 the finance bill, 19,8(as introduced in lok sabba)  the finance bill, 1958 (as introduced in lok saliha)a bill to give effect to the financial proposals of the central government jor the financial year 1958-59 be it enacted by parliament in the ninth year of the republic of india as follows:-1 this act may be called the finance act, 1958 short tit 2 (1) subject to the provisions of sub-sections (2) and (3), for ilicome-l 5 the year beginning on the 1st day of april, 1958,-~ iupc (a) income-tax shall be charged at the rates specified in part i of the first schedule, and, in the cases to which paragraphs a, band c of that part apply, shall be increased by a surcharge for purposes of the union and a special surcharge n of is)iii 10 on unearned income, calculated in either case in the manner provided therein; and (b) super-tax shall, for the purposes of section 55 of the indian income-tax act, 1922 (hereinafter referred to as the income-tax act), be charged at the rates specified in part ii 15 of the first schedule, and, in the cases to which paragraphs a, band c of that part apply, shall be increased by a surcharg: for purposes of the union and a special surcharge on unearn~ income, calculated in either case in the manner provided therein 20 (2) in making any assessment for the year ending on the 31st day of march, 1959,-(a) where the total income of an assessee, not being a company, includes any income chargeable under the head "salaries" or any income chargeable under the head "interest on securities" or any income from dividends in respect of which by virtue of section 49b of the income-tax ad he is deemed himself to have paid the income-tax imposed under that act, the income-tax payable by the assessee on that part of his total s income which consists of such inclusions shall be an amount bearing to the total amount of income-tax payable according to the rates applicable under the operation of the finance (no2) act, 1957, on his total income the same proportion al  '" ,,,, the amount of such inclusions bears to his total income; 10 (b) where the total income of an assessee, not being a company, includes any income chargeable under the head "salaries" on which super-tax has been or might have been deducted under the provisions of sub-eection (2) of section 18 of the income-tax act, the super-tax payable by the assessee on 15 that portion of his total income which consists of such inclusion shan be an amount bearing to the total amount of super-tax payable according to the rates applicable under the operation of the finance (no2) act, 1957, on his total income the same a6 011,,, proportion as the amount of such inclusion bears to his total ~ income (3) in cases to which section 17 of the income-tax act applies the tax chargeab~ shall be determined as provided in that section, and ,with ~ference to the rates imposed by 8u\)sectiob (1) (4) for the purposes of this section, and of tile rates of tax ~s imposed thereby, the expression "total income" means total income as determined for the purposes of income-tax or supel'-tax as the case may be, in accordance with the provisioils of the income-tax act, and the expression "earned income" has the meaninjt assigned to it in clause (6aa) of section 2 of that act 30  s in section 4 of the income-tax act,-li •• -''''''4-(i) in sub-6ection (1), for the third proviso, the tollowinl proviso shall be substituted, namely:-"provided further that if in any year the amo\lllt of income accruing or arising without the taxable territories 35 exceeds the amount brought into the taxable territories in that year, there shall not be included in the assessment of the income of that year 10 much of such excess as does not exceed tour thousand five hundred rupees, and where any part of such exces8 consists of salaries paid by the govem- 40 ment, a local authority or a corporation established by - central,  state or provincial act, the amount of such _aries not  w be included as aforesaid aball be further limited to a sum calculated at the rate of one thousand rupees for each month of service in respect of which the salaries are received abroa~ "; (it) in sub-section (3),,-- (1) for clause (via), the following· clause ihall be substituted, namely:-"(via) subject to sucll conditions as the central government may prescribe,-e if (a) passage moneys or the value of any free or concessional passage received by or due to any person, not being a citizen of india, from his employer for himself, hi9 wife and children, in connection with his proceeding on home leave out of india; and (b) the value of any travel concession or assistance received by or due to any person, being a citizen of india, from his employer for "hfmself, his wife and children, in connection with his proceeding on leave to his home-town or village in india;"; (2) after clause (xi), the following clause shall be inserted, namely:-"(j;ia) any income chargeable under the heads "interest on securities", "income from property" and "income from otner sources" of a registered trade union within the meanin,et of the indian trade unions act, 1926, formed primarily for the purpose ot regulating the relations between workmen and employers or between workmen and workmen;"; (3) for the explanation to clause (riva), the following ezpzanation shall be substituted, namely:-'el:plcmation-"technician" means a person having specialised knowledge and experienct! in constructional or manufacturing operations, or in mining or in the generation or distribution of electricity or any other form of power, who is employed in india in a capacity in which such specialised knowledge and experience are actually utilised;'; (4) in clause (:rxil after the words "sixth schedule to the constitution", the words "or in the union territory of manipur" shall ee inserted, and shall  d"_ alway to have been inserted amllldm_t il hctioa ~" to in section 4a of the income-tax act, for clause (c), the following clause shall be substituted, namely:- "(e) a company is resident in the taxable territorie in , any year, if-(i) it is an indian company;'or (ii) during that year the control and management of its affairs is situated wholly in the tax able temtorie • " 5 in section 7 of the income-tax act,,-10 aldeadmeat r eeed 7· (1) in sub-section (1), in the proviso to ezplamtiot\ i, for the words "state government", the words "state- government, a local authority or a corporation established by a central, state or provincial act" shall be substituted and shall be deemed always to have been substituted; 1$ , (2) in sub-section (2), for clause (ii), the following claue shall be substituted, namely:-"(ii) in respect of any allowance in the nature of an entertainment allowance specifically granted to the alienee by his employer-20 (a) in the case of an assessee who it in receipt of a salary from the government, a sum equal to one-ftfth of his salary (exclusive of any special allowance, benefit or other perquisites) or ive thousand rupees, whichever is less; and 2j (b) in the case of any other assessee, a sum equal to one-fifth of the salary (exclusive of any special allowance, benefit or other perquisites) or seven thousand five hundred rupees, whichever is less, except in any case where the assessee was not in receipt of such 30 entertainment allowance regularly from hi present employer before the year beginning on the firt day of april, 1955" am_cll1lenl of hctiod , • in section 9 of the income-tax act, after clause (b) of iub-ection (4), the following clause shall be inserted and shall be 3' deemed always to have been inserted, namely:-"(e) taxes levied by a local authority in respect of any property shall be deemed to include service taxes levied by the local authority in respect of the property" (1) for clause (vib) of sub-section (2), the following clause sra1l be substituted, namely:-"(vib) in respect of a new ship launched or new machinery or plant installed after the 31st day of march, 1954, which is wholly used for the purposes of the business carried on by the assessee, a sum by way of development rebate in respect of the year of launching of the ship or of the installation ot the machinery or plant, equivalent to,-10 (i) in the case of a ship launched after the 31st day of december, 1957, forty per cent of the actual cost of the ship to the assessee; (ii) in the case of a ship launched before the 1st day of january, 1958, and in the case of any machinery is or plant, twenty-five per cent of the actual cost of the ship or machinery or plant to the assessee: provided that no allowance under this clause shall be made unless-(a) the particulars prescribed for the purpose of 20 clause (vi) have been furnished by the assessee in respect of the ship or machinery or plant; and (b) except where the assessee is a company, being a licensee within the meaning of the electricity (supply) act, 1948, or where the ship has been launched or the 2s machinery or plant has been installed before the 1st day of january, 1958, an amount equal to the allowance due is debited to the profit and loss account of the relevant previous year and credited to a reserve account to be utilised by him during a period of ten years next 30 following only for the acquisition of assets for the purposes of the undertaking or for investment in the undertaking: provided further that, in the case of a ship launched or machinery or plant installed after the 31st day of december, 35 1957, the allowance of development rebate under this clause shall be subject to the condition that the ship or machinery or plant is not sold or otherwise transferred by the assessee to any person other than the government at any time before the expiry of ten years from the end of the year in which the ship was launched or the machinery or plant was inatalled  :-~"~~~~~~:~~~~: (2) after sub-sectieu:;,(4a~;-~~1dl1ewiag :suheieation: slall _  be jnse~ed and s~ be4~~~e4 ~lw~~ tc! _, ll,a~e _ree~ ,inserted j •• _ ~dameiy:~~v~ ~~¥ ,  ,' a\~'~" j~ •- _~-~( ~v __  '~~~ ' ~ ~~,~~:~ _~_~)  ' <,~ u(4b) nothing in clause' {vifor"ctause"(v1q)o(sur;:section  '," ''(zrs'ha1n1e'deem~' ttl 'llllthorisith~jali~~~"for any pre- s '~" "~6us year"of shy'sulii' il1·t~!tp~dt·ts(q11~hruftdfi1g:cti1ichinery, ( ;0, '  : piahrorfliriliture 's6rd; <iisclu'ci~d~enf6n~h~a ·16i··ct'estroyed " ''''''m 'ulat'·year":' " v'" ',:;" ,  ",,--,:'j::;2j~::;_ :;,  ~ \::: :'::'  '-" ••• ' ', " •• , • _0" "' - __ - ___  ___  __  \1 - __ :\~ -:  ~  '>1 ~::;::~:: 8 in sub-secb~~(~~ ,~~, ~ec~ibp:,~8j)~~  ~~:~~ ~eh for the w,-ords ",t a rate representmg the averas~ of th,e rates applicable to 10 the"" estunated' tatar' iiicomeof ,ctne 'as~see-·uilde'e this head", the ,,- woros ttat'lcrat'e' represeiitirig tb~~·i~etage-6tift~j~ir~~'\n force for the financial year in which he is re4u1reo'''fo ~qeducf·th~ tax which are applieabie'to'the'-estimated"total:'-iritottre of tht! assessee under tliis~headllsaah be substituted,--and'shail,'ge-ueemed ah\fays to have ij been 'substnuted:'-- " ,'  "~ -'''''  '{  ,' ,~~~- : --v ;~ 'j', ",",  ~  ___ ',_ ;  ~\_  j \~- '  ~  :~  -_  - - : c  : __ • in section 23a of the income-tax act, ins~p:~e~ion (1), for the words' ~'wiress' lie is' satisrea:' tlia1, 1iavlng reia~~ -fq the losses incurred by the company in earlier years or tothe·smalrness of the proftis"made in,the"previcnd--year,'-'ti're'1>aytftetrt" df'/a dividend or a~ larger' 'dividend- than': that "declared ~:woi1l'd":'b~ ;':'l1ntasollable", the~­following shall· be 'substitat~·naitrety'=~;  ·~ :;,  _v ::<j' _ ; p""unless'he'i5'satisfted~'''" ,~:,  i':"j:"::;" ,:, ',,~''~:, -_:,"~,(~,:tli~t,~h8v~~ ii!~~r~-~o;\~~}9s~~~~~~~by the com· -pany in earlier years or to the smappe~,s, of ~)iefroftts made 2~ ~ ' ,'~: i~t~~ p~vr0us"!e~i, ~~h~·l)~i§~nt,~f~~d1~~~~ or a iarger '- , dividend than tnat aec1ai:ed would $e unreas9nable; or -j  'j' • ,  ,0,_ '> ••  ,j • ', ••• ,'j~~  v~  1  """-',  j~j "  ,, __ <iq t¥t"tb,e p~yj!l~t ~t~·~~~~~~lvger dividend ";': ,~~ that ,de~e9, ~o~c;l  mt,,~'y~:je§ylta<liaua benefit to ',_; ~"th~"rey~nue;~:: __ "'>,'  ',' '{  " :~: •• 'fiv •• u~ j~;: ,  io"in aectidn;35of the imorne-tax'mt,-af-ter s\j~on (10), the following sub-section shall be inserted, namel,·:·~"·;:",:"  ,v "j,'~(llj where,an allgwanoe by,way ~4eyelepm~ft't~rebate haa 'j;~,eade ,~o, an,'assessee in-respeot(9{ ~~shlp;-maclilnery~or plant ",0> ij)'j any year of assessment 'lizuiep,dauae~~{-<tft9)·'ofj'9u~~ion (2) 'so:  ,j~t,,~tionl{) ,and subsequently';,at ""'y time:"befere'-the--expiry of  "wasem ~m theend'dfthe;yeal'~ :whnh tfte shij):wis uunched '''in(,th~,l11acbinery,oi'"plant,wd;mmalletj,,  vu·:, '(;  "; ::  /1 (i)' tbe, ship,,maahinm"¥' or"~ntjis-~vsliid'  x(nojatberwije •• :'1  ~fmtedliy  tbe assessee to::aay-i>ersew tajieru~an the ~ government; or  j~':"'~~~j (ii) the a88esbee utilises the amount credited to the reserve account under that clause for any purpose other than the acquisition of assets for the purposes of the undertaking or for investment in the undertaking; the development rebate originally allowed shall be deemed to have been wrongly allowed, and the income-tax officer may, notwithstanding anything contained in this act, proceed to re-compute the total income of the assessee for the relevant year as if the re-computation is a' rectification of a mistake apparent from 10 the record within the meaning of this section, and the provisions of sub-section (1) shall apply accordingly, the period of four years specified therein being reckoned from the end of the year in which the transfer takes place or the money is so utilised" 11 for section 44 of the income-tax act, the following section substitution  of new iec-15 shall be substituted, namely: -tion for lection 44 "44 (1) where any business, profession or vocation carried liabilip in on by a firm or other association of persons has been discontinu- ~~ ed or where a firm or other association of persons is dissolved, =tin~~ the income-tax officer shall make an assessment of the total or dis- f th fi til  tid f h 'f solved 20 mcome 0 e rm or· 0 er assocla n 0 persons as suc as 1 no such discontinuance or dissolution had taken place (2) if the income-tax officer, the appellate assistant commissioner or the appellate tribunal in the course of any proceedings under this act in respect of any such firm or other 25 as&o£iation of persons as is referred to in sub-section (1) i5 satisfied that the firm or other association is guilty of any of the acts specified in clause (a) or clause (b) or clause (e) of sub-section (1) of section 28, he or it may impose or direct the imposition of a penalty in accordance with the provisions of that section 30 (3) every person who was at the time of such discontinuance or dissolution a partner of the firm or a member of the association, as the case may be, shall be jointly and severally liable for the amount of tax or penalty payable, and all the provisions of chapter iv so far as may be, shall apply to any such assessment 3s or imposition of penalty" 12 in section 59 of the income-tax act, after clause (a) of sub- amendment section (2), the followin, clause shall be inserted, namely:-~~'ection "(44) provide for the determination of the value of any perquisite chargeable to tax under this act in such manner and on such baaij as appear to the central board of reveil\le to be proper and reasonable: provided that the rules made in respect of the matters specified in this clause on the first occasion they are made shall not be subject to the condition of previous publication and may 5 be given retrospective effect from such date as the central board of revenue thinks fit;" 13 (1) the amendment to the income-tax act made by subclause (3) of clause (ii) of section 3 shall not apply-commenee-rent of amendmenu to act ii r 19» (a) to a person to whom the second proviso to clause 10 (riva) of sub-section (3) of section 4 of the income-tax act applies if his contract of service has been approved by the central government before the 1st day of march, 1958; or (b) to any other person who arrives in india before the 1st day of april, 1958 is (2) save as otherwise provided in sub-section (1) or elsewhere in this act, the amendments to the income-tax act made by this act shall have effect on and from the 1st day of april, 1958 amendment 14 in the wealth-tax act, 1957, the following amendments shall of act 27 of i9~7 be made and shall be deemed always to have been made, namley:- 20 (a) for clause (h) of section 2, the following clause shall be substituted, namely:-(h) "company" means a company as defined in section 3 of the companies act, 1956, and includes-1 of 19!56 (i) a company within ihe meaning of any law in zs force in the state of jammu and kashmir relating to companies; and (ii) a company incorporated outside india which has a place of business in india;"; (b) in clause (xvi) of sub-section (1), for the words "and 30 post office national savings certificates", the words "post office national savings certificates and post office national plan certificates" shall be substituted; (c) in section 6, for the words "in computing the net wealth of an individual", the words "in computing the net 35 wealth of an individual who is not a citizen of india or of an individual" shall be substituted amendment of act 32 of 1934 15 the indian tariff act, 1934 (hereinafter referred to as the tariff act), shall be amended in the manner specified in parts i, ii and iii of the second schedule 16 (1) in the indian tariff (amendment) act, 1949, in sections am f aendmenft : o ct 10 4 and 5, for the figures "1958", the figures "1959" shall be 1949 substituted  (2) for the removal of doubts it is hereby declared that the 5 continuance by sub-section (1) of the amendments referred to in j of 1949 section 4 of the indian tariff (amendment) act, 1949, shall be subject to the amendments made in the tariff act by this act, and, further, be deemed always to have been subject to the amendments, if any, made in the tariff act by any act of parliament passed after 10 the commencement of the indian tariff (amendment) act, 1949 17 in the first schedule to the central excises and salt act, amendment 1944,-of act i of 1944· (a) in item no 9,-(i) for sub-item i (5) (iii), the following shall be is substituted, namely:-"(iii) granule ('rawa') of tobacco capable of passing through a sieve having 16 uniform circular or square apertures per linear inch"; (ii) the explanation to sub-item i (5) shall be omitted; 20 (b) in item no 15, for the entry in the third column, the entry "twenty-four rupees per ton" shall be substituted j of 19+40 18 foi' the year beginning on the 1st day of april, 1958, no duty discontinuance of aalt under the central excises and salt act, 1944, or the tariff act shall duty be levied in respect of salt manufactured in, or imported into, india  declaration under the provisicnal collection of taxes act, 1931 (16 of 1931)it is hereby declared that it is expedient in the public interest that the provisions of clauses 15, 16 and 17 of this bill shall have immediate effect under the provisional collection of taxes act, 1931  part! income-tax and surcharge on income-tax paragraph a(i) in the cue ofevcry individual who is marricd:andevery hinda undivided family whose total income does~nqt exceed rs 20,000 in either case | rat,s                    | of                | income-tax    ||--------------------------|-------------------|---------------|| 10                       |                   |               || where the individual has | no                |               || where                    | the               | individual    || has                      |                   |               || where the individual has |                   |               || child                    |                   |               || wholly                   |                   |               || or                       | mainly            | one           || child                    |                   |               || wholly                   | or                | mainly        || more                     |                   |               || than                     |                   |               || one                      |                   |               || cbild                    |                   |               || dependent                | on                |               || him                      |                   |               || or                       | where             |               || dependent                |                   |               || on                       |                   |               || him                      |                   |               || or                       |                   |               || wholly                   | or                | mainly depen- || the                      |                   |               || hindu                    | undivided family  |               || where the                |                   |               || hindu                    | uddivi-           | dent          || on                       |                   |               || him                      |                   |               || or                       | where             |               || the                      |                   |               || sllq                     |                   |               || no                       | minor co-percener | ded family    || has                      |                   |               || one minor                | hindu             | undivided     || co-parcener              | has more          |               || than                     | one minor         |               || co-parcener              |                   |               || is                       |                   |               || ri                      |                   |               || rs                      |                   |               || ri                      |                   |               || (i)                      |                   |               || on                       | the first         |               || 3,000                    |                   |               || of                       | total             |               || 3,300                    |                   |               || of                       | total             |               || 3,600                    |                   |               || of                       | total             |               || nil                      |                   |               || income                   | income            | income        || (2)                      |                   |               || on                       | the next          |               || 2,000                    |                   |               || "                        |                   |               || 1,700                    |                   |               || "                        |                   |               || 1>400                    |                   |               || "                        |                   |               || 3%                       |                   |               || 20                       |                   |               || (3)                      |                   |               || on                       | the               | next          || 2,500                    |                   |               || "                        |                   |               || 2,500                    |                   |               || "                        |                   |               || 2,500                    |                   |               || "                        |                   |               || 6%                       |                   |               || (4)                      |                   |               || on                       |                   |               || the next                 |                   |               || 2,500                    |                   |               || "                        |                   |               || 2,500                    |                   |               || "                        |                   |               || 2,500                    |                   |               || "                        |                   |               || 9%                       |                   |               || (5)                      |                   |               || on                       |                   |               || the                      |                   |               || next                     |                   |               || 2,500                    |                   |               || "                        |                   |               || 2,500                    |                   |               || "                        |                   |               || 2,500                    |                   |               || "                        |                   |               || 11%                      |                   |               || (6)                      |                   |               || on                       | the next          |               || 2,500                    |                   |               || "                        |                   |               || 2,5                     |                   |               || 00                       |                   |               || "                        |                   |               || 2,5                      |                   |               || 00                       |                   |               || "                        |                   |               || 14%                      |                   |               || (7)                      |                   |               || on                       |                   |               || the                      |                   |               || next                     |                   |               || 5,000                    |                   |               || "                        |                   |               || 5,000                    |                   |               || "                        |                   |               || 5,000                    |                   |               || "                        |                   |               || 18%                      |                   |               |(ia) in tho case of every individual who is not married and evuy individual or hiddu 2s undivided family whose total income ill either case exceeds ri 20,000 and in the case of every unregistered firm or other association of persons, not bema a case to which paragraph b or paragraph c or paragraph d of this part applies :-ra (1) on the fint 1,000 of total income nil (2) on the next 4>000 » 3% (3) on the ncltj 2,500 " 6% (4) on the next 2,500 " 9-,4 (5) on the next 2,500 " 11% 35 (6) on the next ~,soo " 14% (7) on the next 5,000 " 18% (8) on the balance of total income 25% : provided that for the purposes of this paragraph-(i) no income-tax shall be payable on a teta1 income which does not exceed the limit specified below; (ii) the income-tax payable shall in no case exceed half the s amount by which the total income exceeds the said limit; (iii) the income-tax payable by an individual who is married or a hindu undivided family whose total income exceeds in either case rs 20,000 shall not exceed the aggregate of--(a) the income-tax which would have been payable if 10 the total income had been rs 20,000; (b) half the amount by which the total income exceeds rs 20,000; the limit aforesaid shall be-(i) rs 6,000 in the case of every hindu undivided family which 15 as at the end of the previous year satisfies either of the following conditions, namely:-(a) that it has at least two members entitled to claim partition who are not less than eighteen years of age; or (b) that it has at least two members entitled to claim par-20 tition who are not lineally descended one from the other and who are not lineally descended from any other living member of the family; (ii) rs 3,000 in every other case  surcharges on income-tax25 'the amount of income-tax computed at the rates hereinbefore specified shall be increased by the aggregate of the surcharges calculated as under:-(a) a surcharge for purposes of the union equal to the swm of-30 (i) five per cent of the amount of income-tax; and (ii) where the earned income included in the total income exceeds rs 1,00,000, five per cent of the difference between the amount of income-tax which would have been payable on the whole of the ,earned income included in the 35 total income if such earned income had been the total income and the amount of income-tax payable on a total income of rs 1,00,000; (b) a special surcharge on unearned income at tuteen per cent of the difference between the amount of income-tax on the total income and the amount of income-tax on the whole of the earned income, if any, included in the total income if such earned income had been the total income: 5 provided that-(i) no surcharge for purposes o~ the union shall be payable where the total income does not exceed the limit specified below; (ii) no special surcharge on unearned income shall be 10 payable in the case of an assessee whose total income does not include any income from dividend on ordinary shares if his total income does not exceed the limit specified below, and where the total income includes any dividends on ordinary shares, such limit shall be increased by rs 1,500 15 or the amount of the said dividends, whichever is less: provided further that-(a) where the total income includes any dividends on ordinary shares, the surcharge for purposes of the union and the special surcharge on unearned income 20 shall not in each case exceed half the amount by which the total income exceeds the respective limits applicable in either case; (b) the surcharge for purposes o~ the union and the special surcharge on une~rned income, both 25 together, shall not exceed half the amount by which the total income exceeds the limit specified below; the limit aforesaid shall be-(i) rs 15,000 in the case of every hindu undivided family which satisfies as at the end of the previous year either of the 30 following conditions, namely:-(a) that it has at least two members entitled to claim partition who are not less than eighteen years of age; or (b) that it has at least two members entitled to claim partition who are not lineally descended one from the other 3s and who are not lineally descended from any other living member 0(; the family; (ii) rs 7,f'()o in every other case explanatio'n-for the purposes of this paragraph, in the cam of every hindu undivided family governed by the mitakshara law, a sor shall be deemed to be entitled to claim partition of the coparcenary property against his father, or grand-father notwith-s standing any custom to the contrary  paragraph bin the case of every company and local authority,-| rates                             ||-----------------------------------|| 30%                               || on the whole of the total income |10 surcharge on incofl'1e-otax the amount of income-tax computed at the rate hereinbefore specified shall be increased by a surcharge of 5 per cent thereon paragraph c (1) in every case in which under the provisions of the income-is tax act, income-tax is to be charged at the maximum rate,-| rates                             ||-----------------------------------|| on the whole of the total income || 25%                               | surcharge on income-taxthe amount of income-tax computed at the rate hereinbefore 20 specified shall be increased by a surcharge of 20 per cent thereon (2) in every case in which under the provisions of the income-tax act, income-tax is to be deducted at the maximum rate, deduction shall be made from the whole income which is to be subjected to such deduction at the following rates, namely:-| rate                | of             | income-tax    | rate    | of             ||---------------------|----------------|---------------|---------|----------------|| on the whole income | on the whole   |               |         |                || in-                 |                |               |         |                || come                |                |               |         |                || in                  | the            | case          | of      | every company || in                  | any other cale |               |         |                || 1'5%                |                |               |         |                || ,%                  |                |               |         |                | paragraph din the case of every registgred firm,-rates of income-tax -~ (1) on the first rs 40,000 of total income (2) on the next rs 35,000 of total income 35 (3) on the next rs 75,000 of total income (4) on the balance of total income nil 5% 6% 9%  part ii super-tax and surcharge on s'llper-tatparagraph a in the case of every individual, hindu undivided family, unregistered firm and other association of persons, not being a case to which any other paragraph of this part applies,-rates of bupe1'-tar nil 5% 15% 20% 10 30% 35% (1) on the first rs 20,000 of total income (2) on the next rs 5,000 of total income (3) on the next rs 5,000 of total income (4) on the next rs 10,000 of total income (5) on the next rs 10,000 of total income (6) on the next rs 10,000 of total income (7) on the next rs 10,000 of total income (8) on the balance of total income 40% 45%  surcharges on super-tarthe amount of super-tax computed at the rates hereinbefore specified shall be increased by the aggregate of the surcharges calculated as under: 20 of-(a) a surcharge for purposes of the union equal to the sum (i) five per cent of the amount of super-tax; and (ii) where the earned income included in the total income exceeds rs 1,00,000, five per cent of the difference between the amount of super-tax which would have been payable on the whole of the earned income included in the 25 total income, if such earned income had been the total income and the amount of super-tax payable on a total income of rs 1,00,000; (b) a special surcharge on unearned income at fifteen per cent of the difference between the amount of super-tax on the 30 total income and the amount of super-tax on the whole of the earned income, if any, included in the total income, if such earned income had been the total income 35  paragraph b in the case of every local authority,- rates of super-ta:r:on the whole of the total income 16% suf'charges on iuper-tgz the amount of luper-tax  computed at the rate hereinbefore ipec1fted thall be increased by a surchatge of 121% thereon  paragraph cs in the case of every association of persons being a co-operative society as defined in clause (sb) of section 2 of the income-tax act,-rate, of super-tqt (1) on the first rs 25,000 of total income nil (2) on the balance of total income 16% 10 surcharges on super-tar the amount of super-tax computed a1l the rates hereinbefore specified shall be increased by a surcharge of 121% thereon pa:ragraph d in the cue of the life insurance corporation of india established 15 under the life insurance corporation act, 1956,-rates of super-tar on the whole of its profits and gains from life insurance bulideu 11 % in the cue of every other company,-20 rates of luper-tax on the whole of the total income provided that,-(i) a rebate at the rate of 40 per cent on 10 much of the totai income as consists of dividends from a subsidiary inman company and a rebate at the rate of 35 per cent on the balance of the total income shall be allowed in the case of any company which  (a) in respect of its profits liable to tax under the income-tax act for the year ending on the 31st day of march, 1959, has made the prescribed arrangements for the declaration and payment within india of the dividends payable out of such profits and for the deduction of super-tax from dividends in accordance with the provisions of sub-section (3d) of section 18 of that act; and 35 (b) is iuch a company as is referred to in sub-aection (9) of section 23a of the income-tax act with a total income not exceeding rs 25,000; 2192 ls-~ (ii) a rebate at the rate of 40 per cent on so much of the total income as consists of dividends from a subsidiary indian company and a rebate at the rate of 30% on the balance of the total income shall be allowed in the case of any company which satisfies condition (a) but not condition (b) of the preceding clause; (iii) a rebate at the rate of 40% on so much of the total income as consists of dividends from a subsidiary indian company and a rebate at the rate of 20% on the balance of the total 10 income shall be allowed in the case of any company not entitled to a rebate under either of the preceding clauses: provided further that,-(i) the amount of the rebate under clause (i) or clause (it) shall be rettuced by the sum, if any, equal to the amount or the is aggregate of the amounts, as the case may be, computed as hereunder: -the whole of amount such part (4) on that part of the aggregate of the sums arrived at in accordance with clause (i) of the second proviso to paragraph d of part ii of the first schedule to tqe finance (no2) act, 1957, as has not been deemed to have been taken into account, in accordance with clause (ii) of the said proviso, for the purpose of reducing los the rebate mentioned in clause (0 of the said proviso to nil at the rate of 30% (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 to the extent to which such bonus shares or bonus have been issued out of premiums received in cash on the issue of its shares; and (c) in addition, in the case of a company referred to in clause (ii) of the preceding proviso which has distributed to its shareholders during the previous year dividends in excess of six per cent of its paid-up capital, not being dividends payable at a fixed rateat the rate of 10 20% (a) in the case of a company which is not such as is referred to in sub-section (9) of section 23a of the income-tax act-l' on that part of the said dividends at the rate of which exceeds 6 per cent but does dot 10% exceed 10 per cent of the paid-up capital; on that part of the said dividends which exceeds 10 per cent of the paidup capital; and rate of $$\begin{array}{l l}{{\mathbf{at}}}&{{\mathbf{the}}}\\ {{10\%}}&{{}}\end{array}$$rate of $$\begin{array}{l l}{{\mathbf{at}}}&{{\mathrm{the}}}\\ {{20\%}}&{{}}\end{array}$$rate of $$\begin{array}{l l}{{\mathbf{at}}}&{{\mathbf{the}}}\\ {{\mathbf{30\%}}}&{{}}\end{array}$$(b) in the case of any other companyon that part of the said dividends which exceeds 6 per cent but does not exceed 10 per cent of the paid-up capital; on that part of the said dividends which exceeds 10 per cent but does not exceed 18 per cent of the paid-up capital; on that part of the said dividends which exceeds 18 per cent of the paidup capital; (ii) where the sum arrived at in accordance with clause (i) of as this proviso exceeds the amount of the rebate arrived at in accordance with clause (i) or clause (h) as the case may be, of the preceding proviso, only so much of the amounts of reduction mentioned in sub-clauses (a), (b) and (c) of clause (i) of this proviso as is sufficient, in that order, to reduce the rebate 30 to nil shall be deemed to have been taken into account for the purpose: provided further that jhe super-tax payable by a company, the total income of which exceeds rupees twenty-five thousand shall not exceed the aegregate of-35 (a) the super-tax which would have been payable by the company it its total income had been rupees twenty-five thousand, and (b) half the amount by whieb its total income exceed rupees twenty-five thousand  e:z:planation-:ror the purposes of this paragraph-(i) the expression "paid-up capital" means the paid-up capital (otherthan capital entitled to a dividend at a fixed rate) of the company as on the first day of the previous year relevant to the assessment for the year ending on the 31st day of marcb, , 1959, increased by any premiums received in cash by the company on the issue of its shares, standing to the credit of the share premium account as on the first day of the previous year aforesaid; (ii) the expression "dividend" shall be deemed to include any 10 distribution included in the expression "dividend" as defined in clause (ga) of section 2 of the income-tax act; (iii) where any portion of the profits and gains of the company is not included in its total income by reason of such portion being exempt from tax under any provision of the income-tax is act, the "paid-up capital" of the company, the amount distribut· ed as dividends (not being dividends payable at a fixed rate) the amount representing the face value of any bonus shares and the amount of any bonus issued to the share-holders shall each be deemed to be such proportion thereof as the total income of ~ the company for the previous year bears to its total profit and gains for that year other than capital receipts, reduced by such allowances as may be admissibl~ undej1 the income-tax act which have not been taken into account by the company in its profit and loss account for that year 25  part iin the first schedule to the tariff act,-s (i) in item no 47 (2), for the existing entry in b fourth column, the entry "rs 3 per pound or 50 per cent eel vcilorem, whichever is higber, plus the excise duty for the time being leviable on like articles if produced or manufactured in india, and where such duty is leviable at different ratejl, the highelt 10 duty" shall be substituted; (ii) in item no 63 (24), for the exiltin, entries in the fourth and fifth columns, the entries "50 per cent ad "imem" and "40 per cent ad valorem" shall respectively be luhltituted; (iii) in item no 63 (33), for bub-item (b) in the second 's column, the following sub-item shall be substituted, namely:-"(b) machine screws, including the following types the shank of which has been threaded to within two pitches from the head, namely:-(0 mushroom head roofing bolts, all types; (h) hexagonal head bolts all types; (iii) mudguard cycle bolts (with threading other than british standard cycle threading)" in the first schedule to the tarift act for items nos 28(27) 28(28) and 71(13) the following items shall respectively be subitituted, namely:-s item no niide of article nature or duty standard rate of duty 10 prefereadal rate or duty if the artk:ie it the produce or manu!ec:-dundon of tureoc ~ -------ratci of the united a brtdah duty kinadcm colooy i :i 3 4 , 6 7  28 (27) is %8 (28) 20 per cent 14 per emt 14 per cent ad fxjlor", ad valor"" ad wl/or,,,, antibiodca i\ich u itreptomycin, p-amicidin, tyrocidine, tyrotbrldn and prepuadoos wluch contain only one antibiotic and are free &om other thcrapeudc idpedients, but not indudina penc:iwn in bulk, and peuic:illin and its products specified in items noe 28 (26) and 28 (2m) (a) sulpha drup and prepara-preferential tiodl which contain only retcinie one sulpha drug and are free from other therapcudc ingredledtlj (6) vttaminl and viwnin prep-preferential ratlodl (excludina flab liver oill) revenuc free from other therapeutic ingredients revenue - 71 (13) (i) zip ~ (a) with metal teeth other than thole specified in category (6) 35 100 per ceot tid nlor", or re i per foot, wbk:bcvcr il hip rcvenue (6) with metal teeth havina not more than 9 teeth per 1ncb on either aide and in wbleb 100 per cedt ad~ or re per foot wbicbcvet 100 per cedt tid f1alomri or re per foot, (a) parts of zip futeden--------------------------------__----- part min the second schedule to the tarift act, in item no9, for the existing entry in the second column, the entry umustard ou (including rapeseed ou jamba ou and radish seed ou)" shall be substituted  statement of objects and reasonsthe object of this bill is to give effect to the financial proposals of the central government for the next financial year and to provide for certain connected matters the notes on clauses explain the vario\ll provisions contained in the bill j nehru new daiu; the 28t" felwuarll, 1958 clause 2 continues for the current financial year the ratell of income-tax and super-tax prescribed by the finance (no2) act, 1957, subject to one minor modification, namely, abolition of the top-m06t slab of 30 per cent in the rate of super-tax payable with reference to excess dividends, in the case of companies which fall within the scope of section 23a of the income-tax act cla1j8e 3 makes the following amendments in section 4:-(i) sub-clause (i) provides that the exemption up to rs 4,500 allowable to a person resident in india in respect of his unremitted foreign income shall be further limited in the case of employees of government, local authority or a statutory corporation, so as not to exceed a sum calculated at the rate of rs 1,000 for each month of service in respect of which the salary is drawn abroad (ii) sub-clause (ii) (1) extends the exemption at present available to persons who are not citizens of india in respect of the value of any free of' concessional passages on home leave outside india received by them from their employers in india, to similar travel concessions received by citizens of india for going on leave to their home towns or villages in india (iii) sub-clause (ii) (2) seeka to exempt investment income al trade unions (iv) sub-clause (ii) (3) amends the definition of "technfejan"  so as to make it clear that only industrial personnel, in the strict sei;lse of the term, are covered thereby (v) sub-clause (ii) (4) is intended to extend the exemption  ow enjoyed by members of scheduled tribes residing in the tribal areas of assam to members of the said tribes who may be residing in the union territory of manipur clause 4 makes an amendment to clause (c) of section 4a with a view to removing one of the tests laid down therein for determining the residence of a company in the taxable territories, namely, the test of income arising in india exceeding the income arising outside india 2192 ls-3 clause 5 makes the following amendments in section 7:-(i) sub-clause (i) extends the exemption at present allowed in respect of death-cum-retirement gratuity benefits received from government to similar gratuities received from local authorities or corporations established by central, state or provincial acts (ii) at present entertainment allowance received by an employee in a case where he has been in receipt of such allowance regularly from his employer before 1st april, 1955, is exempt up to a limit of one-fifth of his salary or rs 7,500 whichever is less sub-clause (ii) seeks to remove this restriction of receipt of such allowances before 1st april, 1955, in the case of persons in receipt of salaries from the government, but reduces the limit in their cases to one-fifth of the salary or rs 5,000 whichever is less clause 6 amends sub-section (4) of section 9 to make it clear that taxes in respect of property include service taxes clause 7 makes the following amendments:-(i) sub-clause (i) increases the development rebate admissible in the case of ships launched after 31st december, 1957, from 25 per cent to 40 per cent further, in the case of ships launched or machinery and plant installed after 31st december, 1957, the grant of the development rebate is made subject to the conditions (i) that the allowance is not utilised by the itssessee for distribution of dividends for a period of ten years and (ii) that the asset is also not sold during the said period (ii) sub-clause (ii) seeks to make it clear that the depreciation or additional depreciation allowances admissible under cla!lses (vi) and (via) of sub-section (2) of section 10 shall not be allowed for the year in which the relevant assets are sold or otherwise disposed of because in those circumstances the necessary relief is secured by the provisions of clause (vii) of subsection (2) of section 10 clause 8 makes a verbal change in sub-section (2) of section 18 in order to make it clear that the rates for deduction of taxes at source from salaries are the rates in force for the financial year ir which the deduction of the tax is to be made clause 9 amends section 23a' to provide for the non-application of that section to cases where the payment of a dividend or a larger dividend than that declared by a company would not have resulted in a benefit to the reven1le clause 10 amends section 35 as a consequence of the amendments_ proposed in clause 7 this amendment will enable assessments being revised wherever the development rebate becomes inadmissible by reason of the contravention by the assessee of any of the conditions imposed for the purpose of getting the rebate clause 11 recasts section 44 so as to provide a complete machinery for the assessment (including the levy of penalty) of, and the collection of the tax from, firms or other association of persons which have been discontinued or dissolved clause 12 gives power to the central board of revenue to frame rules for determining the value of any perquisite charg~able to tax wlder the head "salaries" clause 13 contains a formal provision with respect to the commencement of the various provisions in this bill clause 14 makes the following amendments in the wealth-tax act, 1957:-(i) sub-clause (a) amends the definition of "company" in section 2 to make it clear that companies incorporated in the state of jammu and kashmir under the state law are also within the scope of the act '(ii) sub-clause (b) amends section 5 to include post office national plan certificates within the list of exemptions (iii) sub-clause (c) amends section 6 in order to make it clear that in the case of an individual who is not a citizen of india his foreign assets and debts are to be excluded in the computation of his net wealth clause 15, read with the second sch2du ie, proposes certam changes in the import and export tarifts,-(a) the present statutory rate of import duty of rs 3 per pound on art silk yarn and thread is proposed to be changed to rs 3 per pound or 50 per cent ad valorem whichever is higher plus the excise duty this is because the specific rate of duty has been found to be inadequate in the case of costlier varieties of art silk yarn such as nylon and perlon the proposed change in the pattern of duty will, besides bringing in additional revenue, also act as an incentive for larger imports of cheaper yam for the same foreign exchange outlay (b) the rates of duty of 25 per cent ad valorem (standard) and 15 per cent ad valorem (preferential) on irod- or steel · barbed or stranded wire and wire rope falling under item 63(24) of the impert tariff, are proposed to be raised to 50 per cent ad valorem (standard) and 40 per cent ad valorem (preferential) in order that these finished products may bear a higher duty than the raw material, steel wire (c) changes, mainly verbal, proposed in the other item are not of much revenue significance clawe 16 seeks to maintain for another- year the statw quo in reiard to commitments under the general agreement on tariff and trade clause 17-sub-clause (a) seeks to make a clarificatory amendment in sub-item i (5) of item no 9 relating to unmanufactured tobacco, other than flue cured sub-clause (b) proposes an increase in excise duty on cement from rs 20 to rs 24 per ton clg~e 18, like section 6 of the finance act, 1957, provides that alt ihall be ~uty-free for another yeu  __ a bill to give effect to the financial proposals of the central government for the financial year 1958-59 the president has, in pursuance of clauses (i) and (3) of article ii7 and clause (i) of article 274 of the constitution of india, recommended to the lok sabha, the introduction and consideration of the bill m n kaul, secretary (shrijawaharlal nehru, minister of finane") 