Income Tax Act

Official PDF pages 651–655

SOURCE PDF PAGE 651
Sl.
No.
Income not to be
included in total
income
Eligible persons   Conditions
A   B   C   D
( f )   such political party furnishes
a return of income for the
tax year as per the provisions
of section 263(1)( a )( iii ) and
263(2) on or before the due
date referred to in section
263(1)( c ).
2.   Any   voluntary
contributions re -
ceived.
An electoral trust.   ( a )   Such electoral trust distrib -
utes to any political party,
registered under section 29A
of the Representation of the
People Act, 1951 (43 of 1951),
during the said tax year, 95%
of the aggregate donations
received by it during the said
tax year along with the sur -
plus, if any,   brought forward
from any earlier tax year; and
( b )   such electoral trust functions
as per the rules made by the
Central Government.
Note.— For the purposes of this Schedule, “electoral bond” means a bond referred to
in the   Explanation   to section 31(3) of the Reserve Bank of India Act, 1934 (2 of 1934).
SCHEDULE IX
[ See   section 48]
DEDUCTION FOR TEA DEVELOPMENT ACCOUNT,
COFFEE DEVELOPMENT ACCOUNT AND RUBBER
DEVELOPMENT ACCOUNT FOR COMPUTING INCOME UNDER
THE HEAD “PROFITS AND GAINS OF BUSINESS OR PROFESSION”
Quantum of deduction.
1 . (1) An assessee shall be allowed deduction of,––
( a )   the amount or aggregate of the amounts deposited by the assessee in the
account as specified in paragraph 2; or
( b )   40% of the profits of such business computed under the head “Profits
and gains of business or profession” before making any deduction under
this paragraph,
whichever is less.
(2) The deduction shall be allowed before allowing set off of loss, if any, brought
forward from earlier tax years as per section 112.

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SOURCE PDF PAGE 652
Conditions for claiming deduction.
2 . (1) The deduction under paragraph 1 shall be allowed if the assessee––
( a )   is carrying on the business of growing and manufacturing tea or coffee
or rubber in India during the tax year;
( b )   has, before the expiry of six months from the end of the tax year or before
the due date of furnishing the return of his income, whichever is earlier,
deposited any amount in the specified account being,—
( i )   a special account maintained with the National Bank in accordance
with, and for the purposes specified in the special scheme; or
( ii )   a deposit account in accordance with, and for the purposes specified
in the deposit scheme; and
( c )   gets the accounts of such business for the relevant tax year audited by
an accountant before the specified date referred to in section 63 and fur -
nishes the audit report, in such form and manner as may be prescribed
and verified by such accountant, by that date.
(2) Where the assessee is required, by or under any other law, to get his accounts
audited, then it shall be sufficient compliance of sub-paragraph (1)( c ), if such
assessee—
( a )   gets the accounts of such business audited under such law before the
specified date referred to in section 63; and
( b )   furnishes by that date the report of such audit and a report by an
accountant in the form referred to in sub-paragraph (1)( c ).
(3) If any deduction has been allowed under paragraph 1 in any tax year, no
deduction shall be allowed in respect of such amount in any other tax year.
(4) Where the assessee referred to in paragraph 1 is a firm or an association of
persons or body of individuals, the deduction under paragraph 1 shall not be allowed
in computing the income of any of the partners or members of such assessee.
Withdrawal from special account or deposit account.
3 . (1) Any amount standing to the credit of the assessee in the specified account
shall not be allowed to be withdrawn except for the purpose specified in the special
scheme or, in the deposit scheme, or in the circumstances specified below:—
( a )   closure of business; or
( b )   death of an assessee; or
( c )   partition of a Hindu undivided family; or
( d )   dissolution of a firm; or
( e )   liquidation of a company.
(2) If any amount standing to the credit of the assessee in the specified account, is
withdrawn during any tax year by the assessee in the circumstance referred to in
sub-paragraph (1)( a ) and (1)( d ), the whole of such amount shall be deemed to be
the profits and gains of business or profession of that tax year and shall accordingly
be charged to income-tax for that tax year, as if the business had not been closed
or, the firm had not been dissolved respectively.

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SOURCE PDF PAGE 653
(3) Irrespective of anything contained in sub-paragraph (1), if ––
( a )   any amount standing to the credit of the assessee in the specified account
is released by the National Bank or withdrawn by the assessee from the
Deposit account, during any tax year; and
( b )   such amount is utilised for the purchase of specified articles or thing,
then whole of such amount so utilised shall be deemed to be the profits and gains
of business of that tax year and shall accordingly be charged to income-tax for that
tax year.
(4) If any amount standing to the credit of the assessee––
( a )   in the specified account is released by the National Bank; or
( b )   is withdrawn by the assessee from the deposit account,
during any tax year for utilisation for the purposes of such business as per the
special scheme or deposit scheme and the same is not so utilised, either wholly or
partly, within that tax year, such amount not so utilised shall be deemed to be the
profits and gains of business of that tax year and shall accordingly be charged to
income-tax for that tax year.
(5) The provisions of sub-paragraph (4) shall not apply in cases where amount is
released during any tax year on closure of the account in circumstances referred to
in sub-paragraphs (1)( b ), (1)( c ) and (1)( e ).
(6) In sub-paragraph (3), “specified article or thing” means—
( a )   any machinery or plant to be installed in any office premises or residen -
tial accommodation, including any accommodation in the nature of a
guest-house;
( b )   any office appliances (not being computers);
( c )   any machinery or plant, the whole of the actual cost of which is allowed as
a deduction (whether by way of depreciation or otherwise) in computing
the income chargeable under the head “Profits and gains of business or
profession” of any one tax year;
( d )   any new machinery or plant to be installed in an industrial undertaking
for the purposes of business of construction, manufacture or production
of any article or thing specified in the list in Schedule XIII.
No deduction of expenditure met through the amount withdrawn from
specified account.
4 . If the amount standing to the credit of the assessee in specified account is uti -
lised to incur any expenditure for the purpose of such business as per the special
scheme or deposit scheme, no deduction against such expenditure shall be allowed
in computing the income chargeable under the head “Profits and gains of business
or profession”.
Sale or transfer of asset acquired as per special scheme or deposit scheme.
5 . (1) Where any asset,––
( a )   is acquired in accordance with the special scheme or the deposit scheme;
and

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SOURCE PDF PAGE 654
( b )   is sold or transferred to any person in the tax year at any time before
expiry of eight years from the end of tax year in which such asset was
acquired,
then, the part of cost of asset which is relatable to the deduction allowed under
paragraph 1 shall be deemed to be the profits and gains of business of the tax year
in which such asset is sold or transferred and shall accordingly be charged to in -
come-tax for that tax year.
(2) The provisions of sub-paragraph (1) shall not apply, if the asset is sold or trans -
ferred—
( a )   by the assessee to the specified person; or
( b )   by a firm to a company in connection with succession of business or
profession of the firm by such company subject to the following condi -
tions:––
( i )   the provisions of special scheme or deposit scheme is applicable
to the company in the same manner as it applied to the firm;
( ii )   all the properties of the firm relating to the business or profession
immediately before the succession become the properties of the
company;
( iii )   all the liabilities of the firm relating to the business or profession
immediately before the succession become the liabilities of the
company; and
( iv )   all the shareholders of the company were partners of the firm im -
mediately before the succession.
(3) In this paragraph, “specified person” means,––
( a )   Government; or
( b )   a local authority; or
( c )   a corporation established by or under a Central, State or Provincial Act;
or
( d )   a Government company as defined in section 2( 45 ) of the Companies
Act, 2013 (18 of 2013).
Interpretation.
6 . For the purposes of this Schedule,—
( a )   “Coffee Board” means the Coffee Board constituted under section 4 of
the Coffee Act, 1942 (7 of 1942);
( b )   “deposit account” means an account opened by the assessee for making
deposits by the assessee in accordance with and for the purposes specified
in the deposit scheme;
( c )   “deposit scheme” means the scheme made by the Tea Board or the Cof -
fee Board or the Rubber Board, with the prior approval of the Central
Government;
( d )   “National Bank” means the National Bank for Agriculture and Rural
Development established under section 3 of the National Bank for
Agriculture and Rural Development Act, 1981 (61 of 1981);

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SOURCE PDF PAGE 655
( e )   “Rubber Board” means the Rubber Board constituted under section 4(1)
of the Rubber Act, 1947 (24 of 1947);
( f )   “special account” means an account maintained by the assessee with
the National Bank for making deposits in accordance with and for the
purposes specified in the special scheme;
( g )   “special scheme” means the scheme approved in this behalf by the Tea
Board or the Coffee Board or the Rubber Board;
( h )   “specified account” means a special account or a deposit account;
( i )   “Tea Board” means the Tea Board established under section 4 of the Tea
Act, 1953 (29 of 1953).
SCHEDULE X
[ See   section 49]
DEDUCTION FOR SITE RESTORATION FUND
FOR COMPUTING INCOME UNDER THE HEAD
“PROFITS AND GAINS OF BUSINESS OR PROFESSION”
Quantum of deduction.
1.   (1) An assessee shall be allowed deduction of,––
( a )   the amount or aggregate of the amount deposited by the assessee in the
account as specified in paragraph 2; or
( b )   20% of the profits of such business computed under the head “Profits
and gains of business or profession” before making any deduction under
this paragraph,
whichever is less.
(2) The deduction shall be allowed before allowing set off of loss, if any, brought
forward from earlier tax years as per section 112.
(3) Any interest credited in the specified account shall be deemed to be a deposit.
Conditions for claiming deduction.
2 . (1) Deduction under paragraph 1 shall be allowed if the assessee––
( a )   is, during the tax year, carrying on the business consisting of the pros -
pecting for, or extraction or production of, petroleum or natural gas,
or both in India, and has entered into an agreement with the Central
Government for such business;
( b )   has, before the end of the tax year, deposited any amount in the specified
account, being,––
( i )   a special account maintained with the State Bank of India in ac -
cordance with, and for the purposes specified in the special scheme;
or
( ii )   a site restoration account in accordance with, and for the purposes
specified in the deposit scheme; and
( c )   gets the accounts of such business for the relevant tax year audited by
an accountant before the specified date referred to in section 63 and fur -