MISCELLANEOUS PROVISIONS

FINANCE (NO. 2) ACT, 1971

Deposit Insurance Corporation

120. The Deposit Insurance Corporation was set up under the Deposit Insurance Corporation Act, 1961, and came into existence on 1-1-1962. Under section 30 of that Act, the Corporation was exempted from taxation on its income for an initial period of 5 years covering its profits up to 31-12-1966. This period was extended by 5 years, i.e., to cover profits of the Corporation up to 31-12-1971, by an amendment of section 30 through  the Finance (No. 2) Act, 1967.

FINANCE (NO. 2) ACT, 1971

121. The Corporation has now embarked on an ambitious scheme of extending the coverage of insurance to the co-operative banking sector and also extending such coverage to a higher quantum of individual deposits than formerly. With a view to enabling the Corporation to build up its reserve funds to an adequate extent and also gain experience of the additional risks involved in extending its activities, as stated above, section 30 of the Deposit Insurance Corporation Act, 1961 has been amended by section 53 of the Finance (No. 2) Act, 1971 so as to continue the exemption from taxation of the Corporation on its income for a further period of 5 years. This will cover the profits of the Corporation up to 31-12-1976.

 FINANCE (NO. 2) ACT, 1971

Housing and Urban Development Finance Corporation (P.) Ltd.

122. The Housing and Urban Development Finance Corporation (P.) Ltd. is registered as a company under the Companies Act and is wholly owned by the Government. The primary objective of the Corporation is to provide finances to State Housing Boards, etc., for accelerating housing and urban development programmes. The Corporation will concentrate progressively, on the financing of programmes intended for housing the weaker sections of the community and will thus meet a pressing social need. With a view to enabling the Corporation to perform these functions effectively and to build up its resources, section 54 of the Finance (No. 2) Act, 1971 has made an independent provision exempting from income-tax and surtax the income of the Corporation for a 10-year period covering the assessment years 1971-72 to 1980-81 (both inclusive).

FINANCE (NO. 2) ACT, 1971

Repeal of the provision in section 2 of the Finance Act, 1971 relating to rates of income-tax

123. As the provisions in the Finance Act relating to rates of income-tax seek to replace the corresponding provisions in the earlier Finance Act, 1971, with retrospective effect from 1-4-1971, section 2 of the Finance Act, 1971 has been repealed by section 55 of the Finance (No. 2) Act, 1971.

ANNEXURE I

RATES OF INCOME-TAX FOR THE ASSESSMENT YEAR 1971-72

A.  TAXPAYERS OTHER THAN COMPANIES

1. Individuals, Hindu undivided families, unregistered firms, associations of persons (other than co-operative societies),bodies of individuals and artificial juridical persons

Rates of income-tax

Provided that for the purposes of this paragraph, in the case of a Hindu undivided family which at any time during the previous year satisfies either of the following two conditions, namely,—

  (a)  that it has at least two members entitled to claim partition who are not less than eighteen years of age, or

  (b)  that it has at least two members entitled to claim partition who are not lineally descended one from the other and who are not lineally descended from any other living member of the family :

   (i)  no income-tax shall be payable on a total income not exceeding Rs. 7,000;

  (ii)  where the total income exceeds Rs. 7,000 but does not exceed Rs. 7,660, the income-tax payable thereon shall not exceed forty per cent of the amount by which the total income exceeds Rs. 7,000.

Surcharge on income-tax

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

2. In the case of every co-operative society

Rates of income-tax

Surcharge on income-tax

The amount of income-tax computed at the rate hereinbefore specified shall be increased by a surcharge for purposes of the Union calculated at the rate of ten per cent of such income-tax.

3. In the case of every registered firm

Rates of income-tax

Surcharges on income-tax

The amount of income-tax computed at the rate hereinbefore specified shall be increased by the aggregate of surcharges for purposes of the Union calculated as specified hereunder :

  (a)  in the case of a registered firm whose total income includes income derived from a profession carried on by it and the income so included is not less than fifty-one per cent of such total income, a surcharge calculated at the rate of ten per cent of the amount of income-tax computed at the rate hereinbefore specified;

  (b)  in the case of any other registered firm, a surcharge calculated at the rate of twenty per cent of the amount of income-tax computed at the rate hereinbefore specified ; and

  (c)  a special surcharge calculated at the rate of ten per cent on the aggregate of the following amounts, namely :

   (i)  the amount of income-tax computed at the rate hereinbefore specified; and

  (ii)  the amount of the surcharge calculated in accordance with clause (a), or as the case may be, clause (b) of this sub-paragraph.

Explanation : For the purposes of this paragraph, "registered firm" includes an unregistered firm assessed as a registered firm under clause (b) of section 183 of the Income-tax Act.

4. In the case of every local authority

Rate of income-tax

On the whole of the total income            50 per cent.

Surcharge on income-tax

The amount of income-tax computed at the rate hereinbefore specified shall be increased by a surcharge for purposes of the Union calculated at the rate of ten per cent of such income-tax.

B. COMPANIES

1. In the case of the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956,—

Rates of income-tax

2. In the case of a company, other than the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956,—

Rates of income-tax

Provided that the income-tax payable by a domestic company being a company in which the public are substantially interested, the total income of which exceeds Rs. 50,000 shall not exceed the aggregate of—

  (a)  the income-tax which would have been payable by the company if its total income had been Rs. 50,000 (the income of Rs. 50,000 for this purpose being computed as if such income included income from various sources in the same proportion as the total income of the company); and

  (b)  eighty per cent of the amount by which its total income exceeds Rs. 50,000.

II. In the case of a company other than a domestic company—

   (i)  on so much of the total income as consists of—

  (a)  royalties received from an Indian concern in pursuance of an agreement made by it with the Indian concern after the 31st day of March, 1961, or

  (b)  fees for rendering technical services received from an Indian concern in pursuance of an agreement made by it with the Indian concern after the 29th day of February, 1964.

        and where such agreement has, in either case been approved by the Central Government 50 per cent ;

  (ii)  on the balance, if any, of the total income                       70 per cent.

ANNEXURE II

RATES OF INCOME-TAX FOR DEDUCTION OF TAX AT SOURCE FROM
"SALARIES"  AND  RETIREMENT  ANNUITIES  AND FOR COMPUTING
"ADVANCE TAX" PAYABLE DURING THE FINANCIAL YEAR 1971-72

A. TAXPAYERS OTHER THAN COMPANIES

1. Individuals, Hindu undivided families, unregistered firms, associations of persons (other than co-operative societies), bodies of individuals and artificial juridical persons

Rates of income-tax

Provided that for the purposes of this paragraph, in the case of a Hindu undivided family which at any time during the previous year relevant to the assessment year commencing on the 1st day of April, 1972 satisfies either of the following two conditions, namely :

  (a)  that it has at least two members entitled to claim partition who are not less than eighteen years of age, or

  (b)  that it has at least two members entitled to claim partition who are not lineally descended one from the other and who are not lineally descended from any other living member of the family,

   (i)  no income-tax shall be payable on a total income not exceeding Rs. 7,000,

  (ii)  where the total income exceeds Rs. 7,000 but does not exceed Rs. 7,660, the income-tax payable thereon shall not exceed forty per cent of the amount by which the total income exceeds Rs. 7,000.

Surcharges on income-tax

The amount of income-tax computed in accordance with the preceding provisions of this paragraph shall be increased by a surcharge for purposes of the Union calculated at the following rates, namely :—

  (a)  in a case where the total income does not

        exceed Rs. 15,000                                                     10 per cent ;

  (b)  in any other case                                                       15 per cent :

Provided that the amount of surcharge payable shall, in no case, exceed the aggregate of the following sums, namely :

   (i)  an amount calculated at the rate of 10 per cent on the amount of income-tax on an income of Rs. 15,000 if such income had been the total income (the income of Rs. 15,000 for this purpose being computed as if such income included income from various sources in the same proportion as the total income of the person concerned); and

  (ii)  40 per cent of the amount by which the total income exceeds Rs. 15,000.

2. In the case of every co-operative society

Rates of income-tax

Surcharge on income-tax

The amount of income-tax computed at the rate hereinbefore specified shall be increased by a surcharge for purposes of the Union calculated at the rate of fifteen per cent of such income-tax.

3. In the case of every registered firm

Rates of income-tax

Surcharges on income-tax

The amount of income-tax computed at the rate hereinbefore specified shall be increased by the aggregate of surcharge for purposes of the Union calculated as specified hereunder :

  (a)  in the case of a registered firm whose total income includes income derived from a profession carried on by it and the income so included is not less than fifty-one per cent of such total income, a surcharge calculated at the rate of ten per cent of the amount of income-tax computed at the rate hereinbefore specified ;

  (b)  in the case of any other registered firm, a surcharge calculated at the rate of twenty per cent of the amount of income-tax computed at the rate hereinbefore specified ; and

  (c)  a special surcharge calculated at the rate of fifteen per cent on the aggregate of the following amounts, namely :

   (i)  the amount of income-tax computed at the rate hereinbefore specified; and

  (ii)  the amount of the surcharge calculated in accordance with clause (a), or, as the case may be, clause (b) of this sub-paragraph.

Explanation: For the purposes of this paragraph "registered firm" includes an unregistered firm assessed as a registered firm under clause (b) of section 183 of the Income-tax Act.

4. In the case of every local authority

Rate of income-tax

On the whole of the total income                        50 per cent.

Surcharge on income-tax

The amount of income-tax computed at the rate hereinbefore specified shall be increased by a surcharge for purposes of the Union calculated at the rate of fifteen per cent of such income-tax.

B. COMPANIES

1. In the case of the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956,—

Rates of income-tax

2. In the case of a company, other than the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956,—

Rates of income-tax

Provided that the income-tax payable by a domestic company, being a company in which the public are substantially interested, the total income of which exceeds Rs. 50,000 shall not exceed the aggregate of—

  (a)  the income-tax which would have been payable by the company if its total income had been Rs. 50,000 (the income of Rs. 50,000 for this purpose being computed as if such income included income from various sources in the same proportion as the total income of the company); and

  (b)  eighty per cent of the amount by which its total income exceeds Rs. 50,000.

II. In the case of a company other than a domestic company :

   (i)  on so much of the total income as consists of—

  (a)  royalties received from an Indian concern in pursuance of an agreement made by it with the Indian concern after the 31st day of March, 1961, or

  (b)  fees for rendering technical services received from an Indian concern in pursuance of an agreement made by it with the Indian concern after the 29th day of February, 1964,

  (ii)  on the balance, if any, of the total income                                                   70 per cent.