The Repealing and Amending Act, 2023

(1) This Act may be called the Income-tax Act, 1961. (2) It extends to the whole of India. (3) Save as otherwise provided in this Act, it shall come into force on the 1st day of April, 1962.

In this Act, unless the context otherwise requires, 1(1) advance tax means the advance tax payable in accordance with the provisions ofChapter XVII-C; 2(1A) agricultural income means 3(a) any rent or revenue derived from land which is situated in India and is used foragricultural purposes; (b) any income derived from such land by (i) agriculture; or (ii) the performance by a cultivator or receiver of rent-in-kind of any process ordinarilyemployed by a cultivator or receiver of rent-in-kind to render the produce raised or receivedby him fit to be taken to market; or (iii) the sale by a cultivator or receiver of rent-in-kind of the produce raised or receivedby him, in respect of which no process has been performed other than a process of the naturedescribed in paragraph (ii) of this sub-clause ; (c) any income derived from any building owned and occupied by the receiver of the rent orrevenue of any such land, or occupied by the cultivator or the receiver of rent-in-kind, of any landwith respect to which, or the produce of which, any process mentioned in paragraphs (ii) and (iii)of sub-clause (b) is carried on: 4Provided that (i) the building is on or in the immediate vicinity of the land, and is a building which thereceiver of the rent or revenue or the cultivator, or the receiver of rent-in-kind, by reason ofhis connection with the land, requires as a dwelling house, or as a store-house, or other outbuilding, and (ii) the land is either assessed to land revenue in India or is subject to a local rate assessedand collected by officers of the Government as such or where the land is not so assessed toland revenue or subject to a local rate, it is not situated (A) in any area which is comprised within the jurisdiction of a municipality(whether known as a municipality, municipal corporation, notified area committee,town area committee, town committee or by any other name) or a cantonment boardand which has a population of not less than ten thousand 5***; or 6(B) in any area within the distance, measured aerially, (I) not being more than two kilometres, from the local limits of anymunicipality or cantonment board referred to in item (A) and which has apopulation of more than ten thousand but not exceeding one lakh; or (II) not being more than six kilometres, from the local limits of anymunicipality or cantonment board referred to in item (A) and which has apopulation of more than one lakh but not exceeding ten lakh; or (III) not being more than eight kilometres, from the local limits of anymunicipality or cantonment board referred to in item (A) and which has apopulation of more than ten lakh. 7Explanation 81.For the removal of doubts, it is hereby declared that revenue derivedfrom land shall not include and shall be deemed never to have included any income arising fromthe transfer of any land referred to in item (a) or item (b) of sub-clause (iii) of clause (14) of thissection. 9Explanation 2.For the removal of doubts, it is hereby declared that income derived fromany building or land referred to in sub-clause (c) arising from the use of such building or land forany purpose (including letting for residential purpose or for the purpose of any business orprofession) other than agriculture falling under sub-clause (a) or sub-clause (b) shall not beagricultural income. 10Explanation 3.For the purposes of this clause, any income derived from saplings orseedlings grown in a nursery shall be deemed to be agricultural income. 11Explanation 4.For the purposes of clause (ii) of the proviso to sub-clause (c),population means the population according to the last preceding census of which the relevantfigures have been published before the first day of the previous year; 1213(1B) amalgamation, in relation to companies, means the merger of one or more companieswith another company or the merger of two or more companies to form one company (the companyor companies which so merge being referred to as the amalgamating company or companies and thecompany with which they merge or which is formed as a result of the merger, as the amalgamatedcompany) in such a manner that (i) all the property of the amalgamating company or companies immediately before theamalgamation becomes the property of the amalgamated company by virtue of the amalgamation; (ii) all the liabilities of the amalgamating company or companies immediately before theamalgamation become the liabilities of the amalgamated company by virtue of the amalgamation; (iii) shareholders holding not less than 14three-fourths in value of the shares in theamalgamating company or companies (other than shares already held therein immediately beforethe amalgamation by, or by a nominee for, the amalgamated company or its subsidiary) becomeshareholders of the amalgamated company by virtue of the amalgamation, otherwise than as a result of the acquisition of the property of one company by another companypursuant to the purchase of such property by the other company or as a result of the distribution ofsuch property to the other company after the winding up of the first-mentioned company; 15(1C) Additional Commissioner means a person appointed to be an Additional Commissionerof Income-tax under sub-section (1) of section 117; (1D) Additional Director means a person appointed to be an Additional Director of Income-taxunder sub-section (1) of section 117; (2) annual value, in relation to any property, means its annual value as determinedunder section 23 ; 16* * * * * (4) Appellate Tribunal means the Appellate Tribunal constituted under section 252; (5) approved gratuity fund means a gratuity fund which has been and continues to be approvedby the 1718Principal Chief Commissioner or Chief Commissioner or 19Principal Commissioner orCommissioner in accordance with the rules contained in Part C of the Fourth Schedule ; (6) approved superannuation fund means a superannuation fund or any part of a superannuationfund which has been and continues to be approved by the 1718Principal Chief Commissioner or ChiefCommissioner or 19Principal Commissioner or Commissioner in accordance with the rulescontained in Part B of the Fourth Schedule; (7) assesse means a person by whom 20any tax or any other sum of money is payable underthis Act, and includes (a) every person in respect of whom any proceeding under this Act has been taken for the21assessment of his income or assessment of fringe benefits or of the income of any other personin respect of which he is assessable, or of the loss sustained by him or by such other person, or ofthe amount of refund due to him or to such other person; (b) every person who is deemed to be an assessee under any provision of this Act; (c) every person who is deemed to be an assessee in default under any provision of this Act; 22(7A) Assessing Officer means the 2324Assistant Commissioner or Deputy Commissioner or25Assistant Director or Deputy Director or the Income-tax Officer who is vested with the relevantjurisdiction by virtue of directions or orders issued under sub-section (1) orsub-section (2) ofsection 120 or any other provision of this Act, and the 15Additional Commissioner or 26Additional Director or 27Joint Commissioner or Joint Director who is directed under clause (b) ofsub-section (4) of that section to exercise or perform all or any of the powers and functions conferredon, or assigned to, an Assessing Officer under this Act; (8) assessment includes reassessment; (9) assessment year means the period of twelve months commencing on the 1st day of Aprilevery year; 28(9A) Assistant Commissioner means a person appointed to be an Assistant Commissioner ofIncome-tax 29or a Deputy Commissioner of Income-tax under sub-section (1) of section 117; 30(9B) Assistant Director means a person appointed to be an Assistant Director of Income-taxunder sub-section (1) of section 117; (10) average rate of income-tax means the rate arrived at by dividing the amount of income-taxcalculated on the total income, by such total income; 31(11) block of assets means a group of assets falling within a class of assets comprising (a) tangible assets, being buildings, machinery, plant or furniture; (b) intangible assets, being know-how, patents, copyrights, trade-marks, licences, franchisesor any other business or commercial rights of similar nature, in respect of which the same percentage of depreciation is prescribed; (12) Board means the 32Central Board of Direct Taxes constituted under the Central Boards ofRevenue Act, 1963 (54 of 1963); 33(12A) books or books of account includes ledgers, day-books, cash books, account-books andother books, whether kept in the written form or as print-outs of data stored in a floppy, disc, tape orany other form of electro-magnetic data storage device; (13) business includes any trade, commerce or manufacture or any adventure or concern in thenature of trade, commerce or manufacture; 34(13A) business trust means a trust registered as, (i) an Infrastructure Investment Trust under the Securities and Exchange Board of India(Infrastructure Investment Trusts) Regulations, 2014 made under the Securities and ExchangeBoard of India Act, 1992 (15 of 1992); or (ii) a Real Estate Investment Trust under the Securities and Exchange Board of India (RealEstate Investment Trusts) Regulations, 2014 made under the Securities and Exchange Board ofIndia Act, 1992 (15 of 1992), and the units of which are required to be listed on recognised stock exchange in accordance with theaforesaid regulations; (14)35capital asset means (a) property of any kind held by an assessee, whether or not connected with his business orprofession; (b) any securities held by a Foreign Institutional Investor which has invested in suchsecurities in accordance with the regulations made under the Securities and Exchange Board ofIndia Act, 1992 (15 of 1992), but does not include (i) any stock-in-trade other than the securities referred to in sub-clause (b), consumablestores or raw materials held for the purposes of his business or profession; 36(ii) personal effects, that is to say, movable property (including wearing apparel andfurniture) held for personal use by the assessee or any member of his family dependant on him,but excludes (a) jewellery; (b) archaeological collections; (c) drawings; (d) paintings; (e) sculptures; or (f) any work of art. Explanation 371.For the purposes of this sub-clause, jewellery includes (a) ornaments made of gold, silver, platinum or any other precious metal or any alloycontaining one or more of such precious metals, whether or not containing any preciousor semi-precious stone, and whether or not worked or sewn into any wearing apparel; (b) precious or semi-precious stones, whether or not set in any furniture, utensil orother article or worked or sewn into any wearing apparel. 38Explanation 2.For the purposes of this clause (a) the expression Foreign Institutional Investor shall have the meaning assigned toit in clause (a) of the Explanation to section 115AD; (b) the expression securities shall have the meaning assigned to it in clause (h) ofsection 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956); 39(iii) agricultural land in India, not being land situate (a) in any area which is comprised within the jurisdiction of a municipality (whetherknown as a municipality, municipal corporation, notified area committee, town areacommittee, town committee, or by any other name) or a cantonment board and which has apopulation of not less than ten thousand 40*** ; or 41(b) in any area within the distance, measured aerially, (I) not being more than two kilometres, from the local limits of any municipality orcantonment board referred to in item (a) and which has a population of more than tenthousand but not exceeding one lakh; or (II) not being more than six kilometres, from the local limits of any municipality orcantonment board referred to in item (a) and which has a population of more than onelakh but not exceeding ten lakh; or (III) not being more than eight kilometres, from the local limits of any municipalityor cantonment board referred to in item (a) and which has a population of more than tenlakh. Explanation.For the purposes of this sub-clause, population means the populationaccording to the last preceding census of which the relevant figures have been published beforethe first day of the previous year; 42(iv) 6 per cent.. Gold Bonds, 1977, 43or 7 per cent.. Gold Bonds, 1980, 44or National DefenceGold Bonds, 1980, issued by the Central Government; 45(v) Special Bearer Bonds, 1991, issued by the Central Government; 46(vi) Gold Deposit Bonds issued under the Gold Deposit Scheme, 1999 47or deposit certificatesissued under the Gold Monetisation Scheme, 2015 notified by the Central Government. 48Explanation.For the removal of doubts, it is hereby clarified that property includes andshall be deemed to have always included any rights in or in relation to an Indian company,including rights of management or control or any other rights whatsoever; 49(15) charitable purposeincludes relief of the poor, education, 50yoga, medical relief,51preservation of environment (including watersheds, forests and wildlife) and preservation ofmonuments or places or objects of artistic or historic interest, and the advancement of any otherobject of general public utility: 52Provided that the advancement of any other object of general public utility shall not be acharitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce orbusiness, or any activity of rendering any service in relation to any trade, commerce or business, for acess or fee or any other consideration, irrespective of the nature of use or application, or retention, ofthe income from such activity, unless (i) such activity is undertaken in the course of actual carrying out of such advancement ofany other object of general public utility; and (ii) the aggregate receipts from such activity or activities during the previous year, do notexceed twenty per cent. of the total receipts, of the trust or institution undertaking such activity oractivities, of that previous year; 53(15A) Chief Commissioner means a person appointed to be a Chief Commissioner of Incometax or a Principal Chief Commissioner of Income-tax under sub-section (1) of section 117; 5455(15B) child, in relation to an individual, includes a step-child and an adopted child of thatindividual; 56(16) Commissioner means a person appointed to be a Commissioner of Income-tax or aDirector of Income-tax or a Principal Commissioner of Income-tax or a Principal Director ofIncome-tax under sub-section (1) of section 117; 57(16A) Commissioner (Appeals) means a person appointed to be a Commissioner of Incometax (Appeals) under sub-section (1) of section 117; 58(17) company means (i) any Indian company, or (ii) any body corporate incorporated by or under the laws of a country outside India, or (iii) any institution, association or body which is or was assessable or was assessed as acompany for any assessment year under the Indian Income-tax Act, 1922 (11 of 1922), or whichis or was assessable or was assessed under this Act as a company for any assessment yearcommencing on or before the 1st day of April, 1970, or (iv) any institution, association or body, whether incorporated or not and whether Indian ornon-Indian, which is declared by general or special order of the Board to be a company: Provided that such institution, association or body shall be deemed to be a company only for suchassessment year or assessment years (whether commencing before the 1st day of April, 1971, or on orafter that date) as may be specified in the declaration; (18) company in which the public are substantially interesteda company is said to be acompany in which the public are substantially interested 59(a) if it is a company owned by the Government or the Reserve Bank of India or in whichnot less than forty per cent.. of the shares are held (whether singly or taken together) by theGovernment or the Reserve Bank of India or a corporation owned by that bank; or 60(aa) if it is a company which is registered under section 25 of the CompaniesAct, 1956 (1 of 1956); or (ab) if it is a company having no share capital and if, having regard to its objects, the natureand composition of its membership and other relevant considerations, it is declared by order ofthe Board to be a company in which the public are substantially interested: Provided that such company shall be deemed to be a company in which the public aresubstantially interested only for such assessment year or assessment years (whether commencingbefore the 1st day of April, 1971, or on or after that date) as may be specified in the declaration;or 61(ac) if it is a mutual benefit finance company, that is to say, a company which carries on, asits principal business, the business of acceptance of deposits from its members and which isdeclared by the Central Government under section 620A of the Companies Act, 1956 (1 of 1956),to be a Nidhi or Mutual Benefit Society; or 62(ad) if it is a company, wherein shares (not being shares entitled to a fixed rate of dividendwhether with or without a further right to participate in profits) carrying not less than fifty percent.. of the voting power have been allotted unconditionally to, or acquired unconditionally by,and were throughout the relevant previous year beneficially held by, one or more co-operativesocieties; 63(b) if it is a company which is not a private company as defined in the Companies Act,1956 (1 of 1956), and the conditions specified either in item (A) or in item (B) are fulfilled,namely: (A) shares in the company (not being shares entitled to a fixed rate of dividend whetherwith or without a further right to participate in profits) were, as on the last day of the relevantprevious year, listed in a recognised stock exchange in India in accordance with the SecuritiesContracts (Regulation) Act, 1956 (42 of 1956), and any rules made thereunder; 64(B) shares in the company (not being shares entitled to a fixed rate of dividend whetherwith or without a further right to participate in profits) carrying not less than fifty per cent.. ofthe voting power have been allotted unconditionally to, or acquired unconditionally by, andwere throughout the relevant previous year beneficially held 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 subsidiary company of suchcompany 65if the whole of the share capital of such subsidiary company has been held bythe parent company or by its nominees throughout the previous year. Explanation.In its application to an Indian company whose business consists mainly in theconstruction of ships or in the manufacture or processing of goods or in mining or in the generation ordistribution of electricity or any other form of power, item (B) shall have effect as if for the wordsnot less than fifty per cent., the words not less than forty per cent. had been substituted; (19) co-operative society means a co-operative society registered under the Co-operativeSocieties Act, 1912 (2 of 1912), or under any other law for the time being in force in any State for theregistration of co-operative societies; 66(19A) Deputy Commissioner means a person appointed to be a Deputy Commissioner ofIncome-tax 67*** under sub-section (1) of section 117; 68(19AA) demerger, in relation to companies, means the transfer, pursuant to a scheme ofarrangement under sections 391 to 394 of the Companies Act, 1956 (1 of 1956), by a demergedcompany of its one or more undertakings to any resulting company in such a manner that (i) all the property of the undertaking, being transferred by the demerged company,immediately before the demerger, becomes the property of the resulting company by virtue of thedemerger; (ii) all the liabilities relatable to the undertaking, being transferred by the demerged company,immediately before the demerger, become the liabilities of the resulting company by virtue of thedemerger; (iii) the property and the liabilities of the undertaking or undertakings being transferred by thedemerged company are transferred at values appearing in its books of account immediately beforethe demerger; (iv) the resulting company issues, in consideration of the demerger, its shares to theshareholders of the demerged company on a 69proportionate basis except where the resultingcompany itself is a shareholder of the demerged company; (v) the shareholders holding not less than three-fourths in value of the shares in the demergedcompany (other than shares already held therein immediately before the demerger, or by anominee for, the resulting company or, its subsidiary) become share-holders of the resultingcompany or companies by virtue of the demerger, otherwise than as a result of the acquisition of the property or assets of the demerged company or anyundertaking thereof by the resulting company; (vi) the transfer of the undertaking is on a going concern basis; (vii) the demerger is in accordance with the conditions, if any, notified under sub-section (5)of section 72A by the Central Government in this behalf. Explanation 1.For the purposes of this clause, undertaking shall include any part of anundertaking, or a unit or division of an undertaking or a business activity taken as a whole, but doesnot include individual assets or liabilities or any combination thereof not constituting a businessactivity. Explanation 2.For the purposes of this clause, the liabilities referred to in sub-clause (ii), shallinclude (a) the liabilities which arise out of the activities or operations of the undertaking; (b) the specific loans or borrowings (including debentures) raised, incurred and utilised solelyfor the activities or operations of the undertaking; and (c) in cases, other than those referred to in clause (a) or clause (b), so much of the amounts ofgeneral or multipurpose borrowings, if any, of the demerged company as stand in the sameproportion which the value of the assets transferred in a demerger bears to the total value of theassets of such demerged company immediately before the demerger. Explanation 3.For determining the value of the property referred to in sub-clause (iii), anychange in the value of assets consequent to their revaluation shall be ignored. Explanation 4.For the purposes of this clause, the splitting up or the reconstruction of anyauthority or a body constituted or established under a Central, State or Provincial Act, or a localauthority or a public sector company, into separate authorities or bodies or local authorities or companies, as the case may be, shall be deemed to be a demerger if such split up or reconstructionfulfils 70such conditions as may be notified in the Official Gazette, by the Central Government; 71Explanation 5.For the purposes of this clause, the reconstruction or splitting up of a company,which ceased to be a public sector company as a result of transfer of its shares by the CentralGovernment, into separate companies, shall be deemed to be a demerger, if such reconstruction orsplitting up has been made to give effect to any condition attached to the said transfer of shares andalso fulfils such other conditions as may be notified by the Central Government in the OfficialGazette. (19AAA) demerged company means the company whose undertaking is transferred, pursuant toa demerger, to a resulting company; (19B) Deputy Commissioner (Appeals) means a person appointed to be a DeputyCommissioner of Income-tax (Appeals) 72or an Additional Commissioner of Income-tax (Appeals)under sub-section (1) of section 117; 72(19C) Deputy Director means a person appointed to be a Deputy Director of Income-tax 73***under sub-section (1) of section 117; (20) director, manager and managing agent, in relation to a company, have the meaningsrespectively assigned to them in the Companies Act, 1956 (1 of 1956); 74(21) Director General or Director means a person appointed to be a Director General ofIncome-tax or a Principal Director General of Income-tax or, as the case may be, a Director ofIncome-tax or a Principal Director of Income-tax, under sub-section (1) of section 117, and includes aperson appointed under that sub-section to be an Additional Director of Income-tax or a JointDirector of Income-tax or an Assistant Director or Deputy Director of Income-tax; (22) dividend includes (a) any distribution by a company of accumulated profits, whether capitalised or not, if suchdistribution entails the release by the company to its shareholders of all or any part of the assetsof the company; (b) any distribution to its shareholders by a company of debentures, debenture-stock, ordeposit certificates in any form, whether with or without interest, and any distribution to itspreference shareholders of shares by way of bonus, to the extent to which the company possessesaccumulated profits, whether capitalised or not; (c) any distribution made to the shareholders of a company on its liquidation, to the extent towhich the distribution is attributable to the accumulated profits of the company immediatelybefore its liquidation, whether capitalised or not; (d) any distribution to its shareholders by a company on the reduction of its capital, to theextent to which the company possesses accumulated profits which arose after the end of theprevious year ending next before the 1st day of April, 1933, whether such accumulated profitshave been capitalised or not; (e) any payment by a company, not being a company in which the public are substantiallyinterested, of any sum (whether as representing a part of the assets of the company or otherwise)75made after the 31st day of May, 1987, by way of advance or loan to a shareholder, being aperson who is the beneficial owner of shares (not being shares entitled to a fixed rate of dividendwhether with or without a right to participate in profits) holding not less than ten per cent. of thevoting power, or to any concern in which such shareholder is a member or a partner and in whichhe has a substantial interest (hereafter in this clause referred to as the said concern) or anypayment by any such company on behalf, or for the individual benefit, of any such shareholder, tothe extent to which the company in either case possesses accumulated profits; but dividend does not include (i) a distribution made in accordance with sub-clause (c) or sub-clause (d) in respect of anyshare issued for full cash consideration, where the holder of the share is not entitled in the eventof liquidation to participate in the surplus assets; 76(ia) a distribution made in accordance with sub-clause (c) or sub-clause (d) in so far as suchdistribution is attributable to the capitalised profits of the company representing bonus sharesallotted to its equity shareholders after the 31st day of March, 1964 77and before the 1st day ofApril, 1965; (ii) any advance or loan made to a shareholder 78or the said concern by a company in theordinary course of its business, where the lending of money is a substantial part of the business ofthe company; (iii) any dividend paid by a company which is set off by the company against the whole orany part of any sum previously paid by it and treated as a dividend within the meaning of subclause (e), to the extent to which it is so set off; 79(iv) any payment made by a company on purchase of its own shares from a shareholder inaccordance with the provisions of section 77A of the Companies Act, 1956 (1 of 1956); (v) any distribution of shares pursuant to a demerger by the resulting company to theshareholders of the demerged company (whether or not there is a reduction of capital in thedemerged company). Explanation 1.The expression accumulated profits, wherever it occurs in this clause, shallnot include capital gains arising before the 1st day of April, 1946, or after the 31st day of March,1948, and before the 1st day of April, 1956. Explanation 2.The expression accumulated profits in sub-clauses (a), (b), (d) and (e), shallinclude all profits of the company up to the date of distribution or payment referred to in those subclauses, and in sub-clause (c) shall include all profits of the company up to the date ofliquidation,80but shall not, where the liquidation is consequent on the compulsory acquisition of itsundertaking by the Government or a corporation owned or controlled by the Government under anylaw for the time being in force, include any profits of the company prior to three successive previousyears immediately preceding the previous year in which such acquisition took place. 81Explanation 2A.In the case of an amalgamated company, the accumulated profits, whethercapitalised or not, or loss, as the case may be, shall be increased by the accumulated profits, whethercapitalised or not, of the amalgamating company on the date of amalgamation. 82Explanation 3.For the purposes of this clause, (a) concern means a Hindu undivided family, or a firm or an association of persons or abody of individuals or a company; (b) a person shall be deemed to have a substantial interest in a concern, other than a company,if he is, at any time during the previous year, beneficially entitled to not less than twenty per cent.of the income of such concern; 83(22A) domestic company means an Indian company, or any other company which, in respectof its income liable to tax under this Act, has made the prescribed arrangements for the declarationand payment, within India, of the dividends (including dividends on preference shares) payable out ofsuch income; 84(22AA) document includes an electronic record as defined in clause (t) of sub-section (1) ofsection 2 of the Information Technology Act, 2000 (21 of 2000); 85(22AAA) electoral trust means a trust so approved by the Board in accordance with thescheme made in this regard by the Central Government; 8687(22B) fair market value, in relation to a capital asset, means (i) the price that the capital asset would ordinarily fetch on sale in the open market on therelevant date; and (ii) where the price referred to in sub-clause (i) is not ascertainable, such price as may bedetermined in accordance with the rules made under this Act; 88(23) (i) firm shall have the meaning assigned to it in the Indian PartnershipAct, 1932 (9 of 1932), and shall include a limited liability partnership as defined in the LimitedLiability Partnership Act, 2008 (6 of 2009); (ii) partner shall have the meaning assigned to it in the Indian PartnershipAct, 1932 (9 of 1932), and shall include, (a) any person who, being a minor, has been admitted to the benefits of partnership; and (b) a partner of a limited liability partnership as defined in the Limited Liability PartnershipAct, 2008 (6 of 2009); (iii) partnership shall have the meaning assigned to it in the Indian PartnershipAct, 1932 (9 of 1932), and shall include a limited liability partnership as defined in the LimitedLiability Partnership Act, 2008 (6 of 2009); 83(23A) foreign company means a company which is not a domestic company; 89(23B) fringe benefits means any fringe benefits referred to in section 115WB; 90(23C) hearing includes communication of data and documents through electronic mode; (24) income includes (i) profits and gains; (ii) dividend; 91(iia) voluntary contributions received by a trust created wholly or partly for charitable orreligious purposes or by an institution established wholly or partly for such purposes 92or by anassociation or institution referred to in clause (21) or clause (23), or by a fund or trust orinstitution referred to in sub-clause (iv) or sub-clause (v) 93or by any university or othereducational institution referred to in sub-clause (iiiad) or sub-clause (vi) or by any hospital orother institution referred to in sub-clause (iiiae) or sub-clause (via) of clause (23C), ofsection 1094or by an electoral trust. Explanation.For the purposes of this sub-clause, trust includes any other legal obligation; (iii) the value of any perquisite or profit in lieu of salary taxable under clauses (2) and (3)of section 17; 95(iiia) any special allowance or benefit, other than perquisite included under sub-clause (iii),specifically granted to the assessee to meet expenses wholly, necessarily and exclusively for theperformance of the duties of an office or employment of profit; (iiib) any allowance granted to the assessee either to meet his personal expenses at the placewhere the duties of his office or employment of profit are ordinarily performed by him or at aplace where he ordinarily resides or to compensate him for the increased cost of living; (iv) the value of any benefit or perquisite, whether convertible into money or not, obtainedfrom a company either by a director or by a person who has a substantial interest in the company,or by a relative of the director or such person, and any sum paid by any such company in respectof any obligation which, but for such payment, would have been payable by the director or otherperson aforesaid; 96(iva) the value of any benefit or perquisite, whether convertible into money or not, obtainedby any representative assessee mentioned in clause (iii) or clause (iv) of sub-section (1) of section160 or by any person on whose behalf or for whose benefit any income is receivable by therepresentative assessee (such person being hereafter in this sub-clause referred to as thebeneficiary) and any sum paid by the representative assessee in respect of any obligationwhich, but for such payment, would have been payable by the beneficiary; (v) any sum chargeable to income-tax under clauses (ii) and (iii) of section 28 orsection 41 or section 59; 97(va) any sum chargeable to income-tax under clause (iiia) of section 28; 98(vb) any sum chargeable to income-tax under clause (iiib) of section 28; 99(vc) any sum chargeable to income-tax under clause (iiic) of section 28; 100(vd) the value of any benefit or perquisite taxable under clause (iv) of section 28; 101(ve) any sum chargeable to income-tax under clause (v) of section 28; (vi) any capital gains chargeable under section 45; (vii) the profits and gains of any business of insurance carried on by a mutual insurancecompany or by a co-operative society, computed in accordance with section 44 or any surplustaken to be such profits and gains by virtue of provisions contained in the First Schedule; 102(viia) the profits and gains of any business of banking (including providing credit facilities)carried on by a co-operative society with its members; 103* * * * * 104(ix) any winnings from lotteries, crossword puzzles, races including horse races, card gamesand other games of any sort or from gambling or betting of any form or nature whatsoever. 105Explanation.For the purposes of this sub-clause, (i) lottery includes winnings from prizes awarded to any person by draw of lots or bychance or in any other manner whatsoever, under any scheme or arrangement by whatevername called; (ii) card game and other game of any sort includes any game show, an entertainmentprogramme on television or electronic mode, in which people compete to win prizes or anyother similar game; 106(x) any sum received by the assessee from his employees as contributions to any providentfund or superannuation fund or any fund set up under the provisions of the Employees StateInsurance Act, 1948 (34 of 1948), or any other fund for the welfare of such employees; 107(xi) any sum received under a Keyman insurance policy including the sum allocated byway of bonus on such policy. Explanation.For the purposes of this clause, the expression Keyman insurance policyshall have the meaning assigned to it in the Explanation to clause (10D) ofsection 10; 108(xii) any sum referred to in 109clause (va) of section 28; 110(xiia) the fair market value of inventory referred to in clause (via) of section 28; 111(xiii) any sum referred to in clause (v) of sub-section (2) of section 56; 112(xiv) any sum referred to in clause (vi) of sub-section (2) of section 56; 113(xv) any sum of money or value of property referred to in clause (vii) 114or clause (viia) ofsub-section (2) of section 56; 115(xvi) any consideration received for issue of shares as exceeds the fair market value of theshares referred to in clause (viib) of sub-section (2) of section 56; 116(xvii) any sum of money referred to in clause (ix) of sub-section (2) of section 56; 117(xviia) any sum of money or value of property referred to in clause (x) of sub-section (2)section 56; 118(xviib) any compensation or other payment referred to in clause (xi) of sub-section (2) ofsection 56; 119(xviii) assistance in the form of a subsidy or grant or cash incentive or duty drawback orwaiver or concession or reimbursement (by whatever name called) by the Central Government ora State Government or any authority or body or agency in cash or kind to the assessee 120otherthan, (a) the subsidy or grant or reimbursement which is taken into account for determinationof the actual cost of the asset in accordance with the provisions of Explanation 10 toclause (1) of section 43; or (b) the subsidy or grant by the Central Government for the purpose of the corpus of atrust or institution established by the Central Government or a State Government, as thecase may be; (25) Income-tax Officer means a person appointed to be an Income-tax Officer under121*** section 117; 122(25A) India means the territory of India as referred to in article 1 of the Constitution, itsterritorial waters, seabed and subsoil underlying such waters, continental shelf, exclusive economiczone or any other maritime zone as referred to in the Territorial Waters, Continental Shelf, ExclusiveEconomic Zone and other Maritime Zones Act, 1976 (80 of 1976), and the air space above itsterritory and territorial waters; (26) Indian company means a company formed and registered under the Companies Act, 1956(1 of 1956), and includes (i) a company formed and registered under any law relating to companies formerly in forcein any part of India 123other than the State of Jammu and Kashmir and the Union territoriesspecified in sub-clause (iii) of this clause; 124(ia) a corporation established by or under a Central, State or Provincial Act; (ib) any institution, association or body which is declared by the Board to be a companyunder clause (17); (ii) in the case of the State of Jammu and Kashmir, a company formed and registered underany law for the time being in force in that State; 125(iii) in the case of any of the Union territories of Dadra and Nagar Haveli, Goa, Daman andDiu, and Pondicherry, a company formed and registered under any law for the time being in forcein that Union territory: Provided that the 126registered or, as the case may be, principal office of the company,corporation, institution, association or body in all cases is in India; 127(26A) infrastructure capital company means such company which makes investments by wayof acquiring shares or providing long-term finance to any enterprise or undertaking wholly engaged inthe business referred to in sub-section (4) of section 80-IA or sub-section (1) of section 80-IAB or anundertaking developing and building a housing project referred to in sub-section (10) ofsection 80-IB or a project for constructing a hotel of not less than three-star category as classified bythe Central Government or a project for constructing a hospital with at least one hundred beds forpatients; (26B) infrastructure capital fund means such fund operating under a trust deed registered underthe provisions of the Registration Act, 1908 (16 of 1908) established to raise monies by the trusteesfor investment by way of acquiring shares or providing long-term finance to any enterprise orundertaking wholly engaged in the business referred to in sub-section (4) of section 80-IA orsub-section (1) of section 80-IAB or an undertaking developing and building a housing projectreferred to in sub-section (10) of section 80-IB or a project for constructing a hotel of not less thanthree-star category as classified by the Central Government or a project for constructing a hospitalwith at least one hundred beds for patients; 128* * * * * (28) Inspector of Income-tax means a person appointed to be an Inspector of Income-tax under1295sub-section (1) of section 117; 130(28A) interest means interest payable in any manner in respect of any moneys borrowed ordebt incurred (including a deposit, claim or other similar right or obligation) and includes any servicefee or other charge in respect of the moneys borrowed or debt incurred or in respect of any creditfacility which has not been utilised; 131(28B) interest on securities means, (i) interest on any security of the Central Government or a State Government; (ii) interest on debentures or other securities for money issued by or on behalf of a localauthority or a company or a corporation established by a Central, State or Provincial Act; 132(28BB) insurer means an insurer, being an Indian insurance company, as defined underclause (7A) of section 2 of the Insurance Act, 1938 (4 of 1938), which has been granted a certificateof registration under section 3 of that Act; 133(28C) Joint Commissioner means a person appointed to be a Joint Commissioner ofIncome-tax or an Additional Commissioner of Income-tax under sub-section (1) of section 117; (28D) Joint Director means a person appointed to be a Joint Director of Income-tax or anAdditional Director of Income-tax under sub-section (1) of section 117; (29) legal representative has the meaning assigned to it in clause (11) of section 2 of the Codeof Civil Procedure, 1908 (5 of 1908); 134(29A) long-term capital asset means a capital asset which is not a short-term capital asset; (29B) long-term capital gain means capital gain arising from the transfer of a long-term capitalasset; 135(29BA) manufacture, with its grammatical variations, means a change in a non-living physicalobject or article or thing, (a) resulting in transformation of the object or article or thing into a new and distinct objector article or thing having a different name, character and use; or (b) bringing into existence of a new and distinct object or article or thing with a differentchemical composition or integral structure; 136(29C) maximum marginal rate means the rate of income-tax (including surcharge onincome-tax, if any) applicable in relation to the highest slab of income in the case of an individual137, association of persons or, as the case may be, body of individuals as specified in the FinanceAct of the relevant year; 138(29D) National Tax Tribunal means the National Tax Tribunal established under section 134of the National Tax Tribunal Act, 2005; (30) non-resident means a person who is not a resident 1398, and for the purposes ofsections 92, 93 140*** and 168, includes a person who is not ordinarily resident within the meaning ofclause (6) of section 6; (31) person includes (i) an individual, (ii) a Hindu undivided family, (iii) a company, (iv) a firm, (v) an association of persons or a body of individuals, whether incorporated or not, (vi) a local authority, and (vii) every artificial juridical person, not falling within any of the preceding sub-clauses. 141Explanation.For the purposes of this clause, an association of persons or a body ofindividuals or a local authority or an artificial juridical person shall be deemed to be a person,whether or not such person or body or authority or juridical person was formed or established orincorporated with the object of deriving income, profits or gains; (32) person who has a substantial interest in the company, in relation to a company, means aperson who is the beneficial owner of shares, not being shares entitled to a fixed rate of dividendwhether with or without a right to participate in profits, carrying not less than twenty per cent. of thevoting power ; (33) prescribed means prescribed by rules made under this Act; (34) previous year means the previous year as defined in section 3; 142(34A) Principal Chief Commissioner of Income-tax means a person appointed to be aPrincipal Chief Commissioner of Income-tax under sub-section (1) of section 117; (34B) Principal Commissioner of Income-tax means a person appointed to be a PrincipalCommissioner of Income-tax under sub-section (1) of section 117; (34C) Principal Director of Income-tax means a person appointed to be a Principal Director ofIncome-tax under sub-section (1) of section 117; (34D) Principal Director General of Income-tax means a person appointed to be a PrincipalDirector General of Income-tax under sub-section (1) of section 117; (35) principal officer, used with reference to a local authority or a company or any other publicbody or any association of persons or any body of individuals, means (a) the secretary, treasurer, manager or agent of the authority, company, association or body,or (b) any person connected with the management or administration of the local authority,company, association or body upon whom the Z143Assessing Officer has served a notice of hisintention of treating him as the principal officer thereof;(36) profession includes vocation; 144(36A) public sector company means any corporation established by or under any Central,State or Provincial Act or a Government company as defined in section 617 of the Companies Act,1956 (1 of 1956); (37) public servant has the same meaning as in section 21 of the Indian Penal Code (45 of1860); 145(37A) rate or rates in force or rates in force, in relation to an assessment year or financialyear, means (i) for the purposes of calculating income-tax under the first proviso to sub-section (5)of section 132, or computing the income-tax chargeable under sub-section (4) of section 172 orsub-section (2) of section 174 or section 175 or sub-section (2) of section 176 or deductingincome-tax under section 192 from income chargeable under the head Salaries 146*** or147computation of the advance tax payable under Chapter XVIIC148in a case notfalling under section 115A or 149section 115B 150or section 115BB or section 115BBB or section115E or section 164 or section 164A 151*** 152or section 167B, the rate or rates of income-taxspecified in this behalf in the Finance Act of the relevant year, and for the purposes ofcomputation of the advance tax payable under Chapter XVII-C 153in a case falling under section115A or 154section 115B 150or section 115BB or section 115BBB or section 115E orsection 164 or section 164A 151*** 152or section 167B, the rate or rates specified in section115A or 149section 115B 150or section 115BB or section 115BBB or section 115E or section 164or section 164A 151*** 152or section 167B, as the case may be, or the rate or rates of income-taxspecified in this behalf in the Finance Act of the relevant year, whichever is applicable; (ii) for the purposes of deduction of tax under sections193, 194,155194A,156194B, 194BB157and 194D, the rate or rates of income-tax specified in thisbehalf in the Finance Act of the relevant year; (iii) for the purposes of deduction of tax under 158section 194LBA or159section194LBB or section 194LBC or section 195, the rate or rates of income-tax specified in thisbehalf in the Finance Act of the relevant year or the rate or rates of income-tax specified in 160anagreement entered into by the Central Government under section 90, or an agreement notified bythe Central Government under section 90A, whichever is applicable by virtue of the provisionsof section 90, or section 90A, as the case may be; (38) recognised provident fund means a provident fund which has been and continues to berecognised by the 161162Principal Chief Commissioner or Chief Commissioner or 16218PrincipalCommissioner or Commissioner in accordance with the rules contained in Part A of the FourthSchedule, and includes a provident fund established under a scheme framed under the EmployeesProvident Funds Act, 1952 (19 of 1952); 163* * * * * (40) regular assessment means the assessment made under 164sub-section (3) ofsection 143 or section 144; (41) relative, in relation to an individual, means the husband, wife, brother or sister or anylineal ascendant or descendant of that individual; 165(41A) resulting company means one or more companies (including a wholly owned subsidiarythereof) to which the undertaking of the demerged company is transferred in a demerger and, theresulting company in consideration of such transfer of undertaking, issues shares to the shareholdersof the demerged company and includes any authority or body or local authority or public sectorcompany or a company established, constituted or formed as a result of demerger; (42) resident means a person who is resident in India within the meaning of section 6; 166(42A) 167short-term capital asset means a capital asset held by an assessee for not more than168thirty-sixmonths immediately preceding the date of its transfer: 169Provided that in the case of 170a security (other than a unit) listed in a recognised stock exchangein India 171or a unit of the Unit Trust of India established under the Unit Trust of India Act, 1963 (52of 1963) or 172a unit of an equity oriented fund 17311or a zero coupon bond, the provisions of thisclause shall have effect as if for the words thirty-six months, the words twelve months had beensubstituted: 174Provided further that in case of a share of a company (not being a share listed in a recognisedstock exchange) or a unit of a Mutual Fund specified under clause (23D) of section 10, which istransferred during the period beginning on the 1st day of April, 2014 and ending on the 10th day ofJuly, 2014, the provisions of this clause shall have effect as if for the words thirty-six months, thewords twelve months had been substituted: 175Provided also that in the case of a share of a company (not being a share listed in a recognisedstock exchange in India), 176or an immovable property, being land or building or both the provisionsof this clause shall have effect as if for the words thirty-six months, the words twenty-fourmonths had been substituted. 177Explanation 1.(i) In determining the period for which any capital asset is held by theassessee (a) in the case of a share held in a company in liquidation, there shall be excluded the periodsubsequent to the date on which the company goes into liquidation; (b) in the case of a capital asset which becomes the property of the assessee in thecircumstances mentioned in 178sub-section (1) of section 49, there shall be included the period forwhich the asset was held by the previous owner referred to in the said section; 179(ba) in the case of a capital asset referred to in clause (via) of section 28, the period shall bereckoned from the date of its conversion or treatment; 180(c) in the case of a capital asset being a share or shares in an Indian company, whichbecomes the property of the assessee in consideration of a transfer referred to in clause (vii)of section 47, there shall be included the period for which the share or shares in the amalgamatingcompany were held by the assessee; 181(d) in the case of a capital asset, being a share or any other security (hereafter in this clausereferred to as the financial asset) subscribed to by the assessee on the basis of his right tosubscribe to such financial asset or subscribed to by the person in whose favour the assessee hasrenounced his right to subscribe to such financial asset, the period shall be reckoned from the dateof allotment of such financial asset; (e) in the case of a capital asset, being the right to subscribe to any financial asset, which isrenounced in favour of any other person, the period shall be reckoned from the date of the offer ofsuch right by the company or institution, as the case may be, making such offer; 182(f) in the case of a capital asset, being a financial asset, allotted without any payment and onthe basis of holding of any other financial asset, the period shall be reckoned from the date of theallotment of such financial asset; 183(g) in the case of a capital asset, being a share or shares in an Indian company, whichbecomes the property of the assessee in consideration of a demerger, there shall be included theperiod for which the share or shares held in the demerged company were held by the assessee; 184(h) in the case of a capital asset, being trading or clearing rights of a recognised stockexchange in India acquired by a person pursuant to demutualisation or corporatisation of therecognised stock exchange in India as referred to in clause (xiii) of section 47, there shall beincluded the period for which the person was a member of the recognised stock exchange in Indiaimmediately prior to such demutualisation or corporatisation; (ha) in the case of a capital asset, being equity share or shares in a company allotted pursuantto demutualisation or corporatisation of a recognised stock exchange in India as referred to inclause (xiii) of section 47, there shall be included the period for which the person was a memberof the recognised stock exchange in India immediately prior to such demutualisation orcorporatisation; 185(hb) in the case of a capital asset, being any specified security or sweat equity sharesallotted or transferred, directly or indirectly, by the employer free of cost or at concessional rateto his employees (including former employee or employees), the period shall be reckoned fromthe date of allotment or transfer of such specified security or sweat equity shares; 186(hc) in the case of a capital asset, being a unit of a business trust, allotted pursuant totransfer of share or shares as referred to in clause (xvii) of section 47, there shall be included theperiod for which the share or shares were held by the assessee; 187(hd) in the case of a capital asset, being a unit or units, which becomes the property of theassessee in consideration of a transfer referred to in clause (xviii) of section 47, there shall beincluded the period for which the unit or units in the consolidating scheme of the mutual fundwere held by the assessee; (he) in the case of a capital asset, being share or shares of a company, which is acquired bythe non-resident assessee on redemption of Global Depository Receipts referred to in clause (b)of sub-section (1) of section 115AC held by such assessee, the period shall be reckoned from thedate on which a request for such redemption was made; 188(hf) in the case of a capital asset, being equity shares in a company, which becomes theproperty of the assessee in consideration of a transfer referred to in clause (xb) of section 47, thereshall be included the period for which the preference shares were held by the assessee; 189(hg) in the case of a capital asset, being a unit or units, which becomes the property of theassessee in consideration of a transfer referred to in clause (xix) of section 47, there shall be includedthe period for which the unit or units in the consolidating plan of a mutual fund scheme were held bythe assessee; (ii) In respect of capital assets other than those mentioned in clause (i), the period for which anycapital asset is held by the assessee shall be determined subject to any ruleswhich the Board maymake in this behalf. 190Explanation 2.For the purposes of this clause, the expression security shall have themeaning assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956(42 of 1956). 185Explanation 3.For the purposes of this clause, the expressions specified security and sweatequity shares shall have the meanings respectively assigned to them in the Explanation to clause (d)of sub-section (1) of section 115WB. 191Explanation 4.For the purposes of this clause, the expression equity oriented fund shallhave the meaning assigned to it in 192clause (a) of the Explanation to section 112A; 193(42B) short-term capital gain means capital gain arising from the transfer of a short-termcapital asset; 194(42C) slump sale means the transfer of one or more undertakings as a result of the sale for alump sum consideration without values being assigned to the individual assets and liabilities in suchsales. Explanation 1.For the purposes of this clause, undertaking shall have the meaning assignedto it in Explanation 1 to clause (19AA). Explanation 2.For the removal of doubts, it is hereby declared that the determination of thevalue of an asset or liability for the sole purpose of payment of stamp duty, registration fees or othersimilar taxes or fees shall not be regarded as assignment of values to individual assets or liabilities; 195(43) tax in relation to the assessment year commencing on the 1st day of April, 1965, and anysubsequent assessment year means income-tax chargeable under the provisions of this Act, and inrelation to any other assessment year income-tax and super-tax chargeable under the provisions ofthis Act prior to the aforesaid date 196and in relation to the assessment year commencing on the 1st dayof April, 2006, and any subsequent assessment year includes the fringe benefit tax payableunder section 115WA; (43A) tax credit certificate means a tax credit certificate granted to any person in accordancewith the provisions of Chapter XXII-B and any scheme made thereunder; 197* * * * * 198(44) Tax Recovery Officer means any Income-tax Officer who may be authorised by the199Principal Chief Commissioner or Chief Commissioner or 200Principal Commissioner orCommissioner, by general or special order in writing, to exercise the powers of a Tax RecoveryOfficer 201and also to exercise or perform such powers and functions which are conferred on, orassigned to, an Assessing Officer under this Act and which may be prescribed; (45) “total income” means the total amount of income referred to in section 5, computed in themanner laid down in this Act; 202* * * * * 203(47) “transfer”, in relation to a capital asset, includes, (i) the sale, exchange or relinquishme nt of the asset; or (ii) the extinguishment of any rights therein; or (iii) the compulsory acquisition thereof under any law; or (iv) in a case where the asset is converted by the owner thereof into, or is treated by him as,stock-in-trade of a business carried on by him, such conversion or treatment; 2043or 205(iva) the maturity or redemption of a zero coupon bond; or 204(v) any transaction involving the allowing of the possession of any immovable property tobe taken or retained in part performance of a contract of the nature referred to in section 53A ofthe Transfer of Property Act, 1882 (4 of 1882); or (vi) any transaction (whether by way of becoming a member of, or acquiring shares in, aco-operative society, company or other association of persons or by way of any agreement or anyarrangement or in any other manner whatsoever) which has the effect of transferring, or enablingthe enjoyment of, any immovable property. 206Explanation 1.For the purposes of sub-clauses (v) and (vi), “immovable property” shall havethe same meaning as in clause (d) of section 269UA. 207Explanation 2.For the removal of doubts, it is hereby clarified that “transfer” includes andshall be deemed to have always included disposing of or parting with an asset or any interest therein,or creating any interest in any asset in any manner whatsoever, directly or indirectly, absolutely orconditionally, voluntarily or involuntarily, by way of an agreement (whether entered into in India oroutside India) or otherwise, notwithstanding that such transfer of rights has been characterised asbeing effected or dependent upon or flowing from the transfer of a share or shares of a companyregistered or incorporated outside India; 208(48) “zero coupon bond” means a bond (a) issued by any infrastructure capital company or infrastructure capital fund or public sectorcompany 209or scheduled bank on or after the 1st day of June, 2005; (b) in respect of which no payment and benefit is received or receivable before maturity orredemption from infrastructure capital company or infrastructure capital fund or public sectorcompany 209or scheduled bank; and (c) which the Central Government may, by notification in the Official Gazette, specify in thisbehalf. 210Explanation.For the purposes of this clause, the expression “scheduled bank” shall have themeaning assigned to it in clause (ii) of the Explanation to sub-clause (c) of clause (viia) ofsub-section (1) of section 36.

1For the purposes of this Act, “previous year” means the financialyear immediately preceding the assessment year: Provided that, in the case of a business or profession newly set up, or a source of income newlycoming into existence, in the said financial year, the previous year shall be the period beginning withthe date of setting up of the business or profession or, as the case may be, the date on which thesource of income newly comes into existence and ending with the said financial year.

(1) Where any Central Act enacts that income-tax shall be charged forany assessment year at any rate or rates, income-tax at that rate or those rates shall be charged for thatyear in accordance with, and 1subject to the provisions (including provisions for the levy of additionalincome-tax) of, this Act in respect of the total income of the previous year 2***of every person: Provided that where by virtue of any provision of this Act income-tax is to be charged in respect ofthe income of a period other than the previous year, income-tax shall be charged accordingly. (2) In respect of income chargeable under sub-section (1), income-tax shall be deducted at thesource or paid in advance, where it is so deductible or payable under any provision of this Act.