Section Text
1) Subject to the provisions of sub-sections (2) and (3), for the assessment year commencing on the 1st day of April, 1971. income-lax shall be charged at the rates specified in Part I of the First Schedule and. in the cases to which Paragraphs A, B, C and D of that Part apply, shall be increased by a surcharge for purposes of the Union and in the cases to which Paragraph C applies, also by a special surcharge for purposes of the Union calculated in each case in the manner provided therein.
(2) In making any assessment for the assessment year commencing on the 1st day of April, 1971, where the total income of a company, other than tile Life Insurance Corporation of India established underthe Life Insurance Corporation Act, 1956-includes any profits and gains from life insurance business, the income-tax payable by it shall be aggregate of the income-tax calculated---
(i) on the amount of profits and gains from life insurance business so included, at the rate applicable in the case of the Life Insurance Corporation of India, in accordance with Paragraph E of Part I of the First Schedule, to that part of its total income which consists of profits and gains from life insurance business: and (ii) on the remaining part of its total income, at the rate applicable to the company on its total income.
(3) In cases to whichChapter 12orSection 164 of the Income-tax Act, 1961-(hereinafter referred to as the Income-tax Act) applies, the tax chargeable shall be determined as provided in that Chapter or that section, and with reference to therates imposed by sub-section (1) or the rates as specified in that Chapter or section, as the case may be.
(4) In cases in which tax has to he deducted underSections 193-.194-.194A-and195 of the Incometax Act-at the rates in force, the deduction shall be made at the rates specified in Part II of the First Schedule.
(5) In cases in which income-tax has to be calculated under the first proviso to sub- section (5) ofsection 132 of Income-tax Act-or charged under sub-section (4) ofSection 172-or sub-section (2) ofSection 174-orSection 175-or sub-section (2) ofSection 176-of the said Act or deducted underSection 192-of the said Act from income chargeable under the head "Salaries" or deducted under sub-section (9) ofSection 80E-of the said Act from any payment referred to in the said subsection (9) or in which the "advance tax" payable under Chapter XVII - C of the said Act has to be computed, at the rate or rates in force, such income-tax or, as the case may be. "advance tax" shall be so calculated. charged, deducted or computed at the rate or rates specified in Part III of the First Schedule:
Provided that in respect of any income chargeable to lax underSection 164 of the Income- tax Act-at the rate of sixty-live per cent.. "advance lax" shall be computed at that rate.
(6) For the purposes, of (he section and the First Schedule. ---
(a) "company in which the public are substantially interested" means a company which is such a company as is referred to inSection 103 of the Income-tax Act-:
(b) "domestic company" means an Indian company, or any other company which, in respect of its income liable to income-lax under the Income-tax Act for the assessment year commencing on the 1st day of April. 1971. has made the prescribed arrangements for the declaration and payment within India of the dividends (including dividends on preference shares) payable out of such income in accordance with the provisions ofSection 194-of that Act:
(c) "industrial company" means a company which is mainly engaged in the business of generation or distribution of electricity or any other form of power or in the construction of ships or in the manufacture or processing of goods or in mining. Explantion.-- For the purposes of this clause, a company shall be deemed to be mainly engaged in the business of generation or distribution of electricity or any other form of power or in the construction of ships or in the manufacture or processing of goods or in mining, if the income attributable to any one or more of the aforesaid activities included in its total income of the previous year (as computed before making any deduction under Chapter VIA of the Income-tax Act) is not less than fifty-one per cent. of such total income;
(d) "tax free security" means any security of the Central Government issued or declared to be income-tax free, or any security of a State Government issued income-tax free, the income-tax whereon is payable by the State Government, (e) all other words and expressions used in this section and the First Schedule but not defined in this sub - section and defined in the Income-tax Act shall have the meanings respectively, assigned to them in that Act.