Income Tax Act

Official PDF pages 246–250

SOURCE PDF PAGE 246
( c )   any partner or member of a firm or association of persons or body
of individuals or any relative of such partner or member, if the
person is a firm or association of persons or body of individuals;
( d )   any member of the Hindu undivided family or any relative of such
member, if the person is a Hindu undivided family;
( e )   any individual who has a substantial interest in the business of the
person or any relative of such individual;
( f )   a company, firm or an association of persons or a body of indivi-
duals, whether incorporated or not, or a Hindu undivided family
having a substantial interest in the business of the person or any
director, partner, or member of the company, firm or association
of persons or body of individuals or family, or any relative of such
director, partner or member;
( g )   a company, firm or association of persons or body of individuals,
whether incorporated or not, or a Hindu undivided family, whose
director, partner, or member has a substantial interest in the business
of the person, or family or any relative of such director, partner or
member;
( h )   any other person who carries on a business, if—
( i )   the person being an individual, or any relative of such person,
has a substantial interest in the business of that other person;
or
( ii )   the person being a company, firm, association of persons,
body of individuals, whether incorporated or not, or a Hindu
undivided family, or any director, partner or member of such
company, firm or association of persons or body of individuals
or family, or any relative of such director, partner or mem -
ber, has a substantial interest in the business of that other
person;
( 6 )   “fund” includes—
( a )   any cash;
( b )   cash equivalents; and
( c )   any right, or obligation, to receive or pay, the cash or cash equiva -
lent;
( 7 )   “party” includes a person or a permanent establishment which partici -
pates or takes part in an arrangement;
( 8 )   “relative” shall have the meaning assigned to it in section 92(5)( g )
23
;
( 9 )   a person shall be deemed to have a substantial interest in the business,
if,—

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( a )   in a case where the business is carried on by a company, such per -
son is, at any time during the financial year, the beneficial owner
of equity shares carrying at least 20% of the voting power; or
( b )   in any other case, such person is, at any time during the financial
year, beneficially entitled to at least 20% of the profits of such
business;
( 10 )   “step” includes a measure or an action, particularly one of a series
taken in order to deal with or achieve a particular thing or object in the
arrangement;
( 11 )   “tax benefit” includes,—
( a )   a reduction or avoidance or deferral of tax or other amount payable
under this Act; or
( b )   an increase in a refund of tax or other amount under this Act; or
( c )   a reduction or avoidance or deferral of tax or other amount that
would be payable under this Act, as a result of a tax treaty; or
( d )   an increase in a refund of tax or other amount under this Act as a
result of a tax treaty; or
( e )   a reduction in total income; or
( f )   an increase in loss,
in the relevant tax year or any other tax year;
( 12 )   “tax treaty” means an agreement referred to in section 159(1) or (2).
CHAPTER XII
MODE OF PAYMENT IN CERTAIN CASES, ETC.
Mode of taking or accepting certain loans, deposits and specified sum.
185.   (1) No person shall take or accept from another person any loan or deposit
or specified sum, except through—
( a )   an account payee cheque; or
( b )   account payee bank draft; or
( c )   electronic clearing system through a bank account; or
( d )   any other prescribed electronic mode,
if,—
( i )   the amount or the aggregate amount of such loan, deposit, or speci-
fied sum; or
( ii )   the amount or the aggregate amount of any previously taken or accepted
loan or deposit or specified sum by such person from such another per -
son, which is remaining unpaid, whether due for repayment or not, as
on the date of taking or accepting such amount as referred to in clause
( i ); or
( iii )   the aggregate of the amounts referred to in clauses ( i ) and ( ii ),
is   `   20000 or more.

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SOURCE PDF PAGE 248
(2) Sub-section (1) shall not apply to loans or deposits or specified sums taken or
accepted from or by,—
( a )   the Government;
( b )   any banking company, post office savings bank, or co-operative bank;
( c )   any corporation established by a Central, State or Provincial Act;
( d )   any Government company as defined under section 2( 45 ) of the
Companies Act, 2013 (18 of 2013);
( e )   any institution, association, or body or class of institutions, associations
or bodies notified by the Central Government.
(3) The provisions of sub-section (1) shall not apply to any loan or deposit or speci-
fied sum where, the person taking or accepting such loan or deposit or specified
sum and person from whom such loan or deposit or specified sum is taken or
accepted, both, have agricultural income and neither has any income chargeable
to tax under this Act.
(4) In sub-section (1), “ `   200000” shall be substituted for “ `   20000” in the case of
any deposit or loan, where—
( a )   such deposit is accepted by a primary agricultural credit society or a
primary co-operative agricultural and rural development bank from its
member; or
( b )   such loan is taken from a primary agricultural credit society or primary
co-operative agricultural and development bank by its member.
(5) For the purposes of this section, the expression “loan or deposit” means loan
or deposit of money.
Mode of undertaking transactions.
186.   (1) No person shall receive an amount of   `   200000 or more—
( a )   in aggregate from a person in a day; or
( b )   in respect of a single transaction; or
( c )   in respect of transactions relating to one event or occasion from a person,
except through—
( i )   an account payee cheque; or
( ii )   account payee bank draft; or
( iii )   electronic clearing system through a bank account; or
( iv )   any other electronic mode, as may be prescribed
29a
.
(2) Sub-section (1) shall not apply to—
( a )   any receipt by Government, any banking company, post office savings
bank or co-operative bank;
( b )   transactions of the nature referred to in section 185;
( c )   such other persons or class of persons or receipts, as may be notified by
the Central Government.

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Acceptance of payment through prescribed electronic modes.
187.   Every person shall provide facility for accepting payment, through electronic
modes as may be prescribed, in addition to other electronic modes, if any,
being provided by him, where—
( a )   such person is carrying on business or profession; and
( b )   total sales, turnover or gross receipts in such business or profession
exceeds fifty crore rupees during the immediately preceding tax year.
Mode of repayment of certain loans or deposits or specified advances.
188.   (1) No branch of a banking company or co-operative bank and no other
company or co-operative society and no firm or other person shall repay—
( a )   any loan or deposit made with it; or
( b )   any specified advance received by it,
except through—
( i )   an account payee cheque;
( ii )   account payee bank draft drawn in the name of the person who has made
the loan or deposit or paid the specified advance; or
( iii )   by use of electronic clearing system through a bank account, or any other
prescribed electronic mode,
if, —
( A )   the loan or the deposit or specified advance, together with the interest,
if any, payable thereon; or
( B )   the aggregate amount of the loans or deposits held by such person with
the branch of the banking company or co-operative bank or, as the case
may be, the other company or co-operative society or the firm or other
person (either individually or jointly) on the date of such repayment
together with interest, if any, payable thereon; or
( C )   the aggregate amount of the specified advances received by such person
(either individually or jointly) on the date of such repayment together
with the interest, if any, payable thereon,
is   `   20000 or more.
(2) Irrespective of the provision in sub-section (1), a branch of a banking compa -
ny or co-operative bank, may also make the repayment by crediting such loan or
deposit to the savings bank account or current account, if any, with such branch of
the person to whom such loan or deposit has to be repaid.
(3) Sub-section (1) shall not apply to repayment of any loan, deposit, or specified
advance taken or accepted from—
( a )   Government;
( b )   any banking company, post office savings bank, or co-operative bank;
( c )   any corporation established by a Central, State, or Provincial Act;
( d )   any Government company as defined in section 2( 45 ) of the Companies
Act, 2013 (18 of 2013);

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SOURCE PDF PAGE 250
( e )   any institution, association, or body or class of institutions, associations
or bodies notified by the Central Government.
(4) In sub-section (1), “ `   200000” shall be substituted for “ `   20000” in the case of
any deposit or loan where—
( a )   such deposit is repaid to a member by a primary agricultural credit society
or a primary co-operative agricultural and rural development bank; or
( b )   such loan is repaid by a member to a primary agricultural credit society
or a primary co-operative agricultural and rural development bank.
(5) For the purposes of this section, the expression “loan or deposit” means any loan
or deposit of money which is repayable after notice or repayable after a period and,
in the case of a person other than a company, includes loan or deposit of any nature.
Interpretation.
189.   For the purposes of this Chapter, unless the context otherwise requires,—
( a )   “banking company” means a company to which the provisions of the
Banking Regulation Act, 1949 (10 of 1949) applies and includes any bank
or banking institution referred to in section 51 of that Act;
( b )   “primary agricultural credit society”, and “primary co-operative agricul -
tural and rural development bank” shall have the meanings respectively
assigned to them in section 150;
( c )   “specified sum” means any sum of money receivable, whether as advance
or otherwise, in relation to transfer of an immovable property, whether
or not the transfer takes place;
( d )   “specified advance” means any sum of money in the nature of advance, by
whatever name called, in relation to transfer of an immovable property,
whether or not the transfer takes place.
CHAPTER XIII
DETERMINATION OF TAX IN SPECIAL CASES
A.—Determination of tax in certain special cases
Determination of tax where total income includes income on which no tax is
payable.
190.   Where there is included in the total income of an assessee any income on
which no income-tax is payable under the provisions of this Act, the assessee
shall be entitled to a deduction, from income-tax with which he is chargeable on
his total income, of an amount equal to the income-tax calculated at the average
rate of income-tax on the amount on which no income-tax is payable.
Tax on accumulated balance of recognised provident fund.
191.   Where the accumulated balance due to an employee participating in a
recognised provident fund is included in his total income, owing to the
provisions of paragraph 8 of Part A of Schedule XI not being applicable, the Assess -