Incomes Which Do Not Form Part of Total Income - It

6/9/2017 IncomeTaxDepartment
CHAPTERIII
INCOMESWHICHDONOTFORMPARTOFTOTALINCOME
Incomesnotincludedintotalincome.
10.In computing the total income of a previous year of any person, any income falling within any of the
followingclausesshallnotbeincluded
(1)agriculturalincome
(2) subject to the provisions of subsection (2) of section 64, any sum received by an individual as a
memberofaHinduundividedfamily,wheresuchsumhasbeenpaidoutoftheincomeofthefamily,
or,inthecaseofanyimpartibleestate,wheresuchsumhasbeenpaidoutoftheincomeoftheestate
belongingtothefamily
(2A)inthecaseofapersonbeingapartnerofafirmwhichisseparatelyassessedassuch,hisshareinthe
totalincomeofthefirm.
Explanation.For the purposes of this clause, the share of a partner in the total income of a firm
separatelyassessedassuchshall,notwithstandinganythingcontainedinanyotherlaw,beanamount
whichbearstothetotalincomeofthefirmthesameproportionastheamountofhisshareintheprofits
ofthefirminaccordancewiththepartnershipdeedbearstosuchprofits
(3)[***]
(4) (i) in the case of a nonresident, any income by way of interest on such securities or bonds as the
Central Government may, by notification in the Official Gazette, specify in this behalf, including
incomebywayofpremiumontheredemptionofsuchbonds:
Provided that the Central Government shall not specify, for the purposes of this subclause, such
securitiesorbondsonorafterthe1stdayofJune,2002
(ii)inthecaseofanindividual,anyincomebywayofinterestonmoneysstandingtohiscreditina
NonResident (External) Account in any bank in India in accordance with the Foreign Exchange
ManagementAct,1999(42of1999),andtherulesmadethereunder:
ProvidedthatsuchindividualisapersonresidentoutsideIndiaasdefinedin 41[clause(w)]ofsection
2ofthesaidActorisapersonwhohasbeenpermittedbytheReserveBankofIndiatomaintainthe
aforesaidAccount
(4A)[***]
(4B)inthecaseofanindividual,beingacitizenofIndiaorapersonofIndianorigin,whoisanonresident,
any income from interest on such savings certificates issued before the 1st day of June, 2002 by the
Central Government as that Government may, by notification in the Official Gazette, specify in this
behalf:
Provided that the individual has subscribed to such certificates in convertible foreign exchange
remitted from a country outside India in accordance with the provisions of the Foreign Exchange
ManagementAct,1999(42of1999),andanyrulesmadethereunder.
Explanation.Forthepurposesofthisclause,
(a) a person shall be deemed to be of Indian origin if he, or either of his parents or any of his
grandparents,wasborninundividedIndia
(b)"convertibleforeignexchange"meansforeignexchangewhichisforthetimebeingtreatedbythe
Reserve Bank of India as convertible foreign exchange for the purposes of the Foreign
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ExchangeManagementAct,1999(42of1999),andanyrulesmadethereunder
(5)inthecaseofanindividual,thevalueofanytravelconcessionorassistancereceivedby,ordueto,him,

(a)fromhisemployerforhimselfandhisfamily,inconnectionwithhisproceedingonleavetoany
placeinIndia
(b) from his employer or former employer for himself and his family, in connection with his
proceeding to any place in India after retirement from service or after the termination of his
service,
subjecttosuchconditionsasmaybeprescribed42(includingconditionsastonumberofjourneysand
the amount which shall be exempt per head) having regard to the travel concession or assistance
grantedtotheemployeesoftheCentralGovernment:
Provided that the amount exempt under this clause shall in no case exceed the amount of expenses
actuallyincurredforthepurposeofsuchtravel.
Explanation.Forthepurposesofthisclause,"family",inrelationtoanindividual,means
(i)thespouseandchildrenoftheindividualand
(ii)theparents,brothersandsistersoftheindividualoranyofthem,whollyormainlydependenton
theindividual
(5A)[OmittedbytheFinance(No.2)Act,1998,w.e.f.141999]
(5B)[OmittedbytheFinanceAct,2002,w.e.f.142003]
(6)inthecaseofanindividualwhoisnotacitizenofIndia,
(i)[***]
(ii)theremunerationreceivedbyhimasanofficial,bywhatevernamecalled,ofanembassy,high
commission,legation,commission,consulateorthetraderepresentationofaforeignState,oras
amemberofthestaffofanyoftheseofficials,forserviceinsuchcapacity:
Provided that the remuneration received by him as a trade commissioner or other official
representative in India of the Government of a foreign State (not holding office as such in an
honorarycapacity),orasamemberofthestaffofanyofthoseofficials,shallbeexemptonlyif
theremunerationofthecorrespondingofficialsor,asthecasemaybe,membersofthestaff,if
any,oftheGovernmentresidentforsimilarpurposesinthecountryconcernedenjoysasimilar
exemptioninthatcountry:
Providedfurtherthatsuchmembersofthestaffaresubjectsofthecountryrepresentedandare
notengagedinanybusinessorprofessionoremploymentinIndiaotherwisethanasmembersof
suchstaff
(iii)to(v)[Subclause(ii)substitutedforsubclauses(ii)to(v)bytheFinanceAct,1988,w.e.f.14
1989]
(vi)theremunerationreceivedbyhimasanemployeeofaforeignenterpriseforservicesrenderedby
himduringhisstayinIndia,providedthefollowingconditionsarefulfilled
(a)theforeignenterpriseisnotengagedinanytradeorbusinessinIndia
(b)hisstayinIndiadoesnotexceedintheaggregateaperiodofninetydaysinsuchprevious
yearand
(c)suchremunerationisnotliabletobedeductedfromtheincomeoftheemployerchargeable
underthisAct
(via)[OmittedbytheFinance(No.2)Act,1998,w.e.f.141999]
(vii)[OmittedbytheFinanceAct,1993,w.e.f.141993]
(viia)[OmittedbytheFinance(No.2)Act,1998,w.e.f.141999]
(viii) any income chargeable under the head "Salaries" received by or due to any such individual
beinganonresidentasremunerationforservicesrenderedinconnectionwithhisemployment
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onaforeignshipwherehistotalstayinIndiadoesnotexceedintheaggregateaperiodofninety
daysinthepreviousyear
(ix)[OmittedbytheFinance(No.2)Act,1998,w.e.f.141999]
(x)[OmittedbytheFinance(No.2)Act,1998,w.e.f.141999]
(xi)theremunerationreceivedbyhimasanemployeeoftheGovernmentofaforeignStateduring
his stay in India in connection with his training in any establishment or office of, or in any
undertakingownedby,
(i)theGovernmentor
(ii)anycompanyinwhichtheentirepaidupsharecapitalisheldbytheCentralGovernment,
oranyStateGovernmentorGovernments,orpartlybytheCentralGovernmentandpartly
byoneormoreStateGovernmentsor
(iii)anycompanywhichisasubsidiaryofacompanyreferredtoinitem(ii)or
(iv)anycorporationestablishedbyorunderaCentral,StateorProvincialActor
(v) any society registered under the Societies Registration Act, 1860 (14 of 1860), or under
any other corresponding law for the time being in force and wholly financed by the
Central Government, or any State Government or State Governments, or partly by the
CentralGovernmentandpartlybyoneormoreStateGovernments
(6A) where in the case of a foreign company deriving income by way of royalty or fees for technical
services received from Government or an Indian concern in pursuance of an agreement made by the
foreigncompanywithGovernmentortheIndianconcernafterthe31stdayofMarch,1976butbefore
the1stdayofJune,2002and,
(a) where the agreement relates to a matter included in the industrial policy, for the time being in
force,oftheGovernmentofIndia,suchagreementisinaccordancewiththatpolicyand
(b)inanyothercase,theagreementisapprovedbytheCentralGovernment,
the tax on such income is payable, under the terms of the agreement, by Government or the Indian
concerntotheCentralGovernment,thetaxsopaid.
Explanation.Forthepurposesofthisclauseandclause(6B),
(a)"feesfortechnicalservices"shallhavethesamemeaningasinExplanation2toclause(vii) of
subsection(1)ofsection9
(b)"foreigncompany"shallhavethesamemeaningasinsection80B
(c) "royalty" shall have the same meaning as in Explanation 2 to clause (vi) of subsection (1) of
section9
(6B)whereinthecaseofanonresident(notbeingacompany)orofaforeigncompanyderivingincome
(not being salary, royalty or fees for technical services) from Government or an Indian concern in
pursuanceofanagreemententeredintobeforethe1stdayofJune,2002bytheCentralGovernment
with the Government of a foreign State or an international organisation, the tax on such income is
payable by Government or the Indian concern to the Central Government under the terms of that
agreementoranyotherrelatedagreementapprovedbeforethatdatebytheCentralGovernment,thetax
sopaid
(6BB)whereinthecaseoftheGovernmentofaforeignStateoraforeignenterprisederivingincomefrom
anIndiancompanyengagedinthebusinessofoperationofaircraft,asaconsiderationofacquiringan
aircraft or an aircraft engine (other than payment for providing spares, facilities or services in
connectionwiththeoperationofleasedaircraft)onleaseunderanagreemententeredintoafterthe31st
dayofMarch,1997butbeforethe1stdayofApril,1999,orenteredintoafterthe31stdayofMarch,
2007andapprovedbytheCentralGovernmentinthisbehalfandthetaxonsuchincomeispayableby
suchIndiancompanyunderthetermsofthatagreementtotheCentralGovernment,thetaxsopaid.
Explanation.Forthepurposesofthisclause,theexpression"foreignenterprise"meansapersonwho
isanonresident
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(6C)anyincomearisingtosuchforeigncompany,astheCentralGovernmentmay,bynotificationinthe
Official Gazette, specify in this behalf, by way of royalty orfees for technical services received in
pursuanceofanagreemententeredintowiththatGovernmentforprovidingservicesinoroutsideIndia
inprojectsconnectedwithsecurityofIndia
(7)anyallowancesorperquisitespaidorallowedassuchoutsideIndiabytheGovernmenttoacitizenof
IndiaforrenderingserviceoutsideIndia
(8) in the case of an individual who is assigned to duties in India in connection with any cooperative
technical assistance programmes and projects in accordance with an agreement entered into by the
Central Government and the Government of a foreign State (the terms whereof provide for the
exemptiongivenbythisclause)
(a)theremunerationreceivedbyhimdirectlyorindirectlyfromtheGovernmentofthatforeignState
forsuchduties,and
(b)anyotherincomeofsuchindividualwhichaccruesorarisesoutsideIndia,andisnotdeemedto
accrue or arise in India, in respect of which such individual is required to pay any income or
socialsecuritytaxtotheGovernmentofthatforeignState
(8A)inthecaseofaconsultant
(a) any remuneration or fee received by him or it, directly or indirectly, out of the funds made
availabletoaninternationalorganisation[hereafterreferredtointhisclauseandclause(8B)as
the agency] under a technical assistance grant agreement between the agency and the
GovernmentofaforeignStateand
(b)anyotherincomewhichaccruesorarisestohimoritoutsideIndia,andisnotdeemedtoaccrue
or arise in India, in respect of which such consultant is required to pay any income or social
securitytaxtotheGovernmentofthecountryofhisoritsorigin.
Explanation.Inthisclause,"consultant"means
(i)anyindividual,whoiseithernotacitizenofIndiaor,beingacitizenofIndia,isnotordinarily
residentinIndiaor
(ii)anyotherperson,beinganonresident,
engaged by the agency for rendering technical services in India in connection with any technical
assistanceprogrammeorproject,providedthefollowingconditionsarefulfilled,namely:
(1) the technical assistance is in accordance with an agreement entered into by the Central
Governmentandtheagencyand
(2) the agreement relating to the engagement of the consultant is approved by the prescribed
authority43forthepurposesofthisclause
(8B)inthecaseofanindividualwhoisassignedtodutiesinIndiainconnectionwithanytechnicalassistance
programmeandprojectinaccordancewithanagreemententeredintobytheCentralGovernmentand
theagency
(a) the remuneration received by him, directly or indirectly, for such duties from any consultant
referredtoinclause(8A)and
(b)anyotherincomeofsuchindividualwhichaccruesorarisesoutsideIndia,andisnotdeemedto
accrue or arise in India, in respect of which such individual is required to pay any income or
socialsecuritytaxtothecountryofhisorigin,providedthefollowingconditionsarefulfilled,
namely:
(i)theindividualisanemployeeoftheconsultantreferredtoinclause(8A)andiseithernota
citizenofIndiaor,beingacitizenofIndia,isnotordinarilyresidentinIndiaand
(ii)thecontractofserviceofsuchindividualisapprovedbytheprescribedauthority44before
thecommencementofhisservice
(9)theincomeofanymemberofthefamilyofanysuchindividualasisreferredtoinclause(8)orclause
(8A)or,asthecasemaybe,clause(8B)accompanyinghimtoIndia,whichaccruesorarisesoutside
India,andisnotdeemedtoaccrueorariseinIndia,inrespectofwhichsuchmemberisrequiredtopay
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any income or social security tax to the Government of that foreign State or, as the case may be,
countryoforiginofsuchmember
(10) (i) any deathcumretirement gratuity received under the revised Pension Rules of the Central
Government or, as the case may be, the Central Civil Services (Pension) Rules, 1972, or under any
similar scheme applicable to the members of the civil services of the Union or holders of posts
connectedwithdefenceorofcivilpostsundertheUnion(suchmembersorholdersbeingpersonsnot
governedbythesaidRules)ortothemembersoftheallIndiaservicesortothemembersofthecivil
servicesofaStateorholdersofcivilpostsunderaStateortotheemployeesofalocalauthorityorany
paymentofretiringgratuityreceivedunderthePensionCodeorRegulationsapplicabletothemembers
ofthedefenceservices
(ii)anygratuityreceivedunderthePaymentofGratuityAct,1972(39of1972),totheextentitdoes
not exceed an amount calculated in accordance with the provisions of subsections (2) and (3) of
section4ofthatAct
(iii) any other gratuity received by an employee on his retirement or on his becoming incapacitated
priortosuchretirementoronterminationofhisemployment,oranygratuityreceivedbyhiswidow,
childrenordependantsonhisdeath,totheextentitdoesnot,ineithercase,exceedonehalfmonth's
salary for each year of completed service, calculated on the basis of the average salary for the ten
monthsimmediatelyprecedingthemonthinwhichanysucheventoccurs,subjecttosuchlimitasthe
CentralGovernmentmay,bynotificationintheOfficialGazette,specifyinthisbehalfhavingregardto
thelimitapplicableinthisbehalftotheemployeesofthatGovernment:
Providedthatwhereanygratuitiesreferredtointhisclausearereceivedbyanemployeefrommore
thanoneemployerinthesamepreviousyear,theaggregateamountexemptfromincometaxunderthis
clauseshallnotexceedthelimitsospecified:
Providedfurtherthatwhereanysuchgratuityorgratuitieswasorwerereceivedinanyoneormore
earlierpreviousyearsalsoandthewholeoranypartoftheamountofsuchgratuityorgratuitieswas
notincludedinthetotalincomeoftheassesseeofsuchpreviousyearoryears,theamountexemptfrom
incometaxunderthisclauseshallnotexceedthelimitsospecifiedasreducedbytheamountor,asthe
casemaybe,theaggregateamountnotincludedinthetotalincomeofanysuchpreviousyearoryears.
Explanation.In this clause, and in clause (10AA), "salary" shall have the meaning assigned to it in
clause(h)ofrule2ofPartAoftheFourthSchedule
(10A)(i)anypaymentincommutationofpensionreceivedundertheCivilPensions(Commutation)Rulesof
theCentralGovernmentorunderanysimilarschemeapplicabletothemembersofthecivilservicesof
theUnionorholdersofpostsconnectedwithdefenceorofcivilpostsundertheUnion(suchmembers
orholdersbeingpersonsnotgovernedbythesaidRules)ortothemembersoftheallIndiaservicesor
tothemembersofthedefenceservicesortothemembersofthecivilservicesofaStateorholdersof
civil posts under a State or to the employees of a local authority or a corporation established by a
Central,StateorProvincialAct
(ii)anypaymentincommutationofpensionreceivedunderanyschemeofanyotheremployer,tothe
extentitdoesnotexceed
(a) in a case where the employee receives any gratuity, the commuted value of onethird of the
pensionwhichheisnormallyentitledtoreceive,and
(b)inanyothercase,thecommutedvalueofonehalfofsuchpension,
suchcommutedvaluebeingdeterminedhavingregardtotheageoftherecipient,thestateofhishealth,
therateofinterestandofficiallyrecognisedtablesofmortality
(iii)anypaymentincommutationofpensionreceivedfromafundunderclause(23AAB)
(10AA)(i)anypaymentreceivedbyanemployeeoftheCentralGovernmentoraStateGovernmentasthe
cashequivalentoftheleavesalaryinrespectoftheperiodofearnedleaveathiscreditatthetimeofhis
retirementwhetheronsuperannuationorotherwise
(ii) any payment of the nature referred to in subclause (i) received by an employee, other than an
employee of the Central Government or a State Government, in respect of so much of the period of
earnedleaveathiscreditatthetimeofhisretirementwhetheronsuperannuationorotherwiseasdoes
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notexceedtenmonths,calculatedonthebasisoftheaveragesalarydrawnbytheemployeeduringthe
period of ten months immediately preceding his retirement whether on superannuation or otherwise,
subjecttosuchlimitastheCentralGovernmentmay,bynotificationintheOfficialGazette,specifyin
thisbehalfhavingregardtothelimitapplicableinthisbehalftotheemployeesofthatGovernment:
Providedthatwhereanysuchpaymentsarereceivedbyanemployeefrommorethanoneemployerin
thesamepreviousyear,theaggregateamountexemptfromincometaxunderthissubclauseshallnot
exceedthelimitsospecified:
Providedfurtherthatwhereanysuchpaymentorpaymentswasorwerereceivedinanyoneormore
earlierpreviousyearsalsoandthewholeoranypartoftheamountofsuchpaymentorpaymentswas
or were not included in the total income of the assessee of such previous year or years, the amount
exemptfromincometaxunderthissubclauseshallnotexceedthelimitsospecified,asreducedbythe
amount or, as the case may be, the aggregate amount not included in the total income of any such
previousyearoryears.
Explanation.Forthepurposesofsubclause(ii),
the entitlement to earned leave of an employee shall not exceed thirty days for every year of actual
servicerenderedbyhimasanemployeeoftheemployerfromwhoseservicehehasretired
(10B) any compensation received by a workman under the Industrial Disputes Act, 1947 (14 of 1947), or
underanyotherActorRules,ordersornotificationsissuedthereunderorunderanystandingordersor
underanyaward,contractofserviceorotherwise,atthetimeofhisretrenchment:
Providedthattheamountexemptunderthisclauseshallnotexceed
(i) an amount calculated in accordance with the provisions of clause (b) of section 25F of the
IndustrialDisputesAct,1947(14of1947)or
(ii) such amount, not being less than fifty thousand rupees, as the Central Government may, by
notificationintheOfficialGazette,specifyinthisbehalf,
whicheverisless:
Providedfurtherthattheprecedingprovisoshallnotapplyinrespectofanycompensationreceived
byaworkmaninaccordancewithanyschemewhichtheCentralGovernmentmay,havingregardtothe
needforextendingspecialprotectiontotheworkmenintheundertakingtowhichsuchschemeapplies
andotherrelevantcircumstances,approveinthisbehalf.
Explanation.Forthepurposesofthisclause
(a)compensationreceivedbyaworkmanatthetimeoftheclosingdownoftheundertakinginwhich
heisemployedshallbedeemedtobecompensationreceivedatthetimeofhisretrenchment
(b) compensation received by a workman, at the time of the transfer (whether by agreement or by
operationoflaw)oftheownershipormanagementoftheundertakinginwhichheisemployed
from the employer in relation to that undertaking to a new employer, shall be deemed to be
compensationreceivedatthetimeofhisretrenchmentif
(i)theserviceoftheworkmanhasbeeninterruptedbysuchtransferor
(ii)thetermsandconditionsofserviceapplicabletotheworkmanaftersuchtransferareinany
waylessfavourabletotheworkmanthanthoseapplicabletohimimmediatelybeforethe
transferor
(iii)thenewemployeris,underthetermsofsuchtransferorotherwise,legallynotliableto
paytotheworkman,intheeventofhisretrenchment,compensationonthebasisthathis
servicehasbeencontinuousandhasnotbeeninterruptedbythetransfer
(c) the expressions "employer" and "workman" shall have the same meanings as in the Industrial
DisputesAct,1947(14of1947)
(10BB) any payments made under the Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985 (21 of
1985),andanyschemeframedthereunderexceptpaymentmadetoanyassesseeinconnectionwiththe
BhopalGasLeakDisastertotheextentsuchassesseehasbeenallowedadeductionunderthisActon
accountofanylossordamagecausedtohimbysuchdisaster
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(10BC) any amount received or receivable from the Central Government or a State Government or a local
authoritybyanindividualorhislegalheirbywayofcompensationonaccountofanydisaster,except
the amount received or receivable to the extent such individual or his legal heir has been allowed a
deductionunderthisActonaccountofanylossordamagecausedbysuchdisaster.
Explanation.For the purposes of this clause, the expression "disaster" shall have the meaning
assignedtoitunderclause(d)ofsection2oftheDisasterManagementAct,2005(53of2005)
(10C)anyamountreceivedorreceivablebyanemployeeof
(i)apublicsectorcompanyor
(ii)anyothercompanyor
(iii)anauthorityestablishedunderaCentral,StateorProvincialActor
(iv)alocalauthorityor
(v)acooperativesocietyor
(vi)aUniversityestablishedorincorporatedbyorunderaCentral,StateorProvincialActandan
institution declared to be a University under section 3 of the University Grants Commission
Act,1956(3of1956)or
(vii)anIndianInstituteofTechnologywithinthemeaningofclause(g)ofsection3oftheInstitutes
ofTechnologyAct,1961(59of1961)or
(viia)anyStateGovernmentor
(viib)theCentralGovernmentor
(viic) an institution, having importance throughout India or in any State or States, as the Central
Governmentmay,bynotificationintheOfficialGazette,specifyinthisbehalfor
(viii) such institute of management as the Central Government may, by notification in the Official
Gazette,specifyinthisbehalf,
onhisvoluntaryretirementorterminationofhisservice,inaccordancewithanyschemeorschemes
of voluntary retirement or in the case of a public sector company referred to in subclause (i), a
schemeofvoluntaryseparation,totheextentsuchamountdoesnotexceedfivelakhrupees:
Provided that the schemes of the said companies or authorities or societies or Universities or the
Institutesreferredtoinsubclauses(vii)and(viii),asthecasemaybe,governingthepaymentofsuch
amount are framed in accordance with such guidelines (including inter alia criteria of economic
viability)asmaybeprescribed45:
Providedfurtherthatwhereexemptionhasbeenallowedtoanemployeeunderthisclauseforany
assessmentyear,noexemptionthereundershallbeallowedtohiminrelationtoanyotherassessment
year:
Provided also that where any relief has been allowed to an assessee under section 89 for any
assessment year in respect of any amount received or receivable on his voluntary retirement or
termination of service or voluntary separation, no exemption under this clause shall be allowed to
himinrelationtosuch,oranyother,assessmentyear
(10CC) in the case of an employee, being an individual deriving income in the nature of a perquisite, not
providedforbywayofmonetarypayment,withinthemeaningofclause(2)ofsection17,thetaxon
such income actually paid by his employer, at the option of the employer, on behalf of such
employee, notwithstanding anything contained in section 200 of the Companies Act, 1956 (1 of
1956)
(10D)anysumreceivedunderalifeinsurancepolicy,includingthesumallocatedbywayofbonusonsuch
policy,otherthan
(a)anysumreceivedundersubsection(3)ofsection80DDorsubsection(3)ofsection80DDA
or
(b)anysumreceivedunderaKeymaninsurancepolicyor
(c)anysumreceivedunderaninsurancepolicyissuedonorafterthe1stdayofApril,2003buton
orbeforethe31stdayofMarch,2012inrespectofwhichthepremiumpayableforanyofthe
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yearsduringthetermofthepolicyexceedstwentypercentoftheactualcapitalsumassured
or
(d) any sum received under an insurance policy issued on or after the 1st day of April, 2012 in
respect of which the premium payable for any of the years during the term of the policy
exceedstenpercentoftheactualcapitalsumassured:
Providedthattheprovisionsofsubclauses(c)and(d)shallnotapplytoanysumreceivedon
thedeathofaperson:
Providedfurtherthatforthepurposeofcalculatingtheactualcapitalsumassuredundersub
clause (c), effect shall be given to the Explanation to subsection (3) of section 80C or the
Explanationtosubsection(2A)ofsection88,asthecasemaybe:
Provided also that where the policy, issued on or after the 1st day of April, 2013, is for
insuranceonlifeofanyperson,whois
(i)apersonwithdisabilityorapersonwithseveredisabilityasreferredtoinsection80Uor
(ii)sufferingfromdiseaseorailmentasspecifiedintherulesmadeundersection80DDB,
theprovisionsofthissubclauseshallhaveeffectasifforthewords"tenpercent",thewords
"fifteenpercent"hadbeensubstituted.
Explanation1.Forthepurposesofthisclause,"Keymaninsurancepolicy"meansalifeinsurance
policy taken by a person on the life of another person who is or was the employee of the first
mentioned person or is or was connected in any manner whatsoever with the business of the first
mentionedpersonandincludessuchpolicywhichhasbeenassignedtoaperson,atanytimeduring
thetermofthepolicy,withorwithoutanyconsideration
Explanation2.Forthepurposesofsubclause(d),theexpression"actualcapitalsumassured"shall
havethemeaningassignedtoitintheExplanationtosubsection(3A)ofsection80C
(11)anypaymentfromaprovidentfundtowhichtheProvidentFundsAct,1925(19of1925),appliesor
fromanyotherprovidentfundsetupbytheCentralGovernmentandnotifiedbyitinthisbehalfin
theOfficialGazette
46[(11A) any payment from an account, opened in accordance with the Sukanya Samriddhi Account Rules,
201447madeundertheGovernmentSavingsBankAct,1873(5of1873)]
(12) the accumulated balance due and becoming payable to an employee participating in a recognised
providentfund,totheextentprovidedinrule8ofPartAoftheFourthSchedule
48[(12A)anypaymentfromtheNationalPensionSystemTrusttoanemployeeonclosureofhisaccountor
onhisoptingoutofthepensionschemereferredtoinsection80CCD,totheextentitdoesnotexceed
fortypercentofthetotalamountpayabletohimatthetimeofsuchclosureorhisoptingoutofthe
scheme]
Following clause (12B) shall be inserted after clause (12A) of section 10 by the Finance Act,
2017,w.e.f.142018:
(12B) any payment from the National Pension System Trust to an employee under the pension scheme
referredtoinsection80CCD,onpartialwithdrawalmadeoutofhisaccountinaccordancewiththe
termsandconditions,specifiedunderthePensionFundRegulatoryandDevelopmentAuthorityAct,
2013(23of2013)andtheregulationsmadethereunder,totheextentitdoesnotexceedtwentyfive
percentoftheamountofcontributionsmadebyhim
(13)anypaymentfromanapprovedsuperannuationfundmade
(i)onthedeathofabeneficiaryor
(ii) to an employee in lieu of or in commutation of an annuity on his retirement at or after a
specifiedageoronhisbecomingincapacitatedpriortosuchretirementor
(iii)bywayofrefundofcontributionsonthedeathofabeneficiaryor
(iv)bywayofrefundofcontributionstoanemployeeonhisleavingtheserviceinconnectionwith
whichthefundisestablishedotherwisethanbyretirementatorafteraspecifiedageoronhis
becomingincapacitatedpriortosuchretirement,totheextenttowhichsuchpaymentdoesnot
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exceedthecontributionsmadepriortothecommencementofthisActandanyinterestthereon
49[or]
49[(v)bywayoftransfertotheaccountoftheemployeeunderapensionschemereferredtoinsection
80CCDandnotifiedbytheCentralGovernment]
(13A) any special allowance specifically granted to an assessee by his employer to meet expenditure
actually incurred on payment of rent (by whatever name called) in respect of residential
accommodationoccupiedbytheassessee,tosuchextentasmaybeprescribed50havingregardtothe
areaorplaceinwhichsuchaccommodationissituateandotherrelevantconsiderations.
Explanation.Fortheremovalofdoubts,itisherebydeclaredthatnothingcontainedinthisclause
shallapplyinacasewhere
(a)theresidentialaccommodationoccupiedbytheassesseeisownedbyhimor
(b) the assessee has not actually incurred expenditure on payment of rent (by whatever name
called)inrespectoftheresidentialaccommodationoccupiedbyhim
(14)(i)anysuchspecialallowanceorbenefit,notbeinginthenatureofaperquisitewithinthemeaning
ofclause(2)ofsection17,specificallygrantedtomeetexpenseswholly,necessarilyandexclusively
incurred in the performance of the duties of an office or employment of profit, 51as may be
prescribed,totheextenttowhichsuchexpensesareactuallyincurredforthatpurpose
(ii) any such allowance granted to the assessee either to meet his personal expenses at the place
wherethedutiesofhisofficeoremploymentofprofitareordinarilyperformedbyhimorattheplace
where he ordinarily resides, or to compensate him for the increased cost of living, 52as may be
prescribedandtotheextentasmaybeprescribed:
Provided that nothing in subclause (ii) shall apply to any allowance in the nature of personal
allowancegrantedtotheassesseetoremunerateorcompensatehimforperformingdutiesofaspecial
nature relating to his office or employment unless such allowance is related to the place of his
postingorresidence
(14A)[***]
(15)(i)incomebywayofinterest,premiumonredemptionorotherpaymentonsuchsecurities,bonds,
annuity certificates, savings certificates, other certificates issued by the Central Government and
deposits as the Central Government may, by notification in the Official Gazette, specify in this
behalf,subjecttosuchconditionsandlimitsasmaybespecifiedinthesaidnotification
(iib) in the case of an individual or a Hindu undivided family, interest on such Capital Investment
BondsastheCentralGovernmentmay,bynotificationintheOfficialGazette,specifyinthisbehalf:
Provided that the Central Government shall not specify, for the purposes of this subclause, such
CapitalInvestmentBondsonorafterthe1stdayofJune,2002
(iic)inthecaseofanindividualoraHinduundividedfamily,interestonsuchReliefBondsasthe
CentralGovernmentmay,bynotificationintheOfficialGazette,specifyinthisbehalf
(iid)interestonsuchbonds,astheCentralGovernmentmay,bynotificationintheOfficialGazette,
specify,arisingto
(a)anonresidentIndian,beinganindividualowningthebondsor
(b)anyindividualowningthebondsbyvirtueofbeinganomineeorsurvivorofthenonresident
Indianor
(c)anyindividualtowhomthebondshavebeengiftedbythenonresidentIndian:
ProvidedthattheaforesaidbondsarepurchasedbyanonresidentIndianinforeignexchangeand
theinterestandprincipalreceivedinrespectofsuchbonds,whetherontheirmaturityorotherwise,is
notallowabletobetakenoutofIndia:
Provided further that where an individual, who is a nonresident Indian in any previous year in
whichthebondsareacquired,becomesaresidentinIndiainanysubsequentyear,theprovisionsof
thissubclauseshallcontinuetoapplyinrelationtosuchindividual:
about:blank 9/33
Providedalsothatinacasewherethebondsareencashedinapreviousyearpriortotheirmaturity
by an individual who is so entitled, the provisions of this subclause shall not apply to such
individualinrelationtotheassessmentyearrelevanttosuchpreviousyear:
Provided also that the Central Government shall not specify, for the purposes of this subclause,
suchbondsonorafterthe1stdayofJune,2002.
Explanation.For the purposes of this subclause, the expression "nonresident Indian" shall have
themeaningassignedtoitinclause(e)ofsection115C
(iii) interest on securities held by the Issue Department of the Central Bank of Ceylon constituted
undertheCeylonMonetaryLawAct,1949
(iiia)interestpayabletoanybankincorporatedinacountryoutsideIndiaandauthorisedtoperform
central banking functions in that country on any deposits made by it, with the approval of the
ReserveBankofIndia,withanyscheduledbank.
Explanation.For the purposes of this subclause, "scheduled bank" shall have the meaning
assignedtoitinclause(ii)oftheExplanationtoclause(viia)ofsubsection(1)ofsection36
(iiib) interest payable to the Nordic Investment Bank, being a multilateral financial institution
constituted by the Governments of Denmark, Finland, Iceland, Norway and Sweden, on a loan
advanced by it to a project approved by the Central Government in terms of the Memorandum of
UnderstandingenteredintobytheCentralGovernmentwiththatBankonthe25thdayofNovember,
1986
(iiic)interestpayabletotheEuropeanInvestmentBank,onaloangrantedbyitinpursuanceofthe
frameworkagreementforfinancialcooperationenteredintoonthe25thdayofNovember,1993by
theCentralGovernmentwiththatBank
(iv)interestpayable
(a)byGovernmentoralocalauthorityonmoneysborrowedbyitbeforethe1stdayofJune,2001
from,ordebtsowedbyitbeforethe1stdayofJune,2001to,sourcesoutsideIndia
(b)byanindustrialundertakinginIndiaonmoneysborrowedbyitunderaloanagreemententered
intobeforethe1stdayofJune,2001withanysuchfinancialinstitutioninaforeigncountryas
maybeapprovedinthisbehalfbytheCentralGovernmentbygeneralorspecialorder
(c)byanindustrialundertakinginIndiaonanymoneysborrowedordebtincurredbyitbeforethe
1st day of June, 2001 in a foreign country in respect of the purchase outside India of raw
materials or components or capital plant and machinery, to the extent to which such interest
does not exceed the amount of interest calculated at the rate approved by the Central
Governmentinthisbehalf,havingregardtothetermsoftheloanordebtanditsrepayment.
Explanation 1.For the purposes of this item, "purchase of capital plant and machinery"
includesthepurchaseofsuchcapitalplantandmachineryunderahirepurchaseagreementora
leaseagreementwithanoptiontopurchasesuchplantandmachinery.
Explanation 2.For the removal of doubts, it is hereby declared that the usance interest
payableoutsideIndiabyanundertakingengagedinthebusinessofshipbreakinginrespectof
purchase of a ship from outside India shall be deemed to be the interest payable on a debt
incurredinaforeigncountryinrespectofthepurchaseoutsideIndia
(d) by the Industrial Finance Corporation of India established by the Industrial Finance
CorporationAct,1948(15of1948),ortheIndustrialDevelopmentBankofIndiaestablished
undertheIndustrialDevelopmentBankofIndiaAct,1964(18of1964),ortheExportImport
BankofIndiaestablishedundertheExportImportBankofIndiaAct,1981(28of1981),orthe
National Housing Bank established under section 3 of the National Housing Bank Act, 1987
(53of1987),ortheSmallIndustriesDevelopmentBankofIndiaestablishedundersection3of
the Small Industries Development Bank of India Act, 1989 (39 of 1989), or the Industrial
CreditandInvestmentCorporationofIndiaacompanyformedandregisteredundertheIndian
CompaniesAct,1913(7of1913),onanymoneysborrowedbyitfromsourcesoutsideIndia
before the 1st day of June, 2001, to the extent to which such interest does not exceed the
about:blank 10/33
amount of interest calculated at the rate approved by the Central Government in this behalf,
havingregardtothetermsoftheloananditsrepayment
(e) by any other financial institution established in India or a banking company to which the
BankingRegulationAct,1949(10of1949),applies(includinganybankorbankinginstitution
referredtoinsection51ofthatAct),onanymoneysborrowedbyitfromsourcesoutsideIndia
beforethe1stdayofJune,2001underaloanagreementapprovedbytheCentralGovernment
where the moneys are borrowed either for the purpose of advancing loans to industrial
undertakings in India for purchase outside India of raw materials or capital plant and
machinery or for the purpose of importing any goods which the Central Government may
considernecessarytoimportinthepublicinterest,totheextenttowhichsuchinterestdoesnot
exceedtheamountofinterestcalculatedattherateapprovedbytheCentralGovernmentinthis
behalf,havingregardtothetermsoftheloananditsrepayment
(f)byanindustrialundertakinginIndiaonanymoneysborrowedbyitinforeigncurrencyfrom
sourcesoutsideIndiaunderaloanagreementapprovedbytheCentralGovernmentbeforethe
1st day of June, 2001 having regard to the need for industrial development in India, to the
extent to which such interest does not exceed the amount of interest calculated at the rate
approvedbytheCentralGovernmentinthisbehalf,havingregardtothetermsoftheloanand
itsrepayment
(fa)byascheduledbanktoanonresidentortoapersonwhoisnotordinarilyresidentwithinthe
meaningofsubsection(6)ofsection6ondepositsinforeigncurrencywheretheacceptance
ofsuchdepositsbythebankisapprovedbytheReserveBankofIndia.
Explanation.Forthepurposesofthisitem,theexpression"scheduledbank"meanstheState
BankofIndiaconstitutedundertheStateBankofIndiaAct,1955(23of1955),asubsidiary
bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), a
corresponding new bank constituted under section 3 of the Banking Companies (Acquisition
and Transfer of Undertakings) Act, 1970 (5 of 1970), or under section 3 of the Banking
Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980), or any other
bankbeingabankincludedintheSecondScheduletotheReserveBankofIndiaAct,1934(2
of1934),butdoesnotincludeacooperativebank
(g)byapubliccompanyformedandregisteredinIndiawiththemainobjectofcarryingonthe
business of providing longterm finance for construction or purchase of houses in India for
residentialpurposes,beingacompanyeligiblefordeductionunderclause(viii)ofsubsection
(1)ofsection36onanymoneysborrowedbyitinforeigncurrencyfromsourcesoutsideIndia
underaloanagreementapprovedbytheCentralGovernmentbeforethe1stdayofJune,2003,
totheextenttowhichsuchinterestdoesnotexceedtheamountofinterestcalculatedattherate
approvedbytheCentralGovernmentinthisbehalf,havingregardtothetermsoftheloanand
itsrepayment.
Explanation.For the purposes of items (f), (fa) and (g), the expression "foreign currency"
shallhavethemeaningassignedtoitintheForeignExchangeManagementAct,1999(42of
1999)
(h) by any public sector company in respect of such bonds or debentures and subject to such
conditions, including the condition that the holder of such bonds or debentures registers his
name and the holding with that company, as the Central Government may, by notification in
theOfficialGazette,specifyinthisbehalf
(i) by Government on deposits made by an employee of the Central Government or a State
Government or a public sector company, in accordance with such scheme as the Central
Government may, by notification in the Official Gazette, frame in this behalf, out of the
moneysduetohimonaccountofhisretirement,whetheronsuperannuationorotherwise.
Explanation 1.For the purposes of this subclause, the expression "industrial undertaking"
meansanyundertakingwhichisengagedin
(a)themanufactureorprocessingofgoodsor
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(aa) the manufacture of computer software or recording of programme on any disc, tape,
perforatedmediaorotherinformationdeviceor
(b)thebusinessofgenerationordistributionofelectricityoranyotherformofpoweror
(ba)thebusinessofprovidingtelecommunicationservicesor
(c)miningor
(d)theconstructionofshipsor
(da)thebusinessofshipbreakingor
(e)theoperationofshipsoraircraftsorconstructionoroperationofrailsystems.
Explanation 1A.For the purposes of this subclause, the expression "interest" shall not include
interestpaidondelayedpaymentofloanorondefaultifitisinexcessoftwopercentperannum
overtherateofinterestpayableintermsofsuchloan.
Explanation 2.For the purposes of this clause, the expression "interest" includes hedging
transactionchargesonaccountofcurrencyfluctuation
(v)intereston
(a) securities held by the Welfare Commissioner, Bhopal Gas Victims, Bhopal, in the Reserve
Bank'sSGLAccountNo.SL/DH048
(b)depositsforthebenefitofthevictimsoftheBhopalgasleakdisasterheldinsuchaccount,with
the Reserve Bank of India or with a public sector bank, as the Central Government may, by
notificationintheOfficialGazette,specify,whetherprospectivelyorretrospectivelybutinno
caseearlierthanthe1stdayofApril,1994inthisbehalf.
Explanation.Forthepurposesofthissubclause,theexpression"publicsectorbank"shallhavethe
meaningassignedtoitintheExplanationtoclause(23D)
(vi) interest on Gold Deposit Bonds issued under the Gold Deposit Scheme, 1999 53[or deposit
certificatesissuedundertheGoldMonetisationScheme,2015]notifiedbytheCentralGovernment
(vii)interestonbonds
(a)issuedbyalocalauthorityorbyaStatePooledFinanceEntityand
(b)specifiedbytheCentralGovernmentbynotificationintheOfficialGazette.
Explanation.For the purposes of this subclause, the expression "State Pooled Finance Entity"
shall mean such entity which is set up in accordance with the guidelines for the Pooled Finance
DevelopmentSchemenotifiedbytheCentralGovernmentintheMinistryofUrbanDevelopment
(viii) any income by way of interest received by a nonresident or a person who is not ordinarily
resident,inIndiaonadepositmadeonorafterthe1stdayofApril,2005,inanOffshoreBanking
Unitreferredtoinclause(u)ofsection2oftheSpecialEconomicZonesAct,2005
(15A)anypaymentmade,byanIndiancompanyengagedinthebusinessofoperationofaircraft,toacquire
anaircraftoranaircraftengine(otherthanapaymentforprovidingspares,facilitiesorservicesin
connectionwiththeoperationofleasedaircraft)onleasefromtheGovernmentofaforeignStateora
foreignenterpriseunderanagreement,notbeinganagreemententeredintobetweenthe1stdayof
April,1997andthe31stdayofMarch,1999,andapprovedbytheCentralGovernmentinthisbehalf
:
Providedthatnothingcontainedinthisclauseshallapplytoanysuchagreemententeredintoonor
afterthe1stdayofApril,2007.
Explanation.For the purposes of this clause, the expression "foreign enterprise" means a person
whoisanonresident
(16)scholarshipsgrantedtomeetthecostofeducation
(17)anyincomebywayof
(i)dailyallowancereceivedbyanypersonbyreasonofhismembershipofParliamentorofany
StateLegislatureorofanyCommitteethereof
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(ii)anyallowancereceivedbyanypersonbyreasonofhismembershipofParliamentunderthe
MembersofParliament(ConstituencyAllowance)Rules,1986
(iii)anyconstituencyallowancereceivedbyanypersonbyreasonofhismembershipofanyState
LegislatureunderanyActorrulesmadebythatStateLegislature
(17A)anypaymentmade,whetherincashorinkind,
(i)inpursuanceofanyawardinstitutedinthepublicinterestbytheCentralGovernmentorany
StateGovernmentorinstitutedbyanyotherbodyandapprovedbytheCentralGovernmentin
thisbehalfor
(ii)asarewardbytheCentralGovernmentoranyStateGovernmentforsuchpurposesasmaybe
approvedbytheCentralGovernmentinthisbehalfinthepublicinterest
(18)anyincomebywayof
(i)pensionreceivedbyanindividualwhohasbeenintheserviceoftheCentralGovernmentor
State Government and has been awarded "Param Vir Chakra" or "Maha Vir Chakra" or "Vir
Chakra"orsuchothergallantryawardastheCentralGovernmentmay,bynotificationinthe
OfficialGazette,specifyinthisbehalf
(ii)familypensionreceivedbyanymemberofthefamilyofanindividualreferredtoinsubclause
(i).
Explanation.For the purposes of this clause, the expression "family" shall have the meaning
assignedtoitintheExplanationtoclause(5)
(19) family pension received by the widow or children or nominated heirs, as the case may be, of a
memberofthearmed forces (including paramilitary forces) of the Union, wherethedeathofsuch
memberhasoccurredinthecourseofoperationalduties,insuchcircumstancesandsubjecttosuch
conditions,asmaybeprescribed54
(19A) the annual value of any one palace in the occupation of a Ruler, being a palace, the annual value
whereofwasexemptfromincometaxbeforethecommencementoftheConstitution(Twentysixth
Amendment) Act, 1971, by virtue of the provisions of the Merged States (Taxation Concessions)
Order, 1949, or the Part B States (Taxation Concessions) Order, 1950, or, as the case may be, the
JammuandKashmir(TaxationConcessions)Order,1958:
Providedthatfortheassessmentyearcommencingonthe1stdayofApril,1972,theannualvalueof
everysuchpalaceintheoccupationofsuchRulerduringtherelevantpreviousyearshallbeexempt
fromincometax
(20)theincomeofalocalauthoritywhichischargeableunderthehead"Incomefromhouseproperty",
"Capitalgains"or"Incomefromothersources"orfromatradeorbusinesscarriedonbyitwhich
accruesorarisesfromthesupplyofacommodityorservice(notbeingwaterorelectricity)withinits
own jurisdictional area or from the supply of water or electricity within or outside its own
jurisdictionalarea.
Explanation.Forthepurposesofthisclause,theexpression"localauthority"means
(i)Panchayatasreferredtoinclause(d)ofarticle243oftheConstitutionor
(ii)Municipalityasreferredtoinclause(e)ofarticle243PoftheConstitutionor
(iii)MunicipalCommitteeandDistrictBoard,
legally entitled to, or entrusted by the Government with, the control or management of a
Municipalorlocalfundor
(iv)CantonmentBoardasdefinedinsection3oftheCantonmentsAct,1924(2of1924)
(20A)[***]
(21)55anyincomeofaresearchassociationforthetimebeingapprovedforthepurposeofclause(ii)or
clause(iii)ofsubsection(1)ofsection35:
Providedthattheresearchassociation
about:blank 13/33
(a)appliesitsincome,oraccumulatesitforapplication,whollyandexclusivelytotheobjectsfor
whichitisestablished,andtheprovisionsofsubsection(2)andsubsection(3)ofsection11
shallapplyinrelationtosuchaccumulationsubjecttothefollowingmodifications,namely:
(i)insubsection(2),
(1)thewords,brackets,lettersandfigure"referredtoinclause(a)orclause(b)ofsub
section(1)readwiththeExplanationtothatsubsection"shallbeomitted
(2) for the words "to charitable or religious purposes", the words "for the purposes of
scientific research or research in social science or statistical research" shall be
substituted
(3) the reference to "Assessing Officer" in clause (a) thereof shall be construed as a
referencetothe"prescribedauthority"referredtoinclause(ii)orclause(iii)ofsub
section(1)ofsection35
(ii) in subsection (3), in clause (a), for the words "charitable or religious purposes", the
words "the purposes of scientific research or research in social science or statistical
research"shallbesubstitutedand
(b)doesnotinvestordeposititsfunds,otherthan
(i)anyassetsheldbytheresearchassociationwheresuchassetsformpartofthecorpusof
thefundoftheassociationasonthe1stdayofJune,1973
(ii) any assets (being debentures issued by, or on behalf of, any company or corporation),
acquiredbytheresearchassociationbeforethe1stdayofMarch,1983
(iii)anyaccretiontotheshares,formingpartofthecorpusofthefundmentionedinsubclause
(i),bywayofbonussharesallottedtotheresearchassociation
(iv)voluntarycontributionsreceivedandmaintainedintheformofjewellery,furnitureorany
otherarticleastheBoardmay,bynotificationintheOfficialGazette,specify,
for any period during the previous year otherwise than in any one or more of the forms or
modesspecifiedinsubsection(5)ofsection11:
Providedfurther that the exemption under this clause shall not be denied in relation to voluntary
contribution, other than voluntary contribution in cash or voluntary contribution of the nature
referredtoinclause(b)ofthefirstprovisotothisclause,subjecttotheconditionthatsuchvoluntary
contributionisnotheldbytheresearchassociation,otherwisethaninanyoneormoreoftheforms
ormodesspecifiedinsubsection(5)ofsection11,aftertheexpiryofoneyearfromtheendofthe
previousyearinwhichsuchassetisacquiredorthe31stdayofMarch,1992,whicheverislater:
Provided also that nothing contained in this clause shall apply in relation to any income of the
research association, being profits and gains of business, unless the business is incidental to the
attainment of its objectives and separate books of account are maintained by it in respect of such
business:
Provided also that where the research association is approved by the Central Government and
subsequentlythatGovernmentissatisfiedthat
(i)theresearchassociationhasnotapplieditsincomeinaccordancewiththeprovisionscontained
inclause(a)ofthefirstprovisoor
(ii) the research association has not invested or deposited its funds in accordance with the
provisionscontainedinclause(b)ofthefirstprovisoor
(iii)theactivitiesoftheresearchassociationarenotgenuineor
(iv)theactivitiesoftheresearchassociationarenotbeingcarriedoutinaccordancewithallorany
oftheconditionssubjecttowhichsuchassociationwasapproved,
it may, at any time after giving a reasonable opportunity of showing cause against the proposed
withdrawaltotheconcernedassociation,byorder,withdrawtheapprovalandforwardacopyofthe
orderwithdrawingtheapprovaltosuchassociationandtotheAssessingOfficer
(22)[OmittedbytheFinance(No.2)Act,1998,w.e.f.141999]
about:blank 14/33
(22B)anyincomeofsuchnewsagencysetupinIndiasolelyforcollectionanddistributionofnewsasthe
CentralGovernmentmay,bynotificationintheOfficialGazette,specifyinthisbehalf:
Provided that the news agency applies its income or accumulates it for application solely for
collectionanddistributionofnewsanddoesnotdistributeitsincomeinanymannertoitsmembers:
ProvidedfurtherthatanynotificationissuedbytheCentralGovernmentunderthisclauseshall,at
any one time, have effect for such assessment year or years, not exceeding three assessment years
(including an assessment year or years commencing before the date on which such notification is
issued)asmaybespecifiedinthenotification:
Provided also that where the news agency has been specified, by notification, by the Central
GovernmentandsubsequentlythatGovernmentissatisfiedthatsuchnewsagencyhasnotappliedor
accumulated or distributed its income in accordance with the provisions contained in the first
proviso, it may, at any time after giving a reasonable opportunity of showing cause, rescind the
notification and forward a copy of the order rescinding the notification to such agency and to the
AssessingOfficer
(23)[OmittedbytheFinanceAct,2002,w.e.f.142003]
(23A) any income (other than income chargeable under the head "Income from house property" or any
income received for rendering any specific services or income by way of interest or dividends
derivedfromitsinvestments)ofanassociationorinstitutionestablishedinIndiahavingasitsobject
the control, supervision, regulation or encouragement of the profession of law, medicine,
accountancy, engineering or architecture or such other profession as the Central Government may
specifyinthisbehalf,fromtimetotime,bynotificationintheOfficialGazette:
Providedthat
(i)theassociationorinstitutionappliesitsincome,oraccumulatesitforapplication,solelytothe
objectsforwhichitisestablishedand
(ii)theassociationorinstitutionisforthetimebeingapprovedforthepurposeofthisclausebythe
CentralGovernmentbygeneralorspecialorder:
Provided further that where the association or institution has been approved by the Central
GovernmentandsubsequentlythatGovernmentissatisfiedthat
(i)suchassociationorinstitutionhasnotappliedoraccumulateditsincomeinaccordancewith
theprovisionscontainedinthefirstprovisoor
(ii)theactivitiesoftheassociationorinstitutionarenotbeingcarriedoutinaccordancewithallor
anyoftheconditionssubjecttowhichsuchassociationorinstitutionwasapproved,
withdrawaltotheconcernedassociationorinstitution,byorder,withdrawtheapprovalandforwarda
copy of the order withdrawing the approval to such association or institution and to the Assessing
Officer
(23AA) any income received by any person on behalf of any Regimental Fund or NonPublic Fund
establishedbythearmedforcesoftheUnionforthewelfareofthepastandpresentmembersofsuch
forcesortheirdependants
(23AAA) any income received by any person on behalf of a fund established, for such purposes as may be
notifiedbytheBoardintheOfficialGazette,forthewelfareofemployeesortheirdependantsandof
whichfundsuchemployeesaremembersifsuchfundfulfilsthefollowingconditions,namely:
(a)thefund
(i)appliesitsincomeoraccumulatesitforapplication,whollyandexclusivelytotheobjects
forwhichitisestablishedand
(ii)investsitsfundsandcontributionsandothersumsreceivedbyitintheformsormodes
specifiedinsubsection(5)ofsection11
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(b)thefundisapprovedbythePrincipalCommissionerorCommissionerinaccordancewiththe
rules56madeinthisbehalf:
Providedthatanysuchapprovalshallatanyonetimehaveeffectforsuchassessmentyearoryears
notexceedingthreeassessmentyearsasmaybespecifiedintheorderofapproval
(23AAB)anyincomeofafund,bywhatevernamecalled,setupbytheLifeInsuranceCorporationofIndiaon
orafterthe1stdayofAugust,1996oranyotherinsurerunderapensionscheme,
(i)towhichcontributionismadebyanypersonforthepurposeofreceivingpensionfromsuch
fund
(ii) which is approved by the Controller of Insurance or the Insurance Regulatory and
Development Authority established under subsection (1) of section 3 of the Insurance
RegulatoryandDevelopmentAuthorityAct,1999(41of1999),asthecasemaybe.
Explanation.Forthepurposesofthisclause,theexpression"ControllerofInsurance"shallhavethe
meaningassignedtoitinclause(5B)ofsection2oftheInsuranceAct,1938(4of1938)
(23B)anyincomeofaninstitutionconstitutedasapubliccharitabletrustorregisteredundertheSocieties
RegistrationAct,1860(21of1860),orunderanylawcorrespondingtothatActinforceinanypart
ofIndia,andexistingsolelyforthedevelopmentofkhadiorvillageindustriesorboth,andnotfor
purposes of profit, to the extent such income is attributable to the business of production, sale, or
marketing,ofkhadiorproductsofvillageindustries:
Providedthat
(i)theinstitutionappliesitsincome,oraccumulatesitforapplication,solelyforthedevelopment
ofkhadiorvillageindustriesorbothand
(ii)theinstitutionis,forthetimebeing,approvedforthepurposeofthisclausebytheKhadiand
VillageIndustriesCommission:
ProvidedfurtherthattheCommissionshallnot,atanyonetime,grantsuchapprovalformorethan
threeassessmentyearsbeginningwiththeassessmentyearnextfollowingthefinancialyearinwhich
itisgranted:
Provided also that where the institution has been approved by the Khadi and Village Industries
CommissionandsubsequentlythatCommissionissatisfiedthat
(i)the institution has not applied or accumulated its income in accordance with the provisions
containedinthefirstprovisoor
(ii)theactivitiesoftheinstitutionarenotbeingcarriedoutinaccordancewithalloranyofthe
conditionssubjecttowhichsuchinstitutionwasapproved,
withdrawaltotheconcernedinstitution,byorder,withdrawtheapprovalandforwardacopyofthe
orderwithdrawingtheapprovaltosuchinstitutionandtotheAssessingOfficer.
(i) "Khadi and Village Industries Commission" means the Khadi and Village Industries
CommissionestablishedundertheKhadiandVillageIndustriesCommissionAct,1956(61of
1956)
(ii)"khadi"and"villageindustries"havethemeaningsrespectivelyassignedtotheminthatAct
(23BB) any income of an authority (whether known as the Khadi and Village Industries Board or by any
othername)establishedinaStatebyorunderaStateorProvincialActforthedevelopmentofkhadi
orvillageindustriesintheState.
Explanation.For the purposes of this clause, "khadi" and "village industries" have the meanings
respectively assigned to them in the Khadi and Village Industries Commission Act, 1956 (61 of
1956)
(23BBA) any income of any body or authority (whether or not a body corporate or corporation sole)
established,constitutedorappointedbyorunderanyCentral,StateorProvincialActwhichprovides
for the administration of any one or more of the following, that is to say, public religious or
about:blank 16/33
charitabletrustsorendowments(includingmaths,temples,gurdwaras,wakfs,churches,synagogues,
agiariesorotherplacesofpublicreligiousworship)orsocietiesforreligiousorcharitablepurposes
registeredassuchundertheSocietiesRegistrationAct,1860(21of1860),oranyotherlawforthe
timebeinginforce:
Providedthatnothinginthisclauseshallbeconstruedtoexemptfromtaxtheincomeofanytrust,
endowmentorsocietyreferredtotherein
(23BBB)anyincomeoftheEuropeanEconomicCommunityderivedinIndiabywayofinterest,dividendsor
capitalgainsfrominvestmentsmadeoutofitsfundsundersuchschemeastheCentralGovernment
may,bynotificationintheOfficialGazette,specifyinthisbehalf.
Explanation.For the purposes of this clause, "European Economic Community" means the
EuropeanEconomicCommunityestablishedbytheTreatyofRomeof25thMarch,1957
(23BBC)anyincomeoftheSAARCFundforRegionalProjectssetupbyColomboDeclarationissuedonthe
21stdayofDecember,1991bytheHeadsofStateorGovernmentoftheMemberCountriesofSouth
Asian Association for Regional Cooperation established on the 8th day of December, 1985 by the
CharteroftheSouthAsianAssociationforRegionalCooperation
(23BBD) any income of the Secretariat of the Asian Organisation of the Supreme Audit Institutions
registeredas"ASOSAISECRETARIAT"undertheSocietiesRegistrationAct,1860(21of1860)for
ten previous years relevant to the assessment years beginning on the 1st day of April, 2001 and
endingonthe31stdayofMarch,2011
(23BBE)anyincomeoftheInsuranceRegulatoryandDevelopmentAuthorityestablishedundersubsection
(1)ofsection3oftheInsuranceRegulatoryandDevelopmentAuthorityAct,1999(41of1999)
(23BBF) any income of the NorthEastern Development Finance Corporation Limited, being a company
formedandregisteredundertheCompaniesAct,1956(1of1956)57:
ProvidedthatincomputingthetotalincomeoftheNorthEasternDevelopmentFinanceCorporation
Limited,theamounttotheextentof
(i) twenty per cent of the total income for assessment year beginning on the 1st day of April,
2006
(ii)fortypercentofthetotalincomeforassessmentyearbeginningonthe1stdayofApril,2007
(iii)sixtypercentofthetotalincomeforassessmentyearbeginningonthe1stdayofApril,2008
(iv)eightypercentofthetotalincomeforassessmentyearbeginningonthe1stdayofApril,2009
(v)onehundredpercentofthetotalincomeforassessmentyearbeginningonthe1stdayofApril,
2010andanysubsequentassessmentyearoryears,
shallbeincludedinsuchtotalincome
(23BBG)anyincomeoftheCentralElectricityRegulatoryCommissionconstitutedundersubsection(1)of
section76oftheElectricityAct,2003(36of2003)
(23BBH)anyincomeofthePrasarBharati(BroadcastingCorporationofIndia)establishedundersubsection
(1)ofsection3ofthePrasarBharati(BroadcastingCorporationofIndia)Act,1990(25of1990)
(23C)anyincomereceivedbyanypersononbehalfof
(i)thePrimeMinister'sNationalReliefFundor
(ii)thePrimeMinister'sFund(PromotionofFolkArt)or
(iii)thePrimeMinister'sAidtoStudentsFundor
(iiia)theNationalFoundationforCommunalHarmonyor
58[(iiiaa)theSwachhBharatKosh,setupbytheCentralGovernmentor
(iiiaaa)theCleanGangaFund,setupbytheCentralGovernmentor]
59[(iiiaaaa)theChiefMinister'sReliefFundortheLieutenantGovernor'sReliefFundinrespectofany
StateorUnionterritoryasreferredtoinsubclause(iiihf)ofclause(a) of subsection (2) of
section80Gor]
about:blank 17/33
(iiiab)anyuniversityorothereducationalinstitutionexistingsolelyforeducationalpurposesandnot
forpurposesofprofit,andwhichiswhollyorsubstantiallyfinancedbytheGovernment60or
(iiiac)anyhospitalorotherinstitutionforthereceptionandtreatmentofpersonssufferingfromillness
ormentaldefectivenessorforthereceptionandtreatmentofpersonsduringconvalescenceor
of persons requiring medical attention or rehabilitation, existing solely for philanthropic
purposesandnotforpurposesofprofit,andwhichiswhollyorsubstantiallyfinancedbythe
Government60.
Explanation.For the purposes of subclauses (iiiab) and (iiiac), any university or other
educational institution, hospital or other institution referred therein, shall be considered as
beingsubstantiallyfinancedbytheGovernmentforanypreviousyear,iftheGovernmentgrant
to such university or other educational institution, hospital or other institution exceeds such
percentageofthetotalreceiptsincludinganyvoluntarycontributions,asmaybeprescribed60,
ofsuchuniversityorothereducationalinstitution,hospitalorotherinstitution,asthecasemay
be,duringtherelevantpreviousyearor
(iiiad)anyuniversityorothereducationalinstitutionexistingsolelyforeducationalpurposesandnot
for purposes of profit if the aggregate annual receipts of such university or educational
institutiondonotexceedtheamountofannualreceiptsasmaybeprescribed61or
(iiiae) any hospital or other institution for the reception and treatment of persons suffering from
illness or mental defectiveness or for the reception and treatment of persons during
convalescence or of persons requiring medical attention or rehabilitation, existing solely for
philanthropicpurposesandnotforpurposesofprofit,iftheaggregateannualreceiptsofsuch
hospitalorinstitutiondonotexceedtheamountofannualreceiptsasmaybeprescribed62or
(iv)anyotherfundorinstitutionestablishedforcharitablepurposeswhichmaybeapprovedbythe
prescribedauthority63,havingregardtotheobjectsofthefundorinstitutionanditsimportance
throughoutIndiaorthroughoutanyStateorStatesor
(v) any trust (including any other legal obligation) or institution wholly for public religious
purposesorwhollyforpublicreligiousandcharitablepurposes,whichmaybeapprovedbythe
prescribed authority64, having regard to the manner in which the affairs of the trust or
institution are administered and supervised for ensuring that the income accruing thereto is
properlyappliedfortheobjectsthereof
(vi)anyuniversityorothereducationalinstitutionexistingsolelyforeducationalpurposesandnot
forpurposesofprofit,otherthanthosementionedinsubclause(iiiab)orsubclause(iiiad)and
whichmaybeapprovedbytheprescribedauthority65or
(via) any hospital or other institution for the reception and treatment of persons suffering from
illness or mental defectiveness or for the reception and treatment of persons during
convalescence or of persons requiring medical attention or rehabilitation, existing solely for
philanthropicpurposesandnotforpurposesofprofit,otherthanthosementionedinsubclause
(iiiac)orsubclause(iiiae)andwhichmaybeapprovedbytheprescribedauthority66:
Providedthatthefundortrustorinstitutionoranyuniversityorothereducationalinstitution
or any hospital or other medical institution referred to in subclause (iv) or subclause (v) or
subclause (vi) or subclause (via) shall make an application in the prescribed form67 and
mannertotheprescribedauthority68forthepurposeofgrantoftheexemption,orcontinuance
thereof,undersubclause(iv)orsubclause(v)orsubclause(vi)orsubclause(via):
Provided further that the prescribed authority, before approving any fund or trust or
institution or any university or other educational institution or any hospital or other medical
institution,undersubclause(iv) or subclause (v) or subclause (vi) or subclause (via),may
callforsuchdocuments(includingauditedannualaccounts)orinformationfromthefundor
trust or institution or any university or other educational institution or any hospital or other
medicalinstitution,asthecasemaybe,asitthinksnecessaryinordertosatisfyitselfaboutthe
about:blank 18/33
genuineness of the activities of such fund or trust or institution or any university or other
educationalinstitutionoranyhospitalorothermedicalinstitution,asthecasemaybe,andthe
prescribedauthoritymayalsomakesuchinquiriesasitdeemsnecessaryinthisbehalf:
Provided also that the fund or trust or institution or any university or other educational
institution or any hospital or other medical institution referred to in subclause (iv) or sub
clause(v)orsubclause(vi)orsubclause(via)
(a)appliesitsincome,oraccumulatesitforapplication,whollyandexclusivelytotheobjects
forwhichitisestablishedandinacasewheremorethanfifteenpercentofitsincomeis
accumulatedonorafterthe1stdayofApril,2002,theperiodoftheaccumulationofthe
amountexceedingfifteenpercentofitsincomeshallinnocaseexceedfiveyearsand
(b)doesnotinvestordeposititsfunds,otherthan
(i)anyassetsheldbythefund,trustorinstitutionoranyuniversityorothereducational
institutionoranyhospitalorothermedicalinstitutionwheresuchassetsformpartof
the corpus of the fund, trust or institution or any university or other educational
institutionoranyhospitalorothermedicalinstitutionasonthe1stdayofJune,1973
(ia)anyasset,beingequitysharesofapubliccompany,heldbyanyuniversityorother
educationalinstitutionoranyhospitalorothermedicalinstitutionwheresuchassets
form part of the corpus of any university or other educational institution or any
hospitalorothermedicalinstitutionasonthe1stdayofJune,1998
(ii)anyassets(beingdebenturesissuedby,oronbehalfof,anycompanyorcorporation),
acquired by the fund, trust or institution or any university or other educational
institution or any hospital or other medical institution before the 1st day of March,
1983
(iii) any accretion to the shares, forming part of the corpus mentioned in subclause (i)
andsubclause(ia),bywayofbonussharesallottedtothefund,trustorinstitutionor
any university or other educational institution or any hospital or other medical
institution
(iv)voluntarycontributionsreceivedandmaintainedintheformofjewellery,furnitureor
anyotherarticleastheBoardmay,bynotificationintheOfficialGazette,specify,
foranyperiodduringthepreviousyearotherwisethaninanyoneormoreoftheformsor
modesspecifiedinsubsection(5)ofsection11:
Providedalsothattheexemptionundersubclause(iv)orsubclause(v)shallnotbedeniedin
relationtoanyfundsinvestedordepositedbeforethe1stdayofApril,1989,otherwisethanin
anyoneormoreoftheformsormodesspecifiedinsubsection(5)ofsection11ifsuchfunds
donotcontinuetoremainsoinvestedordepositedafterthe30thdayofMarch,1993:
Providedalsothattheexemptionundersubclause(vi)orsubclause(via)shallnotbedenied
inrelationtoanyfundsinvestedordepositedbeforethe1stdayofJune,1998,otherwisethan
in any one or more of the forms or modes specified in subsection (5) of section 11 if such
fundsdonotcontinuetoremainsoinvestedordepositedafterthe30thdayofMarch,2001:
Providedalsothattheexemptionundersubclause(iv)orsubclause(v)orsubclause(vi)or
subclause(via)shallnotbedeniedinrelationtovoluntarycontribution,otherthanvoluntary
contributionincashorvoluntarycontributionofthenaturereferredtoinclause(b)ofthethird
provisotothissubclause,subjecttotheconditionthatsuchvoluntarycontributionisnotheld
by thetrustorinstitution or any university or other educational institution or anyhospitalor
othermedicalinstitution,otherwisethaninanyoneormoreoftheformsormodesspecifiedin
subsection(5)ofsection11,aftertheexpiryofoneyearfromtheendofthepreviousyearin
whichsuchassetisacquiredorthe31stdayofMarch,1992,whicheverislater:
Providedalsothatnothingcontainedinsubclause(iv)orsubclause(v)orsubclause(vi)or
subclause(via)shallapplyinrelationtoanyincomeofthefundortrustorinstitutionorany
university or other educational institution or any hospital or other medical institution, being
about:blank 19/33
profitsandgainsofbusiness,unlessthebusinessisincidentaltotheattainmentofitsobjectives
andseparatebooksofaccountaremaintainedbyitinrespectofsuchbusiness:
ProvidedalsothatanynotificationissuedbytheCentralGovernmentundersubclause(iv)or
subclause(v),beforethedateonwhichtheTaxationLaws(Amendment)Bill,2006receives
the assent of the President*, shall, at any one time, have effect for such assessment year or
years, not exceeding three assessment years (including an assessment year or years
commencingbeforethedateonwhichsuchnotificationisissued)asmaybespecifiedinthe
notification:
Providedalsothatwhereanapplicationunderthefirstprovisoismadeonorafterthedateon
whichtheTaxationLaws(Amendment)Bill,2006receivestheassentofthePresident,*every
notificationundersubclause(iv)orsubclause(v)shallbeissuedorapprovalundersubclause
(iv)orsubclause(v)orsubclause(vi)orsubclause(via)shallbegrantedoranorderrejecting
theapplicationshallbepassedwithintheperiodoftwelvemonthsfromtheendofthemonthin
whichsuchapplicationwasreceived:
Providedalsothatwherethetotalincome,ofthefundortrustorinstitutionoranyuniversity
orothereducationalinstitutionoranyhospitalorothermedicalinstitutionreferredtoinsub
clause(iv)orsubclause(v)orsubclause(vi)orsubclause(via),withoutgivingeffecttothe
provisions of the said subclauses, exceeds the maximum amount which is not chargeable to
tax in any previous year, such trust or institution or any university or other educational
institutionoranyhospitalorothermedicalinstitutionshallgetitsaccountsauditedinrespect
of that year by an accountant as defined in the Explanationbelow subsection (2) of section
288andfurnishalongwiththereturnofincomefortherelevantassessmentyear,thereportof
such audit in the prescribed form69 duly signed and verified by such accountant and setting
forthsuchparticularsasmaybeprescribed:
Provided also that any amount of donation received by the fund or institution in terms of
clause (d) of subsection (2) of section 80G in respect of which accounts of income and
expenditurehavenotbeenrenderedtotheauthorityprescribedunderclause(v)ofsubsection
(5C) of that section, in the manner specified in that clause, or which has been utilised for
purposesotherthanprovidingrelieftothevictimsofearthquakeinGujaratorwhichremains
unutilised in terms of subsection (5C) of section 80G and not transferred to the Prime
Minister'sNationalReliefFundonorbeforethe31stdayofMarch,2004shallbedeemedtobe
theincomeofthepreviousyearandshallaccordinglybechargedtotax:
Following twelfth proviso shall be inserted after the eleventh proviso to clause (23C) of
section10bytheFinanceAct,2017,w.e.f.142018:
Provided also that any amount credited or paid out of income of any fund or trust or
institutionoranyuniversityorothereducationalinstitutionoranyhospitalorothermedical
institution referred to in subclause (iv) or subclause (v) or subclause (vi) or subclause
(via), to any trust or institution registered under section 12AA, being voluntary contribution
madewithaspecificdirectionthattheyshallformpartofthecorpusofthetrustorinstitution,
shall not be treated as application of income to the objects for which such fund or trust or
institutionoruniversityoreducationalinstitutionorhospitalorothermedicalinstitution,as
thecasemaybe,isestablished:
Providedalsothatwherethefundortrustorinstitutionoranyuniversityorothereducational
institution or any hospital or other medical institution referred to in subclause (iv) or sub
clause(v) or subclause (vi) or subclause (via) does not apply its income during the year of
receipt and accumulates it, any payment or credit out of such accumulation to any trust or
institutionregisteredundersection12AAortoanyfundortrustorinstitutionoranyuniversity
orothereducationalinstitutionoranyhospitalorothermedicalinstitutionreferredtoinsub
clause (iv) or subclause (v) or subclause (vi) or subclause (via) shall not be treated as
applicationofincometotheobjectsforwhichsuchfundortrustorinstitutionoruniversityor
educational institution or hospital or other medical institution, as the case may be, is
established:
about:blank 20/33
Provided also that where the fund or institution referred to in subclause (iv) or trust or
institutionreferredtoinsubclause(v)isnotifiedbytheCentralGovernmentorisapprovedby
theprescribedauthority,asthecasemaybe,oranyuniversityorothereducationalinstitution
referred to in subclause (vi) or any hospital or other medical institution referred to in sub
clause(via),isapprovedbytheprescribedauthorityandsubsequentlythatGovernmentorthe
prescribedauthorityissatisfiedthat
(i)suchfundorinstitutionortrustoranyuniversityorothereducationalinstitutionorany
hospitalorothermedicalinstitutionhasnot
(A)applied its income in accordance with the provisions contained in clause (a)ofthe
thirdprovisoor
(B)investedordepositeditsfundsinaccordancewiththeprovisionscontainedinclause
(b)ofthethirdprovisoor
(ii) the activities of such fund or institution or trust or any university or other educational
institutionoranyhospitalorothermedicalinstitution
(A)arenotgenuineor
(B)are notbeingcarried out in accordance with all or any of the conditions subjectto
whichitwasnotifiedorapproved,
itmay,atanytimeaftergivingareasonableopportunityofshowingcauseagainsttheproposed
action to the concerned fund or institution or trust or any university or other educational
institution or any hospital or other medical institution, rescind the notification or, by order,
withdraw the approval, as the case may be, and forward a copy of the order rescinding the
notificationorwithdrawingtheapprovaltosuchfundorinstitutionortrustoranyuniversityor
othereducationalinstitutionoranyhospitalorothermedicalinstitutionandtotheAssessing
Officer:
Providedalsothatincasethefundortrustorinstitutionoranyuniversityorothereducational
institutionoranyhospitalorothermedicalinstitutionreferredtointhefirstprovisomakesan
application on or after the 1st day of June, 2006 for the purposes of grant of exemption or
continuancethereof,suchapplicationshallbemadeonorbeforethe30thdayofSeptemberof
therelevantassessmentyearfromwhichtheexemptionissought:
Provided also that any anonymous donation referred to in section 115BBC on which tax is
payable in accordance with the provisions of the said section shall be included in the total
income:
Provided also that all pending applications, on which no notification has been issued under
subclause(iv)orsubclause(v)beforethe1stdayofJune,2007,shallstandtransferredonthat
daytotheprescribedauthorityandtheprescribedauthoritymayproceedwithsuchapplications
underthosesubclausesfromthestageatwhichtheywereonthatday:
Provided also that the income of a trust or institution referred to in subclause (iv) or sub
clause(v)shallbeincludedinitstotalincomeofthepreviousyeariftheprovisionsofthefirst
proviso to clause (15) of section 2 become applicable to such trust or institution in the said
previous year, whether or not any approval granted or notification issued in respect of such
trustorinstitutionhasbeenwithdrawnorrescinded:
Providedalso that where the fund or institution referred to in subclause (iv) or the trust or
institution referred to in subclause (v) has been notified by the Central Government or
approvedbytheprescribedauthority,asthecasemaybe,oranyuniversityorothereducational
institutionreferredtoinsubclause(vi)oranyhospitalorothermedicalinstitutionreferredto
insubclause(via),hasbeenapprovedbytheprescribedauthority,andthenotificationorthe
approvalisinforceforanypreviousyear,then,nothingcontainedinanyotherprovisionofthis
section[otherthanclause(1)thereof]shalloperatetoexcludeanyincomereceivedonbehalf
ofsuchfundortrustorinstitutionoruniversityorothereducationalinstitutionorhospitalor
other medical institution, as the case may be, from the total income of the person in receipt
thereofforthatpreviousyear.
about:blank 21/33
Explanation.Inthisclause,whereanyincomeisrequiredtobeappliedoraccumulated,then,
forsuchpurposetheincomeshallbedeterminedwithoutanydeductionorallowancebywayof
depreciationorotherwiseinrespectofanyasset,acquisitionofwhichhasbeenclaimedasan
applicationofincomeunderthisclauseinthesameoranyotherpreviousyear
(23D)subjecttotheprovisionsofChapterXIIE,anyincomeof
(i)aMutualFundregisteredundertheSecuritiesandExchangeBoardofIndiaAct,1992(15of
1992)orregulationsmadethereunder
(ii) such other Mutual Fund set up by a public sector bank or a public financial institution or
authorised by the Reserve Bank of India and subject to such conditions as the Central
Governmentmay,bynotificationintheOfficialGazette,specifyinthisbehalf.
(a)theexpression"publicsectorbank"meanstheStateBankofIndiaconstitutedunderthe
StateBankofIndiaAct,1955(23of1955),asubsidiarybankasdefinedintheStateBank
of India (Subsidiary Banks) Act, 1959 (38 of 1959), a corresponding new Bank
constituted under section 3 of the Banking Companies (Acquisition and Transfer of
Undertakings) Act, 1970 (5 of 1970), or under section 3 of the Banking Companies
(AcquisitionandTransferofUndertakings)Act,1980(40of1980)andabankincludedin
thecategory"otherpublicsectorbanks"bytheReserveBankofIndia
(b) the expression "public financial institution" shall have the meaning assigned to it in
section4AoftheCompaniesAct,1956(1of1956)
(c)theexpression"SecuritiesandExchangeBoardofIndia"shallhavethemeaningassigned
toitinclause(a)ofsubsection(1)ofsection2oftheSecuritiesandExchangeBoardof
IndiaAct,1992(15of1992)
(23DA)anyincomeofasecuritisationtrustfromtheactivityofsecuritisation.
(a)"securitisation"shallhavethesamemeaningasassignedtoit,
(i)inclause(r)ofsubregulation(1)ofregulation2oftheSecuritiesandExchangeBoardof
India(PublicOfferandListingofSecuritisedDebtInstruments)Regulations,2008made
under the Securities and Exchange Board of India Act, 1992 (15 of 1992) and the
SecuritiesContracts(Regulation)Act,1956(42of1956)or
70[(ia)inclause(z)ofsubsection(1)ofsection2oftheSecuritisationandReconstructionof
FinancialAssetsandEnforcementofSecurityInterestAct,2002(54of2002)or]
(ii) under the guidelines on securitisation of standard assets issued by the Reserve Bank of
India
(b)"securitisationtrust"shallhavethemeaningassignedtoitintheExplanationbelow 71[section
115TCA]
(23E)[OmittedbytheFinanceAct,2002,w.e.f.142003]
(23EA) any income, by way of contributions received from recognised stock exchanges and the members
thereof,ofsuchInvestorProtectionFundsetupbyrecognisedstockexchangesinIndia,eitherjointly
orseparately,astheCentralGovernmentmay,bynotificationintheOfficialGazette,specifyinthis
behalf:
ProvidedthatwhereanyamountstandingtothecreditoftheFundandnotchargedtoincometax
duringanypreviousyearisshared,eitherwhollyorinpart,witharecognisedstockexchange,the
wholeoftheamountsosharedshallbedeemedtobetheincomeofthepreviousyearinwhichsuch
amountissosharedandshallaccordinglybechargeabletoincometax
(23EB) any income of the Credit Guarantee Fund Trust for Small Industries, being a trust created by the
Government of India and the Small Industries Development Bank of India established under sub
section(1)ofsection3oftheSmallIndustriesDevelopmentBankofIndiaAct,1989(39of1989),
about:blank 22/33
forfivepreviousyearsrelevanttotheassessmentyearsbeginningonthe1stdayofApril,2002and
endingonthe31stdayofMarch,2007
(23EC)anyincome,bywayofcontributionsreceivedfromcommodityexchangesandthemembersthereof,
of such Investor Protection Fund set up by commodity exchanges in India, either jointly or
separately, as the Central Government may, by notification in the Official Gazette, specify in this
behalf:
ProvidedthatwhereanyamountstandingtothecreditofthesaidFundandnotchargedtoincome
tax during any previous year is shared, either wholly or in part, with a commodity exchange, the
wholeoftheamountsosharedshallbedeemedtobetheincomeofthepreviousyearinwhichsuch
amountissosharedandshallaccordinglybechargeabletoincometax.
Explanation.For the purposes of this clause, "commodity exchange" shall mean a "registered
association"asdefined in clause (jj) of section2ofthe Forward Contracts (Regulation) Act, 1952
(74of1952)
(23ED)anyincome,bywayofcontributionsreceivedfromadepository,ofsuchInvestorProtectionFund
set up in accordance with the regulations by a depository as the Central Government may, by
notificationintheOfficialGazette,specifyinthisbehalf:
during any previous year is shared, either wholly or in part with a depository, the whole of the
amountsosharedshallbedeemedtobetheincomeofthepreviousyearinwhichsuchamountisso
sharedandshall,accordingly,bechargeabletoincometax.
(i)"depository"shallhavethesamemeaningasassignedtoitinclause(e)ofsubsection(1)of
section2oftheDepositoriesAct,1996(22of1996)
(ii)"regulations"meanstheregulationsmadeundertheSecuritiesandExchangeBoardofIndia
Act,1992(15of1992)andtheDepositoriesAct,1996(22of1996)
72[(23EE) any specified income of such Core Settlement Guarantee Fund, set up by a recognised clearing
corporationinaccordancewiththeregulations,astheCentralGovernmentmay,bynotificationinthe
OfficialGazette,specifyinthisbehalf:
duringanypreviousyearisshared,eitherwhollyorinpartwiththespecifiedperson,thewholeof
theamountsosharedshallbedeemedtobetheincomeofthepreviousyearinwhichsuchamountis
sosharedandshall,accordingly,bechargeabletoincometax.
(i)"recognisedclearingcorporation"shallhavethesamemeaningasassignedtoitinclause(o)of
subregulation (1) of regulation 2 of the Securities Contracts (Regulation) (Stock Exchanges
andClearingCorporations)Regulations,2012madeundertheSecuritiesandExchangeBoard
of India Act, 1992 (15 of 1992) and the Securities Contracts (Regulation) Act, 1956 (42 of
1956)
(ii) "regulations" means the Securities Contracts (Regulation) (Stock Exchanges and Clearing
Corporations)Regulations,2012madeundertheSecuritiesandExchangeBoardofIndiaAct,
1992(15of1992)andtheSecuritiesContracts(Regulation)Act,1956(42of1956)
(iii)"specifiedincome"shallmean,
(a)theincomebywayofcontributionreceivedfromspecifiedpersons
(b) the income by way of penalties imposed by the recognised clearing corporation and
creditedtotheCoreSettlementGuaranteeFundor
(c)theincomefrominvestmentmadebytheFund
(iv)"specifiedperson"shallmean,
(a)anyrecognisedclearingcorporationwhichestablishesandmaintainstheCoreSettlement
GuaranteeFund
about:blank 23/33
(b) any recognised stock exchange, being a shareholder in such recognised clearing
corporation,oracontributortotheCoreSettlementGuaranteeFundand
(c)anyclearingmembercontributingtotheCoreSettlementGuaranteeFund]
(23F) any income by way of dividends or longterm capital gains of a venture capital fund or a venture
capitalcompanyfrominvestmentsmadebywayofequitysharesinaventurecapitalundertaking:
Providedthatsuchventurecapitalfundorventurecapitalcompanyisapprovedforthepurposesof
this clause by the prescribed authority73 in accordance with the rules74 made in this behalf and
satisfiestheprescribedconditions:
Providedfurtherthatanyapprovalbytheprescribedauthorityshall,atanyonetime,haveeffectfor
suchassessmentyearoryears,notexceedingthreeassessmentyears,asmaybespecifiedintheorder
ofapproval:
Providedalsothat nothing contained in this clause shall apply in respect of any investment made
afterthe31stdayofMarch,1999.
(a) "venture capital fund" means such fund, operating under a trust deed registered under the
provisions of the Registration Act, 1908 (16 of 1908), established to raise monies by the
trustees for investments mainly by way of acquiring equity shares of a venture capital
undertakinginaccordancewiththeprescribedguidelines
(b)"venturecapitalcompany"meanssuchcompanyashasmadeinvestmentsbywayofacquiring
equitysharesofventurecapitalundertakingsinaccordancewiththeprescribedguidelines
(c)"venturecapitalundertaking"meanssuchdomesticcompanywhosesharesarenotlistedina
recognised stock exchange in India and which is engaged in the business of generation or
generationanddistributionofelectricityoranyotherformofpowerorengagedinthebusiness
of providing telecommunication services or in the business of developing, maintaining and
operating any infrastructure facility or engaged in the manufacture or production of such
articlesorthings(includingcomputersoftware)asmaybenotifiedbytheCentralGovernment
inthisbehalfand
(d)"infrastructurefacility"meansaroad,highway,bridge,airport,port,railsystem,awatersupply
project, irrigation project, sanitation and sewerage system or any other public facility of a
similarnatureasmaybenotifiedbytheBoardinthisbehalfintheOfficialGazetteandwhich
fulfilstheconditionsspecifiedinsubsection(4A)ofsection80IA
(23FA) any income by way of dividends, other than dividends referred to in section 115O, or longterm
capitalgainsofaventurecapitalfundoraventurecapitalcompanyfrominvestmentsmadebyway
ofequitysharesinaventurecapitalundertaking:
Providedthatsuchventurecapitalfundorventurecapitalcompanyisapproved,forthepurposesof
thisclause,bytheCentralGovernmentonanapplicationmadetoitinaccordancewiththerules75
madeinthisbehalfandwhichsatisfiestheprescribedconditions:
ProvidedfurtherthatanyapprovalbytheCentralGovernmentshall,atanyonetime,haveeffect
forsuchassessmentyearoryears,notexceedingthreeassessmentyears,asmaybespecifiedinthe
orderofapproval:
Providedalso that nothing contained in this clause shall apply in respect of any investment made
afterthe31stdayofMarch,2000.
(a) "venture capital fund" means such fund, operating under a trust deed registered under the
provisions of the Registration Act, 1908 (16 of 1908), established to raise monies by the
trustees for investments mainly by way of acquiring equity shares of a venture capital
undertakinginaccordancewiththeprescribedguidelines
(b)"venturecapitalcompany"meanssuchcompanyashasmadeinvestmentsbywayofacquiring
equitysharesofventurecapitalundertakingsinaccordancewiththeprescribedguidelinesand
about:blank 24/33
(c) "venture capital undertaking" means such domestic company whose shares are not listed in a
recognisedstockexchangeinIndiaandwhichisengagedinthe
(i)businessof
(A)software
(B)informationtechnology
(C)productionofbasicdrugsinthepharmaceuticalsector
(D)biotechnology
(E)agricultureandalliedsectorsor
(F)suchothersectorsasmaybenotifiedbytheCentralGovernmentinthisbehalfor
(ii)productionormanufactureofanyarticleorsubstanceforwhichpatenthasbeengrantedto
theNationalResearchLaboratoryoranyotherscientificresearchinstitutionapprovedby
theDepartmentofScienceandTechnology
(23FB)anyincomeofaventurecapitalcompanyorventurecapitalfundfrominvestmentinaventurecapital
undertaking:
76[Providedthatnothingcontainedinthisclauseshallapplyinrespectofanyincomeofaventure
capital company or venture capital fund, being an investment fund specified in clause (a) of the
Explanation1tosection115UB,ofthepreviousyearrelevanttotheassessmentyearbeginningonor
afterthe1stdayofApril,2016.]
(a)"venturecapitalcompany"meansacompanywhich
(A) has been granted a certificate of registration, before the 21st day of May, 2012, as a
VentureCapitalFundandisregulatedundertheSecuritiesandExchangeBoardofIndia
(VentureCapitalFunds)Regulations,1996(hereinafterreferredtoastheVentureCapital
FundsRegulations)madeundertheSecuritiesandExchangeBoardofIndiaAct,1992(15
of1992)or
(B)hasbeengrantedacertificateofregistrationasVentureCapitalFundasasubcategoryof
Category I Alternative Investment Fund and is regulated under the Securities and
Exchange Board of India (Alternative Investment Funds) Regulations, 2012 (hereinafter
referred to as the Alternative Investment Funds Regulations) made under the Securities
and Exchange Board of India Act, 1992 (15 of 1992), and which fulfils the following
conditions,namely:
(i)itisnotlistedonarecognisedstockexchange
(ii)ithasinvestednotlessthantwothirdsofitsinvestiblefundsinunlistedequityshares
orequitylinkedinstrumentsofventurecapitalundertakingand
(iii) it has not invested in any venture capital undertaking in which its director or a
substantialshareholder(beingabeneficialownerofequitysharesexceedingtenper
centofitsequitysharecapital)holds,eitherindividuallyorcollectively,equityshares
inexcessoffifteenpercentofthepaidupequitysharecapitalofsuchventurecapital
undertaking
(b)"venturecapitalfund"meansafund
(A)operatingunderatrustdeedregisteredundertheprovisionsoftheRegistrationAct,1908
(16of1908),which
(I)hasbeengrantedacertificateofregistration,beforethe21stdayofMay,2012,asa
VentureCapitalFundandisregulatedundertheVentureCapitalFundsRegulations
or
(II) has been granted a certificate of registration as Venture Capital Fund as a sub
categoryofCategoryIAlternativeInvestmentFundundertheAlternativeInvestment
FundsRegulationsandwhichfulfilsthefollowingconditions,namely:
about:blank 25/33
(i) it has invested not less than twothirds of its investible funds in unlisted equity
sharesorequitylinkedinstrumentsofventurecapitalundertaking
(ii)ithasnotinvestedinanyventurecapitalundertakinginwhichitstrusteeorthe
settlerholds,eitherindividuallyorcollectively,equitysharesinexcessoffifteen
percentofthepaidupequitysharecapitalofsuchventurecapitalundertaking
and
(iii)theunits,ifany,issuedbyitarenotlistedinanyrecognisedstockexchangeor
(B)operatingasaventurecapitalschememadebytheUnitTrustofIndiaestablishedunder
theUnitTrustofIndiaAct,1963(52of1963)
(c)"venturecapitalundertaking"means
(i)aventurecapitalundertakingasdefinedinclause(n)ofregulation2oftheVentureCapital
FundsRegulationsor
(ii)aventurecapitalundertakingasdefinedinclause(aa)ofsubregulation(1)ofregulation2
oftheAlternativeInvestmentFundsRegulations
77[(23FBA)anyincomeofaninvestmentfundotherthantheincomechargeableunderthehead"Profitsand
gainsofbusinessorprofession"
(23FBB)anyincomereferredtoinsection115UB,accruingorarisingto,orreceivedby,aunitholderofan
investmentfund,beingthatproportionofincomewhichisofthesamenatureasincomechargeable
underthehead"Profitsandgainsofbusinessorprofession".
Explanation.Forthepurposesofclauses(23FBA)and(23FBB),theexpression"investmentfund"
shallhavethemeaningassignedtoitinclause(a)oftheExplanation1tosection115UB]
(23FC)anyincomeofabusinesstrust78[bywayof
(a)interestreceivedorreceivablefromaspecialpurposevehicleor
(b)dividendreferredtoinsubsection(7)ofsection115O.]
Explanation.For the purposes of this clause, the expression "special purpose vehicle" means an
Indiancompanyinwhichthebusinesstrustholdscontrollinginterestandanyspecificpercentageof
shareholding or interest, as may be required by the regulations under which such trust is granted
registration
79[(23FCA)anyincomeofabusinesstrust,beingarealestateinvestmenttrust,bywayofrentingorleasing
orlettingoutanyrealestateassetowneddirectlybysuchbusinesstrust.
Explanation.Forthepurposesofthisclause,theexpression"realestateasset"shallhavethesame
meaning as assigned to it in clause (zj) of subregulation (1) of regulation 2 of the Securities and
Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014 made under the
SecuritiesandExchangeBoardofIndiaAct,1992(15of1992)]
(23FD)anydistributedincome,referredtoinsection115UA, received by a unit holder from the business
trust,notbeingthatproportionoftheincomewhichisofthesamenatureastheincomereferredtoin
80[subclause(a)of]clause(23FC)80a[orclause(23FCA)]
(23G)[OmittedbytheFinanceAct,2006,w.e.f.142007]
(24) any income chargeable under the heads "Income from house property" and "Income from other
sources"of
(a) a registered union within the meaning of the Trade Unions Act, 1926 (16 of 1926), formed
primarily for the purpose of regulating the relations between workmen and employers or
betweenworkmenandworkmen
(b)anassociationofregisteredunionsreferredtoinsubclause(a)
(25)(i)interestonsecuritieswhichareheldby,orarethepropertyof,anyprovidentfundtowhichthe
ProvidentFundsAct,1925(19of1925),applies,andanycapitalgainsofthefundarisingfromthe
sale,exchangeortransferofsuchsecurities
(ii)anyincomereceivedbythetrusteesonbehalfofarecognisedprovidentfund
about:blank 26/33
(iii)anyincomereceivedbythetrusteesonbehalfofanapprovedsuperannuationfund
(iv)anyincomereceivedbythetrusteesonbehalfofanapprovedgratuityfund
(v)anyincomereceived
(a)bytheBoardofTrusteesconstitutedundertheCoalMinesProvidentFundsandMiscellaneous
ProvisionsAct,1948(46of1948),onbehalfoftheDepositlinkedInsuranceFundestablished
undersection3GofthatActor
(b)bytheBoardofTrusteesconstitutedundertheEmployees'ProvidentFundsandMiscellaneous
ProvisionsAct,1952(19of1952),onbehalfoftheDepositlinkedInsuranceFundestablished
undersection6CofthatAct
(25A)anyincomeoftheEmployees'StateInsuranceFundsetupundertheprovisionsoftheEmployees'
StateInsuranceAct,1948(34of1948)
(26) in the case of a member of a Scheduled Tribe as defined in clause (25) of article 366 of the
Constitution,residinginanyareaspecifiedinPartIorPartIIoftheTableappendedtoparagraph20
oftheSixthScheduletotheConstitutionorintheStatesofArunachalPradesh,Manipur,Mizoram,
NagalandandTripuraorintheareascoveredbynotificationNo.TAD/R/35/50/109,datedthe23rd
February,1951,issuedbytheGovernorofAssamundertheprovisotosubparagraph(3)ofthesaid
paragraph 20 [as it stood immediately before the commencement of the NorthEastern Areas
(Reorganisation) Act, 1971 (81 of 1971)] or in the Ladakh region of the State of Jammu and
Kashmir,anyincomewhichaccruesorarisestohim,
(a)fromanysourceintheareasorStatesaforesaid,or
(b)bywayofdividendorinterestonsecurities
(26A) any income accruing or arising to any person from any source in the district of Ladakh or outside
Indiainanypreviousyearrelevanttoanyassessmentyearcommencingbeforethe1stdayofApril,
1989,wheresuchpersonisresidentinthesaiddistrictinthatpreviousyear:
Providedthatthisclauseshallnotapplyinthecaseofanysuchpersonunlesshewasresidentinthat
district in the previous year relevant to the assessment year commencing on the 1st day of April,
1962.
Explanation 1.For the purposes of this clause, a person shall be deemed to be resident in the
districtofLadakhifhefulfilstherequirementsofsubsection(1)orsubsection(2)orsubsection
(3)orsubsection(4)ofsection6,asthecasemaybe,subjecttothemodificationsthat
(i)referencesinthosesubsectionstoIndiashallbeconstruedasreferencestothesaiddistrict
and
(ii)inclause(i)ofsubsection(3),referencetoIndiancompanyshallbeconstruedasreferenceto
a company formed and registered under any law for the time being in force in the State of
JammuandKashmirandhavingitsregisteredofficeinthatdistrictinthatyear.
Explanation2.Inthisclause,referencestothedistrictofLadakhshallbeconstruedasreferencesto
theareascomprisedinthesaiddistrictonthe30thdayofJune,1979
(26AA)[***]
(26AAA)incaseofanindividual,beingaSikkimese,anyincomewhichaccruesorarisestohim
(a)fromanysourceintheStateofSikkimor
(b)bywayofdividendorinterestonsecurities:
ProvidedthatnothingcontainedinthisclauseshallapplytoaSikkimesewomanwho,onorafterthe
1stdayofApril,2008,marriesanindividualwhoisnotaSikkimese.
Explanation.Forthepurposesofthisclause,"Sikkimese"shallmean
(i) an individual, whose name is recorded in the register maintained under the Sikkim Subjects
Regulation, 1961 read with the Sikkim Subject Rules, 1961 (hereinafter referred to as the
"RegisterofSikkimSubjects"),immediatelybeforethe26thdayofApril,1975or
(ii) an individual, whose name is included in the Register of Sikkim Subjects by virtue of the
GovernmentofIndiaOrderNo.26030/36/90I.C.I.,datedthe7thAugust,1990andOrderof
about:blank 27/33
evennumberdatedthe8thApril,1991or
(iii)anyotherindividual,whosenamedoesnotappearintheRegisterofSikkimSubjects,butitis
established beyond doubt that the name of such individual's father or husband or paternal
grandfatherorbrotherfromthesamefatherhasbeenrecordedinthatregister
(26AAB)anyincomeofanagriculturalproducemarketcommitteeorboardconstitutedunderanylawforthe
timebeinginforceforthepurposeofregulatingthemarketingofagriculturalproduce
(26B)anyincomeofacorporationestablishedbyaCentral,StateorProvincialActorofanyotherbody,
institutionorassociation(beingabody,institutionorassociationwhollyfinancedbyGovernment)
wheresuchcorporationorotherbodyorinstitutionorassociationhasbeenestablishedorformedfor
promotingtheinterestsofthemembersoftheScheduledCastesortheScheduledTribesorbackward
classesorofanytwoorallofthem.
(a)"ScheduledCastes"and"ScheduledTribes"shallhavethemeaningsrespectivelyassignedto
theminclauses(24)and(25)ofarticle366oftheConstitution
(b) "backward classes" means such classes of citizens, other than the Scheduled Castes and the
ScheduledTribes,asmaybenotified
(i)bytheCentralGovernmentor
(ii)byanyStateGovernment,
asthecasemaybe,fromtimetotime
(26BB)any income of a corporation established by the Central Government or any State Government for
promotingtheinterestsofthemembersofaminoritycommunity.
Explanation.Forthepurposesofthisclause,"minoritycommunity"meansacommunitynotified
assuchbytheCentralGovernmentintheOfficialGazetteinthisbehalf
(26BBB)anyincomeofacorporationestablishedbyaCentral,StateorProvincialActforthewelfareand
economicupliftmentofexservicemenbeingthecitizensofIndia.
Explanation.For the purposes of this clause, "exserviceman" means a person who has served in
anyrank,whetherascombatantornoncombatant,inthearmedforcesoftheUnionorarmedforces
oftheIndianStatesbeforethecommencementoftheConstitution(butexcludingtheAssamRifles,
Defence Security Corps, General Reserve Engineering Force, Lok Sahayak Sena, Jammu and
Kashmir Militia and Territorial Army) for a continuous period of not less than six months after
attestation and has been released, otherwise than by way of dismissal or discharge on account of
misconductorinefficiency,andinthecaseofadeceasedorincapacitatedexservicemanincludeshis
wife, children, father, mother, minor brother, widowed daughter and widowed sister, wholly
dependantuponsuchexservicemanimmediatelybeforehisdeathorincapacitation
(27)anyincomeofacooperativesocietyformedforpromotingtheinterestsofthemembersofeitherthe
ScheduledCastesorScheduledTribesorbothreferredtoinclause(26B):
Provided that the membership of the cooperative society consists of only other cooperative
societiesformedforsimilarpurposesandthefinancesofthesocietyareprovidedbytheGovernment
andsuchothersocieties
(28)[***]
(29)[OmittedbytheFinanceAct,2002,w.e.f.142003]
(29A)anyincomeaccruingorarisingto
(a) the Coffee Board constituted under section 4 of the Coffee Act, 1942 (7 of 1942) in any
previous year relevant to any assessment year commencing on or after the 1st day of April,
1962orthepreviousyearinwhichsuchBoardwasconstituted,whicheverislater
(b)theRubberBoardconstitutedundersubsection(1)ofsection4oftheRubberBoardAct,1947
(24of1947)inanypreviousyearrelevanttoanyassessmentyearcommencingonorafterthe
1stdayofApril,1962orthepreviousyearinwhichsuchBoardwasconstituted,whicheveris
later
about:blank 28/33
(c)theTeaBoardestablishedundersection4oftheTeaAct,1953(29of1953)inanyprevious
yearrelevanttoanyassessmentyearcommencingonorafterthe1stdayofApril,1962orthe
previousyearinwhichsuchBoardwasconstituted,whicheverislater
(d)theTobaccoBoardconstitutedundertheTobaccoBoardAct,1975(4of1975)inanyprevious
yearrelevanttoanyassessmentyearcommencingonorafterthe1stdayofApril,1975orthe
previousyearinwhichsuchBoardwasconstituted,whicheverislater
(e)theMarineProductsExportDevelopmentAuthorityestablishedundersection4oftheMarine
ProductsExportDevelopmentAuthorityAct,1972(13of1972)inanypreviousyearrelevant
toanyassessmentyearcommencingonorafterthe1stdayofApril,1972orthepreviousyear
inwhichsuchAuthoritywasconstituted,whicheverislater
(f)theAgriculturalandProcessedFoodProductsExportDevelopmentAuthorityestablishedunder
section4oftheAgriculturalandProcessedFoodProductsExportDevelopmentAct,1985(2of
1986)inanypreviousyearrelevanttoanyassessmentyearcommencingonorafterthe1stday
ofApril,1985orthepreviousyearinwhichsuchAuthoritywasconstituted,whicheverislater
(g)theSpicesBoardconstitutedundersubsection(1)ofsection3oftheSpicesBoardAct,1986
(10of1986)inanypreviousyearrelevanttoanyassessmentyearcommencingonorafterthe
1stdayofApril,1986orthepreviousyearinwhichsuchBoardwasconstituted,whicheveris
later
(h)theCoirBoardestablishedundersection4oftheCoirIndustryAct,1953(45of1953)
(30)81inthecaseofanassesseewhocarriesonthebusinessofgrowingandmanufacturingteainIndia,
the amount of any subsidy received from or through the Tea Board under any such scheme for
replantation or replacement of tea bushes or for rejuvenation or consolidation of areas used for
cultivationofteaastheCentralGovernmentmay,bynotificationintheOfficialGazette,specify:
ProvidedthattheassesseefurnishestotheAssessingOfficer,alongwithhisreturnofincome82for
the assessment year concerned or within such further time as the Assessing Officer may allow, a
certificate from the Tea Board as to the amount of such subsidy paid to the assessee during the
previousyear.
Explanation.In this clause, "Tea Board" means the Tea Board established under section 4 of the
TeaAct,1953(29of1953)
(31)inthecaseofanassesseewhocarriesonthebusinessofgrowingandmanufacturingrubber,coffee,
cardamomorsuchothercommodityinIndia,astheCentralGovernmentmay,bynotificationinthe
Official Gazette, specify in this behalf, the amount of any subsidy received from or through the
concerned Board under any such scheme for replantation or replacement of rubber plants, coffee
plants, cardamom plants or plants for the growing of such other commodity or for rejuvenation or
consolidationofareasusedforcultivationofrubber,coffee,cardamomorsuchothercommodityas
theCentralGovernmentmay,bynotificationintheOfficialGazette,specify:
ProvidedthattheassesseefurnishestotheAssessingOfficer,alongwithhisreturnofincomeforthe
assessment year concerned or within such further time as the Assessing Officer may allow, a
certificatefromtheconcernedBoard,astotheamountofsuchsubsidypaidtotheassesseeduring
thepreviousyear.
Explanation.Inthisclause,"concernedBoard"means,
(i)inrelationtorubber,theRubberBoardconstitutedundersection4oftheRubberAct,1947(24
of1947),
(ii)inrelationtocoffee,theCoffeeBoardconstitutedundersection4oftheCoffeeAct,1942(7of
1942),
(iii)inrelationtocardamom,theSpicesBoardconstitutedundersection3oftheSpicesBoardAct,
1986(10of1986),
(iv) in relation to any other commodity specified under this clause, any Board or other authority
establishedunderanylawforthetimebeinginforcewhichtheCentralGovernmentmay,by
notificationintheOfficialGazette,specifyinthisbehalf
about:blank 29/33
(32)inthecaseofanassesseereferredtoinsubsection(1A)ofsection64,anyincomeincludibleinhis
total income under that subsection, to the extent such income does not exceed one thousand five
hundredrupeesinrespectofeachminorchildwhoseincomeissoincludible
(33)anyincomearisingfromthetransferofacapitalasset,beingaunitoftheUnitScheme,1964referred
to in Schedule I to the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of
2002)andwherethetransferofsuchassettakesplaceonorafterthe1stdayofApril,2002
(34)anyincomebywayofdividendsreferredtoinsection115O:
83[Providedthatnothinginthisclauseshallapplytoanyincomebywayofdividendchargeableto
taxinaccordancewiththeprovisionsofsection115BBDA]
(34A)anyincomearisingtoanassessee,beingashareholder,onaccountofbuybackofshares(notbeing
listedonarecognisedstockexchange)bythecompanyasreferredtoinsection115QA
(35)anyincomebywayof,
(a)incomereceivedinrespectoftheunitsofaMutualFundspecifiedunderclause(23D)or
(b)incomereceivedinrespectofunitsfromtheAdministratorofthespecifiedundertakingor
(c)incomereceivedinrespectofunitsfromthespecifiedcompany:
Provided that this clause shall not apply to any income arising from transfer of units of the
Administratorofthespecifiedundertakingorofthespecifiedcompanyorofamutualfund,asthe
casemaybe.
(a)"Administrator"meanstheAdministratorasreferredtoinclause(a)ofsection2oftheUnit
TrustofIndia(TransferofUndertakingandRepeal)Act,2002(58of2002)
(b) "specified company" means a company as referred to in clause (h) of section 2 of the Unit
TrustofIndia(TransferofUndertakingandRepeal)Act,2002(58of2002)
(35A)anyincomebywayofdistributedincomereferredtoinsection115TAreceivedfromasecuritisation
trustbyanypersonbeinganinvestorofthesaidtrust:
84[Providedthat nothing contained in this clause shall apply to any income by way of distributed
incomereferredtointhesaidsection,receivedonorafterthe1stdayofJune,2016.]
Explanation.For the purposes of this clause, the expressions "investor" and "securitisation trust"
shallhavethemeaningsrespectivelyassignedtothemintheExplanationbelow85[section115TCA]
(36)anyincomearisingfromthetransferofalongtermcapitalasset,beinganeligibleequityshareina
companypurchasedonorafterthe1stdayofMarch,2003andbeforethe1stdayofMarch,2004and
heldforaperiodoftwelvemonthsormore.
Explanation.Forthepurposesofthisclause,"eligibleequityshare"means,
(i)anyequityshareinacompanybeingaconstituentofBSE500IndexoftheStockExchange,
Mumbai as on the 1st day of March, 2003 and the transactions of purchase and sale of such
equityshareareenteredintoonarecognisedstockexchangeinIndia
(ii)anyequityshareinacompanyallottedthroughapublicissueonorafterthe1stdayofMarch,
2003andlistedinarecognisedstockexchangeinIndiabeforethe1stdayofMarch,2004and
thetransactionofsaleofsuchshareisenteredintoonarecognisedstockexchangeinIndia
(37)inthecaseofanassessee,beinganindividualoraHinduundividedfamily,anyincomechargeable
underthehead"Capitalgains"arisingfromthetransferofagriculturalland,where
(i)suchlandissituateinanyareareferredtoinitem(a)oritem(b)ofsubclause(iii)ofclause
(14)ofsection2
(ii)suchland,duringtheperiodoftwoyearsimmediatelyprecedingthedateoftransfer,wasbeing
usedforagriculturalpurposesbysuchHinduundividedfamilyorindividualoraparentofhis
(iii) such transfer is by way of compulsory acquisition under any law, or a transfer the
considerationforwhichisdeterminedorapprovedbytheCentralGovernmentortheReserve
BankofIndia
about:blank 30/33
(iv)suchincomehasarisenfromthecompensationorconsiderationforsuchtransferreceivedby
suchassesseeonorafterthe1stdayofApril,2004.
Explanation.For the purposes of this clause, the expression "compensation or consideration"
includesthecompensationorconsiderationenhancedorfurtherenhancedbyanycourt,Tribunalor
otherauthority
86[(37A)anyincomechargeableunderthehead"Capitalgains"inrespectoftransferofaspecifiedcapital
assetarisingtoanassessee,beinganindividualoraHinduundividedfamily,whowastheownerof
suchspecifiedcapitalassetasonthe2nddayofJune,2014andtransfersthatspecifiedcapitalasset
under the Land Pooling Scheme (herein referred to as "the scheme") covered under the Andhra
Pradesh Capital City Land Pooling Scheme (Formulation and Implementation) Rules, 2015 made
under the provisions of the Andhra Pradesh Capital Region Development Authority Act, 2014
(AndhraPradeshAct11of2014)andtherules,regulationsandSchemesmadeunderthesaidAct.
Explanation.Forthepurposesofthisclause,"specifiedcapitalasset"means,
(a)thelandorbuildingorbothownedbytheassesseeasonthe2nddayofJune,2014andwhich
hasbeentransferredundertheschemeor
(b) the land pooling ownership certificate issued under the scheme to the assessee in respect of
landorbuildingorbothreferredtoinclause(a)or
(c)thereconstitutedplotorland,asthecasemaybe,receivedbytheassesseeinlieuoflandor
buildingorbothreferredtoinclause(a)inaccordancewiththescheme,ifsuchplotorland,as
thecasemaybe,soreceivedistransferredwithintwoyearsfromtheendofthefinancialyear
inwhichthepossessionofsuchplotorlandwashandedovertohim]
(38)anyincomearisingfromthetransferofalongtermcapitalasset,beinganequityshareinacompany
oraunitofanequityorientedfundoraunitofabusinesstrustwhere
(a)thetransactionofsaleofsuchequityshareorunitisenteredintoonorafterthedateonwhich
ChapterVIIoftheFinance(No.2)Act,2004comesintoforceand
(b)suchtransactionischargeabletosecuritiestransactiontaxunderthatChapter:
Providedthattheincomebywayoflongtermcapitalgainofacompanyshallbetakenintoaccount
incomputingthebookprofitandincometaxpayableundersection115JB:
87[Providedalsothatnothingcontainedinsubclause(b)shallapplytoatransactionundertakenon
arecognisedstockexchangelocatedinanyInternationalFinancialServicesCentreandwherethe
considerationforsuchtransactionispaidorpayableinforeigncurrency.]
Followingthirdprovisoshallbeinsertedafterthesecondprovisotoclause(38)ofsection10by
theFinanceAct,2017,w.e.f.142018:
Provided also that nothing contained in this clause shall apply to any income arising from the
transfer of a longterm capital asset, being an equity share in a company, if the transaction of
acquisition, other than the acquisition notified by the Central Government in this behalf, of such
equity share is entered into on or after the 1st day of October, 2004 and such transaction is not
chargeabletosecuritiestransactiontaxunderChapterVIIoftheFinance(No.2)Act,2004(23of
2004).
88[Explanation.Forthepurposesofthisclause,
(a)"equityorientedfund"meansafund
(i)wheretheinvestiblefundsareinvestedbywayofequitysharesindomesticcompaniesto
theextentofmorethansixtyfivepercentofthetotalproceedsofsuchfundand
(ii)whichhasbeensetupunderaschemeofaMutualFundspecifiedunderclause(23D):
Provided that the percentage of equity share holding of the fund shall be computed with
referencetotheannualaverageofthemonthlyaveragesoftheopeningandclosingfigures
(b) "International Financial Services Centre" shall have the same meaning as assigned to it in
clause(q)ofsection2oftheSpecialEconomicZonesAct,2005(28of2005)
about:blank 31/33
(c) "recognised stock exchange" shall have the meaning assigned to it in clause (ii) of the
Explanation1to*subsection(5)ofsection43]
(39) any specified income, arising from any international sporting event held in India, to the person or
persons notified by the Central Government in the Official Gazette, if such international sporting
event
(a)isapprovedbytheinternationalbodyregulatingtheinternationalsportrelatingtosuchevent
(b)hasparticipationbymorethantwocountries
(c)isnotifiedbytheCentralGovernmentintheOfficialGazetteforthepurposesofthisclause.
Explanation.For the purposes of this clause, "the specified income" means the income, of the
natureandtotheextent,arisingfromtheinternationalsportingevent,whichtheCentralGovernment
maynotifyinthisbehalf
(40) any income of any subsidiary company by way of grant or otherwise received from an Indian
company, being its holding company engaged in the business of generation or transmission or
distribution of power if receipt of such income is for settlement of dues in connection with
reconstructionorrevivalofanexistingbusinessofpowergeneration:
Provided that the provisions of this clause shall apply if reconstruction or revival of any existing
businessofpowergenerationisbywayoftransferofsuchbusinesstotheIndiancompanynotified
undersubclause(a)ofclause(v)ofsubsection(4)ofsection80IA
(41)anyincomearisingfromtransferofacapitalasset,beinganassetofanundertakingengagedinthe
businessofgenerationortransmissionordistributionofpowerwheresuchtransferiseffectedonor
beforethe31stdayofMarch,2006,totheIndiancompanynotifiedundersubclause(a)ofclause(v)
ofsubsection(4)ofsection80IA
(42)anyspecifiedincomearisingtoabodyorauthoritywhich
(a)hasbeenestablishedorconstitutedorappointedunderatreatyoranagreemententeredintoby
the Central Government with two or more countries or a convention signed by the Central
Government
(b)isestablishedorconstitutedorappointednotforthepurposesofprofit
Explanation.Forthepurposesofthisclause,"specifiedincome"meanstheincome,ofthenature
and to the extent, arising to the body or authority referred to in this clause, which the Central
Governmentmaynotifyinthisbehalf
(43)anyamountreceivedbyanindividualasaloan,eitherinlumpsumorininstalment,inatransaction
ofreversemortgagereferredtoinclause(xvi)ofsection47
(44)anyincomereceivedbyanypersonfor,oronbehalfof,theNewPensionSystemTrustestablished
onthe27thdayofFebruary,2008undertheprovisionsoftheIndianTrustsAct,1882(2of1882)
(45)anyallowanceorperquisite,asmaybenotifiedbytheCentralGovernmentintheOfficialGazettein
thisbehalf,paidtotheChairmanoraretiredChairmanoranyothermemberorretiredmemberofthe
UnionPublicServiceCommission
(46)anyspecifiedincomearisingtoabodyorauthorityorBoardorTrustorCommission(bywhatever
namecalled)which
(a)hasbeenestablishedorconstitutedbyorunderaCentral,StateorProvincialAct,orconstituted
by the Central Government or a State Government, with the object of regulating or
administeringanyactivityforthebenefitofthegeneralpublic
(b)isnotengagedinanycommercialactivityand
Explanation.Forthepurposesofthisclause,"specifiedincome"meanstheincome,ofthenature
andtotheextentarisingtoabodyorauthorityorBoardorTrustorCommission(bywhatevername
called)referredtointhisclause,whichtheCentralGovernmentmay,bynotificationintheOfficial
Gazette,specifyinthisbehalf
about:blank 32/33
(47) any income of an infrastructure debt fund, set up in accordance with the guidelines as may be
prescribed,89whichisnotifiedbytheCentralGovernmentintheOfficialGazetteforthepurposesof
thisclause
(48)anyincomereceivedinIndiainIndiancurrencybyaforeigncompanyonaccountofsaleofcrude
oil,anyothergoodsorrenderingofservices,asmaybenotifiedbytheCentralGovernmentinthis
behalf,toanypersoninIndia:
Providedthat
(i) receipt of such income in India by the foreign company is pursuant to an agreement or an
arrangemententeredintobytheCentralGovernmentorapprovedbytheCentralGovernment
(ii)havingregardtothenationalinterest,theforeigncompanyandtheagreementorarrangement
arenotifiedbytheCentralGovernmentinthisbehalfand
(iii)theforeigncompanyisnotengagedinanyactivity,otherthanreceiptofsuchincome,inIndia
90[(48A)anyincomeaccruingorarisingtoaforeigncompanyonaccountofstorageofcrudeoilinafacility
inIndiaandsaleofcrudeoiltherefromtoanypersonresidentinIndia:
Providedthat
(i) the storage and sale by the foreign company is pursuant to an agreement or an arrangement
enteredintobytheCentralGovernmentorapprovedbytheCentralGovernmentand
(ii)havingregardtothenationalinterest,theforeigncompanyandtheagreementorarrangement
arenotifiedbytheCentralGovernmentinthisbehalf]
Following clause (48B) shall be inserted after clause (48A) of section 10 by the Finance Act,
2017,w.e.f.142018:
(48B)anyincomeaccruingorarisingtoaforeigncompanyonaccountofsaleofleftoverstockofcrudeoil,
ifany,fromthefacilityinIndiaaftertheexpiryoftheagreementorthearrangementreferredtoin
clause(48A)subjecttosuchconditionsasmaybenotifiedbytheCentralGovernmentinthisbehalf
(49)anyincomeoftheNationalFinancialHoldingsCompanyLimited,beingacompanysetupbythe
CentralGovernment,ofanypreviousyearrelevanttoanyassessmentyearcommencingonorbefore
the1stdayofApril,2014
91[(50)anyincomearisingfromanyspecifiedserviceprovidedonorafterthedateonwhichtheprovisions
ofChapterVIIIoftheFinanceAct,2016comesintoforceandchargeabletoequalisationlevyunder
thatChapter.
Explanation.Forthepurposesofthisclause,"specifiedservice"shallhavethemeaningassignedto
itinclause(i)ofsection164ofChapterVIIIoftheFinanceAct,2016.]
about:blank 33/33

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