 corrigenda to the taxation laws (amendmeljt), bill, 1978 cto be/as introduced in lok sabhaj1 page 3, line 5,-omit "for" -2 page 3, line 7,-for ''both'' ~ "(both" 3 page 3, lines 7 and 8,-'lpropertie s) " ''prope rtie s " read -4 page 3, line 23,-fq!' hand" ~ itor" new delhi; m?l 12 1~~8 vajsalffia, 1900 (saka)  r--"'-·· bill no t1 of 1"8 the taxation laws (amendment) bill, 1978a bill further to amend the iru:ome-tax act, 1961 i1nd the wealth-tax act, 1951 be it enacted by parliament in the twenty-ninth year of the repub114 of india as follows:-1 (7) this act may be called the taxation laws (amendment) act, short titm 1878 and eommence_ (2) it shalj come into force on the 1st day of april, 1979 ment amend-2 in the income-tax act, 1961,-ment (a) in chapter iii, after section 13 the following section shall be of act a inserted, namely: _ of 1961 special provision relating to incomes at polltical parties '13a any income of a political party which is chargeable under the head "interest on securities" "income from house property" or "income frbm other sources" or any income by way of voluntary contributions received by a political party from any person shall not be included in the total income of the previous year of such political party: provided that-(a) such political party keeps and maintains such books of account and other documents as would enable the incometax officer to properly deduce its income therefrom; (b) in respect of each such voluntary contribution in excess of ten thol,1sanci rupees, such political party keeps and maintains a record of such contribution and the name and address of the person who has made such contribution' and , (c) the accounts of such political party are audited by an accountant as defined in the ];xplanatian below sijb-section (2) of section 288 explnnation-for the purposes of this section, "political party" means an association or body of individual citizens of india registered with the election commission of india as a political party under paragraph 3 of the election symbols (reservation and allotment) order, 196fl and includes a political party deemed to 10 be registered with that commission under the proviso to subparagraph (2) of that paragraph'; (b) in section 37,-(i) after rub-section (2a), the following sub-section shall be inserted, namely: -is h(2b) notwithstanding anything contained in sub-section (1), no allowance shall be made in respect of expenditure incurred by an asse~see on advertisement in any souvenir brochure, tract, pamphlet or the like published by a political party"~ 20  , (in in sub-section (3a) (as directed to be inserted by section 8 of the finance act, 1978),-(nfor the words, brackets and figure "the provisions of sub-section ('1)", the words, brackets, figures and let<,er lithe provisions of sub-section (2b) or 5u:b-section ('1)" shall 1:e 2s substituted; (3) in the explanation, in clause (0), for the words,  brackets and figurf' "under sub-section (3)", the words, brackets, figures and letter "under sub-section (2b), or subsection (3) or both" !>hall be substituted; 30 (c) in section 139, after sub-section (4a), the following sub-section ~al1 be inserted namely:-"(4b) the chief executive officer (whether such chief execu-· tive officer is known as secretary or by any other designation) of every, political party shall if the total income in respect of whleh 3s the political party is assessable (the total income for this purpose being computed under this act without giving effect to the provisions of section 13a) exceeds the maximum amount which is not chargeable to income-tax, furnish a return of such income of the previous year in the prescribed form and verified in the prescribed 40 manner and s'!tttng forth such other particulars as may be prescribed and all the provisions of this act, shall, so far as may be, apply as if it were a return required to be furnished under subsection (1)" 3 in the wealth-tax act, 1957, in section 45, after clause (h), the fol- 45 lowing clause and explanation shall be inserted, namely:-'(i) any political party, amend_ mentot act 27 of 1957 e~1u1tion-fof the purposes of clause (i~, "political party" :ihall baye the meaning assigned to it in th~  explanation to section '13a of,thejllcome-tax aet', politi~al parties are essential in any democratic set-up the taxation of their imcome, however, reduces their disposable funds thereby adversely affecting their capaeity to finance their activities from legitimate sources of income it is, therefore, propgsed to provide for exemption from income tax in ~spect of specitjed categories of income derived by political parties, namely, income fro>m investments both in movable and immovable prooperties and income by way of voluntary contributions 'mle proposed exemption will be available only in the case of political pat'~which are registered or deemed to be r~gistered with the election commission of india under the election symbols (rest'rvation and allotment) order, 1968 the exemption will not be allowed unless the political party m&intains proper books of account; records the name and address of every person who has made a voluntary contribution of more than ten thousand rupees at a time: and the accounts of the political party are audited by a chartered accountant or other qualified accountant 2 payments made for advertisements in souvenirs, brochures and the like published by political parties are not made on considerations of commercial expediency, but are in the nature of disguised donations made with the twin objective of circumventing the ban on company donations and for securing their deduction in the computation of taxable profits it is therefore proposed to provide that expenditure incurred by a tax-payer for purposes of advertisement in any souvenir, brochure and the like published by a political party will not be allowed as a deduction in computing the taxable profits 3 one of the principal objects of wealth-tax is to reduce disparities in personal incomes and wealth as this consideration does not apply in the case of political parties, it is proposed to exempt them from the levy of wea1th-tax • __ 4 this bill accordingly seeks to amend the income-tax act, 1961 and the wealth-tax act 1957 main1v with a view to achieving the aforesaid '     , , objects new deliu; h m patel the 12th may, 1978 sub-clause (c) of clause 2 of the bill proposes to insert a new sublection (4bt) in section 139 of the income-tax act, 1961 which requires the chief executive officer of a politi('al party to furnish a return of income in such form and verified in such manner and setting forth such particulars as may be prescribed by rules made under the said act as the matters in respect of which rules may be made under this provision pertain to matters of detaiil or procedure, the delegation ot legislative power is ot a norjllal character '  extract from tile income-tax act 1961- 37 (1) - (43 of 1961) - - - ueneral (34) notwithstanding anything contained in sub-section (1) but without prejudice to the provisions of sub-section (3), where the aggregate expenditure incurred by an assessee on advertisement, publicity and sales promotion in india exceeds forty thousand rupees, so much of such aggregate expenditure as is equal to an amount calculated as provided hereunder shall not be allowed as a deduction, namely:-(1,) where such aggregate expenditure does 10 per cent of the adnot exceed i per cent of the turnover or, as the jusb!d expenditure; case may be, gross receipts of the business or profession (ii) where such aggregate expenditure 12~ per cent of the adexceeds! per cent but does not exceed i per justed expenditure; cent of the turnover or, as the case may be, gross receipts of the busine!>s or profession (iii) where such aggregate expenditure 15 per cent of the adexceeds t per cent of the turnuver or, as the justed expenditure case may be, gross receipts of the business or profession explanation-for the purposes of this sub-section,-(a) "adjusted expenditure" means the aggregate expenditure incurred by the assessee on advertisement, publicity and sales promotion in india as reduced by so much of such expenditure as is not allowed under sub-section (1) and as further reduced by so much of such expenditure as is not allowed under sub-section (3); - - - - (b) "turnover" and "gross receipts" mean turnover or gross receipts, as the case may be, as reduced by any discount or rebate allowed by the assessee -  extract from the wealth-tax acr, 1957-  (27 of 1957) - • •- ~ no ·tax shall be levied under this act in respect of the net wealth act notte ofapply in certain - - - - cases (h) any company incorporated outside india which h~· no place of business in india ar - - - - ~~, , "  a billfurther to amend the income-tax act, 1961 and the wealth-tax act, 1857 ($h'l'i h m patel, minilter of pjftmc') 