare that what is stated in the above application is true to the best of our/my information and belief, and that the documents sent herewith are the originals or true copies thereof.

96. Amendment of rules, etc., of fund

No alteration in the rules, constitution, objects or conditions of an approved fund shall be made without the prior approval of the [55][R781] [Chief Commissioner or Commissioner].

97. Appeal

An appeal under sub-rule (1) of rule 8 of Part B of the Fourth Schedule shall be made in Form No. 43 and shall be verified in the manner indicated therein and shall be accompanied by a fee of rupees one hundred.

PART XIV

APPROVED Gratuity FUNDS[56][R782]

98. Definitions

In this part—

(a) "beneficiary" means a person referred to in clause (b) of rule 3 of Part C of the Fourth Schedule for whom provision of gratuity is made;

(b) "fund" means a "gratuity fund"; and

(c) "trust" means the trust under which the fund is established and "trustee" means a trustee thereof.

99. Establishment of fund and trust

The fund and the trust shall be established in India.

100. Conditions regarding trustees

(1) The trust shall have at least two trustees provided that a company [as defined in clause (i) of sub-section (1) of section 3 of the Companies Act, 1956 (1 of 1956)], shall not be appointed as a trustee without the prior approval of the [57][R783] [Chief Commissioner or Commissioner].

(2) The trustees of the fund shall be resident in India and any trustee who leaves India permanently shall vacate his office.

[58][R784] [101. Investment of fund moneys[59][R785]

All moneys contributed to the fund after the [60][R786] [31st day of October, 1974] or received or accruing after that date by way of interest or otherwise to the fund may be deposited in a Post Office Savings Bank Account in India or in a current account [61][R787] [or in a savings account] with any scheduled bank or utilised for the purpose of making contributions under Group Gratuity Scheme entered into with the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956) [62][R788] [or any other insurer as defined in clause (28BB) of section 2 of the Income-tax Act, 1961] [63][R789] [; and to the extent such moneys as are not so deposited or utilize d shall be invested in the manner specified in sub-rule (2) of rule 67 and for this purpose, the expression "investible moneys" in that sub-rule shall mean the moneys of the fund as are not deposited or utilised as aforesaid].]

[64][R790] [101A. Nomination[65][R791]

(1) An employee may be allowed by the trustees of the gratuity fund to make a nomination conferring on one or more persons the right to receive the amount of gratuity in the event of his death, before that amount becomes payable or, having become payable, has not been paid. Such a nomination shall be made in Form No. 40A or in a form as near thereto as may be necessary.

(2) If an employee nominates more than one person under sub-rule (1), he shall, in his nomination, specify the amount or share payable to each of the nominees in such manner as to cover the whole of the amount of gratuity that may be payable in the event of his death.

(3) Where an employee has a family at the time of making a nomination, the nomination shall be in favour of one or more persons belonging to his family. Any nomination made by such employee in favour of a person not belonging to his family shall be invalid.

(4) If at the time of making a nomination the employee has no family, the nomination may be in favour of any person or persons, but if the employee subsequently acquires a family, such nomination shall forthwith be deemed to be invalid and the employee may be allowed to make a fresh nomination in favour of one or more persons belonging to his family.

(5) A nomination made by an employee may, at any time, be modified by him after giving a written notice to the trustees of his intention of doing so in Form No. 40B or in a form as near thereto as may be. If the nominee predeceases the employee, the interest of the nominee shall revert to the employee, who may thereupon make a fresh nomination in respect of such interest.

(6) A nomination or its modification shall take effect to the extent it is valid on the date on which it is received by the trustees.

[66][R792] [Explanation.—For the purposes of this rule, "family" means the employee's spouse, legitimate children, step-children, deceased son's widow, deceased son's legitimate children, deceased son's step-children, dependant parents, sisters, minor brothers and the dependant parents of the employee's spouse.]

102. Admission of directors to a fund

Where the employer is a company as defined in clause (i) of sub-section (1) of section 3 of the Companies Act, 1956 (1 of 1956), a director of the company may be admitted to the benefits of the fund only if he is a whole time bona fide employee of the company and does not beneficially own shares in the company carrying more than five per cent of the total voting power.

103. Ordinary annual contributions[67][R793]

The ordinary annual contribution by the employer to a fund shall be made on a reasonable basis as may be approved by the [68][R794] [Chief Commissioner or Commissioner] having regard to the length of service of each employee concerned so, however, that such contribution shall not exceed 81/3 per cent of the salary of each employee during each year.

104. Initial contributions[69][R795]

The amount to be allowed as a deduction on account of an initial contribution which an employer may make in respect of the past services of an employee admitted to the benefits of a fund shall not exceed 81/3 per cent of the employee's salary for each year of his past service with the employer.

105. Penalty if employee assigns or charges interest in fund

If an employee assigns or creates a charge upon his beneficial interest in a fund, the [70][R796] [Assessing Officer] shall give notice to the employee that if he does not secure the cancellation of the assignment or charge within two months of the date of receipt of the notice, the consideration received for such assignment or charge shall be deemed to be income received by him in the previous year in which the fact became known to the [71][R797] [Assessing Officer] and shall be assessed accordingly.

106. Employer not to have interest in fund moneys

No money belonging to the fund shall be receivable by the employer under any circumstances nor shall the employer have any lien or charge on the fund.[72][R798]

107. Arrangements for winding-up, etc., of business

Where the employer's trade or undertaking is to be wound-up or discontinued, the trustees shall, with the prior approval of, and subject to such conditions as may be imposed by, the [73][R799] [Chief Commissioner or Commissioner], make satisfactory arrangements for the payment of gratuity to the existing beneficiaries.

108. Arrangements for winding up of the fund

Any arrangements for the winding-up of the fund or for its amalgamation with another fund shall be subject to the prior approval of, and to such conditions as may be imposed by, the [74][R800] [Chief Commissioner or Commissioner].

109. Application for approval

(1) The application for approval of a gratuity fund under sub-rule (1) of rule 4 of Part C of the Fourth Schedule shall contain the following information:

(a) Name of employer and address, his business, profession, etc., also his principal place of business.

(b) Classes and number of employees entitled to admission to the fund—

(i) in India,

(ii) outside India.

(c) Place where the accounts of the fund are or will be maintained.

(d) If the fund is already in existence, the details of investment of the fund.

(2) A verification in the following form shall be annexed to the application:

Form of verification

We/I, the trustee(s) of the above-named fund, do declare that what is stated in the above application is true to the best of our/my information and belief, and that the documents sent herewith are the originals or true copies thereof.

110. Amendment of rules, etc., of fund

No alteration in the rules, constitution, objects or conditions of an approved fund shall be made without the prior approval of the [75][R801] [Chief Commissioner or Commissioner].

111. Appeal

An appeal under sub-rule (1) of rule 8 of Part C of the Fourth Schedule shall be made in Form No. 44 and shall be verified in the manner indicated therein and shall be accompanied by a fee of rupees one hundred.

PART XV

MISCELLANEOUS

[76][R802] [111A. * * *]

[77][R803] [111AA. Conditions for reference to Valuation Officers

The percentage of the value of the asset and the amount referred to in sub-clause (i) of clause (b) of section 55A shall, respectively, be 15 per cent and Rs. 25,000.

111AB. Form of report of valuation by registered valuer

The report of valuation by a registered valuer in respect of any asset shall be furnished in the appropriate form specified in rule 8D of the Wealth-tax Rules, 1957, and shall be verified in the manner indicated in such form.]

[78][R804] [111B. Publication and circulation of Board's order

Any general or special order of the Board issued under clause (a) of sub-section (2) of section 119, the publication and circulation of which is, in the opinion of the Board, necessary in the public interest, shall be published and circulated in one or more of the following modes, namely:

(i) publication of the order in the Official Gazette;

(ii) despatching copies of the order to Chambers of Commerce and other trade or professional associations which are, for the time being, borne on the mailing list of the Board;

(iii) displaying copies of the order on the notice board of the office of every [79][R805] [Chief Commissioner or Commissioner], [80][R806] [Deputy Commissioner] and [81][R807] [Assessing Officer].]

112. Search and seizure[82][R808]

(1) [83][R809] The powers of search and seizure under section 132 shall be exercised in accordance with sub-rules (2) to [84][R810] [(14)].

[85][R811] [ (2) (a) The authorisation under sub-section (1) of section 132 (other than an authorisation under the proviso thereto, by the [86][R812] [Director General or Director] or the [87][R813] [Chief Commissioner or Commissioner] or any such [88][R814] [Deputy Director] or [89][R815] [Deputy Commissioner] as is empowered by the Board in this behalf shall be in Form No. 45;

(b) the authorisation under the proviso to sub-section (1) of section 132 by a [90][R816] [Chief Commissioner or Commissioner] shall be in Form No. 45A;

(c) the authorisation under sub-section (1A) of section 132 by a [91][R817] [Chief Commissioner or Commissioner] shall be in Form No. 45B.

(2A) Every authorisation referred to in sub-rule (2) shall be in writing under the signature of the officer issuing the authorisation and shall bear his seal.

(3) Any person in charge of or in any building, place, vessel, vehicle or aircraft authorised to be searched shall, on demand by the officer, authorised to exercise the powers of search and seizure under section 132 (hereinafter referred to as the authorised officer) and on production of the authority, allow him free ingress thereto and afford all reasonable facilities for a search therein.]

(4) If ingress into such building or place cannot be so obtained it shall be lawful for [92][R818] [the authorised officer] executing the authority, with such assistance of police officers [93][R819] [or of officers of the Central Government, or of both,] as may be required, to enter such building or place and search therein and in order to effect an entrance into such building or place, to break open any outer or inner door or window of any building or place, whether that of the person to be searched or of any other person, if after notification of his authority and purpose and demand of admittance duly made, he cannot otherwise obtain admittance:

Provided that, if any such building or place is an apartment in actual occupancy of a woman, who according to custom does not appear in public, [94][R820] [the authorised officer] shall, before entering such apartment, give notice to such woman that she is at liberty to withdraw and shall afford her every reasonable facility for withdrawing and may then break open the apartment and enter it.

[95][R821] [(4A) If ingress into any vessel, vehicle or aircraft authorised to be searched cannot be obtained because such vessel, vehicle or aircraft is moving or for any other reason, it shall be lawful for the authorised officer with such assistance of police officers or of officers of the Central Government, or of both, as may be required, to stop any such vessel or vehicle or, in the case of an aircraft, compel it to stop or land, and search any part of the vessel, vehicle or aircraft; and in order to effect an entrance into such vessel, vehicle or aircraft, to break open any outer or inner door or window of any such vessel, vehicle or aircraft, whether that of the person to be searched or of any other person, if after notification of his authority and purpose and demand of admittance duly made, he cannot otherwise obtain admittance:

Provided that if any such vessel, vehicle or aircraft is occupied by a woman, who according to custom does not appear in public, the authorised officer shall, before entering such vessel, vehicle or aircraft, give notice to such woman that she is at liberty to withdraw and shall afford her every reasonable facility for withdrawing.]

[96][822] [[97][823] [(4B)] [98][824] [The authorised officer] may require any person who is the owner, or has the immediate possession, or control, of any box, locker, safe, almirah or any other receptacle situate in such [99][825] [building, place, vessel, vehicle or aircraft], to open the same and allow access to inspect or examine its contents, and where the keys thereof are not available or where such person fails to comply with any such requirement, may cause any action to be taken including the breaking open of such box, locker, safe, almirah or other receptacle which [100][826] [the authorised officer] may deem necessary for carrying out all or any of the purposes specified in the authority issued under sub-rule (2).]

[101][827] [[102][828] [(4C)] [103][829] [The authorised officer] may, where it is not practicable to seize the money, bullion, jewellery or other valuable article or thing or any books of account or document, serve an order on the owner or the person who is in immediate possession or control thereof that he shall not remove, part with or otherwise deal with it except with the previous permission of [104][830] [the authorised officer], who may take such steps as may be necessary for ensuring compliance with this sub-rule.]

[105][831] [(5) Any person referred to in clause (iia) of sub-section (1) of section 132 may be searched by the authorised officer with such assistance as he may consider necessary. If such person is a woman, the search shall be made by another woman with a strict regard to decency.]

[106][832] [(6) Before making a search, the authorised officer shall,—

(a) where a building or place is to be searched, call upon two or more respectable inhabitants of the locality in which the building or place to be searched is situate, and

(b) where a vessel, vehicle or aircraft is to be searched, call upon any two or more respectable persons, to attend and witness the search and may issue an order in writing to them or any of them so to do.]

(7) The search shall be made in the presence, of the witnesses aforesaid and a list of all things seized in the course of such search and of the places in which they were respectively found shall be prepared by [107][833] [the authorised officer] and signed by such witnesses; but no person witnessing a search shall be required to attend as a witness of the search in any proceedings under [108][834] [the Indian Income-tax Act, 1922 (11 of 1922), or] the Act unless specially summoned.

[109][835] [(8) The occupant of the building, place, vessel, vehicle or aircraft searched, including the person in charge of such vessel, vehicle or aircraft, or some person on his behalf, shall be permitted to attend during the search and a copy of the list prepared under sub-rule (7) shall be delivered to such occupant or person. A copy thereof shall be forwarded to the [110][836] [Chief Commissioner or Commissioner], and, where the authorisation has been issued by any officer other than the [111][837] [Chief Commissioner or Commissioner], also to that officer.]

[112][838] [(9) Where any person is searched under clause (iia) of sub-section (1) of section 132, a list of all things taken possession of shall be prepared and a copy thereof shall be delivered to such person. A copy thereof shall be forwarded to the [113][839] [Chief Commissioner or Commissioner], and, where the authorisation has been issued by any officer other than the [114][840] [Chief Commissioner or Commissioner], also to that officer].

[115][841] [(10) [116][842] [The authorised officer] shall place or cause to be placed the bullion, jewellery and other valuable articles and things seized during the search in a package or packages which shall be listed with details of the bullion, jewellery and other valuable articles and things placed therein; every such package shall bear an identification mark and the seal of [117][843] [the authorised officer or any other income-tax authority] not below the rank of Income-tax Officer and [118][844] [the occupant of the building, place, vessel, vehicle or aircraft, including the person in charge of such vessel, vehicle or aircraft, searched] or any other person in his behalf shall also be permitted to place his seal on them. A copy of the list prepared shall be delivered to such occupant or person. A copy shall be forwarded to the [119][845] [Chief Commissioner or Commissioner], [120][846] [and where the authorisation has been issued by any officer other than the [121][847] [Chief Commissioner or Commissioner], also to that officer].]

[122][848] [[123][849] [(11)] [124][850] [The authorised officer] may convey the books of account and other documents, if any, seized by him in the course of the search made by him and the package or packages, if any, referred to in sub-rule (10) to the office of any Income-tax authority not below the rank of Income-tax Officer (hereinafter referred to as the Custodian). Any money seized in the search referred to above may also be deposited with the Custodian.]

[125][851] [(12)(i) The Custodian shall take such steps as he may consider necessary for the safe custody of—

(a) books of account and other documents, and

(b) the package or packages, conveyed to him.

(ii) The Custodian may deposit for safe custody all or any of the packages with any branch of the Reserve Bank of India or the State Bank of India or of its subsidiaries [126][852] [or the authorised Bank] or a Government Treasury.

(iii) Where any money has been deposited with the Custodian, he may credit the money, or remit the money through the nearest [127][853] [branch of the Reserve Bank of India or the State Bank of India or of its subsidiaries or any authorised bank] [128][854] [* * *] for being credited in the Personal Deposit Account of the [129][855] [Chief Commissioner or Commissioner] in the [130][856] [branch of the Reserve Bank of India or the State Bank of India or of its subsidiaries or any authorised bank] at the place where the office of the [131][857] [Chief Commissioner or Commissioner] is situate.]

[132][858] [(13)(i) Whenever any sealed package is required to be opened for any of the purposes of the Act, [133][859] [the authorised officer] may, unless he is himself the Custodian, requisition the same from the Custodian and on receipt of the requisition, such package or packages, as the case may be, shall be delivered to him by the Custodian. [134][860] [The authorised officer] may break any seal and open such package in the presence of two respectable witnesses after giving reasonable notice to the person from whose custody the contents were seized to be present.

(ii) Such person shall be permitted to be present till all or any of the contents of such package are placed in a fresh package or packages and sealed in the manner specified in sub-rule (1) or delivered to such person or the Custodian, as the case may be.]

[135][861] [(14) The [136][862] [Assessing Officer] to whom the books of account or other documents or assets have been handed over under sub-section (9A) of section 132 shall have all the powers conferred on the authorised officer under sub-rules (11) and (13).]

[137][863] [112A. Inquiry under section 132[138][864]

(1) Where any money, bullion, jewellery or other valuable article or thing (hereinafter referred to as assets) are seized, the [139][865] [Assessing Officer] shall, within fifteen days of the seizure [140][866] [, and in a case where the assets are handed over to him by the authorised officer under sub-section (9A) of section 132, within fifteen days from the date on which such assets are handed over to him], issue to the person in respect of whom enquiry under sub-section [141][867] [(5)] of section 132 is to be made requiring him on the date to be specified therein (not being earlier than fifteen days from the date of service of such notice) either to attend at the office of the [142][868] [Assessing Officer] to explain or to produce or cause to be there produced evidence on which such person may rely for explaining the nature of the possession and the source of the acquisition of the assets.[143][869]

(2) The [144][870] [Assessing Officer] may issue a notice to the person referred to in sub-rule (1) requiring him on a date specified therein to produce or cause to be produced at such time and at such place as the [145][871] [Assessing Officer] may specify such accounts or documents or evidence as the [146][872] [Assessing Officer] may require and may from time to time issue further notices requiring production of such further accounts or documents or other evidence as he may require.

(3) The [147][873] [Assessing Officer] may examine on oath any other person or make such other inquiry as he may deem fit.

(4) Before any material gathered in the course of the examination or inquiry under sub-rule (3) is used by the [148][874] [Assessing Officer] against the person referred to in sub-rule (1), the [149][875] [Assessing Officer] shall give a reasonable notice to that person to show cause why such material should not be used against him.]

[150][876] [112B. Release of articles under section 132(5)[151][877]

Where in pursuance of sub-section [152][878] [(5)] of section 132 of the Act, the assets or part thereof have to be released, the [153][879] [Assessing Officer] shall forthwith deliver the same to the person from whose custody they were seized in the presence of two respectable witnesses.]

[154][880] [112C. Release of remaining assets

Any assets or proceeds thereof which remain after the liabilities referred to in clause (i) of sub-section (1) of section [155][881] [132B] are discharged shall be forthwith made over or paid to the person, from whose custody the assets were seized in the presence of two respectable witnesses.]

[1][882] [112D. Requisition of books of account, etc.

(1) The authorisation under sub-section (1) of section 132A by the [2][883] [Director General or Director] or the [3][884] [Chief Commissioner or Commissioner] shall be in Form No. 45C, shall be in writing under the signature of the officer issuing the authorisation and shall bear his seal.

(2) The officer authorised to make a requisition under sub-section (1) of section 132A (hereinafter referred to as the requisitioning officer) shall make the requisition in writing to the officer or authority referred to in clause (a) or clause (b) or, as the case may be, clause (c) of the said sub-section (hereinafter referred to as the delivering officer or authority) calling upon the delivering officer or authority to deliver the books of account, other documents or assets specified in the requisition to him. The requisition shall be accompanied by a copy of the authorisation in Form No. 45C. A copy of the requisition, along with a copy of the authorisation in Form No. 45C, shall be forwarded to the person referred to in clause (a) or clause (b) or, as the case may be, clause (c) of sub-section (1) of section 132A.

(3) The delivering officer or authority shall prepare a list of the books of account or other documents delivered to the requisitioning officer. Before effecting delivery of any bullion, jewellery or other valuable article or thing, the delivering officer or authority shall place or cause to be placed such bullion, jewellery, article or thing in a package or packages which shall be listed with details of such bullion, jewellery, article or thing placed therein. Every such package shall bear an identification mark and seal of the requisitioning officer or of any other income-tax authority not below the rank of Income-tax Officer on behalf of the requisitioning officer, and also of the delivering officer or authority. The person referred to in clause (a) or clause (b) or, as the case may be, clause (c) of sub-section (1) of section 132A or any other person on his behalf shall also be permitted to place his seal on the said package or packages. A copy of the list prepared shall be delivered to such person and a copy thereof shall also be forwarded by the delivering officer to the [4][885] [Chief Commissioner or Commissioner] and also to the [5][886] [Director General or Director] where the authorisation under sub-rule (1) has been issued by him.

(4) The provisions of sub-rules (11) to (14) (both inclusive) of rule 112 and of rule 112A, rule 112B and rule 112C shall, so far as may be, apply as if the books of account, other documents and assets delivered to the requisitioning officer under section 132A had been seized under sub-section (1) of section 132 by the requisitioning officer from the custody of the person referred to in clause (a) or clause (b) or, as the case may be, clause (c) of sub-section (1) of the said section and as if for the words "the authorised officer" occurring in any of the aforesaid sub-rules and rules, the words "the requisitioning officer" were substituted.]

[6][887] [112E. Form of information under section 133B(1)[7][888]

The information required to be furnished under sub-section (1) of section 133B shall be in Form No. 45D.]

[8][889] [113. Disclosure of information respecting assessees

(1) The application to the [9][890] [Chief Commissioner or Commissioner] under [10][891] [clause (b) of] sub-section (1) of section 138 for information relating to an assessee in respect of any assessment made either under the Act or under the Indian Income-tax Act, 1922 (11 of 1922), on or after the first day of April, 1960, shall be made in Form No. 46.

(2) The information under [11][892] [clause (b) of] sub-section (1) of section 138 shall be furnished by the [12][893] [Chief Commissioner or Commissioner] in Form No. 47.

(3) Where it is not possible for the [13][894] [Chief Commissioner or Commissioner] to furnish the information asked for by the applicant under [14][895] [clause (b) of] sub-section (1) of section 138 owing to the fact that the relevant assessment has not been completed, he shall inform the applicant in Form No. 48.

(4) Where the [15][896] [Chief Commissioner or Commissioner] is satisfied that it is not in the public interest to furnish or cause to be furnished the information asked for, he shall intimate the fact to the applicant in Form No. 49.]

[16][897] [114. Application for allotment of a permanent account number[17][898]

(1) An application under sub-section (1) [18][899] [or sub-section (1A) or sub-section (2) or sub-section (3)] of section 139A for allotment of a permanent account number shall be made [19][900] [* * *] in Form No. 49A.

(2) An application referred to in sub-rule (1) shall be made,—

(i) in cases where the function of allotment of permanent account number under section 139A has been assigned by the [20][901] [Chief Commissioner or Commissioner] to any particular [21][902] [Assessing Officer], to that [22][903] [Assessing Officer];

(ii) in any other case, to the [23][904] [Assessing Officer] having jurisdiction to assess the applicant.

(3) The application referred to in sub-rule (1) shall be made,—

(i) in a case where the total income of the person or the total income of any other person in respect of which he is assessable under the Act during any accounting year exceeds the maximum amount which is not chargeable to income-tax and he has not been allotted any permanent account number, on or before the 31st day of May of the assessment year for which such income is assessable;

(ii) in the case of a person not falling under clause (i), but carrying on any business [24][905] [or profession], the total sales, turnover or gross receipts of which are or is likely to exceed [25][906] [five lakh rupees] in any accounting year and who has not been allotted any permanent account number, before the end of that accounting year;]

[26][907] [(iii) in the case of a person who is required to furnish a return of income under sub-section (4A) of section 139 and who has not been allotted any permanent account number, before the end of the accounting year.]

[27][908] [(4) The application referred to in sub-rule (1) in respect of persons mentioned in Column (2) of the Table below shall be accompanied by the documents mentioned in Column 3 as proof of identity and address of the applicant:

Table

Sl.No.	Applicant	Documents as proof of identity and address
(1)	(2)	(3)
1.	Individual	(i)   Proof of identity— Copy of school leaving certificate or matriculation certificate or degree of a recognised educational institution or depository account or credit card or bank account or water bill or ration card or property tax assessment order or passport or voter identity card or driving license or certificate of identity signed by a Member of Parliament or Member of Legislative Assembly or Municipal Councillor or a Gazetted Officer, as the case may be. In case of a person being a minor, any of the above documents of any of the parents or guardian of such minor shall be deemed to be the proof of identity. (ii)  Proof of address— Copy of electricity bill or telephone bill or depository account or credit card or bank account or ration card or employer certificate or passport or voter identity card or property tax assessment order or driving license or rent receipt or certificate of address signed by a Member of Parliament or Member of Legislative Assembly or Municipal Councillor or a Gazetted Officer, as the case may be. In case of a person being a minor, any of the above documents of any of the parents or guardian of such minor shall be deemed to be the proof of address.
2.	Hindu undivided family	Copy of any document applicable in the case of an individual specified in serial number 1, in respect of Karta of the Hindu undivided family, as proof of identity and address.
3.	Company	Copy of Certificate of Registration issued by the Registrar of Companies.
4.	Firm	Copy of Certificate of Registration issued by the Registrar of Firms. or Copy of Partnership Deed.
5.	Association                of persons                (Trusts)	Copy of Trust deed                or Copy of Certificate of Registration Number issued by Charity Commissioner.
6.	Association of persons (other than         Trusts) or body of individuals or local authority or artificial juridical person	Copy of Agreement                or Copy of Certificate of Registration number issued by Charity Commissioner or Registrar of Co-operative Society or any other Competent Authority            or Any other document originating from any Central or State Government Department establishing Identity and address of such person.]

[28][909] [114A. Application for allotment of a tax deduction and collection account number[29][910]

(1) An application under sub-section (1) of section 203A for the allotment of a tax deduction and collection account number shall be made in duplicate in Form No. 49B.

(2) An application referred to in sub-rule (1) shall be made,—

(i) in cases where the function of allotment of tax deduction and collection account number under section 203A has been assinged by the Chief Commissioner or Commissioner to any particular Assessing Officer, to that Assessing Officer;

(ii) in any other case, to the Assessing Officer having jurisdiction to assess the applicant.

(3) The application referred to in sub-rule (1) shall be made,—

(i) in a case where a person has deducted tax or collected tax in accordance with the provisions of Chapter XVII under the heading 'B.—Deduction at source' or 'BB.—Collection at source', as the case may be, prior to the 1st day of October, 2004, on or before the 31st day of January, 2005;

(ii) in a case where a person has,—

(a) deducted or deducts tax in accordance with the provisions of Chapter XVII under the heading 'B.—Deduction at source'; or

(b) collected or collects tax in accordance with the provisions of Chapter XVII under the heading 'BB.—Collection at source',on or after the 1st day of October, 2004, within one month from the end of the month in which the tax was deducted or collected, as the case may be, or the 31st day of January, 2005, whichever is later.]

[30][911] [114AA. Application for allotment of a tax collection account number

(1) An application under sub-section (1) of section 206CA for the allotment of a tax collection account number shall be made in duplicate in Form No. 49B.

(2) An application referred to in sub-rule (1) shall be made,—

(i) in cases where the function of allotment of tax collection account number under section 206CA has been assigned by the Chief Commissioner or Commissioner to any particular Assessing Officer, to that Assessing Officer;

(ii) in any other case, to the Assessing Officer having jurisdiction to assess the applicant.

(3) The application referred to in sub-rule (1) shall be made,—

(i) in a case where a person has collected tax in accordance with the provisions of Chapter XVII under the heading 'BB. — Collection at source' prior to the 1st day of June, 2002, on or before the 30th day of September, 2002;

(ii) in a case where a person has collected or collects tax in accordance with the provisions of Chapter XVII under the heading 'BB.—Collection of source' on or after the 1st day of June, 2002, within one month from the end of the month in which the tax was collected or the 30th day of September, 2002, whichever is later.]

[31][912] [114B. All documents pertaining to the transactions in relation to which permanent account number

[32][913] [* * *] to be quoted for the purpose of clause (c) of sub-section (5) of section 139A

Every person shall quote his permanent account number [33][914] [* * *] in all documents pertaining to the transactions specified below, namely:—

(a) sale or purchase of any immovable property valued at five lakh rupees or more;

(b) sale or purchase of a motor vehicle or vehicle, as defined in clause (28) of section 2 of the Motor Vehicles Act, 1988 (59 of 1988), which requires registration by a registering authority under Chapter IV of that Act:

[34][915] [Provided that for the purposes of this clause, the sale or purchase of a motor vehicle or vehicle does not include two wheeled vehicles, inclusive of any detachable side-car having an extra wheel, attached to the motor vehicle;]

(c) a time deposit, exceeding fifty thousand rupees, with a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act);

(d) a deposit, exceeding fifty thousand rupees, in any account with Post Office Saving Bank;

(e) a contract of a value exceeding [35][916] [one] lakh rupees for sale or purchase of securities as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);

(f) opening an account [36][917] [not being a time-deposit referred to in clause (c)] with a banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act);

(g) making an application for installation of a telephone connection (including a cellular telephone connection);

(h) payment to hotels and restaurants against their bills for an amount exceeding twenty-five thousand rupees at any one time;

[37][918] [(i) payment in cash for purchase of bank draft or pay orders or banker's cheques from a banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act) for an amount aggregating fifty thousand rupees or more during any one day;

(j) deposit in cash aggregating fifty thousand rupees or more, with a banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act) during any one day;

(k) payment in cash in connection with travel to any foreign country of an amount exceeding twenty-five thousand rupees at any one time.

Explanation.— For the purpose of this clause,—

(a) "payment in cash in connection with travel" includes payment in cash towards fare, or to a travel agent or a tour operator, or for the purchase of foreign currency;

(b) the expression "travel to any foreign country" does not include travel to the neighbouring countries or to such places of pilgrimage as may be specified by the Board under Explanation 3 of sub-section (1) of section 139;]

[38][919] [(l) making an application to any banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act) or to any other company or institution, for issue of a credit card;

(m) payment of an amount of fifty thousand rupees or more to a Mutual Fund for purchase of its units;

(n) payment of an amount of fifty thousand rupees or more to a company for acquiring shares issued by it;

(o) payment of an amount of fifty thousand rupees or more to a company or an institution for acquiring debentures or bonds issued by it;

(p) payment of an amount of fifty thousand rupees or more to the Reserve Bank of India, constituted under section 3 of the Reserve Bank of India Act, 1934 (2 of 1934) for acquiring bonds issued by it:]

[39][920] [Provided that where a person, making an application for opening an account referred to in clause (c) and clause (f) of this rule, is a minor and who does not have any income chargeable to income-tax, he shall quote the permanent account number of his father or mother or guardian, as the case may be, in the document pertaining to the transaction referred to in said clause (c) and clause (f):

Provided further that any person who does not have a permanent account number and who enters into any transaction specified in this rule, shall make a declaration in Form No. 60 giving therein the particulars of such transaction.]

114C. Class or classes of persons to whom provisions of section 139A shall not apply

(1) The provisions of section 139A shall not apply to following class or classes of persons, namely:—

(a) the persons who have agricultural income and are not in receipt of any other income chargeable to income-tax:

Provided that such persons shall make declaration in Form No. 61 in respect of transactions referred to in [40][921] [* * *] rule 114B.

(b) the non-residents referred to in clause (30) of section 2;

[41][922] [* * *]

[42][923] [(c) Central Government, State Governments and Consular Offices in transactions where they are the payers.]

(2) Every person including,—

(a) a registering officer appointed under the Registration Act, 1908 (16 of 1908);

(b) a registering authority referred to in clause (b) of [43][924] [rule 114B];

(c) any manager or officer of a banking company referred to in clause (c) [44][925] [or clause (i) or clause (j)] [45][926] [or clause (l)] of [46][927] [rule 114B];

(d) post master;

(e) stock broker, sub-broker, share transfer agent, banker to an issue, trustee of a trust deed, registrar to issue, merchant banker, underwriter, portfolio manager, investment adviser and such other intermediaries registered under section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992);

(f) any authority or company receiving application for installation of a telephone by it;

(g) any person raising bills referred to in clause (h) [47][928] [or clause (k)] of [48][929] [rule 114B];

[49][930] [(h) any person who purchases or sells the immovable property or motor vehicle;

[50][931] [(i) the principal officer of a company referred to in clause (l) or clause (n) or clause (o) of rule 114B;

(j) the principal officer of an institution referred to in clause (l) or clause (o) of rule 114B;

(k) any trustee or any other person duly authorised by the trustee of a Mutual Fund referred to in clause (m) of rule 114B;

(l) an officer of the Reserve Bank of India, constituted under section 3 of the Reserve Bank of India Act, 1934 (2 of 1934);][51][932] [who has received any document relating to a transaction specified in rule 114B shall ensure after verification that permanent account number has been duly and correctly quoted therein.]

[52][933] [114D. Time and manner in which persons referred to in sub-rule (2) of rule 114C, shall furnish the copies of Form No. 60 and Form No. 61

(1) Every person referred to in sub-rule (2) of rule 114C shall forward to the Commissioner of Income-tax (Central Information Branch) having territorial jurisdiction over the area in which the transaction is entered into, the following documents, namely:—

(a) copies of declaration in Form No. 60 referred to in the second proviso to rule 114B;

(b) copies of declaration in Form No. 61 referred to in the proviso to clause (a) of sub-rule (1) of rule 114C:

Provided that copies of declaration furnished in respect of transactions referred to in clause (f) of rule 114B shall not be furnished.

(2) The copies of declaration in Form No. 60 and Form No. 61 referred to in sub-rule (1) shall be forwarded to the Commissioner of Income-tax (Central Information Branch) in two instalments, that is, the forms received upto 30th September, shall be forwarded latest by 31st October of that year and the forms received upto 31st March shall be forwarded latest by 30th April of that year.

[53][934] [114E. Furnishing of Annual Information Return

(1) The annual information return required to be furnished under sub-section (1) of section 285BA shall be furnished in Form No. 61A and shall be verified in the manner indicated therein.

(2) The return referred to in sub-rule (1) shall be furnished by every person mentioned in column (2) of the Table below in respect of all transactions of the nature and value specified in the corresponding entry in column (3) of the said Table, which are registered or recorded by him during a financial year beginning on or after the 1st day of April, 2004:—

Table

Sl. No.	Class of person	Nature and value of transaction
(1)	(2)	(3)
1	A Banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act).	Cash deposits aggregating to ten lakh rupees or more in a year in any savings account of a person maintained in that bank.
2	A banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act) or any other company or institution issuing credit card.	Payments made by any person against bills raised in respect of a credit card issued to that person, aggregating to two lakh rupees or more in the year.
3	A trustee of a Mutual Fund or such other person managing the affairs of the Mutual Fund as may be duly authorised by the trustee in this behalf.	Receipt from any person of an amount of two lakh rupees or more for acquiring units of that Fund.
4	A company or institution issuing bonds or debentures.	Receipt from any person of an amount of five lakh rupees or more for acquiring bonds or debentures issued by the company or institution.
5	A company issuing shares through a public or rights issue.	Receipt from any person of an amount of one lakh rupees or more for acquiring shares issued by the company.
6	Registrar or Sub-Registrar appointed under section 6 of the Registration Act, 1908.	Purchase or sale by any person of immovable property valued at thirty lakh rupees or more.
7	A person being an officer of the Reserve Bank of India, constituted under section 3 of the Reserve Bank of India Act, 1934, who is duly authorized by the Reserve Bank of India in this behalf.	Receipt from any person of an amount or amounts aggrega-ting to five lakh rupees or more in a year for bonds issued by the Reserve Bank of India.

(3) The return referred to in sub-rule (1) shall be furnished to the Commissioner of Income-tax (Central Information Branch):

Provided that where the Board has authorised an agency[54][935] to receive such return on behalf of the Commissioner of Income-tax (Central Information Branch), the return shall be furnished to that agency.

(4) (a)The return comprising Part A and Part B of Form No. 61A referred to in sub-rule (1) shall be furnished on computer readable media being a floppy (3.5 inch and 1.44 MB capacity) or CD-ROM (650 MB or higher capacity) or Digital Video Disc (DVD), along with Part-A thereof on paper:

Provided that a person responsible for furnishing the return, may, at his option, furnish the return through online transmission of electronic data to a server designated by the "Annual Information Return - Administrator" referred to in sub-rule (7) for this purpose under the digital signature of the person specified in sub-rule (6):

Provided further that the return shall be prepared in accordance with the data structure specified by the "Annual Information Return - Administrator" referred to in sub-rule (7) in this regard;

(b) The person responsible for furnishing the return shall ensure that—

(i) if the data relating to the return or statement is copied using data compression or backup software utility, the corresponding software utility or procedure for its decompression or restoration shall also be furnished along with the computer media return or statement;

(ii) the return is accompanied with a certificate regarding clean and virus free data.

Explanation.—For the purposes of this sub-rule, "digital signature" means a digital signature issued by any Certifying Authority authorised to issue such certificates by the Controller of Certifying Authorities.

(5) The return referred to in sub-rule (1) shall be furnished on or before 31st August, immediately following the financial year in which the transaction is registered or recorded.

(6) The return referred to in sub-rule (1) shall be signed and verified by:—

(a) in a case where the person furnishing the return is an assessee as defined in clause (7) of section 2 of the Act, by a person specified in section 140 of the Act;

(b) in any other case, by the person referred to in column (2) of the Table below sub-rule (2).

(7) The Board may appoint an officer designated as Annual Information Return — Administrator,[55][936] not below the rank of the Commissioner of Income-tax for the purposes of day-to-day administration of furnishing of the Annual Information Return including specification of the procedures, data structure, formats and standards for ensuring secure capture and transmission of data, evolving and implementing appropriate security, archival and retrieval policies.]]

[56][937] [115. [57][938] Rate of exchange for conversion into rupees of income expressed in foreign currency[58][939]

[59][940] [(1)] The rate of exchange for the calculation of the value in rupees of any income accruing or arising or deemed to accrue or arise to the assessee in foreign currency or received or deemed to be received by him or on his behalf in foreign currency shall be the telegraphic transfer buying rate of such currency as on the specified date.

Explanation.—For the purposes of this rule,—

(1) "telegraphic transfer buying rate" shall have the same meaning as in the Explanation to rule 26;

(2) "specified date" means—

(a) in respect of income chargeable under the head "Salaries", the last day of the month immediately preceding the month in which the salary is due, or is paid in advance or in arrears;

(b) in respect of income [60][941] [by way of] "interest on securities", the last day of the month immediately preceding the month in which the income is due;

[61][942] (c) in respect of income chargeable under the heads "Income from house property", "Profits and gains of business or profession" [not being income referred to in clause (d)] and "Income from other sources" (not being income by way of dividends [62][943] [and "interest on securities"]), the last day of the previous year of the assessee;

(d) in respect of income chargeable under the head "Profits and gains of business or profession" in the case of a non-resident engaged in the business of operation of ships, the last day of the month immediately preceding the month in which such income is deemed to accrue or arise in India;

(e) in respect of income by way of dividends, the last day of the month immediately preceding the month in which the dividend is declared, distributed or paid by the company;

(f) in respect of income chargeable under the head "Capital gains", the last day of the month immediately preceding the month in which the capital asset is transferred.]

[63][944] [Provided that the specified date, in respect of income referred to in sub-clauses (a) to (f) payable in foreign currency and from which tax has been deducted at source under rule 26, shall be [64][945] [the date on which the tax was required to be deducted under the provisions of Chapter XVII-B].]

[65][946] [(2) Nothing contained in sub-rule (1) shall apply in respect of income referred to in clause (c) of the Explanation to sub-rule (1) where such income is received in, or brought into India by the assessee or on his behalf before the specified date in accordance with the provisions of the Foreign Exchange Regulation Act, 1973 (46 of 1973).]

[66][947] [115A.Rate of exchange for conversion of rupees into foreign currency and reconversion of foreign currency into rupees for the purpose of computation of capital gains under the proviso to clause (a) of sub-section (1) of section 48 of the Income-tax Act, 1961

For the purpose of computing capital gains arising from the transfer of a capital asset being shares in, or debentures of, an Indian company, in the case of an assessee who is a non-resident Indian, the rate of exchange shall be—

(a) for converting the cost of acquisition of the capital asset, the average of the telegraphic transfer buying rate and telegraphic transfer selling rate of the foreign currency initially utilised in the purchase of the said asset, as on the date of its acquisition;

(b) for converting expenditure incurred wholly and exclusively in connection with the transfer of the capital asset referred to in clause (a), the average of the telegraphic transfer buying rate and telegraphic transfer selling rate of the foreign currency initially utilised in the purchase of the said asset, as on the date of transfer of the capital asset;

(c) for converting the full value of consideration received or accruing as a result of the transfer of the capital asset referred to in clause (a), the average of the telegraphic transfer buying rate and telegraphic transfer selling rate of the foreign currency initially utilised in the purchase of the said asset, as on the date of transfer of the capital asset;

(d) for reconverting capital gains computed in the foreign currency initially utilised in the purchase of the capital asset into rupees, the telegraphic transfer buying rate of such currency, as on the date of transfer of the capital asset.

Explanation.—For the purposes of this rule—

(i) "telegraphic transfer buying rate" shall have the same meaning as in the Explanation to rule 26;

(ii) "telegraphic transfer selling rate", in relation to a foreign currency, means the rate of exchange adopted by the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), for selling such currency where such currency is made available by that bank through telegraphic transfer.]

[67][R948] [116. * * *]

[68][R949] [117. * * *]

[69][R950] [117A. Reduction or waiver of interest payable under section 139[70][R951]

[71][R952] [In respect of assessment relating to an assessment year commencing on or before the first day of April, 1988, the Assessing Officer] may reduce or waive the interest payable under section 139 in the cases and in the circumstances[72][R953] mentioned below, namely:—

(i) where the return of income is furnished by a person who has been treated under section 163 as an agent of a non-resident and is assessed in respect of the latter's income;

(ii) where the return of income is furnished by an assessee whose only source of income during the relevant previous year is a share in the income of an unregistered firm which has been assessed on its total income in respect of that previous year under clause (b) of section 183;

(iii) where the return of income of a deceased individual is furnished by his legal representative and the legal representative satisfies the [73][R954] [Assessing Officer] that he had sufficient cause for not furnishing such return within time;

(iv) where the return of income has been furnished in pursuance of a notice issued under section 148;

(v) any case in which the assessee produces evidence to the satisfaction[74][R955] of the [75][R956] [Assessing Officer] that he was prevented by sufficient cause[76][R957] from furnishing the return within time:

Provided that the previous approval of the [77][R958] [Deputy Commissioner] has been obtained where the amount of interest reduced or waived, as the case may be, under clause (iv) or clause (v) exceeds one thousand rupees.]

[78][R959] [117B. Form of statement under section 222 or section 223

A statement under section 222 or section 223 shall be drawn up by the Tax Recovery Officer in Form No. 57.]

[79][R960] [117C. Tax Recovery Officer to exercise or perform certain powers and functions of an Assessing Officer

(1) The Chief Commissioner or the Commissioner, by general or special order in writing, may authorise a Tax Recovery Officer to exercise or perform the powers and functions conferred on or assigned to an Assessing Officer under section 154 for rectifying any mistake apparent from record in respect of an order passed by the Assessing Officer consequent to which a sum is payable and the Tax Recovery Officer has drawn a Certificate under section 222 in respect of such sum.

(2) The Tax Recovery Officer shall exercise or perform such powers and functions concurrently with the Assessing Officer.]

[80][R961] [118. * * *]

[81][R962] [119. * * *]

[82][R963] [119A. Procedure to be followed in calculating interest[83][R964]

In calculating the interest payable by the assessee or the interest payable by the Central Government to the assessee under any provision of the Act,—

(A) where interest is to be calculated on annual basis, the period for which such interest is to be calculated shall be rounded off to a whole month or months and for this purpose any fraction of a month shall be ignored; and the period so rounded off shall be deemed to be the period in respect of which the interest is to be calculated;

(B) where the interest is to be calculated for every month or part of a month comprised in a period, any fraction of a month shall be deemed to be a full month and the interest shall be so calculated;

(C) the amount of tax, penalty or other sum in respect of which such interest is to be calculated shall be rounded off to the nearest multiple of one hundred rupees and for this purpose any fraction of one hundred rupees shall be ignored and the amount so rounded off shall be deemed to be the amount in respect of which the interest is to be calculated.]

[84][R965] [120. * * *]

[85][R966] [121. * * *]

[86][R967] [121A. Form of statement to be furnished by producer of cinematograph films[87][R968]

The statement required to be furnished under section 285B by a person carrying on production of cinematograph films shall be in Form No. 52A.]

[88][R969] [122. * * *]

[89][R970] [123. Application for obtaining certified copies of certain notices

An application to the [90][R971] [Chief Commissioner or Commissioner] under sub-section (2) of section 281A[91][R972] for furnishing a certified copy of the notice given under sub-section (1) or sub-section (1A) or sub-section (1B) of that section shall be made in Form No. 54.]

[92][R973] [124. Fees for obtaining certified copy of notice[93][R974]

Fees to be paid for the issue of a certified copy of the notice given under sub-section (1) or sub-section (1A) or sub-section (1B) of section 281A shall be two rupees for every such copy.]

[94][R975] [125. * * *]

(i)    name and address of the person entering into the transactions;

(ii)    nature and date of the transaction;

(iii)    amount of each transaction;

(iv)    permanent account number or General Index Register Number quoted in the documents pertaining to any transaction;

Sl. No. (1)	Class of person (2)	Nature and value of transaction (3)
1.	A Banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act).	Cash deposits aggregating to ten lakh rupees or more in a year in any savings account of a person maintained in that bank.
2.	A banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act) or any other company or institution issuing credit card	Payments made by any person against bills raised in respect of a credit card issued to that person, aggregating to two lakh rupees or more in the year.
3.	A trustee of a Mutual Fund or such other person managing the affairs of the Mutual Fund as may be duly authorised by the trustee in this behalf.	Receipt from any person of an amount of two lakh rupees or more for acquiring units of that Fund.
4.	A company or institution issuing bonds or debentures.	Receipt from any person of an amount of five lakh rupees or more for acquiring bonds or debentures issued by the company or institution.
5.	A company issuing shares through a public or rights issue.	Receipt from any person of an amount of one lakh rupees or more for acquiring shares issued by the company.
6.	Registrar or Sub-registrar appointed under section 6 of the Registration Act, 1908.	Purchase or sale by any person of immovable property valued at thirty lakh rupees or more.
7.	A person being an officer of the Reserve Bank of India, constituted under section 3 of the Reserve Bank of India Act, 1934, who is duly authorized by the Reserve Bank of India in this behalf.	Receipt from any person of an amount or amounts aggregating to five lakh rupees or more in a year for bonds issued by the Reserve Bank of India.

(3) The return referred to in sub-rule (1) shall be furnished to the Commissioner of Income-tax (Central Information Branch):

Provided that where the Board has authorised an agency to receive such return on behalf of the Commissioner of Income-tax (Central Information Branch), the return shall be furnished to that agency.

(4)   (a)  The return comprising Part A and Part B of Form No. 65 referred to in sub-rule (1) shall be furnished on computer readable media being a floppy (3.5 inch and 1.44 MB capacity) or CD-ROM (650 MB or higher capacity) or Digital Video Disc (DVD), along with Part-A thereof on paper.

(b)    The person responsible for furnishing the return shall ensure that:—

(i)    if the data relating to the return or statement is copied using data compression or backup software utility, the corresponding software utility or procedure for its decompression or restoration shall also be furnished along with the computer media return or statement;

(ii)    the return is accompanied with a certificate regarding clean and virus free data.

---

[CS1]Published in the Gazette of India, Part II, section 3(ii), dated 31 March, 1962.

[2]Inserted by the Income-tax (Sixth Amendment) Rules, 1981, w.e.f. 19-6-1981

[3]Inserted by the Income-tax (Amendment) Rules, 1965, w.e.f. 1-4-1965

[4]See Letters F. No. 12/19/64-IT(IB), dated 22-1-1965; F. No. 12/19/64-IT(A-I), dated 2-1-1967 and Circular No. 90, dated 26-6-1972. For judicial interpretation, see All India Lakshmi Commercial Bank Officers' Union v Union of India (1984) 150 ITR 1 (Del); Patil Vijaykumar v Union of India (1985) 151 ITR 48 (Kar); Krishna Murthy (M) v CIT (1985) 152 ITR 163 (AP)

[5]Substituted by the Income-tax (Fourth Amendment) Rules, 1986, w.e.f. 1-4-1987. Earlier, it was amended by the Income-tax (Second Amendment) Rules, 1966, w.e.f. 1-4-1966 and substituted by the Income-tax (Third Amendment) Rules, 1975, w.e.f. 1-4-1975 and again substituted by the Income-tax (Third Amendment) Rules, 1981, w.e.f. 20-2-1981

[6]Omitted by the Income-tax (Fourth Amendment) Rules, 1986, w.e.f. 1-4-1987. Earlier, it was amended by the Income-tax (Third Amendment) Rules, 1975, w.e.f. 1-4-1975

[7]Bonus or commission payable have been held to be not a part of the salary for the purposes of this clause: CIT v Yazdi (HV) (1978) 114 ITR 14 (Cal); CIT v Ghosal (B) (1980) 125 ITR 744 (Ker). For details

[8]Omitted by the Income-tax (Fourth Amendment) Rules, 1986, w.e.f. 1-4-1987. Clause (iii) was inserted by the Income-tax (Third Amendment) Rules, 1981, w.e.f. 20-2-1981

[9]Substituted by the Income-tax (First Amendment) Rules, 1989, w.e.f. 1-4-1989. It was inserted by the Income-tax (Third Amendment) Rules, 1975, w.e.f. 1-4-1975.

[10]The limit prescribed in the Rules cannot be ignored for the purpose of disallowance under section 40A(5): CIT v Chloride Industries Ltd. (2001) 251 ITR 730 (Cal).

[11]Substituted by the Income-tax (First Amendment) Rules, 1998, w.r.e.f. 1-10-1997, as corrected by Notification No. 10546, dated 12-3-1998. Prior to substitution, clauses (i), (ii) and (iii) read as under:

"(i) where the journey is performed on or after the 1st day of April, 1989 by rail, an amount not exceeding the air-conditioned second class fare by the shortest route to the place of destination;

(ii) where places of origin of journey and destination are connected by rail and the journey is performed on or after the 1st day of April, 1989 by any other mode of transport, an amount not exceeding the air-conditioned second class rail fare by the shortest route to the place of destination; and

(iii) where the places of origin of journey and destination or part thereof are not connected by rail and the journey is performed on or after the 1st day of April, 1989 between such places, the amount eligible for exemption shall be—

(A) where a recognised public transport system exists, an amount not exceeding the 1st class or deluxe class fare, as the case may be, on such transport by the shortest route to the place of destination; and

(B) where no recognised public transport system exists, an amount equivalent to the air-conditioned second class rail fare, for the distance of the journey by the shortest route, as if the journey had been performed by rail."

The italicised words were inserted by the Income-tax (Fifth Amendment) Rules, 1990, w.r.e.f. 1-4-1989. The constitutional validity of rule 2B(1)(i) has been upheld: Harihara Kumar (KP) v Union of India (2004) 270 ITR 194 (Ker).

[12]Inserted by the Income-tax (Fifth Amendment) Rules, 1990, w.r.e.f. 1-4-1989.

[13]Inserted by the Income-tax (First Amendment) Rules, 1998, w.r.e.f. 1-10-1997.

[14]Substituted by the Income-tax (Twentieth Amendment) Rules, 1993, w.r.e.f. 18-8-1992. Rule 2BA was inserted by the Income-tax (Sixteenth Amendment) Rules, 1992, w.e.f. 18-8-1992 and amended by the Income-tax (Third Amendment) Rules, 1993, w.e.f. 26-2-1993.

[15]Even if the amount is received in instalments, it will be entitled to exemption. Terminal payments, such as, provident fund, gratuity, leave pay, etc. are not to be included in the amount received: Sail DSP VR Employees Assn. 1998 v Union of India (2003) 262 ITR 638 (Cal).

[16]Substituted for "authority," by the Income-tax (Fifth Amendment) Rules, 1994, w.r.e.f. 1-4-1994.

[17]Inserted by the Income-tax (Fifth Amendment) Rules, 1994, w.r.e.f. 1-4-1994.

[18]Inserted by the Income-tax (Tenth Amendment) Rules, 2002, w.e.f. 19-6-2002.

[19]See Notification No. SO 475(E), dated 28-6-1994.

[20]Inserted by the Income-tax (Twenty-third Amendment) Rules, 2000, w.e.f. 24-11-2000.

[21]Inserted by the Income-tax (Fifth Amendment) Rules, 1994, w.r.e.f. 1-4-1994.

[22]Inserted by the Income-tax (Twenty-third Amendment) Rules, 2000, w.e.f. 24-11-2000.

[23]Payments made under a scheme not conforming to the conditions laid down in section 10(10C) will not be entitled to the exemption: SAIL-DSP VR Employees Association-'98 v Union of India (2001) 250 ITR 30 (Cal).

[24]The words "of the company or the authority, as the case may be," omitted by the Income-tax (Fifth Amendment) Rules, 1994, w.r.e.f. 1-4-1994.

[25]

Substituted for the following item (ii) by the Income-tax (Fifth Amendment) Rules, 1994, w.r.e.f. 1-4-1994:

it applies to all employees (by whatever name called) including workers and executives of the company or the authority, as the case may be, excepting Directors of the company;"

[26]Inserted by the Income-tax (Twenty-third Amendment) Rules, 2000, w.e.f. 24-11-2000.

[27]The words "of the company or the authority, as the case may be" omitted by the Income-tax (Fifth Amendment) Rules, 1994, w.r.e.f. 1-4-1994.

[28]Inserted by the Income-tax (Twenty-third Amendment) Rules, 2000, w.e.f. 24-11-2000.

[29]See Arunkumar T Makwana v ITO (2006) 286 ITR 502 (Guj).

[30]Inserted by the Income-tax (Twenty-third Amendment) Rules, 2000, w.e.f. 24-11-2000.

[31]Substituted for "one and one-half month's" by the Income-tax (Tenth Amendment) Rules, 1994, w.e.f. 1-11-1994.

[32]Inserted by the Income-tax (Twenty-third Amendment) Rules, 2000, w.e.f. 24-11-2000.

[33]Inserted by the Income-tax (Eighth Amendment) Rules, 1995, w.e.f. 1-7-1995.

[34]Any allowance, by whatever name called, granted by an employer, which has the element of compensation of the expenditure incurred on commuting from residence to office or vice versa will not qualify for the benefit under section 10(14)(i), for example, transport allowance granted to the employees of the Central Government: Circular No. 764, dated 20-2-1998. Cf item 10 under sub-rule (2), below.

[35]The conveyance allowance paid to LIC officers whether on duty or not irrespective of the place of residence and place of work and also irrespective of whether the employee is posted in any office is not reimbursement of expenditure incurred on conveyance in the performance of duties of office: LIC Class-I Officers (Bombay) Assn v LIC (1998) 229 ITR 510 (Bom). Cf Franco John v Union of India (2004) 269 ITR 441 (Ker). Incentive bonus allowed to LIC Officers is not exempt: CIT v Chinnaiah (B) (1995) 214 ITR 368 (AP).

[36]Substituted for "Composite Hill Compensatory" by the Income-tax (Third Amendment) Rules, 2000, w.r.e.f. 1-8-1997.

[37]Substituted for "Rs. 600" by the Income-tax (Third Amendment) Rules, 2000, w.r.e.f. 1-8-1997.

[38]Substituted for "Rs. 1,200" by the Income-tax (Third Amendment) Rules, 2000, w.r.e.f. 1-8-1997.

[39]Substituted for "Rs. 150", ibid.

[40]Substituted, ibid.

[41]Substituted for "Tribal area" by the Income-tax (Third Amendment) Rules, 2000, w.r.e.f. 1-8-1997.

[42]Substituted for "Rs. 100", ibid.

[43]Substituted for "Rs. 3,000" by the Income-tax (Third Amendment) Rules, 2000, w.r.e.f. 1-8-1997.

[44]Substituted for "Rs. 50", ibid.

[45]Substituted for "Rs. 150", ibid.

[46]Substituted for "Rs. 1,300" by the Income-tax (Twenty-second Amendment) Rules, 2000, w.r.e.f. 1-5-1999. Earlier "Rs. 1,300" was substituted for "Rs. 975" by the Income-tax (Third Amendment) Rules, 2000, w.r.e.f. 1-8-1997.

[47]Substituted for "Rs. 500" by the Income-tax (Twenty-second Amendment) Rules, 2000, w.r.e.f. 1-5-1999. Earlier, "Rs. 500" was substituted for "Rs. 375" by the Income-tax (Third Amendment) Rules, 2000, w.r.e.f. 1-8-1997.

[48]The words "for a period of more than 30 days" omitted by the Income-tax (Twenty-second Amendment) Rules, 2005, w.e.f. 1-4-2006.

[49]Substituted for "Rs. 1,300" by the Income-tax (Twenty-second Amendment) Rules, 2000, w.r.e.f. 1-5-1999. Earlier, "Rs. 1,300" was substituted for "Rs. 975" by the Income-tax (Third Amendment) Rules, 2000, w.r.e.f. 1-8-1997.

[50]Inserted by the Income-tax (Seventh Amendment) Rules, 1998, w.r.e.f. 1-8-1997.

[51]Substituted for "employee" by the Income-tax (Twenty-ninth Amendment) Rules, 1999, w.e.f. 4-10-1999.

[52]Inserted, ibid.

[53]Inserted by the Income-tax (Fourth Amendment) Rules, 2000, w.e.f. 24-4-2000.

[54]The word "coal" omitted by the Income-tax (Thirteenth Amendment) Rules, 2007, w.e.f. 7-11-2007.

[55]Inserted by the Income-tax (Twenty-second Amendment) Rules, 2000, w.r.e.f. 1-5-1999.

[56]Inserted by the Income-tax (Twenty-first Amendment) Rules, 2000, w.r.e.f. 29-2-2000.

[57]Inserted by the Income-tax (Fourth Amendment) Rules, 2005, w.e.f. 9-2-2005.

[58]Inserted by the Income-tax (Eighteenth Amendment) Rules, 1998, w.e.f. 12-10-1998.

[59]

Substituted by the Income-tax (Sixth Amendment) Rules, 2007, w.e.f. 1-6-2007. Rule 2C was inserted by the Income-tax (Ninth Amendment) Rules, 1989, w.e.f. 28-8-1989 as under:

"2C. Application under section 10(23) and under sub-clauses (iv) and (v) of section 10(23C).—(1) The prescribed authority under clause (23) and sub-clauses (iv) and (v) of clause (23C) of section 10 shall be the Director General (Income-tax Exemptions), to whom the applications shall be made as provided in sub-rules (2) and (3).

(2) The form in which an application is to be furnished under clause (23) of section 10 by a sports association or institution shall be in Form No. 55.

(3) The form of application to be furnished under sub-clauses (iv) and (v) of clause (23C) of section 10 by a fund, trust or institution shall be in Form No. 56."

[60]

Substituted by the Income-tax (Seventeenth Amendment) Rules, 2001, w.r.e.f. 3-4-2001. Prior to the substitution, rule 2CA, as inserted by the Income-tax (Eighteenth Amendment) Rules, 1998, w.e.f. 12-10-1998, read as under:

"2CA. Guidelines for approval under sub-clauses (vi) and (via) of clause (23C) of section 10.—(1) The prescribed authority under sub-clauses (vi) and (via) of clause (23C) of section 10 shall be the *[Chief Commissioner] to whom the application shall be made as provided in sub-rule (2).

(2) An application for approval shall be made in Form No. 56D by any university or other educational institution or any hospital or other medical institution referred to in sub-clause (vi) or sub-clause (via) of clause (23C) of section 10.

(3) The approval of the †[Chief Commissioner] shall at any one time have effect for a period not exceeding three assessment years.

#[Explanation.—For the purposes of this rule, the "Chief Commissioner" means the Chief Commissioner to whom the Assessing Officer having jurisdiction to assess the university or other educational institutions or any hospital or other medical institutions referred to in sub-clause (vi) or sub-clause (via) of clause (23C) of section 10 of the Act is subordinate.]"

* Substituted for "Central Board of Direct Taxes constituted under the Central Boards of Revenue Act, 1963 (54 of 1963)" by the Income-tax (Third Amendment) Rules, 2001, w.e.f. 3-4-2001.

† Substituted for "Central Board of Direct Taxes", ibid.

# Inserted, ibid.

[61]Inserted by the Income-tax (Fifth Amendment) Rules, 2007, w.e.f. 1-6-2007.

[62]

Substituted by the Income-tax (Fourteenth Amendment) Rules, 2006, w.e.f. 24-11-2006. Prior to the substitution, sub-rule (3), as originally enacted, read as under:

"(3) The approval of the Central Board of Direct Taxes or Chief Commissioner or Director General, as the case may be, shall at any one time have effect for a period not exceeding three assessment years."

[63]

Substituted by the Income-tax (Fifth Amendment) Rules, 2007, w.e.f. 1-6-2007. Prior to the substutiton, the Explanation read as under:

"Explanation.—For the purposes of this rule, "Chief Commissioner or Director General" means the Chief Commissioner or Director General to whom the Assessing Officer having jurisdiction to assess the university or other educational institutions or any hospital or other medical institutions referred to in sub-clause (vi) and sub-clause (via) of clause (23C) of section 10 of the Act is subordinate."

[64]Inserted by the Income-tax (Eleventh Amendment) Rules, 1995, w.e.f. 18-7-1995.

[65]Omitted by the Income-tax (Twenty-fifth Amendment) Rules, 1998, w.e.f. 1-4-1999.

[66]Omitted by the Income-tax (Twenty-fifth Amendment) Rules, 1998, w.e.f. 1-4-1999.

[67]Substituted for "five" by the Income-tax (Sixth Amendment) Rules, 1997, w.e.f. 28-4-1997.

[68]Ibid.

[69]Ibid.

[70]Inserted by the Income-tax (Thirty-fourth Amendment) Rules, 1999, w.e.f. 27-12-1999.

[71]

Substituted by the Income-tax (Sixth Amendment) Rules, 2004, w.e.f. 12-1-2004. Prior to the substitution, rule 2E, as inserted by the Income-tax (Eighteenth Amendment) Rules, 1998, w.e.f. 12-10-1998 read as under:
"2E. Guidelines for approval under clause (23G) of section 10.—(1) An application for approval shall be made on or after the 1st day of June, 1998 in Form No. 56E by an enterprise to the Central Government.
(2) Every application for approval made under sub-rule (1) shall be accompanied by the following documents, namely:—
(a)	a copy of certificate of incorporation under the Companies Act, 1956 (1 of 1956) or a copy of the documents evidencing the constitution of the enterprises and its legal status;
(b)	a copy of the project report or agreement in respect of the infrastructure facility duly approved by the Central Government or any State Government or any local authority or any other statutory body, as the case may be;
(c)	balance sheets and profit and loss accounts for the three previous years immediately preceding the previous year in which the application has been made and also for the relevant part of the previous year in which the application has been made:
Provided that an application made under sub-rule (1) may be accompanied by the balance sheets and profit and loss accounts for less than three previous years where an enterprise has been formed at any time during the three previous years immediately preceding the previous year in which the application has been made and also for the relevant part of the previous year in which the application has been made.
(3) The Central Government shall approve an enterprise for the purposes of clause (23G) of section 10, if such enterprise is wholly engaged in the business of developing, maintaining and operating any infrastructure facility.
(4) The Central Government may, before approving an enterprise, call for such documents (including audited annual accounts) or information from the enterprise, as it thinks necessary in order to satisfy itself that such enterprise is wholly engaged in the business of developing, maintaining and operating an infrastructure facility and that Government may also make such enquiries as it may deem necessary in this behalf.
(5) The Central Government shall pass an order in writing while granting approval or refusing approval to the enterprise:
Provided that no order refusing the approval shall be passed unless an opportunity of being heard has been given to the enterprise.
(6) The approval of the Central Government under sub-rule (5) shall at any one time have effect for a period not exceeding three assessment years.
(7) Every enterprise approved under sub-rule (5) shall maintain books of account and get such books audited by an accountant, as defined in Explanation to sub-section (2) of section 288 and furnish the report of such audit duly signed and verified by such accountant to the Central Government before the due date of filing of the return under sub-section (1) of section 139.
(8) The Central Government shall withdraw the approval granted under sub-rule (5) if the enterprise—
(a)	ceases to carry on infrastructure facility; or
(b)	fails to maintain books of account and get such accounts audited by an accountant as required by sub-rule (7); or
(c)	fails to furnish the audit report as required by sub-rule (7).
Explanation.—For the purposes of this rule,—
(a)	the expression "enterprise" means any enterprise wholly engaged in the business of developing, maintaining and operating any infrastructure facility;
(b)	the expression "infrastructure facility" shall have the meaning assigned to it in clause (c) of Explanation to clause (23G) of section 10."

[72]

Substituted by the Income-tax (Twenty-second) Amendment Rules, 2001, w.r.e.f. 1-4-2001. No TDS be made for F.Y. 2001-02 in respect of the value of perquisites received in non-monetary form for assessees having income under the head 'Salaries' (exclusive of such perquisites) not exceeding Rs. 1 lakh: Circular No. 1/2002, dated 4-2-2002. Prior to the substitution, rule 3, as amended, read as under:
"3. Valuation of perquisites.—For the purpose of computing the income chargeable under the head "Salaries" the value of the perquisites (not provided for by way of monetary payment to the assessee) mentioned below shall be determined in accordance with the following clauses, namely:—
(a)	The value of rent-free residential accommodation shall be determined on the basis provided hereunder, namely:—

(i)    where the accommodation is provided—

(A)    by Government to a person holding an office or post in connection with the affairs of the Union or of a State;

(B)    by a body or undertaking under the control of Government to any officer of Government whose services have been lent to that body or undertaking (the accommodation itself having been allotted to it by Government),

an amount equal to—

(1)    if the accommodation is unfurnished, the rent which has been or would have been determined as payable by such person or officer in accordance with the rules framed by Government for allotment of residences to its officers;

(2)    if the accommodation is furnished, an amount calculated in accordance with sub-clause (i)(1) plus 10 per cent per annum of the original cost of the furniture (including television sets, radio sets, refrigerators, other household appliances and air-conditioning plant or equipment) or if such furniture is hired from a third party, the actual hire charges payable therefor;

(ii)    where the accommodation is provided—                                                              

(A)    by the Reserve Bank of India, to any person employed by it;

(B)    by a corporation established by a Central, State or Provincial Act, or by a company in which all the shares are held (whether singly or taken together) by the Government or the Reserve Bank of India or a corporation owned by that Bank, to any person employed by it;

(BB)    by a company [not being a company referred to in sub-clause (ii)(B) or sub-clause (ii)(D)] in which all the shares are held by a corporation referred to in sub-clause (ii)(B) or by a company referred to in that sub-clause, to any person employed by it;

(C)    by a body or undertaking including a society registered under the Societies Registration Act, 1860 (21 of 1860), financed wholly or mainly by the Government, to any person employed by it;

(D)    by a company [not being a company referred to in sub-clause (ii)(B) or sub-clause (ii)(BB)] in which not less than 40 per cent of the shares are held (whether singly or taken together) by the Government or the Reserve Bank of India or a corporation owned by that Bank, to any officer of Government whose services have been lent to it or to any person employed by it after his retirement from the service of Government,

an amount equal to—

(1)    if the accommodation is unfurnished, 10 per cent of the salary due to such person or officer, as the case may be, in respect of the period during which the said accommodation was occupied by him during the previous year:

Provided that where the assessee claims and the Assessing Officer is satisfied that the sum arrived at on the aforesaid basis exceeds the fair rental value of the accommodation, the value of the perquisite to the assessee shall be limited to such fair rental value;

(2)    if the accommodation is furnished, an amount calculated in accordance with sub-clause (ii)(1) plus 10 per cent per annum of the original cost of the furniture (including television sets, radio sets, refrigerators, other household appliances and air-conditioning plant or equipment) or if such furniture is hired from a third party, the actual hire charges payable therefor;

(iii)    in any other case,—

(A)    the value of rent-free residential accommodation which is not furnished shall ordinarily be a sum equal to 10 per cent of the salary due to the assessee in respect of the period during which the said accommodation was occupied by him during the previous year:

Provided that—

(1)    where the fair rental value of the accommodation is in excess of 20 per cent of the assessee's salary, the value of the perquisite shall be taken to be 10 per cent of the salary increased by a sum equal to the amount by which the fair rental value exceeds 20 per cent of the salary; so, however, that the Assessing Officer may, having regard to the nature of the accommodation, determine the sum by which 10 per cent of the salary is to be increased, as a percentage (not exceeding 100 per cent) of the amount by which the fair rental value exceeds 20 per cent of the salary;

(2)    where the assessee claims, and the Assessing Officer is satisfied that the sum arrived at on the basis provided above exceeds the fair rental value of the accommodation, the value of the perquisite to the assessee shall be limited to such fair rental value;

(B)    where the accommodation is furnished, the value of rent free residential accommodation shall be the aggregate of the following sums, namely:—

(1)    the fair rental value of the accommodation arrived at in accordance with the provisions of sub-clause (iii)(A) as if the accommodation were not furnished; and

(2)    the fair rent for the furniture (including television sets, radio sets, refrigerators, other household appliances and air-conditioning plant or equipment) calculated at 10 per cent per annum of the original cost of such furniture or if such furniture is hired from a third party, the actual hire charges payable therefor.

Explanation 1.—"Salary" includes the pay, allowances, bonus or commission payable monthly or otherwise, but does not include the following, namely:—

(i)    dearness allowance or dearness pay unless it enters into the computation of superannuation or retirement benefits of the assessee concerned;

(ii)    employer's contributions to the provident fund account of the assessee;

(iii)    allowances which are exempted from payment of tax;

(iv)    any allowance in the nature of an entertainment allowance, to the extent such allowance is deductible under clause (ii) of section 16.

Explanation 2.—For the purposes of sub-clause (iii), the fair rental value of accommodation which is not furnished shall be the rent which a similar accommodation would realise in the same locality or the municipal valuation in respect of the accommodation, whichever is higher.

(b)	The value of residential accommodation provided at a concessional rent shall be determined as the sum by which the value computed in accordance with clause (a), as if the accommodation were provided free of rent, exceeds the rent actually payable by the assessee for the period of his occupation during the relevant previous year.
(ba)	The benefit to the assessee resulting from the provision by the employer of free services of a sweeper, a gardener or a watchman shall be valued at Rs. 120 per month per person.

(c)    (i)    The value of a motor-car provided by the employer for use by the assessee exclusively for his private or personal purposes shall be determined as the sum actually expended by the employer on the maintenance and running of the motor-car during the relevant previous year (including remuneration, if any, paid by the employer to the chauffeur) and, where the motor-car is owned by the employer, as the aggregate of such sum and the amount representing the normal wear and tear of the motor-car;

(ii)    the value of a motor-car provided by the employer for use by the assessee partly in the performance of his duties and partly for his private or personal purposes shall be determined to be a sum equal to that part of the amount actually expended by the employer on the maintenance and running of the motor-car during the relevant previous year (including remuneration, if any, paid by the employer to the chauffeur) which can reasonably be attributed to the user of the motor-car by the assessee for his private or personal purposes or, where the motor-car is owned by the employer, the aggregate of such sum and of a sum equal to that part of the amount representing the normal wear and tear of the motor-car which can reasonably be attributed to the user of the motor-car by the assessee for his private or personal purposes; so, however, that where a determination on the basis mentioned above presents difficulty, the value of the perquisite may be determined on the basis provided in the Table below:

TABLE

Value of perquisite per calendar month
1	2	3
	Where the h. p. rating of the car does not exceed 16 or the cubic capacity of the engine does not exceed 1.88 litres	Where the h.p. rating of the car exceeds 16 or the cubic capacity of the engine exceeds 1.88 litres
	Rs.	Rs.
1.     Where the motor-car is owned or hired by the employer and all the expenses on maintenance and running are met or reimbursed to the assessee by the employer.	600	800
2.     Where the motor-car is owned or hired by the employer but the expenses on maintenance and running for the assessee's private or personal purposes are met by the assessee.	200	300:

Provided that where a chauffeur is also provided to run the motor-car, the value of the perquisite as calculated in accordance with this Table shall be increased by a sum of Rs. 300 per month;

(iii)    where one or more motor-cars are owned or hired by the employer of the assessee and the assessee is allowed the use of such motor-car or all or any of such motor-cars (otherwise than wholly and exclusively in the performance of his duties), an amount calculated in accordance with the Table under sub-clause (ii) and the proviso thereto, as if the assessee had been provided one motor-car for use partly in the performance of his duties and partly for his private or personal purposes:

Provided that where two or more motor-cars are allowed to be so used and the h.p. rating of any one of such motor-cars exceeds 16 or the cubic capacity of the engine of any one of such motor-cars exceeds 1.88 litres, the assessee shall be deemed to have been provided by the employer with one motor-car of h.p. rating exceeding 16:

Provided further that where two or more motor-cars are allowed to be so used and a chauffeur is also provided to run any such motor-car, the value of the perquisite as so calculated shall be increased by a sum of Rs. 300 per month;

(iv)    where the assessee owns a motor-car but the actual running or maintenance charges (including remuneration of the chauffeur, if any) are met, or reimbursed to him, by the employer, the value of the perquisite to the assessee shall be determined as the sum actually expended by the employer which, in the opinion of the Assessing Officer, can reasonably be attributed to the user of the car by the assessee otherwise than wholly and exclusively in the performance of his duties;

(v)    the value of a motor-car or motor-cars provided for the use of, or allowed to be used by, the assessee (otherwise than wholly and exclusively in the performance of his duties) at a concessional rate shall be determined as the sum by which the value computed in accordance with the foregoing provisions of this clause exceeds the amount actually payable by the assessee for the use of such motor-car or motor-cars for the period of use during the relevant previous year;

(vi)    the value of the free use by the assessee of any other type of conveyance provided by the employer shall be determined as so much of the sum actually expended by the employer on the maintenance and running of the conveyance during the relevant previous year, and where the conveyance is owned by the employer, as so much of the aggregate of such sum and the amount representing the normal wear and tear of the conveyance, as, in the opinion of the Assessing Officer, can reasonably be attributed to the user by the assessee, otherwise than wholly and exclusively in the performance of his duties;

(d)

the value of the benefit to the assessee resulting from the supply of gas, electric energy or water for his household consumption free of any charge shall be determined as the sum equal to the amount paid on that account by the employer to the agency supplying the gas, electric energy or water, but—

(i)    where such supply is made from resources owned by the employer without purchasing them from any other outside agency, the value therefor shall be taken as nil, and

(ii)    where the Assessing Officer is satisfied that the gas, electric energy or water supply to any assessee are consumed also for the purposes of his official duties, the Assessing Officer shall determine the value of the benefit to the assessee to be equal to the amount paid on that account by the employer to the agency supplying the gas, electric energy or water or 61/4 per cent of the salary of the assessee, whichever is lower;

(e)	the value of the benefit to the assessee resulting from the provision of free education facilities for any member of his household shall be determined as the sum equal to the amount of the expenditure incurred by the employer in that behalf, but where the educational institution itself is maintained and run by the employer for the benefit of all his employees as a group, the value of the perquisite to the assessee shall be determined with reference to the reasonable cost of such education in a similar institution in or near the locality;
(f)	the value of any benefit or amenity resulting from the provision by any undertaking engaged in the carriage of passengers or goods to any employee of the undertaking or to members of his family or his dependent relatives, of journey free of cost or at concessional fares, in any conveyance owned by the undertaking for the purpose of transport of passengers or goods shall be taken as nil;
(g)	the value of any benefit or amenity not included in the preceding clauses of this rule shall be determined on such basis and in such amount as the Assessing Officer considers fair and reasonable."

[73]See sections 17(2) and 295(2)(c). There is no scope to apply rule 3 while computing the income in respect of business or profession since it is only applicable to computation of income in respect of salary: CIT v Electro Steel Castings Ltd (1992) 193 ITR 103 (Ori). For details.

[74]There must exist relation of employer and employee and rent free accommodation must also arise as a result of posting of an employee at a particular place: CIT v Blackwood (DS) (1989) 178 ITR 470 (Cal); CIT v Lakshmipat Singhania (1973) 92 ITR 598 (All). Actual payment has to be taken into consideration when payment is made in cash: CIT v Shriram Refrigeration Industries Ltd (1992) 197 ITR 431 (Del). Where an assessee is deriving salary income from more than one employer, value of rent free accommodation is to be correlated to the aggregate salary so derived from all the employers: CIT v Mohanlal Jalan (1989) 176 ITR 478 (Bom). Income-tax borne by the employer on behalf of the employee, electricity allowance and profession tax reimburned by the employer have to be taken into consideration as a part of the salary: CIT v Steel (CW) (1972) 86 ITR 821 (Ker); CIT v Dennis (HD) (1982) 135 ITR 1 (Bom). For details. Rule 3, as amended in 2001, is constitutionally valid. The discarding of test of fair rent and basing test on population of cities is valid. The distinction between Government employees and employees of others is not discriminatory: Arun Kumar v Union of India (2006) 286 ITR 89 (SC).

[75]

Substituted by the Income-tax (Fourteenth Amendment) Rules, 2007, w.e.f. 1-4-2006 (A.Y. 2006-07). Earlier, Table I was also substituted by the Income-tax (Seventh Amendment) Rules, 2005, w.e.f. 1-4-2005 (A.Y. 2006-07) for the following:

"Table I (Effective upto 31-3-2005, i.e. A.Y. 2005-06)

Sl. No.

Circumstances

Where the accommo-dation is unfurnished

Where the accommo-dation is furnished

(1)

(2)

(3)

(4)

(1)

Where the accommo-dation is provided by Union or State Govern-ment to their employees either holding office or post in connection with the affairs of Union or State or serving with any body or undertaking under the control of such Government on deputation.

License fee determined by Union or State Government in respect of accommodation in accordance with the rules framed by that government as reduced by the rent actually paid by the employee.

The value of perquisite as determined under col. (3) and increased by 10% per annum of the cost of furniture (including tele-vision sets, radio sets, refrigerators, other household appliances, air conditioning plant or equipment) or if such furniture is hired from a third party, the actual hire charges payable for the same as reduced by any charges paid or payable for the same by the employee during the previous year.        

(2)

Where the accommo-dation is provided by any other employer and

(a)	where the accommo-dation is owned by the employer; or
(b)	where the accommo-dation is taken on lease or rent by the employer.

(i)	10% of salary in cities having popu-lation exceeding 4 lacs as per 1991 census;
(ii)	7.5% of salary in other cities, in respect of the period during

which the said accom-modation was occupied by the employee during the previous year as reduced by the rent, if any, actually paid by the employee.

Actual amount of lease rental paid or payable by the employer or 10% of salary which-ever is lower as redu-ced by the rent, if any, actually paid by the employee.

The value of perquisite as determined under col. (3) and increased by 10% per annum of the cost of furniture (including television sets, radio sets, refrigerators, other household appliances, air conditioning plant or equipment or other similar appliances or gadgets) or if such furniture is hired from a third party, by the actual hire charges payable for the same as reduced by any charges paid or payable for the same by the employee during the previous year.

(3)

Where the accommo-dation is provided by the employer specified in Sl. No. (1) or (2) above in a hotel (except where the employee is provided such accommodation for a period not exceeding in aggregate 15 days on his transfer from one place to another)

Not applicable

24% of salary paid or payable for the previous year or the actual charges paid or payable to such hotel, which is lower, for the period during which such accommodation is provided as reduced by the rent, if any, actually paid or payable by the employee:"

[76]

The classification of Central and State Government employees on the one hand and employees of public and private sector undertakings on the other for determining value of accommodation provided to employees is not an unreasonable classification. Rule 3 is constitutionally valid: BHEL Employees' Assn. v Union of India (2003) 261 ITR 15 (Karn); Tiwari (P N) v Union of India (2004) 265 ITR 224 (All); Aditya Cement Staff Club v Union of India (2004) 266 ITR 70 (Raj); Coal Mines Officers' Assn. of India v Union of India (2004) 266 ITR 429 (Cal); BHEL Executives/Officers Association v DCIT (2004) 269 ITR 390 (Mad); Prasad (KV) v Union of India (2004) 271 ITR 178 (Ker).

[77]

Substituted by the Income-tax (Thirteenth Amendment) Rules, 2004, w.r.e.f. 1-10-2004. Prior to the substitution, the first proviso read as under:

"Provided that nothing contained in this sub-rule would be applicable to any accommodation located in a 'remote area' provided to an employee working at a mining site or an onshore oil exploration site, or a project execution site or an accommodation provided in an offshore site of similar nature:"

[78]

Inserted by the Income-tax (Fourteenth Amendment) Rules, 2007, w.e.f. 1-4-2008. Earlier sub-rule (2), as originally enacted, and omitted by the Income-tax (Seventh Amendment) Rules, 2005, w.e.f. 1-4-2005 (A.Y. 2006-07) read as under:

"(2)(A) The value of perquisite provided by way of use of motor car shall be determined on the basis provided in the Table II below:

Table II

Value of Perquisite per calendar month

Sl. No.	Circumstances	Where cubic capacity of engine does not exceed 1.6 litres	Where cubic capacity of engine exceeds 1.6 litres
(1)	(2)	(3)	(4)
1.	Where the motor car is owned or hired by the employer and, (a)            is used wholly and exclusively in the perfor- mance of his official duties; (b)            is used exclusi- vely for the private or per- sonal purposes of the employee or any member of his household and the running and mainten- ance expenses are met or reimbursed by the employer. (c)            is used partly in the performance of duties and partly for pri- vate or personal purposes of his own or any member of his household and, (i)           the expenses on main- tenance and running are met or reim- bursed by the employer. (ii)           the expenses on running and mainten- ance for such private or per- sonal use are fully met by the assessee.	No value provided that the documents speci- fied in clause (B) of this sub-rule are main- tained by the employer. Actual amount of expenditure incurred by the employer on the running and main- tenance of motor car during the relevant previous year including remuneration, if any, paid by the employer to the chauffeur as increased by the amount representing normal wear and tear of the motor car and as reduced by any amount charged from the employee for such use. Rs. 1,200 (plus Rs. 600, if chauffeur is also provided to run the motor car) Rs. 400 (plus Rs. 600, if chauffeur is provi- ded by the employer to run the motor car)	No value provided that the documents specified in clause (B) of this sub-rule are maintained by the employer. Actual amount of expenditure incurred by the employer on  the running and  maintenance of motor car during the relevant previous year including remuneration, if any, paid by the employer to the chauffeur as increased by the amount representing normal wear and tear of the motor car and as reduced by any amount  charged from the employee for such use. Rs. 1,600 (plus Rs. 600, if chauffeur is also provided to run the motor car) Rs. 600 (plus Rs. 600, if chauffeur is also provided to run the motor car)
2.	Where the employee                owns a motor car but                the actual running    and maintenance      charges (including     remuneration of the chauffeur, if any) are                met or reimbursed to                him by the employer                and,          (i)            such reimburse-                ment is for the                 use of the vehicle                wholly and                 exclusively for                official purposes,                (ii)  such reimburse-  ment is for the                 use of the vehicle                partly for official purposes                and partly for                personal or                private purposes                of the employee                or any member                of his household.	No value provided that                 the documents specified                in clause (B) of this sub-rule are maintained                by the employer.      employer. Subject to the provi-                sions contained in    clause (B) of this sub-                rule, the actual amount                 of expenditure incur-                red by the employer as                 reduced by the amount                 specified in               col. (1)(c)(i) above.	No value provided that the documents specified in clause (B) of this sub-rule are maintained by the Subject to the provisions contained in clause (B) of this sub-rule, the actual amount of expenditure incurred by the employer as reduced by the amount specified in col. (1)(c)(i) above.
3.	Where the employee                owns any other auto-                motive conveyance  but the actual running                and maintenance      charges are met or    reimbursed to him by                the employer and, (i)            such reimburse-                ment is for the                use of the vehicle                wholly and exclu-                sively for official                purposes,	No value provided that                 the documents speci- fied in clause (B) of this sub-rule are main- tained by the employer.	Not applicable
	(ii)  such reimburse-  ment is for the                use of the vehicle                partly for official                 purposes and                 partly for personal   or private purposes   of the employee.	Subject to the provi- sions contained in clause (B) of this sub- rule, the actual amount of expenditure incurred by the employer as reduced by an amount of Rs. 600:

Provided that where one or more motor cars are owned or hired by the employer and the employee or any member of his household are allowed the use of such motor car or all or any of such motor cars (otherwise than wholly and exclusively in the performance of his duties), the value of perquisite shall be the amount calculated in respect of one car in accordance with item (1)(c)(i) of the Table II as if the employee had been provided one motor car for use partly in the performance of his duties and partly for his private or personal purposes and the amount calculated in respect of the other car or cars in accordance with item (1)(b) of the Table II as if he had been provided with such car or cars exclusively for his private or personal purposes.
1[(B) Where the employer or the employee claims that the motor-car is used wholly and exclusively in the performance of official duty or that the actual expenses on the running and maintenance of the motor-car owned by the employee for official purposes is more than the amounts deductible in item 2(ii) or 3(ii) of the above Table, he may claim a higher amount attributable to such official use and the value of perquisite in such a case shall be the actual amount of charges met or reimbursed by the employer as reduced by such higher amount attributable to official use of the vehicle provided that the following conditions are fulfilled:—
(a)	the employer has maintained complete details of journey undertaken for official purpose which may include date of journey, destination, mileage and the amount of expenditure incurred thereon;
(b)	the employer gives a certificate to the effect that the expenditure was incurred wholly and exclusively for the performance of official duties.]
Explanation.—For the purposes of this sub-rule, the normal wear and tear of a motor car shall be taken at 10% per annum of the actual cost of the motor car or cars."
1 Substituted by the Income-tax (Seventeenth Amendment) Rules, 2002, w.e.f. 1-8-2002. Prior to the substitution, clause (B), as originally enacted, read as under:
"(B) Where the employer or the employee claims that the motor car is used wholly and exclusively in the performance of official duty or that the actual expenses on the running and maintenance of the motor car owned by the employee for official purposes is more than the amounts deductible in item 2(ii) or 3(ii) of the above Table, he may claim a higher amount attributable to such official use and the value of perquisite in such a case shall be the actual amount of charges met or reimbursed by the employer as reduced by such higher amount attributable to official use of the vehicle provided that the following conditions are fulfilled:—

(i)    the employer has maintained complete details of journey undertaken for official purpose which may include date of journey, destination, mileage, and the amount of expenditure incurred thereon;

(ii)    the employee gives a certificate that the expenditure was incurred wholly and exclusively for the performance of his official duty;

(iii)    the supervising authority of the employee, wherever applicable, gives a certificate to the effect that the expenditure was incurred wholly and exclusively for the performance of official duties."

[79]

Inserted by the Income-tax (Fourteenth Amendment) Rules, 2007, w.e.f. 1-4-2008. Earlier, sub-rule (6), as originally enacted, and omitted by the Income-tax (Seventh Amendment) Rules, 2005, w.e.f. 1-4-2005, read as under:

"(6) The value of any benefit or amenity resulting from the provision by any undertaking engaged in the carriage of passengers or goods to any employee or to any member of his household for personal or private journey free of cost or at concessional fare, in any conveyance owned, leased or made available by any other arrangement by the undertaking for the purpose of transport of passengers or goods shall be taken to be the value at which such benefit or amenity is offered by such undertaking to the public as reduced by the amount, if any, paid by or recovered from the employee for such benefit or amenity:

1[Provided that nothing contained in this sub-rule shall apply to the employees of 2[an airline or] the Railways.]"

1 Inserted by the Income-tax (Nineteenth Amendment) Rules, 2002, w.r.e.f. 1-4-2001.

2 Inserted by the Income-tax (Third Amendment) Rules, 2003, w.r.e.f. 1-4-2002. The second proviso to sub-rule (9) also needed to be amended, consequent to this amendment.

[80]Substituted for "concessional loan made available to the employee or any member of his household during the relevant previous year by the employer or any person on his behalf shall be determined as the sum equal to the simple interest computed at the rate of 10% per annum in respect of loans for house and conveyance and at the rate of 13% per annum for other loans" by the Income-tax (First Amendment) Rules, 2004, w.e.f. 1-4-2004.

[81]

Inserted by the Income-tax (Fourteenth Amendment) Rules, 2007, w.e.f. 1-4-2008. Earlier, clause (ii) to (vi), as originally enacted, and omitted by the Income-tax (Seventh Amendment) Rules, 2005, w.e.f. 1-4-2005 (A.Y. 2006-07) read as under:
"(ii)	The value of travelling, touring, accommodation and any other expenses paid for or borne or reimbursed by the employer for any holiday availed of by the employee or any member of his household, other than concession or assistance referred to in rule 2B, shall be determined as the sum equal to the amount of the expenditure incurred by the employer in that behalf. Where such facility is maintained by the employer, and is not available uniformly to all employees, the value of benefit shall be taken to be the value at which such facilities are offered by other agencies to the public. Where the employee is on official tour and the expenses are incurred in respect of any member of his household accompanying him, the amount of expenditure so incurred shall also be a fringe benefit or amenity. However, where any official tour is extended as a vacation, the value of such fringe benefit will be limited to the expenses incurred in relation to such extended period of stay or vacation. The amount so determined shall be reduced by the amount, if any paid or recovered from the employee for such benefit or amenity.
(iii)	The value of free 1[food and non-alcoholic beverages] provided by the employer to an employee shall be the amount of expenditure incurred by the employer. The amount so determined shall be reduced by the amount, if any paid or recovered from the employee for such benefit or amenity:
	2[Provided that nothing contained in this sub-rule shall apply to free food and non-alcoholic beverages provided by the employer during working hours at office or business premises or through paid vouchers which are not transferable and usable only at eating joints, to the extent the value thereof in either case does not exceed Rs. 50 per meal or to tea or snacks provided during working hours or to free food and non-alcoholic beverages during working hours provided in a remote area or an offshore installation.]
(iv)	The value of any gift, or voucher, or token in lieu of which such gift may be received by the employee or by member of his household on ceremonial occasions or otherwise shall be determined as the sum equal to the amount of such gift. However, where the value of such gift, voucher or token, as the case may be, is below Rs. 5,000 in the aggregate during the previous year, the value of perquisite shall be taken as nil.
3[(v)	The amount of expenses including membership fees and annual fees incurred by the employee or any member of his household, which is charged to a credit card (including any add-on-card), provided by the employer or otherwise, paid for or reimbursed by the employer shall be taken to be the value of perquisite chargeable to tax. However, there shall be no value of such benefit where the expenses are incurred wholly and exclusively for official purposes and the following conditions are fulfilled:—

(a)    complete details in respect of such expenditure is maintained by the employer which may, inter alia, include the date of expenditure and the nature of expenditure;

(b)    the employer gives a certificate for such expenditure to the effect that the same was incurred wholly and exclusively for the performance of official duties.

The amount so determined shall be reduced by the amount, if any paid or recovered from the employee for such benefit or amenity.]

(vi)  (A)    The value of benefit to the employee resulting from the payment or reimbursement by the employer of any expenditure incurred (including the amount of annual or periodical fee) in a club by him or by any member of his household shall be determined to be the actual amount of expenditure incurred or reimbursed by the employer on that account. The amount so determined shall be reduced by the amount, if any paid or recovered from the employee for such benefit or amenity. However, where the employer has obtained corporate membership of the club and the facility is enjoyed by the employee or any member of his household, the value of perquisite shall not include the initial fee paid for acquiring such corporate membership.

4[(B)    Nothing contained in this sub-rule shall apply if such expenditure is incurred wholly and exclusively for business purposes and the following conditions are fulfilled:—

(a)    complete details in respect of such expenditure is maintained by the employer which may, inter alia, include the date of expenditure, the nature of expenditure and its business expediency;

(b)    the employer gives a certificate for such expenditure to the effect that the same was incurred wholly and exclusively for the performance of official duties.]

 (C)    Nothing contained in this sub-rule shall apply for use of health club, sports and similar facilities provided uniformly to all employees by the employer."

1 Substituted for "food" by the Income-tax (Thirteenth Amendment) Rules, 2004, w.r.e.f. 1-10-2004.

2 Substituted by the Income-tax (Thirteenth Amendment) Rules, 2004, w.r.e.f. 1-10-2004. Prior to substitution, the proviso read as under:

"Provided that nothing contained in this sub-rule shall apply to free meals provided by the employer during office hours at office or business premises or through paid vouchers which are not transferable and usable only at eating joints if the value thereof in either case is upto Rs. 50 per meal or to tea or snacks provided during office hours or to free meals during working hours provided in a remote area or an offshore installation."

3 Substituted by the Income-tax (Seventeenth Amendment) Rules, 2002, w.e.f. 1-8-2002. Prior to the substitution, clause (v), as originally enacted, read as under:

"(v)    The amount of expenses including membership fees and annual fees incurred by the employee or any member of his household, which is charged to a credit card (including any add-on-card), provided by the employer or otherwise, paid for or reimbursed by the employer shall be taken to be the value of perquisite chargeable to tax. However, there shall be no value of such benefit where the expenses are incurred wholly and exclusively for official purposes and the following conditions are fulfilled:

 (a)    complete details in respect of such expenditure are maintained by the employer which may, inter alia, include the date of expenditure and the nature of expenditure;

 (b)    it is certified by the employee that such expenditure was incurred wholly and exclusively for the performance of official duty;

 (c)    the supervising authority of the employee gives a certificate for such expenditure to the effect that the same was incurred wholly and exclusively for the performance of official duties;

 (d)    where an employee incurs expenditure on entertainment and claims the same to have been incurred wholly and exclusively in the performance of his duties, details of such entertainment expenses, inter alia, include the nature and purpose of entertainment and persons entertained.

The amount so determined shall be reduced by the amount, if any paid or recovered from the employee for such benefit or amenity."

4 Substituted by the Income-tax (Seventeenth Amendment) Rules, 2002, w.e.f. 1-8-2002. Prior to the substitution, sub-clause (B), as originally enacted, read as under:

"(B)    Nothing contained in this sub-rule shall apply if such expenditure is incurred wholly and exclusively for business purposes and the following conditions are fulfilled,—

 (a)    complete details in respect of such expenditure are maintained by the employer which may, inter alia, include the date of expenditure, the nature of expenditure and its business expediency;            

 (b)    it is certified by the employee that such expenditure was incurred wholly and exclusively for the performance of official duty;

 (c)    the supervising authority of the employee gives a certificate for such expenditure to the effect that the same was incurred wholly and exclusively for the performance of official duties;

 (d)    where an employee incurs expenditure on entertainment and claims the same to have been incurred wholly and exclusively for the performance of his duties, details of such entertainment expenses, inter alia, include the nature and purpose of entertainment, persons entertained and business expediency for such entertainment."

[82]Inserted by the Income-tax (Fourteenth Amendment) Rules, 2007, w.e.f. 1-4-2008.

[83]

Prior to the omission, sub-rule (8), as originally enacted, read as under:

"(8) The value of any other benefit or amenity, service, right or privilege provided by the employer shall be determined on the basis of cost to the employer under an arms length transaction as reduced by the employees contribution, if any:

Provided however, that nothing contained in this sub-rule shall apply to the expenses on telephones including a mobile phone actually incurred on behalf of the employee by the employer."

[84]Inserted by the Income-tax (Second Amendment) Rules, 2002, w.r.e.f. 1-4-2001.

[85]The words "or the Railways" omitted by the Income-tax (Nineteenth Amendment) Rules, 2002, w.r.e.f. 1-4-2001.

[86]Inserted by the Income-tax (Nineteenth Amendment) Rules, 1992, w.e.f. 7-10-1992. Earlier, rule 3A was inserted by the Income-tax (Second Amendment) Rules, 1985, w.e.f. 1-4-1985 and omitted by the Income-tax (Amendment) Rules, 1986, w.e.f. 1-4-1986.

[87]Substituted for "In granting approval to any hospital for the purposes of sub-clause (b) of clause (ii) of the proviso to clause (2) of section 17," by the Income-tax (Nineteenth Amendment) Rules, 2004, w.e.f. 7-12-2004.

[88]Inserted by the Income-tax (Nineteenth Amendment) Rules, 2004, w.e.f. 7-12-2004.

[89]Inserted by the Income-tax (Nineteenth Amendment) Rules, 2004, w.e.f. 7-12-2004.

[90]

Substituted by the Income-tax (Eighth Amendment) Rules, 2001, w.e.f. 1-4-2002, i.e. A.Y. 2002-03 and subsequent years. Prior to the substitution, rule 4 read as under:
"4. Unrealised rent.—Under clause (x) of sub-section (1) of section 24, deduction shall be allowed of such part of income in respect of which tax is payable under the head "Income from house property" as is equal to the amount of rent payable but not paid by a tenant of the assessee and so proved to be lost and irrecoverable where—
(a)	the tenancy is bona fide;
(b)	the defaulting tenant has vacated, or steps have been taken to compel him to vacate the property;
(c)	the defaulting tenant is not in occupation of any other property of the assessee;
(d)	the assessee has taken all reasonable steps to institute legal proceedings for the recovery of the unpaid rent or satisfies the Assessing Officer that legal proceedings would be useless; and
(e)	the annual value of the property to which the unpaid rent relates has been included in the assessed income of the previous year during which that rent was due and tax has been duly paid on such assessed income:
Provided that the deduction to be allowed on this account shall not exceed the income under the head "Income from house property" included in the total income as computed without making any deduction under this rule."
The italicised words were substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[91]Where the assessee refused to accept the rent deposited with the Rent Controller, the assessee could realise from the tenant the rent originally fixed, the assessee was not entitled to any deduction under rule 4: CIT v Dejoo Tea Co (India) P Ltd (1992) 197 ITR 279 (Cal). There is no prohibition of deduction of more than one year's rent. The mere prescription of a ceiling limit does not infer that the deduction could be claimed only once: CIT v Brahmachari (Dr. N) (1992) 107 CTR (Cal) 270. For allowability of deduction, rent must be irrecoverable: CIT v Airflo Transport (I) P Ltd (1991) 192 ITR 572 (Kar).

[92]Institution of legal proceedings denotes merely commencement and not its culmination: Shree Niketan v CIT (2000) 241 ITR 355 (Guj).

[93]

Substituted by the Income-tax (Third Amendment) Rules, 1987, w.e.f. 2-4-1987. Earlier, rule 5 was amended by the Income-tax (Third Amendment) Rules, 1964; the Income-tax (Sixth Amendment) Rules, 1969, w.e.f. 1-4-1970 and the Income-tax (Fourth Amendment) Rules, 1971, w.e.f. 1-4-1971.

[94]

Where the rate of depreciation is enhanced but the amendment is not retrospective, the amended rates will not apply to pending assessments: Mercantile Credit Corpn. Ltd. v CIT (2000) 245 ITR 245 (Mad). The assessee should furnish the prescribed particulars and claim depreciation. The Assessing Officer is not bound to allow deduction on this account: ITO v Shri Someshwar Sahakari Sakhar Karkhana Ltd (1989) 177 ITR 443 (Bom). Deduction by way of depreciation is compulsory but not mandatory for the ITO in order to arrive at the true figure of profits and gains, in case the prescribed particulars are available during the course of assessment proceedings: CCIT v Machine Tool Corpn of India Ltd (1993) 201 ITR 101 (Kar). The Parliament has full choice or discretion to select or omit items eligible for depreciation. The court has no power to function as a law maker: [Titanium Equipments and Anodes Mfg Co Ltd v Union of India (1994) 207 ITR 566 (Mad). For claiming depreciation, it is not essential that the vehicle should be registered in the assessee's name: CIT v Salkia Transport Associates (1983) 143 ITR 39 (Cal). Registration of conveyance deed is not required for assets transferred by the government to the assessee for allowance of depreciation: CIT v Tamilnadu Small Industries Development Corpn Ltd (1995) 211 ITR 550 (Mad). When the factory remains under lock-out for the entire previous year, depreciation is not admissible: CIT v Oriental Coal Co Ltd (1994) 206 ITR 682 (Cal). Assessee owning a number of trucks, using them in his business. While some of them were under repair during the year, depreciation cannot be denied: CIT v Agarwal (G N) (1996) 217 ITR 250 (Bom).

[95]See sections 32 and 295(2)(d).

[96]Inserted by the Income-tax (Twelfth Amendment) Rules, 1997, w.r.e.f. 2-4-1997.

[97]Substituted for "50 per cent" by the Income-tax (Tenth Amendment) Rules, 1991, w.e.f. 1-4-1992.

[98]Inserted by the Income-tax (Fourteenth Amendment) Rules, 2002, w.e.f. 1-4-2003.

[99]Inserted by the Income-tax (Fifth Amendment) Rules, 1977, w.e.f. 1-4-1978.

[100]Substituted for "5A" by the Income-tax (Fourteenth Amendment) Rules, 2002, w.e.f. 1-4-2003. Rule 5AA was originally inserted by the Income-tax (Amendment) Rules, 1981, w.e.f. 1-4-1981 and omitted by the Income-tax (Third Amendment) Rules, 1987, w.e.f. 2-4-1987.

[101]See section 295(2)(g).

[102]

Investment allowance has been discontinued in respect of any new ship or new aircraft acquired or any new machinery or plant installed after 31-3-1990: see SO 233(E), dated 19-3-1990. For the period 1-4-1987 to 31-3-1988, investment allowance can be claimed only if it fulfils the conditions of section 32A(8B)(a).

[103]Substituted for "Science and Technology" by the Income-tax (Seventh Amendment) Rules, 1985, w.e.f. 6-1-1985.

[104]Inserted by the Income-tax (Sixth Amendment) Rules, 1986, w.e.f. 1-4-1987.

[105]The deduction available under section 32AB has been withdrawn from assessment year 1991-92: see second proviso to section 32AB(1).

[106]Substituted for "3AA" by the Income-tax (Fourteenth Amendment) Rules, 2002, w.e.f. 1-4-2003.

[107]Inserted by the Income-tax (Second Amendment) Rules, 1992, w.e.f. 14-1-1992.

[108]Heading improvised — Not provided in the Amendment Rules.

[109]Inserted by the Income-tax (Twenty-fourth Amendment) Rules, 1999, w.e.f. 30-6-1999.

[110]Inserted by the Income-tax (Amendment) Rules, 1965.

[111]Renumbered as "5B" for "5A" by the Income-tax (Fifth Amendment) Rules, 1977, w.e.f. 1-4-1978.

[112]The deduction under section 33 was discontinued in respect of a ship acquired or machinery or plant installed after 31-5-1974: SO 2167, dated 28-5-1971. A deduction was available in certain cases upto 31-5-1977 in view of section 16 of the Finance Act, 1974 as amended by the Finance Act, 1975.

[113]Substituted by the Income-tax (Sixth Amendment) Rules, 1965.

[114]Rules 5C, 5D and 5E inserted by the Income-tax (Twelfth Amendment) Rules, 2006, w.e.f. 30-10-2006.

[115]Substituted by the Income-tax (Eighth Amendment) Rules, 1989, w.e.f. 23-8-1989. Earlier rule 6 was amended by the Income-tax (Second Amendment) Rules, 1971; Income-tax (Fifth Amendment) Rules, 1974, w.e.f. 2-11-1974; Income-tax (Seventh Amendment) Rules, 1977, w.e.f. 1-11-1977; Income-tax (Sixth Amendment) Rules, 1980, w.e.f. 1-9-1980; Income-tax (Fourth Amendment) Rules, 1982, w.e.f. 1-6-1982 and Income-tax (Seventh Amendment) Rules, 1985, w.e.f 6-1-1985.

[116]See section 295(2)(g).

[117]Inserted by the Income-tax (Twenty-second Amendment) Rules, 1999, w.e.f. 25-6-1999.

[118]Inserted by the Income-tax (Ninth Amendment) Rules, 1996, w.r.e.f. 1-10-1996.

[119]

Substituted by the Income-tax (Eighteenth Amendment) Rules, 2001, w.e.f. 8-8-2001. Prior to the substitution, sub-rule (1A) as inserted by the Income-tax (Ninth Amendment) Rules, 1996, w.r.e.f. 1-10-1996, read as under:

"(1A) For the purposes of sub-section (2AA) of section 35, the prescribed authority shall be the head of the National Laboratory or the University or the Indian Institute of Technology, as the case may be."

[120]Inserted by the Income-tax (Fifth Amendment) Rules, 1998, w.e.f. 1-4-1998.

[121]

Omitted by the Income-tax (Twelfth Amendment) Rules, 2006, w.e.f. 30-10-2006. Prior to the omission, sub-rule (2), as originally enacted, read as under:

"(2) The application required to be furnished by a scientific or industrial research organisation or institution under clause (ii) or (iii) of sub-section (1) of section 35 shall be in Form No. 3CF."

[122]Inserted by the Income-tax (Sixteenth Amendment) Rules, 1993, w.e.f. 15-9-1993.

[123]

Inserted by the Income-tax (Fifth Amendment) Rules, 1998, w.e.f. 1-4-1998. Earlier, sub-rule (4), as inserted by the Income-tax (Sixteenth Amendment) Rules, 1993, w.e.f. 15-9-1993 was omitted by the Income-tax (Ninth Amendment) Rules, 1996, w.r.e.f. 1-10-1996. Prior to the omission, sub-rule (4) read as under:

"(4) The Secretary, Department of Scientific and Industrial Research shall, within eight weeks of the receipt of an application on Form No. 3CG, communicate his decision on each application to the Director General (Income-tax Exemptions)."

[124]

Substituted by the Income-tax (Ninth Amendment) Rules, 1996, w.r.e.f. 1-10-1996. Prior to the substitution, sub-rule (5) read as under:

"(5) The Director General (Income-tax Exemptions) shall within four weeks of the receipt of the decision conveyed by the Secretary, Department of Scientific and Industrial Research, issue an order of approval of programme on Form No. 3CH."

[125]Inserted by the Income-tax (Eighteenth Amendment) Rules, 2001, w.e.f. 8-8-2001

[126]Inserted by the Income-tax (Twelfth Amendment) Rules, 2004, w.e.f. 25-10-2004.

[127]Inserted by the Income-tax (Fifth Amendment) Rules, 1998, w.e.f. 1-4-1998.

[128]

Second proviso omitted by the Income-tax (Twenty-sixth Amendment) Rules, 1999, w.e.f. 5-7-1999. Prior to the omission, the proviso read as under:

"Provided further that an order under this rule shall be passed within two months of the receipt of application under sub-rule (4)."

[129]Substituted for "National Laboratory" by the Income-tax (Eleventh Amendment) Rules, 1994, w.e.f. 23-11-1994.

[130]Substituted for "University or Indian Institute of Technology" by the Income-tax (Eighteenth Amendment) Rules, 2001, w.e.f. 8-8-2001.

[131]Substituted by the Income-tax (Ninth Amendment) Rules, 1996, w.r.e.f. 1-10-1996. It was also amended by the Income-tax (Eleventh Amendment) Rules, 1994, w.e.f. 23-11-1994.

[132]Inserted by the Income-tax (Twelfth Amendment) Rules, 2004, w.e.f. 25-10-2004.

[133]Substituted for "University or Indian Institute of Technology" by the Income-tax (Eighteenth Amendment) Rules, 2001, w.e.f. 8-8-2001.

[134]Ibid.

[135]Ibid.

[136]Inserted by the Income-tax (Eighteenth Amendment) Rules, 2001, w.e.f. 8-8-2001.

[137]Inserted by the Income-tax (Fifth Amendment) Rules, 1998, w.e.f. 1-4-1998.

[138]Omitted by the Income-tax (Thirty-second Amendment) Rules, 1999, w.e.f. 19-11-1999. Rule 6A was inserted by the Income-tax (Third Amendment) Rules, 1970 and amended by the Income-tax (Seventh Amendment) Rules, 1977, w.e.f. 1-11-1977.

[139]Omitted by the Income-tax (Thirty-second Amendment) Rules, 1999, w.e.f. 19-11-1999. Rule 6AA was inserted by the Income-tax (Eighth Amendment) Rules, 1981, w.e.f. 1-8-1981 and amended by the Income-tax (Third Amendment) Rules, 1982, w.e.f. 27-5-1982.

[140]Substituted by the Income-tax (Third Amendment) Rules, 1979, w.e.f. 1-6-1979. It was inserted as rule 6AA by the Income-tax (Fourth Amendment) Rules, 1977, w.e.f. 1-9-1977 and substituted by the Income-tax (Sixth Amendment) Rules, 1978, w.e.f. 1-6-1978.

[141]Renumbered for "6AA" by the Income-tax (Eighth Amendment) Rules, 1981, w.e.f. 1-8-1981.

[142]See section 295(2)(g).

[143]Section 35CC has been omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. This section had been rendered otiose by providing that no programme shall be approved after 16 March, 1985.

[144]Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[145]Ibid.

[146]Ibid.

[147]Ibid.

[148]Omitted by the Income-tax (Thirty-second Amendment) Rules, 1999, w.e.f. 19-11-1999. Rule 6AAB was inserted by the Income-tax (Amendment) Rules, 1978, w.e.f. 18-1-1978 and amended by the Income-tax (Sixth Amendment) Rules, 1986, w.e.f. 1-4-1987.

[149]Inserted by the Income-tax (Sixth Amendment) Rules, 1982, w.e.f. 26-6-1982.

[150]See section 295(2)(g).

[151]Inserted as rule 6AA by the Income-tax (Amendment) Rules, 1972, w.r.e.f. 1-4-1971.

[152]Renumbered as rule 6AB by the Income-tax (Fourth Amendment) Rules, 1977, w.e.f. 1-9-1977.

[153]Substituted for "Form No. 3B" by the Income-tax (Eleventh Amendment) Rules, 2006, w.e.f. 19-10-2006.

[154]Inserted by the Income-tax (Fifth Amendment) Rules, 1979, w.e.f. 1-4-1980.

[155]Inserted by the Income-tax (Sixth Amendment) Rules, 2006, w.e.f. 20-7-2006.

[156]Heading improvised by the editors.

[157]Inserted by the Income-tax (Twentieth Amendment) Rules, 1999, w.e.f. 1-4-2000.

[158]Omitted by the Income-tax (Thirty-second Amendment) Rules, 1999, w.e.f. 19-11-1999. Rule 6AC was inserted by the Income-tax (Third Amendment) Rules, 1965 and amended by the Income-tax (Fourth Amendment) Rules, 1965; the Income-tax (Second Amendment) Rules, 1966; the Income-tax (Third Amendment) Rules, 1970 and Income-tax (Amendment) Rules, 1972, w.e.f. 1-4-1971.

[159]

Omitted by the Income-tax (Thirty-second Amendment) Rules, 1999, w.e.f. 19-11-1999. Rule 6B was inserted by the Income-tax (Second Amendment) Rules, 1966 and amended by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988; the Income-tax (Tenth Amendment) Rules, 1990, w.e.f. 12-4-1990 and the Income-tax (Eighth Amendment) Rules, 1992, w.e.f. 1-4-1992.

Original rule was inserted by the Income-tax (Third Amendment) Rules, 1965 and later omitted by the Income-tax (Fourth Amendment) Rules, 1965.

[160]Omitted by the Income-tax (Amendment) Rules, 1973, w.e.f. 1-4-1973. It was inserted by the Income-tax (Second Amendment) Rules, 1966. Original rule was inserted by the Income-tax (Third Amendment) Rules, 1965 and later omitted by the Income-tax (Fourth Amendment) Rules, 1965.

[161]Omitted by the Income-tax (Thirty-second Amendment) Rules, 1999, w.e.f. 19-11-1999. Original rule 6D was inserted by the Income-tax (Third Amendment) Rules, 1965 and later omitted by the Income-tax (Fourth Amendment) Rules, 1965. It was again inserted by the Income-tax (Second Amendment) Rules, 1966 and amended by the Income-tax (Fifth Amendment) Rules, 1975, w.e.f. 1-4-1976; the Income-tax (Fourth Amendment) Rules, 1980, w.e.f. 18-6-1980 and the Income-tax (Eighth Amendment) Rules, 1992, w.e.f. 1-4-1992.

[162]

Substituted by the Income-tax (Eighth Amendment) Rules, 2007, w.e.f. A.Y. 2008-09. Prior to the substitution, rule 6DD, as inserted by the Income-tax (Amendment) Rules, 1969, w.e.f. 1-4-1969, read as under:
"6DD. Cases and circumstances in which payment in a sum exceeding 1[twenty thousand] rupees may be made otherwise than by 2[an account payee cheque drawn on a bank or account payee bank draft].—No disallowance under sub-section (3) of section 40A shall be made where any payment in a sum exceeding 3[twenty thousand] rupees is made otherwise than by 4[an account payee cheque drawn on a bank or account payee bank draft] in the cases and circumstances specified hereunder, namely:—
(a)	where the payment is made to—

(i)    the Reserve Bank of India or any banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949);

(ii)    the State Bank of India or any subsidiary bank as defined in section 2 of the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959);

(iii)    any co-operative bank or land mortgage bank;

(iv)    any primary agricultural credit society as defined in clause (cii) of section 2 of the Reserve Bank of India Act, 1934 (2 of 1934), or any primary credit society as defined in clause (civ) of that section;

(v)    the Life Insurance Corporation of India established under section 3 of the Life Insurance Corporation Act, 1956 (31 of 1956);

(vi)    the Industrial Finance Corporation of India established under section 3 of the Industrial Finance Corporation Act, 1948 (15 of 1948);

(vii)    the Industrial Credit and Investment Corporation of India Ltd.;

(viii)    the Industrial Development Bank of India established under section 3 of the Industrial Development Bank of India Act, 1964 (18 of 1964);

(ix)    the Unit Trust of India established under section 3 of the Unit Trust of India Act, 1963 (52 of 1963);

(x)    the Madras Industrial Investment Corporation Ltd., Madras;

(xi)    the Andhra Pradesh Industrial Development Corporation Ltd., Hyderabad;

(xii)    the Kerala State Industrial Development Corporation Ltd., Trivandrum;

(xiii)    the State Industrial and Investment Corporation of Maharashtra Ltd., Bombay;

(xiv)    the Punjab State Industrial Development Corporation Ltd., Chandigarh;

(xv)    the National Industrial Development Corporation Ltd., New Delhi;

(xvi)    the Mysore State Industrial Investment and Development Corporation Ltd., Bangalore;

(xvii)    the Haryana State Industrial Development Corporation Ltd., Chandigarh;

(xviii)    any State Financial Corporation established under section 3 of the State Financial Corporations Act, 1951 (63 of 1951);

(b)	where the payment is made to Government and, under the rules framed by it, such payment is required to be made in legal tender;
(c)	where under any contract entered into by the assessee before the 1st day of April, 1969, the payment is required to be made in legal tender;
(d)	where the payment is made by—

(i)    any letter of credit arrangements through a bank;

(ii)    a mail or telegraphic transfer through a bank;

(iii)    a book adjustment from any account in a bank to any other account in that or any other bank;

(iv)    a bill of exchange made payable only to a bank.

Explanation.—For the purposes of this clause and clause (h), the term "bank" means any bank, banking company or society referred to in sub-clauses (i) to (iv) of clause (a) and includes any bank [not being a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949)], whether incorporated or not, which is established outside India;

(e)	where the payment is made by way of adjustment against the amount of any liability incurred by the payee for any goods supplied or services rendered by the assessee to such payee;
(f)	where the payment is made for the purchase of—

(i)    agricultural or forest produce; or

(ii)    the produce of animal husbandry (including hides and skins) or dairy or poultry farming; or

(iii)    fish or fish products; or

(iv)    the products of horticulture or apiculture,

to the cultivator, grower or producer of such articles, produce or products;

(g)	where the payment is made for the purchase of the products manufactured or processed without the aid of power in a cottage industry, to the producer of such products;
(h)	where the payment is made in a village or town, which on the date of such payment is not served by any bank, to any person who ordinarily resides, or is carrying on any business, profession or vocation, in any such village or town;
(i)	where any payment by way of gratuity, retrenchment compensation or similar terminal benefit, is made to an employee of the assessee or the heirs of any such employee on or in connection with the retrenchment, resignation, discharge or death of such employee, if the income chargeable under the head "Salaries" of the employee in respect of the financial year in which such retirement, resignation, discharge or death took place or the immediately preceding financial year did not exceed Rs. 7,500;5
6[(j)	where the payment is made by an assessee by way of salary to his employee after deducting the income-tax from salary in accordance with the provisions of section 192 of the Income-tax Act, 1961 and when such employee—

(A)    is temporarily posted for a continuous period of fifteen days or more in a place other than his normal place of duty or on a ship; and

(B)    does not maintain any account in any bank at such place or ship;

(k)	where the payment was required to be made on a day on which the banks were closed either on account of holiday or strike;
(l)	where the payment is made by any person to his agent who is required to make payment in cash for goods or services on behalf of such person;]]
7[(m)	where the payment is made by an authorised dealer or a money changer against purchase of foreign currency or travellers cheques in the normal course of his business.
Explanation.—For the purpose of this clause, the expression "authorised dealer" or "money changer" means a person authorised as an authorised dealer or money changer to deal in foreign currency or foreign exchange under any law for the time being in force."
1 Substituted for "ten thousand" by the Income-tax (Thirty-first Amendment) Rules, 1999, w.r.e.f. 1-4-1997, which was earlier substituted for "two thousand five hundred" by the Income-tax (Fifth Amendment) Rules, 1989, w.e.f. 18-5-1989.
2 Substituted for "a crossed cheque drawn on a bank or by a crossed bank draft" by the Income-tax (Thirteenth Amendment) Rules, 2006, w.e.f. 9-11-2006.
3 Substituted for "ten thousand" by the Income-tax (Thirty-first Amendment) Rules, 1999, w.r.e.f. 1-4-1997, which was earlier substituted for "two thousand five hundred" by the Income-tax (Fifth Amendment) Rules, 1989, w.e.f. 18-5-1989.
4 Substituted for "a crossed cheque drawn on a bank or by a crossed bank draft" by the Income-tax (Thirteenth Amendment) Rules, 2006, w.e.f. 9-11-2006.
5 Should also be enhanced to Rs. 20,000 in view of the amended section 40A(3).
6 Inserted by the Income-tax (Twenty-first Amendment) Rules, 1995, w.e.f. 1-12-1995. Clause (j), as originally enacted, was substituted by the Income-tax (Fifth Amendment) Rules, 1970, w.e.f. 1-4-1970 and omitted by the Income-tax (Fourteenth Amendment) Rules, 1995, w.e.f. 25-7-1995.
7 Inserted by the Income-tax (Sixteenth Amendment) Rules, 2000, w.e.f. 6-9-2000.

[163]The constitutionality of this rule was unsuccessfully challenged in Mudiam Oil Co v ITO (1973) 92 ITR 519 (AP) and Attar Singh Gurmukh Singh v ITO (1991) 191 ITR 667 (SC).

[164]This rule and section 40A apply to illegal business also: Venkata Subba Rao v CIT (1988) 173 ITR 340 (AP).

[165]Section 40A(3) is attracted only to 'expenditure'. The scope of this word has been explained in Sajowanlal Jaiswal v CIT (1976) 103 ITR 706 (Ori); Badrilal Phool Chand Rodawat v CIT (1987) 167 ITR 404 (Raj); Attar Singh Gurmukh Singh v ITO (1991) 191 ITR 667 (SC); Nathalal Jethalal v CIT (1993) 199 ITR 757 (Guj). Payments made to suppliers for purchase of goods are expenditure: Ideal Tannery v CIT (1979) 117 ITR 34 (All). See also Board's letter, dated 10-4-1969.

[166]See Circular No. 34, dated 5-3-1970.

[167]The prohibition in section 40A(3) will be attracted even in cases of payments by book adjustments where the book adjustments were not made by the assessee directly in the accounts of the party who supplied the goods or services to the assessee: CIT v Kishan Chand Maheshwari Dass (1980) 121 ITR 232 (P&H).

[168]Circular No. 34, dated 5-3-1970. See also Kanti Lal Purshottam & Co v CIT (1985) 155 ITR 519 (Raj).

[169]If the assessee fails to establish that the payments were made to the producers, the assessee will not be entitled to the relief: Ideal Tannery v CIT (1979) 117 ITR 34 (All).

[170]

The expression includes livestock and meat. However, the purchase must be from the producer and not a trader, broker or any other middlemen by whatever name called: Circular No. 4/2006, dated 29-3-2006. A producer of livestock and meat is a person who buys animals from the farmers, slaughters them and then sells the raw meat/carcasses to the meat processing factories or to the traders/retail outlets: Circular No. 8/2006, dated 6-10-2006.

[171]These words qualify all the preceding four sub-clauses and not only sub-clause (iv): CIT v Pehlaj Rai Daryanmal (1991) 190 ITR 242 (All).

[172]Inserted by the Income-tax (Twentieth Amendment) Rules, 2005, w.e.f. 1-7-2005.

[173]Inserted as rule 6A by the Income-tax (Second Amendment) Rules, 1962.

[174]Renumbered for rule 6B by the Income-tax (Second Amendment) Rules, 1966. Earlier, the original rule 6A was renumbered as rule 6E by the Income-tax (Third Amendment) Rules, 1965 and as rule 6B by the Income-tax (Fourth Amendment) Rules, 1965.

[175]

	Substituted for clause (a) by the Income-tax (Seventh Amendment) Rules, 2002, w.e.f. 1-4-2003. Prior to substitution, clause (a) read as under:
"(a)	where the insurance business relates to fire insurance or miscellaneous insurance, 50 per cent of the net premium income of such business of the previous year;"

[176]Substituted by the Income-tax (First Amendment) Rules, 1997, w.r.e.f. 9-8-1962.

[177]Inserted by the Income-tax (Tenth Amendment) Rules, 1992, w.r.e.f. 1-4-1991.

[178]Heading improvised — Not provided in the Amendment Rules.

[179]Inserted by the Income-tax (Thirtieth Amendment) Rules, 1999, w.e.f. 6-10-1999.

[180]Inserted by the Income-tax (Ninth Amendment) Rules, 1981, w.e.f. 21-11-1981. This rule and section 44AA have been held not to violate the equality enshrined in article 14 of the Constitution: Rao (HAK) v Union of India (1991) 189 ITR 322 (Kar).

[181]See section 295(2)(dda). Once the Board has prescribed certain books of account, it is not open to the assessing authority to desire some other books of account to be maintained. Where proper books of account and documents have been maintained, the income can properly be deduced therefrom and the provisions of section 145(1) cannot be invoked: CIT v Ranji Kant Dave (2006) 281 ITR 6 (All).

[182]

Substituted by the Income-tax (First Amendment) Rules, 2000, w.e.f. 6-4-2000. Prior to the substitution, the proviso, as inserted by the Income-tax (Fifth Amendment) Rules, 1983, w.e.f. 28-2-1983, read as under:
"Provided that nothing in this sub-rule shall apply in relation to any previous year—
(a)	in the case of any person other than a person referred to in clause (b), if his total gross receipts in the profession do not exceed sixty thousand rupees in any one of the three years immediately preceding the previous year, or, where the profession has been newly set up in the previous year, his total gross receipts in the profession for that year are not likely to exceed the said amount;
(b)	in the case of a person who, in the course of his medical profession, dispenses drugs and medicines, his total gross receipts in the profession do not exceed eighty thousand rupees in any one of the three years immediately preceding the previous year, or, where the profession (including the dispensing of drugs and medicines) has been newly set up in the previous year, his total gross receipts in the profession for that year are not likely to exceed the said amount."

[183]See Keshava Bhat (A.) v ITO (2001) 247 ITR 83 on the interpretation of the proviso.

[184]Substituted by the Income-tax (Fifth Amendment) Rules, 1983, w.e.f. 28-2-1983.

[185]Inserted by the Income-tax (Fifth Amendment) Rules, 1983, w.e.f. 28-2-1983.

[186]Substituted for "week" by the Income-tax (Fifth Amendment) Rules, 1983, w.e.f. 28-2-1983.

[187]Inserted by the Income-tax (Fifth Amendment) Rules, 1983, w.e.f. 28-2-1983.

[188]Ibid.

[189]Substituted for "eight" by the Income-tax (First Amendment) Rules, 2002, w.e.f. 4-2-2002.

[190]

First proviso omitted, ibid. Prior to the omission, the first proviso read as under:

"Provided that in relation to the books of account referred to in clause (i) and clause (iii) of sub-rule (2), the provisions of this sub-rule shall apply as if for the words "eight years", the words "sixteen years" had been substituted:"

[191]The word "further" omitted, ibid.

[192]Inserted by the Income-tax (Second Amendment) Rules, 1982, w.r.e.f. 21-11-1981.

[193]Substituted for "September, 1982" by the Income-tax (Fifth Amendment) Rules, 1983, w.e.f. 28-2-1983.

[194]Inserted by the Income-tax (Amendment) Rules, 1985, w.e.f. 1-4-1985.

[195]Substituted by the Income-tax (Fourteenth Amendment) Rules, 1999, w.e.f. 4-6-1999. Prior to the substitution, rule 6G was inserted by the Income-tax (Amendment) Rules, 1985, w.e.f. 1-4-1985 and amended by the Income-tax (Sixth Amendment) Rules, 1985, w.e.f. 1-4-1985.

[196]Inserted by the Income-tax (Twenty-seventh Amendment) Rules, 2003, w.e.f. 20-11-2003.

[197]Inserted by the Income-tax (Twenty-first Amendment) Rules, 1999, w.e.f. 25-6-1999.

[198]See section 295(2)(b)(i). For judicial interpretation, see CIT v Mathias (1939) 7 ITR 48 (PC); Maharaja Ram Ran Vijaya Prasad Singh v Province of Bihar (1949) 17 ITR 164 (Pat); Amarendra Lal Khan v C Ag IT (1959) 36 ITR 288 (Cal); CIT v Thiru Arooran Sugars Ltd (1983) 144 ITR 4 (Mad); and (1990) 183 ITR 41 (Mad); and Arooran Sugars Ltd v CIT (1999) 239 ITR 16 (Mad).

[199]Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[200]Inserted by the Income-tax (Second Amendment) Rules, 2001, w.e.f. 1-4-2002 i.e. assessment year 2002-03 and subsequent years.

[201]

Substituted by the Income-tax (Third Amendment) Rules, 2002, w.e.f. 1-4-2003. Prior to the substitution, sub-rule (1) read as under:

"(1) Income derived from the sale of centrifuged latex or cenex manufactured from rubber plants grown by the seller in India shall be computed as if it were income derived from business, and thirty-five per cent of such income shall be deemed to be income liable to tax."

[202]

Substituted for sub-rule (1) by the Income-tax (Eleventh Amendment) Rules, 2002, w.e.f. 1-4-2002. Prior to the substitution, sub-rule (1) read as under:

"(1) Income derived from the sale of coffee grown and manufactured by the seller in India, with or without mixing of chicory or other flavouring ingredients, shall be computed as if it were income derived from business, and forty per cent of such income shall be deemed to be income liable to tax."

[203]An individual deriving income from growing and curing of coffee would not be required to file his return, if the aggregate of 25% of his income from growing and curing of coffee and income under all other sources liable to tax is equal to or less than the basic exemption limit prescribed for individual tax payers in the First Schedule of the Finance Act of the relevant year: Circular No. 10 of 2003, dated 24-12-2003, read with Circular No. 10/2006, dated 16-10-2006.

[204]An individual deriving income from growing, curing, roasting and grounding of coffee with or without mixing chicory or other flavouring ingredients would not be required to file the return of income if the aggregate of 40% of his income from such activities and income under all other sources liable to tax is equal to or less than the exemption limit prescribed in the First Schedule of the Finance Act of the relevant year: Circular No. 10 of 2003, dated 24-12-2003, read with Circular No. 10/2006, dated 16-10-2006.

[205]Substituted for "such income" by the Income-tax (Eleventh Amendment) Rules, 2002, w.e.f. 1-4-2002.

[206]See Circular Nos. 600, dated 23-5-1991 and 310, dated 29-7-1981.

[207]

See section 295(2)(b)(i). For case law, see Killing Valley Tea Co Ltd v Secretary of State (1921) 1 ITC 54 (Cal); Brihan Maharashtra Sugar Syndicate v CIT (1946) 14 ITR 611 (Bom); CIT v Khan Bahadur Waliur Rahman (1946) 14 ITR 287 (Cal); Dooars Tea Co Ltd v C Ag IT (1962) 44 ITR 6 (SC); Maharaj Prasad Jain v CIT (1966) 61 ITR 297 (All); Anglo-American Direct Tea Trading Co Ltd v CAgIT (1968) 69 ITR 667 (SC); Chidambaram Pillai v CIT (1970) 77 ITR 494 (Mad); Tea Estate India (P) Ltd v CIT (1976) 103 ITR 785 (SC); CIT v Chidambaram Pillai (RM) (1976) 106 ITR 292 (SC); CIT v Haroocharai Tea Co (1978) 111 ITR 495 (Gau); Sookerating Tea Co (P) Ltd v CIT (1978) 111 ITR 457 (Gau); Tata Tea Ltd v State of West Bengal (1988) 173 ITR 18 (SC); CIT v Kothari Plantations & Industries Ltd (1993) 203 ITR 547 (Cal); CIT v Kodanad Tea Estates Co (2000) 243 ITR 199 (Mad); CIT v CWS (India) Ltd (2000) 246 ITR 278 (Ker); Assam Co Ltd v State of Assam (2001) 248 ITR 567 (SC).

[208]

When by fiction the income is computed as an income under the Act, all deductions as are available both for the agricultural component and for the business component of the income are to be allowed as a natural corollary. The entire amount paid as cess under the Agricultural Income-tax Act is eligible for deduction: CIT v AFT Industries Ltd (2004) 270 ITR 167 (Cal). The apportionment postulated in rule 8 is to be made before deduction under section 80HHC is allowed: Union of India v Warren Tea Ltd. (2004) 266 ITR 226 (Cal); Bazaloni Group Ltd v CIT (2005) 272 ITR 11 (Gau).

[209]The maintenance of nursery for the purpose of raising bushes to be utilised for replantation of dead or useless bushes within the plantation area does not come under rule 8(2): CIT v Tasati Tea Ltd. (2003) 262 ITR 388 (Cal).

[210]Inserted by the Income-tax (Second Amendment) Rules, 1971.

[211]Inserted by the Income-tax (Fourth Amendment) Rules, 1967, w.e.f. 1-4-1967.

[212]

The deduction available under this section has been discontinued from 1-4-1990, i.e. assessment year 1990-91: see the first proviso to section 33A(1). The provisions of rule 8A are directory in nature and the benefit of development allowance cannot be denied to an assessee who had failed to file the required certificate along with the return but filed it at the time of assessment: George Williamson (A) Ltd v CIT (2006) 286 ITR 533 (Gau).

[213]Substituted for "August, 1967" by the Income-tax (Third Amendment) Rules, 1968, w.r.e.f. 1-4-196.

[214]Substituted for "September, 1967", ibid.

[215]Though the filing of the certificate is mandatory, the failure to file it along with the return will not result in the forfeiture of the claim to development allowance: see CIT v Malayalam Plantations Ltd (1976) 103 ITR 835 (Ker).

[216]Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988

[217]

Inserted by the Income-tax (Amendment) Rules, 1968, w.e.f. 1-4-1968.

[218]Rules 8B and 8C inserted by the Income-tax (Third Amendment) Rules, 2006, w.e.f. 1-4-2006.

[219]See section 295(2)(f).

[220]Inserted by the Income-tax (Seventh Amendment) Rules, 1976, w.e.f. 30-12-1976.

[221]Subsidy received by producers of regional feature films should not be charged to tax as a revenue receipt: see Circular No. 541, dated 25-7-1989 as amended by Circular No. 544, dated 15-9-1989.

[222]See section 295(2)(a). Rules 9A and 9B do not apply to the valuation of the publicity materials, which cannot be taken as nil at the end of the specified period: Sethu Film Distributors v CIT (2001) 252 ITR 307 (Mad). For the scope of rule 9A, see CIT v Sagar (S M) (2003) 261 ITR 271 (Bom).

[223]Substituted by the Income-tax (Second Amendment) Rules, 1986, w.e.f. 2-4-1986. For the effect of this amendment, see Verghese (V) v DCIT (1994) 210 ITR 511 (Kar).

[224]Inserted by the Income-tax (Seventh Amendment) Rules, 1989, w.e.f. 7-7-1989.

[225]The words "regional language" omitted by Income-tax (Second Amendment) Rules, 1986, w.e.f. 2-4-1986.

[226]Substituted for "one hundred and eighty" by the Income-tax (Ninth Amendment) Rules, 1998, w.e.f. 1-4-1999, which was earlier substituted for "ninety" by the Income-tax (Second Amendment) Rules, 1986, w.e.f. 2-4-1986.

[227]The words "regional language" omitted by the Income-tax (Second Amendment) Rules, 1986, w.e.f. 2-4-1986.

[228]Substituted for "one hundred and eighty" by the Income-tax (Ninth Amendment) Rules, 1998, w.e.f. 1-4-1999, which was earlier substituted for "ninety" by the Income-tax (Second Amendment) Rules, 1986, w.e.f. 2-4-1986.

[229]The words "regional language" omitted by the Income-tax (Second Amendment) Rules, 1986, w.e.f. 2-4-1986.

[230]Original sub-rule (8) renumbered as a consequence of the omission of sub-rules (5), (6) and (7) by Income-tax (Second Amendment) Rules, 1986, w.e.f. 2-4-1986.

[231]Substituted, ibid.

[232]Original sub-rule (9) renumbered as a consequence of the omission of sub-rules (5), (6) and (7) by the Income-tax (Second Amendment) Rules, 1986, w.e.f. 2-4-1986.

[233]Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[234]Original clause (b) relettered as a consequence of the omission of the original clause (a) by the Income-tax (Second Amendment) Rules, 1986, w.e.f. 2-4-1986.

[235]Ibid.

[236]Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[237]Original sub-rule (10) renumbered as a consequence of the omission of sub-rules (5), (6) and (7) by the Income-tax (Second Amendment) Rules, 1986, w.e.f. 2-4-1986.

[238]Original sub-rule (11) renumbered as a consequence of the omission of sub-rules (5), (6) and (7) by the Income-tax (Second Amendment) Rules, 1986, w.e.f. 2-4-1986.

[239]Substituted for the original sub-rule (11) by the Income-tax (Second Amendment) Rules, 1986, w.e.f. 2-4-1986.

[240]Explanations 1 and 2 omitted by the Income-tax (Second Amendment) Rules, 1986, w.e.f. 2-4-1986.

[241]Inserted by the Income-tax (Seventh Amendment) Rules, 1976, w.e.f. 30-12-1976.

[242]See section 295(2)(a). Rules 9A and 9B do not apply to the valuation of the publicity materials, which cannot be taken as nil at the end of the specified period: Sethu Film Distributors v CIT (2001) 252 ITR 307 (Mad). For the scope of this rule, see CIT v Prakash Pictures (2003) 260 ITR 456 (Bom).

[243]Substituted for "by the film distributor to the film producer as defined in rule 9A under an agreement entered into by him with such film producer" by the Income-tax (Second Amendment) Rules, 1986, w.e.f. 2-4-1986.

[244]Substituted for "one hundred and eighty" by the Income-tax (Ninth Amendment) Rules, 1998, w.e.f. 1-4-1999, which was earlier substituted for "ninety" by the Income-tax (Second Amendment) Rules, 1986, w.e.f. 2-4-1986.

[245]Ibid.

[246]Inserted by the Income-tax (Second Amendment) Rules, 1986, w.e.f. 2-4-1986.

[247]Substituted, ibid.

[248]Inserted by the Income-tax (Thirty-third Amendment) Rules, 1999, w.e.f. 15-12-1999.

[249]See sections 9, 92 and 295(2)(b)(ii). For case-law, see CIT v Indian Textile Engineers (P) Ltd (1983) 141 ITR 69 (Bom); CIT v Saudi Arabian Airlines (1985) 155 ITR 65 (Bom); CIT v Shinwa Kaium Kaisha Ltd (1987) 165 ITR 270 (Cal).

[250]Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[251]The words "and super-tax" omitted by Income-tax (Amendment) Rules, 1967, w.e.f. 13-2-1967.

[252]Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[253]Ibid.

[254]Inserted by the Income-tax (Twenty-first Amendment) Rules, 2001, w.e.f. 21-8-2001.

[255]See Circular No. 12/2001, dated 23-8-2001 clarifying certain issues relating to transfer pricing.

[256]

Omitted by the Income-tax (Twenty-first Amendment) Rules, 2001, w.e.f. 21-8-2001. Prior to the omission, rule 11, as originally enacted, read as under:

"11. Determination of income from transactions with non-residents.—The profits and gains derived from any business carried on in the manner referred to in section 92 may be determined for the purposes of assessment to income-tax †[* * *] according to rule 10."

† The words "and super-tax" omitted by Income-tax (Amendment) Rules, 1967, w.e.f. 13-2-1967."

[257]

Substituted by the Income-tax (Eighteenth Amendment) Rules, 2005, w.e.f. 29-6-2005. Prior to the substitution, rule 11A, as substituted by the Income-tax (Twentieth Amendment) Rules, 2003, w.r.e.f. 1-4-2003, read as under:

"11A. Certificate to be obtained from the medical authority for the purposes of deduction under section 80DD and section 80U.—(1) For the purposes of sub-section (4) of section 80DD and sub-section (2) of section 80U, the assessee shall furnish along with the return of income, a copy of the certificate issued by the medical authority in the form prescribed vide Notification No. 16-18/97-NI.1, dated 1st June, 2001 published in the Gazette of India, Part I, Section 1 dated the 13th June, 2001 and Notification No. 16-18/97-NI.1, dated 18th February, 2002 published in the Gazette of India, Part I, Section 1, dated the 27th February, 2002 and notified under the Guidelines for evaluation of various disabilities and procedure for certification, keeping in view the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996).

(2) Where the condition of disability is temporary and requires reassessment after a specified period, the certificate shall be valid for the period starting from the assessment year relevant to the previous year during which the certificate was issued and ending with the assessment year relevant to the previous year during which the validity of the certificate expires."

Rule 11A was inserted by the Income-tax (Third Amendment) Rules, 1992, w.r.e.f. 1-4-1991.

The earlier rule 11A, which dealt with a different subject, was omitted by the Income-tax (Ninth Amendment) Rules, 1983, w.e.f. 1-4-1984. It was inserted by the Income-tax (Amendment) Rules, 1967, w.r.e.f. 1-4-1965; substituted by the Income-tax (Second Amendment) Rules, 1968, w.e.f. 18-3-1968; amended by the Income-tax (Second Amendment) Rules, 1976, w.e.f. 15-3-1976; the Income-tax (Seventh Amendment) Rules, 1980, w.e.f. 1-4-1981 and Income-tax (Amendment) Rules, 1982, w.e.f. 2-4-1982.

[258]Inserted by the Income-tax (Seventeenth Amendment) Rules, 1992, w.e.f. 21-9-1992.

[259]Non-payment of outstanding demand of earlier year cannot be a ground for denial of continuation of approval: Parivar Seva Sanstha v Director of Income-tax (Exemptions) (2002) 255 ITR 132 (Del).

[260]For exclusion of time, see Bangalore Education Trust v Director of Income-tax (Exemptions) (2004) 267 ITR 549 (Kar).

[261]Inserted by the Income-tax (Nineteenth Amendment) Rules, 1998, w.e.f. 13-10-1998. Earlier rule 11B was inserted by the Income-tax (Fourth Amendment) Rules, 1976, w.e.f. 2-4-1976 and substituted by the Income-tax (Third Amendment) Rules, 1981, w.e.f. 20-2-1981. It was applicable upto A.Y. 1997-98.

[262]

Substituted by the Income-tax (Second Amendment) Rules, 1988, w.e.f. 31-5-1988. It was inserted by the Income-tax (Sixth Amendment) Rules, 1976.

[263]

Omitted by the Income-tax (Twentieth Amendment) Rules, 2003, w.r.e.f. 1-4-2003. Prior to the omission, rule 11D, as substituted by the Income-tax (Third Amendment) Rules, 1992 read as under:
"11D. Permanent physical disabilities, etc. for the purposes of deduction under section 80U.—For the purposes of section 80U,—
(i)	permanent physical disability shall be regarded as a permanent physical disability if it falls in any one of the categories specified below, namely:—

(a)    permanent physical disability of more than 50 per cent in one limb; or

(b)    permanent physical disability of more than 60 per cent in two or more limbs; or

(c)    permanent deafness with hearing impairment of 71 decibels and above; or

(d)    permanent and total loss of voice;

(ii)	1mental retardation shall be regarded as a mental retardation if intelligence quotient is less than 50 on a test with a mean of 100 and a standard deviation of 15 such as the Wechsle scale.
(iii)	blindness shall be regarded as a permanent physical disability, if it is incurable and falls in any one of the categories specified below, namely:—
All with corrections

Better eye	Worse eye
(a)           6/60-4/60 or Field of vision 110-20	3/60 to Nil
(b)           3/60 to 1/60 or Field of vision 100	F.C. at 1 foot to Nil
(c)            F.C. at 1 foot to Nil or	F.C. at 1 foot to Nil or
Field of vision 100	Field of vision 100
(d)           Total absence of sight	Total absence of sight."

1 See Circular No. 653, dated 15-6-1993, Rules.

Clauses (i) and (ii) shall be deemed to have been substituted w.r.e.f. 1-4-1990 and clause (iii) w.e.f. 1-4-1992. Earlier, rule 11D was inserted by the Income-tax (Fourth Amendment) Rules, 1985, w.e.f. 1-4-1985.

[264]

Substituted by the Income-tax (Twenty-fifth Amendment) Rules, 2003, w.r.e.f. 1-4-2003. Prior to the substitution, rule 11DD, as inserted by the Income-tax (Third Amendment) Rules, 1997, w.e.f. 11-3-1997, read as under:
"11DD. Specified diseases and ailments under section 80DDB.—(1) For the purposes of section 80DDB, the specified diseases and ailments shall be as under:—
(i)	Neurological Diseases

(a)    Dementia

(b)    Dystonia Musculorum Deformans

(c)    Motor Neuron Disease

(d)    Ataxia

(e)    Chorea

(f)    Hemiballismus

(g)    Aphasia

(h)    Parkinson's Disease

Explanation.—For the purposes of this rule the above-mentioned diseases shall be treated as chronic and protracted, if the disability has been certified to be 40% and above.

(ii)	Cancer
(iii)	Full Blown Acquired Immuno-Deficiency Syndrome (AIDS)
(iv)	Chronic Renal Failure
(v)	Hemophilia
(vi)	Thalassaemia
(2) For the purposes of section 80DDB, the prescribed authority shall be any doctor registered with the Indian Medical Association with post-graduate qualifications.
(3) The certificate shall be from the Prescribed Authority in Form 10-I."

[265]Omitted by the Income-tax (Thirty-second Amendment) Rules, 1999, w.e.f. 19-11-1999. Rule 11E was inserted by the Income-tax (Tenth Amendment) Rules, 1988, w.e.f. 1-4-1989.

[266]Inserted by the Income-tax (Ninth Amendment) Rules, 1997, w.r.e.f. 1-10-1994.

[267]

Substituted for "sub-clause (c) of clause (iv) of sub-section (2) of section 80-IA" by the Income-tax (Seventeenth Amendment) Rules, 1999, w.e.f. 1-4-2000.

[268]Renumbered by the Income-tax (Eleventh Amendment) Rules, 1997, w.r.e.f. 1-10-1994.

[269]Inserted, ibid.

[270]Substituted for "sub-clause (c) of clause (iv) of sub-section (2) of section 80-IA" by the Income-tax (Seventeenth Amendment) Rules, 1999, w.e.f. 1-4-2000.

[271]Inserted by the Income-tax (Eleventh Amendment) Rules, 1997, w.r.e.f. 1-10-1994.

[272]Substituted for "sub-clause (c) of clause (iv) of sub-section (2) of section 80-IA" by the Income-tax (Seventeenth Amendment) Rules, 1999, w.e.f. 1-4-2000.

[273]Omitted by the Income-tax (Thirty-second Amendment) Rules, 1999, w.e.f. 19-11-1999. Sub-chapter "EE" alongwith section 11EE was inserted by the Income-tax (Fourteenth Amendment) Rules, 1992, w.e.f. 2-7-1992 and amended by the substituted by the Income-tax (Fifth Amendment) Rules, 1996, w.e.f. 21-11-1996; by the Income-tax (Thirteenth Amendment) Rules, 1995, w.e.f. 19-7-1995; by the Income-tax (Thirteenth Amendment) Rules, 1995, w.e.f. 19-7-1995; by the Income-tax (Sixth Amendment) Rules, 1994, w.e.f. 7-6-1994; by the Income-tax (Twelfth Amendment) Rules, 1993, w.e.f. 13-8-1993 and by the Income-tax (Eighteenth Amendment) Rules, 1992, w.e.f. 30-9-1992.

[274]Inserted by the Income-tax (First Amendment) Rules, 1992, w.e.f. 2-1-1992.

[275]Substituted by the Income-tax (Fourth Amendment) Rules, 1993, w.e.f. 5-3-1993.

[276]Inserted by the Income-tax (Seventh Amendment) Rules, 1993, w.e.f. 16-4-1993.

[277]Inserted by the Income-tax (Eighth Amendment) Rules, 1994, w.e.f. 12-8-1994.

[278]Inserted by the Income-tax (Tenth Amendment) Rules, 1998, w.e.f. 30-7-1998.

[279]Inserted by the Income-tax (Seventh Amendment) Rules, 1999, w.e.f. 14-5-1999.

[280]Inserted by the Income-tax (Second Amendment) Rules, 2000, w.e.f. 6-4-2000.

[281]Inserted by the Income-tax (Fourth Amendment) Rules, 2001, w.e.f. 4-5-2001.

[282]Inserted by the Income-tax (Fifth Amendment) Rules, 2002, w.e.f. 1-4-2002.

[283]Inserted by the Income-tax (Sixth Amendment) Rules, 2002, w.e.f. 7-5-2002.

[284]For prescribed format of the application, see Division Two, post.

[285]

Substituted for the following sub-clause (v) by the Income-tax (Fourth Amendment) Rules, 1993, w.e.f. 5-3-1993:

Brief particulars of the activities of the association or institution during three years preceding the date of application;"

[286]Substituted for "decision at the adjourned meeting" by the Income-tax (Second Amendment) Rules, 1995, w.e.f. 17-2-1995.

[287]Inserted by the Income-tax (Second Amendment) Rules, 1995, w.e.f. 17-2-1995.

[288]Inserted by the Income-tax (Fifteenth Amendment) Rules, 2005, w.e.f. 17-6-2005.

[289]

Substituted by the Income-tax (Second Amendment) Rules, 1995, w.e.f. 17-2-1995.

[290]Inserted by the Income-tax (Second Amendment) Rules, 1993, w.e.f. 24-2-1993.

[291]Inserted by the Income-tax (Eleventh Amendment) Rules, 2004, w.e.f. 29-9-2004.

[292]

Inserted by the Income-tax (Eighth Amendment) Rules, 2005, w.e.f. 1-4-2005.

[293]

Substituted by the Income-tax (Fourth Amendment) Rules, 2007, w.e.f. 14-5-2007. Prior to the substitution, rule 12, as substituted by the Income-tax (Second Amendment) Rules, 1967 and amended by the Income-tax (Amendment) Rules, 1968, w.e.f. 1-4-1968; the Income-tax (Amendment) Rules, 1971, w.e.f. 1-4-1971; the Income-tax (Second Amendment) Rules, 1972, w.e.f. 1-7-1972; the Income-tax (Amendment) Rules, 1976, w.e.f. 1-4-1976; the Income-tax (Fifth Amendment) Rules, 1976, w.e.f. 21-6-1976; the Income-tax (Second Amendment) Rules, 1979, w.e.f. 1-4-1979; the Income-tax (Amendment) Rules, 1981, w.e.f. 1-4-1981; the Income-tax (Eighth Amendment) Rules, 1991, w.r.e.f. 1-4-1989; the Income-tax (Third Amendment) Rules, 1994, w.e.f. 1-6-1994; the Income-tax (Fourth Amendment) Rules, 1995, w.e.f. 1-6-1995; the Income-tax (Sixteenth Amendment) Rules, 1995, w.e.f. 23-8-1995; the Income-tax (Eighth Amendment) Rules, 1997, w.e.f. 27-6-1997; the Income-tax (Fourth Amendment) Rules, 1998, w.e.f. 1-4-1998; the Income-tax (Thirteenth Amendment) Rules, 1998, w.e.f. 9-9-1998; the Income-tax (Tenth Amendment) Rules, 2001, w.e.f. 2-7-2001; the Income-tax (Thirteenth Amendment) Rules, 2002, w.e.f. 24-6-2002; the Income-tax (First Amendment) Rules, 2003, w.e.f. 28-1-2003; the Income-tax (Sixth Amendment) Rules, 2003, w.e.f. 14-5-2003; the Income-tax (Fifth Amendment) Rules, 2004, w.e.f. 1-4-2004; the Income-tax (Fifth Amendment) Rules, 2006, w.e.f. 1-6-2006; the Income-tax (Seventh Amendment) Rules, 2006, w.e.f. 24-7-2006; the Income-tax (Eleventh Amendment) Rules, 2006, w.e.f. 19-10-2006, read as under:
"12. Return of income and return of fringe benefits—(1) The return of income required to be furnished under sub-section (1), or proviso to sub-section (1), or sub-section (2), or sub-section (3), or sub-section (4A), or sub-section (4B) or sub-section (4C) of section 139 or sub-section (4D) of section 139 or clause (i) of sub-section (1) of section 142 or the return of fringe benefits required to be furnished under sub-section (1) or sub-section (2) of section 115WD or under sub-section (3) of section 115WH shall,—
(a)	in the case of a company [not being a company to which clause (c) applies], be in Form No. 1 and be verified in the manner indicated therein;
(b)	in the case of a person not being a company to which clause (a) applies, and [not being a person to whom clause (c) applies]—

(i)    where the total income includes any income chargeable to income-tax under the head "Profits and gains of business or profession", be in Form No. 2 and be verified in the manner indicated therein;

[(ii)    * * *]

(iii)    where the total income does not include any income chargeable to income-tax under the head "Profits and gains of business or profession" be in Form No. 3 and be verified in the manner indicated therein:

Provided that the assessee to whom clause (b) applies shall also have the option of filing the return in Form No. 2D SARAL:

Provided further that in the case of an individual or a Hindu undivided family, resident in India, where the total income does not include income chargeable to income-tax under the head "Profits and gains of business or profession" or "Capital gains" or agricultural income, the assessee shall also have the option of filing the return in Form No. 2E NAYA SARAL on or before 31st day of July, 2006:

Provided also that in the case of an individual, resident in India, where—

(a)    his total income includes income chargeable to income-tax under the head 'Salaries';

(b)    the income from salaries before allowing deductions under section 16 of the Income-tax Act, 1961 does not exceed rupees one lakh fifty thousand;

(c)    his total income does not include income chargeable to income-tax under the head 'Profits and gains of business or profession' or 'Capital gains' or agricultural income; and

(d)    he is not in receipt of any other income from which tax has been deducted at source by any person other than the employer;

the assessee shall also have the option of filing return in Form No. 16AA:

Provided also that in the case of an assessee being an individual or a Hindu undivided family, resident in India, where—

(a)    the total income does not include income chargeable to income-tax under the head "Profits and gains of business or profession" or "Capital gains" or agricultural income;

(b)    no relief under section 89 in respect of arrears or advance of salary is claimed; and

(c)    he does not own more than one house property,

	the assessee shall also have the option of filing the return in Form No. 2F and the return in this Form shall not be accompanied by a statement showing the computation of the tax payable on the basis of the return, or proof of the tax, if any, claimed to have been deducted at source or the advance tax or tax on self-assessment, if any, claimed to have been paid:
(c)	in the case of a person [including a company whether or not registered under section 25 of the Companies Act, 1956 (1 of 1956)], in receipt of income derived from property held under trust or other legal obligation wholly for charitable or religious purposes, or in part only for such purposes, who claims exemption under section 11, be in Form No. 3A and be verified in the manner indicated therein;
(d)	in the case of a person required to file a return under proviso to sub-section (1) of section 139, be in Form No. 2C and verified in the manner prescribed therein;
(e)	in the case of a person required to file a return under sub-section (4C) of section 139 or sub-section (4D) of section 139, be in Form No. 3A and be verified in the manner indicated therein;
(f)	in the case of a person who—

(i)    is required to furnish the return of income and also the return of fringe benefits but has filed the return of income in Form No. 1 or Form No. 2 or Form No. 2D or Form No. 3A for the assessment year 2006-07 before the publication of these rules or opts to furnish the return of income in Form No. 2D; or

(ii)    is not required to furnish the return of income but is required to furnish the return of fringe benefits,

the return of fringe benefits shall be in Form No. 3B and be verified in the manner indicated therein.
(1A) The return setting forth the total income including the undisclosed income for the block period required to be furnished under clause (a) of section 158BC shall be in Form No. 2B and be verified in the manner indicated therein.
(2) Notwithstanding anything contained in sub-rule (1),—
(a)	where a return of income relates to the assessment year commencing on the 1st day of April, 1961, or any earlier assessment year, it shall be furnished in the appropriate form prescribed in rule 19 of the Indian Income-tax Rules, 1922, and shall be verified in the manner indicated therein;
(b)	where a return of income relates to the assessment year commencing on the 1st day of April, 1962, or the 1st day of April, 1963, or the 1st day of April, 1964, it shall be furnished in the appropriate form in force immediately before the 1st day of April, 1967 and shall be verified in the manner indicated therein.
(3) The return of income or the return of fringe benefits to be furnished in Form No. 1 or Form No. 2 or Form No. 3 or Form No. 3B shall not be accompanied by a statement showing the computation of the tax payable on the basis of the return, or proof of the tax, if any, claimed to have been deducted at source or the advance tax or tax on self-assessment, if any, claimed to have been paid or any document or copy of any account or Form or report of audit required to be attached with the return of income or the return of fringe benefits under any of the provisions of the Income-tax Act, 1961."
The original rule 12 was amended by the Income-tax (Amendment) Rules, 1962 and Income-tax (Third (Amendment) Rules, 1964.

[294]Inserted by the Income-tax (Amendment) Rules, 1962.

[295]See Jayasree Chit Funds & Services (P) Ltd v CIT (1981) 127 ITR 740 (Ker) for the scope of statements and explanations given by the representative being binding on the assessee.

[296]Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[297]Inserted by the Income-tax (Fourteenth Amendment) Rules, 2000, w.e.f. 29-8-2000.

[298]Inserted by the Income-tax (Fifteenth Amendment) Rules, 2000, w.e.f. 29-8-2000.

[299]

Omitted by the Income-tax (Fifth Amendment) Rules, 1989, w.e.f. 18-5-1989. Prior to the omission, rule 13 was amended by the Income-tax (Fourth Amendment) Rules, 1971, w.e.f. 1-4-1971. For case law, see CIT v Bhilai Mahila Samaj (1991) 187 ITR 604 (MP).

[300]Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[301]Needs to be renumbered as clause (iii), consequent upon the renumbering of the clauses in section 142(1).

[302]Inserted by the Income-tax (Second Amendment) Rules, 1977, w.e.f. 18-1-1977.

[303]See section 295(2)(eec).

[304]Inserted by the Income-tax (Third Amendment) Rules, 2008, w.e.f. 5-2-2008. Prior to its omission, rule 14A was originally inserted by the Income-tax (Amendment) Rules, 1972, w.e.f. 1-4-1972 and later renumbered as rule 14B by the Income-tax (Second Amendment) Rules, 1977, w.e.f. 18-1-1977. Rule 14B was omitted by the Income-tax (Fifth Amendment) Rules, 1989, w.e.f. 18-5-1989.

[305]Substituted for "rules 16 and 38" by the Income-tax (Fourth Amendment) Rules, 1964.

[306]The figure "16", omitted by the Income-tax (Fourth Amendment) Rules, 1971, w.e.f. 1-4-1971.

[307]Omitted by the Income-tax (Third Amendment) Rules, 1964.

[308]

Inserted by the Income-tax (Third Amendment) Rules, 1984, w.e.f. 1-10-1984. The original rule 16 was omitted by the Income-tax (Fourth Amendment) Rules, 1971, w.e.f. 1-4-1971.

[309]Substituted for "Appellate Assistant Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[310]Inserted by the Income-tax (Amendment) Rules, 1972, w.e.f. 1-4-1971.

[311]

Substituted by the Income-tax (Fourth Amendment) Rules, 1982, w.e.f. 1-6-1982. The original rule 16A was inserted by the Income-tax (Fourth Amendment) Rules, 1971, w.e.f. 1-4-1971; substituted by the Income-tax (Fifth Amendment) Rules, 1974, w.e.f. 2-11-1974 and amended by the Income-tax (Seventh Amendment) Rules, 1977, w.e.f. 1-11-1977.

[312]See section 295(2)(g).

[313]Substituted for "Science and Technology" by the Income-tax (Seventh Amendment) Rules, 1985, w.e.f. 6-1-1985.

[314]Inserted by the Income-tax (Eighteenth Amendment) Rules, 1993, w.e.f. 30-11-1993.

[315]See section 295(2)(g).

[316]Inserted by the Income-tax (Fifteenth Amendment) Rules, 1995, w.e.f. 27-7-1995.

[317]Inserted by the Income-tax (Eighth Amendment) Rules, 2006, w.e.f. 25-7-2006.

[318]Heading improvised by the editors.

[319]Inserted by the Income-tax (Seventeenth Amendment) Rules, 2000, w.e.f. 27-9-2000.

[320]Inserted by the Income-tax (Fifteenth Amendment) Rules, 2003, w.e.f. 26-8-2003.

[321]Inserted by the Income-tax (Eighteenth Amendment) Rules, 2000, w.e.f. 27-9-2000.

[322]Inserted by the Income-tax (Seventh Amendment) Rules, 2004, w.e.f. 31-3-2004.

[323]Substituted by the Income-tax (Eighth Amendment) Rules, 1989, w.e.f. 1-4-1990. Prior to the substitution, rule 17 was amended by the Income-tax (Amendment) Rules, 1971, w.e.f. 1-4-1971 and the Income-tax (Fifth Amendment) Rules, 1989, w.e.f. 18-5-1989.

[324]The period prescribed under rule 17 is directory and not a mandatory provision. As long as the assessee issues the notice under rule 17 before the assessment is made he will be entitled to the benefit of section 11: CIT v Mumtaz Yarud Dowla Waqf (1998) 234 ITR 6 (AP).

[325]Inserted by the Income-tax (Second Amendment) Rules, 1973, w.e.f. 1-4-1973.

[326]

Substituted for "clause (a)" by the Income-tax (Seventh Amendment) Rules, 2007, w.e.f. 1-6-2007.

[327]The words "Chief Commissioner or" omitted by the Income-tax (Seventh Amendment) Rules, 2007, w.e.f. 1-6-2007. Earlier, these words were inserted by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[328]Inserted by the Income-tax (Second Amendment) Rules, 1973, w.e.f. 1-4-1973.

[329]

Inserted by the Income-tax (Eighth Amendment) Rules, 1990, w.e.f. 29-3-1990.

[330]Proviso omitted by the Income-tax (Sixteenth Amendment) Rules, 1990, w.e.f. 29-3-1990. It was inserted by the Income-tax (Eighth Amendment) Rules, 1990, w.e.f. 29-3-1990.

[331]Inserted by the Income-tax (First Amendment) Rules, 1995, w.e.f. 6-1-1995.

[332]Inserted by the Income-tax (Fifteenth Amendment) Rules, 1998, w.e.f. 17-9-1998.

[333]Inserted by the Income-tax (Tenth Amendment) Rules, 2006, w.r.e.f. 26-11-1999.

[334]Inserted by the Income-tax (Second Amendment) Rules, 2007, w.e.f. 1-4-2007.

[335]Inserted by the Income-tax (Thirteenth Amendment) Rules, 1999, w.e.f. 2-6-1999.

[336]Omitted by the Income-tax (Third Amendment) Rules, 1973, w.e.f. 1-4-1974. Prior to omission, it was amended by the Income-tax (Third Amendment) Rules, 1964; the Income-tax (Third Amendment) Rules, 1967 and the Income-tax (Second Amendment) Rules, 1968, w.e.f. 18-3-1968.

[337]Omitted by the Income-tax (Third Amendment) Rules, 1976, w.e.f. 1-4-1976. It was inserted by the Income-tax (Fourth Amendment) Rules, 1968 and amended by the Income-tax (Second/Third Amendment) Rules, 1970.

[338]Omitted by the Income-tax (Fifth Amendment) Rules, 1996, w.r.e.f. 1-4-1993. It was inserted by the Income-tax (Ninth Amendment) Rules, 1990, w.e.f. 11-4-1990.

[339]

Inserted by the Income-tax (Fourteenth Amendment) Rules, 1993, w.e.f. 6-9-1993, as amended by Notification No. SO 721(E), dated 27-9-1993.

[340]See section 295(2)(g).

[341]

Inserted by the Income-tax (Twenty-second Amendment) Rules, 2002, w.r.e.f. 3-2-2002.

[342]Inserted by the Income-tax (Twenty-sixth Amendment) Rules, 2002, w.e.f. 29-11-2002.

[343]Inserted by the Income-tax (Tenth Amendment) Rules, 1996, w.e.f. 1-4-1997. See also rule 18BBD to the same effect.

[344]Inserted by the Income-tax (Fifth Amendment) Rules, 1974, w.e.f. 2-10-1974.

[345]Inserted by the Income-tax (Sixth Amendment) Rules, 1977, w.e.f. 1-4-1978.

[346]Substituted by the Income-tax (Tenth Amendment) Rules, 1986, w.e.f. 1-4-1987. It was inserted by the Income-tax (Seventh Amendment) Rules, 1982, w.e.f. 1-4-1983.

[347]Marginal heading was substituted for "Form of reports for claiming deduction under section 80HHB or under section 80HHC or under section 80HHD" by the Income-tax (Eleventh Amendment) Rules, 1989, w.e.f. 30-11-1989 which was earlier substituted for the original marginal heading, as above, by the Income-tax (Fifth Amendment) Rules, 1989, w.e.f. 18-5-1989.

[348]Inserted by the Income-tax (Second Amendment) Rules, 1999, w.e.f. 15-1-1999.

[349]Inserted by the Income-tax (Twelfth Amendment) Rules, 1999, w.e.f. 1-6-1999.

[350]Substituted by the Income-tax (Second Amendment) Rules, 1989, w.e.f. 1-4-1989.

[351]Inserted by the Income-tax (Twenty-first Amendment) Rules, 2003, w.e.f. 25-9-2003.

[352]Inserted by the Income-tax (Fifth Amendment) Rules, 1989, w.e.f. 18-5-1989.

[353]Inserted by the Income-tax (Eleventh Amendment) Rules, 1989, w.e.f. 30-11-1989.

[354]Inserted by the Income-tax (Sixth Amendment) Rules, 1992, w.e.f. 1-4-1992.

[355]Inserted by the Income-tax (Fourth Amendment) Rules, 1992, w.r.e.f. 1-4-1991.

[356]Inserted by the Income-tax (Twenty-second Amendment) Rules, 1998, w.e.f. 23-10-1998.

[357]Inserted by the Income-tax (Twenty-third Amendment) Rules, 1998, w.e.f. 23-10-1998.

[358]Inserted by the Income-tax (Eighteenth Amendment) Rules, 1999, w.e.f. 1-4-2000.

[359]

Substituted by the Income-tax (Twenty-third Amendment) Rules, 2002, w.e.f. 6-9-2002, as corrected by the Income-tax (Ninth Amendment) Rules, 2003. Prior to the substitution, rule 18BBB, as inserted by the Income-tax (Seventh Amendment) Rules, 1983, w.e.f. 19-8-1983, read as under:

"18BBB. Form of audit report for claiming deduction under section 80-I 1[or section 80-IA].—The report of the audit of the accounts of an assessee, other than a company or a co-operative society, which is required to be furnished under sub-section (7) of section 80-I 2[or sub-section (7) of section 80-IA] shall be in Form No. 10CCB."

1 Inserted by the Income-tax (Seventh Amendment) Rules, 1992, w.e.f. 27-3-1992.

2 Substituted for "or sub-section (8) of section 80-IA" by the Income-tax (Fifteenth Amendment) Rules, 1999, w.e.f. 1-4-2000. The substituted words were inserted by the Income-tax (Seventh Amendment) Rules, 1992, w.e.f. 27-3-1992.

[360]Inserted by the Income-tax (Third Amendment) Rules, 2005, w.e.f. 4-2-2005.

[361]Inserted by the Income-tax (Third Amendment) Rules, 2005, w.e.f. 4-2-2005.

[362]Ibid.

[363]Substituted by the Income-tax (Nineteenth Amendment) Rules, 1999, w.e.f. 1-4-2000. Rule 18BBC was inserted by the Income-tax (Seventh Amendment) Rules, 1992, w.e.f. 27-3-1992 and amended by the Income-tax (Eighth Amendment) Rules, 1998, w.e.f. 29-5-1998.

[364]Inserted by the Income-tax (Fifth Amendment) Rules, 1996, w.e.f. 21-11-1996. See also rule 18AAB to the same effect.

[365]Inserted by the Income-tax (Third Amendment) Rules, 1998, w.e.f. 4-2-1998.

[366]Substituted for "(7A) of section 80-IA" by the Income-tax (Sixteenth Amendment) Rules, 1999, w.e.f. 1-4-2000.

[367]

Substituted by the Income-tax (First Amendment) Rules, 2008, w.e.f. 8-1-2008. Prior to the substitution, rule 18C, as inserted by the Income-tax (Twenty-sixth Amendment) Rules, 1998, w.e.f. 24-12-1998, read as under:

"18C. 1[Eligibility of Industrial Parks and Special Economic Zones for benefits under section 80-IA(4)(iii)] of the Income-tax Act, 1961.—(1) The undertaking shall begin to operate an industrial park during the period beginning on the 1st day of April, 1997 and ending on the 31st day of March, 2002.

2[(1A) The undertaking shall begin to develop or develop and operate or maintain and operate a special economic zone any time during the period beginning on the 1st day of April, 2001 and ending on 31st day of March, 2006.]

(2) The undertaking shall be duly approved by the Ministry of 3[Commerce and] Industry in the Central Government under the scheme for industrial park 4[or special economic zones] notified by that Ministry.

(3) The undertaking shall continue to fulfil the conditions envisaged in the scheme.

(4) On approval under sub-rule (2), the Central Board of Direct Taxes, shall notify industrial parks for benefit under section 80-IA."

Earlier, rule 18C was inserted by the Income-tax (Third Amendment) Rules, 1975, w.e.f. 1-4-1976 and omitted by the Income-tax (Fifth Amendment) Rules, 1996, w.r.e.f. 1-4-1989.

1 Substituted for "Eligibility of Industrial Parks for benefits under section 80-IA(4D)" by the Income-tax (Sixteenth Amendment) Rules, 2002, w.r.e.f. 1-4-2001.

2 Inserted by the Income-tax (Sixteenth Amendment) Rules, 2002, w.r.e.f. 1-4-2001.

3 Ibid.

4 Ibid.

[368]Inserted by the Income-tax (First Amendment) Rules, 2001, w.e.f. 31-1-2001.

[369]Inserted by the Income-tax (Twenty-seventh Amendment) Rules, 2002, w.e.f. 1-4-2002.

[370]Inserted by the Income-tax (Eighth Amendment) Rules, 2004, w.r.e.f. 1-4-2002.

[371]Inserted by the Income-tax (Fifth Amendment) Rules, 2005, w.e.f. 17-2-2005.

[372]Inserted by the Income-tax (Fifteenth Amendment) RUles, 2007, w.e.f. 1-4-2008.

[373]

Omitted by the Income-tax (Fifth Amendment) Rules, 1989, w.e.f. 18-5-1989. Prior to the omission, rule 19 was amended by the Income-tax (Amendment) Rules, 1967, w.e.f. 1-4-1967 and Income-tax (Second Amendment) Rules, 1968, w.r.e.f. 1-4-1962.

[374]Omitted by the Income-tax (Thirty-second Amendment) Rules, 1999, w.e.f. 19-11-1999. Earlier, rule 19A was inserted by the Income-tax (Second Amendment) Rules, 1968, w.e.f. 1-4-1968 and amended by the Income-tax (Third Amendment) Rules, 1971, w.e.f. 1-4-1972.

[375]Inserted by the Income-tax (Twenty-first Amendment) Rules, 1998, w.e.f. 23-10-1998.

[376]Inserted by the Income-tax (Nineteenth Amendment) Rules, 2003, w.r.e.f. 1-4-2003.

[377]Inserted by the Income-tax (Eighteenth Amendment) Rules, 2003, w.e.f. 5-9-2003.

[378]Inserted by the Income-tax (Twenty-sixth Amendment) Rules, 2003, w.e.f. 13-11-2003.

[379]Inserted by the Income-tax (Sixth Amendment) Rules, 1996, w.e.f. 22-11-1996. As originally enacted, rule 20 was amended by the Income-tax (Amendment) Rules, 1967 and Income-tax (Second Amendment) Rules, 1968, w.e.f. 1-4-1968 and omitted by the Income-tax (Fifth Amendment) Rules, 1989, w.e.f. 18-5-1989.

[380]Inserted by the Income-tax (Twenty-fourth Amendment) Rules, 2005, w.e.f. 3-11-2005.

[381]Inserted by the Income-tax (Twenty-fourth Amendment) Rules, 2005, w.e.f. 3-11-2005.

[382]Substituted for "public issue" by the Income-tax (Second Amendment) Rules, 1997, w.r.e.f. 22-11-1996.

[383]

Substituted by the Income-tax (Twenty-fourth Amendment) Rules, 2005, w.e.f. 3-11-2005. Prior to the substitution, the Explanation, as inserted by the Income-tax (Second Amendment) Rules, 1997, w.r.e.f. 22-11-1996, read as under:

"Explanation.—For the purpose of this rule, "the eligible issue of capital" means an issue referred to in clause (i) of Explanation of clause (xvi) in sub-section (2) of section 88."

[384]Inserted by the Income-tax (Eleventh Amendment) Rules, 1996, w.e.f. 26-12-1996.

[385]Inserted by the Income-tax (Twenty-fourth Amendment) Rules, 2005, w.e.f. 3-11-2005.

[386]Inserted by the Income-tax (Twenty-fourth Amendment) Rules, 2005, w.e.f. 3-11-2005.

[387]Inserted by the Income-tax (Twenty-fourth Amendment) Rules, 2005, w.e.f. 3-11-2005.

[388]Inserted by the Income-tax (First Amendment) Rules, 2005, w.e.f. 6-1-2005.

[389]Omitted by the Income-tax (Fifth Amendment) Rules, 1989, w.e.f. 18-5-1989. As originally enacted, it was amended by the Income-tax (Second Amendment) Rules, 1962.

[390]Inserted by Income-tax (Amendment) Rules, 1972, w.r.e.f. 1-4-1971.

[391]See Sundaram Motors (P) Ltd v Ameerjan (1985) 152 ITR 64 (SC); Joshi (KC) v Union of India (1987) 163 ITR 597 (SC); Sant Raj v Singla (OP) (1987) 163 ITR 588 (SC); Satyapal v Wool & Woollen Export Promotion Council (1988) 169 ITR 507 (Bom). An assessee is also entitled to relief under section 89(1) on excess over amount exempt under section 10(10C): CIT v Venugopal (GV) (2005) 273 ITR 307 (Mad). See also Letter F. No. 7/60/65-ITJ, dated 3-11-1965; Circular Nos. 331, dated 22-3-1982 and 431, dated 12-9-1985.

[392]

Substituted by the Income-tax (Twenty-first Amendment) Rules, 2002, w.e.f. 1-4-2002. Prior to the substitution, sub-rules (1) and (2) read as under:
"(1) Where, by reason of any portion of an assessee's salary being paid in arrears or in advance or by reason of his having received in any one financial year salary for more than twelve months or a payment which under the provisions of clause (3) of section 17 is a profit in lieu of salary, his income is assessed at a rate higher than that at which it would otherwise have been assessed, the relief to be granted under sub-section (1) of section 89 shall be—
(a)	where any portion of the assessee's salary is received in arrears or in advance, in accordance with the provisions of sub-rule (2);
(b)	where the payment is in the nature of gratuity in respect of past services of the assessee extending over a period of not less than five years, in accordance with the provisions of sub-rule (3);
(c)	where the payment is in the nature of compensation received by the assessee from his employer or former employer at or in connection with the termination of his employment after continuous service for not less than three years and where the unexpired portion of his term of employment is also not less than three years, in accordance with the provisions of sub-rule (4);
(d)	where the payment is in commutation of pension, in accordance with the provisions of sub-rule (5); and
(e)	where the payment is not in the nature of salary paid in arrears or in advance or gratuity in respect of past services or compensation received at or in connection with the termination of employment or in commutation of pension, in accordance with the provisions of sub-rule (6).
(2)(a) In a case referred to in clause (a) of sub-rule (1), the tax payable by the assessee on his total income of the previous year in which the salary is received in arrears or in advance (such salary and such previous year being hereafter in this sub-rule referred to respectively as the additional salary and the relevant previous year) shall be reduced by the amount, if any, by which the tax on the additional salary, calculated in the manner specified in clause (b), exceeds the tax or the aggregate tax on the additional salary, calculated in the manner specified in clause (c) or clause (d), as the case may be.
(b) Tax shall be calculated on the total income of the relevant previous year as reduced by the additional salary, as if the total income so reduced were the total income of the assessee, and the amount by which the tax so calculated falls short of the tax on the total income before such reduction shall, for the purposes of clause (a), be taken to be the tax on the additional salary under this clause.
(c) Where the additional salary relates to only one previous year, tax shall be calculated on the total income of the said previous year as increased by the additional salary, as if the total income so increased were the total income of the assessee, and the amount by which the tax so calculated exceeds the tax payable by the assessee in respect of the total income of the said previous year shall, for the purposes of clause (a), be taken to be the tax on the additional salary under this clause.
(d) Where the additional salary relates to more than one previous year,—
(i)	the previous years to which the additional salary relates and the amount relating to each such previous year shall first be ascertained;
(ii)	tax shall, then, be calculated on the total income of each such previous year as increased by the amount relating to such previous year ascertained under sub-clause (i), as if the total income so increased were the total income of that previous year, and
the amount by which the aggregate amount of tax in respect of the aforesaid previous years as calculated under sub-clause (ii) exceeds the aggregate amount of tax payable by the assessee in respect of the total income of the said previous years shall, for the purposes of clause (a), be taken to be the aggregate tax on the additional salary under this clause."

[393]Inserted by the Income-tax (Eighth Amendment) Rules, 1987, w.e.f. 29-10-1987.

[394]See section 192(2A).

[395]Substituted for "public sector undertaking" by the Income-tax (Ninth Amendment) Rules, 1991, w.e.f. 16-5-1991.

[396]Omitted by the Income-tax (Thirty-second Amendment) Rules, 1999, w.e.f. 19-11-1999. Rule 21B was inserted by the Income-tax (Amendment) Rules, 1972, w.r.e.f. 1-4-1971.

[397]This Part needs to be omitted consequent upon the change in the scheme of taxation of firms doing away with the registration of firms from assessment year 1993-94.

[398]See Sri Ramamohan Motor Service v CIT (1991) 188 ITR 212 (SC).

[399]See CIT v Damodaran Nair (K) (1981) 130 ITR 682 (Ker); Mahadevasa & Co (DS) v CIT (1984) 145 ITR 187 (Kar); CIT v Amar Singh Gowamal & Sons (1986) 161 ITR 315 (SC).

[400]See Benares Cloth Dealers v ITO (1965) 51 ITR 507 (All); Rampatmal Tirkha Ram v CIT (1967) 65 ITR 596 (Raj); Kishore Chand Ramji Dass v CIT (1970) 77 ITR 76 (Pun); Athitope Estate v State of Karnataka (1984) 150 ITR 490 (Kar); CIT v Delhi Colonizers (1985) 154 ITR 50 (Del); CIT v Jagannath Pyarelal (1985) 156 ITR 220 (SC); CIT v JB Coal Traders (1987) 164 ITR 450 (Pat); CIT v Toolsidass Jewraj (1991) 192 ITR 568 (Cal).

[401]See CIT v Gelli Krishnamurthy (1940) 8 ITR 21 (Mad); Ravulu Subha Rao v CIT (1956) 30 ITR 163 (SC); Dutta (SK) v Board of Agricultural Income-tax (1964) 51 ITR 104 (Ass); CIT v Jagannath Pyarelal (1985) 156 ITR 220 (SC).

[402]See Dilipsinhji P Desai & Bros v CIT (1964) 54 ITR 91 (Guj); Rampatmal Tirkha Ram v CIT (1967) 65 ITR 596 (Raj); Safari Wines v CIT (1988) 169 ITR 695 (AP); CIT v Sriram Industrial Distribution (1989) 176 ITR 180 (Cal).

[403]Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[404]Ibid.

[405]See Dilipsinhji P Desai & Bros v CIT (1964) 54 ITR 91 (Guj); CIT (Addl) v Sunderlal Banwarilal (1985) 156 ITR 617 (Del).

[406]See CIT (Addl) v Ratnaswamy & Sons (SV) (1977) 106 ITR 154 (Kar); CIT v Toolsidass Jewraj (1991) 192 ITR 568 (Cal); CIT v Swastik Industries (1994) 210 ITR 399 (Pat); CIT v Chidambarathanu (S) (1997) 223 ITR 557 (Mad).

[407]Inserted by the Income-tax (Third Amendment) Rules, 1976, w.e.f. 1-4-1976.

[408]Substituted by the Income-tax (Eighth Amendment) Rules, 1977, w.e.f. 1-11-1977. The original rule was earlier amended by the Income-tax (Third Amendment) Rules, 1967 and Income-tax (Second Amendment) Rules, 1968.

[409]See section 192(6).

[410]Inserted by the Income-tax (First Amendment) Rules, 1993, w.e.f. 5-1-1993.

[411]Ibid.

[412]

Substituted by the Income-tax (Twenty-second Amendment) Rules, 2001, w.r.e.f. 1-4-2001. Prior to the substitution, rule 26A, as inserted by the Income-tax (Eighth Amendment) Rules, 1987, w.e.f. 29-10-1987, read as under:

"26A. Furnishing of particulars of income under the head "Salaries" received from other employer(s) for deduction of tax at source.—The assessee may furnish to the person responsible for making the payment referred to in sub-section (1) of section 192, the details of the income under the head "Salaries" due or received by him from the other employer or employers referred to in sub-section (2) of that section and of any tax deducted at source from such income in Form No. 12B."

[413]See section 192(2).

[414]

Substituted by the Income-tax (Twenty-fifth Amendment) Rules, 2002, w.e.f. 1-6-2002. Prior to the substitution, clause (b) read as under:
"(b)	Form No. 12BA, if the amount of salary paid or payable to the employee is more than one lakh and fifty thousand rupees."

[415]

Substituted by the Income-tax (Twenty-fourth Amendment) Rules, 2003, w.e.f. 1-10-2003. Prior to the substitution, rule 26B, as inserted by the Income-tax (Eighth Amendment) Rules, 1987, w.e.f. 29-10-1987, read as under:

"26B. Furnishing of particulars of income under heads of income other than "Salaries" for deduction of tax at source.—The assessee may send to the person responsible for making the payment referred to in sub-section (1) of section 192, the particulars of any income chargeable under any head of income other than "Salaries" (not being a loss under any such head 1[other than the loss under the head "Income from house property"]), received by the assessee for the same financial year, and of any tax deducted on such income in Form No. 12C."

1 Inserted by the Income-tax (Fourteenth Amendment) Rules, 1998, w.e.f. 14-9-1998.

[416]See section 192(2B).

[417]Substituted for "sections 80B, 194, 195, 236 and 286" by the Income-tax (Third Amendment) Rules, 1996, w.e.f. 2-7-1996. Earlier, "80B" was inserted by the Income-tax (Second Amendment) Rules, 1968.

[418]Substituted by the Income-tax (Third Amendment) Rules, 1988, w.e.f. 9-6-1988. Prior to the substitution, rule 28 was amended by the Income-tax (Fifth Amendment) Rules, 1967; Income-tax (Third Amendment) Rules, 1972, w.e.f. 1-9-1972; Income-tax (Third Amendment) Rules, 1973, w.e.f. 15-7-1973; Income-tax (Sixth Amendment) Rules, 1977, w.e.f. 1-10-1977 and Income-tax (Fifth Amendment) Rules, 1978, w.e.f. 1-6-1978.

[419]The words "other than a company", omitted by the Income-tax (Twentieth Amendment) Rules, 1992, w.e.f. 23-12-1992.

[420]

Omitted by the Income-tax (Twenty-fourth Amendment) Rules, 2003, w.e.f. 1-10-2003. Prior to the omission, sub-rule (2) read as under:

"(2) An application by a contractor or a sub-contractor for a certificate under sub-section (4) of section 194C in respect of income comprised in payments to contractors and sub-contractors shall be made in Form No. 13C."

[421]Omitted by the Income-tax (Tenth Amendment) Rules, 1993, w.e.f. 16-6-1993.

[422]Omitted by the Income-tax (Twenty-fourth Amendment) Rules, 2003, w.e.f. 1-10-2003. Sub-rule (4) was inserted by the Income-tax (Twentieth Amendment) Rules, 1992, w.e.f. 23-12-1992.

[423]Omitted by the Income-tax (Twenty-fourth Amendment) Rules, 2003, w.e.f. 1-10-2003. Sub-rule (5) was inserted by the Income-tax (Seventeenth Amendment) Rules, 1995, w.e.f. 1-7-1995.

[424]Omitted by the Income-tax (Third Amendment) Rules, 1996, w.e.f. 2-7-1996. Rule 28A was inserted by the Income-tax (Sixth Amendment) Rules, 1977, w.e.f. 1-10-1977.

[425]Inserted by the Income-tax (Third Amendment) Rules, 1988, w.e.f. 9-6-1988.

[426]Substituted for ", other than a company, under sub-rule (1) of rule 28, may issue a certificate in accordance with the provisions of clause (a) of sub-section (1) of section 197" by the Income-tax (Twentieth Amendment) Rules, 1992, w.e.f. 23-12-1992.

[427]The words "or sub-rule (3)" omitted by the Income-tax (Tenth Amendment) Rules, 1993, w.e.f. 16-6-1993.

[428]Omitted by the Income-tax (Twenty-fourth Amendment) Rules, 2003, w.e.f. 1-10-2003.

[429]Inserted by the Income-tax (Third Amendment) Rules, 2004, w.e.f. 1-4-2004.

[430]Substituted for "sub-rule (2)" by the Income-tax (Tenth Amendment) Rules, 2004, w.r.e.f. 1-4-2004.

[431]

Substituted by the Income-tax (Tenth Amendment) Rules, 1993, w.e.f. 16-6-1993. Earlier, the above opening words were substituted by the Income-tax (Twentieth Amendment) Rules, 1992, w.e.f. 23-12-1992. It was also amended by the Income-tax (Amendment) Rules, 1967; Income-tax (Sixth Amendment) Rules, 1977, w.e.f. 1-10-1977 and Income-tax (Third Amendment) Rules, 1988, w.e.f. 9-6-1988.

[432]Substituted for "qualify for deduction under the provisions of section 80F" by the Income-tax (Twentieth Amendment) Rules, 1992, w.e.f. 23-12-1992, with the effect of revoking the amendment made by the Income-tax (Third Amendment) Rules, 1988, w.e.f. 9-6-1988. Since section 80F was not introduced in the Income-tax Act, the present amendment should also have been withdrawn w.e.f. 9-6-1988.

[433]Substituted for "Income-tax Officer" by the Income-tax (Third Amendment) Rules, 1988, w.e.f. 9-6-1988.

[434]Substituted for "(2)" by the Income-tax (Third Amendment) Rules, 1988, w.e.f. 9-6-1988.

[435]The words "or sub-rule (3), as the case may be," omitted by the Income-tax (Tenth Amendment) Rules, 1993, w.e.f. 16-6-1993.

[436]Sub-rule (2) of rule 29 does not bar an assessee from making an application for a fresh certificate for the succeeding period some time before the expiry of the earlier certificate: see Letter F. No. 1(54)-63/TPL, dated 18 May, 1963.

[437]Substituted for "Income-tax Officer" by the Income-tax (Third Amendment) Rules, 1988, w.e.f. 9-6-1988.

[438]

Omitted by the Income-tax (Twenty-fourth Amendment) Rules, 2003, w.e.f. 1-10-2003. Prior to the omission, sub-rule (5), read as under:

"(5) The certificate shall be issued in Form No. 15."

[439]

Substituted by the Income-tax (Nineteenth Amendment) Rules, 2003, w.e.f. 1-4-2003. Prior to the substitution, rule 29A, as inserted by the Income-tax (Fifth Amendment) Rules, 1997, w.e.f. 19-3-1997, read as under:

"29A. Form of certification to be filled with the return of income for claiming deduction under sections 80R, 80RR and 80RRA.—The certificate referred to in sections 80R, 80RR and 80RRA shall be in Form No. 10H."

Earlier, rule 29A, dealing with a different subject, was inserted by the Income-tax (Fifth Amendment) Rules, 1967 and omitted by the Income-tax (Twelfth Amendment) Rules, 1992.

[440]Inserted by the Income-tax (Eleventh Amendment) Rules, 1999, w.e.f. 1-6-1999.

[441]Heading improvised — Not provided in the Rules.

[442]Inserted by the Income-tax (Third Amendment) Rules, 1970.

[443]Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[444]Ibid.

[445]

Omitted by the Income-tax (Twenty-fourth Amendment) Rules, 2003, w.e.f. 1-10-2003. Prior to the omission, sub-rule (6), as originally enacted, read as under:

"(6) The certificate shall be in Form No. 15E."

[446]

Substituted by the Income-tax (Eighth Amendment) Rules, 2003, w.e.f. 9-6-2003. Prior to the substitution, rule 29C, as inserted by the Income-tax (Fifth Amendment) Rules, 1982, w.e.f. 21-6-1982 and amended from time to time, read as under:

"29C. Declaration by person claiming receipt of certain incomes without deduction of tax.—1[* * *]

(2) A declaration under sub-section (1) of section 197A by an individual, who is resident in India, for payment of dividend without deduction of tax under section 194 shall be in Form No. 15G and shall be verified in the manner indicated therein.

2[(3) A declaration under sub-section (1A) of section 197A by a person (not being a company or firm) for payment, without deduction of tax at source, of interest on securities under section 193, interest other than "interest on securities" under section 194A or income in respect of units under section 194K, as the case may be, shall be in Form No. 15H and shall be verified in the manner indicated therein.]

3[(3A) A declaration under sub-section (1) of section 197A by an individual, being resident in India, for payment of any amount referred to in clause (a) of sub-section (2) of section 80CCA without deduction of tax under section 194EE shall be in Form No. 15-I and shall be verified in the manner indicated therein.]

(4) The declaration referred to in sub-rule (1) or sub-rule (2) or sub-rule (3) 4[or sub-rule (3A)] shall be furnished in duplicate to the person responsible for paying the "Interest on securities" or dividend or 5[interest other than "Interest on securities" or 6[income in respect of units], as the case may be, any amount referred to in clause (a) of sub-section (2) of section 80CCA].

(5) The person referred to in sub-rule (4) shall deliver or cause to be delivered to the Chief Commissioner or Commissioner one copy of the declaration referred to in sub-rule (1) or sub-rule (2) or 7[sub-rule (3) or, as the case may be, sub-rule (3A)] on or before the seventh day of the month next following the month in which the declaration is furnished to him.

Explanation.—For the purposes of sub-rule (5), Chief Commissioner or Commis-sioner means the Chief Commissioner or Commissioner to whom the Assessing Officer having jurisdiction to assess the person referred to in sub-rule (4) is subordinate."

1 Omitted by the Income-tax (Thirty-second Amendment) Rules, 1999, w.e.f. 19-11-1999. Prior to the omission, sub-rule (1) read as under:

"(1) A declaration under sub-section (1) of section 197A by an individual, who is resident in India, for payment of "Interest on securities" without deduction of tax under section 193 shall be in Form No. 15F and shall be verified in the manner indicated therein."

2 Substituted by the Income-tax (Thirty-second Amendment) Rules, 1999, w.e.f. 19-1-1999. Prior to the substitution, sub-rule (3) read as under:

"(3) A declaration under sub-section (1A) of section 197A by a person (not being a company or firm) for payment of interest other than "interest on securities" without deduction of tax at source under section 194A or income in respect of units without deduction of tax at source under section 194K, as the case may be, shall be in Form number 15H and shall be verified in the manner indicated therein."

Earlier, sub-rule (3) was substituted by the Income-tax (Seventh Amendment) Rules, 1995, w.e.f. 1-7-1995. It was also amended by the Income-tax (Twelfth Amendment) Rules, 1992, w.e.f. 1-6-1992.

3 Inserted by the Income-tax (Eleventh Amendment) Rules, 1991, w.e.f. 1-10-1991.

4 Ibid.

5 Substituted for ", as the case may be, interest other than 'interest on securities'", ibid.

6 Inserted by the Income-tax (Seventh Amendment) Rules, 1995, w.e.f. 1-7-1995.

7 Substituted for ", as the case may be, sub-rule (3)" by the Income-tax (Eleventh Amendment) Rules, 1991, w.e.f. 1-10-1991.

[447]Inserted by the Income-tax (Fourteenth Amendment) Rules, 2003, w.e.f. 1-8-2003.

[448]Inserted by the Income-tax (Fourteenth Amendment) Rules, 2003, w.e.f. 1-8-2003.

[449]Inserted by the Income-tax (Fourteenth Amendment) Rules, 2005, w.e.f. 17-6-2005.

[450]Heading improvised by the editors.

[451]Inserted by the Income-tax (Twenty-fifth Amendment) Rules, 2002, w.e.f. 1-6-2002.

[452]

Substituted by the Income-tax (Twelfth Amendment) Rules, 2003, w.e.f. 31-7-2003. Prior to the substitution, sub-rule (1), as substituted by the Income-tax (Fifth Amendment) Rules, 1967 and amended from time to time, read as under:
"[(1) All sums deducted in accordance with the provisions of sections 192 to 194, 1[section 194A, section 194B, 2[section 194BB,] section 194C], 3[section 194D, section 194E, 4[section 194EE, section 194F, section 194G, section 194H, 5[section 194-I,] 6[section 194J, section 194K,] section 195, section 196A 7[, section 196B 8[, section 196C and section 196D]]]] shall be paid to the credit of the Central Government—
(a)	in the case of deduction by or on behalf of the Government, on the same day;
(b)	in all other cases,—

9[(i)    in respect of sums deducted in accordance with the provisions of 10[section 193, section 194A, section 194C, 11[section 194D, section 194E, 12[section 194G, section 194H, 13[section 194-I,] 14[section 194J, section 194K,] section 195, section 196A 15[, section 196B 16[, section 196C and section 196D]]]],—]

(1)    17[where the income by way of interest on securities referred to in section 193 or the income by way of interest referred to in section 194A or the sum referred to in section 194C or the income by way of insurance commission referred to in section 194D 18[or the payment to non-resident sportsmen or sports associations referred to in section 194E 19[or the income by way of commission, remuneration or prize on sale of lottery tickets referred to in section 194G or the income by way of commission or brokerage referred to in section 194H 20[or the income by way of rent referred to in section 194-I] 21[or the income by way of fees for professional or technical services referred to in section 194J] or the interest or any other sum referred to in section 195 or the income of a foreign company referred to in sub-section (2) of section 196A or the income from units referred to in section 196B]]] 22[or the income from foreign currency bonds or shares of an Indian company referred to in section 196C] 23[or the income of Foreign Institutional Investors from securities referred to in section 196D] is credited by a person 24[to the account of the payee as on the date up to which the accounts of such person] are made, within two months of the expiration of the month in which that date falls;

(2)    in any other case, within one week from the last day of the month in which the deduction is made; and]

(ii)    in respect of sums deducted in accordance with the other provi-sions, 25[* * *] within one week from the date of such deduction:

Provided that the 26[Assessing Officer] may, in special cases, and with the approval of the 27[Deputy Commissioner],—    

(a)    in cases falling under clause (i), permit any person to pay the income-tax 28[* * *] deducted from any income by way of interest, other than 29[income by way of interest on securities] or any income by way of insurance commission 30[or any income by way of commission or brokerage referred to in section 194H] quarterly on July 15th, October 15th, January 15th and April 15th, and

(b)    in cases falling under clause (ii), permit an employer to pay income-tax deducted from any income chargeable under the head "salaries" quarterly on June 15th, September 15th, December 15th and March 15th."

1 Substituted for "section 194A" by the Income-tax (Third Amendment) Rules, 1972, w.e.f. 9-9-1972.

2 Inserted by the Income-tax (Fifth Amendment) Rules, 1978, w.e.f. 1-6-1978.

3 Substituted for "section 194D and section 195" by the Income-tax (Sixth Amendment) Rules, 1991, w.e.f. 28-2-1991. It was amended earlier by the Income-tax (Third Amendment) Rules, 1973, w.e.f. 15-7-1973.

4 Substituted for "section 195 and section 196A" by the Income-tax (Eleventh Amendment) Rules, 1991, w.e.f. 1-10-1991.

5 Inserted by the Income-tax (Fourth Amendment) Rules, 1994, w.e.f. 1-6-1994.

6 Inserted by the Income-tax (Twelfth Amendment) Rules, 1995, w.e.f. 1-7-1995.

7 Substituted for "and section 196B" by the Income-tax (Eleventh Amendment) Rules, 1992, w.e.f. 1-6-1992.

8 Substituted for "and section 196C" by the Income-tax (Tenth Amendment) Rules, 1993, w.e.f. 16-6-1993.

9 Substituted by the Income-tax (Third Amendment) Rules, 1972, w.e.f. 1-9-1972. It was earlier substituted by the Income-tax (Second Amendment) Rules, 1968.

10 Substituted for "section 194A, section 194C and section 194D" by the Income-tax (Twelfth Amendment) Rules, 1990, w.e.f. 8-6-1990. These words were earlier substituted by the Income-tax (Third Amendment) Rules, 1973, w.e.f. 15-7-1973.

11 Substituted for "section 194D and section 195" by the Income-tax (Sixth Amendment) Rules, 1991, w.e.f. 28-2-1991. It was earlier amended by the Income-tax (Twelfth Amendment) Rules, 1990, w.e.f. 8-6-1990.

12 Substituted for "section 195 and section 196A" by the Income-tax (Eleventh Amendment) Rules, 1991, w.e.f. 1-10-1991.

13 Inserted by the Income-tax (Fourth Amendment) Rules, 1994, w.e.f. 1-6-1994.

14 Inserted by the Income-tax (Twelfth Amendment) Rules, 1995, w.e.f. 1-7-1995.

15 Substituted for "and section 196B" by the Income-tax (Eleventh Amendment) Rules, 1992, w.e.f. 1-6-1992.

16 Substituted for "and section 196C" by the Income-tax (Tenth Amendment) Rules, 1993, w.e.f. 16-6-1993.

17 Substituted for "where the income by way of interest referred to in section 194A or the sum referred to in section 194C or the income by way of insurance commission referred to in section 194D" by the IT (Twelfth Amendment) Rules, 1990, w.e.f. 8-6-1990. Earlier, it was amended by the IT (Third Amendment) Rules, 1973, w.e.f. 15-7-1973.

18 Substituted for "or the interest or any other sum referred to in section 195" by the Income-tax (Sixth Amendment) Rules, 1991, w.e.f. 28-2-1991.

19 Substituted for "or the interest or any other sum referred to in section 195 or the income of a foreign company referred to in sub-section (2) of section 196A" by the Income-tax (Eleventh Amendment) Rules, 1991, w.e.f 1-10-1991.

20 Inserted by the Income-tax (Fourth Amendment) Rules, 1994, w.e.f. 1-6-1994.

21 Inserted by the Income-tax (Twelfth Amendment) Rules, 1995, w.e.f. 1-7-1995.

22 Inserted by the Income-tax (Eleventh Amendment) Rules, 1992, w.e.f. 1-6-1992.

23 Inserted by the Income-tax (Tenth Amendment) Rules, 1993, w.e.f. 16-6-1993.

24 Substituted for "carrying on a business or profession to the account of the payee as on the date up to which the accounts of such business or profession" by the Income-tax (Third Amendment) Rules, 1996, w.e.f. 2-7-1996.

25 The words "within one week from the date of receipt of the challan by the person making the deduction, who shall make an application to the Assessing Officer" omitted by the Income-tax (Twelfth Amendment) Rules, 1990, w.e.f. 8-6-1990. Earlier, in this sub-clause, the words "the date of such deduction or" were omitted and the words "who shall make an application to the Income-tax Officer within one week from the date of such deduction" were substituted for ", as the case may be" by the Income-tax (Sixth Amendment) Rules, 1988, w.e.f. 12-7-1988 and later the words "Assessing Officer" were substituted for "Income-tax Officer' by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

26 Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

27 Substituted for "Inspecting Assistant Commissioner" by the Income-tax (Sixth Amendment) Rules, 1988, w.e.f. 12-7-1988.

28 The words "and super-tax" omitted by the Income-tax (Amendment) Rules, 1967.

29 Substituted for "income chargeable under the head "Interest on securities" by the Income-tax (Twelfth Amendment) Rules, 1990, w.e.f. 8-6-1990. Clause (a) was earlier amended by the Income-tax (Third Amendment) Rules, 1973, w.e.f. 15-7-1973.

30 Inserted by the Income-tax (Eleventh Amendment) Rules, 1991, w.e.f. 1-10-1991.

[453]Inserted by the Income-tax (Sixth Amendment) Rules, 2004, w.e.f. 30-11-2004.

[454]Inserted by the Income-tax (Twenty-fifth Amendment) Rules, 2002, w.e.f. 1-6-2002.

[455]Inserted by the Income-tax (Twenty-fifth Amendment) Rules, 2002, w.e.f. 1-6-2002.

[456]Substituted for "the Government treasury or office of the Reserve Bank of India or of the State Bank of India" by the Income-tax (Sixth Amendment) Rules, 1981, w.e.f. 19-6-1981.

[457]

The words ", blank copies of which shall be supplied by the Assessing Officer on request for the purpose" omitted by the Income-tax (Twelfth Amendment) Rules, 1990, w.e.f. 8-6-1990. Earlier, the words "Assessing Officer" were substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[458]Proviso omitted by the Income-tax (Twelfth Amendment) Rules, 1990, w.e.f. 8-6-1990. It was amended by the Income-tax (Sixth Amendment) Rules, 1988, w.e.f. 12-7-1988 and the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[459]Substituted for "Provided further that" by the Income-tax (Twelfth Amendment) Rules, 1990, w.e.f. 8-6-1990.

[460]Inserted by the Income-tax (Twenty-fifth Amendment) Rules, 2002, w.e.f. 1-6-2002.

[461]Substituted for "193, 194 and 195" by the Income-tax (Fifth Amendment) Rules, 1967.

[462]Substituted for "194A" by the Income-tax (Third Amendment) Rules, 1972, w.e.f. 1-9-1972.

[463]Inserted by the Income-tax (Fifth Amendment) Rules, 1978, w.e.f. 1-6-1978.

[464]Substituted for "194D and 195" by the Income-tax (Sixth Amendment) Rules, 1991, w.e.f. 28-2-1991.

[465]

Substituted for "195 and 196A" by the Income-tax (Eleventh Amendment) Rules, 1991, w.e.f. 1-10-1991.

[466]

Inserted by the Income-tax (Fourth Amendment) Rules, 1994, w.e.f. 1-6-1994.

[467]Inserted by the Income-tax (Twelfth Amendment) Rules, 1995, w.e.f. 1-7-1995.

[468]Substituted for "and 196B" by the Income-tax (Eleventh Amendment) Rules, 1992, w.e.f. 1-6-1992.

[469]Substituted for "and 196C" by the Income-tax (Tenth Amendment) Rules, 1993, w.e.f. 16-6-1993.

[470]Substituted for "the Government treasury or office of the Reserve Bank of India or of the State Bank of India" by the Income-tax (Sixth Amendment) Rules, 1981, w.e.f. 19-6-1981.

[471]The words "blank copies of which shall be supplied by the Assessing Officer on request for the purpose," omitted by the Income-tax (Twelfth Amendment) Rules, 1990, w.e.f. 8-6-1990. Earlier, the words "Assessing Officer" were substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[472]

Omitted by the Income-tax (Twenty-fourth Amendment) Rules, 2003, w.e.f. 1-10-2003. Prior to the omission, rule 30A, as inserted by the Income-tax (Sixth Amendment) Rules, 1968, read as under:
"30A. Credit for tax deducted at source to a person other than the shareholder in certain circumstances.—(1) Subject to the provisions of sub-rule (2), where the dividend on any share is assessable as the income of a person other than the shareholder, any deduction made in accordance with section 194 and paid to the Central Government, shall be deemed to be a payment of tax on behalf of, and the credit in respect thereof shall be given to, such other person in the circumstances specified below, namely:—
(i)	where a company has a right to appoint any person or persons, or where any nominee or nominees of the company has or have been appointed, as a director or directors of any other body corporate, and shares owned by such company in such other body corporate, to an amount not exceeding the nominal value of the shares which are required to be held by a director thereof, are registered in the name of any such person or nominee;
(ii)	where a company owns any shares in its subsidiary and such shares are registered in the name or names of any nominee or nominees of the company, if and in so far as it is necessary so to do, to ensure that the number of members of the subsidiary is not reduced, where it is a public company, below seven, and where it is a private company, below two;
(iii)	where a corporation established by or under a Central, State or Provincial Act owns any shares in a company and such shares are registered in the name or names of any nominee or nominees of the corporation in the circumstances specified in clause (i) or clause (ii);
(iv)	where any person deposits, with any bank, including a co-operative bank or a land mortgage bank, any shares owned by him, for the collection of dividends thereon and such shares are registered in the name of the bank;
(v)	where any person deposits with any other person any shares owned by him, by way of security for the repayment of any loan or the performance of any obligation and such shares are held by, or on behalf of, any of the following, namely:—

(a)    the Government or the Reserve Bank of India or any body corporate owned by the Government, or the Reserve Bank of India, or in which not less than forty per cent of the shares are held (whether singly or taken together) by the Government or the Reserve Bank of India or a corporation owned by that bank;

(b)    a local authority;

(c)    the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), or any of its subsidiary banks;

(d)    any banking company, including a co-operative bank or a land mortgage bank;

(e)    the Industrial Finance Corporation of India, the Industrial Credit and Investment Corporation of India Ltd., the Madras Industrial and Investment Corporation of India Ltd. and the Refinance Corporation for Industry Ltd.;

(f)    a State Financial Corporation established under the State Financial Corporations Act, 1951 (63 of 1951);

(g)    an Industrial Development Corporation established in India by a State Government;

(h)    the Life Insurance Corporation of India established under the Life Insurance Corporation of India Act, 1956 (31 of 1956);

(i)    the Industrial Development Bank of India established under the Industrial Development Bank of India Act, 1964 (18 of 1964);

(vi)	where shares are held by a trustee appointed under a trust declared by a duly executed instrument in writing whether testamentary or otherwise [including any wakf deed which is valid under the Mussalman Wakf Validating Act, 1913 (6 of 1913)] and the dividend thereon is received by the trustee on behalf of, or for the benefit of, any person who is a beneficiary of the trust;
(vii)	where the shares owned by a firm are held in the name of any of its partners;
(viii)	where the shares owned by a Hindu undivided family are held in the name of the karta or any other adult member of the family;
(ix)	where the shares have been sold or otherwise transferred by the registered shareholder and action for registering the transfer in the name of the purchaser or other person has been taken in accordance with the provisions of section 108 of the Companies Act, 1956 (1 of 1956);
(x)	where the shares owned by a member of a recognised Stock Exchange in India deposited with the Stock Exchange in accordance with the regulations of the Exchange are registered in the names of the trustees of the Exchange or the bankers of the Exchange.
(2) The credit referred to in sub-rule (1) shall not be given unless the person entitled to such credit furnishes to the 1[Assessing Officer] a declaration in Form No. 15B made by him and the shareholder concerned, together with a certificate of deduction of tax at source in Form No. 19."
1 Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[473]Substituted by the Income-tax (Ninth Amendment) Rules, 1988, w.e.f. 1-4-1989. Prior to the substitution, rule 31 was amended by the Income-tax (Fifth Amendment) Rules, 1967; Income-tax (Third Amendment) Rules, 1972; Income-tax (Third Amendment) Rules, 1973, w.e.f. 15-7-1973 and Income-tax (Fifth Amendment) Rules, 1978, w.e.f. 1-6-1978.

[474]Inserted by the Income-tax (Twenty-fifth Amendment) Rules, 2002, w.e.f. 1-6-2002.

[475]Substituted by the Income-tax (Sixth Amendment) Rules, 1991, w.e.f. 28-2-1991.

[476]Where the tax deducted at source had been paid in time, the return in respect thereof was duly filed in time, no loss of revenue had occurred and none of the contractors had raised any grievance on account of late supply of certificates, the default was merely technical or venial in nature, penalty could not be imposed: HMT Ltd v CIT (2005) 274 ITR 544 (P&H).

[477]Inserted by the Income-tax (Twenty-fifth Amendment) Rules, 2002, w.e.f. 1-6-2002.

[478]See Circular Nos. 529, dated 13-2-1989; 555, dated 22-2-1990; 597, dated 27-3-1991; 749, dated 27-12-1996; 756, dated 10-10-1997; 758, dated 7-11-1997; 761, dated 13-1-1998 and 764, dated 20-2-1998. See also Circular Nos. 605, dated 12-6-1991; 607, dated 4-7-1991 and 625, dated 12-2-1992 directing that the TDS Certificates issued up to 31-3-1992 in the old (unified) Form No. 16 should continue to be accepted by the Assessing Officers in lieu of Form No. 16B. It is clarified that the unified Form No. 16 shall be accepted only for those categories of TDS for which the new Form No. 16B is prescribed at present. Form No. 16B shall also remain in force along with the old (unified) Form No. 16 and the tax deductors can use either of the two forms till 31-3-1992. However, once again it was decided to dicontinue the use of Form No. 16B and to substitute it with Form No. 16A, w.e.f. 1-7-1993: Circular No. 664, dated 29-9-1993.

[479]Inserted by the Income-tax (Fifth Amendment) Rules, 2004, w.e.f. 1-4-2004.

[480]

Substituted for the following clauses (b) and (c) by the Income-tax (Eleventh Amendment) Rules, 1993, w.e.f. 1-7-1993:
"(b)	section 193, section 194, section 194A [in so far as it relates to interest on time deposits referred to in clauses (vii) and (viia) of sub-section (3) of this section], section 194D, section 194EE, section 194F, section 194G, section 194H, section 196B and 196C shall be in Form No. 16A;
(c)	section 194A [other than in the case of interest on the time deposits referred to in clauses (vii) and (viia) of sub-section (3) of this section], section 194B, section 194BB, section 194C, section 194E, section 195 and section 196A shall be in Form No. 16B."
Clause (b) was amended by Income-tax (Eleventh Amendment) Rules, 1991, w.e.f. 1-10-1991; Income-tax (Eleventh Amendment) Rules, 1992, w.e.f. 1-6-1992 and Income-tax (Tenth Amendment) Rules, 1993, w.e.f. 16-6-1993. Clause (c) was amended by the Income-tax (Eleventh Amendment) Rules, 1991, w.e.f. 1-10-1991.

[481]Inserted by the Income-tax (Fourth Amendment) Rules, 1994, w.e.f. 1-6-1994.

[482]Inserted by the Income-tax (Twelfth Amendment) Rules, 1995, w.e.f. 1-7-1995.

[483]Inserted by the Income-tax (Sixteenth Amendment) Rules, 2004, w.e.f. 30-11-2004.

[484]See Circular No. 759, dated 18-11-1997 for the procedure to be adopted in remitting any sum to a non-resident.

[485]Omitted by the Income-tax (Eleventh Amendment) Rules, 1993, w.e.f. 1-7-1993. Prior to the omission, sub-rule (2) was amended by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988 and Income-tax (Sixth Amendment) Rules, 1991, w.e.f. 28-2-1991.

[486]See Circular No. 597, dated 27-3-1991.

[487]Substituted for "one month and fourteen days from the date of credit or payment of the sum, or, as the case may be, from the date of issue of a cheque or warrant for payment of any dividend to a shareholder" by the Income-tax (Third Amendment) Rules, 1996, w.e.f. 2-7-1996. Earlier, the words "and fourteen days" were inserted by the Income-tax (Eleventh Amendment) Rules, 1991, w.e.f. 1-10-1991.

[488]Substituted for "where the income by way of interest referred to in section 194A or the sum referred to in section 194C or the income by way of insurance commission referred to in section 194D" by the Income-tax (Sixth Amendment) Rules, 1991, w.e.f. 28-2-1991.

[489]Substituted for "or the interest or any other sum referred to in section 195 or the income of a foreign company referred to in sub-section (2) of section 196A" by the Income-tax (Eleventh Amendment) Rules, 1991, w.e.f. 1-10-1991.

[490]Inserted by the Income-tax (Fourth Amendment) Rules, 1994, w.e.f. 1-6-1994.

[491]Inserted by the Income-tax (Twelfth Amendment) Rules, 1995, w.e.f. 1-7-1995.

[492]Inserted by the Income-tax (Eleventh Amendment) Rules, 1992, w.e.f. 1-6-1992.

[493]Inserted by the Income-tax (Tenth Amendment) Rules, 1993, w.e.f. 16-6-1993.

[494]Substituted for "carrying on a business or profession to the account of the payee as on the date up to which the accounts of such business or profession" by the Income-tax (Third Amendment) Rules, 1996, w.e.f. 2-7-1996.

[495]Substituted for "under section 192" by the Income-tax (Twenty-fifth Amendment) Rules, 2002, w.e.f. 1-6-2002.

[496]Inserted by the Income-tax (Sixth Amendment) Rules, 1991, w.e.f. 28-2-1991.

[497]Inserted by the Income-tax (Eleventh Amendment) Rules, 1991, w.e.f. 1-10-1991.

[498]Inserted by the Income-tax (Third Amendment) Rules, 1996, w.e.f. 2-7-1996.

[499]Inserted by the Income-tax (Sixth Amendment) Rules, 1991, w.e.f. 28-2-1991.

[500]The words "or Form No. 16B" omitted by the Income-tax (Eleventh Amendment) Rules, 1993, w.e.f. 1-7-1993.

[501]Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[502]Inserted by the Income-tax (Tenth Amendment) Rules, 2005, w.e.f. 30-3-2005.

[503]Numbered as sub-rule (1) by the Income-tax (Nineteenth Amendment) Rules, 2005, w.e.f. 30-6-2005.

[504]Substituted for "the prescribed income-tax authority or to the person authorised by such authority" by the Income-tax (Nineteenth Amendment) Rules, 2005, w.e.f. 30-6-2005.

[505]M/s NSDL, Mumbai has been authorised to receive quarterly statements of tax deducted at source in paper as well as electronic format: Notification, dated 11-7-2005.

[506]Substituted for "30th April" by the Income-tax (Nineteenth Amendment) Rules, 2005, w.e.f. 30-6-2005.

[507]

Substituted by the Income-tax (Tenth Amendment) Rules, 2007, w.e.f. 1-9-2007. Prior to the substitution, the first proviso, as inserted by the Income-tax (Nineteenth Amendment) Rules, 2005, w.e.f. 30-6-2005, read as under:

"Provided that the person responsible for deducting tax at source in the case of every office of Government and the principal officer in the case of every company responsible for deducting tax at source shall deliver or cause to be delivered such quarterly statements on computer media (3.5" 1.44 MB floppy diskette or CD-ROM of 650 MB capacity):"

[508]Inserted by the Income-tax (Nineteenth Amendment) Rules, 2005, w.e.f. 30-6-2005.

[509]Numbered as sub-rule (1) by the Income-tax (Nineteenth Amendment) Rules, 2005, w.e.f. 30-6-2005.

[510]Substituted for "the prescribed income-tax authority or to the person authorised by such authority" by the Income-tax (Nineteenth Amendment) Rules, 2005, w.e.f. 30-6-2005.

[511]

M/s NSDL, Mumbai has been authorised to receive quarterly statements of tax collected at source in paper as well as electronic format: Notification, dated 11-7-2005.

[512]

Substituted by the Income-tax (Tenth Amendment) Rules, 2007, w.e.f. 1-9-2007. Prior to the substitution, the first proviso, as inserted by the Income-tax (Nineteenth Amendment) Rules, 2005, w.e.f. 30-6-2005 read as under:

"Provided that the person responsible for collecting tax at source on behalf of Government and the principal officer in the case of every company responsible for collecting tax at source shall deliver or cause to be delivered such quarterly statements on computer media (3.5" 1.44 MB floppy diskette or CD-ROM of 650 MB capacity):"

[513]Inserted by the Income-tax (Nineteenth Amendment) Rules, 2005, w.e.f. 30-6-2005.

[514]Substituted for "The prescribed income-tax authority or the person authorised by such authority referred to in section 203AA or the second proviso to sub-section (5) of section 206C" by the Income-tax (Nineteenth Amendment) Rules, 2005, w.e.f. 30-6-2005.

[515]Substituted for "a statement in Form No. 26AS by the 15th June" by the Income-tax (Nineteenth Amendment) Rules, 2005, w.e.f. 30-6-2005.

[516]

Rules 31AC and 31ACA substituted for rule 31AC by the Income-tax (Second Amendment) Rules, 2006, w.e.f. 17-3-2006. Rule 31AC, inserted by the Income-tax (Seventeenth Amendment) Rules, 2005, w.e.f. 28-6-2005 read as under:
"31AC. Quarterly return of non-deduction of tax at source under section 206A.—(1) The quarterly return to be furnished under sub-section (1) or sub-section (2) of section 206A shall be in Form No. 26QA and shall be verified in the manner indicated therein.
(2) The quarterly return referred to in sub-rule (1) shall be furnished,—
(i)	to the Director General of Income-tax (Systems) or the person authorised by the Director General of Income-tax (Systems);
(ii)	on or before the 31st July, the 31st October, the 31st January and the 30th June following the respective quarter of the financial year."

[517]

Substituted by the Income-tax (Twenty-fourth Amendment) Rules, 2003, w.e.f. 1-10-2003. Earlier, rule 33 was amended by the Income-tax (Sixth Amendment) Rules, 1988, w.e.f. 12-7-1988; Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988 and Income-tax (Third Amendment) Rules, 1996, w.e.f. 2-7-1996.

[518]Inserted by the Income-tax (Sixth Amendment) Rules, 1988, w.e.f. 12-7-1988.

[519]The words "sub-section (1) of" omitted, ibid.

[520]Substituted by the Income-tax (Amendment) Rules, 1980, w.e.f. 19-1-1980.

[521]Inserted by the Income-tax (Sixth Amendment) Rules, 1988, w.e.f. 12-7-1988.

[522]Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[523]Substituted by the Income-tax (Nineteenth Amndt.) Rules, 2005, w.e.f. 30-6-2005. Earlier, rule 36A was inserted by the Income-tax (Sixth Amndt.) Rules, 1988, w.e.f. 12-7-1988 and amended by the Income-tax (Fifth Amndt.) Rules, 1989, w.r.e.f. 1-4-1988.

[524]Heading improvised by the editors.

[525]M/s NSDL, Mumbai has been notified for the purpose: Notification dated 11-7-2005.

[526]Rules 37 and 37A were substituted for rule 37 by the Income-tax (Sixth Amendment) Rules, 1988, w.e.f. 12-7-1988. Prior to the substitution, rule 37 was amended by the Income-tax (Fifth Amendment) Rules, 1967; Income-tax (Second Amendment) Rules, 1970; Income-tax (Third Amendment) Rules, 1972; Income-tax (Third Amendment) Rules, 1973, w.e.f. 15-7-1973 and Income-tax (Fifth Amendment) Rules, 1978, w.e.f. 1-6-1978.

[527]See Circular Nos. 597, dated 27-3-1991; 719, dated 22-8-1995 and 744, dated 6-5-1996.

[528]Substituted for "Assessing Officer" by the Income-tax (Nineteenth Amendment) Rules, 2005, w.e.f. 30-6-2005, which was earlier substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[529]

Substituted by the Income-tax (Twelfth Amendment) Rules, 2003, w.e.f. 31-7-2003. Prior to the substitution, the Table, as substituted by the Income-tax (Sixth Amendment) Rules, 1988, w.e.f. 12-7-1988 and amended from time to time read as under:

"TABLE

Sl. No.	Nature of returns	Form No.	Month
1.	Annual return of deduction of tax under section 192 from "salaries"	24	May
2.	Annual return of deduction of tax under section 193 from "interest on securities"	25	June
3.	Annual return of deduction of tax under section 194 from "divi-dends" or under section 194K from "income in respect of units"	26	April
4.	Annual return of deduction of tax under section 194A from "interest other than interest on securities"	26A	June
5.	Annual return of deduction of tax under section 194B from "winnings from lotteries or crossword puzzles"	26B	May
6.	Annual return of deduction of tax under section 194BB from "winnings from horse races"	26BB	May
7.	Annual return of deduction of tax under section 194C from "payments to any contractor or sub-contractor"	26C	June
8.	Annual return of deduction of tax under section 194D from "insurance commission"	26D	June
10.	Annual return of deduction of tax under section 194EE from "pay-ments in respect of deposits under National Savings Scheme, etc."	26F	June
11.	Annual return of deduction of tax under section 194F from "payments on account of repurchase of units by Mutual Fund or Unit Trust of India"	26G	June
12.	Annual return of deduction of tax under section 194G from "commission, etc., on sale of lottery tickets"	26H	June
13.	Annual return of deduction of tax under section 194H from "Commission or brokerage"	26-I	June
14.	Annual return of deduction of tax under section 194-I from "rent"	26J	June
15.	Annual return of deduction of tax under section 194J from "fees for professional or technical services"	26K	June

Prior to the above substitution, the Table was amended by the Income-tax (Twelfth Amendment) Rules, 1990, w.e.f. 8-6-1990; the Income-tax (Sixth Amendment) Rules, 1991, w.e.f. 28-2-1991; the Income-tax (Fifth Amendment) Rules, 1992, w.e.f. 1-4-1992; the Income-tax (Fourth Amendment) Rules, 1994, w.e.f. 1-6-1994; the Income-tax (Twelfth Amendment) Rules, 1995, w.e.f. 1-7-1995; by the Income-tax (Fourth Amendment) Rules, 1997, w.e.f. 19-3-1997; the Income-tax (Thirty-second Amendment) Rules, 1999, w.e.f. 19-11-1999; the Income-tax (Twenty-third Amendment) Rules, 2001, w.e.f. 11-10-2001.

[530]Substituted for "and under section 194K from "Income in respect of units"" by the Income-tax (Eleventh Amendment) Rules, 2005, w.e.f. 30-3-2005.

[531]Rules 37 and 37A substituted for rule 37 by the Income-tax (Sixth Amendment) Rules, 1988, w.e.f. 12-7-1988.

[532]Substituted for "194 and 195" by the Income-tax (Sixth Amendment) Rules, 1991, w.e.f. 28-2-1991.

[533]Substituted for "and 196A" by the Income-tax (Eleventh Amendment) Rules, 1991, w.e.f. 1-10-1991.

[534]Substituted for "and 196B" by the Income-tax (Eleventh Amendment) Rules, 1992, w.e.f. 1-6-1992.

[535]Substituted for "and 196C" by the Income-tax (Tenth Amendment) Rules, 1993, w.e.f. 16-6-1993.

[536]Substituted for "shall within fourteen days of the date of deduction send a statement in Form No. 27" by the Income-tax (Third Amendment) Rules, 1996, w.e.f. 2-7-1996.

[537]Substituted for "Form No. 27" by the Income-tax (Nineteenth Amendment) Rules, 2005, w.e.f. 30-6-2005.

[538]Substituted for "Assessing Officer" by the Income-tax (Nineteenth Amendment) Rules, 2005, w.e.f. 30-6-2005, which was earlier substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[539]Inserted by the Income-tax (Sixth Amendment) Rules, 1991, w.e.f. 28-2-1991.

[540]Inserted by the Income-tax (Eleventh Amendment) Rules, 1991, w.e.f. 1-10-1991.

[541]Inserted by the Income-tax (Eleventh Amendment) Rules, 1992, w.e.f. 1-6-1992.

[542]Inserted by the Income-tax (Tenth Amendment) Rules, 1993, w.e.f. 16-6-1993.

[543]Substituted for "carrying on a business or profession to the account of the payee as on the date up to which the accounts of such business or profession" by the Income-tax (Third Amendment) Rules, 1996, w.e.f. 2-7-1996.

[544]Substituted for "Form No. 27" by the Income-tax (Nineteenth Amendment) Rules, 2005, w.e.f. 30-6-2005.

[545]Omitted by the Income-tax (Fourth Amendment) Rules, 1997, w.e.f. 19-3-1997. Rule 37AA was inserted by the Income-tax (Fifth Amendment) Rules, 1967 and amended by the Income-tax (Sixth Amendment) Rules, 1988, w.e.f. 12-7-1988 and Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[546]

Substituted by the Income-tax (Sixteenth Amendment) Rules, 2003, w.e.f. 26-8-2003. Prior to the substitution, rule 37B, as inserted by the Income-tax (Fifth Amendment) Rules, 1999, w.e.f. 30-3-1999, read as under:
"37B. Returns regarding tax deducted at source on computer media under sub-section (2) of section 206.—(1) Where a person responsible for deducting the tax under Chapter XVII-B desires to file any return or statement referred to in rule 37 or rule 37A on a computer media, he shall deliver or cause to be delivered to the Assessing Officer referred to in rule 36A such return or statement on a computer media within the time specified under rule 37 or rule 37A, as the case may be.
(2) The return or statement filed on a computer media must contain all the information required under rule 37 or rule 37A, as the case may be.
(3) The computer media must conform to the following specifications:
(a)	CD ROM of 650 MB capacity;
(b)	4mm 2 GB/4GB (90M/120M) DAT Cartridge; or
(c)	3.5" 1.44 MB floppy diskette.
(4) While filing the return or statement on a computer media, the person responsible for deducting the tax shall ensure that:
(i)	the return or statement is accompanied with Form No. 27A furnishing the information specified therein;
(ii)	in no case, more than one return or statement is included on one unit of computer media. However, a single return or statement may spawn multiple units of the same computer media. If more than one unit of computer media is used in the case of a particular type of return or statement, then each computer media will be serially numbered;
(iii)	if the data relating to a return or statement is copied using data compression or backup software utility, the corresponding software utility or procedure for its decompression or restoration shall also be furnished alongwith the computer media return or statement;
(iv)	the return or statement is accompanied with a certificate regarding clean and virus free data."
Earlier, rule 37B was inserted by the Income-tax (Sixth Amendment) Rules, 1977, w.e.f. 1-10-1977; amended by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988 and omitted by the Income-tax (Fourth Amendment) Rules, 1997, w.e.f. 19-3-1997.

[547]Part VIA containing rules 37C and 37D was inserted by the Income-tax (Fourth Amendment) Rules, 1988, w.e.f. 1-6-1988.

[548]

Substituted by the Income-tax (Twenty-second Amendment) Rules, 2003, w.e.f. 30-9-2003. Prior to the substitution, rules 37C and 37D as inserted by the Income-tax (Fourth Amendment) Rules, 1988, w.e.f. 1-6-1988, read as under:

"37C. Certificate for no collection of tax at source under section 206C(1).—(1) The certificate to be given by the Assessing Officer to the effect that any of the goods referred to in the Table in sub-section (1) of section 206C are to be utilised for the purposes of manufacturing, processing or producing articles or things and not for trading purposes shall be in Form No. 27C.

(2) The certificate given under sub-rule (1) shall be valid for such period (not exceeding one year from the date of certificate) as the Assessing Officer may specify therein, unless it is cancelled by him at any time before the expiry of the specified period.

(3) An application for a fresh certificate may be made, if required, after the expiry of the period of validity of the earlier certificate.

(4) The certificate shall be valid only for the person named therein.

37D. Certificate for collection of tax at source under section 206C(5).—The certificate to be furnished by any person collecting tax at source under sub-section (5) of section 206C shall be in Form No. 27D."

[549]As to the scope of "processing", see Natwarlal v Union of India (1998) 233 ITR 490 (MP).

[550]Inserted by the Income-tax (Sixteenth Amendment) Rules, 2004, w.e.f. 30-11-2004.

[551]Inserted by the Income-tax (Sixteenth Amendment) Rules, 2004, w.e.f. 30-11-2004.

[552]Inserted by the Income-tax (Sixteenth Amendment) Rules, 2004, w.e.f. 30-11-2004.

[553]Inserted by the Income-tax (Sixteenth Amendment) Rules, 2004, w.e.f. 30-11-2004.

[554]Inserted by the Income-tax (Sixteenth Amendment) Rules, 2004, w.e.f. 30-11-2004.

[555]Inserted by the Income-tax (Sixteenth Amendment) Rules, 2004, w.e.f. 30-11-2004.

[556]Inserted by the Income-tax (Sixteenth Amendment) Rules, 2004, w.e.f. 30-11-2004.

[557]

Substituted by the Income-tax (Eleventh Amendment) Rules, 2005, w.e.f. 30-3-2005. Prior to the substitution, rule 37E, as substituted by the Income-tax (Thirteenth Amendment) Rules, 2003, w.e.f. 31-7-2003 read as under:

"37E. Prescribed return regarding tax collected at source under section 206C1.—Every person collecting tax in accordance with the provisions of section 206C shall, in respect of the period ending on 30th September and 31st March in each financial year, deliver or cause to be delivered to the income-tax authority referred to in rule 37F, the return for collection of tax in Form No. 27E 2[within one month from the end of the period for which the return is required to be filed]."

Earlier, Rule 37E was inserted by the Income-tax (Third Amendment) Rules, 1990, w.e.f. 19-2-1990 and the Table therein was substituted by the Income-tax (Fourth Amendment) Rules, 1997, w.e.f. 19-3-1997.

1    Heading improvised — Not provided in the Amendment Rules.

2    Inserted by the Income-tax (Twenty-second Amendment) Rules, 2003, w.e.f. 30-9-2003.

[558]Substituted for "Income-tax Authority" by the Income-tax (Nineteenth Amendment) Rules, 2005, w.e.f. 30-6-2005.

[559]

Substituted by the Income-tax (Ninth Amendment) Rules, 2005, w.e.f. 30-3-2005. Prior to the substitution, rule 37EA, as inserted by the Income-tax (Twenty-fifth Amendment) Rules, 1999, w.e.f. 2-7-1999 read as under:
"37EA. Returns regarding tax collected at source on computer media under sub-section (5B) of section 206C.—(1) Where a person responsible for collecting the tax under Chapter XVII-BB of the Act desires to file any return of the nature referred to in rule 37E on a computer media, he shall deliver or cause to be delivered to the Income-tax Officer referred to in rule 37F such return on a computer media within the time specified under rule 37E.
(2) The return on a computer media shall be in Form No. 27EA or Form No. 27EB or 27EC or 27ED, as the case may be and contain all the information, details and particulars specified in such Forms.
(3) The computer media shall conform to the following specifications, namely:—
(a)	CD ROM of 650 MB capacity; or
(b)	4mm 2 GB/4GB (90M/120M) DAT Cartridge; or
(c)	3.5" 1.44 MB floppy diskette.
(4) While filing the return on a computer media, the person responsible for collecting the tax shall ensure that:—
(i)	such return is accompanied with Form No. 27B and verified in the manner indicated therein;
(ii)	only one return is included on one unit of computer media. However, a single return may spawn multiple units of the same computer media. If more than one unit of computer media is used in the case of a particular type of return, then each computer media will be serially numbered;
(iii)	in a case where the data relating to a return is copied using data compression or backup software utility, the corresponding software utility or procedure for its decompression or restoration shall also be furnished alongwith the computer media return;
(iv)	the return is accompanied with a certificate regarding clean and virus free data."

[560]

Substituted by the Income-tax (Nineteenth Amendment) Rules, 2005, w.e.f. 30-6-2005. Prior to the substitution, rule 37F, as inserted by the Income-tax (Third Amendment) Rules, 1990, w.e.f. 19-2-1990 read as under:
"37F. Income-tax authority for purposes of section 206C(5A).—The return referred to in rule 37E shall be furnished to:—
(i)	The Income-tax Officer so designated by the Chief Commissioner or Commissioner of Income-tax within whose area of jurisdiction the office of the person responsible for collecting tax under Chapter XVIIBB is situated; or
(ii)	In any other case, to the Income-tax Officer within whose area of jurisdiction the office of the person responsible for collecting tax under Chapter XVIIBB is situated."

[561]Heading improvised by the editors.

[562]M/s NSDL, Mumbai has been authorised for the purpose: Notification No. dated 11-7-2005.

[563]Inserted by the Income-tax (Twenty-third Amendment) Rules, 1999, w.e.f. 29-6-1999.

[564]Substituted for "a buyer" by the Income-tax (Sixteenth Amendment) Rules, 2004, w.e.f. 30-11-2004.

[565]Substituted for "Form No. 27F" by the Income-tax (Twenty-fourth Amendment) Rules, 2003, w.e.f. 1-10-2003.

[566]The words "or licensee or lessee" also need to be inserted here.

[567]Inserted by the Income-tax (Sixteenth Amendment) Rules, 2004, w.e.f. 30-11-2004.

[568]Inserted by the Income-tax (Sixteenth Amendment) Rules, 2004, w.e.f. 30-11-2004.

[569]Inserted by the Income-tax (Sixteenth Amendment) Rules, 2004, w.e.f. 30-11-2004.

[570]The words "in Form No. 27G" omitted by the Income-tax (Twenty-fourth Amendment) Rules, 2003, w.e.f. 1-10-2003.

[571]Inserted by the Income-tax (Sixteenth Amendment) Rules, 2004, w.e.f. 30-11-2004.

[572]Omitted by the Income-tax (Tenth Amendment) Rules, 1989, w.e.f. 13-9-1989. Rule 38A was inserted by the Income-tax (Fourth Amendment) Rules, 1978, w.e.f. 1-6-1978 and amended by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[573]Substituted by the Income-tax (Tenth Amendment) Rules, 1989, w.e.f. 13-9-1989. Earlier, rule 39 was amended by the Income-tax (Fourth Amendment) Rules, 1978, w.e.f. 1-6-1978) and the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[574]Both the sections 215 and 217 have ceased to apply from 1-4-1989.

[575]Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[576]The sub-rules of rule 40 are independent of each other and deal with different situations. Sub-rule (1) will not restrict cases covered by sub-rule (5). Waiver of part of interest under rule 40(1) and balance of interest under sub-rule (5) is permissible: Sir Shadilal Enterprises Ltd v CIT (1998) 234 ITR 592 (All).

[577]See Circular Nos. 103(3)/64, dated 1-9-1964; F. No. 12/66-IT(B), dated 9-6-1965 and 492, dated 21-7-1987. See also Ambica Chemical Products v ITO (1991) 191 ITR 382 (AP); Jeewanlal (1929) Ltd v ITO (1992) 197 ITR 495 (Cal); CIT v Bennet Coleman & Co Ltd (1996) 217 ITR 216 (Bom); Peico Electronics and Electricals Ltd v DCIT (2005) 278 ITR 319 (Cal).

[578]The High Court will not interfere with the matter unless there is non-application of mind by the authorities concerned: Manuel Sons Wines v ITO (1999) 236 ITR 909 (Ker); DCIT v Antony (P M) (2002) 257 ITR 616 (Ker); Dalmia Dairy Industries v Union of India (2002) 255 ITR 476 (Del).

[579]Substituted for "Inspecting Assistant Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[580]Inserted by the Income-tax (Tenth Amendment) Rules, 1989, w.e.f. 13-9-1989.

[581]Omitted by the Income-tax (Fifth Amendment) Rules, 1989, w.e.f. 18-5-1989. It was inserted by the Income-tax (Second Amendment) Rules, 1968.

[582]Inserted by the Income-tax (Nineteenth Amendment) Rules, 2000, w.e.f. 27-9-2000.

[583]Inserted by the Income-tax (Twelfth Amendment) Rules, 2007, w.e.f. 1-4-2008.

[584]

Prior to the omission, clause (f) read as under:"(f)    "equity share" shall have the meaning assigned to it in section 85 of the Companies Act, 1956 (1 of 1956)."

[585]Inserted by the Income-tax (Second Amendment) Rules, 2008, w.e.f. 1-4-2008.

[586]See sections 239(1) and 295(2)(k).

[587]Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[588]Substituted for "sections 192 to 195" by the Income-tax (Fifth Amendment) Rules, 1967.

[589]

Substituted by the Income-tax (Twenty-eighth Amendment) Rules, 2003, w.e.f. 21-11-2003. Prior to the substitution, rules 42 and 43, as originally enacted, read as under:

"42. Application for tax clearance certificate.—(1) An application under section 230 for a tax clearance certificate or an exemption certificate may be made in Form No. 31 to any competent authority.

(2) Where the applicant is a person domiciled in India or is a person who has been assessed by an 1[Assessing Officer] anywhere in India, the application shall be accompanied by an authorisation in Form No. 32 to be obtained by the applicant from the 1[Assessing Officer] who has jurisdiction to assess him.

43. Form of certificate.—(1) A tax clearance certificate issued under sub-section (1) of section 230 shall be in Form No. 33 and shall be valid for the period mentioned therein.

(2) An exemption certificate issued under the proviso to sub-section (1) of section 230 shall be in Form No. 34 and shall be valid for the period mentioned therein."

1 Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[590]See section 295(2)(l).

[591]See section 295(2)(l).

[592]See section 295(2)(l).

[593]Inserted by the Income-tax (Amendment) Rules, 1965.

[594]See Krishnamachari (TT) v ITO (1970) 77 ITR 651 (Mad); Srinivasan (KV) v ITO (1972) 83 ITR 299 (Mad); Indira (Smt) v ITO (1984) 150 ITR 351 (Kar). See also Board's Letter F. No. 358/4/91-IT(B), dated 10-12-1992.

[595]

Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[596]Inserted by the Income-tax (Amendment) Rules, 1965.

[597]Vijayakumar (R) v ACIT (1991) 190 ITR 245 (Mad).

[598]Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[599]Part IXA containing sections 44C and 44D was inserted by the Income-tax (Third Amendment) Rules, 1976, w.e.f. 1-4-1976.

[600]Inserted by the Income-tax (Ninth Amendment) RUles, 2007, w.e.f. 7-8-2007.

[601]Inserted by Income-tax (Third Amendment) Rules, 1984, w.e.f. 1-10-1984.

[602]Substituted by the Income-tax (Third Amendment) Rules, 1984, w.e.f. 1-10-1984.

[603]Inserted by the Income-tax (Ninth Amendment) Rules, 2007, w.e.f. 7-8-2007.

[604]

Substituted by the Income-tax (Ninth Amendment) Rules, 2007, w.e.f. 7-8-2007. Prior to the substitution, rule 44CA, as inserted by the Income-tax (Third Amendment) Rules, 1984, w.e.f. 1-10-1984, read as under:

"44CA. Disclosure of information in the application for settlement of cases.—(1) The Settlement Commission may, while calling for a report from the 1[Chief Commissioner or Commissioner] under sub-section (1) of section 245D, forward a copy of the application filed in Form No. 34B (other than the Annexure and the statements and other documents accompanying such Annexure).

(2) Where an order under sub-section (1) of section 245D allowing the application to be proceeded with is made by the Settlement Commission, the information contained in the Annexure to the application in Form No. 34B and in the statements and other documents accompanying such Annexure shall be sent to the 2[Chief Commissioner or Commissioner] along with a copy of the said order.]"

1 Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

2 Ibid.

[605]Inserted by the Income-tax (Nineteenth Amendment) Rules, 1993, w.e.f. 2-11-1993.

[606]Should be Part IXB and not Chapter IXB as the Income-tax Rules, 1962 contains Parts.

[607]See Chapter XIXB (sections 245N to 245V).

[608]Substituted by the Income-tax (Tenth Amendment) Rules, 1999, w.e.f. 28-5-1999.

[609]Substituted by the Income-tax (Thirteenth Amendment) Rules, 2000, w.e.f. 3-8-2000.

[610]Inserted by the Income-tax (Second Amendment) Rules, 2003, w.e.f. 6-2-2003.

[611]See sections 249(1) and 295(2)(m).

[612]Substituted for "Appellate Assistant Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[613]The words "Deputy Commissioner (Appeals) and" omitted by Income-tax (Twentieth Amendment) Rules, 1998, w.e.f. 22-10-1998.

[614]The words "and Commissioner (Appeals)" inserted by the Income-tax (Seventh Amendment) Rules, 1978, w.e.f. 10-7-1978.

[615]

Substituted, ibid. Earlier, it was substituted by the Income-tax (Second Amendment) Rules, 1973, w.e.f. 1-4-1973.

[616]The words "the Deputy Commissioner (Appeals) or, as the case may be," omitted by the Income-tax (Twentieth Amendment) Rules, 1998, w.e.f. 22-10-1998.

[617]The words "Deputy Commissioner (Appeals)" substituted for "Appellate Assistant Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[618]Substituted by the Income-tax (Fifth Amendment) Rules, 1989, w.e.f. 18-5-1989. Earlier, sub-rule (2) was amended by the Income-tax (Third Amendment) Rules, 1976, w.e.f. 1-4-1976.

[619]See Damodar Prasad v CIT (1929) 3 ITC 405 (Pat); C Ag IT v Keshab Chandra Mandal (Sri) (1950) 18 ITR 569 (SC); Naraindas Narsinghdas v CIT (1950) 18 ITR 204 (All); Rai Sri Krishnaji v CIT (1962) 45 ITR 612 (All); Arunachalam Chettiar v CIT (1962) 45 ITR 407 (Mad); CIT (Addl) v Prem Kumar Rastogi (1978) 115 ITR 503 (All).

[620]

A memorandum of appeal not signed by a competent person is an irregularity which can be rectified later: Remfry & Sons v CIT (2005) 276 ITR 1 (Del); CIT v Hope Textiles Ltd (2006) 287 ITR 321 (MP).

[621]See section 295(2)(m).

[622]Inserted by the Income-tax (Second Amendment) Rules, 1973, w.e.f. 1-4-1973. This rule was held to be intra vires sections 250 and 251: Mohindar Kaur v Central Government (1976) 104 ITR 120 (All).

[623]See section 295(2)(mm). See also Tara Devi Goenka v CIT (1980) 122 ITR 14 (Cal); CIT v Jay Textile Mills (1981) 128 ITR 480 (P&H); Baij Nath v CIT (1981) 132 ITR 7 (P&H); CIT v Girdharilal Wadhwa (1988) 174 ITR 541 (MP).

[624]Substituted for "Appellate Assistant Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[625]Inserted by the Income-tax (Seventh Amendment) Rules, 1978, w.e.f. 10-7-1978.

[626]Substituted for "Appellate Assistant Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[627]Inserted by the Income-tax (Seventh Amendment) Rules, 1978, w.e.f. 10-7-1978.

[628]Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[629]Ibid.

[630]Ibid.

[631]Ibid.

[632]Ibid.

[633]Substituted for "Appellate Assistant Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[634]Inserted by the Income-tax (Seventh Amendment) Rules, 1978, w.e.f. 10-7-1978.

[635]The failure to record the reasons will not vitiate the grant of permission: CIT v Motilal Hirabhai Spg & Wvg Co Ltd (1978) 113 ITR 173 (Guj).

[636]Substituted for "Appellate Assistant Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[637]Inserted by the Income-tax (Seventh Amendment) Rules, 1978, w.e.f. 10-7-1978.

[638]Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[639]A mere notice of the hearing of the appeal will not be sufficient: CIT v Valimohamed Ahmadbhai (1982) 134 ITR 214 (Guj). Mere presence of the assessing authority will not give rise to a presumption that he consented to the admission of additional evidence: Haji Lal Mohd Biri Works v CIT (2005) 275 ITR 496 (All).

[640]On a consideration of rule 46A(4) and section 250(1) conferring power on the Commissioner (Appeals), inspite of rule 46A(1), the Commissioner (Appeals) can accept additional evidence in appropriate cases: CIT v Ravindranathan Nair (K) (2004) 265 ITR 217 (Ker). See also Ramgopal Ganpatrai & Sons Ltd v CEPT (1953) 24 ITR 362 (Bom); Rai Kumar Srimal v CIT (1976) 102 ITR 525 (Cal); Mohindar Kaur v Central Government (1976) 104 ITR 120 (All); Arjan Dass v CIT (1978) 112 ITR 480 (P&H); ITO v Bhattacharya (BN) (1978) 112 ITR 423 (Cal); Hanutram Ramprasad v CIT (1978) 114 ITR 19 (Gau); Manjushree Plantation Ltd v CIT (1981) 131 ITR 307 (Mad).

[641]Substituted for "Appellate Assistant Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[642]Inserted by the Income-tax (Seventh Amendment) Rules, 1978, w.e.f. 10-7-1978.

[643]Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[644]See section 295(2)(m).

[645]Inserted by the Income-tax (Second Amendment) Rules, 1966.

[646]Ibid.

[647]Omitted by the Income-tax (Fifth Amendment) Rules, 1989, w.e.f. 18-5-1989. It was inserted by the Income-tax (Fourth Amendment) Rules, 1964.

[648]

Inserted by the Income-tax (Fourth Amendment) Rules, 1972, w.e.f. 15-11-1972.

[649]

Chapter XXA does not apply in relation to the transfer of any immovable property made after 30-9-1986. See section 269RR.

[650]Inserted by Income-tax (Eighth Amendment) Rules, 1982, w.e.f. 31-7-1982.

[651]See Bafna Bros v CIT (1988) 174 ITR 733 (AP).

[652]Ibid.

[653]Ibid.

[654]For a copy of the notification, refer at the end under Annexure 1.

[655]Ibid.

[656]See Rajata Trust v CIT (1992) 193 ITR 220 (Kar).

[657]Substituted by the Income-tax (Seventh Amendment) Rules, 1987, w.e.f. 8-10-1987. Rule 48L has no retrospective operation and will not apply to an agreement entered into prior to 1-10-1986: Sanjeev Sethi v Union of India (1992) 195 ITR 338 (Del).

[658]See Circular No. 475, dated 9-12-1986, waiving punitive action in all cases of belated compliance made on or before 15-11-1986.

[659]See (1987) 168 ITR St 155.

[660]Substituted by the Income-tax (Second Amendment) Rules, 1968.

[661]Inserted by the Income-tax (Fourth Amendment) Rules, 1979, w.e.f. 21-7-1979.

[662]

Inserted by the Income-tax (Second Amendment) Rules, 1970, w.e.f. 23-2-1970.

[663]Inserted by the Income-tax (Eleventh Amendment) Rules, 1986, w.e.f. 12-12-1986.

[664]Substituted for "Income-tax Officers" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[665]Ibid.

[666]Ibid.

[667]Inserted by the Income-tax (Second Amendment) Rules, 1991, w.e.f. 11-1-1991.

[668]See Circular No. 2, dated 23-2-1951. See also Mohan Lal Gumber v Secretary, CBDT (1973) 90 ITR 410 (P&H); Moti Lal v Secretary, CBDT (1978) 113 ITR 461 (P&H); Taxation Bar Association v CIT (1983) 141 ITR 82 (P&H).

[669]See section 295(2)(g).

[670]Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[671]See section 295(2)(n) for rules 53 to 66.

[672]Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[673]Ibid.

[674]Inserted by the Income-tax (Fourth Amendment) Rules, 1979, w.e.f. 21-7-1979.

[675]Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[676]Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[677]Inserted by the Income-tax (Fourth Amendment) Rules, 1979, w.e.f. 21-7-1979.

[678]Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[679]Ibid.

[680]Substituted for "Commissioners", ibid.

[681]Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[682]See Part A of the Fourth Schedul.

[683]Substituted by Income-tax (Fourth Amendment) Rules, 1974, w.e.f. 1-11-1974.

[684]

Rule 67 applies only to recognised provident funds and not to gratuity funds: Surinder Arora v Durga Das (1987) 168 ITR 562 (Del).

[685]Substituted for "or in a current account with any scheduled bank" by the Income-tax (Third Amendment) Rules, 1986, w.e.f. 1-4-1986.

[686]Inserted by the Income-tax (Sixth Amendment) Rules, 1993, w.e.f. 1-4-1993.

[687]

Substituted by the Income-tax (Twenty-third Amendment) Rules, 2005, w.r.e.f. 1-4-2005. Prior to the substitution, sub-rule (2), as substituted by the Income-tax (Tenth Amendment) Rules, 2003, w.r.e.f. 1-4-2003, read as under:

"(2) The manner of investment referred to in sub-rule (1) shall be in accordance with the following Table, namely:—

Table

Investment Pattern

S. No.	Investment	Minimum percentage of investible moneys to be invested in items referred to in column (2)
(1)	(2)	(3)
(i)	in Central Government securities as defined in section 2 of the Public Debt Act, 1944 (18 of 1944); and/or units of such Mutual Funds which have been set up as dedicated Funds for investment in Government Securities and which have been approved by the Securities and Exchange Board of India;	Twenty-five per cent
(ii)	(a) in Government securities as defined in section 2 of the Public Debt Act, 1944 (18 of 1944), created and issued by any State Govern-ment, and or units of such Mutual Funds which have been set up as dedicated Funds for invest-ment in Government Securities and which have been approved by the Securities and Exchange Board of India; and/or	Fifteen per cent
	(b) in any other negotiable securities, the principle whereof and interest whereon is fully and unconditionally guaranteed by the Central Government or any State Government except those covered under (iii)(a) below;
(iii)	(a) in bonds/securities of a public financial institution or of a public sector company or of a public sector bank; and/or (b) short duration (less than a year) Term Deposit Receipts (TDR) issued by public sector banks.	Thirty per cent
(iv)	to be invested in any of the above three categories, as decided by their Trustees.	Thirty per cent

Provided that any moneys received on the maturity of investments made prior to 1st day of April, 2003, reduced by obligatory outgoing, shall be invested in accordance with the manner of investment specified in this sub-rule:
Provided further that the trustees may invest an amount not exceeding one-third out of the amount referred to in clause (iv) of the said Table in the bonds or securities of any company, other than a public sector company, which have an investment grade rating from at least two credit rating agencies registered under sub-section (1A) of section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992):
Provided also that in the event of the rating of any instruments mentioned in the second proviso to this sub-rule falling below the investment grade, as certified by at least two credit rating agencies registered under sub-section (1A) of section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), then the option of exit from such instruments can be exercised and the released funds shall be invested in accordance with the manner provided in the Table of this sub-rule:
Provided also that any amount invested after 31st March, 2003, but on or before the date of issue of this notification in accordance with the manner of investment in force in this behalf from the 1st day of April, 1997 to 31st March, 2003, shall be deemed to have been invested in the manner specified in this sub-rule.
Explanation 1.—The manner of investment specified in this sub-rule shall apply to the aggregate amount of investible moneys with the fund in the previous year.
Explanation 2.—For the purposes of this sub-rule,—
(i)	the expression "public financial institutions" shall have the meaning assigned to it in section 4A of the Companies Act, 1956 (1 of 1956);
(ii)	the expression "public sector company" shall have the meaning assigned to it in clause (36A) of section 2 of the Income-tax Act; and
(iii)	the expression "public sector bank" shall have the meaning assigned to it in clause (23D) of section 10 of the Income-tax Act."
Earlier, sub-rule (2) was substituted by the Income-tax (Ninth Amendment) Rules, 1978, w.e.f. 1-1-1979; amended by the Income-tax (Eighth Amendment) Rules, 1979, w.e.f. 6-11-1979; Income-tax (Ninth Amendment) Rules, 1980, w.e.f. 1-1-1981 and Income-tax (Ninth Amendment) Rules, 1985, w.e.f. 1-1-1986; substituted by the Income-tax (Third Amendment) Rules, 1986, w.e.f. 1-4-1986 and the Income-tax (Sixth Amendment) Rules, 1993, w.e.f. 1-4-1993 and amended by the Income-tax (Thirteenth Amendment) Rules, 1994, w.r.e.f. 1-4-1994/23-12-1994; substituted again by the Income-tax (Twentieth Amendment) Rules, 1995, w.e.f. 1-4-1995 and the Income-tax (Seventh Amendment) Rules, 1997, w.r.e.f. 1-4-1997 and amended by the Income-tax (Sixth Amendment) Rules, 1999, w.r.e.f. 1-4-1998 and the Income-tax (Twenty-fourth Amendment) Rules, 2000, w.r.e.f. 1-4-1999.

[688]Inserted by the Income-tax (Second Amendment) Rules, 1971. See also Circular No. 110, dated 13-4-1973.

[689]Inserted by the Income-tax (Fifth Amendment) Rules, 1985, w.e.f. 1-8-1985.

[690]The words ", sisters and minor brothers" omitted by the Income-tax (First Amendment) Rules, 2007, w.e.f. 15-1-2007.

[691]Inserted by the Income-tax (Second Amendment) Rules, 1966.

[692]Substituted for "High School" by the Income-tax (Fifth Amendment) Rules, 1985, w.e.f. 1-8-1985.

[693]Substituted for "High School stage, provided that the course of study is for not less than three years" by the Income-tax (Fifth Amendment) Rules, 1985, w.e.f. 1-8-1985.

[694]Substituted by Income-tax (Eighth Amendment) Rules, 1983, w.r.e.f. 3-10-1981. Earlier, clause (d), was substituted by the Income-tax (Fourth Amendment) Rules, 1964.

[695]Inserted by the Income-tax (Fifth Amendment) Rules, 1985, w.e.f. 1-8-1985.

[696]The expression includes a 'flat': Karnataka Bank Employees Assn v CIT (1998) 234 ITR 628 (Kar).

[697]Substituted for "two thousand and five hundred" by the Income-tax (Third Amendment) Rules, 1991, w.e.f. 1-4-1991. Earlier, these words were substituted for "one thousand and six hundred" by the Income-tax (Eighth Amendment) Rules, 1985, w.e.f. 18-12-1985.

[698]Inserted by the Income-tax (Fifth Amendment) Rules, 1985, w.e.f. 1-8-1985.

[699]Ibid.

[700]Substituted for "two thousand and five hundred" by the Income-tax (Third Amendment) Rules, 1991, w.e.f. 1-4-1991. Earlier, these words were substituted for "one thousand and six hundred" by the Income-tax (Eighth Amendment) Rules, 1985, w.e.f. 18-12-1985.

[701]Inserted by the Income-tax (Fifth Amendment) Rules, 1993, w.e.f. 16-3-1993.

[702]Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[703]

Substituted by the Income-tax (Fifth Amendment) Rules, 1993, w.e.f. 16-3-1993. Clause (g), as inserted by the Income-tax (Amendment) Rules, 1979, w.e.f. 30-1-1979, read as under:
"(g)	to meet the expenses of the damage caused to the movable or immovable property of the employee as a direct result of flood, cyclone, earthquake or other convulsion of nature;"

[704]Inserted by the Income-tax (Fifth Amendment) Rules, 1985, w.e.f. 1-8-1985.

[705]Substituted for "two thousand and five hundred" by the Income-tax (Third Amendment) Rules, 1991, w.e.f. 1-4-1991. Earlier, these words were substituted for "one thousand and six hundred" by the Income-tax (Eighth Amendment) Rules, 1985, w.e.f. 18-12-1985.

[706]Inserted by the Income-tax (Fifth Amendment) Rules, 1993, w.e.f. 16-3-1993.

[707]Substituted by the Income-tax (Fifth Amendment) Rules, 1985, w.e.f. 1-8-1985.

[708]Inserted by the Income-tax (Fifth Amendment) Rules, 1993, w.e.f. 16-3-1993.

[709]Substituted for "two thousand and five hundred" by the Income-tax (Third Amendment) Rules, 1991, w.e.f. 1-4-1991. Earlier, these words were substituted for "one thousand and six hundred" by the Income-tax (Eighth Amendment) Rules, 1985, w.e.f. 18-12-1985.

[710]Ibid.

[711]Inserted by the Income-tax (Fifth Amendment) Rules, 1993, w.e.f. 16-3-1993.

[712]Inserted by the Income-tax (Eighth Amendment) Rules, 1983, w.r.e.f. 3-10-1981.

[713]Substituted for "two thousand and five hundred" by the Income-tax (Third Amendment) Rules, 1991, w.e.f. 1-4-1991. Earlier, these words were substituted for "one thousand and six hundred" by the Income-tax (Eighth Amendment) Rules, 1985, w.e.f. 18-12-1985.

[714]Substituted by the Income-tax (Second Amendment) Rules, 1964.

[715]Substituted by the Income-tax (Eighth Amendment) Rules, 1980, w.e.f. 17-11-1980 for the word "twenty". Earlier, "twenty" was substituted for "twenty-three" by the Income-tax (Second Amendment) Rules, 1971.

[716]The expression includes a 'flat': Karnataka Bank Employees Assn v CIT (1998) 234 ITR 628 (Kar).

[717]Inserted by the Income-tax (Eighth Amendment) Rules, 1983, w.r.e.f. 3-10-1981.

[718]Substituted for "two thousand and five hundred" by the Income-tax (Third Amendment) Rules, 1991, w.e.f. 1-4-1991. Earlier, these words were substituted for "one thousand and six hundred" by the Income-tax (Eighth Amendment) Rules, 1985, w.e.f. 18-12-1985.

[719]Substituted by the Income-tax (Fifth Amendment) Rules, 1985, w.e.f. 1-8-1985.

[720]Substituted for "twenty-four" by the Income-tax (Eighth Amendment) Rules, 1985, w.e.f. 18-12-1985.

[721]Inserted by the Income-tax (Eighth Amendment) Rules, 1983, w.r.e.f. 3-10-1981.

[722]Substituted for "two thousand and five hundred" by the Income-tax (Third Amendment) Rules, 1991, w.e.f. 1-4-1991. Earlier, these words were substituted for "one thousand and six hundred" by the Income-tax (Eighth Amendment) Rules, 1985, w.e.f. 18-12-1985.

[723]Substituted for "six" by the Income-tax (Fifth Amendment) Rules, 1985, w.e.f. 1-8-1985.

[724]Inserted by the Income-tax (Fifth Amendment) Rules, 1985, w.e.f. 1-8-1985.

[725]Inserted by the Income-tax (Eighth Amendment) Rules, 1983, w.r.e.f. 3-10-1981.

[726]See Letter BC No. T-II/251(77), dated 18-6-1965 and F. No. 44/13/64-ITJ, dated 6-9-1964.

[727]Inserted by the Income-tax (Fifth Amendment) Rules, 1985, w.e.f. 1-8-1985.

[728]

Substituted by the Income-tax (Second Amendment) Rules, 1971.

[729]Inserted by the Income-tax (Fifth Amendment) Rules, 1985, w.e.f. 1-8-1985.

[730]Substituted for "two thousand and five hundred" by the Income-tax (Third Amendment) Rules, 1991, w.e.f. 1-4-1991. Earlier, these words were substituted for "one thousand and six hundred" by the Income-tax (Eighth Amendment) Rules, 1985, w.e.f. 18-12-1985.

[731]Inserted by the Income-tax (Eighth Amendment) Rules, 1983, w.r.e.f. 3-10-1981.

[732]Substituted for "clause (d) or clause (e)" by the Income-tax (Fifth Amendment) Rules, 1993, w.e.f. 16-3-1993.

[733]Inserted by the Income-tax (Eighth Amendment) Rules, 1983, w.r.e.f. 3-10-1981.

[734]Inserted by the Income-tax (First Amendment) Rules, 2007, w.e.f. 15-1-2007.

[735]Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[736]Substituted for "Income-tax Officer", ibid.

[737]

Substituted by the Income-tax (Ninth Amendment) Rules, 1994, w.e.f. 30-8-1994. Prior to substitution, rule 73, read as under:

"73. Withdrawal on leave preparatory to retirement.—Notwithstanding anything contained in rules 68 to 72, it shall be open to the trustees of a provident fund to permit the withdrawal of ninety per cent of the amount standing at the credit of an employee if the employee takes leave preparatory to retirement, provided that if he rejoins duty on the expiry of his leave he shall refund the amount drawn together with interest at the rate allowed by the fund."

[738]Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[739]

Substituted by the Income-tax (First Amendment) Rules, 2007, w.e.f. 15-1-2007. Prior to the substitution, sub-rule (4), as amended by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988, read as under:

"(4) An abstract for the financial year or other applicable accounting period of the individual account of each employee participating in a provident fund in respect of whom a return is required to be furnished under sub-rule (4) of rule 35 shall be furnished by the trustees to the Assessing Officer specified in sub-rule (2) of rule 32 not later than the fifteenth day of June in each year or any other subsequent date fixed by the Assessing Officer. It shall be in the form prescribed in sub-rule (2) of this rule, but shall show only the totals of the various columns thereof for the financial year or other accounting period. It shall also give an account of any temporary withdrawals by the employee during the year and of the repayment thereof. Similar abstract shall also be furnished in respect of other employees participating in a provident fund who were allowed withdrawals under rules 68 to 70 or who come within the purview of sub-rule (1) of rule 75."

[740]Inserted by the Income-tax (First Amendment) Rules, 2007, w.e.f. 15-1-2007.

[741]Rule 75(1) fixing ceiling limit for joint contribution of employer and employee goes beyond the power of rule making authority. It has to be read down to limit contribution of employer only: CIT v Raab Pipe Works (P) Ltd (1997) 226 ITR 710 (Mad).

[742]The restriction of deduction to Rs. 250 applies to contributions to fund maintained by the company only. The contributions to a fund under a scheme formulated under EPF Act are deductible in full: CIT v Indocean Engineer (P) Ltd (1997) 225 ITR 201 (AP).

[743]Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[744]Ibid.

[745]Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[746]Ibid.

[747]Ibid.

[748]Substituted for "Income-tax Officer", ibid.

[749]Ibid.

[750]Substituted for "The application shall contain the following information" by the Income-tax (First Amendment) Rules, 2007, w.e.f. 15-1-2007.S

[R751]

Substituted by the Income-tax (First Amendment) Rules, 2007, w.e.f. 15-1-2007. Prior to the substitution, sub-rule (4), read as under:

"(4) A verification in the following form shall be annexed to the application:—

Form of verification

We/I, the trustee(s) of the above-named fund, do declare that what is stated in the above application is true to the best of our/my information and belief, and that the documents sent herewith are the originals or true copies thereof."

[R752]

Inserted by the Income-tax (First Amendment) Rules, 2007, w.e.f. 15-1-2007.

[R753]Inserted by the Income-tax (Second Amendment) Rules, 1971, w.e.f. 11-5-1971. Order of recognition once granted cannot be reviewed by the taxing authorities: Gestetner Duplicators (P) Ltd v CIT (1979) 117 ITR 1 (SC).

[R754]Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[R755]

Substituted by the Income-tax (First Amendment) Rules, 2007, w.e.f. 15-1-2007. Prior to the substitution, rule 79 as amended by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988, read as under:

"79. Withdrawal of recognition.—Before withdrawing recognition, the Chief Commissioner or Commissioner shall give an opportunity to the employer and the trustees of the fund to show cause why recognition should not be withdrawn."

[R756]Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[R757]Substituted for "income-tax and super-tax" by the Income-tax (Amendment) Rules, 1967.

[R758]Substituted for "income-tax and super-tax" by the Income-tax (Amendment) Rules, 1967.

[R759]See Part B of the Fourth Schedule.

[R760]Inserted by the Income-tax (Eighth Amendment) Rules, 1996, w.r.e.f. 29-9-1995.

[R761]Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[R762]Substituted by the Income-tax (Fourth Amendment) Rules, 1974, w.e.f. 1-11-1974.

[R763]Inserted by the Income-tax (Sixteenth Amendment) Rules, 1990, w.e.f. 1-4-1991.

[R764]Substituted for "twenty-five" by the Income-tax (Second Amendment) Rules, 1998, w.r.e.f. 22-9-1997.

[R765]See Circular Nos. 44(3)/IT/49, dated 12-2-1949 and 4-P(LVIII-30), dated 25-11-1965. See also CIT v Hyderabad Asbestos Cement Products Ltd (1988) 172 ITR 762 (AP) holding that the conditions laid down in Notification No. 100 (SO No. 3433), dated 21-10-1965 are in excess of the power conferred on the Board by the second limb of section 36(1)(iv) and are thus not valid.

[R766]Inserted by the Income-tax (Second Amendment) Rules, 1998, w.r.e.f. 22-9-1997.

[R767]See Circular Nos. 444, dated 13-12-1985; 482, dated 26-3-1987; 500, dated 9-12-1987. See also Circular No. 403, dated 5-12-1984, reproduced, ibid, volume 1, p.

[R768]Inserted by the Income-tax (Fifteenth Amendment) Rules, 2002, w.r.e.f. 23-10-2000. The same amendment was made by the Income-tax (Fourth Amendment) Rules, 2002, w.e.f. 1-4-2002.

[R769]Ibid.

[R770]Inserted by the Income-tax (Eighth Amendment) Rules, 1996, w.r.e.f. 29-9-1995.

[R771]Substituted by the Income-tax (Second Amendment) Rules, 1968.

[R772]Substituted for "one-fourth" by the Income-tax (Fourth Amendment) Rules, 1984, w.e.f. 1-4-1985.

[R773]Substituted for "one-third", ibid.

[R774]See also Sasadhar Chakravarty v Union of India (1997) 223 ITR 796 (SC) holding rule 91 is neither arbitrary nor unreasonable.

[R775]Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[R776]Ibid.

[R777]See Circular No. 595, dated 5-3-1991.

[R778]Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[R779]See Circular No. 595, dated 5-3-1991.

[R780]Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[R781]Ibid.

[R782]See Part C of the Fourth Schedule.

[R783]Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[R784]Substituted by the Income-tax (Fourth Amendment) Rules, 1974, w.e.f. 1-11-1974.

[R785]See Carborandum Universal Ltd. v CIT (1984) 146 ITR 1 (Mad).

[R786]Substituted for "31st day of March, 1987" by the Income-tax (Fourth Amendment) Rules, 1987, w.e.f. 1-4-1987. Earlier, the words "31st day of March, 1987" were substituted for the words "31st day of October, 1974" by the Income-tax (Second Amendment) Rules, 1987, w.e.f. 1-4-1987.

[R787]Inserted by the Income-tax (Sixteenth Amendment) Rules, 1990, w.e.f. 1-4-1990.

[R788]Inserted by the Income-tax (Fifteenth Amendment) Rules, 2002, w.r.e.f. 23-10-2000. The same amendment was made by the Income-tax (Fourth Amendment) Rules, 2002, w.e.f. 1-4-2002.

[R789]

Inserted by the Income-tax (Fourth Amendment) Rules, 1987, w.e.f. 1-4-1987. Earlier these words were omitted by the Income-tax (Second Amendment) Rules, 1987, w.e.f. 1-4-1987. See Circular No. 482, dated 26-3-1987.

[R790]Inserted by the Income-tax (Second Amendment) Rules, 197.

[R791]See Circular No. 110, dated 13-4-1973.

[R792]Substituted by Income-tax (Eighth Amendment) Rules, 1988, w.e.f. 5-10-1988.

[R793]For judicial interpretation, see CIT v Eastern Equipment & Sales Ltd. (1993) 201 ITR 858 (Cal).

[R794]Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[R795]See Circular Nos. 70(XI-3), dated 3-11-1951 and 30(XLVII-18), dated 30-11-1964. For judicial interpretation, see CIT (Addl) v Balrampur Raj Electric Supply Co. (1981) 128 ITR 615 (Guj); CIT v Smith, Kline & French (India) Ltd. (1991) 191 ITR 308 (Kar).

[R796]Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[R797]Ibid.

[R798]An employer is entitled to deduction in respect of the interest payment made by it on the amount drawn by it from the gratuity fund: CIT v Punalur Paper Mills Ltd. (1998) 233 ITR 369 (Ker).

[R799]Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[R800]Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[R801]Ibid.

[R802]Omitted by the Income-tax (Thirty-second Amendment) Rules, 1999, w.e.f. 19-11-1999. Rule 111A was inserted by the Income-tax (Third Amendment) Rules, 1964.

[R803]Inserted by the Income-tax (Fourth Amendment) Rules, 1972, w.e.f. 1-1-1973.

[R804]Inserted by the Income-tax (Fourth Amendment) Rules, 1971, w.e.f. 1-4-1971.

[R805]Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[R806]Substituted for "Inspecting Assistant Commissioner", ibid.

[R807]Substituted for "Income-tax Officer", ibid.

[R808]The constitutionality of this rule has been upheld in Pooran Mal v Director of Inspection (1974) 93 ITR 505 (SC) and Bhupendra Ratilal Thakkar v CIT (1976) 102 ITR 531 (SC).

[R809]Jagmohan Mahajan v CIT (1976) 103 ITR 579 (P&H); Sibal (HL) v CIT (1976) 103 ITR 606 (P&H); Manmohan Krishan Mahajan v CIT (1977) 107 ITR 420 (P&H); Devarajan (I) v Tamil Nadu Farmers Service Cooperative Federation (1981) 131 ITR 506 (Mad); Dwarka Prosad Agarwalla v Director of Inspection (1982) 137 ITR 456 (Cal); Balakrishnan Nair (Dr. C) v CIT (1999) 237 ITR 70 (Ker).

[R810]Substituted for "(11)" by the Income-tax (Second Amendment) Rules, 1965. Earlier, "(11)" was substituted for "(10)" by the Income-tax (Third Amendment) Rules, 1964.

[R811]Substituted by the Income-tax (Fourth Amendment) Rules, 1975, w.e.f. 1-10-1975. Earlier, sub-rule (2) was substituted by the Income-tax (Third Amendment) Rules, 1964 and later amended by the Income-tax (Amendment) Rules, 1965; Income-tax (Second Amendment) Rules, 1965, w.e.f. 15-2-1965 and Income-tax (Fifth Amendment) Rules, 1965, w.e.f. 10-6-1965.

[R812]Substituted for "Director of Inspection" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[R813]Substituted for "Commissioner", ibid.

[R814]Substituted for "Deputy Director of Inspection", ibid.

[R815]Substituted for "Inspecting Assistant Commissioner", ibid.

[R816]Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[R817]Ibid.

[R818]Substituted for "the Inspecting Assistant Commissioner or the Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1965.

[R819]Inserted by the Income-tax (Second Amendment) Rules, 1965.

[R820]Substituted for "the Inspecting Assistant Commissioner or the Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1965.

[R821]Inserted by the Income-tax (Fourth Amendment) Rules, 1975, w.e.f. 1-10-1975.

[822]Inserted as sub-rule (4A) by the Income-tax (Second Amendment) Rules, 1965.

[823]Renumbered as sub-rule (4B) by the Income-tax (Fourth Amendment) Rules, 1975, w.e.f. 1-10-1975.

[824]Substituted for "The Inspecting Assistant Commissioner or the Income-tax Officer, as the case may be" by the Income-tax (Fifth Amendment) Rules, 1965.

[825]Substituted for "building or place" by the Income-tax (Fourth Amendment) Rules, 1975, w.e.f. 1-10-1975.

[826]Substituted for "the Inspecting Assistant Commissioner or the Income-tax Officer, as the case may be" by the Income-tax (Fifth Amendment) Rules, 1965.

[827]Inserted as sub-rule (4B) by the Income-tax (Second Amendment) Rules, 1965.

[828]Renumbered as sub-rule (4C) by the Income-tax (Fourth Amendment) Rules, 1975, w.e.f. 1-10-1975.

[829]Substituted for "The Inspecting Assistant Commissioner or the Income-tax Officer, as the case may be" by the Income-tax (Fifth Amendment) Rules, 1965.

[830]Substituted for "The Inspecting Assistant Commissioner or the Income-tax Officer, as the case may be" by the Income-tax (Fifth Amendment) Rules, 1965.

[831]Substituted by the Income-tax (Fourth Amendment) Rules, 1975, w.e.f. 1-10-1975.

[832]Ibid.

[833]Substituted for "the Inspecting Assistant Commissioner or the Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1965.

[834]Inserted by the Income-tax (Third Amendment) Rules, 1964.

[835]Substituted by the Income-tax (Fourth Amendment) Rules, 1975, w.e.f. 1-10-1975.

[836]Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[837]Ibid.

[838]Substituted by the Income-tax (Fourth Amendment) Rules, 1975, w.e.f. 1-10-1975.

[839]Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[840]Ibid.

[841]Substituted by the Income-tax (Second Amendment) Rules, 1965. It was originally inserted by the Income-tax (Third Amendment) Rules, 1964.

[842]

Substituted for "The Inspecting Assistant Commissioner or the Income-tax Officer, as the case may be" by the Income-tax (Fifth Amendment) Rules, 1965.

[843]Substituted for "the Inspecting Assistant Commissioner or any other income-tax authority" by the Income-tax (Fifth Amendment) Rules, 1965.

[844]Substituted for "the occupant of the building or place searched" by the Income-tax (Fourth Amendment) Rules, 1975, w.e.f. 1-10-1975.

[845]

Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[846]Substituted for "and also to the Director of Inspection where the authorisation under sub-rule (2) has been issued by him" by the Income-tax (Fourth Amendment) Rules, 1975, w.e.f. 1-10–1975.

[847]Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[848]Originally sub-rule (10). It was renumbered by the Income-tax (Third Amendment) Rules, 1964.

[849]Substituted by the Income-tax (Second Amendment) Rules, 1965.

[850]Substituted for "The Inspecting Assistant Commissioner or the Income-tax Officer, as the case may be" by the Income-tax (Fifth Amendment) Rules, 1965.

[851]Sub-rules (12), (13) and (14) inserted by the Income-tax (Second Amendment) Rules, 1965.

[852]Inserted by the Income-tax (Sixth Amendment) Rules, 1981, w.e.f. 19-6-1981.

[853]Substituted for "Government Treasury", ibid.

[854]The words "free of charge" omitted by the Income-tax (Sixth Amendment) Rules, 1981, w.e.f. 19-6-1981.

[855]Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[856]Substituted for "Government Treasury" by the Income-tax (Sixth Amendment) Rules, 1981, w.e.f. 19-6-1981.

[857]Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[858]Inserted by the Income-tax (Second Amendment) Rules, 1965.

[859]Substituted for "the Inspecting Assistant Commissioner or the Income-tax Officer, as the case may be" by the Income-tax (Fifth Amendment) Rules, 1965.

[860]Substituted for "The Inspecting Assistant Commissioner or the Income-tax Officer, as the case may be", ibid.

[861]Substituted by the Income-tax (Fourth Amendment) Rules, 1975, w.e.f. 1-10-1975. This sub-rule was inserted by the Income-tax (Second Amendment) Rules, 1965.

[862]Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[863]Inserted by the Income-tax (Second Amendment) Rules, 1965.

[864]Rule 112A is not mandatory. Section 132(5) permitted an Assessing Officer to pass an order within 90 days and that power could not be whittled down in any way by a rule made under that section: Director of Inspection v Pooran Mall & Sons (1974) 96 ITR 390 (SC).

[865]Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[866]Inserted by the Income-tax (Fourth Amendment) Rules, 1975, w.e.f. 1-10-1975.

[867]Substituted for "(1B)" by the Income-tax (Fifth Amendment) Rules, 1965.

[868]Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[869]The notice can require explanation of the source of acquisition of even such items of undisclosed income as during the search of their premises had merely been listed: Gardhara Singh v CIT (1980) 125 ITR 340 (P&H).

[870]Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[871]Ibid.

[872]Ibid.

[873]Ibid.

[874]Ibid.

[875]Ibid.

[876]Inserted by the Income-tax (Second Amendment) Rules, 1965.

[877]The constitutionality of this rule was upheld in Bhupendra Ratilal Thakkar v CIT (1976) 102 ITR 531 (SC).

[878]Substituted for "(1B)" by the Income-tax (Fifth Amendment) Rules, 1965.

[879]Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[880]Substituted by the Income-tax (Fifth Amendment) Rules, 1965. It was inserted by the Income-tax (Second Amendment) Rules, 1965.

[881]Substituted for "132A" by the Income-tax (Fourth Amendment) Rules, 1975, w.e.f. 1-10-1975.

[882]Inserted by the Income-tax (Fourth Amendment) Rules, 1975, w.e.f. 1-10-1975. Earlier, it was inserted by the Income-tax (Second Amendment) Rules, 1965, and omitted by the Income-tax (Fifth Amendment) Rules, 1965.

[883]Substituted for "Director of Inspection" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[884]Substituted for "Commissioner", ibi.

[885]Ibid.

[886]Substituted for "Director of Inspection", ibid.

[887]Inserted by the Income-tax (Fifth Amendment) Rules, 1986, w.e.f. 9-7-1986.

[888]Heading improvised — Not provided for by the Amendment Rules.

[889]Substituted by the Income-tax (Third Amendment) Rules, 1964.

[890]Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[891]Inserted by the Income-tax (Second Amendment) Rules, 1968.

[892]Ibid.

[893]Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[894]Ibid.

[895]Inserted by the Income-tax (Second Amendment) Rules, 1968.

[896]Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[897]Inserted by the Income-tax (Third Amendment) Rules, 1976, w.e.f. 1-4-1976. Original rule was omitted by the Income-tax (Third Amendment) Rules, 1964.

[898]See section 295(2)(eeb).

[899]Substituted for "or sub-section (2)" by the Income-tax (Twenty-fourth Amendment) Rules, 2001, w.e.f. 31-12-2001.

[900]The words "in duplicate" omitted, ibid.

[901]Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[902]Substituted for "Income-tax Officer", ibid.

[903]Ibid.

[904]Ibid.

[905]Inserted by the Income-tax (Twenty-fourth Amendment) Rules, 2001, w.e.f. 31-12-2001.

[906]Substituted for "fifty thousand rupees", ibid.

[907]Inserted by the Income-tax (Fifth Amendment) Rules, 1991, w.e.f. 25-2-1991.

[908]Inserted by the Income-tax (Seventh Amendment) Rules, 2003, w.e.f. 29-5-2003.

[909]

Substituted by the Income-tax (Twentieth Amendment) Rules, 2004, w.e.f. 8-12-2004. Prior to the substitution, section 114A, as inserted by the Income-tax (Fifth Amendment) Rules, 1987, w.e.f. 12-8-1987 and amended by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988, read as under:
"114A. Application for allotment of a tax deduction account number.—(1) An application under sub-section (1) of section 203A for the allotment of a tax deduction account number shall be made in duplicate in Form No. 49B.
(2) An application referred to in sub-rule (1) shall be made,—
(i)	in cases where the function of allotment of tax deduction account number under section 203A has been assigned by the Chief Commissioner or Commissioner to any particular Assessing Officer, to that Assessing Officer;
(ii)	in any other case, to the Assessing Officer having jurisdiction to assess the applicant.
(3) The application referred to in sub-rule (1) shall be made,—
(i)	in a case where a person has deducted tax in accordance with the provisions of Chapter XVII under the heading 'B—Deduction at source' prior to the 1st day of June, 1987, on or before the 30th day of September, 1987;
(ii)	in a case where a person has deducted or deducts tax in accordance with the provisions of Chapter XVII under the heading 'B—Deduction at source' on or after the 1st day of June, 1987, within one month from the end of the month in which the tax was deducted or the 30th day of September, 1987, whichever is later."

[910]

See Circular No. 497, dated 9-10-1987.

Footnote of page 1.261

[911]Inserted by the Income-tax (Twentieth Amendment) Rules, 2002, w.e.f. 5-8-2002.

[912]Inserted by the Income-tax (Sixteenth Amendment) Rules, 1998, w.e.f. 1-11-1998.

[913]The words "or General Index Register Number" omitted by the Income-tax (Seventeenth Amendment) Rules, 2004, w.e.f. 1-12-2004.

[914]The words "or General Index Register Number" omitted by the Income-tax (Seventeenth Amendment) Rules, 2004, w.e.f. 1-12-2004.

[915]Inserted by the Income-tax (Twenty-fourth Amendment) Rules, 1998, w.e.f. 1-11-1998.

[916]Substituted for "ten" by the Income-tax (Eighth Amendment) Rules, 2002, w.e.f. 19-6-2002.

[917]Inserted by the Income-tax (Fourth Amendment) Rules, 1999, w.e.f. 27-1-1999.

[918]Inserted by the Income-tax (Fourth Amendment) Rules, 1999, w.e.f. 27-1-1999.

[919]Inserted by the Income-tax (Seventeenth Amendment) Rules, 2004, w.e.f. 1-12-2004.

[920]

Substituted by the Income-tax (Seventeenth Amendment) Rules, 2004, w.e.f. 1-12-2004. Prior to the substitution, the first, second and third provisos read as under:

"Provided that a person shall quote General Index Register Number in the documents pertaining to transactions specified in the above clauses (a) to 1[(k)] till such time the permanent account number is allotted to him:

Provided further that where a person, making an application for opening an account referred to in 2[clause (c) and] clause (f) of this rule, is a minor and who does not have any income chargeable to income-tax, he shall quote the permanent account number or General Index Register Number of his father or mother or guardian, as the case may be, in the document pertaining to the transaction referred to in the said 3[clause (c) and] clause (f):

Provided also that any person, who has not been allotted a permanent account number or who does not have a General Index Register Number and who makes payment in cash or otherwise than by a crossed cheque drawn on a 4[bank or through credit card issued by any bank] in respect of any transaction specified in clauses (a) to 5[(k)], shall make a declaration in Form No. 60 giving therein the particulars of such transaction."

1 Substituted for "(h)" by the Income-tax (Eighth Amendment) Rules, 2002, w.e.f. 19-6-2002.

2 Inserted by the Income-tax (Fourth Amendment) Rules, 1999, w.e.f. 27-1-1999.

3 Inserted by the Income-tax (Fourth Amendment) Rules, 1999, w.e.f. 27-1-1999.

4 Substituted for "banker by a crossed bank draft" by the Income-tax (Fourth Amendment) Rules, 1999, w.e.f. 27-1-1999

5 Substituted for "(h)" by the Income-tax (Eighth Amendment) Rules, 2002, w.e.f. 19-6-2002.

[921]The words "clauses (a) to (k) of" omitted by the Income-tax (Seventeenth Amendment) Rules, 2004, w.e.f. 1-12-2004. Earlier, the reference to clause (k) was substituted for clause (h) by the Income-tax (Eighth Amendment) Rules, 2002, w.e.f. 19-6-2002.

[922]Omitted by the Income-tax (Fourth Amendment) Rules, 1999, w.e.f. 27-1-1999.

[923]Inserted by the Income-tax (Fourth Amendment) Rules, 1999, w.e.f. 27-1-1999.

[924]Substituted for "sub-rule (1)" by the Income-tax (Fourth Amendment) Rules, 1999, w.e.f. 27-1-1999.

[925]Inserted by the Income-tax (Eighth Amendment) Rules, 2002, w.e.f. 19-6-2002.

[926]Inserted by the Income-tax (Seventeenth Amendment) Rules, 2004, w.e.f. 1-12-2004.

[927]Substituted for "sub-rule (1)" by the Income-tax (Fourth Amendment) Rules, 1999, w.e.f. 27-1-1999.

[928]Inserted by the Income-tax (Eighth Amendment) Rules, 2002, w.e.f. 19-6-2002.

[929]Substituted for "sub-rule (1)" by the Income-tax (Fourth Amendment) Rules, 1999, w.e.f. 27-1-1999.

[930]Substituted by the Income-tax (Fourth Amendment) Rules, 1999, w.e.f. 27-1-1999.

[931]Inserted by the Income-tax (Seventeenth Amendment) Rules, 2004, w.e.f. 1-12-2004.

[932]Substituted for "who has received any document relating to a transaction specified under clauses (a) to (k) of rule 114B shall ensure after verification that permanent account number or General Index Register Number has been duly and correctly quoted in the document or declaration received by such person." by the Income-tax (Seventeenth Amendment) Rules, 2004, w.e.f. 1-12-2004. Earlier, the reference to clause (k) was substituted for clause (h) by the Income-tax (Eighth Amendment) Rules, 2004, w.e.f. 1-12-2004.

[933]

Substituted by the Income-tax (Seventeenth Amendment) Rules, 2004, w.e.f. 1-12-2004. Prior to the substitution, rule 114D, as substituted by the Income-tax (Ninth Amendment) Rules, 2002, w.e.f. 19-6-2002 read as under:
"114D. Time and manner in which persons referred to in sub-rule (2) of rule 114C shall intimate the details of transaction to the Director of Income-tax (Investigation).—(1) Every person referred to in sub-rule (2) of rule 114C shall forward to the concerned Director of Income-tax (Investigation) or Commissioner of Income-tax (Central Information Branch), the following documents, namely:
(a)	a statement indicating therein details of all documents pertaining to any transaction referred to in clauses (a) to (k) of rule 114B where payment is made in cash;
(b)	the statement referred to in clause (a) shall contain,—

(i)    name and address of the person entering into the transactions;

(ii)    nature and date of the transaction;

(iii)    amount of each transaction;

(iv)    permanent account number or General Index Register Number quoted in the documents pertaining to any transaction;

(c)	copies of declaration in Form No. 60 referred to in third proviso to rule 114B;
(d)	copies of declaration in Form No. 61 referred to in clause (a) of sub-rule (1) of rule 114C:
Provided that copies of declaration furnished in respect of transaction referred to in clause (f) of rule 114B shall not be furnished to the Director of Income-tax (Investigation) or Commissioner of Income-tax (Central Information Branch).
(2) The statement and copies of declaration in Form Nos. 60 and 61 referred to in sub-rule (1) shall be forwarded to the concerned Director of Income-tax (Investigation) or Commissioner of Income-tax (Central Information Branch) in two instalments, that is, the forms received up to 30th September, shall be forwarded latest by 31st October of that year and the declaration till the 31st March shall be furnished latest by 30th April of the same year."
Rule 114D was originally inserted by the Income-tax (Sixteenth Amendment) Rules, 1998, w.e.f. 1-11-1998 and substituted by the Income-tax (Fourth Amendment) Rules, 1999, w.e.f. 27-1-1999.

[934]

Substituted by the Income-tax (Twenty-first Amendment) Rules, 2005, w.r.e.f. 1-12-2004. Prior to the substitution, rule 114E, as inserted by the Income-tax (Seventeenth Amendment) Rules, 2004, w.e.f. 1-12-2004 read as under:

"114E. Furnishing of Annual Information Return.—(1) The annual information return required to be furnished under sub-section (1) of section 285BA shall be furnished in Form No. 65 and shall be verified in the manner indicated therein.

(2) The return referred to in sub-rule (1) shall be furnished by every person mentioned in column (2) of the Table below in respect of all transactions of the nature and value specified in the corresponding entry in column (3) of the said Table, which are registered or recorded by him during a financial year beginning on or after the 1st day of April, 2004:—

Table

Sl. No. (1)	Class of person (2)	Nature and value of transaction (3)
1.	A Banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act).	Cash deposits aggregating to ten lakh rupees or more in a year in any savings account of a person maintained in that bank.
2.	A banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act) or any other company or institution issuing credit card	Payments made by any person against bills raised in respect of a credit card issued to that person, aggregating to two lakh rupees or more in the year.
3.	A trustee of a Mutual Fund or such other person managing the affairs of the Mutual Fund as may be duly authorised by the trustee in this behalf.	Receipt from any person of an amount of two lakh rupees or more for acquiring units of that Fund.
4.	A company or institution issuing bonds or debentures.	Receipt from any person of an amount of five lakh rupees or more for acquiring bonds or debentures issued by the company or institution.
5.	A company issuing shares through a public or rights issue.	Receipt from any person of an amount of one lakh rupees or more for acquiring shares issued by the company.
6.	Registrar or Sub-registrar appointed under section 6 of the Registration Act, 1908.	Purchase or sale by any person of immovable property valued at thirty lakh rupees or more.
7.	A person being an officer of the Reserve Bank of India, constituted under section 3 of the Reserve Bank of India Act, 1934, who is duly authorized by the Reserve Bank of India in this behalf.	Receipt from any person of an amount or amounts aggregating to five lakh rupees or more in a year for bonds issued by the Reserve Bank of India.

(3) The return referred to in sub-rule (1) shall be furnished to the Commissioner of Income-tax (Central Information Branch):

Provided that where the Board has authorised an agency to receive such return on behalf of the Commissioner of Income-tax (Central Information Branch), the return shall be furnished to that agency.

(4)   (a)    The return comprising Part A and Part B of Form No. 65 referred to in sub-rule (1) shall be furnished on computer readable media being a floppy (3.5 inch and 1.44 MB capacity) or CD-ROM (650 MB or higher capacity) or Digital Video Disc (DVD), along with Part-A thereof on paper.

(b)    The person responsible for furnishing the return shall ensure that:—

(i)    if the data relating to the return or statement is copied using data compression or backup software utility, the corresponding software utility or procedure for its decompression or restoration shall also be furnished along with the computer media return or statement;

(ii)    the return is accompanied with a certificate regarding clean and virus free data.

(5) The return referred to in sub-rule (1) shall be furnished on or before 31st August, immediately following the financial year in which the transaction is registered or recorded.
(6) The return referred to in sub-rule (1) shall be signed and verified by—
(a)	in a case where the person furnishing the return is an assessee as defined in clause (7) of section 2 of the Act, by a person specified in section 140 of the Act;
(b)	in any other case, by the person referred to in column (2) of the Table below sub-rule (2)."

[935]M/s. National Securities Depository Limited, Trade World, 4th Floor, Kamla Mills Compound, Lower Parel, Mumbai-400 013 including its front offices called TIN Facilitation Centres have been authorised: Notification, dated 21-7-2005.

[936]Director General of Income Tax (Systems), ARA Centre, E-2 Jhandewalan Extension, New Delhi has been designated: Notification, dated 21-7-2005.

[937]Substituted by the Income-tax (Eighth Amendment) Rules, 1977, w.e.f. 1-11-1977. Earlier, it was substituted by the Income-tax (Third Amendment) Rules, 1967 and later amended by the Income-tax (Second Amendment) Rules, 1968.

[938]

Rule 115 is not ultra vires the substantive provisions of the Income-tax Act: CIT v Chowgule & Co. Ltd. (1996) 218 ITR 384 (SC).

[939]See section 192(6). Rule 115 prescribes the rate of exchange for conversion into rupees of income expressed in foreign currency. It has no application to incomes expressed in Indian rupees: CIT v E R Squibb & Sons Inc (1999) 235 ITR 1 (Bom); CIT v Pfizer Corpn (1993) 202 ITR 105 (Bom).

[940]Numbered by the Income-tax (Seventh Amendment) Rules, 1990, w.e.f. 1-4-1990.

[941]Substituted for "chargeable under the head" by the Income-tax (Fifth Amendment) Rules, 1989, w.e.f. 18-5-1989.

[942]See CIT v Chowgule & Co. Ltd. (1996) 218 ITR 384 (SC) on the interpretation of this clause.

[943]Inserted by the Income-tax (Fifth Amendment) Rules, 1989, w.e.f. 18-5-1989.

[944]Inserted by the Income-tax (Ninth Amendment) Rules, 1993, w.e.f. 25-5-1993.

[945]Substituted for the words "the date on which the tax has been so deducted" by the Income-tax (Third Amendment) Rules, 1995, w.e.f. 9-5-1995.

[946]Inserted by the Income-tax (Seventh Amendment) Rules, 1990, w.e.f. 1-4-1990.

[947]Inserted by the Income-tax (Fourth Amendment) Rules, 1991, w.r.e.f. 1-4-1990.

[R948]Omitted by the Income-tax (Fifth Amendment) Rules, 1989, w.e.f. 18-5-1989. Prior to the omission, rule 116 was amended by the Income-tax (Ninth Amendment) Rules, 1977, w.e.f. 1-4-1978.

[R949]Omitted by the Income-tax (Fifth Amendment) Rules, 1989, w.e.f. 18-5-1989.

[R950]Inserted by the Income-tax (Second Amendment) Rules, 1964.

[R951]Opportunity must be given to assessee to show-cause why interest should not be levied: Ambica Chemical Products v ITO (1991) 191 ITR 382 (AP). See also Kerala State Cashew Development Corpn Ltd. (1990) 186 ITR 521 (Ker).

[R952]Substituted for "The Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.e.f. 18-5-1989.

[R953]

Rule 117A cannot be read independently of section 139. The rule refers not only to section 139 but also uses the expression "circumstances": Kunal Engg Co. Ltd. v CIT (1996) 217 ITR 11 (Mad).

[R954]Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[R955]While exercising the discretion, the Assessing Officer cannot act arbitrarily: Leader Engg. Works v ITO (2003) 264 ITR 65 (P&H).

[R956]Substituted for "Income-tax Officer" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[R957]Sufficient cause is not the same as reasonable cause. If facts are enough to satisfy the requirement of sufficient cause, they cannot be interpreted to hold that requirement of reasonable cause has not been made out: Assam Tribune v DCIT (2006) 284 ITR 668 (Gau).

[R958]Substituted for "Inspecting Assistant Commissioner", by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[R959]Inserted by the Income-tax (Eleventh Amendment) Rules, 1989, w.e.f. 30-11-1989.

[R960]Inserted by the Income-tax (Eleventh Amendment) Rules, 2007, w.e.f. 16-10-2007.

[R961]Omitted, ibid. Earlier, rule 118 was amended by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[R962]Omitted by the Income-tax (Eleventh Amendment) Rules, 1989, w.e.f. 30-11-1989. Earlier, rule 119 was amended by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[R963]Substituted by the Income-tax (Tenth Amendment) Rules, 1989, w.e.f. 13-9-1989. It was inserted by the Income-tax (Sixth Amendment) Rules, 1974, w.e.f. 1-1-1975.

[R964]See section 295(2)(kk).

[R965]Omitted by the Income-tax (Fifth Amendment) Rules, 1989, w.e.f. 18-5-1989. It was inserted by the Income-tax (Amendment) Rules, 1965.

[R966]Ibid.

[R967]Inserted by the Income-tax (Third Amendment) Rules, 1976, w.e.f. 1-4-1976.

[R968]See section 295(2)(mma).

[R969]Omitted by the Income-tax (Fifth Amendment) Rules, 1989, w.e.f. 18-5-1989. Earlier, rule 122 was inserted by the Income-tax (Fourth Amendment) Rules, 1972, w.e.f. 15-11-1972 and amended by the Income-tax (Second Amendment) Rules, 1984, w.e.f. 24-7-1984.

[R970]Substituted by the Income-tax (Second Amendment) Rules, 1984, w.e.f. 24-7-1984. It was inserted by the Income-tax (Fourth Amendment) Rules, 1972, w.e.f. 15-11-1972.

[R971]Substituted for "Commissioner" by the Income-tax (Fifth Amendment) Rules, 1989, w.r.e.f. 1-4-1988.

[R972]Section 281A has been omitted by the Benami Transactions (Prohibition) Act, 1988, w.e.f. 19-5-1988.

[R973]Substituted by the Income-tax (Second Amendment) Rules, 1984, w.e.f. 24-7-1984. It was inserted by the Income-tax (Fourth Amendment) Rules, 1972, w.e.f. 15-11-1972.

[R974]Section 281A was repealed by the Benami Transactions (Prohibition) Act, 1988, w.e.f. 19-5-1988. Hence, this rule should be omitted.

[R975]Omitted by the Income-tax (Thirty-second Amendment) Rules, 1999, w.e.f. 19-11-1999. Rule 125 was inserted by the Income-tax (Sixth Amendment) Rules, 1989, w.e.f. 1-4-1989.