Income - Tax Act

Introduction [Sections 1 to 4]
1 Name of the Act and Date of its commencement
2 Definitions
2(7) Assessee
2(9) Assessment Year
2(22) Dividend
2(23B) Fringe Benefits
2(24) Income
2(31) Person
2(34) "Previous Year" defined
2(43) Tax
4 Charge of Income tax

Scope of Total Income & Residential Status [Sections 5 to 9]

2(30) Non - Resident defined
2(45) Total Income defined
5 Scope of Total Income/Incidence of Tax
5(1) Scope of Total Income in case of resident in India
Proviso to Section 5(1) Scope of Total Income in case of not ordinarily resident in India
5(2) Scope of Total Income in case of non resident
5A Apportionment of income between spouses governed by Portuguese Civil Code
6 Resident in India
6(1) Rules for determining the residential status of an individual
6(2) Rules for determining the residential status of an HUF, Firm, AOP, BOI
6(3) Rules for determining the residential status of a company
6(4) Rules for determining the residential status of firm/AOP/BOI
6(5) Deemed Resident
6(6) Not ordinarily resident in India
7 Incomes received or deemed to be received
8 Dividend Income
9 Income deemed to accrue or arise in India

Income which do not form part of Total Income [Sections 10, 10A, and 10B]
10(1) Agricultural income
10(2) Sum received by a member from HUF
10(2A) Share of profit of a partner from a firm
10(4) Interest on securities or bonds held by a non resident/interest on Non - resident (External) Account
10(4B) Interest on Savings Certificates of Non - resident Indian Citizen, etc.
10(5) Travel concession or assistance received by an individual from his employer
10(6) Remuneration to certain persons who are not citizens of India
10(6A) Tax payable on royalty or fees for technical service on behalf of foreign company
10(6B) Tax payable on certain income of and on behalf of a non-resident or a foreign company
10(6BB) Tax payable on income from leasing of aircraft, etc.
10(6C) Income of foreign companies providing technical services in projects connected with security of India
10(7) Allowances or perquisites outside India
10(8) Remuneration under Co-operative Technical Assistance Programmes
10(8A),10(8B), & 10(9) Remuneration or fee received by non-resident 'consultants', their employees, and their family members
10(10) Death-cum-retirement gratuity received by an employee
10(10A) Payment in commutation of pension received by the employees
10(10AA) Leave encashment
10(10B) Compensation on retrenchment
10(10BB) Payments under Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985
10(10C) Amount received on voluntary retirement
10(10CC) Tax on non-monetary perquisites paid by employer
10(10D) Amount received under Life Insurance Policy
10(11) Provident Fund
10(12) Payments from Recognised Provident Fund
10(13) Any payment from an approved Superannuation Fund
10(13A) House Rent Allowance
10(14) Notified Special Allowance
10(15) Interest, premium or bonus on specified investments
10(15A) Lease rent for leasing of an aircraft
10(16) Scholarships granted to meet the cost of education
10(17) Daily and constituency allowance, etc. received by MPs and MLAs
10(17A) Award or Reward
10(18) Pension received by certain awardees/any member of their families
10(19) Family pension received by the family members of armed forces personnel killed in action
10(19A) Annual value of one palace of the ex-ruler
10(20) Income of a local authority
10(21) Income of an approved scientific research association
10(22B) Income of specified news agency
10(23A) Income of professional association/institution
10(23AA) Income of armed forces fund
10(23AAA) Income of fund established for welfare of employee and their dependents
10(23AAB) Income of a fund set-up by Life Insurance Corporation of India
10(23B) Income of society or trust existing for development of khadi or village industries
10(23BB) Income of an authority known as Khadi and Village Industries Board, etc.
10(23BBA) Income of any body or authority established under an Act for administration of charity, endowment, etc.
10(23BBB) Income of European Economic Community (EEC)
10(23BBC) Income of SAARC Fund
10(23BBD) Income fo Secretariat of Asian Organisation of Supreme Audit
10(23BBE) Income of Insurance Regulatory and Development Authority
10(23C) Income of certain funds of national importance
10(23D) Income of notified mutual funds
10(23EA) Income of Investor Protectin Fund set-up by recognised stock exchange
10(23EB) Exemption of any income of the Credit Guarantee Fund Trust
10(23FB) Any income of venture capital company or venture capital fund from investment in a venture capital undertaking
10(23G) Income of an Infrastructure Capital Fund or an Infrastructure Capital Company
10(24) Income fo Trade Union
10(25) Income of trustees of provident fund, gratuity fund, superannuation fund, etc.
10(25A) Income of Employee's State Insurance Fund
10(26) Income of a member of Scheduled Tribe residing in certain speicfied areas
10(26B) Income of corporation of govt. or any body wholly financed by govt. for promoting interest of SC/ST/Backward classes
10(26BB) Income of a corporation for promoting the Interest of Minority Community
10(26BBB) Income of a corporation established for the welfare and economic upliftment of ex-servicemen
10(27) Income of Co-operative Societies for Scheduled Castes/ Scheduled Tribes
10(29A) Income of certain Boards/Authorities
10(30) Icome of Subsidy from Tea Board
10(31) Income of subsidy from Rubber Board or Coffee Board or Spices Board or any other Notified Board
10(32) Income of minor clubbed in the hands of a parent
10(33) Capital gain on transfer of units of US 64 exempt if transfer takes place on or after 1-4-2002
10(34) Dividend to be exempt in the hands of the shareholders
10(35) Income from units to be exempt in the hands of the unit-holders
10(36) Long-term capital gian on eligible equity shares exempt if the shares are acquired within a certain period
10(37) Capital gains on compensation received on compusory acquisition of agricultural land situated within specified urban limits
10(38) Capital gain arising from sale of shares and units
10(39) Exemption of specified income from international sporting event held in India
10(40) Exemption in respect of grant, etc. received by a subsidiary company from its holding company engaged in the business of generation, etc. of distribution of power
10(41) Exemption in capital gain on transfer of an asset of an undertaking engaged in the business of generation, etc. of power
10A Income of newly established industrial undertakings in Free Trade Zones
10AA Special provisions in respect of newly established Units in Special Economic Zones
10B Special provisions in respect of newly established 100% Export Oriented Undertakings
10BA Special provisions in respect of export of eligible articles of things

Charitable or Religious Trusts and Institutions [Sections 11 to 13]

11 Income from property helf for charitable or religious purposes
12 Income of trusts or institutions from contributions
12A Registration of trust
12AA Procedure for registration
13 Section 11 not to apply in certain cases
13A Income of political parties
Rule 17 Prescribed form or modes of investment or deposit

Heads of Income [Section 14]

14 Heads of Income
14A No deduction for expenditure in respect of exempt income

Income under the head "Salaries" [Sections 15 to 17]

15 Basis of Charge or Chargeability of Salaries
16 Deductions from Salaries
16(ii) Deductions on account of entertainment allowance
16(iii) Deductions on account of tax on employment i.e., professional tax
17 Salary', 'Perquisite', and 'Profit in lieu of Salary' defined
17(1) Inclusive definition of 'Salary'
17(2) Inclusive definition of 'Perquisite'
Proviso to Section 17(2) Treatment of Medical Facilities
17(2)(iiia) Treatment of ESOP
17(3) Inclusive definition of 'Profits in lieu of Salary'

Income under the head "Income from House Property" [Sections 22 to 27]
22 Income from House Property - Chargeability and Basis of Charge
23(1)a,b,& c Annual Value, how determined
Explanation to 23(1) Treatment of unrealised rent
23(2),(3) &(4) Computation of Income of a property which is occupied by the owner for his own residence or which could not actually be self occupied owing to employment
24 Deductions from income from house property
25 Interest when not deductible from "Income from House Property"
25A& 25AA Special provisions for cases where unrealised rent allowed as deduction is realised subsequently
25B Special provisions for arrears of rent received
26 Property owned by co-owners
27 Deemed ownership
27(i) Transfer of a house property to spouse or minor child without adequate consideration
27(ii) Impartible Estate
27(iii) Members of cooperative society, company or other association of persons
27(iiia) Transfers in a part – performance contract
27(iiib) Power of attorney type of transactions

Income under the head "Profits and Gains from Business or Profession" [Sections 28 to 44D]
28 Profits and Gains of Business or Profession Chargeability/Scope of income under this head
29 Income from Profits and Gains of Business or Profession, how computed?
30 Rent, Rates, Taxes, Repairs and Insurance for Buildings
31 Reparis and Insurance of Machinery, Plant and Furniture
32 Depreciation
32(2) Treatment of unabsorbed depreciation
33AB Tea Development Account/Coffee Development Account and Rubber Development Account
33ABA Site Restoration Fund
33AC Reserves for Shipping Business
35 Expenditure on Scientific Research
35(2AA) Weighted deduction for contribution to National Laborator, University, etc
35(2AB) Weighted deduction on in-house research and development to company assessee
35ABB Expenditure for obtaining license to operate telecommunication services
35AC Expenditure on eligible projects or schemes
35CCA Expenditure by way of payment to association and institutions for rural development programmes
35D/Rule 6AB Amortisation of certain preliminary expenses
35DD Amortisation in case of amalgamation or demerger
35DDA Amortisation of expenditure income under voluntary retirement scheme
35E/Rule 6AB Deduction for expenditure on prospecting etc., for certain minerals
36 Other deductions
36(1)(i) Insurance premium of stocks
36(1)(ia) Insurance premium of cattle
36(1)(ib) Insurance on health of employees
36(1)(ii) Bonus or commission to employees
36(1)(iii) Interest on borrowed capital
36(1)(iiia) Discount on issue of zero coupon bonds to be allowed as deduction on pro rata basis
36(1)(iv) Employer's contribution to a recognised provident fund or approved superannuation fund
36(1)(v) Employer's contribution to an approved gratuity fund
36(1)(va) Sums received from employees towards certain welfare schemes if credited to their accounts before the due date
36(1)(vi) Allowance in respect of dead or permanently useless animals
36(1)(vii) Bad Debts
36(1)(viia) Provisions for bad and doubtful debts in respect of rural branches of scheduled banks or non-scheduled banks
36(1)(viii) Special reserve created by financial corporation, etc.
36(1)(ix) Expenditure on promoting family planning amongst the employees
36(1)(x) Contribution by public financial institution to Exchange Risk Administration Fund
36(1)(xii) Revenue expenditure incurred by a corporation, etc. established by Central, State or Provincial Act
36(1)(xiii) Deduction of banking cash transaction tax
37(1) General Deductions
37(2B) Advertisement to political parties
38 Building, etc., partly used for business, etc., or not exclusively so used
40 Amounts not deductible
40(a) In case of all assessees
40(b) Disallowable in case of partnership firm
40(ba) Disallowable in case of AOP/BOI
40A Expenses or payments not deductible in certain circumstances
40A(2) Payments to relatives
40A(3) & Rule 6DD Disallowance out of cash expenditure exceeding Rs. 20000
40A(7) Disallowance in respect of provision for gratuity
40A(9) Disallowance in respect of contribution to Non-statutory Funds
41 Deemed profits chargeable to tax
42 Special provisions for deductions in the case of business for prospecting, etc., for mineral oil
43(1) Actual Cost
Expln. to sec 43(1) Notional Actual Cost
43(2) Paid
43(3) Plant
43(4) Scientific Research
43(6) Written Down Value
43B Certain deductions to be only on actual payment
43D Special provisions in case of income of public financial institutions etc.
44 Insurance Business
44A Special provision for deduction in the case of trade, professional or similar association
44AA & Rule 6F Maintenance of accounts by certain persons carrying on business or profession
44AB & Rule 6G Compulsory audit of accounts
44AD Special provisions for computing profits and gains of business of civil construction
44AE Special provisions for computing profits and gains of business of plying, hiring or leasing goods carriages
44AF Special provisions for computing profits and gains of retail business
44B Special provisions for computing profits and gains of shipping business in the case of non-residents
44BB Special provisions for computing profits and gains in connection with the business of exploration, etc., of mineral oils
44BBA Special provisions for computing profits and gains of business of operation of aircraft in the case of non-residents
44BBB Special provisions for computing profits and gains of foreign companies engaged in the business of civil construction, etc., in certain turnkey power projects
44C Deduction of head office expenditure in the case of non-residents
44D Special provisions for computing income by way of royalties, etc, in the case of foreign companies

Income under the head "Capital Gains" [Sections 45 to 55A]

45 Capital Gains
45(1) Basis of Charge
45(1A) Capital gain arises from insurance claims received for damage or destruction of a capital asset
45(2) Capital gain on conversion of capital asset into stock-in-trade
45(2A) Transfer of securities by depository
45(3) Capital gain on transfer of a capital asset by a person to a firm/AOP as capital contribution
45(4) Capital gain on transfer of a capital asset by way of distribution on dissolution of a firm/AOP
45(5) Capital gain on transfer by way of compulsory acquisition of an asset
45(6) Capital gain on repurchase of units of mutual funds under Equity Linked Savings Schemes
46 Capital gain on distribution of assets by companies in liquidation
46(1) Whether capital gain arises to company or not
46(2) Whether capital gain arises to shareholders or not
46A Capital gains on purchase of own shares or securities
47 Transactions not regarded as transfer
47A Withdrawal of exemption in certain cases
48 Mode of computation of capital gain
Sec 48 Prv1/Rule 115A Capital gain in the cse fo tranfer fo certain shares/debentures by non-resident
Expln(iii) to sec 48 Indexed cost of acquisition
Expln(iv) to sec 48 Indexed cost of improvement
49 Deemed cost of acquisition
50 Special provision for computation of capital gains in case of depreciable assets
50A Capital gain of depreciable assets of electricity companies
50B Special provision for computation of capital gains in case of slump sale
50C Computation of capital gains in real estate transactions
51 Advance money received
54 Profit on sale of property used for residence
54B Capital gain on transfer of land used for agriculture pruposes not to be charged in certain cases
54D Capital gain on compulsory acquisition of lands and buildings not to be charged on investment in certain bonds
54EC Capital gain on transfer of long-term capital assets not to be charged on investment in certain bonds
54ED Captial gain on transfer of certain listed securities or units
54F Capital gain on transfer of certain capital assets not to be charged in case of investment in residential house
54G Exemption of capital gains on transfer of assets in cases of shifting of Industrial Undertaking from Urban area
54GA Exemption of capital gains on transfer of assets due to shifting of industrial undertaking from urban area to special economic zone
54H Extension of time for acquiring new asset or depositing or investing amount of capital gain
55 Meaning of 'cost of improvement' and 'cost of acquisition'
55(1)(b) Cost of improvement
55(2) Cost of acquisition
55A Reference to Valuation Officer

Income under the head "Income from Other Sources" [Sections 56 to 59]
56 Income from other sources
56(1) Chargeability
56(2) Specific incomes included under income from other sources
56(2)(i) Taxability of dividend
56(2)(ib) Winnings from lotteries, crossword puzzles, etc.
56(2)(ic) Contribution of employees towards welfare fund
56(2)(id) Interest on securities
56(2)(ii) Income from letting out of machinery, plant and furniture
56(2)(iii) Income from composite letting out of machinery, plant, furniture and building
56(2)(v) Income to include gift of money from unrelated person
57 Deductions
57(i) Deduction in case of dividends and interest on securities
57(ia) Deduction in case of employees' contribution to welfare fund
57(ii) Deduction permissible for letting out of machinery, plant, furniture and buildings
57(iia) Deduction from family pension received by legal heirs of deceased employee
57(iii) Deduction for any other expenditure
58 Amounts not deductible
59 Deemed income chargeable to tax

Income of other persons included in Assessee's Total Income (Clubbing of Income)[Sections 60 to 65]
60 Transfer of income without tranfer of assets
61 Revocable transfer of assets
62 Transfer irrevocable for a specified period
63 Transfer and revocable transfer defined
64 Income of an individual to include income of spouse, minor child, etc.
64(1)(i) Omitted
64(1)(ii) Remuneration of a spouse from a concern in which the other spouse has substantial interest
64(1)(iii) Omitted
64(1)(iv) Income from assets transferred to the spouse
64(1)(v) Omitted
64(1)(vi) Income from assets transferred to son's wife
64(1)(vii) Income from assets transferred to any person for the benefit of the spouse of the transferor
64(1)(viii) Income from assets transferred to any person for the benefit of Son's Wife of the transferor
64(1A) Clubbing of income of a minor child
64(2) Income from self acquired property converted to joint family property
65 Liability of person in respect of income included in the income of another person

Set off or Carry Forward and set off of Losses [Sections 70 to 80]
70 Set off of loss from one source against income from another source under the same head of income
71 Set off of loss from one head against income from another
71B Carry forward and set off of loss from house property
72 Carry forward and set off of business losses
72A Provisions relating to carry forward and set off of accumulated loss and unabsorbed depreciation allowance in certain cases of amalgamation
72A(6) Carry Forward and set off of losses on succession of the firm
73 Losses in speculation business
74 Losses under the head "Capital Gains"
74A Carry forward and set off of loss from activity of owning and maintaining race horses
75 Losses of firms prior to assessment year 1992-93
76 Omitted
77 Omitted
78 Carry forward and set off of losses in case of change in constitution of firm or on succession
79 Carry forward and set off of losses in the case of certain companies
80 Compulsory filing of loss returns

Deductions to be made in computing Total Income [Sections 80A to 80U (Chapter VI A)]
80A/AB Basic rules of deductions
80C Deduction in respect of Life Insurance Premia,Contribution to Provident Fund, etc.
80CC/CCA/CCB Either omitted or not relevant
80CCC Deduction in respect of contribution to certain pension funds
80CCD Deduction in respect of contribution to notified pension scheme of central government
80CCE Limit on deductions u/s 80C,80CCC & 80CCD
80D Deduction in respect of medical insurance premia
80DD Deduction in respect of maintenance including medical treatment of a dependant who is a person with diability
80DDB Deduction in respect of medical treatment, etc.
80E Deduction in respect of repayment of loan taken for higher education
80G Deduction in respect of donations to certain funds, charitable institutions, etc.
80GG Deductions in respect of rent paid
80GGA Deduction in respect of certain donations for scientific research or rural development, etc.
80GGB Deduction in respect of contributions given by companies to political parties
80GGC Deduction in respect of contributions given by any person to political parties
80-IA Deduction in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development, etc.
80-IAB Deduction in respect of profits and gains by an undertaking a enterprise engaged in development of special economic zone
80-IB Deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development, etc.
80-IC Deduction in respect of certain undertakings or enterprises in certain special category states
80JJA Deduction in respect of profits and gains from business of collecting and processing or bio degradable waste
80JJAA Deduction in respect of employment of new workmen
80LA Deduction in respect of certain incomes of Offshore Banking Units
80P Deduction in respect of income of co-operative societies
80QQB Deduction in respect of royalty income, etc., of authors of certain books other than text books
80RRB Deduction in respect of royalty on patents
80U Deduction in the case of a person with disability

Rebates and Reliefs of Income-Tax [Sections 87 to 89]

87 Rebate of Income-Tax
88E Rebate in respect of securities transaction tax
89(1) Relief of Income Tax

Income Tax Authorities [116 to 138]

116 Income Tax Authorities
117 Appointment of income tax authorities
118 Control of income tax authorities
119 Instructions to subordinate authorities
120 Jurisdiction of income tax authorities
124 Jurisdiction of Assessing Officers
127 Power to transfer cases
129 Change of incumbent of an office
131 Power regarding discovery, production of evidence, etc.
132 Search and Seizure
132A Power to requisition books of accounts etc.
133 & 134 Power to call for information and inspect registers of companies
133A Power of survey
133B Power to collect certain information
135 & 136 Other provisions
138 Disclosure of information regarding assesses

Return of Income and Procedure of Assessment [Sections 139 to 157]

Return of Income
139 Return of income
139(1) Submission of return of income
139(1) 1st Provisio Obligatory filing of return
139(1A) Bulk filing of returns of the employees by the employer on computer readable media
139(1B) Return may be filed on a specified computer readable media
Rule 12 Form of return of income
139(2) Omitted
139(3) Return of loss
139(4) Belated return
139(4A) Return of income of charitable institutions
139(4B) Return of income of political party
139(4C) Return of income of certain associations and institutions
139(5) Revised return
139(6)/(6A) Particulars to be furnished with the return
139(9) Defective return
139A Permanent Account Number
140 Return by whom to be signed
140A Self Assessment
Procedure for Assessment
142 Enquiry before assessment
143 Assessment
143(1) Summary assessment on basis of returns
143(2) Compulsory issue of notice
143(3) Regular/Scrutiny assessment on basis of return of income
144 Best judgment assessment
144A Power of Joint Commissioner to issue directions in certain cases
145 Method of Accounting
146 Omitted
147 Income escaping assessment
148 Issue of notice where income has escaped assessment
149 Time limit for issue of notice
151 Sanctions for issue of notice
153 Time limit for completion of all assessments and reassessments
153A Notice for filing return in search cases
153B Time limit for completion of assessment of search cases
153C Assessment of income of any other person in search cases
154 Rectification of mistakes
155 Other amendments
156 Notice of demand
157 Intimation of loss

Appeals, References and Revision [Section 246 to 264]

246A Appeal to Commissioner (Appeals)
247 Omitted
248 Appeal by person denying liability to deduct tax
249 Procedure for filing appeal
250 Procedure in hearing appeal
251 Powers of Commissioner (Appeals)
252 Appellate Tribunal
253(1)&(2) Appeals to Appellate Tribunal
254 Orders of Appellate Tribunal
260A Direct appeal to High Court
261 Appeal to the Supreme Court
263 Revision of orders prejudicial to revenue
264 Revision of orders in favour of assessee
268 Exclusion of time for calculating time limit for filing appeal

Central Sales Tax Act [Sections 1 to 26]

Introduction [Sections 1 to 2]
1 Name of the Act and date of commencement
2 Definitions
2(a) Appropriate State
2(aa) Business
2(b) Dealer
2c Declared Goods
2(d) Goods
2(dd) Place of business
2(f) Registered Dealer
2(g) Sale
2(h) Sale Price
2(i) Sales tax law
2(j) Turnover
2(ja) Works contract
2(k) Year
3 In the course of Inter-state trade or commerce
8 Rate of sales tax

Formulation of principles for determining

(A) When a sale or purchase of goods takes place in the course of inter-state trade or Commerce; or
(B) Outside a state; or
[C] In the course of import or export
[Sections 3 to 5]
3 When is a sale or purchase of goods said to take place in the course of Inter-state Trade or Commerce
3(a) Sale/Purchase which occasion the movement of goods from one state to another
3(b) Sale by transfer of documents
4 When is a sale or purchase of goods said to take place outside a State
5 When is a sale or purchase of goods said to take place in the course of import or export
5(1) Export of goods out of India
5(2) Import of goods into India

Inter-State Sales-Tax [Section 6]

6(1)&6(1A) Liability to tax on Inter-state sales
6(2) Exemption from Central Sales Tax on subsequent sale
6A Transfer of goods otherwise than by way of sale

Registration of Dealers [Section 7]

7(1) Compulsory Registration
7(2) Voluntary registration
7(3)&Rule 3 Procedure for obtaining registration
7(4)(a) Amendment of certificate of registration
7(4)(b)&(5) Cancellation of certificate of registration

Rates, Levy and Collection of Tax [Sections 8 and 9]

81)&8(2) Rate of tax
8(1)(a) Sale to the Government
8(5) Exemption through notification
8(6),(7)&(8) Units located in any special economic zone
8A Determination of turnover
9(1) Levy of Central Sales Tax
9(2) Powers of the authorities of appropriate states
9(2B) Liability to pay interest
9(3) Distribution of tax proceeds
9A Collection of Tax
9B Rounding off a tax, etc.

Penalties and Prosecutions [Section 10/Section 10A]

10 Penalties in the form of prosecution/fine or both
10A Penalties in lieu of prosecution
Goods of special importance in Inter-state trade or commerce [Sections 14 and 15]
14 Goods of special importance in Inter-state trate or commerce
15 Restrictions and conditions in regard to tax on sale or purchase of declared goods within a state

Liabilities in Special Cases [Sections 16 to 18]

16 Definitions
17 Liquidation of a company
18 Liabilities of Directors of Private Companies in Liquidation

Authority to settle dispute in course of inter-state trade or commerce [Sections 19 to 26]

19 Central Sales Tax Appellate Authority
20 Appeals
21 Procedure on receipt of application
22 Powers of the Authority
23 Procedure of Authority
24 Authority of advance ruling to function as authority under this Act
25 Transfer of pending proceedings
26 Applicability of order passed