Income Tax Act

Official PDF pages 111–115

SOURCE PDF PAGE 111
Sl
No.
Specified business   Specified
assessee
Profits and gains of business or
profession
A   B   C   D
production of min -
eral oils.
in the prospecting for, or extraction
or production of mineral oils in India,
paid or payable (in or outside India),
to the assessee or any other person on
his behalf;
B = sum on account of business of
providing   services   and   facilities   in
connection with, or supply of plant and
machinery on hire used, or to be used,
in the prospecting for, or extraction or
production of mineral oils outside India,
received or deemed to be received in
India, by the assessee or any other person
on his behalf.
6.   Business   of   pro -
viding   services   or
technology in India,
for the purposes of
setting up an elec -
tronics   manufac -
turing   facility   or
in connection with
manufacturing   or
producing electron -
ic goods, article or
thing in India to a
resident   company.
Non-
resident.
25% of (A + B),
where,—
A = the amount paid or payable to the
non-resident assessee or to any person
on his behalf on account of providing
services or technology;
B = the amount received or deemed to
be received by the non-resident assessee
or on behalf of non-resident assessee
on account of providing services or
technology.
(3) For the purposes of sub-section (2) (Table: Sl. Nos. 4 and 5) the specified assessee
may claim that the profits actually earned from the specified business are lower
than the business profits computed under sub-section (2), if,—
( a )   he keeps and maintains such books of account and other documents as
required under section 62; and
( b )   gets his accounts audited and furnish a report of such audit as required
under section 63.
(4) Any loss, allowance or deduction allowable under the provisions of this Act
shall not be allowed against the income computed in the manner specified in
sub-section (2).
(5) The written down value of any asset used for the purposes of specified business
or profession shall be computed, as if the assessee mentioned in column C of the

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Table in sub-section (2) had claimed and was actually allowed depreciation thereon
for each of the relevant tax years.
(6) For the purposes of sub-section (2) (Table: Sl. No. 5) the provisions of this sec -
tion shall not apply where the provisions of section 54 or 59 or 207 or 527 apply
for the purposes of computing profits and gains or any other income referred to in
the said sections.
(7) For the purposes of sub-section (2) (Table: Sl. No. 5), “plant” includes ships,
aircrafts, vehicles, drilling units, scientific apparatuses and equipments used for
the purposes of the specified business.
(8) For the purposes of sub-section (2) (Table: Sl. No. 6), resident company shall
satisfy the following:—
( a )   it is establishing or operating electronics manufacturing facility or a con -
nected facility for manufacturing or producing electronic goods, article
or thing in India, under a scheme notified by the Central Government
in the Ministry of Electronics and Information Technology; and
( b )   it satisfies the conditions as may be prescribed in this behalf.
(9) The provisions of sections 59 and 207 shall not apply to amounts referred to in
sub-section (2) (Table: Sl. No. 6).
Maintenance of books of account.
62.   (1)( a ) Any person carrying on specified profession; or
( b )   any person carrying on, business; or any profession [not being a profes -
sion referred to in clause ( a )] and satisfying the conditions referred to
in sub-section (2),
shall keep and maintain such books of account and other documents to enable the
Assessing Officer to compute his total income under this Act.
(2) The conditions in respect of persons referred to in sub-section (1)( b ) shall be
the following:—
( a )   where the income from business or profession exceeds   `   120000 or its
total sales, turnover or gross receipts from such business or profession
exceeds ten lakh rupees in any one of the three years immediately preced -
ing the tax year; or
( b )   where business or profession is newly set up in the tax year, the income
from business or profession is likely to exceed   `   120000 or its total sales,
turnover or gross receipts from such business or profession is likely to
exceed ten lakh rupees during such tax year; or
( c )   where during the tax year, the assessee referred to in section 58(2) or
61(2) (Table: Sl. Nos. 4 and 5), has claimed income from business or
profession to be lower than the deemed profits as referred to in section
58(2) or section 61(2); or
( d )   in case of an individual or Hindu undivided family, clauses ( a ) and ( b )
shall be modified to the extent of income from such business or profession

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exceeding   `   250000 and its total sales, turnover or gross receipts from
such business or profession exceeding twenty-five lakh rupees.
(3) For the purposes of this section, the Board may prescribe—
( a )   the books of account and other documents (including inventories, wher -
ever necessary) to be kept and maintained;
( b )   particulars to be contained therein;
( c )   the form, manner and place at which they shall be kept and maintained;
and
( d )   the period for which such books of account and other documents are to
be retained.
(4) For the purposes of this section, the expression “specified profession” means—
( a )   legal, medical, engineering, architectural, accountancy, technical consul -
tancy, interior decoration, information technology or company secretary;
or
( b )   any other profession, as may be notified by the Board in this behalf.
Tax audit.
63.   (1) Every person, carrying on the business or profession fulfilling any of the
conditions specified in column B of the Table below, shall get his accounts
of the tax year audited by an accountant, before the specified date.
TABLE
Sl.
No.
Conditions for getting books of account audited
A   B
1.   Every person—
( a )   carrying on business shall, if his total sales, turnover or gross
receipts, as the case may be, in business exceed or exceeds one
crore rupees in any tax year, subject to the provisions of clause
( b );
( b )   in case of a person whose—
( i )   aggregate   of   all   amounts   received   including   amount
received for sales, turnover or gross receipts during the tax
year, in cash, does not exceed 5% of the said amount; and
( ii )   aggregate of all payments made including amount incurred
for expenditure, in cash, during the tax year does not exceed
5% of the said payment,
clause ( a ) shall have effect as if for the words “one crore rupees”,
the words “ten crore rupees” had been substituted;
( c )   carrying on profession shall, if his gross receipts in profession
exceed fifty lakh rupees in any tax year.

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Sl.
No.
Conditions for getting books of account audited
A   B
2.   If the person is carrying on business or profession, referred to in section
58(2) or 61(2) (Table: Sl. Nos. 4 and 5) and the profits and gains from such
business or profession are claimed to be lower than the deemed profits as
referred to in the said sections.
(2) The provisions of this section shall not apply where profits and gains of business
or profession, declared by the assessee are as per section 58(2) or 61(2).
(3) The assessee shall furnish by the specified date, the report of such audit in such
form, duly signed and verified by the accountant and setting forth such particulars,
as may be prescribed.
(4) Where a person is required, by or under any other law, to get his accounts audited,
then it shall be sufficient compliance of this section, if such person—
( a )   gets the accounts of such business or profession audited under such law
before the specified date; and
( b )   furnishes by that specified date the report of such audit along with the
report of the accountant in the form as may be prescribed.
(5) For the purposes of this section,—
( a )   “specified date” in relation to the accounts of the assessee of the tax year,
means the date one month prior to the due date for furnishing the return
of income under section 263(1);
( b )   the payment or receipt, as the case may be, by a cheque drawn on a bank
or by a bank draft, which is not account payee, shall be deemed to be
the payment or receipt, as the case may be, in cash.
Special provision for computing deductions in case of business reorganisation
of co-operative banks.
64.   (1) The deduction under section 33 or 44 or 52(1) (Table: Sl. No. 1 or 2) shall, in
a case where business reorganisation of a co-operative bank has taken place
during the tax year, be allowed as per provisions of this section.
(2) The amount of deduction allowable to the predecessor co-operative bank or to
the successor co-operative bank or to the converted banking company under section
33 or 44 or 52(1) (Table: Sl. No. 1 or 2)shall be determined as per the formula—
( i )   for predecessor co-operative bank:—
A × B
C
( ii )   for successor co-operative bank or converted banking company:—
A × D
C

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where,—
A = the amount of deduction allowable to the predecessor co-operative bank,
if the business reorganisation had not taken place;
B = the number of days comprised in the period beginning with the 1st day of
the tax year and ending on the day immediately preceding the date of business
reorganisation; and
C = the total number of days in the tax year in which the business reorgani -
sation has taken place.
D = the number of days comprised in the period beginning with the date of
business reorganisation and ending on the last day of the tax year.
(3) The provisions of section 44 or 52(1) (Table: Sl. No. 1 or 2) shall, in a case
where an undertaking of the predecessor co-operative bank entitled to the deduc -
tion under the said section is transferred before the expiry of the period specified
therein to a successor co-operative bank or to a converted banking company on
account of business reorganisation, apply to the successor co-operative bank or to
the converted banking company in the tax years subsequent to the year of business
reorganisation as they would have applied to the predecessor co-operative bank, as
if the business reorganisation had not taken place.
Interpretation for purposes of section 64.
65.   For the purposes of section 64,—
( a )   “amalgamation” means the merger of an amalgamating co-operative
bank with an amalgamated co-operative bank, if—
( i )   all the assets and liabilities of the amalgamating co-operative bank
or banks immediately before the merger (other than the assets
transferred, by sale or distribution on winding up, to the amalga -
mated co-operative bank) become the assets and liabilities of the
amalgamated co-operative bank;
( ii )   the members holding 75% or more voting rights in the amalgam -
ating co-operative bank become members of the amalgamated
co-operative bank; and
( iii )   the shareholders holding 75% or more in value of the shares in the
amalgamating co-operative bank (other than the shares held by the
amalgamated co-operative bank or its nominee or its subsidiary,
immediately before the merger) become shareholders of the amal -
gamated co-operative bank;
( b )   “amalgamating co-operative bank” means—
( i )   a co-operative bank which merges with another co-operative bank;
or
( ii )   every co-operative bank merging to form a new co-operative bank;
( c )   “amalgamated co-operative bank” means—
( i )   a co-operative bank with which one or more amalgamating co-op -
erative banks merge; or