' •• i~  , - ::,i corrigenda to  '    the fi }tance bill, 1965  - ' : " i' _~ - :a(; (a~ introduced in lok sabha) lfid-p:fl:l~ ,~\fj:th ,'lfna  numbsrs"7 - ",:0· -__-----: page 25, l:'1"e ~~," 1 2 page 31, line 7-- "!  ' :~ ~ \,,2 0:2  q - ~ i 3 pag9 31, line 19~-4 page 36 t li~e 40,-,-:  _ - r !2! "cnar~e~b~e" !!~ "chargeable" 5 page 41, line 35, -after "in which" insert " " , 6 page ~7, line 27,-7 page ~a, li~a ~5,-insert" " , a~~er it s liol'se" insert it rt , 8 page 49, :ine ~3,-for "d~-;3:1:"  :ntsli ~ '~dependantsn  --- for "depandor  s" !~ad:·ltdependants" 10 page 49, line: ~:o,-after iract'~ insert it " , 11 page 50, l1n~ 0,-fer "c:: !e!lci "70 11  " 12 page 51, line 17,-for liwhiahli re9d i:which" ----13 page 54, line 10,-!2!: "1959 ri! ~ '1959'" 14 page 54; 11n9 13 7 -for "1suned" read "issued" --15 page 54, 11n~ 3j,-for :1 192~ ~" !~~ '1922,1 i for" 810,000" read "rs10,oootr -21 page 65, 11ne ~8,­!g!  oe'f !!!!2 "be" 22 page 66, 11ne 22,-before "where" ine;ert "(2)" 23 page 69, 11ne 2,-(1) !2£ "at the rate" ~ "at sllch rate"; and (11) after "rates" insert "as ara" 24 page 78, line 3,-!se if (n1 tro11ne stone)" ~ "(n1 tro1ime stone)" 25 prge 92, line 8,-for nwor~shlprt ~ "worship" 26 corre~t 11ne numbers on pages 1, 3, 7 to 0, 11, 15, 16, 43, 50, 58, 60, 61, 70 to 72 new delhi; march 5, 1965 pfialguna 14, 1886 tsaka) - bill no 10 of ih5 the finance bill, 1965 a bill to give effect to the financial proposals of the central government for the financial year 1965-66 be it enacted by parliament in the sixteenth year of the republic of india as follows:-1 (1) this act may be called the finance act, 1965 short title (2) save as otherwise providedin this act, sections ~ 67 and =~=~t , 69 to 74 shall be deemed to have come into force on the 1st day of april, 1965, and section 68 shall be deemed to have come into force on the 1st day of march, 1965 z (11 subjet:!t to the provisions of sub-sections (2), (3), (4) and incom (5), for the assessment year commencing on the 1st day of april, tax 10 1965, income-tax shall be charged at the rates specified in part i of the first schedule and, in the cases to which paragraphs ~ b, c and d of that part apply, shall be increased by a surcharge for purposes of the union calculated in either case in the manner provided therein  i (2) in making any assessment for the assessment year commencing 5 on the 1st day of april, 1965, where the total income of an assessee, not being a company, includes any income chargeable under the head "salaries", the income-tax payable by the assessee on that part of h~ total income which consists of such inclusion shall be an amount bearin~ to the total amount of income-tax and super-tax payable accordin~ to the rates applicable under the operation of the finance act, 1964, on his total income the same proportion as the amount of s  of 1984 such inclusion bears to his total income  (3) in making any assessment for the assessment year comrrenring on the 1st day of april, 1965, where the total income of a company, other than the life insurance corporation of india established under the life insurance corporation act, 1956, includes any profits and 10 31 of 1958 gains from life insurance business, the income-tax payable bv it shall :j be the aggregate of the income-tax c~lculated-(i) on the amount of profits and gains from life insurance business so included, at the rate applicable to the life insurance corporation of india in accordance with paragraph e of part i is of the first schedule; and (ii) on the remaining part of its total income, at the rate applicable to the company on its total income  43 of 1961 (4) in cases to whlch chapter xii of the income-tax act, 1961 (hereinafter referred to as the income-tax act) appues, the tax 20 chargeable shall be determined as provided in that chapter, aqd with reference to the rates imposed by sup-section (1,' or the rates as \ specified in that chapter as the case may be  - (5) (a) in respect of any assessment for the assessment year ('ommencing on the 1st day of april, 1965----25 (i) an vsessee being an indian company or any other company which has made the prescribed arrangements for the declaration and payment of dividends within india or an assessee (other than a company) whose total income includes any profits and gains derived from the export of any goods or merchandise 30 out of india, shall be entitled to a deduction, from the amount of income-tax with which he is chargeable, of an amount equal to the income-tax calculated at one-tenth of the average rate of income-tax on the amount of such profits and gains included in the total income; 35 (ii) where an assessee of the type referred to in sub-clause (i) engaged in the manufacture of any articles in an industry specified in the first schedule to the industries (development and regulation) act 1951 has during the previous year exported such articles out of india, he shall be entitled, in addition to the 40 deduction of income-tax referred to in sub-clause (i), to a further deduction, from the amount of income-tax with which he is chargeable for the assessment year, of an amo~nt equal to the income-tax calculated at the average rate of ldcome-tax on an amount equal to two per cent of the sale proceeds receivable by  , him in respect of such ~xport; (iii) where an assessee of the type r~ferr~d to ~ sub-clause (~) engaged in the manufacture of any articles m an mdustry speci-fied in the said first schedule has, during the previous year, sold such articles to any other person in india who himself has '0 exported them out of india and evidence is produced before the income-tax officer of such articles having been so exported, the assessee shall\ be entitled to a deduction, from the amount of income-tax with which he is chargeable for the assessment year, of an amount equal to the income-tax calculated at the average rate of income-tax on a sum equal to two per cent of the sale s proceeds receivable by him in respect of such articles from the exporter (b) the total of the deductions under this sub-section shall in no case exceed the amount of income-tax otherwise payable by the assessee 10 (c) nc»hing contained in sub-clause (ii) and sub-clause (iii) 01 clause (a) shall apply,-(i) in relation to--(1) fuels, (2) fertilisers, (3) photographic raw film and 'paper, (4) textiles (including those dyed, printed or otherwise processed) made wholly or in part of jute including jute twine and rope, (5) newsprint, 20 (6) pulp-wood pulp, mechanical, chemical, including dissolving pulp, (7) sugar, (8) vegetable oils and vanaspathi, (9) cement and gypsum products, (10) arms and ammunition, and (11) cigarettes, respectively specified in items 2, 18, 20, 23(2), 24(2), 2(:5), 25, 28, 35, 37 and 38 of the first schedule to the industries (development and regulation) act, 1951; or "5 of 1951 ~(ii) in relation to textiles specified in items 23(1), 23(3), 23(4) and 23(5) of that schedule where such textiles have been exported before the 1st day of march, 1964 (d) the amount of· any profits and gains derived from the export of any goods or merchandise out of india in respect of which dedue-35 tion of income-tax is admissible under sub-clause (i) of clause la) shall be computed in accordance with the rules made by the central board of direct taxes in this behalf (6) in cases in which tax has to be deducted under sections 193 to 195 of the income-tax act at the rates in force, the deduction 40 shall be made at the rates lpecified in part n of the first scbc(lille (7) for the purpoli4!s of this section, and of the rates of income-tax impoted thereby, and pf section 3-(i) the expressions "assessment year", "average i'ate of incom~tax", "non~resident", "partner", and cltotal income" have, unless the context otherwise requires, the meanings respectivel)" s assigned to them under clauses (9), (10), (30), (23) and (45) c;r section 2 of the income-tax act: -(ii) the expression "earned income" means any income ot an assessee who is an individual, hindu undivided family, unregistered firm or other association of persons er body of individuals, 10 whether incorporat~d or not, not being a company, a local authority, a registered firm or a finn assessed under clause (b) of section 183 of the said act-(4) which is chargeable under the head "salaries"; or - , (b) which is chargeable under the head "profits and gains is ot business or profession" where the business or profession i carried on by the assessee or, in the case of a finn, wher ~ the assessee is a partner actively engaged in the conduct of the business or profession; or (c) which is chargeable under the head uincome from 20 other sources" if it is immediately derived from personal exertion or represents a pension or superannuation or other allowance given to the assessee in respect of the past services of any deceased person, or which is chargeable under that head under clause (ia) of sub-section (2) of section 56 25 of the income-tax act; and includes any such income which, though it is the income of another person, is included in the assessee's income under the provisions of the income-tax act, but does not include any such income on which income-tax is not payable under clause (iii) or 30 clause (v) of section 86 of that act or which is exempted from  tax under a notificatton issued under sectten 60 of the indian income-tax act, 1922, as continued in force by clause (l) of 11 of 1922 sub-section (2) of section 297 of the income-tax act; (iii) the expression "unearned income" means income which 35 is not "earned income" 3 (1) save as otherwise provided in chapter xxiia of the income-tax act, annuity deposit for the assessment year commencing 011 the lit day of april, 1965 shall be made by every person to whom the provisions of that chapter apply at the rates specified in the 40 second schedule, (2) for the purposes of this section and the second schedule, the expressions "adjusted total income", "annuity deposit" and "depositor" have the meanings respectively assigned to them under clauses (1), (5) and (6) of section 280b of the income-tu act s 4 in section 2 of the income-tax act,--amedcimentot (i) in clause (7), for the words "income-tax or the words "any tax" shall be substituted; super-tax", mctlon 2 (ii) clause (11) shall be omitted; (iii) in clause (18) ,-10 (i) in sub-clause (b) (i), for the words and brackets "held by, the government or a corporation established by a central, state or provincial act or the public (not being a director, or a company to ~hich this clause does not apply) ", the following shall be substituted, namely:-15 iiheld by-(a) the government, or (b) a corporation established by a central, state or provincial act, or (c) any company to which this clause applies or any 20 subsidiary company of such company where such subsidiary company fulfils the conditions laid down in clause (b) of section 108 (hereinafter in this clause referred to as the subsidiary company), or (d) the public (not being a director, or a company to 25 which this clause does not apply)"; (ii) in' clause (i) of explanation 1, after the word "applies", the words "or the subsidiary company of such company" shall be inserted; (iv) in clause (22), after sub-clause (i), the following 30 sub-clause shall be inserted, namely:-"(ia) a distribution made in accordance with s~b­clause (c) or sub-clause (d) in so far as such distribution is attributable to the capitalised profits of the company representing bonus shares allotted to its equity shareholders 35 after the 31st day of march, 1964;"; (v) in clause (30), the figures "113" shall be omitted; (vi) for clause (43), the following clauses shan be substiluted, namely :-'(43) "tax" in rfilation to the assessment year cold-40 mencing on the 1st day of april 1965, and any subsequent ahe'ment year means income-tax chargeaqi, under the provisions of this act and in relation to any other assessment year income-tax and super-tax chargeable under the provisions of this act prior to the aforesaid date; (43a) "tax credit certificate" means a tax credit 5 certificate granted to any person in accordance with the provisions of chapter xxiib and any scheme made thereunder;'; (vii) clause (46) shall be omitted 5 in section 8 of the income-tax act-· 10 (i) for the words "for the purposes of inclusion in the total income of an assessee, any dividend", the words, brackets and letter "for the purposes of inclusion in the total income of an assessee,-(a) any dividend" shall be substituted; is (ii) the following clause shall be inserted at the end, namely:-, (b) any interim dividend paid by a company shall be deemed to be the income of the previous year~ln which the amount of such dividend is unconditionally made available 20 by the company to the member who is entitled to it" 6 in section 10 of the income-tax act,-(i) after clause (4), the following clause shall be inserted, namely:-"(4a) in the case of a non-resident, any income from 2s interest on moneys standing to his credit in a non-resident account in any bank in india in accordance with the foreign exchange regulation act 1947 and any rures made there-7 of 1m7 under;"; (ii) in sub-clause (vii) (a) of clause (6),-(a) after the words "such person continues'" the words, figure and letters "with the approval of lhe central government obtained before the 1 st day of october of the relevant assessment year" shall be inserted; (b) for the words "twenty-four months", the wor<w 35 "sixty months" shall be sub~tituted; (iii) for clause (13), the following clause shall be substituted, namely:-"(13) any payment from an approved superannuation  _- fund mad~  s 10 is 20 (i) on the death of a beneficiary; or (ii) to an employee in lieu of or in commutation of an annuity on his retirement at or after a specified age or on his becoming incapacitated prior to such retirement; or (iii) by way of refund of contributions on the death of a beneficiary; or (iv) by way of refund 8f contributions to an employee on his leaving the service in connection with which the fund is established otherwise than by retirement at or after a specified age or on his becoming incapacitated prior to such retirement, to the extent to which such payment does not exceed the contributions made prior to the commencement of this act and any interest thereon;"; ·w (iv) after clause (27), the following clause shall be inserted, namely:-"(28) in the case of any p~on granted a tax credit certificate, any amount adjusted or paid to him in respect of such certificate under the provisions of chapter xxiib 25 and any scheme made thereunder" amendment of section 18 'i in section 18 of the income-tax act, in clause (i) of sub-section (1), after the word "government", the words, figures and letters "not being interest payable under section 280d in respect of any annuity deposit made under chapter xxiiau shall be inserted 8 in section 33 of the income-tax act,-30 amendment of (i) in sub-section (1), for clause (iii), the following clause section 38 shall be subs~ituted, namely:-"(iii) in the case· of machinery or plant installed after the 31st day of march, 1961-35 (a) where the machinery or plant is installed after the 31st day of march, 1963 and before the 1st day of april, 1966 for the purposes of business of mining coal, thirty-five per cent of the actual cost of the machinery or plant to the assessee, (b) where the machinery or plant is installed before the lst day of april, 1965 for the purposes of any other b\1siness, twenty per cent,  (c) where the"machinery or plant is inatalled after the 31st day of march, 1965-(a) for the purposes of business of construction, manufacture or production of any ode or more of the articles or things specified in the list in the fifth ~ s schedule, twenty-five per cent of the actual cost of the machinery or plant to the assessee, and "'-(b) for the purposes of any other business,-(a) twenty per cent of the actual cost of the machinery or plant to the assessee, where it is 10 installed before the 1st day of april, 1967; and (b) fifteen' per cent of such cost, in any other case " , , (ii) in sub-section (2), for the words, brackets, figures and letter "any allowance under sub-section (1) or sub-section (la)", is wherever they occur, the words, brackets, figures and letters "any allowance under sub-section (1) or sub-section (1a) of thii section or sub-section (1) of section 33a" shall be substituted; (iii) after sub-section (5), the following sub-section shall be inserted, namely:-"(6) notwithstaqding anything contained in the foregoing provisions of this section, no deduction by way of development rebate shall be allowed in respect of any machinery or plant installed after the 31st day of march, 1965 in any office premises or any residential accommodation, including any accommodation in the nature of a guest-house" 2s 9 aft~r section 33 of the in~ome-tax act, the following section shall be inserted, namely:-inaertion old  section 33a development allowance '33a (1) in respect of planting of tea bushes on any land in india owned by an assessee who carries on business of growing and manufacturing tea in india, a sum by way of development 30 allowance equivalent to-(i) where tea bushes have been planted on any land not planted at any time with tea bushes or on any land which had been previously abandoned, forty per cent of the actual cost of planting; and 3; s 10 (ii) where tea bushes are planted in replacement of tea bushes that have died or have become permanently useless on any land already planted, twenty per cent of the actual cost of planting, shall, subject to the provisions of this section, be allowed as a ded,uction in respect of the third succeeding previous year next following the previous year in which the land is prepared for planting or replanting, as the case may be: provided that no deduction under clause (i) shall be allowed unless the planting has commenced after the 31st day of march, 1965, and no deduction shall be allowed under clause (ii) unless the planting has commenced after the 31st day c?f march, 1965, and been completed before the 1st day of april, 1970 is 20 (2) where the total income of the assessee assessable for the assessment year relevant to the third succeeding previous year next following the previous year in which the land has been prepared [the total income for this purpose being computed after making the allowance under sub-section (1) or sub-section (la) or clause (ii) of sub-section (2) of section 33 but without making any allowance under sub-section (1) of this section] is nil or is less than the full amount of the development allowance calculated at the rates specified in sub-secti9n (1)-(i) the sum to be allowed by way of development allowance for that assessment year under sub-section (1) shall be only such amount as is sufficient to reduce the said total income to nil' and 30 35 (ii) the amount of the development allowance, to the extent to which it has not been allowed as aforesaid, shall be carried forward to the following assessment year, and the development allowance to be allowed for the following assessment year shall be such amount as is sufficient to reduce the total income of the assessee assessable for that assessment year, computed in the manner aforesaid, to nil, and the balance of the development allowance, if any, still outstanding shall be carried forward to the followine assessment year and so on, so however, that no portion of the develo~ ment allowance shall be carried forward for more than eight assessment years immediately succeeding the assessment year in which the deduction was first allowable erplanation-where for any assessment year development allowance is to be allowed in accordance with the provisions of sub-section (2) in respect of more than one 2248 (b) ls-2 previous year, and the total income of the assessee assessabie for that assessment year [the total income for this purpose being computed after making the allowance under subsection (1) or sub-section (la) or clause (ii) of sub-section (2) of section 33 but without making any allowance under 5 sub-section (1) of this section] is less than the amount of the development allowance due to be made in respect of that assessment year, the following procedure shall be followed, namely :-(i) the allowance under clause (ii) of sub-section (2) 10 of this section shall be made before any allowance under clause (i) of that sub-section is made; and (ii) where an allowance has to be made under clause (ii) of sub-section (2) of this section in respect of amounts carried forward from more than one assessment i, year, the amount carried forward from an earlier assessment year shall be allowed before any amount carried forward from a later assessment year (3) the deduction under sub-section (1) shall be allowed only if the following conditions are fulfilled, namely: -20 (i) the partictilars prescribed in this behalf have been furnished by the assessee; (ii) an amount equal to seventy-five per cent of the development' allowance to be actually allowed is debited to the profit and loss account of the relevant previous year and 25 credited to a reserve account to be utilised by the assessee during a period of eight years next following for the purposes of the business of the undertaking, other than-(a) for distribution by w~y of dividends or profits; ~ 30 (b) for remittance outside india as profits or for the creation of any asset outside india; and (iii) such other conditions as may be prescribed (4) if any such land is sold or otherwise transferred by the  assessee to any person at any time before the expiry of eight 35 years from the end of the previous year in which the deduction under su~ction (l) was allowed, any allowance under this  section shall be deemed to have been wrongly made for the purposes of this act, and the provisions of sub-section (sa) of section '155 ihall apply accordingly:' 4° s " provided that this sub-~ion, shall~o~ apply-- (i) wh~re the land is sold or otherwise transtmed by the assessee to the government, a local authority, a corporation' establish~ by a central, state or provincial act or a government company as defined in section 617 of the companies act, 1956; or (ii) where the sale or transfer of the land is made in connection with the amalgamation or succession referred to in sub-section (5) or sub-section (6) 10 (5) where in a scheme of amalgamation, a company (hereinafter in this sub-section referred to as the predecessor) sells or ,oth~ise ,transfers to the company formed ~ pursuance of the predecessor's amalgamation with, that company ,(hereinafter in this sub-section referred to as the successor) any land in respect of which development allowance haa been allowed to the predecessor under sub-section (1) ,-, (a) the successor shall continue to fulftl the conditions mentioned in sub-section (3) in respect of the reserve created by the predecessor and in respect of the period within which such land shall not be sold or otherwise transferred and in default of any of these conditions, the provisions of subs~tion(5a) of section 155 shall, apply to the successor as they would have applied to the predecessor had it committed the default; (b) the balance of development allowance, if any, stfll outstanding to the predecessor in respect of such land shall be allowed to the successor in accordance with the provisions of sub-section (2), so however, that the total period· for which the balance of development allowance shall be carried"> ,> forward in the assessments of the predecessor and the successor shall not exceed the period of eight years apecl4ed in ,sub-section (2) and the successor shall be treated as the asseaee in respect of 'such la!ld' 'for the purposea of this section ezplamtion-for the purpoaes of tbia sub-lecttcm, ~amalp­mation" shall have the meaning assigned to it in the !zp~ to sub-section (3) of aection 33 (6) where a firm is succeeded to by a company in the busid_, carried on by it as a result of which the firm sells or otherwlle transfers to the company any land on which development allowance has been allowed, the provialons of clau8fll (4) ~ > (b) of > > lub-eectton' (5) ihall, 10 0 far as may be, apply to the ftrm and the company ezplanation-the provisions of this sub-section shall apply if the conditions laid down in the ezplanaticm to sub-eection (4) of section 33 are fu1ft11ed 5 0(7) for the purposes of this section, "actual cost of planting" means the aggregatf! of-(i) the cost of preparing the land; (ii) the cost of seeds, cutting and nurseries; (iii) the cost of planting and replanting; and 10 (iv) the cost of up-keep thereof for the previous year in which the land has been prepared and the three successive previous years next following such previous year, reduced by that portion of the cost, if any, as has been met 'directly or indirectly by any other person or authority: is '0 provided that where such cost exceeds twelve thousand five hundred rupees per hectare in respect of land situate in a hilly area or exceeds ten thousand rupees per hectare in any other area, then the excess shall be ignored (8) the board may, having regard to the elevation and 20 topography, by general or special order, declare any areas to be hiuy areas for the purposes of this section and such order shall not be questioned before any court of law or any other authority' amend ment of eec:dog m 10 in section 34 of th~ income-tax act, in the ezplanation to clause '(i) of sub-section (2), for the words, brackets and figures "is 25 'transferred by a company to a subsidiary company, then, if the 'conditions of clause (iv) of section 47 are satisfied", the following "ilhan be substituted, namely:-"is transferred by a holding ~ompany to its subsidiary eompany or by a subsidiary company to its holding co;-pany, 30 then if the conditions of clause (iv) or, as the case may be, of clause (v) of section 47 are satisfied" ameft4 11 in section 38 of the ineome-tax act, in sub-s~ctfon (1), after mat of iecuon 38elause (viii), the following clause shall be inserted, namely:-"(ix) any expenditure bona fide in~rred by a company for 3' the purpose of, promoting family planning amongst tts employees: provided that where such expenditure or any part thereot is of a capital nature, one-fifth of such expenditure·lhall:be - deducted for the previous year in which it was incurred; and the ba lance thereof shall be deducted in equal instalments for , each of the four immediately succeeding previous years" 12 in section 37 of the income-tax act, in clause (i) of 8ub-section amedd t -t men 0  (2), after the word and figures usection 33", the words, ftgures and section 3'1 letter "or section 33a" shall be inserted in sub-clause (iii) of amendment of section fo 13 in section 40 of the income-tax act, 10 clause (e) ,-(a) in the proviso-(i) after the words, brackets and figure "in sub-clause (;)", the words, brackets and figures "orany··payment of tax referred to in sub-clause (vii)" shall be inserted; i, (ii) after the words, brackets and figures 4'clause (iv) or clause· (11) ", the words, brackets and: figures i'or any expenditure referred to in clause (ix)" shan be inserted; (b) after the proviso, the following proviso shall be inserted, namely:-'provided further that nothing in this sub-clause shad apply to any expenditure which results directly or indirect- ly in the provision of any benefit or amenity or perquisite to an employee whose income chargeable 1,ulderthe head "salaries" is seven thousand five hundred rupees or le1111', 15 14 in section 43 of the income-tax act, in' ·!:xplgnatioft  8 to clause tmt6-(1) and explanation 2 to clause (6), for the words, brackets and :no143 figures "is transferred by a company-to· its subsidiary ·company then, if the conditions of clause (iv) of ·eecttan 47aresaf:iafted", the following shall be substituted, n~e1y :-"is transferred ·by  a holding eompany ··to ,its iubsfcuary company or by a subsidiary company to· its ·holdingeompany, then, if the conditions of clause (iv) or,  the "'may be of clause (v) of section 47 are satlsfted" am_d-15 in section 47 of the income-tax act, after clause (it,), the :~~ '7 following clause shall be inserted, namely:-" (v) any transfer of a capital asset by a subsidiary company to the holding company h-(a) the whole of the share capital of the subsidiary com-5 pany is held by the holding company, and (b) the holding company is an indian company" 16 in section 49 of the income-tax act,-(i) in sub-clause (e) of clause (iii), after the word, brackets and figures "clause (iv)", the words, brackets and ftgure "or 10 clause (v)" shall be inserted;  (ii) at the end, the following explanation shall be added, namely:-te:cplanation-in this section the expression "previous owner of the property" in relation to any capital asset 15 owned by an assessee means the last previous owner of the capital asset who acquired it by a mode of acquisition other than that referred to in clause (i) or clause (ii) or clause  (iii) of this section' insertiod of new section ma relief of tax on capital laids in certain ca8m 17 after section 54 of the income-tax act, the following section 20 shall be inserted, namely:-'ma (1) where in the case of an assessee, being an individual who is not a citizen of india or being a company which is not an indian company, a capital gain arises from the transfer of a capital asset, being shares in an indian company, and the 25 assessee has, within a period of two years from the date' of such transfer, re-invested the full value of the consideration or any part th~reof received or accruing as a result of such transfer in an investment approved by the central government in this behalf (hereinafter in this section referred to as the approved 30 i~vestment), the assessee shall, subject to the provisions of subsection (3), be entitled to a credit of a ~m calculated in accor~, anee with the provisions of sub-section (2)   (2) the amount to be given as credit under sub-section (1) shall be a sum which bears to the amount of income-tax 35 payable by the assessee on the income chargeable under the head "capital gains" arising from the transfer referred to in sub-section (1) the same proportion as the amount invested in the approved investment as reduced by the cost of acquisition [as ascertained for the purposes of clause (ii) of section 48] 40 of the transferred shares bears to the capital gains aris~nl from loch transfer  (3) the amount of credit so calculated shan be liven in the following manner, namely:-(a) u the approved investment is made by the assessee within the period of two years aforesaid and before the completion of the assessment in respect of the year in 'which the income arising from such transfer is chargeable to tax, the amount of the credit shall, on the assessee making a claim in this behalf in the prescribed form and in the prescribed manner, be adjusted against the tax payable by the assessee in respect of that assessment year, and [0 (b) if the approved investment is made by the assessee within the period of two years aforesaid but after the assessment for the relevant year is made, the amount of the credit shall, on the assessee making a claim in the prescribed form and in the prescribed manner be deemed to be refund due to the assessee under chapter xix and all the provisions of this act shall apply accordingly' 18 in section 56 of the income-tax act, in sub-section (2), after amend clause (i), the following clause shall be inserted, namely:-=:o:~ ao ,e (ia) income referred to in sub-clause (viii) of clause (24) of section 2;" 19 after section 69a of the income-tax act, the following inaertiod section shall be inserted under the sub-heading n aggregation of :!ct~:: income", namely:-698  )s"6gb iwhere in any financial year the assessee baa made in- amount of vestments or is found to be the owner of any bullion, j-ewellen 1ilvenor other valuable article, and the income-tax officer finds th~t :;,~n~3;c", the amount expended on making such investments or in ac disclosed in " " h bull"  11 h books ot qulrmg suc lon, jewe ery or ot er valuable article ex- account ceeds the amount recorded in this behalf in the books of ac count maintained by the assessee for any source of income, and, the assessee offers no explanation about such excess amount or the ,explanation offered by him is not, in the opinion of the income-tax officer, satisfactory, the excess amount may be 'deemed to be the income of the assessee for such financial year" ii after sect~n 80 of the income-tax act the following chapter and sections shall be inserted, namely:- 'chapter via  deductions to be made in computing total incomeboa (1) in computing the total income ()f an assessee there , shall be deducted, in accordance with and subject to the provisions of this section, an amount equal to fifty per cent of the aggregate of the sums i:»pecified in sub-section (2) (2) the sums referred to in sub-section (1) shall be the following, namely:-10 (a) where the assessee is an individual, any sums paid in the previous year by the assessee out of his income chargeable to tax-(i) to effect or to keep in force an insurance on the life of the assessee or on the life of the wife or husband is ot the assessee; or (ii) to effect or to keep in force a contract {or a deferred annuity on the lile of the assessee or on the life of the wife or husband of the assessee; or (iii) as a contribution to any provident fund to 20 which the provident funds act, 1925 applies; 19 of 192! ~ f; (b) where the assessee is a hindu undivided family, any sums paid in the previous year by the assessee out of its income chargeable to tax, to effect or to j:teep in force an insurance on the life of any male member of the family 25 or of the wife of any such member; (c) any sum deducted in the previous year from the salary payable by or on behalf of the government to any individual, being a sum deducted in accordance with the conditions of his service, for the purpose of securing to hml 30 a deferred annuity or m~king provision for  qis wife 01 children, in so far as the sum so deducted does not exceed one-fifth of the salary; (d) if the assessee is an employee participating in a recognized provident fund, his own contributions to his individual account in the fund in the previous year, to the extent 35 provided in rule 7 of part a of the fourth schedule; (e) if the assessee is an employee participating in an _pproved superannuation fund, any sum paid in the previous year by him by way of contribution towards the super- 40 annuation fund; <f) where the assesse~, is an individual, any sums deposited, in the previous year by the assessee out of his income chargeable to tax, in a ten-year account or a fifteen-year account under the post office savings bank (cumulative time deposits) rules, 1959, as amended from time to time (3) the provisions of clauses (a) and (b) of sub-section (2) shall apply only to so much of any premium or other payment made on a policy other than a contract for a deferred annuity as is not in excess of ten per cent of the actual capital iwi1 10 assured explanation-in calculating any such capital sum, do account shall be taken-(i) of the value of any premiums agreed to be retum~ or 15 (ii) of any benefit by way of bonus or otherwise over and above the sum actually assured, which is to be or may be receiv-ed under the policy by any person (4) the aggregate of the sums referred to in sub-section (2), which qualifies for the purposes of computing the deduction referred to in sub-section (1), shall not exceed-20 (i) in the case of an individual' being an author, playwright, artist, musician or a-etor, such percentage of his total income, as computed before making any deduction under this chapter and before deduction of any amount of annuity deposit under section 2800, or such amount, as ~y be prescribed: provided that such individual has effected an insurance referred to in sub-clause (i) of clause (a) of sub-sectign (2) prior to the 1st day of march, 1964 and has paid any sum in the previous year to keep in force such insurance; 53 (ii) in the case of any other individual [including an authqr, play-wright, artist,~ldusician or actor to whom the  provisions of clause (i) do not apply], twenty-five per cent of the total income, as computed before making any deduction under this chapter and before deduction of any amount of annuity deposit under section 2800, or twelve thousand five hundred rupees, whichever is less; (iii) in the case of a hindu undivided family, twenty-five per cent of its total income, as computed before making any deduction under this chapter and before deduction of any amount of annuity deposit under section 2800, or twenty-five thousand rupees, whichever is less 2248 (b) ls-3 (5) if the total income of the assessee includes any incom~ chargeable under the head "salaries", the deduction under subsection (1) shall be made in computing the income under that head, and if there is no income chargeable under that head, or if the amount required to be deducted exceeds such income, the whole s or the balance of the amount required to be deducted shall be allowed as a deduction in computing earned income chargeable under any other head, and, if there is no earned income chargeable under any other head or the whole or the balance of the amount required to be deducted exceeds such earned income, the whole 10 or the balance of the amount required to be deducted shall be allowed as a deduction in computing any other income under any head ,(6) this section shall apply in respect of-(i) the assessment year commencjng on the 1st day of is april, 1966 and any subsequent assessment year, in the case of an assessee whose total income includes any income chargeable under the head "salaries" from which tax is deducted, or deductible, at source in accordance with the provisions of section 192; and 20 (ii) the assessment year commencing on the 1st day of april, 1965 and any subsequent ass~ssment year, in the ~ of any other assessee  deducuon i in respect ofmedlcal1 treatment i etc •• of handi-capped sob (1) where an assessee who is resident in india, being an individual or hindu undivided family, who has, during the 2s previous year, incurred out of his or its income chargeable to income-tax,  any expenditure for the medical treatment (including nursing) of a person who-i pei'ioda ! (a) is a relative of the individual, or, as the case may be, is a member of the hindu undivided family and is not 30 dependent on any person other than such individual or hindu undivided family for his support o~ maintenance, and  _', (b) is suffering from a physical or mental disability which is certified by a registered medical practitioner to have the e1fect of reducing considerably such person's 3s capacity for normal work or engaging in a gainful employment (hereinafter in this section referred to as handicapped dependant) , me assessee shall, subject to the provisions of this section, be allowed a deduction of the amount specified in sub-section (2) 40 in the computation of his total income in respect of the previoul year (2) the deduction under sub-section (1) shall be-s (i) in a case where the handicapped dependant has been admitted in a hospital or a nursing home or any medical institution for a period of one hundred and eighty-two days or more during the pr,evious year and fees and charges for his medical treatment (including nursing) are payable to such hospital or nursing home or medical institution, as the case may be, a sum of two thousand four hundred rupees, or (ii) in any other case, a sum of six hundred rupees, 10 as reduced, in either case, by an amount equal to the income, if any, of the handicapped dependant in respect of the previous year : provided that where the assessee has, during the previous year, incurred expenditure on more than one handicapoed is de~ndant, the deduction under sub-section (1) shall be allowed only with reference to one such handicapped dependant as may be chosen by the assessee 20 (3) if the total income of the assessee includes any earned income', the allowance referred to in sub-section (1) shall be made in computing the earned income chargeable under any head, and if there is no such income -er the amount of the allowance exceeds such income, the whole or the balance of mlch amount as the case may be, shall be allowed as a deduction in computing the assessee's unearned income chargeable under any head (4) nothing contained in this section shall apply in a casp where the assessee,'s total income in respect of the previous year 30 3s computed before making any deduction under this chapter and before deduction of any amount of annuity deposit under section 2800 exceeds twenty thousand rupees or where the income of the handicapped dependant in respect of the previous year exceeds two thousand four hundred rupees, or as the case may be, six hundred rupees 3s roc (1) where in the ca«;e of an asressee, beinlt an relief individu;tl who is a citizen of india and is resident in tndia, :~~lo his rhare in the' income of a registered firm which renders for ri  secu nr proferslonal s~nrfce as chartered accountant, solicitor, lawver, retirement architect, or such other professional service as may be notified annuities in this behalf by the central government in the oftlcial gazette ie; charg~able to tax and he has paid out of his income chargeable to tax a premium (by whatever name called) in any previous year under an amiuity contract for the time being approved by the commissioner as having for its main object the provision for the individual of a life annuity in old age (hereinafter in this section referred to as qualifying premium) , then the assessee shall, subject to the provisions of this section, be allowed a 5 deduction of the amount of the qualifying premium in the computation of his total income in respect of the previous year: provided that the amount which may be 10 deducted ~ha11 110t exceed the sum of five thousand rupees or one-tenth of his total income for that year, whichever is less: 10-provided further that any annuity payable to the individual shall be deemed to be his earned income to the extent to which it is attributable to the amount in respect of which deduction h3s been allowed under this section and chargeable to tax accordingly is erplanation-for the purposes of the first proviso "total income" means the total income computed in accordance with the provisions of this act, before making any deduction under this chaptet and before deduction of any amount of annuity ~i deposit under section 2800 but excluding any income which 20 would otherwise be included in his total income under the provisions of section 64 (2) subject to sub-section (3) and any rules made by the board in this behalf, the commissioner shall not approve a contract unless he is satisfied that it does not-25 (a) provide for the payment durin(! the life of the individual of any sum except sums payable by way of annuity to the individual; or (b) provide for the annuity payable to the individual to eommence before he attains the age of fifty-eight or after 30 he attains the age of sixty-eight; or (e) provide for the payment of any other sums except sums payable by way of annuity to the individual's widow or widower and any sums which in the event of no annuity becoming payable either to the individual or to· a widow or 35 widower of thp individual are payable to the individual's legal representative, by w~v of return of premiums, by way of reasonable interest on premiums and by way of bonus out of profits; or '(d) provide for the payment of annuity, if any, payable 40 to a widow or widower of the individu~l to be of a greater annual amount than that paid or payable to the individual; or (e) provide for the payment of any annuity otherwise than for the life of the annuitant; and that it does fnclud~ a provision that no annuity payable under it shall be capable in whole or in part of surrender, s commutation or assignment (3) the commissioner may, if he thinks ftt, and subject to any conditions the board may, by rules, prescribe and subject to any conditions he thinks proper to impose, approve a contract notwithstanding that the contract provides for one or more ot 10 ·the following matters, that is to say,-(a) for the payment after the individual's death of an annui~ to a dependant other than the widow or widower of the individual; (b) for the payment to the individual of an annuity 15 commencing before he attains the age of fifty-efght, if the ann':lity is payable on his becoming incapable through infirmity of mind or body of being actively engaged in his profession or any profession of a similar nature for which he is trained or fttted; 20 (c) for the annuity payable to any person to continue for a specifted ,term (not exceeding mn years), notwithcrtand ing his death within that term; (d) in the case of an annuity which is to continue for such specifted term, for the annuity to be assignable by wid 25 (4) the foregoing provisions of this section shan apply in relation to a contribution (by whatever name called) to d fund approved by the commission~r as they apply in relatlon to any premium under ad annuity contract so approved provided the fund satisftes also the conditions set out below and any nther 30 conditions which the board may by rules prescribe namely:-(a) the fund shall be a fund established in india under an irrevocable trust for the benefit of individuals enpged in any profession referred to in sub-section (1); (b) the fun~ shall have for its sole purpose the provisinn 35 of annuities for individuals engaged in such profession on attaining a specified age or on their becoming incapacitated prior to attaining such age or for the widow, children or dependants of such persons on their death; (c) an annuities, pensions and other benefits granted \0 from the fund shan be payable only in india ________  (5) the commissioner diby, at any time, after giving a reasonable opportund~ of sho~g cause agaburt the proposed withdrawal to the persons by and to whom premiums are payable under any contract for the time being approved under this section, or to the trustees of any fund so approved, withdraw the approval 5 (6) notwithstanding anything contained in sub-sections (1) and (4), no deduction under this section shall be adowed in the case of any individual-(i) whose total income includes unearned income of more than ten thousand rupees; or 10 (ii) who is entitled to any pension or participating in any pension or superannuation scheme (7) the allowance under this section shan be made hi computing the earned income of the assessee included in the total income, so however, that the allowance shall not in any cue is exc~d the amount of the income computed under the head "profits and gains of business or profession" (8) any annuity payable under an approved contract referred to in sub-section (1) or from any fund referred to in sub-aeetiod (4), to a person other than the individual who pays the premium 20 or makes the contribution lifld any interest on premiums or bonus out of profits payable to such person, shan be deemed to be his unearned income to the extent it is attributable to the amount of deduction allowed under sub-section (1) and chargeable to tax accordingly 25 (9) where any payment by way of annuity or otherwise is made by a person to whom premiums or contributions are payable under sub-section (1) or sub-section (4), such person shall, subject to any rules made by the board in this behalf, deduct from the total amount so paid during any financial year, tax at 30 such pate or rates in forcea that year as would be applicable to such amount, if it were the total income and shall pay the amount so deducted to the credit of the central government within the prescribed time and in such manner as the board may direct and the provisions of section 201 shall, so far as may be, 35 apply to s~ch person if he does not deduct, or after deducting fails to pay, such tax (10) where a deduction under this section is claimed and allowed for any assessment year in respect of any payment, relief shall not be given in respect of it unds- any other provision ot 40 this act for the same or a later assessment year 'dor (in the case of paymmt under an annuity contract) in respect of any other premium or consideration for an annuity under the same contract (ll) (4) the board may, by notification in the official gazette, make rules for carrying out the purposes of this section (b) in particular and without prejudice to the generality of the forel0ing power, such rules may-(i) prescribe the statements and other information to be submitted along with an application for approval; , (ii) prescribe the returns, statements, particulars or " information which the income-tax officer may require from a person by and to whom premiums or contributions are payable under this section; (iii) provide for the assessment by way of penalty of any consideration received by an individual for an assign-j s ment of, or creation of a charge upon, any annuity or other sum receivable by him under any contract or from any fund approved for the time being under this section; and (iu) provide for securing such further control over the approval granted under this section and administration 01 funds approved under this section as it may deem requisite: i~ sod in this chapter-detlni-(i) "relative" in relation to an individual meanstiodi (a) the mother, father, husband or wife of the individual, or (b) a son, daughter, brother, sister, nephew or niece os the individual, or (c) a grandson or grand-daughter of the individual, or , 30 (d) the spouse of any person referred to in sub- clause (b); (ii) "income" in relation to a handicapped dependant means the aggregate income of such person from all sourcesj (iii) the expressions "earned income" and "unearned income" shan have the meanings respectively assigned to 35 them in the finance act of the relevant year' amendment of mctionln 11 in section 84 of the income-tax act, in sub-section (6), for the word, figures and letter "chapter xi-d", the word and figures "chapter xi" shall be lubltituted d after sectwip 85 of the income-tax act, the followina section shall be inserted, namely :-"s5a where the total income of an assessee being a com· pany includes any income by way of dividends received by it from an indian company or a company which has made the s prescribed arrangements for the declaration and payment 01 dividends (including dividends on preference shares) within india, the assessee shall be entiued to a deduction from the income-tax with which it is chargeable on its total income for any assessment year of so much of the amount of income-tax calculated at the 10 average rate of income-tax on the income so included as exceeds an amount of twenty-five per cent thereof: provided that in the case of a company which has not made the prescribed arrangements for the declaration and payment of dividends within india and whose total income include& is any income by way of dividends received by it from an indian company which is not such a company as is referred to in sec· tion 108 and which is wholly or mainly engaged in the business of generation or distribution of electricity or of construction, manufacture or production of anyone or more of the articles or :!o things specified in the list in paragraph 2 of the third schedule to the companies (profits) surtax act, 1964, the amount of 7 of 1964 income-tax deductible under this section shall be so much of the amount of income-tax calculated at the average rate of incometax on the income so included as exceeds an amount of fifteen 25 per cent thereot 7 of 1964 explanation-for the purpos~s of this section, a company shall be deemed to be mainly engaged in the business of genera· tion or distribution of electricity or of construction, manufacture or production of an)' one or more of the articles or things specijied 30 in the list in paragraph 2 of the third schedule to the companies (profits) surtax act, 1964, if the income attributable to any of the aforesai~ctivities included in its total income for the previous year is not less than fifty-one per cent of such total income" 35 23 in section 86 of the income-tax act, clauses (i) and (ii) shall be omitted 24 in chapter vii of the income-tax act, after section 86, the following section shall be inserted, namely:-"86a where there is included in the total income of an 40 assessee-amendment of section 86 insertion of new aection b6a deduction from tax od certain hcul'lt1el (i) the interest due on any security of the central government issued or declared to be income-tax free, or (ii) the interest due on any security of a state government issued income-tax free, the ir,come-tax whereon ia payable by the state government,  -  the assessee shan be entitled to a deduction from the amount " 5 ,pf income-tax with which he is chargeable on his total income, of an· amount equal to the income-tax calculated on the amount 10 inclu~ed at the average rate of income-tax or at the rate ot tw'enty-five per cent, whichever is less" 15 in section 87 ~f the income-tax act,-   ~t ~ 10 (i) in sub-section (4), the words, figures and letter "together iectioi1i'7 "!vjth the amount of super-tax deductible under section 99a" shall be omitted; (ii) after sub-section (4), the following sub-section- shall be inserted, namely:-15 '(5) this section shall not apply in respect of-20: - (i) the assesmen t year commencing on the 1st day of april, 1966 and any subsequent assessment year, in the case of an assessee whose total income includes any income chargeable under the head "salaries" from which tax is deducted, or deductible, at source ill accordance with the provisions o~ section 192; and (ii) the assessment year commencing on the lst day of april, 1965 and any subsequent assessment year in' the case of any other assessee' 26 in section 88 of the income-tax act,-amend-(i) in sub-section (1), for the words "of an amount equal =~  to the income-~x calculated at the average rate of income-tax on any sums paid by him in the preyious year", the' following shall be substituted, namely:-30 "(a) where the assessee is a company, of an amount ·equal to the income-tax calculated at the average' rate ot income-tax or at the rate of twenty-five per cent, whichever is less, and  " ," ~ " 1)  ',', ,    (b) i~ the case of any other assessee, of an amount equal 35  }~ th~ income-tax calculated at the average rate of incomefax, " on any sums paid by the assessee in the previous year"; , (ii) in sub-section (3), after the first proviso, tlie fellowtac proviso shall be inserted, namely:-,~o "provided further that where any ucla iuiiw paid ciurinl any previous year reltot to tile •• , is went ,ear 2248(b):rs-4  commencing on the 1st day of april, 1965 or any subsequent assessdient year include any donation referred to in 1ubsection (6), and such sums exceed the limit of two hundred thousand rupees specified in the first proviso, then such limit shall be raised to cover that portion of the donation which s is equal to the difference between such sums and the said limit, so however, that the limit so raised shall dot exceed ten per cent of the assessee's total income as reclueed as aforesaid or five hundred thousand rupees, whichever is less :"; 10 (iii) in sub-section (4), the words and ftgures "together with the amount of super-tax deductible under section 100" shall 1m! omitted; (iv) in sub-section (6) ,-(a) for the words "any temple, mosque, gurdwara, 15 church or any other place", the words "any such temple, mosque, gurdwara, church or other place" shan be, add iba1l be deemed always to have been, substituted; (b) after the words "artistic importance", the words "or to be a place of public worship of renown throughout ~ any state or states" shall be inserted 27 in section 90 of the income-tax act, in clause (a), the brackets and words "(including super-tax)" shall be omitted amendmeat of section 90 !s in section 91 of the income-tax act, in clause (i) of the explanation, the words "and super-tax" shall be omitted 25 amend~ ment of section 91 29 in chapter 'xi of the income-tax act,-(i) for the heading "super-tax", the heading "almm:oxal amendment of chapter xl income-tax on undistmltrfm propits" shall be substituted; iii) sub-headings "a-s:generaz", "b-17lc:olm fonnj"i1 pcrt of total income on which no super-teu: is p4114ble", "c-rebete of 30 supet-tax"~d "d-additi07l41 super-tax oft undimibuted pro- ff,ts" and sections 95 to 103 (both inclusive) shall be omitted 30 in section 104 of the income-tax act, in sub-segtion (1),-amendment of section 104 (i) for the word "super-tax", the word "income-tax" shan be substituted; (u)fn clause (a) ,the word "and" shall be omitted; (iii) for the brackets, letter and words" (b) thirty-seven per cent in the case of any other company", the following shall be iubstituted, namely:-"(b) thirty-seven per cent __ in the case of a trading " company, and ' (c) twenty-five per cent in the case of any other company" 11 in section 109 of the income-tax act,-amendment of aec:t1on lot 10 (i) in sub-clause (a) of clause (i) the words "and supertax" shall be omitted and for the words "any super-tax", the words "any income-tax" shall be substituted; (ii) after clause (ii), the following clause shall be inserted, namely:-'(iicz) "trading company" means a company whose bus i-is ness consists wholly or mainly in dealing in goods or merchandise manufactured, produced or processed by a person other than that company and whose incomeattriltutable to such business included in its total income is not less than flfty-one per cent of the amount of such total income;'; 20 tai) in clause (iii), to sub-clause (4) (4), the following proviso shall be added, namely:-'provided that in the case of such company, not being a trading company, sub-clause (a) shall have effect as if for the word "exceed", the words "exceed twice the 25 amount of" were substituted' u for section 110 of the income-tax act, the following section shall be substituted, namely:-subatitu-, tionofnew seetlon for ~onll0~' "110 where there is included in the total income of an aaessee any income on which no income-tax is payable under 30 the provisions of this act, the assessee shall be entitled to a deduction, from the amount of income-tax with which h  chargeable on his total income, of an amoubt equal to the income-tax calculated at the average rate of income-tax on the amount on which no income-tax is payable" determination of tax where total ' ineeme includes income on which no taxis payable 3s 13 in section 111 of the income-tax act, for the words "income- amendtax and luper-tax", the word "tax" shall be substituted =~:~1l, 14 in sectism 112 of the income-tax act,-amend-(i) in clause (i), for the word "income-tax", the word "tax" ment of shall be substituted; section 112 (ii) clause (ii) shall be omitted; (iii) in clause (iii), for the words "income-tax and· supertax", the word "tax" shall be substituted  35 section 113 of the income-tax act shall be omitted omission of hction 11336 in section 114 of the income-tax act,-amendment of mction 114 (i) the words "and super-tax", wherever they occur, shall he omitted; (ii) in clause (b)-(a) in sub-clause (i), the words "and the average rate of super-tax: respectively" shall be omitted; 10 (b) in sub-clause (ii), after the second proviso, the following proviso shan be ipserted, namely:-"provided further~hat the amount of income-tax so calculated in respect otthe capital gains relating to bonus shares, if any, chargeable under sub-section (2)'8f section 15 45, shall be reduced by an amount equal to ten per cent of the face value of such bonus shares or the amount of income-tax so calculated, whichever is less"; and (c) the words "and three-fourths of the average rate of super-tax respectively", "and one-half of the average rate o~ 20 super-tax respectively" and "and average rate of super-tax" shall be omitted sm-tin-37 for section 115 of the income-tax act, the following section tiou·ofuew shall be substituted, namely:-mction for mdiod 115 tax on c:r!~ i in cue of oompanl • '115 where the total income of a company includes any 25 income chargeable under the head "capital gains" (whether such l" gains relate to short-term capital assets or to other capi~al assets), the income-tax payable-by it -shall be the aggregate of-(i) the amount of income-tax calculated at the rate of twelve and a half per cent on the amount of capital gains 30 relating to bonus shares, if any, chargeable under sub-section  (2) of section 45 as reduced by an amount equal to ten per cent of the face value of such bonus shares; so howe~r, that the reduction shall in no case exceed the amouht of income-tax so calculated; 35 (ii) the amount of income-tax ca1c~ated on the amount ot capital gains relating to capital assets other than short-term capital assets included in the total income-(a) at the rate of corty per cent on 80 much of the amo~t of such capital gains as relate to buildings or lands or any rights in buildings or lands; and s (b) at the rate of thirty per cent on the balance  of such capital gains, if any [excluding capital gains, if any, referred to in clause (i)]; and (iii) the amount of income-tax with which it would have been chargeable had its total income been reduced by the 10 amount of capital gains referred to in clauses (i) and (io' 38 in section 131 of the income-tax act, after the words "appellate ~::td~f assistant cqmmissioner'\ the words "inspecting assistant commis- ecuod 131 sioner" shall be inserted 39 in section 155 !jf the income-tax act,-amendment of section 155 is (i) after sub-section (5), the following sub-section shall be inserted, namely:-20 "(sa) where an allowance by way of development allowance has been made wholly or partly to an assessee in respect of the cost of planting in any area in any assessment year und2r section 33a and subsequently-1 of ih8 (i) at any time before the expiry of eight years from the end of the previous year in which such allowance was made, the land is sold or otherwise transferred by the assessee to any person other than the government, a local authority, a corporation established by a central, state or provincial act or a government company as defined in section 617 of the companies act, 1956, or in connection with any amalgamation or succession referred to in sub-section (5) or sub-section (6) of section 33a; or (ii) at any ~ime before the expiry of the eight years referred to in sub-section (3) of section 33a, the assessee utilises the amount credited to the reserve account under clause (ii) of that sub-section-3s (a) for distribution by way of dividends or profits; or (b) for remittance outside india as profits or for the creation of any asset outside india; or (c) for any other purpose which is not a purpose of the business of the undertaking, the development allowance originally allowed shall be deemed to have been wrongly allowed, and the incometax officer may, notwithstanding anything contained in -- - this act,· recompute the total income of the assessee {or the relevant previous year and make the necessary s amendment; and the provisions of section 154 shall, 80 far as may be, apply thereto, the period of four years specified in sub-section (7) of that section being reckoned from the ebd of the previous year in which the sale or transfer took place or the money was so utilised"; 10 (ii) in sulwection (7), for the words "the super-tax", the words "the tax" shan be substituted co in section 164 of the income-tax act, the words "or total world - income" shall be omitted amend· ment of section 164 am end-41 in section 178 of thp income-tax act, for sub-sections (3) and is ment of section 178 (4), the iollowing sub-sections shall be substituted, namely:-"(3) the liquidator-(4) shall not, without the leave of the commis&ioner, part with any of the assets of the company or the properues in his hands until he has been notified by the income-tax 20 officer under sub-section (2); and (b) on being so notified, shall set aside an aj80udt eq~ to the amount notified and, until he so sets aside such amount, shall not part with any of the assets of the company or the properties in his hands: 2s pro'nded that nothinli( cont'1ined in this sub-section !lhall debar the liquidator from partin~with such assets or properti~ for the purpose of the payment of the tax payable by the company or for m~kiny any payment to secured creditors whose debts are entitled under law to priority of payment over debts 30 due to government on the date of liquidation or for meeting such costs and expenses of the winding up of the company as are in the' opinion of the commissioner reasonable '  (4) if the liquidator fails to give the notice in accordance with sub-section (1) or fails to set aside the amou,nt as required by sub- 3s section (3) or part; with any of the assets of the company or thl!' properties in hi$ hands in contravention of the provisions of that sub-section, he shall be personally liable for the payment of the tax which the compatj~· would be liable to pay: provided that if the amount of any tax payable by the com- 40 paly is notified under sub-s~ction (2), the personal liability of the liquidator under this ~ub-section shall be to the extent of such &mount" a in section 181 of the lncome-tax act, after the words "tax free", amelldment of ig-~tthe followin~ words s~al1 be inserted namely: -teetiod iii "at such rate not exceedin~ twenty-five per cent as may be notified by the central government in the official gazette from 5 time to time" g in section 191 of the income-tax act, the brackets and figure am_dmeat of "(1)'~ and sub-secti~n 2) slj,all be omitted ledloa 181 "- in section 192 or the income-tax act,-amendment v! section 19~ 10 (i) in sub-section (1), the words "and super-tax" and the words "and average rate of super-tax respectively" shall 'b~ omitted; (ii) sub-seeb~r (2) shall be omitted; (iii) in sub-section (3), the words, brackets and fig~re "~r sub-section (2)" shall be omitted; is (iv) in sub-section (5), for the words "income-tax and suflertax", the word "tax" shall be substi~uted; (v) in the expzaflation, the words, brackets and figure "subsection (2), and in'~ shall be omitted 45 in section 193 of the income-tax act, the words "and super- amend-20 tax" shan be omitted ment ot ftobi1 ~  section b,, ta in section 194 of the income-tax act, the words "and super-tax" amendment ~f and the words "or the total world income" shall be omitted seetlon um 47 in section 195 of the income-tax act, in sub-section (1), the amendment -01 words "and super-tax", wherever they occur, shall be omitted iedlad iii • in section 197 of the income-tax act,-amendment ot section u" (i) in sub-section (1) ,-30 (a) the words "or super-tax", wherever they occur, and the words "or the total world income" shall be oplitted; (b) in clause (b), for the word "super-tax", the word "income-tax" shall be substituted; (ii) in sub-section (2), the words uand super-tax" shall be omitted; (iii) in sub-section (3) ,-(a) for the words and flgures "sections 84 and 101" the 35 word and flgures "section 84" shall be substituted: (b) the words, brackets and figures "and sub-section (2) ef section 101" shall be omitted; (c) for the words and figures "sections 85 and 101 "_ the word and figures "section 85~' shall be substituted amend-49 in section 199 bf the income-tax act, for the words "incomement of sec:tiod 189 tax or super-tax, as the case may be", the word "tax" shall be substituted 5 50 in section 203 of the income-tax act, for the words "incometax or super-tax", wherever they occur, the word "tax" shall be substituted amend-51 in section 206 of the income-tax act, in clause (c) of subment of sec:tion 201 section (1), the words "and super-tax" shall be omit~ed 1'0 52 in section 209 of the income-tax act,-amendmentof sectiod" (i) in clause (a),-(a) in sub-clauses (ii) and (iii), the words "and supertax", wherever they occur, shall be omitted; (b) in sub-clause (iv), the words "and super-tax" and is the brackets and letter "(b)" shall be omitted; (ii) clause (b) shall be omitted; (iii) in the explanation, for the words, brackets and letters "clauses (a) and (b)", the word brackets and letter c4clause (a)" shall be substituted 20 53 in sections 213 to 217, 220, 243 and 244 of the income-tax act, {or the words "four per cent", the words usix per cent" shall, be substituted 54 in section 226 of the income-tax act, for sub-section (5), the following sub-sedion shall be substituted, namely:-2s amendmentof sectlcma 211 to 217, 220, 243 andm4 amendment of section 228 "(5) the income-tax officer may, if so authorised, by the commissioner'by general or speciai order, recover any an"ears of tax due from a"'l assessee by distraint and sale !l{ bis ,movable property in the manner laid down in the third schedule" 55 in section 235 c! the income-tax act for clause (~), th~ 30 followin~ clause shall l:c substituted namely:- (b) where the shareholder-, (i) is not a company, the amount of income-tax payable by him ~der thih act but not exceedinj( income-tax calculated at the r"te of twenty-ive per ent and (ii) is a company, twenty-five per'cent, on that portion of the dividend which is attributable to the profit;; of the company as~essed to agricultural income-tax," amendment of section 238 56 in section 236 of the income-tax act, in clause (iii) of explana-5 tion 2, for the words and figures "sections 88 and 100", the word and figures "section 88" shah be substituted 57 in section 236a of the income-tax act, in sub-section (2) for amendment of the word "super-tax" the word ··tax" shall be substituted sectiol'l 236a 58 after section 276 of the income-tax act, the following section insertiod 10 shall be inserted, namely: -~!e~::' 276a "276a if a person, without reasonable cause or excuse,-(i) fails to give the notice in accordance with sub-section (1) of section 178; or failure to comply with the - provisions of subsections (1) and - (3) of  section 1 '1a 15 (ii) fails to set aside the amount as required by subsection (3) of that section; or (iii) parts with any of the assets of the company or the properties in hjs hands in contravention of the provisions of the aforesaid ~~ub-section, he shall be punishable with rigorous imprisonment for a term 2 which may exten~ to two years: provided that in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court, such imprisonment shcll1 not be for less than six months" 59 in section 279-of the income-tax act, in sub-section (1), after amend-25 the word and figures "section 276", the words figures and letter "er ~ti~;k section 276a" shall be inserted 60 in section 280p of the income-tax act, the words "and super- amendment of tax" shall be omitted section 280p 61 in section 28cx of the income-tax act, in sub-section (2' the amendment of 30 hrackets and words "(but not super-tax)" shall be omitted section 280x 2248 (b) ls-5 n after sect~on 280x of the incom~tax act, the following chapter and sections shall be inserted, namely:- 'chapter xxiib tax credit certj:ncates280y in this chapter,-s meenitiona (a) "eligible issue of capital" means an issue of ordinary shares specified as such ill the scheme; (b) "public company" means a public company as defined in section 3 of the companies act, 1956; (e) "scheme" means a scheme made under this chapter; 10 (d) "urban area" means any area which the centraj government may, having regard to the population, concen· tration of industries, need for proper planning of the area and other relevant factors, by general or special order, declare to be an urban area for the purposes of this chapter 15 ~u:credit ieertiftcates to certain _uity pare-,clders 280z (1) an individual shall be granted a tax credit certificate if he by himself or some other person on his behalf has subscribed to, and made payments in respect of, any eligible issue of capital (2) a hindu undivided family shall also be granted a tax 20 credit certificate if any person has subscribed to, and made payments in respect of, any eligible issue of capital on behalf of that hindu undivided family (3) a tax credit certificate granted under the provisions of this section shall be for the amount or the aggregate of the ~s amounts computed as hereunder with reference to the capital so subscribed and paid:  -2t the rate of 5 per cent; 30 (i) on the first rs 15,000 of the amount paid in the financial year ' at the rate of 3 per cent; (ii) on the next rs 10,000 of the amount paid in the financial year at the rate of 2 per cent; (iii) on the next rs 10,000 of the amount paid in the financial year   nil (iv) on the balance of the amount paid in the financiaj year ezplanation-for the purposes of ,this section, a payment shall be treated as having been made to the extent to which and on the date on which the amount of the said payment has been credited to the share capital account-of the company (4) a tax credit certificate for the amount specified in subsection (3) shall be gra_nted to an individual or hindu undivided family in respect 01-(a) the financial year in which payment by way of subscription to an eligible issue of capital was made, and jo (b) each of the three financial years following that year: provided that the capital continues to be held by or on behalf of the individual or on behalf of the hindu undivided family, as the case may be, until the end of the relevant financial year: 20 provided further that where any part of the capital in respect of which a tax credit certificate had been granted in a financial year (hereinafter referred to as the earlier financial ye~r) is sold, transferred or otherwise disposed of in a subsequent financial year, the tax credit certificate to be granted with reference to the remaining capital in respeot of the said subsequent financial year or any financial year following that year shall be for such amount as bears to tt\e amount for which the tax: creciit certificate was granted in the earlier financial year the same proportion as the amount of the remaining capital as on the 31st day of march of the subsequent financial year bears to the total amount of the capital with reference to which the tax credit certificate was granted in the earlier financial year 11 of 122 3s (5) the amount shown on a tax credit certificate granted to an indjvidual or hindu undivided family shall, on the certificate being produced before the income-tax officer, be adjusted against any existing liability of such individual or hindu un  divided family under the in,;luln income-tax act, 1922, or this act, or any such liability arising within the period of twelve months from the date on which the certificate was produced before the income-tax officer, and where the amount of such certificate exceeds such liability, or where there is no such liability, the excess or the whole of such amount, as the case may be, shall, notwithstanding anything contained in chapter xix, be deemed, on the date of the expiry of the said period of twelve mon!hs, to be refund due to such individual or hindu undivided family, as the case may be, under that chapter and the provisions of thll act ,shall apply -accordingly (6) the central government may specify in a scheme any issue of ,"ordinary shares by a public company as eligible issue of capital (7) in specifying any issue of ordinary shares as eligible issue of capital, the central government shall have regard to s the following facton, namely =-(a) the total amount of the capital issued; ,b) tile terms and conditions subject to which the capital is issued; (c) the trade or business in which the company con  10 cemed is engaged; (d) the purposes for which the issue is being made; (e) any other relevant factor 280za (1) if any public company owning an industrial undertaking situate in an urban area shifts, with the prior is approval of the board, such undertaking to any area (not being the area in which such undertaking is situate), it shall be granted a tax credit certificate tax credit certificates for shifting ofindus-, trial  undertaking from urban u"el (2) the tax credit certificate to be granted under sub-section (1) shall be for an amount computed in the following manner 20 with reference to the amount of the tax payable by the company on its incbme chargeable under' the head "capital gains" arising from the transfer of capital assets being buildings or lands or any rights in buildings or lands used for the purposes of the business of the said undertaking in the urban area, effected in the 25 course of or in consequence of the shifting of such industrial undertaking, namely:-(a) the amount of expenditure incurred by the company ln~ (i) acquiring lands or constructing buildings for the 30 ",&urposes of the business of the company in the area to  which the undertaking is shifted, and  (ii) shifting its machinery or plant and other e1!ects and transferring its establishment to such area,  within a period of three years, from the date of the approval 35 referred to in sub-section (1), or such further period as the board may allow, shall first be ascertained; (b) the amowlt of the tax credit certificate shall bear to the amount of tax payable by the company on its income ,:nargeabie under tbe head "capital gains" as aforesaid, the 40 same proportiod as the amount of expenditure ascertained under clause (a) bears to the amount of the said income: provided that the amount of the tax credit certificate shall in no case exceed the amount of the tax aforesaid 5 (3) the amount shown on a tax credit certificate granted to a public compal"ly tinder sub-section (1) shall, on the certificate u at 1922 10 bein~ produced before the income-tax officer, be adjusted against any existing liability of the company under the indian incometax act, 1922, or this act, or any such liability aris~ng within the perjt'd of twelve months from the date on which the certificate was produced before the income-tax officer, and where the amount of such certificate exceeds such liability, or where there is no such liability, the excess or the whole of such amount, as the case may be, shall, notwithstanding anything contained in 15 cbap~r xix, be deemed, on the date of the expiry of the said period of twelve months, to be refund due to such company under that chapter and the provisions of this act shall apply accordingly 20 tof 156 30 35 i ' , , (4) where a capital asset, being building or land, or any right in building or land, acquired or, as the case may be, constructed in the area to which the undertaking of the company is shifted, is transferred by the company within a period of five years from the date of acquisition or, as the case may be, the date of completion of construction to any person other than the go,,-rnment, a local authority, a corporation established by a central, state or provincial act or a government company as defined in section 617 of the companies act 1956, an amount equal to one-half of the amount for which a tax credit certificate has been granted to the company under sub-section (1) shall be deemed to be tax due from the company on the thirtieth day following the date of transfer under a notice of demand isfued under section 156, and all the provisions of this act shall apply accordingly explanation-any land or building used for the residence of persons employed in the business of the company or for the use of such persons as a hospital, creche, school, canteen; library, recreational centre, shelter, rest-room or lunch-room shall, for the purposes of this section, be deemed to be land or building used for the purposes of the business of the company 280zb (1) where any company engaged in the manufacture or production of any of the articles mentioned in the first schedule to the industries (development and regulation) act, 1951-of 1151 turin, e  (i) is liable to pay any tax for the assessment year commencing on the 1st day of april, 1965 (hereinafter referred to as the base year) and anyone or m~e of the five assessment years next following that year under the incometax act and the companies (profits) surtax act, 1964; or (ii) is not liable to pay any tax for the base year but becomes so liable for any succeeding year (hereinafter s referred to as the succeeding base year) under the aforesaid acts and also for anyone or more of the assessment years following that year, not being an assessment year commencing after the 1st day of april, 1970, and the aggregate of such tax for any such succeeding year 10 exceeds-(a) in the case referred to in clause (i), the aggregate tax payable for the base year; (b) ill the case referred to in clause (ii), the aggregate tax payable for the succeeding base year, is then the company shall be granted a tax credit certificate for an amount equal to twenty per cent of such excess: provided that the amount of the tax credit certificate shall not for any assessment year exceed ten per cent of such aggregate tax: payable by the company for that year 20' (2) the amount shown oil a tax credit certificate granted to any company under the provisions of sub-section (1) shall, on the certificate being produced before the income-tax officer, be adjusted against any existing liability of such company under the indian income-tax act, 1922, or this act, or any such liability 25 11 ef 182z arising within a period of twelve months from the date on which the certificate was produced before the income-tax ·officer and where the amount of such certificate exceeds such liability, or where there is no suoh liability, the excess or the whole of such amount, as the case may be, shall, notwithstanding anything 30 contained in chapter xix, be deemed, on the date of the expiry of the said period of twel~ months, to be refuftd due to such company under that·chapter and the provisions of this act shall apply accordingly: provided that the adjustment or refund, as the case may be, 35 under this sub-section shall be only for such amount, not exceeding the amount of the certificate, as is used within such period as may be specified in the scheme lor repayment of loans taken by the company from any financial institutions notified in this behalf by the central government or for redemption of 40 its debentures  ezpla~tion-the amount of income-tax payable by the company for any assessment year for the purposes of this section shan be computed after making allowance for any relief, rebate or deduction in respect of income-tax to which the company is s  - entitled under the provisions of this act or the annual finance act after deducting from such amount of income-tax the amount, if any, by which the rebate of income-tax admissible to the company under the provisions of the annual finance act is, under the provisions of the said act, reduced with reference to the 10 face value of any bonus shares or the amount of any bonus issued by the company to its shareholders during the previous year or any previous year' prior to that year or with reference to any amount of dividends declared or distributed by it during the previous year or any previous year prior to that year' 15 tax credit certificate in relation to exports 7 of 1947 20 2f>qzc (1) a person who exports any goods or merchandise out of india after the 28th day of february, 1965, and receives the sale proceeds thereof in india in accordance with the foreign exchange regulation act, 1947, and the rules made thereunder, shall be gr:mted a tax credit certificate for an amount calculated at a rate not exceeding fifteen per cent on the amount of such sale proceeds (2) the goods or merchandise in respect of which a tax credit certificate may-be granted under sujjsection (1) and the - rate at which the amount of such certificate shall be calculated 25 shall be such as may be specified in the scheme: provided that different rates may be specified in respect of different goods or merchandise (3) in specifying the goods or merchandise and the rates, the central government shall have regard to the following fac-30 tors, namely:-3s (a) the cost of manufacture or production of such goods or merchandise and prices of similar goods in the foreign markets; -- (b) the need to develop foreign markets for such goods or merchandise; (c) any other relevant factor (4) the amount shown on a tax credit certificate granted to any person under this section shall, 011 the certificate being produced before the income-tax officer, be adjusted against any existing liability of that person under the indian income-tax act, 1922, 0:1" this act, or any such liability arising within the period of twelve months from the date on which the certificate was produced before the income-tax oftlcer and where the amount of such certificate exceeds such liability, or where there is no such liability, the excess or the whole of such amount, as the case may be, shall, notwithstanding anything contained in chapter s xix, be deemed, on the date of the expiry of the said period, to be refund due to such person under that chapter and the provisions of this act shall apply accordingly tax credit certlftcates in r~lation to increased production of certain roodl 280zd (1) a person who, during any financial year commencing on the 1st day of april, 1965, or any subsequent finan- 10-cial year (not being a year commencing after the 1st day of april, 1969), manufactures or produces any goods, shall be granted a tax credit certificate for an amount calculated at a rate not exceeding twenty-five per cent of the amount by which the duty of excise paid by him in ~the relevant financial year on such is goods exceeds the duty so paid by him, in the base year 20-(2) the goods in respect of which a tax credit certificate may be granted under sub-section (1) and the rate at which the amount of such certificate shall be calculated shall be such as may be specified in the scheme: provided that different rates may be specified in respect of different goods (3) in specifying the goods and the rates under sub-section (1), the central government shall have regard to the following factors, namely:-2s· (a) the need for stimulating industrial output; (b) -the need fol' financial assistance ~industrial undertakings engaged in the manufacture or production of such goods; (c) any other relevant factor 30 (4) the amount shown on a tax credit certificate granted to any person under the provisions of sub-section (1) shall, on the certificate being produced before the income-tax officer, be adjusted against any existing liability of such person under the indian income-tax act, 1922, or this act, or any such liability 3s 11 of 192 10 1$ arising within a period of twelve months from the date on which the eettiftcate was produced before the income-tax ofbcer and where the amount of such certiftc~te exceeds such uability, or where there is no such liability, the excess or the whole of such  amount, as the case may be, shau, notwithstanding anything con- _ _ taided in chapter xix, be deemed, on the date of the expiry of the said period of twelve months, to be refund due to such persoll under that chapter and the provisions of this act shall apply accordingly:  provided that the adjustment or refund, as the case may be, under this sub-section shall be only for such amount, not exceeding the amount of the certificate, as is used within such perioci as may be specified in the scheme for repayment of loans taken by the person from any financial institutions notified in this behalf by the central government or, in the cue of a company, also for redemption of its debentures (5) in this section-20 (a) "base year" in relation to an existfng undertaking which manufactures or produces the goods referred to in sub-section (1), means the ftnancial year commencing on the 1st day of april 1964 and in relation to any other undertaking, the ftnancial year in which such undertaldng begins to manufacture or produce such goods; (b) "duty of excise" means the duty of excise leviable under the central excises and salt act, 1944 1 of 1144 2s0ze (1) the central government shall by notiftcation in ~c:n:t the official gazette frame one or more scheme or schemes to be ichem': cajlpd tax credit certificate scheme or schemes in relation to tax credit certificates to be granted under this chapter 30 (2) a scheme harned under sub-section (1) may provide for-i   ---- (a) the form and manner in which and the autl10rity to which applications for the grant of tax credit certificates shall be made; 35 (b) the form in which and the intervals at which and the authority by which such certiftcates shan be issued; (c) the veriftcation of any information or particulars furnished or contained in any appucation made, by or on behalf of any person entitled to trx credit eertifteatea; 40 (d') the determination of the ri~hts, and obli~ations of 8 person to whom such certificate has been granted and the 2248 {b)ls-i circumat·nces in which any right in or title to the laid ,certulcate may be trlldlferred to or devolve on 8df other penon by succession or otherwise' , (e) the determination of the rights and obligations of penons who jointly subscribe to an eligible issue of capital; s-(n the determination of the rights and obligations of per-sollli who subscribe to an eligible issue of capital, on behalf, or for the benefit, of any other person; (g) the appointment of any officer of government or of the reserve bank of india to exercise any rights or perform 10 any duties in connection with the grant of the said certificates; (h) the goods or merchandise and the rate or rates for the purposes of section 280zc and section 280zd; (i) any other matter which may be necessary or proper for 'the e1!ectlve implementation of the provisions of this is chapter or the scheme (3) the central government may, by notification in the official gazette add to, amend, vary or rescind any scheme made unde r this section (4) any scheme made under this section shall be laid, as soon ao as n-ay be, after it is made, before each house of parliament while it is in session {or a total period of thirty days which may be comprised in one ~ion or in two successive sessions and if, before the expiry of the session in which it is 80 laid or tht~ session immediately following, both houses agree in making any s modification in any provision of th~ scheme or both houses agree 2 that any provision in the scheme should not be made, that provision of the scheme shan thereafter have effect only in such modified form ,or be of no effect, as the case may be; so however that any such modification or annulment shall be without 30 prejudic~ to the validity of anything previously done under that provision' 63 in section 294 of the income-tax act, ~he words "or super-tax" shall be omi tted ~ ' 'amendmmt of " i'int , sc1ledule 64 in s~ction 295 of the income-tax act, in clause (e) of sub- 3s section (2), after the words, brackets and figures uclauae (i) of subsection (3) of section 87", the words, bl'ackets; figures and letter "or clause (i) of sub-aection (4) of section 80a, as th~ case may be," shall be inserted 65 in the first schedule to the income--t&x aet,' in rule 3, in 40 clause (c), for the words "but do tncom~tax shall be payable on the k%1nu~l average of tbe amount of nch ijltelwt" the wol'ds "but ," ~   the assessee shall be entitled to a deduction from the amount of income-tax with which he is chargeable on his total income, of an amount calculated at -the rate of twenty-five per cent on the annual ' average of the amount of such interest" ihall be substituted  s ii in the fourth schedule to the income-tax act,-(a) in part a,-ammd· mmtof fourtll - sebectule (i) in rule 6, the words "and super-tax" shall omitted; be 10 (ti) to rule 7, the followinr' proviso shall be added, namely:-'provided that in respect of an assessment year commencing on the 1st day of april, 1966 and any subsequent assessment year, this rule shall have et!ect as if for the words beginning with "from the amount of income-tax" and ending with the words "at the average rate of income-tax on", the words, figures and letter "under section boa computed with reference to" were substituted'; 20 -(iii) in sub-rule (1) of rule 9, for the words "incometax and super-tax", wherever they occur, the word "tax" shall be substituted; (iv) in sub-rule (3) of rule 11, the words "ana supertax" shall be omitted; 25 (11) in clause (d) of sub-rule (1) of rule 15, fox'_ the words "income-tax and super-tax", the word "tax" shall be substituted; (b) in part b,-(i) in rule 5, the words "and super-tax" shall be omitted; (ii) in rule 6,-35 (a) for the words "income-tax and super-tax", wherever they occur, the word "tax" shall be substituted; (b) after the words "paid to an employee during his life time,", the words, brackets and figures "in circumstances other than those referred to in clause (13) of section 10" shall be inserted; (iii) in clause (e) of sub-rule (1) of rulell, for the words uincome-tax and super-tax", ~he word "tax" shall be substituted; (c) in part c, in rule 7, the words "and super-tax" shall be omitted 81 arter the fourth schedule to the income-tax act, the followina schedule hall be inserted, namely :- 'the fifth schedule rsee section 33(1) (iii) (c)]list of articles and things (1) iron and steel (metal), ferro-alloys and special steels (2) aluminium, copper, lead and zinc (metals) (3) industrial machinery specified under the heading "8 indus- 10 trial machinery", sub-heading "a major items of specialised equipment used in specific industries", of the first schedule to the industries (development and regulation) act, 1951 8s of 1951 (4) bouers and steam generating plants, steam engines and turbines and internal combustion engines is (5) equipment for the generation and transmission of electricity including transformers, cables and transmisc;ion towers (6) machine tools, precision tools (including cutting tools and small tools), dies and jigs (1) tractors and earth-moving machinery 20 (8) steel castings and forgings and malleable iron and steel castings (9) cement (18) fertilisers, namely, ammonium sulphate, ammonium sulphate nitrate (double salt), ammonium nitrate, calcium ammonium 25 nitrate (nitrolime stone), ammonium chloride, super phosphate, urea and complex fertilisers of synthetic origin containjng both nitrogen and phosphorus, such as ammonium phosphates, ammonium sulphate phosphate and ammonium nitro phosphate  (11) paper and pulp 30 (12) electronic equipment, namely, radar equipment, computers, electronic accountiag and business machines, electronic communication equipment, electronic control instruments and basic components, such as valves, transistors, resistors, condensors, coils, magnetic materials and micro wave components 3$ (13) petrochemicals including corresponding products manufactured from other basic raw materials like calcium carhide, ethyl alcohol or hydrocarbons from other sources (14) shlpi (15) component parts of the articles mentioned in items nos (3), (4), (5) and (7), ~hat is to say, such parts as are essential for the working of the machinery referred to in the items aforesaid and have been given for that purpose some ~pecial shape or s quality which would not be essential for their use for any other purpose and are in complete finished form and ready for fitment' 88 (1) where any person makes a declaration in accordance with voluntary sub-section (2) in respect of the amount representing income-10 (a) which he has failed to disclose in a return of income for any assessment year filed by him before the 1st day of march, 11 of 1922 1965 under the indian income-tax act, 1922 or the income-tax 43 of 1961 act, 1961, or (b) which has escaped assessment for any assess~nt year for which an assessment has been made before the 1st day of march, 1965 under either of the said acts, or (c) for the assessment of which no proceeding under either of the said acu; has beer taken before the 1st day of march, 1965, he shall, notwithstandin~ anything contained in the said a~ts, be 20 charged income-tax at the rate -specified in sub-sectioa (3) in respect of the amount so declared if he,-(i) either pays the amount of income-tax as computed at the said rate, or (ii) furnishes adequate security for the payment thereof and undertakes to pay such income-tax within a period, not exceeding 'six months, from the date of the declaration as may be specified by him therein (2) the declaration shall be made to the commissioner, and shall specify the period required to be specified under clause (ii) of sub-30 section (1), contain the name, address and signature of the person making the declaration and also full information in respect or the following matters, namely:-(a) whether he was assessed to income-tax or not and, jf assessed, the name of the income-tax circle in which he wu assessed 3' (b) the ammnt o( income declared, giving where available, details of the financial year or years in which the income was earned and the amount pertaining to each such year (c) whether the amount declared is represented by c&lh (includina bank deposits), bullion, inveltments in sharet, debt due from other persona, commodities, or any other assets, and the name in which it is held and location thereof: a  --- ---provided that the declaration shall be of no effect unless it is made after the 28th day of february, 1965 and before the lst day of jude, 1965 5 (3) the rate of income-tax chargeable in respect of the amount referred to in sub-section (1) shall be sixty per cent of such amount: provided that if before the 1st day of april, 1965, the tax on the amount declared is paid by the declarant at the rate of fifty-seven per cellt of such amount, he shall not be liable to pay any further 10 tax on such amount (4) a person shall not be considered to have furnished adequate security for the payment of the tax for the purposes of sub-section (1) unless the payment is e,uaranteed by a scheduled bank or the person makes an assignment, in favour of the president of india, of any is security of the central government explanation-for the purposes of this sub-section, where an assignment of government securities is made in favour of the president, the amount covered by such assignment shall be the market value of the securities on the date of the assignment 20 (5) any amount d incrme-tax paid in pursuance of a declaration made under this section shall not be refundable in any circumitances, and no person who has li'od~ the declaration shall be entitled, in respect of any amounlso d£'c1ared or any amount of tax so paid, to reopen any assessment or reassessment made under the indian 1s income-tax act, 1922, or the income-tax act, 1961, or the excess 11 of 1922 profits tax act, 1940, tu the business profits 1tax act, 1947, or the 43 of 1981 super profits tax act, 1963, or the companies (profits) surtax act, h5 of 1940 1964, or claim any set off or relief in any appeal, reference, revision 21 of 1947 or other proceeding in relation to any such assessment or 30 14 of 1963 reassessment 7 of 1884 (6) (a) any amount declared by any person under this section in respect of which the tax referred to in sub-section (3) is paid shall not be included in his total income for any assessment under any of the acts mentioned in sub-section (5) if he credits in the 35 books of account, if any, maintained by him for any source of income or in any other record, the amount declared as reduced by the tax paid thereon under this section (&) a credit made under clauae (4) hall be intimated to the ·income--lax: ofilcer (7) (4) the commiisioner shall grant a certificate to every person who has made a declaration under this section and paid the income-- tax under this section  (b) the certificate shcfll set forth the particulars of the amount stated in the declaration the amount of income-tax paid in respect of the same and the date of payment 10 the (8) (a) all particula!"s contained in any declaration made under t'  is sec ion or record of any proceeding under this section shall bt! treated as confidential and, notwithstanding anything contained in any law for the time bein~ in force no court shall be entitled to requi!'~ any public servant to produce before it any such declaration or record or any part thereof or to give evidence before it in respect 15 thereof (b) no public sen'ant shall disclose any particulars contained in any ~uch declaration or record except to any officer employed in the execution of any of the acts mentioned in sub-section (5) 01" to any offtcpr appointed by the comptroller and auditor-general of india or 20 the board to audit inc0me-tax receipts or refunds (9) any payment of income-tax under this section shall be made by depositin~ the amount to the credit of the central government at a government treasury or sub-treasury or at any branch of the reserve bank of india or at any branch of the state bank of incn or 2' at any of its agencies conducting government treasury business (10) in this section,-i(i) "board" mean~ the central board of direct taxes con-54 of 181 stituted under the c~ntral boards of revenue act 1963; 43 of lisi 30 35 (ii) "commissioner" means the commissioner of income-tax appointed under the income-tax act 1961 having for the time being jurisdiction for the purposes of that act over the person who makes a declaration under this section st in the estate duty act 1953,-amendment of (i) in se('tion9 in sub-section (1),"101" the words "two y@'irs", t::3~4 of the words "one year" shan be' substituted; (it) in ~ectlon 10-fa) in the proviso for the words "two years" the words "one year" shall be substituted; (b) aftel the proviso; the followin~ proviso shall be inserted namely:-"provided further that a house or part thereof taken under any "gift made to the spouse, son, daughter, -,"j brother or sis~r, shall not be deemed to pass on the donor's death by reason only of the residence therein i'lf the donor except where a right of residence therein is reserved or secured directly or indirectly to the donor under the relevant disposition or under any collateral s disposition" ; (iii) in sub-section (2) of section 11,-(a) for the wordr "two years", wherever they occur, the 'words "one year" shan be substituted; (b) after the first proviso the following proviso shall to be inserted namely:-"provid?d further that where> the disposition or determination of an interest limited to cease on the death in a house or part thereof was effected or sui!wed in favour of thp ~oom:~ son dau~hter brother or sister, is then the di!;position or determination shall notwith· standin~ the residence therein of the person who immediately before the disposition or determination had the interest be deemed to be pxcepted by this sub-section savp where a right cf re!;idence therein is reserved or 20 secured dirpctlv or indirectly to such person under the re'c"an t dbpo!;ition or under any collateral disposition"; (iv) in sub-section (1) of section 12,-(a) in the proviso, for the words "two years", the words "one vpar" shall be substituted; 2s (b) after the proviso and before the e:rplanation, the followin~ proviso shall be inserted namely:-"provided further that a house or part thereof comprised in such ~ett1ement made' in favour of the spouse son dau~hter brother or sister shall not be 30 deemed to pass on the' settlor's death by reason only of the residence therein of the settlor except where a right of residence is reserved or secured directly or indirectly to the settlor under the ~ settlement or under -any collateral disposition"; 3s (v) in section 22-((f) for the words "two y\!ars'· the wol"ds "one y\!ar" ~hal1 b~ substituted; (b) for the proviso, the fonowin~ proviso shall be substftut\!d namely: -40 "provided that a house or part thereof hf"ld by the d\!c\!ased as trusteoe for another ·~rson under a disposi s tion made by him in favour of the spouse, so~ daughter, brother or sister, shall not be deemed to be included in the property passing on the death of the deceased by reason only of the residence therein of the deceased except where a riih t of residence therein is reserved or secured directly or indirectly to the deceased under the relevant disposition or under any collateral disposition"; 10 (vi) after section 29, the following section shall be inserted, namely:-"29a estate duty shall not be payable in respect of-exemption of pensions, etc, in certain cases is (4) any pension accruing or arising on the death of the deceased to his widow or other dependents under the revised pension rules of the central government or under any similar scheme of a state government, a local authority or a corporation established by a central, state or provincial act, or under the new pension code applicable to the members of the defence services; or (b) any annuity or pension payable to such widow or dependents from-20 1 of 1922 of 1961 (i) a superannuation fund appro~ under the indian income-tax act, 1922, or the income-tax act, 1961, to the extent to which the amount of such annuity or pension does not exceed the equivalent of fifteen thousand rupees per annum, or 25 (ii) a superannuation or pension fund established by such international organisations as the central government may, by notification in the official gazette, specify in this behalf"; (vii) in section 33, in sub-section (1),-30 _ (4) in clause (b), fqr the words "two yeatll", the worda "one year" shall be substituted; (b) after clause (n), the following clause shall be 35 lisa 40 inserted, namely:-" (0) property taken under any gift made by the deceased to the spouse, son, daughter, brother or sister, beyond a period of five years before his death: provided that the property is either chargeable to gift-tax under the gift-tax act, 1958, or is not chargeable d ti un er sec on 5 of that act for any assessment year 964 " commencing after the 31st day of march, 1 ;; 2248 (b) ls-7 (viii) in section 34, in clause (a) of sub-section' (1), for the word, brackets and letter "and (n) ", the brackets, letters and word" (n) and (0)" shall be substituted; -(iz) in section 46, in sub-section (2) for the words "two " , years, the words "one year" shall be substituted s  10 in the wealth-tax act 1957- , ,amendment of act 27 of 1857 (i) in sub-section (1) of section 5, after clause (xix), the following clause shall be inserted, namely:-"(xx) the value of any equity shares subscribed and paid for by the assessee where such shares form part of the 10 initial issue of equity share capital made after the 28th day of february, 1965 by a company of the type referred to in clause (d) of section 45, for a period of five successive assessment years commencing with the assessment year next following the date of such issue;"; is (ii) for part i of the schedule, the following part shall be :';'lbstituted, namely:- 'part i paragraph a: l) in the case of every individual:-20 rate of ta  r nil 0·5% 1·0% 2·0% 25 2'5% (i) on the first rupees one lakh of net wealth (ii) on the next rupees four lakhs of net wealth (iii) on the next rupees five lakhs of net wealth (iv) on the next rupees ten lakhs of net wealth (v) on the balance of net wealth (b) in the case of every hindu undivided family:-(i) on the first rupees two lakhs of net wealth (ii) on the next rupees three lakhs of net wealth (iii) on the next rupees five laldfs\)f net wealth (iv) on the next rupees ten lakhs of net wealth (v) on the balance of net wealth nil 0'5% 1·0% 30 2·0% 2·5% (c) in addition, in the case of every individual and hindu undivided family, where the net wealth of the individual or hindu undivided family includes the value of any asset, being building or 35 land (other than business premises), or any right in such building or land, situated in any area falling in category a or category b or category c or category d specified in rule 2 of paragraph b tax at the following rate or rates computed with reference to the value of such assets determined in accordance with rule 1 of the said 40 paragraph b :-| (i) where             | the          | total value       | of    | such    ||-----------------------|--------------|-------------------|-------|---------|| assets as             |              |                   |       |         || determined            |              |                   |       |         || under                 | para-        |                   |       |         || graph b               | does         | not exceed rupees |       |         || two                   |              |                   |       |         || lakhs                 |             |                  |      |        || nil                  |              |                   |       |         || s                     |              |                   |       |         || (n)                   |              |                   |       |         || where the total value | of           | such              |       |         || assets                |              |                   |       |         || as                    |              |                   |       |         || determined            | under        |                   |       |         || para-                 |              |                   |       |         || graph                 |              |                   |       |         || b                     |              |                   |       |         || exceeds               | rupees       | two               |       |         || lakhs                 |              |                   |       |         || but                   | does         | not exceed rupees |       |         || seven                 |              |                   |       |         || lakhs                 |              |                   |       |         || 1                     |              |                   |       |         || %                     |              |                   |       |         || of                    | the          |                   |       |         || amount                |              |                   |       |         || by                    |              |                   |       |         || which                 | the          | total             |       |         || valua                 |              |                   |       |         || of                    | such         |                   |       |         || assets                |              |                   |       |         || 88                    |              |                   |       |         || so                    |              |                   |       |         || determined            |              |                   |       |         || exceeds               |              |                   |       |         || rupees                | two          |                   |       |         || iakha                |              |                   |       |         || 10                    |              |                   |       |         || (iii)                 |              |                   |       |         || where the total value | of           | such              |       |         || assets as determined  | under        |                   |       |         || para-                 |              |                   |       |         || graph                 |              |                   |       |         || b                     |              |                   |       |         || exceeds               | rupees seven |                   |       |         || 1akhs                 |              |                   |       |         || but                   |              |                   |       |         || does                  |              |                   |       |         || not                   |              |                   |       |         || exceed                |              |                   |       |         || rupees                |              |                   |       |         || twelve                |              |                   |       |         || 1akhs                 |              |                   |       |         || 15                    |              |                   |       |         || rs                   |              |                   |       |         || 5,000                 |              |                   |       |         || plw                   |              |                   |       |         || 2%                    |              |                   |       |         || of                    |              |                   |       |         || the amount            |              |                   |       |         || by                    |              |                   |       |         || which                 | the          |                   |       |         || total                 | value        | of                | such  |         || assets as             |              |                   |       |         || 80                    |              |                   |       |         || determined            |              |                   |       |         || exceeds rupees        | seven        |                   |       |         || lakhs                |              |                   |       |         || 20                    |              |                   |       |         || (iti)                 |              |                   |       |         || where the total value | of           | such              |       |         || assets as determined  | under        |                   |       |         || para-                 |              |                   |       |         || graph                 |              |                   |       |         || b                     |              |                   |       |         || exceeds               |              |                   |       |         || rupees                |              |                   |       |         || twelve                |              |                   |       |         || lakhs                 |              |                   |       |         || but                   |              |                   |       |         || does                  |              |                   |       |         || not                   |              |                   |       |         || exceed                |              |                   |       |         || rupees                |              |                   |       |         || seventeen             |              |                   |       |         || lakhs                 |              |                   |       |         || rs                   |              |                   |       |         || 15,000                |              |                   |       |         || plus                  |              |                   |       |         || 3%                    |              |                   |       |         || of                    |              |                   |       |         || the amount            |              |                   |       |         || by                    |              |                   |       |         || which                 |              |                   |       |         || the                   |              |                   |       |         || total                 | value        | of                | such  |         || assets                |              |                   |       |         || as                    |              |                   |       |         || 80                    |              |                   |       |         || determined            |              |                   |       |         || exceeds               |              |                   |       |         || rupees                |              |                   |       |         || twelve                |              |                   |       |         || lakhs                |              |                   |       |         || (v)                   |              |                   |       |         || where the total value | of           | such              |       |         || assets as determined  |              |                   |       |         || under                 |              |                   |       |         || para-                 |              |                   |       |         || graph b               | exceeds      | rupees seventeen  |       |         || lakhs                 |              |                   |       |         || 2s                    |              |                   |       |         || rs                   |              |                   |       |         || 30,000                |              |                   |       |         || plus                  |              |                   |       |         || 4                     |              |                   |       |         || %                     |              |                   |       |         || of                    |              |                   |       |         || the amount            |              |                   |       |         || by                    |              |                   |       |         || which the             |              |                   |       |         || total                 | value        |                   |       |         || of                    |              |                   |       |         || such                  |              |                   |       |         || assets                |              |                   |       |         || as                    |              |                   |       |         || 80                    |              |                   |       |         || determined            |              |                   |       |         || exceeds1rupees       | seventeen    |                   |       |         || lakhs                |              |                   |       |         |explanation-for the purposes of this part "business premises" means any building or land or part of such building or land, or any 30 right in building 'or land or part thereof, owned by the assessee and used throughout the previous year for the purposes of his business or profession, and includes any ijuilding used for thc",\>urpose of residence of persons employed in the business or any building used for the welfare of such persons as a hospital, creche, school, canteen, 3s library, recreational centre, shelter, rest-room or lunch-room  paragraph brut~ l-tht: total value of assets for the purposes of clause (c) of paragraph a shall be determined as being the aggregate amount by which the value of such assets, i~cluded in the ne~ wea~th of the 4~ individual or hindu undivided family, which are sltuated m any area falling in the category specified in columr, 1 hereunder exceeds the amount specified there against in column 2;-category~of area (i) amount  (2) ---~-------------------------------------------------a rs 5,00,000 5 b the amount: by -; which th:i!,~ue of such assets situated in any area fj  in category a falls short of ri 5,00,000, or an amount of rs 4,00,000, whichever is less c the amount by which the aggregate of 10 the  value of such assets situated in any area falling in category a or category b falls short of rs 5,00,000, or in a case where there is do such asset situated in an area falling in category a, the amount by 15 which the value of such usets situated in any area fallina in category b falls short of rs 4,00,000, or an amount of rs 3,00,000, whichever is less d the amount by which the aggregate of the 20 value of such assets situated in any area falling in category a or category b or category c falls short of rs 5,00,000, or, in a case where there is no such asset situated in an area falling in category a, 25 the amount by which the aggregate of the value of such assets situated in any area falling in category b or category c falls short of rs 4,00,000, or, in a case where there is no such asset situated in an area 30 falling)n ca~ a or category b, the amount by which the value of suc:b, assets situated in,any areafalling in category c falls short of rs 3,00,000, or an amount of ra 2,00,000, whichever is 3s less rule 2- for the purposes of this part, all cities and towns in india, the population of which, including the population of the contiguous municipalities and cantonments according to the census held in the year 1961-40 (i) exceeds sixteen lakhs shall be treated as falling in category ai lu) exceeds eight !akhs but does not exceed sixteen lakhs shall be treated as falling in category b; (it;,) ~xc€eds four lakhs but does not exceed eight lakhs shall be treated as falling in category c; and s (i-v) exceeds one lakh but does not exceed four lakhs shall he treated as falling in category d' 71 in the gift-tax act, 1958,-amendmentot l i) in ~;ection 5, in sub-section (1), after clause (v), the act 18 of 1958 following clause shall be inserted, namely:-10 "(va) (i) to such temple, mosque, gurdwara, church or other place as has been notifted by the central government for the purposes of sub-section (6) of section 88 of the income-tax act 1961: or 13 of 1961 (it) by way of settlement on trust, of property the income from which, according to the deed of settlement, is to be used exclusively in connection with the temple, mosque, gurdwara, church or other place specified therein and noti1ied as aforesaid'''' , , 20 !, it) in chapter iv, after section 18, the following section sha ii be inserted, namely:-| credit     ||------------|| ltampduty  || paid       || on         || instrument || at         || lift      |2s "18a where any stamp duty has been paid under any law relating to stamp duty in force in any state on an instrument of gift of property in respect of which the gift-tax payable exceeds one' thousand rupees, the assessee shall be entitje:d to a deduction from the gift-tax payable by him of cln a~nount equal to the stamp duty so paid or one-half of the surll by which the gift-tax payable, before making the deduction under this section, exceeds one thousand rupees, whichever is less" 72 in the preference shares (regulation of dividends) act, 1960,- amend- f - ment at (i) in section 2,-act s3 of 1980 {a) in clause (b), for the words, brackets, figures and letters "clause (7 a) of section 2 of the indian income-tax act, 1922 and includes a company referred to in sub-clause (ii) of clause (sa)", the following shall be substituted, namely:-~l of 1922 3s 43 of 1881 "claus~ (26) of section 2 of the income-tax act, 1961 ana includes a company referred to in sub-clause (ii) of dause (17)"; (b) in clau'3e (c), the words, figures and letters "having been issued and subscribed for before the 1st day of april, 1960" shall be omitted; (c) in clause (d), for the words and figures "indian income-tax act, 1922", the words and figures "income-tax act 11 of 1922, 1961" shall be substituted; 43 of 1961 (ii) in section 3,-, (a) in sub-section (1) and in sub-section (3), after th~ 5 words "preference share of a company", the words, figures and letters "issued and subscribed for before the 1st april, 1960" shall be inserted; (b) in sub-section (2), after the words, figures and letters "after the 31st march, 1959", the words, figures and letters 10 "and before the 1st april, 1960" shall be inserted; (c) in sub-section (4), after the words "preference share", the words, figures and letters "isuued and subscribed for before the 1st april, 1960" shalll be inserted; (d) in sub-section (6),-is (i) after the words "in this section", the words, figure and letter "and section 4a" shall be inserted; (ii) for the words, brackets, figures and letter "subsection (3d) of section 18 of the indian income-tax act, 1922", the words and figures "section 194 of the income- 20 11 of 1922, tax act, 1961" shall be substituted; 43 of 1961 (iii) in section 4,-(a) for the words "where any preference share has been issued b} a company any portion of the profits and gains of which", the following shall be substituted, namely:-25 "where any preference share of a company has been issued and subscribed for before the 1st april, 1960, and any portion of the profits and gains of the company"; (b) for the words and figures "indian ~come-tax act, 11 of 1922 1922", the words and figures "income-tax a~t, 1961" shall be 30 43 of 1961 substituted; (iv) after section 4, the followin~ section shall be inserted 'namely:-"4a where the stipulated dividend in respect of a preference share of a company-, 35 deduction of incometax (a) is specified to be subject to income-tax and d deduction is made therefrom on account of the incometax payable by the company, or (b) is being paid subject to a deduction therefrom on account of the ~come-tax payable by the company, not- 40 withstanding the absence of any speciftcatioti that the dividend would be subject to income-tax, such deduction shall in no case exceed twenty-five per cent of the stipulated dividend"; s (v) in section 6, for the words "this act", the words and figures "section 3 or section 4" shall be substituted 73 in section 32 of the unit trust act, 1963,-ment of (i) in sub-section (1), for clause (b), the following clause shall act 52 of be substituted, namely: _ 1983 10 43 of \\ldl '(b) where in the case of a unit holder, being an individual, the total income for any previous year as computed under the income-tax act, 1961 before including therein the amount of qualifying dividend-(i) does not exceed a sum of twenty thousand rupees, is the qualifying dividend shall not be included in computing the total income of the unit holder for that year; (ii) exceeds a sum of twenty thousand rupees, the qualifying dividend shall be included in computing the total income of the unit holder for that year, but he shalj 20 be entitled to a deduction from the amount of income-tax payable by him of a sum calculated at the rate of twentyfive per cent on such qualifying dividend explanation-in this section, "qualifying dividend" means, where the income received by a unit holder from the trust in 2s respect of units does not exceed one thousand rupees, such income, and where such income exceeds one thousand rupees, a sum of one thousand rupees'; (ii) in sub-section (2),-- (a) in clause (a):-the word "and'~ shall be omitted; 30 (b) in clause (b), after the word "individual", the words "who is resident; and" shall be inserted; (c) after clause (b), the following clause shall be inserted, namely:-"(c) deduction of income-tax shall be made by the 35 trust from the income distributed by it to a unit holder being an individual who is not resident in india at the rate of fifteen per cent of such income" 'c in the companies -(profits) surtax act, 1964,---(i) in section 18, the words "and super-tax" shall be omitted; (ii) in the first schedule,-(a) in clause (xii) of rule 1, the words "and super-tax" 5 shall be omitted; (b) in clause (i) of rule 2, the words "and super-tax·', where vel" they occur, shall be omitted, and for the word "super-tax" occurring in sub-clause (b), the word "incometax" shall be substituted; 10 (iii) in the third schedule,-(a) in paragraph 1-(i) in the first proviso, for the words "of manufat 'me or production of anyone or more of the articles", the words "of construction, manufacture or production or is anyone or more of the articles or things" shall be substituted; (ii) in the second proviso, for the words "of manufacture or production of any article", the words "of construction, manufacture or production of any article 20 or thing" shall be substituted; (iii) after the second proviso, the following proviso shall be in~erted, namely:-"provided further that where in the case of an indian company or a company which has made 2s the prescribed arrangements for the declaration and payment of dividends within india-(i) which is such a company as is referred to in section 108 of the income-tax act, and (ii) whose paid up share capital (subs- 30 crib81band paid for in cash) as on the last day of the previous year, is not less than twentyfive per cent of the amount of the capital as computed under the second schedule to this act, 35 the aggregate of-(a) the amount of income-tax payable by the company in respect of its total income of the previous year under the provisions of the income-tax act after making allowance for 40 any relief, rebate or deduction in respect of income-tax to which the com[lany is entitled under the provisions of the snid act or the annual finance act after deducting from-such amount of income-tax the amount, if any, by which the rebate of income-tax admissible to the company ullder the provisions of the annual finance act is, under the provisions of the said act, reduced with reference to the face value of any bonus shares or the amount of any bonus 10 issued by the company to its shareholders during the previous year or any previous year prior to that year; and {b) the amount of surtax computed in accordance with the foregoing provisions of this 15 paragraph, exceeds the amount calculated at seventy per cent of the total income of the company, the amount of such excess shan be deducted from the amount of surtax referred to in clause (b) above and the 20 balance shall be the amount of the surtax payable by the company"; (b)- for paragraph 2, the following ~aragraph shall be substituted, namely:-'2 the list of articles and thin~s referred to in 2s paragraph 1 shan be as follows:-(1) iron and steel (metal), ferro-alloys and special steels (2) aluminium, copper, lead and zinc (metals) (3) coal, lignite, iron ore, bauxite, manganese ore, dolomite, limestone, magnesite and mineral oil (4) industrial machinery ~pecified under the (-~heading "8 industrial machinery", sub-beading "a major items of specialised equipment used in specific industries", of the first schedule to the industries (development and regulation) act, 1951 8s of 19s1 3s (5) boilers and steam generating plants, steam engines and turbines and internal combustion engines (6) flame and drip proof motors 40 (7) equipment for the generation and transmission of electricity including transformers, cables and transmission towers (8) machine tools, precision tools (including cutting tools and small tools}, dies and jigs (9) tractors and earth-moving machinery (10) steel castings and forgings and malleable iron and steel castings s (11) cement and refractories (12) fertilisers, namely, ammc;mium sulphate, ammonium sulphate nitrate (double salt), ammonium nitrate, calcium ammonium nitrate (nitrolime stone), ammonium chloride, super phosphate, urea 10 and complex fertilisers of synthetic origin containing both nitrogen and phosphorous, such as ammonium phosphates, ammonium sulphate phosphate and ammonium nitro phosphate (13) paper and pulp is (14) tea (15) electronic equipment, namely, radar equipment, computers, electronic accounting and business machines, electronic communication equipment, electronic control instruments and basic 20 components, such as valves, transistors, resistors, condensors, coils, magnetic materials and micro wave components (16) petrochemicals including corresponding products manufactured from other basic raw 25 materials like calcium carbide, ethyl alcohol or hydrocarbons from other sources (17) ships (18) component parts of the articles mentioned in items nos (4), (5), (7) and (9), that is to say, 30 such parts as are essential for the working of the machinery referred to in the items aforesaid and have beensiven for that purpolie:;some special shape or quality which would not be" essential for their use for any other purpose and are in complete finished 35 form and ready for fitment' 75 the indian tariff act, 1934 (hereinafter referred to as the tariff act) shall be amended in the manner specified in the third schedule amendment of act 32 of 1934 76 (1) in the case of goods chargeable with a duty of customs which is specified in the first schedule to- the tariff act as amended 40 surcharge by thi~ act or any subsequent act of p,-liament, or in that schedule ~ ~~~ read with any notiftcation of the ('entral gove~nment for the time being in force, there shall be lmied and collected as an addition to, and in the same manner as, the total amount so chargeable, a sum equal to 10 per cent of such amount: provided that in co~p~ting the total amount so chargeable, any s duty chargeable under section 2a of the tarift act or section 77 of this act shall not be included 10 of 1897 (2) sub-section (1) shall cease to have effect after the 31st day of march, 1966 except as respects things done or omitted to be done before such cesser; and section 6 of the general clauses act, 1897 10 shall apply upon such cesser as if the said sub-section had then been repealed by a central act - 77 (1) with a view to regulating, or bringing greater economy in, lteauiatory imports there shall be levied and collected, with e1fect from such ~ date, and at such rate, as may be specified in this behalf by the central 15 government by notification in the oftlclal gazette, on all or any of the goods mentioned in the first schedule to the tariff act as amencied by this act or any subsequent act of parliament, a regulatory duty of customs not exceeding-(4) 25 per cent of the rate, if any, specified in the 2{' said first schedule read with any notification issued under section 3a or sub-section (1) of section oi of the tariff act; or s2 of 1962 (b) 10 per cent of the value of the goods as determined in accordance with the provisions of section 14 of the customs act, 1962, 2s whichever is higher: provided that different dates and different rates may be specified by the central government for different kinds of goods (2) sub-section (1) shall cease to have effect after the 15th day of may, 1966 except as respects things done or omitted to be done 10 of 1897 30 before such cesser; and section, ~ of the general clauses act, 1897 shall apply upon such cesser as ii the said sub-section had then been repealed by a central act (3) the regulatory duty of customs leviable under this section in respect of any goods referred to in sub-section (1) shall be in addition to any other duty of customs chargeable on such goods under s2 of 162 35 the customs act, 1962 s2 of 1962 (4) the provisions of the customs act, 1962 and the rules and regulations made thereunder, including those relating to refunds and exemptions from duties, shall, as far as may be, apply in relation to 40 the levy and collectinn of the regulatory duty of customs leviable under this section in respect ' any goods as they apply in relation to the levy and collection of the duties of customs on such goods under that act or those rules and regu!atiol'ls (5) evf!!ry notiftcation issued under sub-section (1) shau, as soon as may be after it is issued, be placed before each house of parliament (6) all regulatory duties of customs levied under sub-section (1) 5 of section 58 of the finance act, 1964, shall, subject to any no tift-5 of 1814 cation issued under section 25 of the customa act, 1962 read with 52 ef 1862 sub-aection (4) of the said section 58, continue to have effect udtil the other provisions of this section come into force 78 in the indian tariff (amendment) act, 1949, in sections 4 and 5, 10 fjjr the figures "1965", the figures "1966" shall be substituted 71 in the central excises and salt act, 1944 (hereinafter referred to as the central excises act), in the first schedule,-amendment of act 1·of 1949 amendment of act 1 of 1944 (a) in item no4, under "ii manufactured tobacco-", for sub-item (2), the following sub-item shall be substituted, 's namely:-"(2) cigarettes  one hundred per cent ad valorem"; (b) in item no 26, for the entry in the third column, the entry "sixty rupees per m&tric tonne" shall be substituted; (c) in item no 26a, for the entries in the third column 20 against sub-items (1) and (z), the entries "one thousand rupees per metric tonne'~ and "one thousand and five hundred rupees per metric tonne" shall, respectively, be substituted; (d) in item no 26aa,-(i) for the entry in the third column against each of 2s the sub-items (i) and (ia), the entry "forty-five rupees per metric tonne plus the excise duty for the time being leviable on steel ingots" shall be substituted; (ii) for sub-ite~(ii) and (iii), the following sub-items shall be substituted, namely: -30 | three                    ||--------------------------|| metric tonne             || plus                     || the                      || excise duty for the time || being leviable           || od                       || ateel                    || ingots                  || 35                       |" (ii) plates and sheets (including uncoated plates and sheets intend- ed fol' t;inn"laand forms 8uch as l'ldges, c nnels, ram water pipes and their fittmgs ma~e from plates or sheets, but not including plates and sheets after tinning), and hoops, ~ sorts, other than akelp and stnps (iii) skelp and strips three hundred rupees per 40 metric tonne plus the excise duty for me time being leviable on steel ingots" ; s 10 (,) in item no 27,-(i) for the entry in the second a>lumn against sub-item (b), the entry "manufactures, the f011o~, namely, plates, sheets, circles and strips in any form or size, dot otherwise specified" shall be substituted ; (ii) for the entry in the second column against sub-item (c), the entry "pipes and tubes, other than extruded pipes and tubes" shall be substituted ; 20 (iii) after sub-item (c), the following sub-item shall be inserted, namely:-"(d) extruded shapes and ten per cent ad valor_" ; sections including extruded pipes and tubes (f) in item no 28, for the entry in the third column, the entry "three hundred and seventy-five rupees per metric tonne;' 25 shall be substituted 88 (1) when goods of~he description mentioned in this section special chargeable with a duty of excise under the' central excises act (as :;%e~ amended by this act or any subsequent act of parliament) read ~ with any notification for the time being in force issued by the cen· g 30 tral government in relation to the duty so chargeable, are assessed to duty, there shall be levied and col1ected-3s (a) as respects goods comprised in items nos 6, 8, 9, 14d, 22a, 23a except sub-item (1) thereof, 23b, 28, 29, sub-items (2) and (3) of item no 31 and item no 32 of the first schedule to the central excises act, a special duty of excise equal to 10 per  cent of the total a~unt so chargeable on such goods; (b) as respects goods comprised in items nos 2, 3(1), subitems i, ii(2) and ii(3) of item no4, items nos 13, 14, 14f, 15 15a, 15b, 16, 16a, 17, 18a(2), 21, 22, 23, 23a(i), ti, 30, 31(1), 33, sub-items (1), (3a) and (4) of item no 34 and item no 37 of that schedule, a special duty of excise equal to 20 per' cent of the total amount so chargeable on such goods; and (c) as respects goods' comprised in items nos 41i(1), 18, 18a(1), 18b, 20, 29a, 33a, sub-items (2) and (3) of item no 34 and radiograms comprised in item no 37a of that schedule, a special duty of excise equal to 33i per cent of the total amount so chargeable on such goods ' (2) sub-section \1) shall cease to have effect after the 31st day of march, 1966, except as respects things done or omitted to be done before such cesser; and section 6 of the general clauses act, 1897 shall apply upon such cesser as if the said sub-section had then been repealed by a central act s (3) the duties of excise referred to in sub-section (1) in respect of the goods specified therein shall be in addition to the duties of excise chargeable on such goods under the central excises act or any other law for the time being in force and such special duties shall be' levied for purposes of the union and the proceeds thereof 10 shall not be distributed among the states (4) the provisions ot the central excises act and the rules made thereunder, includirlg those relating to refunds and exemptions from duties, shall, as far as may be, apply in relation to the levy and collection of the duty of excise leviable under this section in respect is of any goods as they apply in relation to· the levy and collection of the duties of excise on such goods under that act or those rules be,watory duty of exciae ii (1) with a view to regulating or bringing greater economy in consumption, there shall be levied and collected, with effect from such date, and at such rate, as may be specified in this behalf by the 20 central government by ilqtification in the offici!ji gazette, on all or any of the goods mentioned if! the first schedule to the central excises act as amended by this act or any subsequent act of parliament, a regulatory duty of excise which shall not exceed 15 per cent of the value of the goods as determined in accordance with the 2s provisions of section 4 of the central excises act: provided that different dates and differerlt rates may be specified by the central government for different kinds of goods (2) sub-section (1) shall cease to have effect after the 15th day of may, 1966, except as respects things done or omitted to be done 30 before such cesser; and  section 6 of the genwl clauses act, 1897 10 of 1897 shall apply upon such cesser as if the said sub-section had then been repe'aled by a central act (3) the duties of excise referred to in sub-section (1) in respect of the goods specified therein shall be in addition to the duties of 35 'excise chargeable on such goods under the central excises act or any other law for the time being in force and such regulatory duties shall be levied for purposes of the union and the proceeds thereof shall not be distributed among the states (4) the provisions of the central excises act and the rules made 40 thereunder, including those relating to refunds and exemptions from duties, shall, as far as may be, apply in relation to the levy and collection of the regulatory duty of excise le\liable under this section in respect of any goods as they apply in relation to the levy and collection of the duties of excise on such goods under that act or those rules   : s (5) every notification issued under sub-section (1) shall, as soon \ as may be after it is issued, be placed before each house of parliament (6) all regulatory duties of excise levied under sub-section (1) " of 11m of section 62 of the finance act, 1964, shall, subject to any raotmca-10 tion issued under rule 8 of the central excise rules, 1944, read with sub-section (4) of the said section, continue to have effect until the other provisions of this section come into force 82 for the year beginning on the 1st day of april, 1965, no duty discontinuance of under the central excises act, or the tariff act shall be levied in salt duty is respect of salt manufactured in, or imported into, india amendment of act 58 of 1957 83 in the first schedule to the additional duties of excise (goods of special importance) act, 1957, in item no4, under "ii manufactured tobacco", for sub-item (2), the followir,g sub-item shall be· substituted, namely:-20 "(2) cigarettes twenty-five per cent ad valorem" ~  declaration under the provisional collection of tclzes act, 1931it is hereby declared that it is expedient in the public interest that the provisions of clauses 75, 76, 77 (6), 78, 79, 80, 81 (6) and 83 of this bill shall have immediate e1!ect under the provisional 2s collection of taxes act, 1931 16 of 1931  (see section 2) part i income-tax and surcharge on income-tax po!,ogroph ain the case of every individual or hindu undivided family or unregistered firm or other association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the income-tax act, not being a case to which any other paragraph 10 of this part applies- rates of income-tax(r) where the total income does not 5 per cent of the total inmme exceed rs 5,000 (2) where the total income exceeds rs 250 pm 10 per cent of is rs 5,000 but does not exceed the amount by which the total rs 10,000 income exceeds rs 5,000 (3) where the total income exceeds ra '150 plus 15 per a:dt of r s 10,000 but does not exceed the amount by which the total rs 15,000 income exceed ra 10,000 20 (4) where the total income exceeds rs i,sco plus 20 per cent of ri 15,000 but does not exceed the amount by which the total ra 20,000 inaxne exceeds ra 15,000 (5) where the total income exceeds ra 2,500 plus 30 per cent of ra 20,000 but does not exceed the amount by which the total 25 ra 25,000 income exceeds ri 20,000 exceeds ra 4,000 plus 40 per cent of exc8:'lf the amount by which the total income exceeds ra 25,000 (6) where the total income ra 25,00<1 but does not rs 30,000 (7) where the total income exceeds rs 6,000 plus 50 per cent of 30 rs 30,000 but does not exceed the amount by which the total rs so,ooo income exceeds ra 30,000 exceeds ra 16,000 plus 60 per cent of exceed the amount hy which the total income exceeds ri 50,000 35 (8) where the total income rs so,ooo but does not rs 70,000 (9) where the total income excaeds rs28,000 plus 6s per cent of rs 70,000 the amollilt by which the total incoi:le ~xceed8 rs 70,000: provided that for t4e purposes of this paragraph, in the case ot - person, not being a nen-resident-(i) no income-tax shall be payable on a total income ~~t exceeding the following limit, namely:-5 (a) rs 6,000 in the case of every hindu undivided family which as at the end of the previous year satisfies either of the following two conditions, namely:-10 (i) that it has at least two members entitled to claim partition who are not less than eighteen years of age; or is (ii) 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; (b) rs 3,000 in every other case; (ii) in the case of an individual or a hindu undivided family, the income-tax computed at the rate hereinbefore specified shall de reduced by so much of the amount specified hereunder, as does not t:xceed the amount of income-tax so computed:-20 (a) rs 100 in the case of an unmarried individual; (b) rs 175 i!\ the case of a married individual who has no child wholly or mainly dependent on him or a hindu undivided family which has no minor coparcener; 25 (c) rs 195 in the case of a married individual who has one child wholly or mainly dependent on him or a hindu undivided family which has one minor coparcener wholly or mainly supported from the income of such family; 30 (d) rs 215 in the case of a married individual who has ",:lpore than one child wholly or mainly dependent on him or a hindu undivided family which has more than one minor coparcener wholly or mainly supported from 35 the income of such family; (iii) where the total income is twenty thousand rupees or less, the income-tax payable shall not exceed forty per cent of the amount by which the total income exceeds the limit specified in sub-clause (a) or, as the case may be, sub-clause (b) of clause 40 (i) of this proviso 22~ (b) ls-9 the amount of income-tax computed in accordance with the preced41g provisions of this paragraph shall be increased by a surcharge for purposes of the unton, which shan be equal to the aggregate of the sums computed as hereunqer: -(4) where-(i) in the case of an individual or a hindu undivided family, the amount of unearned income, not being income by way of interest on any security of the central or state government, included in the total income, or 10 (ii) in any other case, the amount of unearned income included in the total income exceeds rs 15,000, a sum calculated on the difference between the amount of income-tax computed in respect of the income referred to in sub-clause (i) or, 15 ~ the case may be, su1h:lause (ii) , if such income had been the total income and the amount of income-tax computed in respect of an income of rs 15,000 if it had been the total income, at the following rate, namely:-(i) where the amount of the difference 20 per cent of the amount of 20 does not exceed its 14,500, r such difference   -i~) where the amount of the difference rs 2,900 plus 25 per cent of the exceeds ri 14,500 amount by which the difference aforesaid exceeds ri 14,500 (b) where---(i) in the case of an individual or a hindu undivided family, the earned income and income by way of interest on any security of the central or state government included in the total income, or (ii) in any other case, the earned income included in the 30 total inc3me exceeds rs 1 lakh, a sum calculated on the amount of the difference between the incometax computed in respect of the income referred to in sub-clause (i) or, as the case may be, sub-clause (ii) , if such income had been the 3s total incqme and the income-tax ,computed in respect of a total income of rs 1 lakh, at the following ra~e, namely:- (i) where the amount of the difference does not exceed rs 65,000 5 per cent of the amount of such difference (2) where the amount of the differeoce rs 3a,0 piau 10 per cedt of the aceeds ri 65;g111o but doee dot exceed amount by wh1c:h the ctifl'tiedcc rs 1,30,000 aforesaid exceeds ra 65,000 (3) where the amount of the s exceeds ri 1,30,000 dift'~ _ rs 9150 ilw is per cent of the amount by whic:h the difference aforesaid exceeds ri 130000 paragrtlph b in the case of every association of persons being a co-operative 10 society lis defined in clause (19) of section 2 of the income-tax act,- rtltes of income-ttj%(i) where the totaqincome does dot exceed , per cent of the total income iu 5,000 (2) where the total income exceeds rs 250 plw 10 per cent of the 15 rs 5,000 but does not rs 10,000 exceed amount by which the total income exceeds ri "oco (3) where the total income rs 10,000 but does not rs 15,000 exceeds its 750 plus is per cent of the exceed amount by which the total income exceeds ra 10,000 20 c-4) where the total income rs 15,000 but does not rs 20,000 exceeds rs 1,500 plus 20 per cent exceed of the amount by which the total income c:xceeds ra i~ooo (5) where the totalii income exceeds rs 2,500 plus 25 per cent of rs 20,000 but does not exceed the amount by which the 25 rs 25,000 total income excecda rs 20,000 (6) where the rs 2s,''vlo total income exceeds rs 3,750 plus 41 per cent of the amowu by which the total income excacls ra 25,000  30surcharge on income-ta% where the total income exceeds rs 25,000, the amount of incometax on such total income computed at the rates hereinbefore specifted shall be increased by a surcharge for purposes of the union of ii per cent of the'':'atnount of the difference between the income-tax 35 so computed and the income-tax computed in respect of a total income of rs 25,000 paragraph c -in the case of every registered ftrm,- rates of income-tax40 (i) where the total income does not exceed rs 2s,000 nil (2) where the total income ra 25,000 but does not ra 50,000 exceeds 6 ~_ cent of the amount exceed by "'which the total income exceeds ri 25,000 (3) where the total income exceed& ri 50,000 but does not exceed its 1,00,000 rs 1,500 plus 8 per cent of the 5 amount by which the total income exceeds rs so,ooo (~) where the total income exceeds lla 100,000 i rs 5,500 plus u per cent of the amount by which the total income exceeds rs 1,00,000 surcharge on income-tax 10 the amount of income-tax computed at the rates hereinbefore specified shan be increased by a surcharge for purposes of the union of twenty per cent of the amount of income-tax: provided that in the case of a registered firm whose total income includes income derived from a profession carried on by it and the 15 income so included is not less than futy-one per cent of such total income, the amount of surcharge for purposes of the union computed at the rate hereinbefore specified shall be reduced by one-half of such amount  paragraph dir the case of every local authority,-rate of income-tax on the whole of the total income 45 per cent  surcharge on income-taxthe amount of income-tax computed at the rate herein- 25 "before specified shall be increased by a surcharge for purposes of the union of ten per cent of the amount of income-tax paragraph e in the case of the life insurance corporation of india established under the life insurance corporation act, 1956,-30 31 of 1158--  rate of income-tu": 47'5 per cent on the whc'le of its profits and gains from life insurance business paragraph f id the case of every company, other than the life insurance cor- 3s poration of india established under the life insurance corporation act, 1156,-31 of 11m kate of income-tax on the whole of the total income 10 per cent: provided that a rebate shall be allowed in the case of sucia companies on such- 'income at the rate or rates speculed hereunder:-rate of rebate income on which rebate is to be allowed i in the case of a company which-10 15 20 (a) in respect ofits income liable to income-tax under the income-tax act for the assessment year commencing on the 1st day of april, 1965, has made the prescribed arrangements for the declaration and payment within india of the dividends payable out of such income in accordance with the provisions of section 194 of that act; and (b) is slich a company as ia referred to in section ros of the income-tax act,-(i) where the total on the whole of the total income does not income 37 0 5 per cenl exceed rio 25,000 (ii) where the total income excelds rio 25,000 35 (a) on so much of the total income as consists of profits and gains attributable to the business of generation or distribution of electricity or of construction, manufacture or production of anyone or more of the articles or things specified in the list in part iii of this schedule 0 3s per cent rate",:of rebate income on which rebate is to be allowed () oil the balance of the total income 30 per cent 5 ii in the case of a company wbich-10 15 20 (a) satisfies condition (a) ef item i hereinabove, and (b) is not such a company 81 is referred to in eection 108 of the income-tax act,-(i) in the case of a company which is wholly or mainly engaged in the business of generation or distribution of electricity or any other form of power or in the construc-tion of ships or in the manuiacture or processing of goods or in mining (a) on 10 much of the total income as consists of profits and gains attributable to the business of generation or distributi0n of electricity or of construction, manufacture or production of anyone or more of the articles or things specified in the list in part iii of this schedule-(i) on so much of the profits and gains aforesaid as do not exceed rs 10 lakhs 35 per cent 30 (ii) on the balance of the profits and gains aforesaid  26 per cent 35 (b) on any income other than the profits and ~ referred to' in (a) hereinabove-(i) on so much of such income as, together 40 with the profits and pins referred to in (a) hereinabove, does not exceed rs 10 lakhs 30 per cent 45 (ii) on the balance of such income  20 per cent ~------------------------------------------------~ rate of rebate income on which rebate is to be allowed (ii) in any other case 5 10 is (a) on 10 much of the total income as consists of profits and gains atttibu~b~ to ~ buane of aeneration or distribution of electricity or of construction, manufacture or production of anyone or more of -the articles or thin specified in the list f: part iii of this schedule 26 per cent ( b) on the balance of the total income 20 per cent 20 30 per cent (a) on so much of the total income as consists of royalties received from an indian concern in pursuance of an agreement made by it with the indian concern on or after the 1st day of april, 1961 and which has been approved by the central oovernment iii in the case of a company which in respect of its income liable to incometax under the income-tax act for the assessment year commencing on the 1st da, of april, 1965, has not made the prescribed arrangements for the d~tion and payment within india of the dividends payable out of such income in accordance with the provisions of section 194 of that act 35 45 (b) on so much of the total income as consists of 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 which has been approved by the central government 30 per cent (c) on the balance of the total income is per cent: provided further that-(i) the amount of rebate arrived at under the preceding proviso in the case of a company referred to in item i or item  ii of that proviso shall be reduced by the sum, if any, equal to the amount or the aggregate of the amounts, as the case may s be, computed as hereunder:-(a) on the aggregate of the sums computed in the manner provided in clause (i) of the second proviso to paragraph d of part ii of the first schedule to the finance act, 1964 as reduced by the amount, if any, which is deemed to have been taken into account, in accordance with clause (n) of the said proviso, for the purpose of reducing the rebate mentioned in clause (i) of the said proviso to nil; (b) on the amount representing the face value of any bonus shares or the amount of any bonus issued to its shareholders during the previous year with a view to increasing the paid-up capital except where such bonus shares or bonus have been issued wholly out e>f the share premium account of the company after the 31st day of march, 1964 ; and (c) in addition, in the case of-(i) a company as is referred to in section los of the income-tax act, or (ii) a company as is referred to in clause (iii) of sub-section (2) or sub-section (4) of section 104 of the said act, or said act by a notification issued under the provisions of sub-section (3) of that section, which has declared or distributed to its shareholders during the previous year any dividends other than dividends on preference shares-(a) in the case of a company which since the date of the commencement of its activities has declared or distributed any dividends for the first time during the previous year or any one of the four previous years immediately preceding such previous year-' on that part of the dividends other than diviat the rate of 7·5 per dends on preference shares which exceeds ten cent per cent of the paid-up equity capital (b) in any other case-on the whole amount of the dividends other than dividends on preference shares at the rate of 7  s per cent ; (ii) where the sum arrived at in accordance with clause (i) s of this proviso exceeds the amount of the rebate arrived at under the preceding proviso, only so much of the amounts of reduction mentioned in sub-clauses (4), (b) and (c) of clause (i) of this proviso as is sufficient, in that order, to reduce the rebate to nil shall be deemed to have been taken into account 10 for the purpose: provided further that the income-tax payable by a company, as is referred to in section 108 of the income-tax act, and the total income of which exceeds rs 25,000, shall not exceed the aggregate of-is (a) the income-tax which would have been payable by the company if its total income had been rs 25,000 (the income of rs 25,000 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 20 (b) eighty per cent of the amount by which its total income elkceeds rs 25,000 explanation i-for the purposes of this paragraph, a company shall be deemed to be mainly engaged in the business of generation or distribution of electricity or any other form of power or in the 25 construction of ships or in the manufacture or processing of goods or in mining, if the income attributable to any of the aforesaid activities included in its total income for the previous year is not less than fifty-one per cent of such total income expzanation 2-for the purposes of this paragraph, where a part 30 of the income of a company is not included in its total income because it is agricultural income, the amount declared or distributed as dividends (other than dividends on preference shares), the amount representing the face value of any bonus shares and the amount of any bonus issued to its shareholders shall each be deemed 35 to be such proportion thereof as the sum specified in clause (a) bears to the sum specified in clause (b), such sums being-(a) the average amount of the total income of the company in the five previous years in which it has been in receipt of taxable income immediately preceding the relevant previous year; ~o and (b) the average amount of the total profits and gains (excluding capital receipts) of the company for the five previous years referred to in clause (ci) reduced by such allowances as may be admissible under the income-tax act but which have dot been taken into account by the company in its profit and 5 loss accounts for the said five previous yea~s ezplanaticm 3-for the purpose of sub-clause (b) of clause (i) of the aecond proviso, "share pre~um account" means an account ferming a separate and identifiable part of the reserves of a company to which has been transferred a sum equal to the aggregate amount 10 or value of the premiums on shares issued by the company ezplclnation 4-for the removal of doubts it is hereby declared that where any dividends were declared by the company before the commencement of the previous year and are distributed by it during that year, no reduction in the rebate shall be made under sub-clause 15 (c) of clause (i) of the second proviso in respect of such dividends  part ii rates fot deduction of tax at soutce in certain casesin every case in which under the provisions of sections 193 to 195 _ of the income-tax act, tax is to be deducted at the mte8 in force, 20 deduction shall be made from the income subject to deduction, at the following rates:-income-tax rate of income-tax rate of surcharge 25 i in the case of a person other than a company-(a) where the person is resident-2 per cent 35 on the whole income (excluding 18 per cent interest payable on any security of the central government issued or declared to be incometax free, and interest payable on any security of a state government issued income-tax free, the income-tax whereon is payable by the state government) ; income-tax rate of income-tax rate of surcharae (6) where the person is not resident s in india-| income-tax                     | at               ||--------------------------------|------------------|| 2s                             |                  || per                            |                  || cent                          | and              || surcharge                      |                  || at s                           | per              || the                            |                  || amount                         | of               || 10                             |                  || or                             |                  || 15                             |                  || (i)                            | on               || interest payable               |                  || on                             | any security     || of                             | the              || issued                         |                  || or                             |                  || declared                       |                  || to                             |                  || be                             | iname-           || tax                            |                  || free,                          |                  || and                            |                  || int~t                          |                  || payable                        |                  || on                             | any              || state government issued        |                  || in-                            |                  || oome-tax                       |                  || free,                          |                  || the                            | inoome-tax       || whereon                        |                  || is                             |                  || payable by the state           |                  || government) ;                  |                  || income-tax and                 | surcharge        || od                             |                  || income-tax                     | in               || respect                        |                  || of                             |                  || the                            |                  || income at the rates prescribed |                  || in paragraph a                 |                  || of                             |                  || pan                            |                  || i                              | of               || this                           | schedule,        || if                             |                  || such                           |                  || income had been the            | total            || income,                        |                  || (whichever is higher          |                  || 20                             |                  || (ii)                           |                  || on the income from             | interest         || 12·5                           |                  || per cent                      |                  || 2·5                            |                  || per                            | cent            || payable                        |                  || on                             | any security     || central                        |                  || government                     |                  || issued                         |                  || or                             |                  || declared                       |                  || to                             |                  || be                             |                  || income-tax                     |                  || free,                          |                  || and interest payable on any    |                  || 25                             |                  || security                       | of               || issued                         | income-tax free, || the                            |                  || income-tax whereon is payable  |                  || by                             |                  || the                            | state government |2 in the case of a company-30 (a) where the company is either an indian company or a company which has made the prescribed arrangements for the declaration and paymenf of dividends within 35 india,- ' on the whole income (excluding interest payable on any security of the central government issued or declared to be incometax free, and interest payable on any security of a state government issued income-tax free, the income-tax whereon is payable by the state government) ; 20 per cent nil " income-tax rate of income-tax rate of surclwje 5 (b) where the company is neither an indian company nor a company which has made the prescribed arrangements for the declaration and payment of dividends within india,-10 15 20 (i) on the income from dividends payable by an indian company which is not such a company as is referred to in section 108 of the income-tax act and which is wholly or mainly engaged in the business cjf generation or distribution of electricity or of construction, manufacture or production of anyone or more of the articles or things specified in the list in part iii nil of this schedule ; 15 per cent nil (ii) on the income from dividends payable by any other indian company or any 'compaliy which has made the prescribed arrangements for the declara  tion and payment of dividends within india; 25 per cent 30 35 nil (iii): on the income from royalties payable by an indian concern in pursuance of an agreement which is made by it with the indian concern on or after the 1st day of april, 1961, and which has been appt'ovcd by the central: government ; 50 per cent 45 nil (iv) on the income from 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 which has been approved1ty the central government ; 50 per cent income-tax rate of income-tax rate of surcharge s 10 'nil ( 'v) on the income from interest payable on any security of the centtal government issued or declared to be income-tax free, and interest payable on any security of a state government issued income-tax free, the income-tax whereon is payable by the state government ; and - -40 per cent nil ('vi) on any other income  6s per cent  is part iii list of articles and things(1) iron and steel (metal), ferro-alloys and special steels (2) aluminium, copper, lead and zinc (metals) (3) coal, lignite, iron ore, bau'xite, manganese ore, dolomite, lime-20 stone, magnesite and mineral oil (4) industrial machinery specified under the heading "8 industrial machinery", sub-heading iia major items of specialised equipment used in specific industries", of the first schedule to is of 151 the industries (development and regulation) act, 1951 25 (5) boilers and steam generating plants, steam engines and turbines and internal combustion engines (6) flame and drip proof motors - (7) equipment for the generation and transmission of electricity including transformers, cables and transmission towers 30 (8) machine tools, precision tools (including cutting tools and small tools), dies and jigs (9) tractors and earth-moving machinery (10) steel castings and forgings and malleable iron and steel castings 9s (11) cement and refractories (12) fertilisers, namely, ammomum_aulphate, ammonium sulphate nitrate (double salt), ammonium nitrate, calcium ammonium nitrate (nitroline stone), ammonium chloride, super phosphate, urea and complex fertilisers of synthetic origin containing both nitrogen and phosphorus, such as ammonium ph08- s phates, ammonium sulphate phosphate and ammonium nitro phosphate (13) paper and pulp (14) tea (15) electronic equipment, namely, radar equipment, computers, 10 electronic accounting and business machines, electronic communication equipment, electronic control instruments and basic components, such as valves, tranaistors, resistors, condensors, coils, magnetic materials and micro wave components (16) petrochemicals including corresponding products manufac- is tured from other basic raw materials like calcium carbide, ethyl alcohol or hydrocarbons from other sources (17) ships (13) component parts of the articles mentioned in items nos (4), (5), (7) and (9), that is to say such parts as are essential for 20 the working of the machinery referred to in the items aforesaid and have been given for that pwpose some special shape or quality which would not be essential for their use for any other purpose and are in complete finished form and ready for fttment 25  the second schedule (see section 3) rates of annuity deposits(i) in the case of any depositor whose total income does not exceed rs 15,000 nil 30 (ii) in the case of any depositor whose total income exceeds rs 15,000 but does not exceed rs 20,000-5 per cent of the adjusted total income: provided that the annuity deposit to be made shall in· no case exceed half the amount by which the total income exceeds rs 15,000 3s (iii) in the c:ue of a depositor whose total income exceeds rs 20,000 but does not exceed rs 40,000-76 per cent of the adjusted total income: 5 provided that the annuity deposit to be made aball in no cue exceed the aggregate of the followine luma, nuaeb':-(4) an amount calculated at five per cent on so much of the adj usted total income as does not exceed rs 20,000; (b) one-half qf the amount by which the total income exceeds ri 20,000 (iv) in the case of a depositor whose total income exceeds rs  40,000 but does not exceed rs 70,000-10 per cent of the adjusted total income: 10 provided that the annuity deposit to be made ahall in no case is exceed the aggregate of the following sums, namely:-(4) an amount calculated at sev~ and a half per cent on so much of the adjusted total income as does not exceed rs4o,000; (b) one-half of the amount by which the total income exceeds rs40,000 (v) in the case of a depositor whose total income exceeds rs 70,000-12 per cent of the adjusted total income: 20 provided that the annuity deposit to be, made shall in no case exceed the aggregate of th~ following sums, namely:-25 (a) an amount calculated at ten per cent on so much of the adjusted total income as dews not exceed rs 70,000; (b) one-half of the amount by which the total income exceeds rs 70,000 explanation-in this schedule, "total income" means total income computed in the manner laid down in the income-tax act without making any allowance under section 2800 of that act  the third schedule (s ee section 75)part i in the first schedule to the tari1f act,-(i) in item no 30, for the figures "60" and "50" in the fourth and fifth columns, the figures al75" and "65" shall, respectively, be substituted; 35 (ii) in items nos 31, 31 (2) 31 (3) and 31 (5), for the entry against each of them in the fourth column the entry "100 per cent ad valorem" shall be substituted; (iii) in item no 31 (1), for the figures "75" and "65" in the fourth and sixth columns, the figures "100" and u90" shall, respectively, be substituted; (iv) in item no 44, for the figures u50" in the fourth colwnn, the figures "75" shall be substituted; (v) in i_t~m no 46 (3), for the figures "26" in the fourth column, the figures "50" shall be substituted; (vi) in item no 47 (2), for the entry in the fourth column, 5 the entry "rs 10·25 per kilogram or 75 per cent ad valorem, whichever is higher" shall be substituted; (vii) in item no 63 (10) ,-(i) for the entry in the fourth column against sub-item (i), the entry "rs 305·00 per tonne" shall be substituted; 10 (2) for the entry in the fourth column against sub-item (ii) the entry "rs 325'00 per tonne" shall be substituted; and (viii) in item no 63 (20a) , for the figures "30" in the fourth column, the figures "100" shall be substituted i5  part iiitem ne name of nature standard preferential rate of duration article of rate of du:h if the article of produty duty is e produce or tective manufacture of rates of 20  duty the a united british kingdom colony i 3  s 6 7 25 in the first schedule to the tariff act, in section vi, after item no 28a, the following item shall be inserted namely:-"28b sodium prefelooper 90 per 90 per "    hydrosulrential cent cent cent phite revenue ad "aid-ad "aload "alo-,,,,, r", rem --  statement of objecrs and reasonsthe object of-the bill is to give effect to the financial proposals of the central government for the financial year 1965-88 and to provide for certain connected matters the bill, inter cllia~ proposes the grant of tax credit certificates for certain purposes this is being done with a view to stimulating industrial output 81'1d investment in new equity issues and for the purpose of facilitating dispersal of existing industries from urban areas to other areas for relieving congestion the notes on clauses explain the various provisions contained in the bill new deijii; t t krishnamachari the 27th februllty 1965  president's recommendation under articles 117 and 274 of the constitution of india[copy of letter no f~3 (16)-b/65, dated thtr 27th february, 1965 from shri t  t krishnamachari, minister of finance to the secretary, lok sabha]  ~ i !ill the president having been informed of the subject matter of the proposed bill, recommends under article 117 (1) and (3) read with article 274 (1) of the constitution of india, the introduction of the finance bill, 1965 to the lok sabha and also recommends to the lot sabha the consideration of the bill 2248 (b) ls-ll  note on clause,clciuse 2 prescribes the rates of income-tax and surcharge on: income-tax (wherever leviable) for the assessment year 1965-66 for income other than capital gains, and also the rates at which incometax and surcharge (where leviable) are to be dcduded at source from interest on securities, dividends and other income during the financial· year 196fmj6 as the provision relatinr to the charge of super-tax us been removed from the income-tax act, 1961 under various amendments to that act incorporated in this bill, no levy of supertax has been prescribed for the assessment year 1965-66 the element of super-tax has, however, been integrated in the new rate structure of income-tax prescribed in the bill in the rate schedule of income-tax for individuals, hindu undivided families, unregistered fhms and associations of persons etc, the income slabs have been regraded and the' rates of tax for the first and the top slabs, as well as for several intermediary slabs of income, llave been reduced from those applicable for the assessment year 1964-65 unlike under the rate schedules of income-tax for the assessment year 1964-65, which contain an initial slab of income free of income-tax, the rate schedule for the assessment year 1965-66 does not contain any iditial-slab of income exelllpt from income-tax however, in the case of individuals and hindu undivided families- - (other than non-residents) j provision has been made for reduction' of the tax calculated on the total income by a specified amount of tax relief on' account of personal allowances the amount of this tax relief has been calculated at the rate of income-tax on the first slab of income on various amounts of personal allowances, which are higher than the initial slabs of income exempt from income-tax in the case· of individuals and hindu undivided families under the finance act, 1964 the amount of unearned income not liable tlj surcharge for the assessment year 1965-66 is rs 15,000 as compared with rs 10,000 under the finance act, 1964 further, the rates of surcharge on the income-tax on unearned income fot 1965-66 have been prescribed on the basis of slabs of such income (instead of for ranges of unearned income as under the finance act, 1964), and the tax on the first slab of unearned income of rs 15,000 is free of surcharge in all cases the rates of surcharge on the tax on the next slab of unearned incon:te of rs 35,000, ie, up to rs 50,000, is 20 per cent, and on the balance it is 25 per cent in the case of individuals and hindu undivided families, interest on government securities is free from the surcharge in respect of unearned income, but it is liable to the surcharge leviable in respect of earned income as regards surcharge on the tax on earned income, the first slab of such income upto rs 1 lakh remajns free of surcharge as under the finance act, 1964, but the rate for the next slab of rs 1 lakh upto rs 2 lakhs has been fixed at 5 per cent (instead of 10 per cent as under the finance act, 1964), on the next rs 1 lakh upto rs 3 lakhs, it is 10 per cent, and for the balance of the earned income, it is 15 per cent non-residents as well as assessees who are resident but not ordinarily resident in india will be charged to tax for the assessment year 1965-66 on their income assessable in india in the same manner as resident assessees, but non-residents will not be entitled to any tax relief on account of personal allowances the effect of all these changes is that the incidence of tax on personal income at all levels will be lower than what it was for the asspssment year 1964-65   in the case of registered firms, the rates of income-tax are the same as for the assessment year 1964-65 the general rate of surcharge on income-~ is 20 per cent, but in the case of a registered 'firm whose income· from profession is 51 per cent or more of its total income, the surcharge will be reduced by one-half in the case of, co-operative societie __ a separate rate schedule of income-tax has been prescribed, because in their case super-tax was chargel under tm finance act, 1964 at a concessional rate in their case, a single surcharge on income-tax will be levied in respect of income exceeding rs 25,000 at a uniform rate of 61 per cent, instead -of three surcharges leviable under the finance act, 1964, viz, the surcharge on income-tax on unearned income and earned income, :and surcharg~ on super-tax in th~case of companies, the rate of income-tax (as consolidated with super-tax) has been fixed at 80 per cent (made up of preintegration income-tax, 25 per cent plus super-tax 55 per cent), but this is subj~ct to vario~s rebate~'6n different types of income, corresponding to the rebates of super-tax admissible under the finance act, 1964 in the case of companies in which the public are not substantiauy interested and which are wholly or mainly engaged in the business of manufacture or production of goods or construction o! ships or in mining or the generation or distribution of electricity the rate of tax on the first rs 10 lakhs of their income has been fi'"(ed at 50 per cent, and on the balance of the income it will b~ 60 per cent (under the finance act, 1964, the rate of tax c>n the first rs 2 lakhs of the income of companies of the above ca tegory whose total income did not exceed rs 5 1akhs was 50 per -cent; add on the balance, it wasjso per cent) in the case of au other compame!ij, the rates of income-tax are the same as for the &l8es8meut year 1964-m'  ';file special rebate of tax provided under the finance act, 1964 od income derived by companies (other than those which do not declaretheir dividends in india) from the manufacture or production of specified articles of priority and basic industries, equivalent to 10 per cent of the normal tax, is being continued' for the assessment year 1965-66 the area of this benefit has been enlarged by the addition of several new items in the list of such articles which is contained ill part m of the first schedule to the bill the rates at which tax is to be deducted at source from the income' of d04-residents during the financial year 1965-66 has been fixed at 30 per cent, or the amount of income-tax and surcharge on incometax calculated on the whole of the income liable to such deduction at the rates prescribed in the rate schedule of income-tax in paragraph a of part i of the first schedule to the bill, whicheve1' ~ highet this compares with the rate for deduction of tax at source at 48·375 per cent (subject to a higher deduction on account of super-tax 'where the income attracts super-tax in accordance with the rate schedule applicable to resident assessees at a rate higher than 19 per cent) which was presciil?ed under the finance act, 1964 in the case of resident assessees and companies, the rate for deduc;  tion of tax at source for the financial year 1965-66 is the same as for the financial year 1964-65 the b~is and the quantum of tax rebates in relation to exports' for the assessment year 1965-66 are the same as for the assessment year 1964-65 clause 3 prescribes the rates at which annuity deposits in respect of the assessment ye'ar 1965-!>6 and advance annuity deposits for the financial year 1965-66 will be required to be made by individuals" hindu undivided families, unregistered firms, associations of persorj,s, ~ ; etc under the provisions of chapter-xxiia of the income-tax act sub-clause (i) of clause 4 seeks to amend clause (7) of section 2' of the income-tax act this amendment is consequential to the ,amendment under clause 29 of the bill sub-clause (ii) of clause 4 seeks to omit clause (11) of section 2' of the income-tax act this omission is consequential to the amendment under clause 29 of the bill sub-clause (iii) of clause 4 seeks to amend clause (18) of section 2 of the income-tax act and clause (i) of explanation 1 to that clause  the effect of' ibis amendment will be that a company whose equity mares to the extent of not less than 50 per cent (40 per cent in the case of an industrial company) are held by another company in which lhe public are substantially interested or by a 100 per cent subsidiary of such a company will be regarde4 as a company in which the pub lie are &ubstantially interested if it satisfies other conditions of section 2 (18) further, in ascertaining whether the affairs of the company or the shares carrying more than 50 per cent of its total voting power were at no time during the relevant previous year controlled or held by five or less persons, no account will be taken of a company in which the public are substantially interested or a 100 per cent lubsidiary of such a company which holds not less than 50 per cent (or 40 per cent as the case may be) of the equity shares of the ftrst-  mentioned company  sub-clause (iv) of clause 4 seeks to amend clause (22) of section 2 of the income-tax act the effect of the amendment would be that the distribution received by the shareholder of a company on the· reduction of its capital or on its liquidation would, to the extent such distribution is attributable to the capitalised profits of the company from which bonus shares have been issued by it to its equity shareholdt!:s after 31st march, 1964, would not be chargeable to tax in the hands of e shareholder as his dividend income sub-clause (v) of clause 4 seeks to amend clause (30) of section 2 of the income-tax act this amendment is consequential to the amendment under clause 35 of the bill sub-clause (vi) of clause 4 seeks to amend clause (43) of section 2 of the income-tax act this amendment is consequential to the amend-· ment under clause 29 of the bill further, this sub-clause seeks to insert a new clause (43a) in section 2 of the income-tax act to define a "tax credit certificate'" to mean a tax credit certificate granted to any person in accordance w:th the provisions of chapter xxiib of the act and any scheme made thereunder sub-clause (vii) of clause 4 seeks to omit clause (46) of section % of the income-tax act this amendment is consequential to the amendment under clause 35 of the bill clause 5 seeks to amend section 8 of the income-tax act to secure  that an interim dividend paid by a company shall be deemed to be the income of the previous year in which the amount of such dividend is unconditionally made available by the company to the member who is entitled to it this amendment secures that the year  of taxability of the interim dividend will be determined withou\ regard to the method of accounting followed by the assessee  sub-clause (i) of clause 6 seeks to insert a new clause (4a) insection 10 of the income-tax act to secure that in the case of a non-resident, any income from interest on moneys standing to his credit in a non-resident account in any bank in india in accordance with the foreign exchange regulation act, 1947 and the rules made thereunder will be excluded in computin~ the total income of the non-resident sub-clause (ii) of clause 6 seeks to amend sub-clause (vii) (a) of clause 6 of section 10 of the income-tax act the effect of this amendment will be that a foreign technician having specialised know ledge and experience in constructional or manufacturing operations or in mining or in the generation or distribution of power who is now exempt from tax on his salary for a period of 36 months 'from the date of his arrival in india and from further tax on the tax paid by his employer on his salary for the following 24 months, · will henceforward be entitled to exemption from tax on the tax  paid by his employer for a period of 60 months following the expiry of the initial period of 36 months, provided that the approval of the · central government is obtained to his continuing to remain in em- ployment tn india for the extended period sub-clause (iii) of clause 6 seeks to amend clause (13) of section '10 of the income-tax act to secure that any payment from ad approved superannuation fund by way of refund of contributions · ,to an employee on his leaving the service in connection with wbicb the fund is established, otherwise than by retirement at or after a · specified age or on his becoming incapacitated prior to such retirement will be excluded in the computation of his total income to the -extent to which such payment does not exceed the contributions · made prior to the commencement of the income-tax act, 1961 and any interest thereon  sub-cla-use (iv) of clause 6 seeks to insert a new clause (28) in section 10 of the income-tax act to the effect that in the case o{ any person who is granted a tax credit certificate, any amount adjusted or paid to him in respect of such certificate under the pl'ovlshms of chapter xxiib proposed to be introduced in the act by clause 62 of the bill will not be included in the computation ~f his total income clause 7 seeks to amend section 18 of the income-tax act to · exclude from the head of income "interest on securities" the interest elej?:l~nt included in an annuity payable under section 280d of the" income-tax act sub-clause (i) of clause 8 seeks to amend sub-section (1) of section 33 of the income-tax act the effect of this amendmen twill ' be that in the case of machinery or plant installed after 31st march, 1965 for purposes of the business of construction or manufacture or production of anyone or more of the articles specified in the list in·, the fifth schedule proposed to be inserted in the income-tax act by clause 67 of the bill, development rebate will be admissible at the rate of 25 per cent of the actual cost, and in the case of any other machinery or plant installed after 31st march, 1965, develop--ment rebate will be allowed at 20 per cent of the actual cost, and· where it is installed after 31st march, 1967, at 15· per cent of such· cost sub-clausc! (ii) of clause 8 seeks to amend sub-section (2) of; section 33 these amendments are consequential to the amendment sought to be made by clause 'd of the bill sub-clause (iii) of clause 8 seeks to insert a new sub-section (6)" in section 33 of the income-tax act the effect of this amendment will be that no development rebate will be admissible in respect of machitjery or plant installed after 31st ,march, 1965 in any o1llce' premises or in any residential accommodation, including guest houses clause 9 seeks to insert a new section 33a in the income-tax act under this st"ction, a deduction by way of development allowance' equivalt:!nt to 40 per cent of the actual cost of planting of tea in· new areas and 20 per cent of the actual cost of planting in replacement of bushes in existing areas will be made in computing incomefrom a business of growing or manufacturing tea in india subject to certain limits and conditions, which are broadly similar to those in existence in respect of the deduction of development rebate in respect of machinery or plant the actual cost of planting for  the' purposes of the development allowance will include cost of preparing the land, cost of seeds, cuttings and nurserjes and also the cost of upkeep of the area for a period of 4 years including the previous year in which the land was prepared the actual cost of planting for the purpose of this allowance will be subject to a ceiling of rs 12,5~0 per hectare if the land is in a hilly area and rs 10,000 per hectare if the land is in any other area these figures are approximately equivalent to rs 5,000 per acre and rs 4,000 per acre respectively the development allowance will be admissible in respect of the expenditure on planting commenced after 31st march,  ins and, in respect of planting in jeplacement of bushes in an exist· : jag area where the planting has commenced after 31st march, 1965 and is completed before 1st april, 1970 the allowance will be made in computing the income assessable for the assessment year relevant to the third succeeding previous year next following the previous year in which the land has been prepared clause 10 seeks to amend section 34 of the income-tax act this amendment is consequential to the amendment of section 47 sought to be made by clause 15 of the bill clause 11 seeks to insert a new clause in sub-section 0) of section 36 of the income-tax act under this provision, any expenditure bonn fide incurred by a company for the purpose of promoting family planning amongst its employees will be allowed as a deduction in computing the compally's income under the head "profits and gains of buiiiness or profession" where the expenditure in this respect is of a capital nature, one-fifth of such expenditure will be deducted in the previous year in which it was incurred and in each of the four immediately succeeding previous years clause 12 seeks to make certain amendments to section 37 of the income-tax act which are consequential to the insertion of a new section 33a in the income-tax act under clause 9 of the bill clause 13 seeks to make certlftn amendments to sub-clause (iii) of clau::ie (c) of section 40 of the income-tax act the effect of one of these amendments would be that the expenditure incurred by companies in providing any benefit or amenity or perquisite to their employees whose income chargeable under the head "salaries" does not exceed rs 7,500 would not be taken into account for the purposes of tr  e aforesaid provision the effect of the other amendment would be that in coml=utlng the expenditure incurred by a company in providing any benefit, amenity or perquisite to its employees for the purposes of the aforesaid provision, the perquisite represented by the tax paid by the company on the salary income of a foreign technician in its" employment [whichtr exempt from tax in the hands tlf the technician under section 10 (6) (vii) of the act], and any expen- diture incurred by a company for promoting family planning amongst its employees, would also not be taken into account clause 14 seeks to amend section 43 of the income-tax act this amendment is consequential to the amendment of section 47 of the act sought to be made by clause 15 of the bill clause 15 seeks to amend section 47 of the income-tax act by the insertion of a new clause (11) the effect of this amendment  will be that any transfer of a capital asset by a subsidiary company to the holding company will dot be treated u a transfer for purpos of the chargeabuity to tax under the head "capital gains" under section 45 where the subsidiary company is a 100 per cent subsidiary of the holding company and the latter 'is an indian company: suli-claulc (i) of clause 16 seeks ,to amend clause (iii) of section 49 of the income-tax act this amendment is consequential to the amendment to section 47 under clause 15 of the bill sub-clause (ii) of clause 16 seeks te insert an explanation at the· end of section 49 of the income-tax act the effect of this provision" will be that where a capital asset became the property of the assessee on any distribution of assets on the total or partial partition of:' hindu undivided family or under a rift or will qr under successi~ inheritance, devolution, etc, the cost 'of acquisition of the asset to the previous owner of the property will mean the cost of acquisition to the last previous o~r who acquired it otherwise than by any of the modes of acquisition specified in the section ": , clause 17 seeks to insert a new section 54a in the income-~' act under this section, an individual who is net a citizen of 1dc:f:i&' or a company which is not an indian company transferring, 'my shares held by him or it in an indian company and becoming liabie to pay tax on the capital lains arising out of such transfer will bi entitled to a credit of the whole or part of- the tax so payable  proportion to the amount of the proceeds of the transfer as reduced by the cost of acquisition of the transferred shares, which are re; invested in any of the approved investments within a period of two years from the date of the transfer of the shares clause 18 seeks to insert a new clause (ia) in sub-section (2) of section 56 of the income-tax act to secure that an annuity ~ue ~ the commuted value of any annuity paid under section 289d of ~ income-tax act will be chargeable to tax under the head "income from other sources" clause 19 seeks to insert a new section 69b in the income-to: act the effect of this amendment will be that where in any ~ , , cial year, the assessee has made any investment or is found to be the owner of anybullion, jewellery or other valuable article and the income-tax officer finds that the amount expended on makil)g such investment or in acquiring such bullion, jewelle17 or other valuable article exceeds the amount recorded in this behalf in the books of account maintained by the assessee for any source of income, the excess amount may be deemed to be the income of the assessee for such financial year unless he is able to offer satisfacto!'f explanation for the same 2248 (b) ls-12 ~ czauae 20 seeks to introduce a new chapter via in the incometu act containing provisions relating to deductions to-be made in qomputing the total income under section 80a of the proposed chapter, an individual or hindu undivided family will be entitled to a deduction of an amount equal to 50 per cent of the aggregate of the qualifying sums in respect of payments towards life insurance premia, contributions to provident funds and superannuation funds and deposits in certain cumulative time deposit accounts in the post oftice eic this provision will replace the existing provision in section 87 of the act relating to the allowance of rebate in respect of such sums and will come into effect from the assessment year 1966-67 in the case of assessees whose total income assessable for the assessment year 1965-66 ineludes any income chargeable under the head "salaries" from which tax is deducted or deductible at source in accordance with the provisions of section 192, and from the assessment year 1965-66 in the case of other assessees the monetary limit of the qualifying amount in respect of the sums referred to above will be rs 12,500 in the case of an individual and rs 25,000 in the case of a hindu undivided family, as against the existing monetary limit of rs 10,000 in the ease of an individual and rs 20,000 in the case of a hindu undivided family for the purpose of rebate of tax under the new section 80b, an individual or a hindu undivided family resident in india will be entitled to a deduction lof a speclfted iudl in the computation of the total income where expenditure has been incurred by him or it on the medical treatment (including nursing) of a physically or mentally disabled person who is a relative of the individual or is a member of the hindu undivided family and is dependent on the individual or the hindu undivided family for his support the deduction will be admissible only where the total income oi the individual or the hindu undivided family as computed before making any deduction under this chapter and before deducting any annuity deposit under section 2800 does not exceed rs 20,000 and will be reduced in either ('jise by the income, if 8py, of the disabled dependant ( the new section aoc provides for relief subject to certain conditions in respect of premiums paid by partners of registered firms of chartered accountants, architects, solicitors or lawyers, under an approved contract, or contributions made to an approved fund, for the purpose of securing retirement annuities in old age the relief will be by way of deduction of the amount of the premiums not exceeding one-tenth of the total income of the individual 10r the year (subject to certain adjustments) or rs 5,000, whichever :is less, in computingqis total income the annuity when received will be trea,ted as earned income to 'the extent to which it is attributable to the amount of deduction allowed under this section, and charged to tax accordingly the approval of annuity contracts and funds will be given by the <=ommissioner subject te certain rules and conditions the new section 80d contains definition of certain terms used in :this chapter clause 21 seeks to amend section 84 of the income-tax act this amendment is consequential to the amendment under clause 29 of the bill clause 22 seeks to insert a new section 85a in the income-tax act to secure that income from dividends received by one company :from another indian company or a company which has made the prescribed arrangements for the declaration or payment of dividends within india will bear income-tax at the rate of 25 per cent further, 1n the case of a company which has not made the prescribed arrange ment for the declaration and payment of dividends within india and which receives dividend from an indi'an company in which the pubuc are not substantially interested and which is wholly or mainly -engaged in certsln priority industries, the income from dividends will bear income-tax at the rate of 15 per cent - clause 23 seeks to amend section 86 of the income-tax act this amendment is consequential to the amendment to the income-tax act under clause 24 of the bill clause 24 seeks to introduce a new section 86a in chapter vn of the income-tax act under the new section, income from interest ~n securities issued income-tax free by the central government or by any state government on which income-tax is payable by the 'state government, which is included in the total income 9f an agsessee will qualify for: a rebate of income-tax calculated thereon :at the average rate of income-tax or at the rate of 25 per cent which--ever is less this amendment is consequential to the amendment under clause 29 of the bill clause 25 seeks to amend section 87 of _the income-tax act the amendment sought to be made by sub-clause (i) is consequential to the amendment under clause 29 of the bill, while that sought to be mad~ by sub-clause (ii)' is consequential to the introduction of de1lj section 80a in the act under clause 20 of the bill ' clauae 26 seeks to amend section 88 of the income-tax act the 'amendments td 'sub:clauie (i) and sub-clause (iii) are consequential to the amendment under clause 29 of the bill the effect of the amendments under sub-clause (ii) and sub-clause (iv) will be that the assessee will be entitled to a rebate of tax in' respect of donations given for the renovation or repair of any temple, mosque, gurdwara, church or other place which is notified by the central government in the official gazette to be a place of public workship of renown throughout any state or states at present the rebate of tax is available o~y where the temple, mosque, etc is notified by the central government to be of historic, archaeological or artistic importance the monetary limit upto which such donations will quality for the rebate is also sought to be raised from rs 2 lakhs to rs 5 lakhs clauses 27 and 28 seek to amend sections 90 and 91 respectively of the income-tax act these amendments are consequential to the amendment under clause 29 of the bill cla1j8e 29 seeks to amend chapter xi of the income-tax act which contains provisions relating to charge of super-tax these amendments i:teek to remove the charge of super-tax and consequentially, to omit the provisioiut relating to rebate or relief in respect of super-tax, and to substitute the levy of super-tax on the undistributed profits of certain companies by the levy of income-tax thereon chapter xi will hereafter contain only the provisions relating to charge of additional income-tax ~ith reference to the undistributed income of certain companjes, clause 30 seeks to amend section 104 of the income-tax act the amendment in sub-clause (i) is consequential to the amendment under clause 29 of the bill the amendment in sub-clause (iii) secures thlt a non-trading company (o~ler than an investment company) which is liable to the additional income-tax on undistributed income will pay such tax at 25 per cent of the undistributed income while a ~ding company will p~l such tax at 37 per cent the amendment in sub-clause (ii) is consequential to the amendment in sub-clause (iii) czause 31 seeks to amend section 109 of the income-tax act the amendment in sub-clause (iii) secures that in the case of a nontrading company which is liable to the additional income-tax on undistributed income at the rate of 25 per cent under the amendmen~ iflclause 30, the statutory percentage qf distributable income will tinue to be 60 per cent until the accumulated profits and reserves ~the company exceed twice the aggregate of the paid-up capital and loan capital, which, is the property of the share-holders, or ·twice the value of the fixed assets, whichever is greater the amendment in sub-clause (ii) gives the definition of "trading company" and the amendment in sub-clause (i) is consequenui 19 -the amendmen-; in clause 29 of the bill  clauses 32 to 34 seek to amend certain provisions of the incom~ -tax act in consequence of the amendment under clause 29 91· the bill clause 35 seeks to omit section 113 of the income-tax act th~ effect of this omission will be that a non-resident assessee, not being a company, will be chargeable to tax on his total income at the average rate of tax applicable to such income clause 36 seeks to amend section 114 of the income-tax act sub-·clause (ii) (b) seeks to introduce a second proviso in sub-clause (ii)· of clause (b) of section 114 this proviso will have the effect of 'reducinj!! the tax calculated on the capital gains relating to bonus :shares chargeable under sub-section (2) of section 45 by an amount equal to 10 par cent of the face value of the bonus shares or ~e amount of income-tax so calculated, whichever is less the rest of the amendments sought to be made by this clause are consequential to the amendment under clause 29 of the bill clause 37 seeks to substitute section 115 of the income-tax act by a new section under the new section, the income-tax calculated in the case of a company on its income under the head "capital gains:' relatin~ to bonus sh:ares chargeable under sub-section (2) of section 45 will be reduced by an amount equal to 10 per cent of the face value of the bonus shares or the amount of income-tax so calculated, whicheve~ is less the remainin~ changes from the existing provisions of section 115 are consequential to the amendment under clause 29 of the bill clause 38 seeks to amend section 131 of the income-tax act to confer on the inspecting assistatlt commissioner of income-tax the powers of discovery ~d inspection, enforcing attendance of any person, including any officer of a banking company, and examining him on oath, compelling production of books of acco~t and other documents and is~~g commissions at present ~ese p~wers are available to the income-tax 'officer, appellate assistant commissioner and commissioner under this section and also to the appellate "tribunai  under the ot~er provisions of the act clause 39 seek~ to amend section 155 of ~e income-tax act the :amendme:lt undef sub-cla~e(i) is consequential to the introduction - of the !l'!w section 33a in the income-tax act under clause 9 of the- ~11l the amendment in sub-clause (ii) is consequential to theamendment under clause 29 of the bill --clause 40 seeks to amend section 164 of the income-tax act this: amendment is consequential to the amendment under clause 3~ of the bill clault! 41 seeks to amend section 178 of the income-tax act the' effect of these amendments will be that the liquidator of a company who is under a statutory obligation to notify the income-tax officer of his appointment within 30 days of his becoming the liquidator, will be debarred from partin~ with the assets of the company and properties in his hands until he is notified by the income-tax officer of the amount which will be sufficient to provide for any tax which: is then, or is likely thereafter to become, payable by the company' except with the previous approval of the commissioner and for ar specific purpose, namely payment af the tax payable by the company, payments to secured creditors whose debts are entitled under law to priority of payment over debts due to government on thedate of liquidation and meeting such costs and expenses of thewinding up of the company as are, in the opinion of the commissioner r reasonable if the liquidator either fails to notify the incoljle-tax: officer of his appointment within the time specified or fails to set aside the amount intimated to him by the income-tax officer as: being sufficient to provide for the tax liability of the company or parts: with any of the assets of the company or property in his hands ill' contravention of the above provisions, he shall be personally liablefor the payment of the tax which the company would be liable to payor, as the case may be, the amount intimated to him by the-income-tax officer clauses 42 to 52 seek to amend the provisions of the income-tax act in consequence of the amendment under clause 29 or clause 35 of' the bill l clause 53 seeks to amend sections 213 to 217, 220, 243 and 244 of the· income-tax act to secure that the rate of interest chargeable odt delayed payments of tax and the interest payable by gov~rnment on delayed refunds will be six per cent as against the existing rate of 4 per ce~t per annum c1-""use 54 seeks to amend sub-section (5) of section 226 of the:  f in _-income-tax act to secure that the commuwloner 0 come-wia may  th rise by general or special order the recovery of my arrears o! :: d:e from an assessee by distraint add sale of}8 fmmovable~ property clauses 55 to 57 seek to make amendments to the income-tax act which are consequentia! on the amendment under clause 29 of the bill clause 58 seeks to introduce a new section 276a in the income-tu act to provide that a person who is appointed as liquidator of - company and who fails to give notice of his appointment to tile income-tax officer as required by section 178( 1) or fails to set aside the amount which is intimated to him by the income-tax ofticeru  bein~ sufficient to cover the tax liabilities of the company as required' by section 178(3) or parts with any of the assets of the company or the properties in his hands in contravention of the provisions of section 178(3) shall be punishable with rigorous imprisonment the term of such imprisonment is subject to maximum of two years and a minimum of six months as in sections 277 and 278 clause 59 seeks to amend section 279 of the income-tax act thu amendment is consequential on the insertion of the new section 276a under clause 58 of the bill clauses 60 and 61 seek to make amendments to the income-tax act which are consequential on the amendment under clause 29 of the bill clause 62 seeks to introdu~ a new chapter xxiib in the incometax act to provide for the grant of tax credit certificates for different purposes new section 280z in this chapter provides for the grant of a tax credit certificate to an individual or hindu undivided family id respect of amounts subscribed and paid by him or it to an eligible issue of capital by a public company the amount of the tax credit certificate will be calculated at graded rates witlr reference to the total amount paid during a financial year by the individual or hindu undivided family and will be limited to a maximum of rs 1,250 which is reached when the total payment is rs 35,000 a tax credi~ certificate for the amount so' calculated will be granted for the financial year in wbich the payment is first made and for each of the three following financial years subject to the condition that the relevant shares are held by the individual or hindu undivided famuy till the end of the respective financial years, and proportionately reduced if the whole or part of such shares are sold during any of these three years - new section 280za provides for the grant of a tax credit certificate to a public company which shifts, with the prior approval of the central board of direct taxes, its industrial undertaking from ad ~ban area (to be notified by the central government) to any other area, and in~ liability for payment of tax on the 'capital gains' derived from the sale of lands and buildings (or any rights therein) used for the purposes of its business in the urban area~ the amount  of the tax credit certiftcate will be calculated as a prop~rtion of the tax payable on the 'capital pins', which the expenditure incurred by the company in acquiring lands or constructing buildings for the purposes of its business in the area and on the shifting of its  machinery or plant and other effects and transferring its establishi,ment to such area, within a period of three years from the date of the board's approval to the shifting, bears to the 'capital gains' derived from the sale of its lands and buildings in the urban area as ~ed above  if the investment in lands and buildings in the new area, including the expenditure on shifting, _ as stated above, equals or exceeds such 'capital gains', the tax credit certificate will be granted for the whole of the amount of the tax payable on the 'capital gains' the period of three years may be extended by the board in suitable cases if the company transfers the lands or buildings in the new area within !l period of five years to a person, other than government or a public sector corporation, an amount equal to one-half of the amount of the tax credit certificate will be taken back from the company new section 280zb provide-for the grant of a tax credit certificate to a company engaged in the manufacture or production of specified articles, where the company is liable to pay for any of the five assessment years, 1966-67 to 1970-71, an aggregate amount of income-tax and sur-tax in excess of the corresponding amount which it is liable to pay for the base year, namely, assessment year 1965-66 the amount of the tax credit certificate will be calculated at 20 per cent of such excess for each of the five years mentioned above in the case of a company which is not liable to pay any tax for the assessment year 1965-66, but becomes so liable for any but the last of the  following five years mentioned above, such year will be treated as the 'base year' for that company, and the tax credit certificate will be granted for 20 per cent of the excess of the aggregate tax which it becomes liable to pay for any subsequent assessment year (within the five-year period mentioned above) over the aggregate tax of such 'base year' the amount of the tax credit certificate for any year will not,in any case, exceed ten per cent  of the aggregate tax for that year an 'amount equal to the amount of the tax credit certificate    t d under this section should be utilised by the company for i gran e fr fin'a1 th yment of loans taken by the company' om any anci e ,repa ' institutions to be notified in this ~ by the central government ()r for redemption of its debentures to enable it to have the benefit ()f the tax credit certificate new section 280zc provides for the grant of a tax credit -certificate to any person who exports any goods or merchandise out of india af~er 28th february, 1965 and receives the sale proceeds thereof in india through recognised fereign exchange channels the amount of the tax credit certificate will be calculated with reference ~ to the amount of such proceeds at the rate which will be specified in this behalf in the scheme to be made by the central government for this purpose the rate will in no case ~ceed 15 per cent new section 280zd provides for the grant of a tax credit certificate to any person' who manufactures or produces any goods for an "amount calculated with reference to the excess amount of duty of central excise on such goods which he pays in any of the financial years 1965-66 to 1969-70 over the amount of such duty which he has paid on such goods during the base year the rate at which the amount of the certificate is to be calculated will be specified in the scheme, but it shall not exceed 25 per cent of the excess stated above 'the b~:;e year lor this purpose is the financial year 1964-65, but in the case cf an undertaking which was not in production during that year, it wjl be any subsequent financial year in which it begins  " productiur an amount equal to the amount of the tax credit certificate granted under this section should be utilised by the person for the repayment of loans taken by the person from any financial institutions to be notified in this behalf by the central government (including in the case of a company the redemption of its debentures) to enable it to have the benefit of the certificate the amount shown on a tax credit certificate granted to any person under the above sections will be adjusted against any existing liability 4 such person under the indian income-tax act, 1922 or the income-ta~ act, 1961 or any such liability arising within a period of twelve montl?s from the date on which the certificate is preduced before the income~tax officer, and the amount, if any, remainlng after such adjustment will be refunded ~o the person on the expiry of that period the "central government has been empowered to frame a scheme or schemes making detailed provisions for the implementation of the provisions relating to grant of tax credit certificates for vu:tous purpose! the scheme will, intet alia, contain provisions as to the manner in which and the authority by whom the certiftcate will be issued  clause 63 seeks to amend section 294-of the income-tax act this ame~dment is consequential to the amendment under clause 29 of the bill c~use 64 seeks to amend section 295 of the income-tax act this amendment is consequential to the insertion of a new section aoa in the act under clause 20 of the bill clause 65 seeks to amend rule 3 of the first schedule to the income-tax act this amendment is consequential on the amendment under clause 29 of the bill clause 66 seeks to amend the fourth schedule to the income-tax act one of the amendments seeks to provide that no tax: should be deducted at source under rule 6 of part b, from a payment which is exempt under section 10(13) of the income-tax act the rest of the amendments are consequential to the amendments under clause 20 or clause 29 of the bill clause 67 seeks to introduce a new fifth schedule in the incometax act, specifying the list of articles and things for the purposes of the allowance of development rebate on machinery or plant at  the enhanced rate of, 25 per, cent prescribed under the amendment to the income-tax act in clause 8 clause 68 seeks to make a provision for voluntary disclosures ot income which a person has failed to disclose in a return of income for any assessment year filed by him before 1st march, 1965 under the indian income-tax act, 1922 or the income-tax act, 1961, or which has escaped assessment for any assessment year for which an assess· ment has been made before 1st march, 1965 under either of the said acts or fqr the assessment of which no proceedings under either of the said acts have been taken before 1st march, 1965 such dis· closures may be made any time during the months of march, april ~ and may, 1965, but not thereafter the ·amount declared under this provision will be charged to income-tax at the rate of 60 per cent, but if the tax is paid during the month of march, 1965 at the rate of 57 per cent of the declared amount, there will be no further liability to tax in respect of that amount the tax on the amount declared may be paid any time during a period of six months from the date of declaration, provided the payment is guaranteed by a scheduled bank or central government securities sufbcient to cover the amount of tax are assigned to the president of india for this purpose the securities will be taken at their market value on the date of assignment the declaration under this section should be made to the commissioner and should, inter alia, contain particulars of the year or years in which the income was earned, and the form in which thedeclared amount is held and the location of the relevant assets where an amount is declared under this section and the tax there--on is paid, the balance may be credited by the declarant to his books" of account or other record, and if he does so, the amount declared' mall not be included in his total income for any assessment under· the indian income-tax act, 1922 or the income-tax act, 1961 or tne-excess profits tax act, 1940, or the business profits tax act, 1947, or the super profits tax act, 1963 or the companies (profits) surtax act, 1964 full secrecy will be ensured in respect of the particulars contained in any declaration or record of any proceedings under this section clause 69 seeks to amend the estate duty act, 1953 sub-clauses (i), (ii) (a), (iii) (a), (iv) (a) and (v) (a) respectively seek to reduce the period specified in sections 9, 10, 11, 12 and 2z for the inclusion in his estate of property gifted by the deceased durin,~ hft life time from two 'years to one year sub-clause (iz) seeks to make a similar amendment in section 46(2) in respect of debts or incumbrances repaid or discharged by the deceased where but for the repayment or discharge the liability would have beed precluded from deduction in the computation of the net principaj value of his estate sub-clauses (ii)(b), (iii)(b), (iv)(b) and (v)(b) respectively seek to amend sections 10, 11, 12 and 22 to secure that where the deceased had lived in a house or part thereof which he had gifted, or otherwise disposed of, in favour of the spouse, son, daughter, brother-w sister, and there is no right of residence reserved qrsecured to him under the relevant disposition or under any collateral disposition, the property will not be included in his estate sub-clatue (1:i) seeks to insert a new section 29a in the estate-duty act to secure that estate duty shall not be attracted in respect of any pension payable on the death of an employee to his widow or other dependants under the relevant pension rules of the central government, a state government, a local authority or a public sector corporation or in respect of any annuity or pension payable to the widow>or dependants of the employee from a superannuation fund" approved under the indian inc~me-tax act, 1922 or the income-tax act, 1961 or from a superannuation or pension fund estabushed by' snternational organisations to be notifled by the central government 'there will be a limit of rs 15,000 per annum on the annuity or pen- alon payable out of an approved superannuation' fund which qualifles for this exemption: --  sub-clawe (vii)(b) seeks to insert a new clause (0) in section 33(1) of the estate duty act to secure that property gifted by the deceased to the spouse, son, daughter, brother or sister, will not be uicluded in the estate of the donor if he dies after five years from the date of the gift, provided that the property is' either chargeable to gift-:tax under the gift-tax act, 1958, or is not chargeable under section 5 of that act for the assessment year 1964-65 or any subse-quent assessment year the  amendments in sub-clauses (vii)(a) and (viii) are consequential to the amendments in the other sub-clauses  clause 70 seeks to amend the wealth-tax act, 1957sub-clause (i) seeks to introduce a new clause (xx) in sub-section (1) of section 5 of the wealth-tax act to secure that where the assessee is the owner of any shares subscribed and paid for by him and such shares form part of the initial issue 01 the equity share capital made after the 28th february, 1965 by a company established with the ·ob_ct of carrying on an industrial undertaking in india, the value ()f such shares shall not be chargeabte to wealth-tax for a period of five successive assessment years commencing with the assessment year next following the date of such issue sub-clause (ii) seeks to amend part i of the schedule to the wealth-tax act to secure the levy of an additional wealth-tax on assets, being buildings or lands other than business premises or any right in such buildings or lands, situated in areas with a population exceeding 1 lakh, included in the net wealth of an individual or ,a hindu undivided family at graded rates on the slab system this additional wealth-tax will be calculated at the specified rates on the tettl value of such assets which exceeds certain initial exempt emounts prescribed having regard to the population of the area in which the assets are situated clause 71 seeks to ~mend the gift-tax act   sub-clause (i) seeks to insert a new clause (va) in section 5(1) of the gift-tax act to secure exemptioqfrom gift-tax ·to a aift made to a temple, mosque, gurdwara,- church or other place which has bean notified by  the central government for the purposes of section '8s( 6) o! the 'income-tax act or a gift of property by way of settlement on' trust where-the income from property is, ~ccordiog to the deed of ~ttlement, to be used exclusively in conne~on with sucb a temple, etc sub-czause (ii) seeks to introduce a new section l8a in· chapter ix of the gift-tax act to- secure that where any stamp duty has been paid on an instrument of gift of property in respect of which the gift-tax payable exceeds rs  1,000, the assessee shall be entitled to a deduction from the gift-tax payable by hun of ~ amount equal to the stamp duty so paid subject to a mufmum of one-hah of the- sum by which the aift-tax payable before ~nj:( the deduction for stamp duty exceeds rs 1,000' - clause 72 seeks to introduce a new section 4a in the preference shares (regulation of dividends) act 1960, and to make some consequential amendments to ~rtain other provisions of that act thenew sect~on 4a referred to above seeks to provide that in respect or preference shares, the stipulated dividend on which is subject to a deduction by the company concerned of the income-tax payable by it, the company shall not make a deduction in excess of 25 per cent~ of the amount of the stipulated dividend on such shares,-25 per cent_ bein~ the existing rate at which income-tax is chargeable od companies: the other amendments under this clause are consequential tc) the amendments to the income-tax act, 1961 under clause 29 of the-bill clause 73 seeks to amend section 32 of the unit trust of india act, 1963 these amendments are 'consequential to the amendment to the-incon~e-tax act (under clause 29 of the bill) relating to the removal of the charge of super-tax under one of the existing provisions, of the aforesaid section, an individual unit holder is allowed to deduct the qualifying amount of the dividend received on the units (viz, dividends not exceedinl{ a sum of rs 1,000) from his total income, normally, for the ~purpose of income-tax only and not for super-tax the deduction is allowed both for in~e-tax and supertax, only where the individual's income would not at~ract super-tax but for the inclusion therein of the amount of qdalifyinl{ dividend with the integration of super-tax with ,income-tax, a deduction of' the amount of the qualifying dividend would, however, result in a tax relief in respect of the element of super-tax also the proposed amendment, therefore, secures that on the integration of super-tax with in~ome-tax, the tax relief in terms of the consolidated income--tax would be limited to what the individual would be entitled to un~er the existing provisions of the aforesaid act under another existing provision in section 32 of the afo~said act, individuals are exempt from deduction of income-tax at source ·from the dividends paid to them by the unit trust when super-tax gets 4ntegrated into income-tax, the e~ect of the existing provision would be that non-residents would be exempt from the deduction of the element of super-tax also, fro~ the dividends mceived by them from the unit trust of india to avoid this position, it is sought to amend the relevant provision to provide that in the case of nonresident individuals, income-tax shall be deducted at source from the dividends received by th~m on the units, at the rate of 15 per cent clause 74 seeks to amend certain provisions of the companies (profits) surtax act, 1964 sub-clauses (i) and (ii)-the amendments under these sub-clauses are consequential to the amendments to the income-tax act, under clause 29 of the bill, relating to the removal of the charge of supertax  i t i ~ ; j • ~: sub-clause (iii)(,,) introduces a provision limiting the aggregate amount of income-tax and surtax on companies of certain categories to 70 per cent of their total income if the aggregate amount of 5uch tax liability is found to be in excess of the aforesaid limit, the surtax otherwise payable by the company will be reduced by the excess amount for the purpose of this provision, income-tax will include the amount of income-tu i payable by the copany with reference to the amount of the dividends declared or distributed by it in respect of its equi~y capital, but  will not include the income-tax payable by it with reference to bonus shares or borus issued by it to its shareholders in any year sub-clause (iii)(b) adds certain new items to the list of articles in paragraph 2 of the third schedule to the companies (profits) 'surtax act the profits derived from the production or manufacture  , of which qualify for a rebate of surtax clause 75 read with the third schedule, seeks to increase the , -basic import· duties on certain ifems the changes are:-(i) the duty on certain paints, colours and painters' materials is propose'ci to be raised by 15% ad valo,em; (ii) the duty on essential oils, certain varieties of perfumery and paper is proposed to be raised by 25% ad 'valorem; (iii) the basic customs duty on raw cotton is pro~sed t~ be raised from 26 paise per kiloil"am to 50 ·paise per kilogram, (iv) the duty on art sillfyarn and thread is proposed to be raised by about 20% ad valo'rem; (v) the duty on steel tinplates is proposed to be raised by about 18% ad v4lorem; ",-(in) the duty on stainless steel plates and sheets is proposed to be raised by 70% ad valorem; and (vii) the duty on sodium hydrosulphite is proposed to be  raised by 60% ad valorem cl4uae 76 seeks to continue up to the 31st day of march, 1966 the existing surcharge on customs duties  clause 77-sub-clauses (1) to (5) seek to provide for levy of regulatory duty of customs up to the 15th day of may, 1966 on a flexible basis within the specified ceiling rates, for regulating or bringing greater economy in imports suo-clause (6) seeks to continue up to the passing of this act the regulatory duties of customs levied under the finance act, 1964 read with notifications issued under that act and the customs act, 1962 clause 78 seeks to maintain for another year the status quo in regard to commitments under the general aireement on tariffs and trade clause 79-sub-clause (a) seeks to substitute an ad valorem rate for the existing specific rates of duty on cigarettes; sub-clause (b) seeks to raise the rate of duty on steel ingots; sub-clause (c) seeks to raise the rates of duty on copper and copper alloys and their manufactures; sub-clause (d) seeks to raise the rates of duty on certain 'iron or steel prodl1cts and also to mo" the existing tarift classification sub-clause (e) seeks to revise the tarift classification of certain manufactures of aluminium; and sub-clause (i) seeks to raise the rate of duty on tin plate and tinned sheets clause 80 seeks to continue up to the 31st day of march, 1966 the existing special duties of excise i czauae 81-i         i                              '                                                ',j"                                  sub-clause, (1) to (5) seek to provide for levy of regulatoryd~ty of ex;cise \lp to the 15th day of :may, 1966 on a flexible basis within the specified ceilinj rates, for regulating or bringing greater economy in consumption     sub-clause (6) seeks to continue up to the passing of this ,act the regulatory duties of excise levied tinder the finance act 1964 read with any exempijon ~otiftcation    clause 82 like section 63 of the finance act, 1964 provides that salt shall be duty free for another year clciuse 83 seeks to substitute ad valotem rate for the existing:: ~t: rates of duty ~n cig~ettes in the additional duties of: excise (goods of special iuiportance) act, 1957  financialt memorandum income-tax and otiid didct taxissome of the provisions contained in the finance bill, 1965 will result in an increase in the work load on the income-tax department instances of these provisions are the levy of the additional wealth-tax on immovable property in certain areas, introduction of a deme of voluntary discloaures, grant of tax credit certiftcates for certain purposes and generally an- increase in the number of asses&eel expected during the financial year 1965-66 due to various measures adopted in this behalf the aforesaid measures will necessitate the employment of an additional number of officers and other staff the expenditure on this account together with the incidental expenses on administration is estimated at about rs 16·50 lakhs as indicated herein below:-number annual coat emolumedts ra  i offiurs:| commiaaionen    | of      ||-----------------|---------|| 3               |         || 3               |         || x               |         || ra             |         || 23,800          |         || 68,400         |         || a               |       || iltult          |         || commiaaioncn    |         ||               |         || ~               |         ||               |         || 10              |         || 10              |         || x               |         || ra             |         || it:             |         || 1:3t,ooo        |         || income-tu       |         || 0fiicen         |         || (claaa          |         || i)              |         || 28              | 28      || x               |         || ra             |         || ,000            |         || 16             |         || 0010           |         || ii             |         || stt1/!:         |         || inspectors      |         || 21              |         || 21              | x       || as             |         || 3,060           |         || 64260          |         || supervisor      |         || 17              | 17 x    || ra             |         || ss040           |         || 8s,680          |         || heiidderb       |         || 45              |         || 45              |         || x               |         || ra             |         || 3,060           |         || l3l·3          |         || oo              |         || stcdopapbcn     |         ||                |         || 13              |         || 13              |         || x               |         || ra             |         || 2964           |         || 3s32           |         || upper           |         || division        |         || clerks          |        || 178             |         || 178 x           |         || ra             |         || 2,964           |         || 5,27,592      |         || sten~~_         |         || 28              |         || 28              |         || x               |         || ra             |         || 2364           |         || 66192          |         || lower           | 'vislon || oerb            |        || 96              |         || 96              |         || x               |         || ra             |         || 2,124           |         || 203,904        |         || iii            |         || irr&idalal      |         || ",pnm          | :       || incidental      |         || apenaes         |         || includiq        |         || cjua            |         || iv              | ad      || 1,50,000       |         || total           |         || -1             |         || 16,,53,860     |         || or              |         || say             |         || ra             |         || 16,50           |         || ,oao            |         |clause 53, which amends among others, sections 214, 243 and 244 provides for the increase of interest from four per cent to six per cent the exact amount of interest payable by the central government as a result of this amendment cannot be foreseen at the present  105 2248 (b) ls-lt memorandum ~~ing delegated legislationnew section 280ze proposed to be inserted by clause 62 empowers the central government to frame one or more schemes to be called ,tax eredit eertiftcate ;scheme drsclreijies in relation to tax ciedit certifteates to be «ranted under chapter xxiib the various id:atten which amodg others may be providedform any such achem:e have been specifted in clauses (4) to (i) of sub-section (2) of th8t sedion 'such matters, mter alia, relate to the form and manner ill which, and the authority to which, applicationsfor 'such certfftcates may be made, the authority by which such 'c:ertiftcates may be griilted, the determination of the rights and obligations of persons to wh'omsuch certificates have been granted, etc clause 2 (5) (d), proposed new sections 33a, 80a and soc empower the board to make rules in relation to the matters specified therein the aforesaid matters are matters of procedure and administrative detail it is hardly practicable for these matters of detail or procedure to be pl'o\tided in the bill itself the delegation of legislative power is thus of a normal character  a bill to give effect to the financial proposals of the central govt:rnment for the financial year 1965-66 (shri t t krishnlmoduni, minister of finance) 